In a recent decision, the Ontario Court of Appeal
overturned a lower court decision that dismissed an action
on a summary judgment motion. Significantly, the motion judge had
dismissed the entirety of the claim, even though the Plaintiffs had
moved for judgment on only a portion of it.
The Plaintiffs were unsophisticated investors, who purchased
units in Toronto's Trump International Hotel, under a program
in which owners placed their units in a common pool of rooms to be
rented out at luxury rates. After unexpectedly low reservation
rates, the plaintiffs sued for rescission of their purchases,
claiming that they were misled by marketing materials that breached
an Ontario Securities Commission exemption order.
At the outset of the hotel's operations, pains were taken
before the OSC to treat the hotel units as real estate, rather than
securities, asserting that the units would not be marketed as
investments for profit or gain. The OSC granted the exemption, on
the basis that the pool program was a feature secondary to
occupancy rights, and that prospective purchasers would not be
provided with cash flow forecasts, or induced to rely on
expectations of economic benefits. The subsequent marketing
materials estimated a yearly rate of return of up to 21% per
The Plaintiffs moved for summary judgment. The motions judge
held that the Plaintiffs had not established their claims in breach
of the OSC ruling, and misrepresentations. However, it also
dismissed the Plaintiffs' claims in oppression, collusion, and
breach of fiduciary care.
The Court of Appeal held that the motions judge stepped outside
of the scope of the motion by dismissing the additional claims not
before the court, and that it was a denial of procedural fairness
and natural justice to do so.
The Court of Appeal set aside the motions judge's order, and
substituted an order rescinding the purchase, awarding damages for
negligent misrepresentation, and remitting the claim for fraudulent
misrepresentation to be decided properly on another motion.
The use of electronic signatures is becoming increasingly commonplace in commercial transactions, as individuals and businesses capitalize on the administrative efficiency afforded by today’s digital world.
Following the Divisional Court's decision in Toronto-Dominion Bank v. Ryerson University, companies that contract with government institutions should be aware that such contracts are likely open to disclosure under the Freedom of Information and Protection of Privacy Act.
Back in April 2015, we discussed key questions to keep in mind when negotiating earn-outs, and looked at recent trends coming out of the American Bar Association's 2014 Canadian Private Target M&A Deal Points Study (the 2014 ABA Study).
Before sending out that next tweet or posting to a blog, hit the pause button and consider whether the timing and content pass muster. Reporting issuers and their representatives must take note of Staff Notice 51-348
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