Statutes referred to
Canada Business Corporations Act, R.S.C. 1985, c. C-44
Securities Act, R.S.O. 1990, c. S.5, ss. 1(1) [as am.], 1.1 [as am.], 75 [as am.], Part
XXIII.1 [as am.], ss. 138.1 [as am.], 138.3 [as am.], (1) [as am.], (4) [as am.],
138.4(1) [as am.], (2) [as am.], 138.5(3), 138.8(1) [as am.]
MOTION for leave to proceed with an action for secondary
Albert Pelletier, Andrew J. Morganti and Hadi Davarinia,1 for
Scott Kugler and Marco Romeo, for defendants Colt Resources,
Inc., Joe Kin Foon Tai and Paul Yeou.
Simon Bieber and Jocelyn Howell, for defendant Shahab Jaffrey.
Jeffrey Larry, for defendant Nikolas Perrault.
GLUSTEIN J.: —
Nature of Motion and Overview
 The proposed representative plaintiff, Manuel Kauf
(“Kauf”),2 brings this motion under s. 138.8(1) of the Securities
Act, R.S.O. 1990, c. S.5 (the “Act”), for leave to proceed with his
action for liability for secondary market disclosure under s. 138.3.3
 The motion is brought within a proposed class action
against the defendants Colt Resources, Inc. (“Colt”), Nikolas
Perrault (“Perrault”), Shahab Jaffrey (“Jaffrey”), Joe Kin Foon
Tai (“Tai”) and Paul Yeou (“Yeou”).
 Since Jaffrey and Perrault have separate counsel, I refer in
these reasons to the defendants Colt, Tai and Yeou as the “Colt
Defendants”, and to “Jaffrey”, when considering the submissions of
the parties to the extent they differ.4 I otherwise refer to the “
Defendants” as a collective group when their submissions are common.
 The claims arise out of an investment on or about July 13,
2016 (the “Turcolt Investment”) by a Colt subsidiary (Eurocolt), in
1 Mr. Morganti appeared with Mr. Pelletier as counsel for the plaintiff on
December 12, 2018 and Mr. Davarinia appeared with Mr. Pelletier as
counsel for the plaintiff on March 6, 2019.
2 Web Objectives, Inc. (“WOI”) is also a proposed representative plaintiff in
this action. The plaintiffs allege that WOI is wholly owned by Tom Doura-makos, who was formerly a representative plaintiff in this action. WOI is
the owner of 175,000 common shares purchased from Colt’s private placement (and not on the secondary market). As such, WOI does not bring this
motion under s. 138.8(1).
3 Unless otherwise noted, all references to sections are to the Act.
4 Perrault made no submissions at the hearing.