Kerr et al. v. Danier Leather Inc. et al., [2004] O.T.C. 397 (SC)

• Judge: Lederman, J.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: May 07, 2004
• Jurisdiction: Ontario
• Citations: [2004] O.T.C. 397 (SC)

Kerr v. Danier Leather Inc., [2004] O.T.C. 397 (SC)

MLB headnote and full text

Temp. Cite: [2004] O.T.C. TBEd. MY.042

Douglas Kerr, S. Grace Kerr and James Fredrick Durst (plaintiffs) v. Danier Leather Inc., Irving Wortsman, Jeffrey Wortsman and Bryan Tatoff (defendants)

(98-CV-158675)

Indexed As: Kerr et al. v. Danier Leather Inc. et al.

Court of Ontario

Superior Court of Justice

Lederman, J.

May 7, 2004 and May 16, 2005.

Summary:

This headnote contains no summary.

Practice - Topic 210.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Costs - See paragraphs 375 to 456.

Practice - Topic 7061

Costs - Party and party costs - Counsel fees - Increased or decreased fee (incl. premium) - See paragraphs 422 to 435.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - See paragraphs 405 to 413.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Improper, irresponsible or unconscionable conduct - See paragraphs 375 to 404.

Securities Regulation - Topic 5405

Prospectuses - False or misleading information - See paragraphs 1 to 209.

Securities Regulation - Topic 5409

Prospectuses - Damages for misleading prospectus - See paragraphs 210 to 373.

Cases Noticed:

Mason (V.K.) Construction Ltd. v. Canadian General Insurance Group Ltd. (1998), 116 O.A.C. 272; 42 O.R.(3d) 618 (C.A.), refd to. [para. 31].

R.S. v. R.H. (2000), 139 O.A.C. 378; 52 O.R.(3d) 152 (C.A.), refd to. [para. 31].

Royal Trustco Ltd. v. Ontario Securities Commission (1981), 2 O.S.C.B. 322C, affd. (1983), 42 O.R.(2d) 147 (Div. Ct.), refd to. [paras. 42, 123].

YBM Magnex International Inc. et al., Re (2003), 26 O.S.C.B. 5285, refd to. [para. 42].

C.T.C. Dealer Holdings Ltd. et al. v. Securities Commission (Ont.) et al. (1987), 21 O.A.C. 216; 37 D.L.R.(4th) 94 (Div. Ct.), refd to. [para. 45].

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 (C.A.), reving. [2001] B.C.T.C. 1054; 94 B.C.L.R.(3d) 133 (S.C.), refd to. [paras. 45, 347].

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1, refd to. [para. 45].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 54].

Esso Petroleum Co. v. Mardon, [1976] 2 All E.R. 5 (C.A.), refd to. [para. 57].

NationsMart Corporations Securities Litigation, Re (1997), 130 F.3d 309 (8th Cir.), refd to. [para. 63].

Apple Securities Litigation, Re (1989), 886 F.2d 1109 (9th Cir.), refd to. [para. 63].

Trump (Donald J.) Casino Securities Lit., Re (1993), 7 F.3d 357 (3rd Cir. D.C. Cir.), refd to. [para. 72].

With v. O'Flanagan, [1936] 1 Ch. 575 (C.A.), refd to. [para. 94].

Hogar Estates Ltd. v. Shebron Holdings Ltd. (1979), 25 O.R.(2d) 543 (H.C.), refd to. [para. 94].

Feit v. Leasco Data Processing Equipment Corp. et al. (1971), 332 F. Supp. 544 (E.D.N.Y.), refd to. [para. 103].

Basic Inc. v. Levison (1988), 108 S. Ct. 978, refd to. [para. 103].

Shaw v. Digital Equipment Corp. (1996), 82 F.3d 1194 (1st Cir. D.C. Cir.), refd to. [para. 104].

Kaplan v. Rose (1994), 49 F.3d 1363, refd to. [para. 125].

