Rooney et al. v. ArcelorMittal S.A. et al., 2016 ONCA 630

• Judge: Simmons, Gillese and Hourigan, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 04, 2016
• Jurisdiction: Ontario
• Citations: 2016 ONCA 630;(2016), 352 O.A.C. 170 (CA)

Rooney v. ArcelorMittal S.A. (2016), 352 O.A.C. 170 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. AU.019

Peter Rooney and Archie Leach (plaintiffs/appellants) v. ArcelorMittal S.A., Lakshmi N. Mittal, Aditya Mittal, 1843208 Ontario Inc., Philippus F. Du Toit, Nunavut Iron Ore Acquisition Inc., Iron Ore Holdings LP, NGP Midstream & Resources L.P., NGP M&R Offshore Holdings L.P., Jowdat Waheed, Bruce Walter, John T. Raymond, John Calvert, Baffinland Iron Mines Corporation, Richard D. McCloskey, John Lydall and Daniella Dimitrov (defendants/respondents)

Proceeding under the Class Proceedings Act, 1992

(C60949; 2016 ONCA 630)

Indexed As: Rooney et al. v. ArcelorMittal S.A. et al.

Ontario Court of Appeal

Simmons, Gillese and Hourigan, JJ.A.

August 17, 2016.

Summary:

At issue in this case was the interpretation of s. 131(1) of the Securities Act (Ont.). Section 131(1) provided that, in the context of a misrepresentation in a take-over bid circular, the security holders of the offeree issuer could sue on account of that misrepresentation. Two issues arose. The first was whether the security holder had to choose between suing the offeror and suing the offeror's directors and other individuals who signed or approved the take-over bid circular. The second was whether security holders who sold their shares in the secondary market could rely on s. 131(1) to assert a claim based on a misrepresentation in a take-over bid circular.

The Ontario Superior Court (motions judge), held that a plaintiff who wanted to bring an action under s. 131(1) had to make an election as to whom it would sue. With respect to the second issue, the motions judge found that security holders who transacted in the secondary market could not rely on s. 131(1) to assert a claim. The plaintiffs appealed.

The Ontario Court of Appeal allowed the appeal in part. As to the first issue, the motions judge focussed too narrowly on the plain meaning of s. 131(1). The modern principle of statutory interpretation required the court to look not only to the plain meaning of a particular provision but to the surrounding context in which the words of that provision were found. Here, once you "pan[ned] the analytical lens out" to view s. 131(1) as part of a larger scheme of civil liability for misrepresentation in securities markets, the motions judge's interpretation could not be sustained. The appeal court held that the motions judge was correct on the second issue. The argument that secondary market participants had a cause of action under s. 131(1) ignored the legislative scheme and history of the Securities Act.

Securities Regulation - Topic 5367

Trading in securities - Civil liability (incl. secondary market disclosure) - Liability for misrepresentation in circular - See paragraphs 22 to 79.

Statutes - Topic 2601

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - General principles - See paragraphs 10 to 21.

Counsel:

Michael G. Robb, Douglas M. Worndl and Emilie Maxwell, for the appellants, Peter Rooney and Archie Leach;

Steve Tenai and Saeed Teebi, for the respondents, ArcelorMittal S.A., Lakshmi N. Mittal, Aditya Mittal, 1843208 Ontario Inc., Philippus F. Du Toit and Baffinland Iron Mines Corporation;

Andrea Burke and Michael Finley, for the respondents, Nunavut Iron Ore Acquisition Inc., Iron Ore Holdings LP, NGP Midstream & Resources L.P., NGP M&R Offshore Holdings L.P., Jowdat Waheed, Bruce Walter, John T. Raymond and John Calvert;

Alan L. W. D'Silva, for the respondents, Richard D. McCloskey, John Lydall and Danielle Dimitrov.

This appeal was heard on May 4, 2016, before Simmons, Gillese and Hourigan, JJ.A., of the Ontario Court of Appeal. The following decision was released for the court by Hourigan, J.A., on August 17, 2016.