Lundin Mining Corp. v. Markowich, 2025 SCC 39

SUPREME COURT OF CANADA

Appeal Heard: January 15, 2025 Judgment Rendered: November 28, 2025 Docket: 40853

Between: Lundin Mining Corporation, Paul K. Conibear, Marie Inkster, Paul McRae, Lukas H. Lundin and Stephen Gatley Appellants and Dov Markowich Respondent - and - Canadian Coalition for Good Governance, Ontario Securities Commission, Mining Association of Canada, CFA Societies Canada Inc., LiUNA Pension Fund of Central and Eastern Canada, Insurance Bureau of Canada and Canadian Chamber of Commerce Interveners Coram: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer, Jamal, O'Bonsawin and Moreau JJ.

Reasons for Judgment: (paras. 1 to 127)

Jamal J. (Wagner C.J. and Karakatsanis, Rowe, Martin, Kasirer, O'Bonsawin and Moreau JJ. concurring)

Dissenting Reasons: (paras. 128 to 284)

Côté J.

Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports.

Lundin Mining Corporation, Paul K. Conibear, Marie Inkster, Paul McRae, Lukas H. Lundin and Stephen Gatley Appellants

v.

Dov Markowich Respondent

and

Canadian Coalition for Good Governance, Ontario Securities Commission, Mining Association of Canada, CFA Societies Canada Inc., LiUNA Pension Fund of Central and Eastern Canada, Insurance Bureau of Canada and Canadian Chamber of Commerce Interveners

Indexed as: Lundin Mining Corp. v. Markowich

2025 SCC 39

File No.: 40853.

2025: January 15; 2025: November 28.

Present: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer, Jamal, O'Bonsawin and Moreau JJ.

on appeal from the court of appeal for ontario

Securities — Liability for secondary market disclosure — Statutory action for failure to make timely disclosure — Material change — Test for leave to commence action — Pit wall instability and ensuing rockslide at mine owned by issuer disclosed as part of periodic updates — Investor seeking leave to commence class action against issuer for failure to make timely disclosure on basis that pit wall instability and rockslide resulted in material changes that had to be disclosed forthwith — Whether investor had reasonable possibility of showing that there had been material changes such that he should be granted leave to commence action — Securities Act, R.S.O. 1990, c. S.5, ss. 1(1) "material change", 178.8(1).

A Canadian mining company detected pit wall instability at its premier mine. Within days, the pit wall instability caused a localized rockslide in the open pit mine that required the company to shut down at least part of the mine for a time and to revise the mine's production forecast downward by 20 percent for the next year. The mining company, an issuer under Ontario's Securities Act, did not disclose the pit wall instability or rockslide to investors immediately. When it disclosed these developments about a month later as part of its regular or periodic updates, the company's share price dropped 16 percent the next day.

An investor who had purchased shares of the mining company's stock after the pit wall instability and rockslide had occurred but before the company disclosed those developments commenced a proposed class proceeding against the mining company and several of its officers and directors. He alleged that they failed to make timely disclosure of the pit wall instability and rockslide, contrary to their obligations under the Securities Act, since the pit wall instability and rockslide each resulted in a "material change", as defined in s. 1(1) of the Securities Act, in the company's "business, operations or capital" that should have been disclosed "forthwith" under s. 75(1) of the Securities Act. The investor brought a motion under s. 138.8(1) of the Securities Act for leave to pursue the statutory cause of action, and also moved for certification of the proposed class proceeding.

The motion judge refused to grant leave for the investor to pursue the statutory cause of action and accordingly dismissed the motion for class certification. He concluded that since the mining company continued its business and operations as a mining company, there was no reasonable possibility that the investor could establish that either the pit wall instability or the rockslide resulted in a "material change" in the mining company's affairs requiring immediate disclosure. He held that neither development resulted in a change in the mining company's business, operations or capital. The Court of Appeal allowed the investor's appeal, granting him leave to proceed with the statutory cause of action but referring issues regarding the certification of the class proceeding back to the lower court. It held that based on a more generous interpretation of the words "change in the business, operations or capital", there was a reasonable possibility that the pit wall instability and rockslide involved changes in the mining company's operations, given the undisputed evidence that the developments impacted the company's phasing of the mine and reduced its next annual production forecast. Consequently, the investor had advanced a plausible interpretation and sufficient evidence to support granting leave.

