A Couple of Comments on "Ha-Redeye and Yap — Piedra v. Copper Mesa Mining Corp."

There is an interesting blawg collaboration between Omar Ha-Redeye of lawiscool.com and James Yap of thecourt.ca commenting on the Ontario decision in Piedra v. Copper Mesa Mining Corporation, 2010 ONSC 2421 (CanLII). Ha-Redeye’s and Yap’s analyses are each commendable and commentable.
Here are a couple of thoughts relating to Mr. Justice Colin Campbell’s decision.

1. Rule 21-Cooper-Anns test and Duty of Care
1.  The court’s Rule 21 analysis concluding no genuine issue for trial appears to gloss over the statutory and common law duties imposed upon the TSX Inc. and TSX Group Inc. defendants. C. Campbell J. describes the TSX thusly:

“[8] The TSX operates a stock exchange in Toronto and is incorporated by virtue of the Toronto Stock Exchange Act, R.S.O. 1990 ch. T-15 and related statutes. The claim in the action against TSX is that it owed duties to the Plaintiffs in connection with the actions of the Copper Mesa subsidiary in Ecuador as a result of Copper Mesa raising funds through a public offering.”

Following the link above, readers will note that the Toronto Stock Exchange Act [“TSEA”] provides the following definitions:

“continued Corporation” means The Toronto Stock Exchange as continued under the Business Corporations Act pursuant to Part II.1; (“Société maintenue”)

“Corporation” means The Toronto Stock Exchange; (“Société”)

Scrolling down further you will find sub-section 13.0.3(3), which explicitly preserves both statutory and common law rights and liabilities relating to the continued Corporation and reads as follows:

Rights, liabilities, etc., preserved

(3)Upon the Corporation being continued under the Business Corporations Act,

(a) the continued Corporation possesses all the property, rights, privileges and franchises and is subject to all the liabilities, including civil, criminal and quasi-criminal, and all contracts, disabilities and debts of the Corporation;

(b) a conviction against, or ruling, order or judgment in favour of or against the Corporation may be enforced by or against the continued Corporation;

(c) the continued Corporation shall be deemed to be the party plaintiff or the party defendant, as the case may be, in any civil action commenced by or against the Corporation; and

(d) the continued Corporation is a recognized stock exchange under the Securities Act and is subject to that Act and to any terms and conditions imposed under subsection 13.0.1 (3). 1999, c. 9, s. 225. [emphasis added

I would tend to agree with Yap that the TSX is more than merely a regulator and may be subject to private causes of action in relation to its business decisions, irrespective of its primary regulatory role. However, the proximity and foreseeability analysis is dependent upon pleading sufficiency. Regrettably, the Statement of Claim is not yet available online, although the Ha-Redeye and Yap joint post contains links to the plaintiff’s responding factum.
2. Jurisdiction 
The plaintiffs commenced 3 separate actions. Notably, the plaintiffs were unsuccessful in resisting a motion to transfer the actions from the Toronto Civil List to the Toronto Commercial List: (Ramírez Piedra v. TSX Inc., 2009 CanLII 69783 (ON S.C.D.C.))
The first two actions name Copper Mesa MiningCorporation [“Copper Mesa Mining], a B.C. corporation and its two directors, William Stearns Vaughan and John Gammon, both Ontario residents. The third action names TSX Inc. and TSX Group Inc., but not Copper Mesa Mining or any of the remaining members of the board of directors. A few questions come to mind: 
1. Why not just sue in B.C. instead? If the plaintiffs’ actions arising from the international human rights claims sound only in damages, rather than declaratory relief, then the Mocambique Rule is not engaged.
2. Since Copper Mesa Mining is also listed in the TSX Venture Exchange and had some filing issues with the B.C. Securities Commission and Alberta Securities Commission, why not sue there as well?
3. Mr. Justice Colin Campbell does obliquely refer to a lack of a “real and substantial connection” between the subject-matter of the dispute and the corporate defendant, when he writes,

“[6] Other than having its shares registered on the Toronto Stock Exchange (“TSX”), Copper Mesa does not appear to have any connection with Ontario. The Defendants Vaughan and Gammon are residents of Ontario who in 2006 and 2007 respectively became non-management directors of Copper Mesa.” [emphasis added]

It may be advisable for the plaintiffs to consider relying upon Justice Sharpe’s “forum of necessity” exception in Van Breda v. Village Resorts Limited to buttress any novel case arguments.

With respect to forum non conveniens, among the oft-cited factors, “loss of juridical advantage” will not trump any of the other factors if they tend to point towards Ecuador as the natural forum. However, if one considers Van Breda with a grain of salt (which the Supreme Court of Canada will likely do on March 21, 2011), it is arguable that a combination of “forum of necessity” (re: jurisdiction simpliciter) and “loss of juridical advantage” (re: forum non conveniens) may give the Ontario Court of Appeal a moment of pause when considering the order and fairness of assuming jurisdiction over these type of international human rights claims.

One Response to “A Couple of Comments on "Ha-Redeye and Yap — Piedra v. Copper Mesa Mining Corp."”

  1. Omar Ha-Redeye Says:

    Antonin,Thanks for your insightful comments.I agree that the TSX is more than a "mere" regulator, but even a corporation with rights and liabilities still has a strong argument about remoteness. My point is that the liabilities attached to the exchange relate more directly to the function as outlined in the Securities Act.You can find a copy of the Statement of Claim here. In para. 122 they do point to the necessity of holding the trial in Ontario. I can only conclude they chose Ontario over B.C. due to the additional jurisdictional factors they cite in para. 121.

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