www.lexpert.ca/usguide-litigation/ | LEXPERT • December 2017 | 17
Both Aitkens and Peers turned to the Alberta Court of Appeal.
But the appellate court held that "a maximum penalty of 'five
years less one day' does not become a 'more severe punishment'
just because some collateral negative consequences are added to
it." e court wrote that "from a purposive perspective, that is
not enough to change the offence into one that is 'serious' enough
to warrant a jury trial," noting the maximum penalty of five years
less a day was deliberately chosen to avoid jury trials in complex
securities prosecutions.
Both cases were appealed to the Supreme Court of Canada,
only to be tersely dismissed: "We conclude that the appellant was
not entitled to a trial by jury, substantially for the reasons of the
majority of the Court of Appeal."
Wendy Berman, a litigator at Cassels Brock & Blackwell LLP,
says US counsel should pay attention because it means violations
such as securities fraud, insider trading and illegal distribu-
tions "could impact officers" of companies inter-listed on US
and Canadian exchanges. "e bottom line is that individuals
charged with securities law violations, including officers and
directors of public companies … will be tried by judge alone."
Darryl Cruz, a Toronto litigator at McCarthy Tétrault LLP,
intervened for the Canadian Constitution Foundation, which
wanted the right to a jury trial "for a case as serious as this." He
says US companies with divisions in Canada that employ Canadi-
ans should be aware of the ruling because, while he doesn't know
the full US scope in the area, "my belief is they're always entitled
to a jury trial down there. at's certainly not our situation; it's
the exact opposite. So securities law offenses will be prosecuted in
provincial courts in trials before a judge only. e Supreme Court
had the opportunity to expand the right to a jury trial in Canada,
and they declined." — S.R.
9.
Trump v. Singh
At press time, according to widely reported polls, President
Donald Trump's popularity was slipping as he faced a barrage of
negative media reports in the United States. As it turns out, his
brand wasn't doing that well in Canadian courts either.
In March 2017, the Supreme Court of Canada refused to hear
an appeal from an Ontario Court of Appeal (OCA) judgment
that ordered the return of a C$250,000 deposit to warehouse
worker Sarbjit Singh, who had refused to close on the sale of a
unit in the Trump International Hotel & Tower in Toronto.
e units ranged in price from C$784,000 to C$843,000. e
OCA also ordered that damages be paid to homemaker Se Na
Lee for negligent misrepresentation. Lee claims she lost almost
C$1 million aer purchasing a unit.
e hotel, which is not owned by President Trump, licenses
his name and is operated by one of his companies. Both plain-
tiffs relied on allegations that the units were marketed under false
pretenses, with promised returns ranging from 7.74 per cent to
20.9 per cent. Sales representatives provided some 200 investors
with a document called "Estimated Return on Investment" that
contained projected occupancy rates and profits ranging from
C$18,000 to C$63,000 annually.
At trial, Justice Paul Perell of the Ontario Superior Court of
Justice ruled that the estimates were just opinions or forecasts,
albeit "uninformed," "ill-informed" and "essentially just pick-
a-number speculations about what might be charged and what
might happen in the marketplace." But he concluded that
the plaintiffs had failed to establish that they relied on the
misrepresentations.
On appeal, the OCA took a different view. It ruled that,
although the estimates were "for discussion purposes only" and
"not a guaranteed investment program," they still contained
misrepresentations in their assertion that the estimates were
based on the best information available, and that the hotel would
be profitable immediately.
e court also ruled that various exclusionary clauses that
limited investors' ability to sue were unconscionable, unenforce-
able and amounted to "a trap to these unsurprisingly unwary
purchasers." e positioning of the exclusionary clauses in the
documentation, the plaintiffs' lack of sophistication and the
overall circumstances surrounding the marketing and sale all
contributed to the plaintiffs' failure to understand that the defen-
dants were limiting their liability.
"e court of appeal was prepared to help these unsuspect-
ing investors who lost their shirts despite the wording in the
CROSS-BORDER SIGNIFICANCE
Darryl Cruz
McCarthy Tétrault LLP
"Securities law offenses
will be prosecuted in
provincial courts in trials
before a judge only.
The Supreme Court
had the opportunity
to expand the right to
a jury trial in Canada,
and they declined."
Sandra Forbes
Davies Ward Phillips
& Vineberg LLP
"The court of appeal
[in Trump v. Singh]
was prepared to help
these unsuspecting
investors who lost
their shirts despite
the wording in the
documents."
