Investor Presentaiton
Statutory Rights of Action (continued)
In addition, no person or company, other than the issuer, will be liable if the person or company proves that:
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EXPLORATION
a)
b)
the offering memorandum or any amendment to it was sent or delivered without the person's or company's knowledge or consent and that, on becoming aware of it being sent or delivered,
that person or company gave reasonable general notice that it was so sent or delivered; or
with respect to any part of the offering memorandum or any amendment to it purporting to be made on the authority of an expert, or purporting to be a copy of, or an extract from, a report,
an opinion or a statement of an expert, that person or company had no reasonable grounds to believe and did not believe that there had been a Misrepresentation, the part of the offering
memorandum or any amendment to it did not fairly represent the report, opinion or statement of the expert, or was not a fair copy of, or an extract from, the report, opinion or statement of
the expert.
Not all defences upon which purchasers may rely are described herein. Please refer to the full text of the Saskatchewan Act for a complete listing.
Similar rights of action for damages and rescission are provided in section 138.1 of the Saskatchewan Act in respect of a Misrepresentation in advertising and sales literature disseminated in
connection with an offering of securities.
Section 138.2 of the Saskatchewan Act also provides that where an individual makes a verbal statement to a prospective investor that contains a Misrepresentation relating to the securities
purchased and the verbal statement is made either before or contemporaneously with the purchase of the securities, the investor is 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 the individual who made the verbal statement.
Section 141(1) of the Saskatchewan Act provides an investor with the right to void the purchase agreement and to recover all money and other consideration paid by the investor for the securities
if the securities are sold in contravention of the Saskatchewan Act, the regulations to the Saskatchewan Act or a decision of the Financial and Consumer Affairs Authority of Saskatchewan.
Section 141(2) of the Saskatchewan Act also provides a right of action for rescission or damages to an investor of securities to whom an offering memorandum or any amendment to it was not
sent or delivered prior to or at the same time as the investor enters into an agreement to purchase the securities, as required by Section 80.1 of the Saskatchewan Act.
The rights of action for damages or rescission under the Saskatchewan Act are in addition to and do not derogate from any other right which an investor may have at law.
Section 147 of the Saskatchewan Act provides that no action shall be commenced to enforce any of the foregoing rights more than:
a)
in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the cause of action; or
b)
in the case of any other action, other than an action for rescission, the earlier of:
one year after the plaintiff first had knowledge of the facts giving rise to the cause of action; or
I.
II. six years after the date of the transaction that gave rise to the cause of action.
The Saskatchewan Act also provides an investor who has received an amended offering memorandum delivered in accordance with subsection 80.1(3) of the Saskatchewan Act has a right to
withdraw from the agreement to purchase the securities by delivering a notice to the person who or company that is selling the securities, indicating the investor's intention not to be bound by
the purchase agreement, provided such notice is delivered by the investor within two business days of receiving the amended offering memorandum.
New Brunswick
Section 150 of the Securities Act (New Brunswick) provides that where an offering memorandum contains a Misrepresentation, a purchaser who purchases securities shall be deemed to have
relied on the Misrepresentation if it was a Misrepresentation at the time of purchase and:
a)
the purchaser has a right of action for damages against
1.
the issuer,
b)
II. the selling security holder on whose behalf the distribution was made;
III. every person who was a director of the issuer at the date of the offering memorandum;
IV. every person who signed the offering memorandum, or
if the purchaser purchased the securities from a person referred to in subparagraph (a)(i) or (ii) above, the purchaser may elect to exercise a right of rescission against the person referred to
in that subparagraph, in which case the purchaser shall have no right of action for damages against the person.
This statutory right of action is available to New Brunswick purchasers whether or not such purchaser relied on the Misrepresentation. However, there are various defences available to the issuer
and the selling security holder(s). One such defence is that no person will be liable for a Misrepresentation if such person proves that the purchaser purchased the securities with knowledge of the
Misrepresentation. Moreover, in an action for damages, the amount recoverable will not exceed the price at which the securities were offered under the offering memorandum and any
defendant will not be liable for all or any part of the damages that the defendant proves do not represent the depreciation in value of the security as a result of the Misrepresentation.
If the purchaser intends to rely on the rights described in (a) or (b) above, such purchaser must do so within strict time limitations. The purchaser must commence an action for rescission within
180 days after the date of the transaction that gave rise to the cause of action. The purchaser must commence its action for damages within the earlier of:
a)
b)
one year after the purchaser first had knowledge of the facts giving rise to the cause of action; or
six years after the date of the transaction that gave rise to the cause of action.
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