Huddleston v. Herman & Maclean (1981), 640 F.2d 534 (5th Cir. D.C. Cir.), refd to. [para. 128].

Ainsley Financial Corp. et al. v. Ontario Securities Commission et al. (1993), 14 O.R.(3d) 280 (Gen. Div.), affd. (1994), 77 O.A.C. 155; 21 O.R.(3d) 104 (C.A.), refd to. [para. 150].

Beecher v. Able (1977), 435 F. Supp. 397 (S.D.N.Y.), refd to. [para. 162].

Imperial Trust Co. and Taylor Assets (Dominion) Ltd. v. Canbra Foods Ltd. (1987), 78 A.R. 267 (Q.B.), refd to. [para. 163].

TSC Industries Inc. v. Northway Inc. (1976), 426 U.S. 438, refd to. [para. 168].

SEC v. Texas Gulf Sulphur Co. (1968), 401 F.2d 833 (2nd Cir.), refd to. [para. 170].

Donnini, Re (2002), 25 O.S.C.B. 6225, refd to. [para. 171].

Sheridan, Re (1993), 16 O.S.C.B. 6345, refd to. [para. 171].

Glassman v. Computervision Corp. (1996), 90 F.3d 617 (1st Cir.), refd to. [para. 174].

Oran v. Stafford (2000), 225 F.3d 275 (3rd Cir. D.C. Cir.), refd to. [para. 177].

Escott v. BarChris Construction Corp. (1968), 283 F. Supp. 643 (S.D.N.Y.), refd to. [para. 191].

Campbell Soup Company Securities Litigation, Re (2001), 145 F. Supp.2d 574 (D.N.J.), refd to. [para. 245].

Peek v. Derry (1887), 37 Ch. D. 541 (C.A.), refd to. [para. 308].

Burke v. Cory (1959), 19 D.L.R.(2d) 252 (Ont. C.A.), refd to. [para. 308].

McMahan & Co. v. Wherehouse Entertainment Inc. (1995), 65 F.3d 1044 (2nd Cir. D.C. Cir.), refd to. [para. 311].

Grossman v. Waste Management Inc. (1984), 589 F. Supp. 395 (N.D. Ill.), refd to. [para. 316].

Harris v. American Investment Co. (1975), 523 F.2d 220 (8th Cir. D.C. Cir.), refd to. [para. 332].

Akerman v. Oryx Communications Inc. (1984), 609 F. Supp. 363 (D.C.N.Y.), refd to. [para. 335].

National Trust Co. v. H & R Block Canada Inc. (2003), 312 N.R. 91; 180 O.A.C. 1 (S.C.C.), refd to. [para. 340].

Cant v. Becker & Co. (1974), 379 F. Supp. 972 (N.D. Ill.), refd to. [para. 344].

Hunt v. TD Securities Inc. et al. (2003), 175 O.A.C. 19; 66 O.R.(3d) 481 (C.A.), leave to appeal dismissed (2004), 330 N.R. 198; 196 O.A.C. 399 (S.C.C.), refd to. [para. 380].

Prinzo v. Baycrest Centre for Geriatric Care (2002), 161 O.A.C. 302; 215 D.L.R.(4th) 31 (C.A.), refd to. [para. 383].

Gibbs v. Grand Bend (Village) (1990), 72 O.R.(2d) 697 (H.C.), refd to. [para. 399].

Windisman v. Toronto College Park Ltd. (1996), 10 O.T.C. 375; 3 C.P.C.(4th) 369 (Gen. Div.), refd to. [para. 404].

Rueter v. Fraser Estate (2000), 143 O.A.C. 388 (Div. Ct.), refd to. [para. 411].

C.R. et al. v. Morana et al. (2000), 135 O.A.C. 123; 49 O.R.(3d) 157 (C.A.), refd to. [para. 424].

Jack v. Kirkrude et al. (2002), 155 O.A.C. 28 (C.A.), refd to. [para. 424].

