The plaintiff brought a proposed class action against Aphria Inc., its directors/officers, and several underwriters, alleging misrepresentations in both the primary and secondary markets regarding two corporate acquisitions.
The plaintiff sought leave to discontinue certain claims, leave to assert secondary market claims under the Securities Act, and certification of the class action.
The court granted the discontinuances and leave for the secondary market claims, certifying them on consent.
For the primary market claims against the underwriters, the court held that the 'Ragoonanan Principle' still applies in Ontario, meaning a representative plaintiff must have a direct cause of action against each defendant.
Since the plaintiff only purchased shares in the secondary market, it could not represent primary market purchasers.
However, the court conditionally certified the primary market claims, giving class counsel 100 days to recruit an eligible representative plaintiff who purchased shares in the prospectus offering.