Held (Côté J. dissenting): The appeal should be dismissed.

Per Wagner C.J. and Karakatsanis, Rowe, Martin, Kasirer, Jamal, O'Bonsawin and Moreau JJ.: The motion judge erred by relying on restrictive definitions of "change", "business", "operations" and "capital", and then by applying those definitions to determine whether there was a reasonable possibility that there had been a material change. The Ontario legislature intentionally left these terms undefined to allow the legislation to be applied flexibly and contextually to a wide range of industries and corporate structures. Moreover, the test for leave under s. 138.8(1) of the Securities Act requires a plausible analysis of the applicable legislative provisions and some credible evidence in support of the claim. A plausible analysis is not a plausible statutory interpretation, but rather a plausible application of the legislation to the facts. The uncontested evidence in the instant case was that the pit wall instability and rockslide impacted the company's operations at its mine. Accordingly, a plausible analysis of the applicable legislative provisions and evidence on the motion showed a reasonable or realistic chance that the action could succeed; as a result, the investor should have been granted leave to commence an action for the alleged breach of the mining company's timely disclosure obligations.

Section 1(1) of the Securities Act defines a "material fact" as "a fact that would reasonably be expected to have a significant effect on the market price or value of the securities". It also defines a "material change", in subcl. (a)(i) of the definition, as "a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer". Under the Securities Act, material facts need only be disclosed periodically, while material changes must be disclosed immediately, or in the words of s. 75(1), "forthwith". This imposes an obligation on issuers to make timely disclosure of material changes. Proper disclosure is the heart and soul of the securities regulations across Canada and is pivotal for an effective securities regime. Disclosure helps maintain a level playing field of information between investors and issuers, and preventing and deterring informational asymmetry between investors and issuers is essential to the integrity of the securities system and the public interest. Disclosure also promotes the efficiency of capital markets by helping investors to identify and direct capital to the most deserving public companies.

The distinction between a "material fact" and a "material change" must be resolved under the modern principle of statutory interpretation. A statutory provision is interpreted based on its text, context, and purpose to find a meaning that is harmonious with the legislation as a whole. Under the Securities Act, material changes are distinct from the broader category of material facts. A material fact is static, because it provides a snapshot of an issuer's affairs at a particular point in time, whereas a material change is dynamic, because it necessarily compares an issuer's affairs at two points in time. For a material change to occur, there must be a change, as opposed to the existence of a fact. Moreover, material changes are related to changes in the issuer's business, operations or capital, they must be internal rather than external to the issuer, and they usually involve more than mere negotiations or internal deliberations. Like material facts, however, material changes must be reasonably expected to have a significant effect on the market price or value of securities. There are two main policy reasons for the distinction between a material fact and a material change: (1) it balances the burden that disclosure places on issuers with the need for investors to be informed on a timely basis of material developments in an issuer's affairs; and (2) it promotes the purpose of securities law to remedy informational asymmetry between issuers and investors.

The term "change", which is not defined in the Securities Act, should not be interpreted restrictively. The inherent flexibility of what can be a "change" suggests that the ordinary meaning of the term should not be constrained by dictionary definitions. Substituting a dictionary definition for the intentionally undefined term "change" restricts the reach of the legislation, contrary to the legislature's purpose. The Ontario legislature's intentional decision to leave the word "change" undefined and to use that term with a group of other undefined words has several consequences. First, the legislature intended the word "change" to retain its ordinary meaning. Second, the word "change" takes meaning from the particular context of securities legislation, where the purpose of continuous disclosure obligations is to level the informational playing field between issuers and investors. Third, by leaving the term "change" undefined, the legislature has maintained flexibility for the Securities Act to apply to widely varying factual scenarios. Finally, although the legislature left "change" undefined, regulators and courts have provided helpful interpretive guidance on what constitutes a "material change" in various policy documents and judicial decisions.