Bakhtiari et al. v. Axes Investments Inc. et al. (2004), 182 O.A.C. 185; 69 O.R.(3d) 671 (C.A.), leave to appeal refused (2004), 333 N.R. 199; 198 O.A.C. 196 (S.C.C.), refd to. [para. 424].

Banihashem-Bakhtiari v. Axes Investments Inc. - see Bakhtiari et al. v. Axes Investments Inc. et al.

Lurtz v. Duchesne et al. (2005), 194 O.A.C. 119 (C.A.), refd to. [para. 424].

Walker v. Ritchie et al. (2005), 197 O.A.C. 81 (C.A.), refd to. [para. 424].

Sun-Rype Products Ltd. v. Archer Daniels Midland Co. et al., [2002] B.C.T.C. 379; 17 C.P.C.(5th) 178 (S.C.), refd to. [para. 441].

Knowles v. Wyeth-Ayerst Canada Inc. et al., [2001] O.T.C. 348; 16 C.P.C.(5th) 330 (Sup. Ct.), refd to. [para. 441].

Bank of America Canada v. Mutual Trust Co. et al., [2002] 2 S.C.R. 601; 287 N.R. 171; 159 O.A.C. 1, refd to. [para. 453].

Statutes Noticed:

Class Proceedings Act, S.O. 1992, c. 6, sect. 26(9) [para. 438].

Securities Act, R.S.O. 1990, c. S-5, sect. 130(1) [para. 34].

Authors and Works Noticed:

Alboini, Victor P., Securities Law and Practice (Looseleaf), vol. 2, pp. 23.1.8 [para. 192]; 844, 845 [para. 196].

Alboini, Victor P., The 1997 Annotated Securities Act (1996), pp. 254 [para. 135]; 668 [para. 124; 751 [para. 100]; 834 [para. 112]; 859 [para. 325].

Côté, Pierre-André, The Interpretation of Legislation in Canada (3rd Ed. 2000), p. 277 [paras. 118, 325].

Fleming, John G., The Law of Torts (9th Ed. 1998), pp. 613 [para. 56]; 696 [para. 121]; 697 [para. 52].

Gillen, Mark R., Securities Regulation in Canada (2nd Ed. 1988), pp. 145, 149, 150 [para. 60].

Hazen, Treatise on The Law of Securities Regulation (3rd Ed. 1995), p. 387 [para. 125].

Klar, Lewis N., Tort Law (3rd Ed. 2003), pp. 221, 222 [para. 56]; 607, 608 [para. 52].

MacIntosh, Jeffrey G., and Nicholls, Christopher C., Securities Law (2002), pp. 154 [para. 85]; 155 [para. 158]; 161 [para. 60]; 275, 276 [para. 176].

Toronto Stock Exchange Committee, Interim Report on Corporate Disclosure's (Allen Committee), c. 3 [para. 103]; p. 32 [para. 105].

Toronto Stock Exchange Committee, Report on Corporate Disclosure, Final Report: Responsible Corporate Disclosure - A Search for Balance (1997), p. 80 [para. 176].

Waddams, Stephen M., The Law of Contracts (4th Ed. 1999), pp. 301, 302 [para. 57]; 315 [paras. 94, 121].

Counsel:

Peter R. Jervis, George S. Glezos, Jasmine T. Akbarali and Melanie D. Schweizer, for the plaintiffs;

Alan J. Lenczner, Q.C., and Craig Martin, for the defendant, Danier Leather Inc.;

Benjamin Zarnett and Jessica Kimmell, for the defendants, Jeffrey Wortsman and Bryan Tatoff.

This action was heard on May 28-30, June 3-6, 19, 26, August 18-20, September 8-11, 16-19, October 9-10, 27-31, November 3, 4, 10, 12-14, December 1-5, 15-19 and 22, 2003, by Lederman, J., of the Ontario Superior Court, who released the following decision on May 7, 2004. Subsequently submissions on costs were heard on April 14 and 15, 2005, with additional reasons issued on May 16, 2005.

Please note: The following judgment has not been edited.