Liability for misrepresentation in disclosure document prescribed by regulation
2007, c.38, s.164; 2012, c.31, s.16
153.1(1)If a disclosure document prescribed by regulation contains a misrepresentation, a purchaser who purchases securities offered by the disclosure document shall be deemed to have relied on the misrepresentation if it was a misrepresentation at the time of purchase and has a right of action for damages against
(b)
every director of the issuer at the date of the disclosure document, and
(c)
every person who signed the disclosure document.
153.1(2)The purchaser may elect to exercise a right of rescission against the issuer, in which case the purchaser has no right of action for damages against the issuer.
153.1(3)No person is liable under subsection (1) if the person proves that the purchaser purchased the securities with knowledge of the misrepresentation.
153.1(4)No person is liable under subsection (1) if the person proves
(a)
that the disclosure document was delivered to purchasers without the person’s knowledge or consent and that, on becoming aware of its delivery, the person gave written notice to the issuer that it was delivered without the person’s knowledge or consent,
(b)
that, on becoming aware of any misrepresentation in the disclosure document, the person withdrew the person’s consent to the disclosure document and gave written notice to the issuer of the withdrawal and the reason for the withdrawal, or
(c)
that, with respect to any part of the disclosure document purporting to be made on the authority of an expert or purporting to be a copy of, or an extract from, a report, opinion or statement of an expert, the person had no reasonable grounds to believe and did not believe that there had been a misrepresentation or that the part of the disclosure document did not fairly represent the report, opinion or statement of the expert or was not a fair copy of, or extract from, the report, opinion or statement of the expert.
153.1(5)No person is liable under subsection (1) with respect to any part of a disclosure document not purporting to be made on the authority of an expert and not purporting to be a copy of, or an extract from, a report, opinion or statement of an expert unless the person
(a)
failed to conduct such reasonable investigation as to provide reasonable grounds for a belief that there had been no misrepresentation, or
(b)
believed that there had been a misrepresentation.
153.1(6)Subsections (4) and (5) do not apply to the issuer.
153.1(7)In an action for damages under subsection (1), the defendant is not liable for all or any portion of the damages that the defendant proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied on.
153.1(8)All or any one or more of the persons referred to in subsection (1) are jointly and severally liable, and every person who becomes liable to make any payment under this section may recover a contribution from any person who, if sued separately, would have been liable to make the same payment unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.
153.1(9)In no case shall the amount recoverable under this section exceed the price at which the securities were offered to the public.
153.1(10)The right of action for rescission or damages conferred by this section is in addition to and without derogation from any other right the purchaser may have at law.
153.1(11)If a misrepresentation is contained in a document incorporated by reference in, or deemed incorporated into, a disclosure document, the misrepresentation shall be deemed to be contained in the disclosure document.
2007, c.38, s.164; 2012, c.31, s.17