Kerr et al. v. Danier Leather Inc. et al.

Kerr et al. v. Danier Leather Inc. et al. – this class action was brought by shareholders of Danier Leather Inc. and was the first Canadian trial of civil liability under section 130 of the Ontario Securities Act. The shareholders alleged that the prospectus for Danier’s initial public offering contained misrepresentations with respect to its projected financial results.

The shareholders were successful at trial, but that decision was overturned by the Court of Appeal for Ontario. The plaintiff class obtained leave to appeal to the Supreme Court of Canada. The Supreme Court dismissed the shareholders’ appeal and determined that Danier had complied with its disclosure obligations under the Securities Act and was not civilly liable for misrepresentation. The Supreme Court also determined that the business judgment rule does not protect issuers or management from the obligations in the Securities Act.