TransactionsCassels Brock Successfully Strikes Out Claim Against Public Company and its DirectorsPublished: 08/17/2010 Cassels Brock & Blackwell LLP successfully brought a motion to strike out a statement of claim in which the plaintiffs sought significant relief against a public company and its directors, including more than $8 million in damages, delivery of 6,250,000 shares of the public company, and establishment of trusts totalling $8,250,000 for the benefit of the plaintiffs. In this case, the plaintiffs had asserted a number of causes of action against the defendants, including unjust enrichment, intentional interference with economic relations, and conspiracy. In so doing, the plaintiffs made allegations tantamount to fraud and other illicit activities. Counsel for the defendants argued, among other things, that the claims asserted against the individual directors were derivative in nature and were unlawfully commenced by virtue of the plaintiffs not having obtained leave of the court to bring such claims. In an endorsement of the Ontario Superior Court of Justice, released July 29, 2010, in the case of Rosewater Management Group et al. v. Moneylogix Group, Inc. et al., Justice Lauwers agreed that, without having sought leave of the court in advance, the plaintiffs did not have capacity to bring the derivative claims. Furthermore, Justice Lauwers held that the pleading was so confusing and so saturated with derivative claims that, rather than strike out individual sections, the appropriate course of action was to strike the entire claim. The endorsement in this case is of particular note due to ongoing debates around liability of individual officers and directors, the status of shareholders to bring claims against corporations, as well as individual officers and directors, and the sufficiency of pleadings in the context of a motion to strike them out. Robert B. Cohen (Litigation) and Taryn McCormick (Litigation) acted for the successful parties. |