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Evidence Case Dicta - Bootstrapping. Kitmitto v. Ontario (Securities Commission)
In Kitmitto v. Ontario (Securities Commission) (Div Court, 2024) the Divisional Court considers (and dismissed) related appeals from two Capital Markets Tribunal (CMT) decisions, one respecting 'merits' and one respecting 'sanctions' [under Securities Act (SA), s.10(1)], here addressing SA 76 "which prohibits insider trading and tipping" ['Part XVIII - Continuous Disclosure ' ('Trading where undisclosed change' and 'Tipping')].
Here the court considers a 'bootstrapping' argument by the appellant, which appears to be 'if X, then Y' reasoning - grounded on a refusal of the fact-finder to believe X in the face of no confirming evidence to the contrary:iii. Evidence bootstrapping
[122] Mr. Candusso submits that that the Tribunal majority’s refusal to believe that he would buy Amaya shares without consulting Mr. Kitmitto was not a proper basis for rejecting his evidence of independent research and decision-making: see Merits Decision, at para. 258. He relies on Quantum, at paras. 57-63, which set out the following evidentiary principle: “Evidence that is rejected by the trier of fact has no evidentiary value and cannot be used as a basis for findings of fact”, citing Waxman, at para. 351. In Walton, at para. 104, an insider tipping case, the Alberta Court of Appeal stated that it was it was “bare speculation” to turn a “disbelieved denial into proof positive” in the absence of any evidence of the denied conversation. In addition to his own direct evidence of independent research and decision-making, Mr. Candusso also relies on Mr. Kitmitto’s evidence that he did not know about Mr. Candusso’s trades or even how active a trader he was.
[123] Once again, I do not agree there was any reversible error.
[124] At para. 258(a), the Tribunal majority provided an explanation for their finding that Mr. Candusso’s explanation for his Amaya trades was not credible, given the following circumstances: he made a significant purchase of Amaya shares, with borrowed funds, shortly before the announcement of a significant transaction, a fact known to his close friend and roommate who covered the stock and had been the one to tell him about Amaya in the first place. Given the strong circumstantial case against Mr. Candusso otherwise outlined in the Merits Decision, the Tribunal majority justifiably considered those circumstances as providing additional support for the inference that it was more likely than not that the explanation for the share purchase was that Mr. Kitmitto tipped Mr. Candusso, rather than independent research and decision-making. I see no error in their doing so.
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