Canada: Ontario Court Of Appeal Declines Jurisdiction Over Securities Claim Against Foreign Issuer For Shares Traded On Foreign Exchange

Following prevailing international standards tying jurisdiction to where securities are traded, Ontario's highest appellate court in Kaynes v. BP, PLC1 has exercised its discretion to decline jurisdiction over proposed claims of Canadian residents who bought their shares of a foreign issuer on a foreign exchange and based on foreign law.

The decision strikes a blow to class action plaintiffs who seek to use trades on the TSX as a toehold for bringing securities class actions in Ontario encompassing much larger volumes of trades on a foreign exchange of a foreign issuer. Describing such actions as "opportunistic" and a classic example of the "tail wagging the dog," Ontario's Court of Appeal stayed claims against BP based on trades on foreign exchanges.

In so doing, the Court of Appeal has established that:

  • Presumptive jurisdiction in Ontario can be based on where the alleged misrepresentation was received for Part XXIII.1 secondary market misrepresentation claims. The term "release" under s. 138.3(1) of the Ontario Securities Act (OSA) includes not only documents circulated from Ontario but also documents received in Ontario.
  • In determining whether to nonetheless decline jurisdiction based on forum non conveniens, Ontario courts should consider the implications of departing from the norms and practices of other countries concerning jurisdiction over secondary market misrepresentation claims, particularly given cross-border transactions are routine and maintaining an orderly and predictable regime for resolving claims is imperative.

Proposed class action

The plaintiff commenced a proposed securities class action in Ontario asserting an action for secondary market misrepresentation under Part XXIII.1 of the OSA. The suit arose from the Deep Water Horizon oil spill in the Gulf of Mexico. It alleged that BP Plc made various misrepresentations in documents sent to its shareholders. The action sought to represent all Canadian residents who acquired BP securities between May 9, 2007, and May 28, 2010, (Class Period) wherever those securities were purchased. Parallel proposed class proceedings in the US, based on the same allegations, were also pending certification.

Listing of BP shares

BP is a UK corporation. It is headquartered in London and does not own any property or carry on business in Canada. Its common shares are listed on two European exchanges. They have never been listed on the Toronto Stock Exchange. BP also issued American Depository Shares (ADS), which trade on the New York Stock Exchange and London Stock Exchange. The plaintiff purchased BP ADS on the NYSE.

BP's ADS formerly traded on the TSX but were delisted on August 15, 2008, because of low trading volume. Only 83,945 ADS traded on the TSX during the Class Period, compared to about 9 billion ADS traded on the NYSE and about 8.7 billion traded on the LSE. Of the 83,945 ADS traded on the TSX, only between 14 and 7,477 ADS were held through the end of the Class Period.

BP ceased to be a reporting issuer in Ontario and other Canadian provinces after its ADS were delisted. As a condition to ceasing to be a reporting issuer, it continued to send security holders in Canada all disclosure materials that are required under US securities laws to be sent to US residents.

Jurisdictional challenge

BP conceded that Ontario has jurisdiction over claims of those proposed class members who purchased their securities on the TSX. However, BP challenged the Ontario court's jurisdiction over the claims of Canadian residents who purchased their shares on foreign exchanges, arguing there is no real and substantial connection between Ontario and their claims. In the alternative, BP argued that if there is jurisdiction, the Ontario court should decline to exercise its jurisdiction on the grounds of forum non conveniens. The motion judge dismissed BP's motion, and the issues of jurisdiction and forum non conveniens came before the Ontario Court of Appeal.

Jurisdiction based on statutory tort having been committed in Ontario

On appeal, BP argued that the motion judge erred in finding jurisdiction based on the statutory tort having been committed in Ontario. Section 138.3(1) of the OSA provides for a cause of action where a responsible issuer "releases a document that contains a misrepresentation." BP argued that for the statutory tort to be committed in Ontario, the document containing the alleged misrepresentation must have been released in Ontario. In this case, as BP does not have a presence in Ontario, the documents' point of initial release was outside Ontario.

