The applicant underwriters sought a declaration that the respondent issuer, Aphria Inc., was required to pay their ongoing legal fees in defending a proposed securities class action.
The class action alleged that the underwriters engaged in market manipulation prior to a prospectus offering.
Aphria argued that the indemnity in the underwriting agreement did not cover intentional wrongdoing.
The court held that the plain language of the indemnity clause required Aphria to pay defence costs for any claims arising from the underwriters' professional services, subject only to an exclusion if a court makes a final, non-appealable determination of fraud or willful misconduct.
As no such determination had been made, the application was granted.
