Brittany Ariel Sokol Davis

The parties brought competing summary judgment motions regarding an Independent Auditor's report on Earn-Out Payments under a Share Purchase Agreement.

The Purchasers argued the auditor committed manifest errors and failed to follow instructions by deferring the choice of EBITDA calculation to the court.

The Superior Court of Justice found that the auditor materially departed from its mandate by failing to determine the EBITDA for the Second Earn-Out Period and directed the auditor to make that determination.

The court also found manifest errors in the auditor's treatment of Kits sales revenue and the starting point for related party sales adjustments, but dismissed challenges to the auditor's treatment of subcontractor costs.

The auditor's report was deemed not final and binding.

This is a costs decision following the respondent's successful appeal of orders certifying an action as a class proceeding and granting leave to proceed under the Securities Act.

The respondent sought $120,000 in total costs ($20,000 for the Divisional Court leave to appeal motion and $50,000 for each of two appeals to the Court of Appeal).

The court awarded $70,000 in total costs ($20,000 for the leave to appeal and $50,000 for the appeals), finding that while there were technically two separate appeals, the issues and arguments were inextricably bound together in substance.

This appeal concerns the certification of a class proceeding and the granting of leave to proceed with a secondary market misrepresentation claim under the Securities Act.

The respondent, a former shareholder of Akumin Inc., sought to certify a class action on behalf of purchasers of Akumin securities (common shares and secured notes) alleging misrepresentations in financial statements and seeking relief under both statutory provisions and common law negligence.

The appellants challenged both the leave order and the certification order, arguing that certain disclosures did not constitute "public corrections" that an efficient market requirement applied to secondary market claims, and that common law negligence claims should not be certified alongside statutory claims.

The Court of Appeal upheld the motion judge's decisions, clarifying the law on public corrections, rejecting an efficient market requirement, and confirming that common law claims can be certified alongside statutory claims.

The plaintiff brought a motion for leave to commence a secondary market securities class action under Part XXIII.1 of the Securities Act against Akumin Inc., its directors and officers, and its auditor, Ernst & Young LLP, and for certification of the action under the Class Proceedings Act.

The claims arose from alleged misrepresentations in Akumin's financial statements that were later restated.

The court granted leave against the Akumin defendants, finding a reasonable possibility of success at trial regarding the alleged misrepresentations and public corrections.

However, the court denied leave against the auditor, EY, finding insufficient evidence that the auditor's statements were material or publicly corrected.

The court certified the action as a global class proceeding against the Akumin defendants, rejecting arguments to exclude American purchasers from the class.