The appellants brought a class action for prospectus misrepresentation under s. 130(1) of the Ontario Securities Act.
The respondent company made an initial public offering with a prospectus containing a sales forecast.
Before the offering closed, internal analysis showed sales lagging due to unseasonably warm weather, but this was not disclosed.
The Supreme Court of Canada held that the company had no obligation to disclose the intra-quarterly results because they did not amount to a 'material change' under the Act.
The Court also held that the Business Judgment Rule does not apply to statutory disclosure obligations.
The appeal was dismissed with costs.