A development does not need to be important or substantial to constitute a change. The magnitude or significance of a development in an issuer's affairs is therefore not to be imported as a consideration for whether it constitutes a change. The undefined term "change" does not include qualifiers such as core, fundamental, or key. Evaluating the nature of the change is qualitative, while considering the magnitude of the change or whether it is significant is a question of materiality. While a narrower disclosure standard has developed in the jurisprudence and provides that a change must be important and substantial to need to be disclosed immediately, this narrower standard is inconsistent with the text of the legislation, which simply refers to a "change", and is mistaken as a matter of doctrine and policy.

Similarly, the undefined terms appearing in the phrase "business, operations or capital" should not be interpreted restrictively. Not only are the terms not defined in the Securities Act, they are also not defined in the leading judicial decisions, regulatory decisions, securities law textbooks or in the key regulatory instruments or policy statements. The legislature left these terms undefined for several reasons. First, the Securities Act relies on the ordinary commercial meaning of these widely understood commercial concepts, rather than creating rigid statutory definitions. Second, leaving the terms undefined allows courts and regulators to apply the legislation as broadly and flexibly as the context and circumstances require. Finally, the phrase "change in the business, operations or capital" is a holistic standard to be applied, rather than a requirement to parse each element separately.

Whether there has been a material change in a given case is a highly contextual question of mixed fact and law. While disclosure decisions are a matter of legal obligation, there is no bright line test and the determination is a matter of judgment and common sense applied to the unique circumstances of each case. The contextual exercise of identifying a material change is guided by the purpose of disclosure obligations to level informational asymmetry between issuers and investors, which serves to maintain the integrity of the securities system and protect the public interest.

Pursuant to s. 138.8(1) of the Securities Act, a plaintiff must obtain leave of a court to commence an action for breach of timely disclosure obligations under the Securities Act. The test for leave in s. 138.8(1) provides that the court should grant leave only where it is satisfied that "the action is being brought in good faith" and "there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff". It is a preliminary merits test, but does not require proof on a balance of probabilities that the action will succeed at trial. The test is, however, more stringent than the test for authorization or certification of a class action. It is a threshold screening mechanism intended to deter meritless litigation brought to coerce unjust settlements. The plaintiff must establish a reasonable or realistic chance, and not merely a possibility, that the action will succeed at trial, based on a plausible analysis of the applicable legislative provisions and some credible evidence in support of the claim. A plausible analysis of the applicable legislative provisions is not simply a plausible interpretation of those provisions. On a motion for leave, the interpretation of the provisions at issue must still be correct. Statutory interpretation is not conducted less stringently or in a more relaxed fashion than at a trial on the merits. The plaintiff must show a plausible application of the relevant legislative provisions, based on the limited evidence available at this early stage of the proceedings.

Per Côté J. (dissenting): The appeal should be allowed, the judgment of the Court of Appeal set aside, and the motion judge's order dismissing the investor's motion for leave restored. The Court of Appeal erred in concluding that the investor could satisfy the leave requirement. With the proper interpretation of "material change", the investor would not be able to satisfy the court that he had a reasonable possibility of successfully establishing at trial that the pit wall instability or rock slide constituted a change in the mining company's business, operations, or capital.

A "material change" is a change in the core or high-level aspects of the issuer's business, operations, or capital. In drawing the distinction it did between "material fact" and "material change", the legislature intended to oblige issuers to assess only changes that alter the nature of their business, operations, or capital, understood at a high level of generality, for materiality and potential disclosure. Four principles have emerged from the common law for circumscribing the meaning of "a change in the business, operations or capital of the issuer". They consist of four exclusions for events affecting an issuer that do not come within the definition of "change" such that, even if the events in question may reasonably be expected to have a significant effect on an issuer's share price, they do not require immediate disclosure. The first type is external facts or changes beyond the control of an issuer. These cannot constitute a material change unless they actually result in a change in an issuer's business, operations or capital. The second type is simple fluctuations in revenue or production. Even explained changes in results that do not stem from alterations in an issuer's business, operations, or capital can fall outside the category of "material change". The third type is uncertain developments in an issuer's business, operations or capital, such as moving through interim stages of a merger negotiation, having new discussions relating to an acquisition, or responding to a take-over bid. The fourth type is events that maintain the status quo of an issuer.

