Plaintiffs were hedge fund and customer of defendant’s prime brokerage unit. In absence of plaintiffs being able to meet margin requirements for accounts, defendant seized them and subsequently liquidated them. Plaintiffs alleged that defendant’s actions resulted in significant loss and they brought this action. Plaintiffs examined representative of defendant. Plaintiffs sought order granting them leave to examine for discovery second representative of defendant. Motion dismissed. Plaintiffs had not met test for leave to examine second representative. Court was not satisfied that plaintiffs had not been able to obtain satisfactory answers through undertakings. Fact that there were numerous undertakings did not establish that first representative failed to properly inform himself of issues. Defendant took long time to answer undertakings but there were many undertakings that involved many individuals. Examination of second representative would not avoid further undertakings. Examination of second representative would not expedite action.
Silvercreek II Ltd. v. Royal Bank of Canada (Oct. 24, 2014, Ont. S.C.J. [Commercial List], L.A. Pattillo J., File No. CV-11-9538-00CL) 245 A.C.W.S. (3d) 799.