An Entrepreneurial Expectation Of Risk: Yip v. HSBC Holdings

In Yip v. HSBC Holdings plc, the Ontario Superior Court of Justice granted the class action defendants $1 million in costs, based in part on Justice Perell's conclusion that the "entrepreneurial" plaintiff ought to have reasonably expected that the defendants would spend that amount in response to an $8 billion lawsuit.  The costs decision followed a ruling delivered earlier this year where Justice Perelll held the Ontario courts lacked jurisdiction over HSBC as a foreign issuer that does not do business in Ontario and whose shares do not trade in the province.1

Background

In the proposed class action, the plaintiff had asserted a misrepresentation claim under the Ontario Securities Act against HSBC Holdings ("the Bank") and a former employee, as well as a common law negligent misrepresentation claim. As described below, the Bank ultimately brought a successful motion to dismiss and stay the action on jurisdictional grounds.