An ordinary reading of the text of the definition of "material change" in s. 1(1) of the Securities Act indicates, and the context and purpose strongly support, that only changes to high-level or core elements of an issuer constitute a change in its "business, operations or capital". The text of the provision and the constituents of immediate context support this interpretation. The meaning of "change" must be understood in relation to the terms it acts upon, namely, "business, operations or capital". Those words are to be interpreted in accordance with the "associated words" rule of statutory interpretation that takes the surrounding terms into account. Considered as a group, the words all suggest a high level of generality and all relate to the core aspects of an issuer. The textual emphasis on high-level alterations is also signalled in subcl. (a)(ii) of the definition of "material change", that defines the term "material change" to also mean "a decision to implement a change referred to in subclause (i) made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer". This strongly suggests that a "change" under both subclauses excludes minor alterations in the affairs of the issuer that are beneath the purview of these decision makers and therefore concerns decisions that affect an issuer's business, operations, or capital at their core or at a high level.

The motion judge's analysis of the ordinary meaning of the key terms at play in the instant case is accepted. He interpreted the term "change" by adopting its ordinary and grammatical meaning. He construed a "change" as a shift in the issuer's core aspects that puts it in a different position, or on a different course, or direction. His interpretations of "business", "operations" and "capital" also accord with the legislature's focus on understanding those terms at a high level of generality, as evidenced by both the general words chosen and their association with other terms. In addition, the motion judge's use of the dictionary definition of "change" was not improper given that the definition he found was tested against, and supported by, his assessment of the purpose of the statute and legislative intent. The motion judge's interpretation, by linking "change" to "business, operations or capital", properly focusses on the core aspects or high-level elements of an issuer while excluding consideration of external, production or revenue-oriented, uncertain, routine, or ordinary developments that do not rise to the level of "changes".

The broader context and purpose of the Securities Act also support the motion judge's interpretation. In particular, his interpretation accords with the legislature's deliberate distinction between "material change" and "material fact", the various policy considerations underlying the distinction, and the purposes that underlie the Securities Act's disclosure regime. Investor protection and the remedying of informational asymmetry do not exclusively favour a low threshold for disclosure; too much disclosure can also be prejudicial to investors. Moreover, investor protection does not override the other objectives of the Securities Act. The legislature chose to impose balanced disclosure obligations on issuers using the distinction between "material fact" and "material change"; the importance of this distinction has been repeatedly recognized. In making this distinction, the legislature struck a balance between ensuring meaningful investor protection and avoiding undue burdens on issuers, thereby crafting a disclosure regime with limits. The legislature sought periodic disclosure of a broad array of information affecting an issuer, and immediate disclosure of only a narrower subset of changes.

The impacts or consequences of the majority's overbroad understandings of the terms "change", "business", "operations" and "capital" will be that almost every event that affects the affairs of an issuer will have to be reviewed for materiality and almost every analysis of "material change" will become a question of materiality alone. In effect, the words "business, operations or capital" are given no meaning, the clear legislated distinctions are collapsed, and the regulatory burden is increased in a manner that is not justified by the text, context, and purpose of the Securities Act. It is unclear how the four common law exclusions for events affecting an issuer that do not come within the definition of "change" can survive the expansive definitions adopted by the majority. There is, however, agreement with the majority that it is not desirable to attempt to create a bright line test for material change. To decipher whether a "material change" has occurred, the inquiry will always be fact-specific. This preserves the flexibility that courts require to consider the unique facts of each case.

Overbroad disclosure obligations that conflate "material change" and "material fact" run contrary to the Securities Act's delicate policy considerations and have practical consequences. Specifically, the conflation may encourage over-disclosure or premature disclosure beyond what is required by the statute, carrying with it an increased regulatory burden and risks to the efficiency of capital markets. The impact may incentivize issuers to over-disclose or disclose prematurely to mitigate compliance and liability risk. This presents at least two concerns for investors. First, this market noise may very well prevent investors from assessing the true character and activities of an issuer, valuing its securities, and making informed investment decisions, resulting in increased costs in corporate transactions. Second, over-disclosure or premature disclosure may also frustrate the goal of directing capital to the most deserving issuers, which may stunt efficiency and the allocation of capital within the market, ultimately reducing overall returns for investors. Issuers will also be required to undertake internal changes that could prove costly to respond to the majority's upholding of the Court of Appeal's broad interpretation, as they will also be required to assess every event affecting their affairs for materiality. This is not practicable, nor is it just when civil liability may follow from a failure to disclose. Finally, the potential liability of directors and officers will also be expanded by this broad and undefined disclosure standard, with negative impacts.

