In Kaynes v. BP, 2013 ONSC 5802, Justice Conway
determined that a statutory claim for secondary market
misrepresentation under the Ontario Securities Act
("OSA") is a "statutory tort" over which the
Ontario Superior Court of Justice can assume jurisdiction, even
when investors have purchased the defendant's shares on a
foreign stock exchange.
Mr. Kaynes, an Ontario resident, proposed a class action against
BP for alleged misrepresentations made in investor documents about
an oil spill in the Gulf of Mexico. He brought a statutory action
under section 138.3 of the OSA on behalf of all Canadians who
purchased BP's shares on the Toronto Stock Exchange
("TSX") and other foreign stock exchanges. BP requested a
stay of the action, arguing that the court did not have
jurisdiction over the dispute or, alternatively, that there were
other more appropriate forums for dealing with the dispute.
When a tort claim is brought in Ontario against a foreign
defendant, the court can only assume jurisdiction where there is a
"real and substantial connection" between the province
and the claim. A plaintiff can prove this connection by
establishing a "connecting factor." One of these factors
is whether "the tort was committed in Ontario." The Court
of Appeal in Ontario (Attorney General) v. Rothmans, 2013 ONCA
353, recently decided that a statutory claim based on a common
law tort is nearly identical to a "tort committed in
Ontario," or similar enough to qualify as a "connecting
Applying Rothmans, Justice Conway determined that a
claim under section 138.3 of the OSA was "founded on
misrepresentation" and could be viewed as a "statutory
tort" presumptively connected to Ontario. BP submitted that
this "statutory tort" was not committed in Ontario in
relation to the investors who purchased BP's shares outside of
the province. Justice Conway disagreed because:
The language of section 138.3 of the OSA is broad and does not
restrict the cause of action to investors who purchased their
shares on an Ontario stock exchange.
The OSA assumes that an Ontario investor relied on a
misrepresentation when he or she purchased the shares. The location
of the stock exchange where the purchase was made does not
determine the issue.
BP's position was inconsistent with the Ontario Court of
Appeal's recent decision in Abdula v. Canadian Solar Inc, 2012 ONCA 211,
which allowed an Ontario investor, who purchased shares on a
foreign stock exchange, to bring a claim in Ontario against a
BP also argued that the U.S. and U.K. courts were more
appropriate forums for dealing with these investors. Justice Conway
rejected this argument as inefficient and costly because: (1) the
investors who purchased BP's shares on the TSX would still
bring a claim in Ontario; (2) staying the Ontario action might stop
the investors who purchased BP's shares on the New York Stock
Exchange from opting-out of an ongoing, but uncertified, U.S. class
action; and (3) the investors who purchased BP's shares on a
European stock exchange would have to bring individual claims in
the U.K. and then seek an order to have them tried together.
The Court's liberal interpretation of jurisdiction in
relation to statutory secondary market claims could result in more
of these claims being brought in Ontario.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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