Abdula v. Canadian Solar Inc. et al.,

• Jurisdiction: Ontario
• Judge: Feldman,Hoy,Spence
• Neutral Citation: 2012 ONCA 211
• Date: 13 February 2012
• Subject Matter: SECURITIES REGULATION,STATUTES
• Court: Court of Appeal (Ontario)

Abdula v. Cdn. Solar Inc. (2012), 289 O.A.C. 226 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. AP.008

Tajdin Abdula (plaintiff/respondent) v. Canadian Solar Inc., Shawn Xiaohua Qu and Arthur Chien (defendants/appellants)

(C54372; 2012 ONCA 211)

Indexed As: Abdula v. Canadian Solar Inc. et al.

Ontario Court of Appeal

Feldman and Hoy, JJ.A., and Spence, J.(ad hoc)

March 30, 2012.

Summary:

Canadian Solar Inc. appealed a motion judge's decision that Canadian Solar was a "responsible issuer" as defined by s. 138.1 of the Ontario Securities Act (OSA). Canadian Solar's position was that, since its shares were publicly traded only outside of Canada, it was not a "responsible issuer" as defined under s. 139.1(b) of the OSA and the plaintiff could not advance a statutory claim against it pursuant to s. 138.3 of the OSA.

The Ontario Court of Appeal held that Canadian Solar was a "responsible issuer" and dismissed the appeal.

Securities Regulation - Topic 109

Definitions - Responsible issuer - Canadian Solar Inc.'s registered office was in Toronto, Ontario, and its principal executive office was in Kitchener, Ontario - Its shares were publicly traded on NASDAQ, an American electronic securities exchange - Its shares did not trade on the Toronto Stock Exchange or any other Canadian stock exchange - Abdula, the proposed representative plaintiff in a putative class proceeding, alleged that Canadian Solar materially overstated its financial results - The statutory cause of action created by s. 138.3 of the Ontario Securities Act (OSA) applied to a misrepresentation by a "responsible issuer" - Section 138.1 defined "responsible issuer" as: (a) a reporting issuer, or (b) any other issuer with a real and substantial connection to Ontario, any securities of which are publicly traded - Canadian Solar did not fall within paragraph (a) of the definition as it was not a reporting issuer in Ontario - However, the motions judge concluded that Canadian Solar fell within paragraph (b) of the definition of responsible issuer - Canadian Solar appealed - Canadian Solar's position was that, since its shares were publicly traded only outside Canada, it was not a "responsible issuer" and Abdula could not advance a statutory claim against it pursuant to s. 138.3 of the OSA - The Ontario Court of Appeal dismissed the appeal - The court held that "when the words 'publicly traded' in paragraph (b) of the definition of 'responsible issuer' are read in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme of the OSA, the object of the OSA and the intention of the legislature, gleaned from the legislative history and the words chosen by the legislature, they do not mean 'publicly traded in Canada'" - Canadian Solar was a "responsible issuer".

Statutes - Topic 2601

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - General principles - [See Securities Regulation - Topic 109 ].

Words and Phrases

Publicly traded - The Ontario Court of Appeal considered the meaning of the words "publicly traded" in paragraph (b) of the definition of "responsible issuer" in s. 138.1 of the Ontario Securities Act, R.S.O. 1990, c. S-5 - See paragraph 39.

Cases Noticed:

Ernst & Ernst v. Hochfelder (1976), 425 U.S. 185, refd to. [para. 24].

Unifund Assurance Co. v. Insurance Corp. of British Columbia, [2003] 2 S.C.R. 63; 306 N.R. 201; 176 O.A.C. 1; 2003 SCC 40, dist. [para. 27].

Pearson et al. v. Boliden Ltd. et al. (2002), 175 B.C.A.C. 104; 289 W.A.C. 104; 222 D.L.R.(4th) 453; 2002 BCCA 624, leave to appeal denied (2003), 321 N.R. 396 (S.C.C.), refd to. [para. 33].

Coulson v. Citigroup Global Markets Canada Inc. et al., [2010] O.T.C. Uned. 1596; 92 C.P.C.(6th) 301; 2010 ONSC 1591, affd. (2012), 288 O.A.C. 355; 2012 ONCA 108, refd to. [para. 33].

McKenna v. Gammon Gold Inc. et al., [2010] O.T.C. Uned. 1591; 88 C.P.C.(6th) 27; 2010 ONSC 1591, leave to appeal denied (2010), 266 O.A.C. 314; 103 O.R.(3d) 451; 2010 ONSC 4068 (Div. Ct.), refd to. [para. 33].

Dobbie et al. v. Arctic Glacier Income Fund et al., [2011] O.T.C. Uned. 25; 3 C.P.C.(7th) 261; 2011 ONSC 25, refd to. [para. 33].

Silver v. Imax Corp. (2009), 66 B.L.R.(4th) 222 (Ont. Sup. Ct.), refd to. [para. 36].

R. v. Jameson, [1896] 2 Q.B. 425, refd to. [para. 43].

Reference Re Firearms Act (Can.), [2000] 1 S.C.R. 783; 254 N.R. 201; 261 A.R. 201; 225 W.A.C. 201; 2000 SCC 31, refd to. [para. 52].

Kerr et al. v. Danier Leather Inc. et al. (2005), 205 O.A.C. 313; 77 O.R.(3d) 321 (C.A.), refd to. [para. 52].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 73].

Silver v. Imax Corp. (2009), 86 C.P.C.(6th) 273 (Ont. Sup. Ct.), refd to. [para. 85].

Statutes Noticed:

Securities Act, R.S.O. 1990, c. S-5, sect. 138.1 [para. 5].

Counsel:

Bryan Finlay, Q.C., Michael Statham and Richard Ogden, for the appellants;

A. Dimitri Lascaris, Douglas Worndl and Anthony O'Brien, for the respondent.

This appeal was heard on February 13, 2012, before Feldman and Hoy, JJ.A., and Spence, J.(ad hoc), of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Hoy, J.A., and was released on March 30, 2012.