Kaynes v. BP plc, 2014 ONCA 580

• Judge: Sharpe, Simmons and Benotto, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 24, 2014
• Jurisdiction: Ontario
• Citations: 2014 ONCA 580;(2014), 324 O.A.C. 207 (CA)

Kaynes v. BP plc (2014), 324 O.A.C. 207 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. AU.009

Peter Kaynes (plaintiff/respondent) v. BP, PLC (defendant/appellant)

(C57876; 2014 ONCA 580)

Indexed As: Kaynes v. BP plc

Ontario Court of Appeal

Sharpe, Simmons and Benotto, JJ.A.

August 14, 2014.

Summary:

The plaintiff brought a proposed class action alleging that the defendant, BP plc, made misrepresentations in documents it sent to shareholders. The plaintiff asserted the statutory cause of action for secondary market misrepresentation conferred by Part XXIII.1 of the Securities Act. The plaintiff had purchased his shares over the New York Stock Exchange. The proposed class definition included all residents of Canada who acquired BP securities between certain dates, wherever those securities were purchased. BP conceded that Ontario had jurisdiction to entertain the claims of members of the proposed class who purchased their shares on the Toronto Stock Exchange. However, BP brought a motion contending that there was no real and substantial connection between Ontario and the claims of Canadian residents who purchased their shares on foreign exchanges. Alternatively, BP argued that if there was jurisdiction simpliciter, Ontario should decline to exercise that jurisdiction on grounds of forum non conveniens.

The Ontario Superior Court, in a decision reported at [2013] O.T.C. Uned. 5802, dismissed BP's motion. BP appealed.

The Ontario Court of Appeal agreed with the motion judge that Ontario had jurisdiction simpliciter. However, the court concluded that the motion judge erred in principle in failing to decline jurisdiction on grounds of forum non conveniens. The court allowed the appeal and stayed the plaintiff's claim.

Conflict of Laws - Topic 8

General - Doctrine of comity - [See Conflict of Laws - Topic 7601 ].

Conflict of Laws - Topic 603

Jurisdiction - General principles - Jurisdiction simpliciter (territorial competence) - The plaintiff brought a proposed class action alleging that the defendant, BP plc, made misrepresentations in documents it sent to shareholders - The plaintiff asserted the statutory cause of action for secondary market misrepresentation conferred by Part XXIII.1 of the Securities Act - The plaintiff had purchased his shares over the New York Stock Exchange - The proposed class definition included all residents of Canada who acquired BP securities between certain dates, wherever those securities were purchased - The Ontario Court of Appeal agreed with a motion judge's finding that Ontario had jurisdiction simpliciter over the claims of class members who purchased their shares on foreign exchanges - By releasing a document outside Ontario that BP knew it was required to send to Ontario shareholders, BP committed an act with sufficient connection to Ontario to qualify as the commission of a tort in Ontario - The motion judge did not err in concluding that, on the facts alleged by the plaintiff, the statutory tort of secondary market misrepresentation was committed in Ontario - See paragraphs 18 to 34.

Conflict of Laws - Topic 605

Jurisdiction - General principles - Class actions - [See Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 1664

Actions - General - Forum conveniens - Considerations - [See Conflict of Laws - Topic 7601 ].

Conflict of Laws - Topic 7601

Torts - Jurisdiction - Forum conveniens - The plaintiff brought a proposed class action alleging that the defendant, BP plc, made misrepresentations in documents it sent to shareholders - The plaintiff asserted the statutory cause of action for secondary market misrepresentation conferred by Part XXIII.1 of the Securities Act - The plaintiff had purchased his shares over the New York Stock Exchange - The proposed class definition included all residents of Canada who acquired BP securities between certain dates, wherever those securities were purchased - The Ontario Court of Appeal agreed with a motion judge's finding that Ontario had jurisdiction simpliciter over the claims of class members who purchased their shares on foreign exchanges - However, the court held that the motion judge erred in failing to decline jurisdiction on grounds of forum non conveniens - The motion judge failed to take into account the principle of comity in assessing the effect of exercising Ontario jurisdiction over claims arising from foreign traded securities - She also erred in law with respect to the related issue of avoiding a multiplicity of proceedings - The plaintiff's claim had to be considered in the full international context of the securities law regimes of Ontario, the United States and the United Kingdom and the trading of BP securities in those jurisdictions - The US and UK regimes asserted jurisdiction on the basis of the exchange where the securities were traded - US law also provided for the exclusive jurisdiction of the US district courts over claims for secondary market misrepresentation under US securities law and precluded suits related to transactions on foreign exchanges - That claim of exclusive jurisdiction was a factor that the court was obliged to consider in keeping with the principle of comity - When the issue of avoiding a multiplicity of proceedings was considered in the light of the entire context of the jurisdictional standards prevailing elsewhere, it weighed heavily in favour of declining jurisdiction - See paragraphs 35 to 54.

Conflict of Laws - Topic 7605

Torts - Jurisdiction - Real and substantial connection - [See Conflict of Laws - Topic 603 ].

Conflict of Laws - Topic 9201

Practice - General - Comity - [See Conflict of Laws - Topic 7601 ].

Securities Regulation - Topic 5

General principles - Civil action for breach of statute - [See Conflict of Laws - Topic 603 and Conflict of Laws - Topic 7601 ].

Cases Noticed:

Van Breda et al. v. Village Resorts Ltd. et al. (2012), 429 N.R. 217; 291 O.A.C. 201; 2012 SCC 17, refd to. [para. 12].

Abdula v. Canadian Solar Inc. et al. (2012), 289 O.A.C. 226; 110 O.R.(3d) 256; 2012 ONCA 211, refd to. [para. 15].

Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; 1 N.R. 122, refd to. [para. 27].

Central Sun Mining Inc. v. Vector Engineering Inc. et al. (2013), 310 O.A.C. 391; 117 O.R.(3d) 313; 2013 ONCA 601, refd to. [para. 29].

Prince et al. v. ACE Aviation Holdings Inc. et al. (2014), 319 O.A.C. 163; 120 O.R.(3d) 140; 2014 ONCA 285, refd to. [para. 37].

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81, refd to. [para. 38].

Hilton v. Guyot (1895), 159 U.S. 113, refd to. [para. 38].

Gould v. Western Coal Corp. et al., [2012] O.T.C. Uned. 5184; 2012 ONSC 5184, refd to. [para. 47].

Currie v. McDonald's Restaurants of Canada Ltd. et al. (2005), 195 O.A.C. 244; 74 O.R.(3d) 321 (C.A.), refd to. [para. 50].

Silver et al. v. IMAX Corp. et al., [2013] O.T.C. Uned. 1667; 36 C.P.C.(7th) 254; 2013 ONSC 1667, refd to. [para. 51].

Statutes Noticed:

Securities Act, R.S.O. 1990, c. S-5, sect. 138.1, sect. 138.3(1) [para. 11].

Authors and Works Noticed:

United States Securities and Exchange Commission, Study of the Cross-Border Scope of the Private Right of Action under Section 10(b) of the Securities Exchange Act of 1934 (April 2012), generally [para. 42].

Counsel:

Larry P. Lowenstein, Laura K. Fric and Kevin O'Brien, for the appellant;

Joseph Groia, Andrew Morganti and Matthew Stroh, for the respondent.

This appeal was heard on June 24, 2014, before Sharpe, Simmons and Benotto, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Sharpe, J.A., and was released on August 14, 2014.