The Court of Appeal for Ontario has upheld a lower court’s decision, dismissing a $275-million lawsuit between Bay Street titans on the basis that the claim was brought too late.
In February 2025, the Ontario Superior Court of Justice dismissed a claim brought by former Yorkton Securities Inc. CEO Scott Paterson against RBC Dominion Securities Inc. (RBC DS) and several former RBC DS executives. The lawsuit, which was filed in 2022, sought $250 million in general and aggravated damages for “civil conspiracy, defamation, injurious falsehood, and interference with economic relations” and $25 million in punitive damages.
According to the court’s decision, the lawsuit alleged that years earlier, between 1998 and 2002, the defendants sought to harm Paterson’s reputation, including by pushing the Ontario Securities Commission (OSC) to investigate and take enforcement action against Yorkton, when he was running the firm.
Those allegations have not been proven.
The lower court ruled that the claim was brought too late, as it exceeded the 15-year limitation period, and it rejected arguments that the limitation period should have been paused due to “willful concealment of material facts” by the defendants in the case.
It also found that the proposed lawsuit represented an “abuse of process” because, among other things, it sought to “re-litigate the facts underlying the settlement agreement” reached with the OSC in 2000, as part of the regulator’s enforcement action against Yorkton.
On appeal, Paterson sought to have the order of the motion judge set aside — arguing that the judge erred in dismissing the case — and requesting that the action be allowed to go ahead.
While the appeal court said it didn’t necessarily agree with the lower court’s ruling that the action amounted to an abuse of process, it didn’t deal with this issue, as it did agree with the lower court’s finding that the case should be dismissed for being filed too late.
On the limitation issue, the appeal court said the motion judge was right to conclude that the facts underlying the claim were known by 2004 at the latest — meaning that a lawsuit would have to have been brought by 2019 to meet the deadline under the ultimate limitation period of 15 years.
“I agree with the motion judge that these allegations in the statement of claim show that the appellant had formed the view, no later than 2004, that the respondents had caused the OSC to investigate him, and that the respondents had defamed him to the press and to the community,” the decision said.
“The statement of claim was properly struck because the claims asserted therein are barred by the expiry of the ultimate limitation period,” it noted.
The appeal court also sided with the defendants on their appeal of the motion judge’s decision not to order costs against either side in the case.
The motion judge ruled that even though the defendants were successful in having the case dismissed, there should be no costs ordered because there was evidence indicating that “there was a level of animus towards Paterson that should not be rewarded with costs.”
RBC DS and the other defendants appealed that decision, arguing that the judge erred in finding that pre-litigation animus was a reason to deny them their costs — and the appeal court agreed.
“In my view this is an exceptional case where the motion judge’s exercise of discretion reflects an error in principle, and it is appropriate for this court to overturn the costs order,” the decision said.
“While I am not prepared to say that such an order could not fall within the proper exercise of a motion judge’s discretion, it would be an unusual order to make, and in my view inappropriate, without having the benefit of full submissions from the parties,” it added.
As a result, the court allowed the cross-appeal on costs, and ordered that the defendants are entitled to $51,746.77 in costs on the original motion. It also ordered another $30,000 in costs to the defendants based on their success in the appeal and cross-appeal.