The appellants, proposed representative plaintiffs in a securities class action, appealed a motion judge's order that granted leave for one misrepresentation claim but denied leave for others under the Ontario Securities Act.
The primary issues on appeal concerned the motion judge's approach to determining "public correction" of alleged misrepresentations, particularly by assuming falsity and applying a narrow textual analysis without considering market context.
The Court of Appeal found that the motion judge erred in principle by not engaging in a reasoned consideration of evidence regarding how alleged public corrections would be understood in the secondary market.
The Court remitted the issues of leave for capital expense/scheduling and accounting/financial reporting misrepresentations back to the lower court for redetermination, while upholding the denial of leave for certain environmental misrepresentations due to chronology issues.