As for the standard to be met for granting leave to a plaintiff who argues that an issuer has failed to immediately disclose a material change, there is agreement with the majority that the definition of "material change" remains static at all stages of litigation. The interpretation of the statute must be correct and does not change based on the stage of proceedings. There is also agreement with the majority that the requirement in s. 138.8(1)(b) of the Securities Act that there be "a reasonable possibility that the action will be resolved at trial in favour of the plaintiff" means that the plaintiff must offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim. There is further agreement that the language "plausible interpretation" requires that the application of the statute to the available evidence be plausible. As a result, the motion judge was correct to apply his own interpretation of the term "material change" rather than leaving the interpretation open for the parties to settle at trial.

Cases Cited

By Jamal J.

Applied: Theratechnologies inc. v. 121851 Canada inc., 2015 SCC 18, [2015] 2 S.C.R. 106; considered: Kerr v. Danier Leather Inc., 2007 SCC 44, [2007] 3 S.C.R. 331, aff'g (2005), 77 O.R. (3d) 321; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; Coventree Inc. (2011), 34 OSCB 10209, aff'd 2013 ONSC 1310, 306 O.A.C. 107; AiT Advanced Information Technologies Corporation (2008), 2008 ONSEC 3, 31 OSCB 712; Peters v. SNC-Lavalin Group Inc., 2023 ONCA 360, 166 O.R. (3d) 756; referred to: Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, [2015] 3 S.C.R. 801, aff'g 2014 ONCA 90, 118 O.R. (3d) 641, rev'g 2012 ONSC 3637, 29 C.P.C. (7th) 225; Green v. Canadian Imperial Bank of Commerce, 2012 ONSC 3637, 29 C.P.C. (7th) 225 rev'd 2014 ONCA 90, 118 O.R. (3d) 641, aff'd 2015 SCC 60, [2015] 3 S.C.R. 801; Mask v. Silvercorp Metals Inc., 2015 ONSC 5348, aff'd 2016 ONCA 641, 132 O.R. (3d) 161; Cartaway Resources Corp. (Re), 2000 BCSECCOM 88, [2000] B.C.S.C.D. No. 92 (Lexis), 2000 CarswellBC 3125 (WL); Cornish v. Ontario Securities Commission, 2013 ONSC 1310, 306 O.A.C. 107; British Columbia Securities Commission v. Branch, [1995] 2 S.C.R. 3; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653; Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031; Telus Communications Inc. v. Federation of Canadian Municipalities, 2025 SCC 15; R. v. Monney, [1999] 1 S.C.R. 652; An Informer v. A Chief Constable, [2012] EWCA Civ 197, [2013] Q.B. 579; Rex Diamond Mining v. Ontario Securities Commission, 2010 ONSC 3926; Miller v. FSD Pharma, Inc., 2020 ONSC 4054; Coffin v. Atlantic Power Corp., 2015 ONSC 3686, 127 O.R. (3d) 199; YBM Magnex International Inc. (2003), 26 OSCB 5285; Rex Diamond Mining Corporation (2008), 2008 ONSEC 18, 31 OSCB 8337; Amaya inc. v. Derome, 2018 QCCA 120; Ironworkers Ontario Pension Fund (Trustee of) v. Manulife Financial Corp. (2013), 2013 ONSC 4083, 44 C.P.C. (7th) 80; Goldsmith v. National Bank of Canada, 2016 ONCA 22, 128 O.R. (3d) 481; Nseir v. Barrick Gold Corporation, 2022 QCCA 1718; Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675) v. Barrick Gold Corporation, 2024 ONCA 105; Rahimi v. SouthGobi Resources Ltd., 2017 ONCA 719, 137 O.R. (3d) 242; Graaf v. SNC-Lavalin Group Inc., 2024 QCCA 303; Bayens v. Kinross Gold Corporation, 2014 ONCA 901; Badesha v. Cronos Group Inc., 2022 ONCA 663, 163 O.R. (3d) 481.