The Court of Appeal upheld the motion judge's finding of jurisdiction. It noted that Canadian courts have rejected the "place of acting" test for determining where a tort has been committed in determining jurisdiction.2 Instead, it cited prior Supreme Court of Canada jurisprudence finding jurisdiction where a plaintiff suffered damages in circumstances where a manufacturer reasonably ought to have contemplated that the impugned product would enter that jurisdiction.3

The Court of Appeal observed, by analogy, that when BP released the documents in issue it knew, by virtue of the undertaking it had given as a condition to ceasing to be a reporting issuer, that even if the initial point of release was outside Ontario, the documents were certain to find their way to Ontario and its Ontario shareholders. Hence, by releasing a document outside Ontario it knew it was required to send to Ontario shareholders, BP committed an alleged statutory tort in Ontario.

The Court of Appeal also rejected the argument that for purposes of s. 138.3(1) of the OSA, the documents' point of release must be Ontario. It commented that its prior decision in Abdula v. Canadian Solar Inc.4 equates documents "released" with documents either released or presented in Ontario.5

Stay based on forum non conveniens

On the issue of whether the motion judge erred in not declining jurisdiction under the forum non conveniens doctrine, the Ontario Court of Appeal agreed with BP and found the court ought to have declined jurisdiction. A stay of the action was ordered with leave to amend the claim to allow the claims of proposed class members who purchased BP shares on the TSX to proceed.

(i) Comity

Citing prior decisions, the Court of Appeal noted that the principle of comity and an attitude of respect for the courts and legal systems of other countries underlies the forum non conveniens analysis.6 Hence, the plaintiff's claim had to be considered in the context of the securities law regimes of Ontario, the US and the UK along with the trading of BP securities in those jurisdictions. In that regard, the Court of Appeal noted that both the US and UK statutes assert jurisdiction based on the exchange where the securities are traded, and US law provides for the exclusive jurisdiction of federal US district courts over claims for secondary market misrepresentation under US securities law and precludes suits relating to transactions on foreign exchanges.

Taking a contextual approach, the Court of Appeal found the principles of comity strongly favoured declining jurisdiction, reasoning that:

  • Asserting Ontario jurisdiction over the plaintiff's claim would be inconsistent with the approach taken under both US and UK law concerning jurisdiction over claims for secondary market misrepresentation.7 While Ontario courts are not obliged to slavishly follow the jurisdiction standards of other courts, the Court of Appeal stated that, "The principle of comity requires the court to consider the implications of departing from the prevailing international norm or practice, particularly in an area such as the securities market where cross-border transactions are routine and the maintenance of an orderly and predictable regime for the resolution of claims is imperative."8
  • As the plaintiff's claim rests to a significant degree upon the disclosure obligations imposed by US securities law, the case for asserting jurisdiction is considerably weakened and would contradict US law's claim for exclusive jurisdiction over claims for secondary market misrepresentation under US securities law.9
  • Having regard to the relative number of BP Canadian shareholders who acquired their shares on the TSX compared to a foreign exchange, permitting the plaintiff to use the negligible relative trading on the TSX as a toehold for bringing foreign exchange purchasers under the jurisdiction of an Ontario court would be "opportunistic" and "a classic example of the 'tail wagging the dog'."10

In terms of fairness, the Court of Appeal commented that it would not come as a surprise to purchasers who used foreign exchanges that they should look to the foreign court to litigate their claims.11

(ii) Avoidance of a Multiplicity of Proceedings

The Court of Appeal further observed that order and fairness will be achieved by adhering to the prevailing international standard tying jurisdiction to the place where the securities were traded and avoiding a multiplicity of proceedings involving the same claims or class of claims. Although litigation in this case in more than one jurisdiction is inevitable, the court found the motion judge erred in not considering further the avoidance of litigation in more than one jurisdiction over the same claims of the same parties.

Future implications

The Ontario Court of Appeal's decision should cause class action plaintiffs to rethink seeking to use Ontario courts as a forum for secondary market misrepresentation claims against foreign issuers for trades on foreign exchanges using negligible trades on the TSX as a toehold. The court has sent a strong message to lower courts that Ontario courts should align with prevailing norms and practices for such claims to achieve predictability in multi-jurisdictional securities litigation.


1. Kaynes v. BP, PLC, 2014 ONCA 580

2. Para. 27

3. Ibid

4. 2012 ONCA 211

5. Paras 31 and 32

6. Para. 37 citing Prince v. ACE Aviation Holdings Inc., 2014 ONCA 285 and Club Resorts Ltd. v. Van Breda, 2012 SCC 17

7. Para. 48

8. Para. 49

9. Ibid

10. Ibid

11. Para. 50

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.