Patrick Stephenson

The appellant sought leave to bring a class action for secondary market misrepresentation under the Securities Act, alleging the respondent company's public disclosures overstated mining resources and inflated its share price.

The motion judge dismissed the leave application and the certification motion, finding the appellant's expert evidence was completely undermined by the respondent's evidence.

On appeal, the appellant argued the motion judge applied an overly strict test by weighing the evidence.

The Court of Appeal dismissed the appeal, holding that the statutory leave test requires a reasoned consideration and weighing of all evidence proffered by both parties to ensure the action has a reasonable possibility of success.

The plaintiff sought leave under s. 138.8 of the Securities Act and certification under the Class Proceedings Act to bring a class action against a mining company for secondary market misrepresentation.

The plaintiff alleged that the company's public disclosures regarding mineral production and grade levels were false, as purportedly revealed by a subsequent technical report and anonymous short-seller internet postings.

The court dismissed the motion, finding that the plaintiff failed to show a reasonable possibility of success at trial because the defendants' uncontroverted expert evidence explained that the discrepancies between the reports were due to different reporting parameters, not misrepresentations.

The plaintiffs brought a proposed securities class action for secondary market misrepresentation under Part XXIII.1 of the Securities Act, obtained leave under s. 138.1, and had the action certified.

They later moved for leave to amend their statement of claim to add new allegations of misrepresentation.

The defendants consented to amendments that merely expanded already-pleaded allegations but opposed the balance as fresh misrepresentation claims requiring a separate, and now time-barred, leave application.

The court held that leave under s. 138.8 is assessed against each discrete allegation of misrepresentation, so that the impugned amendments — alleging new bribery and code-of-ethics violations in multiple jurisdictions — were not mere elaborations but discrete claims requiring a fresh leave application.

The motion was granted in part: the consented amendments were allowed and the impugned amendments were refused.

The defendants sought leave to appeal two interlocutory orders compelling their witness to answer questions refused on cross-examination and refusing to vary the initial order.

The court found that the first category of questions was moot because the witness had already answered them without condition.

The court also held that the defendants failed to satisfy the test for leave to appeal under Rule 62.02(4) for both categories of questions, as there were no conflicting decisions and the issues were not of such importance to warrant leave.

The motion for leave to appeal was dismissed.