By Côté J. (dissenting)

Theratechnologies inc. v. 121851 Canada inc., 2015 SCC 18, [2015] 2 S.C.R. 106; Kerr v. Danier Leather Inc., 2007 SCC 44, [2007] 3 S.C.R. 331, aff'g (2005), 77 O.R. (3d) 321; Green v. Canadian Imperial Bank of Commerce, 2012 ONSC 3637, 29 C.P.C. (7th) 225; Peters v. SNC-Lavalin Group Inc., 2021 ONSC 5021; Cornish v. Ontario Securities Commission, 2013 ONSC 1310, 306 O.A.C. 107; Mask v. Silvercorp Metals Inc., 2015 ONSC 5348, aff'd 2016 ONCA 641, 132 O.R. (3d) 161; Rex Diamond Mining Corporation (2008), 2008 ONSEC 18, 31 OSCB 8337, aff'd 2010 ONSC 3926; Coventree Inc. (2011), 34 OSCB 10209; AiT Advanced Information Technologies Corporation (2008), 2008 ONSEC 3, 31 OSCB 712; Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43; Opitz v. Wrzesnewskyj, 2012 SCC 55, [2012] 3 S.C.R. 76; 2747-3174 Québec Inc. v. Quebec (Régie des permis d'alcool), [1996] 3 S.C.R. 919; TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976); Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund v. Barrick Gold Corp., 2021 ONCA 104; Miller v. FSD Pharma, Inc., 2020 ONSC 4054; Dyck v. Tahoe Resources Inc., 2021 ONSC 5712; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.

Statutes and Regulations Cited

Civil Code of Québec.

Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5.

Securities Act, C.C.S.M., c. S50, ss. 1(1) "material change", 112(1) "material fact", 140.1 "material fact", 191(1), (2).

Securities Act, CQLR, c. V-1.1, ss. 5 "material fact", 5.3, 225.4.

Securities Act, R.S.A. 2000, c. S-4, ss. 1(ff), (gg), 211.08(1), (2).

Securities Act, R.S.B.C. 1996, c. 418, ss. 1(1) "material change", "material fact", 140.8(1), (2).

Securities Act, R.S.N.L. 1990, c. S-13, ss. 2(1)(w), (x), 138.8(1), (2).

Securities Act, R.S.N.S. 1989, c. 418, ss. 2(1)(v), (w), 146H(1).

Securities Act, R.S.O. 1990, c. S.5, ss. 1(1) "issuer", "material change", "material fact", "reporting issuer", "security", 1.1, 56(1), 75, 138.1 "responsible issuer", 138.3, 138.8.

Securities Act, R.S.P.E.I. 1988, c. S-3.1, ss. 1(1)(ff), (gg), 129(1), (2).

Securities Act, S.N.B. 2004, c. S-5.5, ss. 1(1) "material change", "material fact", 161.41(1).

Securities Act, S.N.W.T. 2008, c. 10, ss. 1(1) "material change", "material fact", 129(1), (2).

Securities Act, S. Nu. 2008, c. 12, ss. 1(1), 129(1), (2).

Securities Act, S.Y. 2007, c. 16, ss. 1(1) "material change", "material fact", 129(1), (2).

Securities Act, 1988, S.S. 1988-89, c. S-42.2, ss. 2(1)(y), (z), 136.4(1), (2).

Authors Cited

Anand, Anita, and Mary Condon. "Weather, Leather, and the Obligation to Disclose: Kerr v. Danier Leather Inc." (2006), 44 Osgoode Hall L.J. 727.

Biron, Julie. "Gouvernance et assemblées d'actionnaires", in Jurisclasseur Québec — Collection Droit des affaires — Valeurs mobilières, by Stéphane Rousseau, ed. Montréal: LexisNexis, fascicule 8 (updated August 2, 2021).

Burrows, Andrew. Thinking About Statutes: Interpretation, Interaction, Improvement. Cambridge: Cambridge University Press, 2018.

