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ARTICLE · 19 OCTOBER 2007

The Supreme Court Of Canada’s Decision In "Danier"

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The Supreme Court of Canada established three important principles in its decision in "Kerr v. Danier Leather Inc."

CanadaLitigation, Mediation & Arbitration
Andrew Gray
Andrew Gray
James Tory
James Tory
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The Supreme Court of Canada established three important principles in its decision in Kerr v. Danier Leather Inc.:

  • In updating a prospectus, the distinction between "material facts" and "material changes" is key: the Securities Act (Ontario) does not require issuers to update a prospectus by disclosing material facts that occur after a receipt for a final prospectus is issued.

  • The business judgment rule does not apply to protect disclosure decisions from second-guessing by the courts.

  • In securities litigation brought by way of class action, such as Danier, the usual costs rule in commercial litigation applies: the loser pays the winner’s legal costs.

Danier

was a prospectus class action – the first such case in Ontario to go all the way to trial. Danier offered shares in an initial public offering in May 1998. The prospectus for the IPO contained a forecast of anticipated revenue and earnings for the fourth quarter of its fiscal year. After the prospectus had been

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