Executive Summary: Key Legal and Evidentiary Issues

• The Ontario Superior Court of Justice denied a motion to stay a proposed securities class action in favour of a parallel proceeding commenced in British Columbia.
   
• Defendants argued that overlapping subject matter with the British Columbia action favoured resolving the claims in a single jurisdiction under section 5(6) of the Class Proceedings Act, 1992.
   
• Justice Morgan found that the Ontario proceeding had advanced further procedurally, having already served a complete record for the leave and certification motions.
   
• Evidentiary considerations included the location of the largest shareholder base, the corporate defendant's resources, and counsel's location, each of which favoured continuing in Ontario.
   
• Following dismissal of the stay motion, the court addressed written costs submissions and ordered the defendants to pay the plaintiff an all-inclusive amount.
   
• A parallel British Columbia action remained stalled by a sequencing motion and subsequent appeal, reinforcing the court's preference for letting the Ontario proceeding continue on its existing timetable.
   

Facts of the case

The plaintiff, Albert Yee [captioned as "ALBEERT YEE" in the costs endorsement, 2026 ONSC 4633], commenced a proposed global securities class action in the Ontario Superior Court of Justice by Statement of Claim on January 28, 2025, against Telus International (Cda) Inc. (doing business as Telus Digital Experience) and three of its former officers, Jeff Pruitt [spelled "Puritt" in the case captions], Vanessa Kanu, and Gopi Chande. Yee alleged that Telus Digital released audited annual financial statements and MD&A for the 2022 financial year on February 9, 2023, and thereafter negligently misrepresented its pro forma revenues, profit margins, and earnings per share by omitting material facts about its developing artificial intelligence products and services. Public corrective disclosures followed on May 9, 2024, and August 2, 2024. Yee purchased 14,400 Telus Digital subordinate voting shares during the proposed class period and held them until after the final corrective disclosure, suffering a loss exceeding $20,000.

A related action, Middleton v. TELUS International, had already been commenced in the Supreme Court of British Columbia on December 12, 2024, by representative plaintiff Kayne Michael Middleton, who purchased 69.1299 shares for a total of $1,042.63 and sold them on June 10, 2024. The British Columbia claim pleaded largely the same underlying representations and corrective disclosures but added a shareholder oppression claim and named twelve additional individual defendants beyond the three officers named in Ontario. The British Columbia proceeding had been delayed by a sequencing dispute over whether the leave and certification motions should be heard separately; the case management judge ordered they be heard together, and the defendants in that action appealed, with leave to appeal granted but the appeal not yet heard. Meanwhile, the Ontario action had progressed to the point that a case conference had set hearing dates of October 19 to 22, 2026, for the leave and certification motions, and the plaintiff had already served his complete motion record. Two days before an April 1, 2026 case conference, the Ontario defendants first indicated they intended to bring a motion to stay the Ontario action in favour of the British Columbia proceeding, and that motion was heard on May 22, 2026.

Policy and legislative provisions at issue

The stay motion turned on sections 5(6) through 5(8) of the Class Proceedings Act, 1992, provisions added in 2020 to address overlapping multijurisdictional class proceedings. Section 5(6) requires the court to determine whether it is preferable for some or all of the claims to be resolved in the other jurisdiction's proceeding instead. Section 5(7)(a) directs the court to be guided by four objectives: ensuring due consideration of the interests of all parties in each applicable jurisdiction, ensuring the ends of justice are served, avoiding irreconcilable judgments, and promoting judicial economy. Section 5(7)(b) lists factors to be considered, including the alleged basis of liability and jurisdictional differences in the law, the stage each proceeding has reached, the litigation plan for each proceeding, the location of class members and representative plaintiffs, the location of evidence and witnesses, and the ease of enforceability in each jurisdiction. Section 5(8) makes a stay an available remedy, and section 4.1 permits the court to dispose of or narrow a proceeding.

The underlying claims themselves engaged Part XXIII.1 of the Ontario Securities Act, which governs statutory secondary market misrepresentation and, under section 138.3(1)(c), exposes individuals who certified impugned corporate documents to personal liability; the equivalent British Columbia provisions were sections 140.3 and 140.3(1)(c) of the Securities Act. The Ontario claim also pleaded common law negligent misrepresentation, mirrored in the British Columbia action, which additionally pleaded oppression under section 227 of the Business Corporations Act. Section 138.4(1) of the Ontario statute and the equivalent section 140.4(1) in British Columbia impose a heightened burden of proof, requiring a plaintiff alleging misrepresentation in a non-core document to demonstrate actual knowledge, a distinction relevant to the parties' differing class-period start dates.

Reasoning and analysis

Justice Morgan noted that the discretion to grant a stay under these newly enacted provisions is to be exercised sparingly, with the burden on the moving party, and that no prior decision had yet interpreted section 5(6). Weighing the section 5(7)(a) objectives, the court held that the goal of judicial economy emphasized by the defendants had to be balanced against the equally important objectives of ensuring due consideration of all parties' interests and serving the ends of justice; economizing litigation could not come at the expense of substantive fairness to the Ontario class.

Turning to the section 5(7)(b) factors, the court found that the Ontario action was comparatively streamlined, naming only the corporate defendant and the three officers who had personally certified the impugned financial disclosures, while the British Columbia action named twelve additional individual defendants who had not certified those documents and added an oppression claim that the court characterized as adding burden without discernible benefit. The Ontario proceeding had reached a materially more advanced stage, with a complete motion record served and hearing dates already fixed, whereas the British Columbia proceeding remained mired in an unresolved sequencing appeal. On the location of shareholders, evidence from a Bloomberg-sourced affidavit indicated that the largest institutional holders of Telus Digital shares during the class period were Ontario-based funds representing several million investors, consistent with the company's TSX listing. The court treated enforceability as a non-issue given that Canadian provinces reciprocally recognize each other's judgments, and found that forum non conveniens-type considerations, including that defendants' counsel in both actions were the same Toronto-based lawyers, did not meaningfully favour British Columbia notwithstanding that the representative plaintiff resided in Alberta. The court also observed that Telus, as a large, well-resourced telecommunications company operating in over 45 countries, was well positioned to litigate effectively regardless of jurisdiction. On the alternative relief sought, the court agreed that the leave and certification motions should proceed together on a single record but that the leave decision should be rendered first, and extended the defendants' deadline to serve their responding record by two months, to August 31, 2026.

Ruling and overall outcome

The motion for a stay of proceedings was dismissed, with Justice Morgan concluding that the Ontario action, being more procedurally advanced and narrowly pleaded, should proceed on its existing course while the British Columbia action remained delayed by its sequencing appeal. In a subsequent costs endorsement dated August 11, 2026, the court confirmed that the plaintiff, Albert Yee, was the successful party on the motion and was entitled to his costs. The plaintiff had sought partial indemnity costs of $49,108.90 plus disbursements of $808.18, while the defendants sought a reduction of $16,530 to exclude costs attributable to the plaintiff's cross-examination of a British Columbia lawyer's affidavit that the defendants had not solicited. The court agreed to reduce the costs award to account for that cross-examination and, using round numbers, ordered the defendants to pay the plaintiff costs in the all-inclusive amount of $33,500.