Côté, Pierre-André, and Mathieu Devinat. Interprétation des lois, 5th ed. Montréal: Thémis, 2021.

Fraiberg, Jeremy D., and Robert Yalden. "Kerr v. Danier Leather Inc.: Disclosure, Deference and the Duty to Update Forward-Looking Information" (2006), 43 Can. Bus. L.J. 106.

Gillen, Mark R. Securities Regulation in Canada, 4th ed. Toronto: Thomson Reuters, 2019.

Iacobucci, Edward M. "On Lemons and Leather: Liability for Misrepresentations of Forward-Looking Information in Danier Leather" (2009), 48 Can. Bus. L.J. 3.

Johnston, David, Kathleen Doyle Rockwell and Laura Levine. Canadian Securities Regulation, 6th ed. Toronto: LexisNexis, 2025.

Nicholls, Christopher C. Securities Law, 3rd ed. Toronto: Irwin Law, 2023.

Ontario. Ministry of Finance. Five Year Review Committee. Five Year Review Committee Final Report — Reviewing the Securities Act (Ontario). Toronto: Queen's Printer for Ontario, 2003.

Ontario Securities Commission. "Consolidation of Remarks of Peter J. Dey Concerning Disclosure Under the Securities Act Made to Securities Lawyers in Calgary and Toronto on June 7 and 9" (1983), 6 O.S.C. Bull. 2361.

Ontario Securities Commission. National Instrument 43-101. Standards of Disclosure for Mineral Projects (2001), 24 OSCB 304.

Ontario Securities Commission. National Instrument 51-102. Continuous Disclosure Obligations (2004), 27 OSCB 3439.

Ontario Securities Commission. National Policy 51-201. Disclosure Standards (2002), 25 OSCB 4492.

Park, James J. "Insider Trading and the Integrity of Mandatory Disclosure", [2018] Wis. L. Rev. 1133.

Provencher, Richard, et al. "Information continue", in Jurisclasseur Québec — Collection Droit des affaires — Valeurs mobilières, by Stéphane Roussesau, dir. Montréal: LexisNexis, fascicule 8 (updated April 14, 2025).

Rousseau, Stéphane. Droit des valeurs mobilières: Théorie et pratique. Montréal: Éditions Thémis, 2023.

Rousseau, "Étude du recours statutaire en responsabilité civile pour le marché secondaire des valeurs mobilières au Québec" (2009), 43 R.J.T. 709.

Sale, Hillary A. "Disclosure's Purpose" (2018), 107 Geo. L.J. 1045.

Sarro, Douglas. "Material Change Standards in Securities Law" (2025), 69 Can. Bus. L.J. 1.

Sullivan, Ruth. The Construction of Statutes, 7th ed. Toronto: LexisNexis, 2022.

APPEAL from a judgment of the Ontario Court of Appeal (Simmons, Benotto and Favreau JJ.A.), 2023 ONCA 359, 166 O.R. (3d) 732, 44 B.L.R. (6th) 33, [2023] O.J. No. 2547 (Lexis), 2023 CarswellOnt 7651 (WL), setting aside a decision of Glustein J., 2022 ONSC 81, [2022] O.J. No. 37 (Lexis), 2022 CarswellOnt 58 (WL) and remitting issues regarding the certification of the class proceeding to the Superior Court. Appeal dismissed, Côté J. dissenting.

Lara Jackson, John M. Picone, Kate Byers and Laura Cloutier, for the appellants.

Joseph Groia, Jay Strosberg, Scott Robinson and Yona Gal, for the respondent.

John A. Fabello, Gillian B. Dingle and Lauren Nickerson, for the intervener Canadian Coalition for Good Governance.

Aaron Dantowitz and Charlie Pettypiece, for the intervener Ontario Securities Commission.

Luis Sarabia, Jonathan Bilyk and Matthew Howe, for the intervener Mining Association of Canada.

Monique Jilesen, Brian Kolenda and Devon R. Kapoor, for the intervener CFA Societies Canada Inc.

Vlad Calina and Caitlin Leach, for the intervener LiUNA Pension Fund of Central and Eastern Canada.

Dana M. Peebles and Valérie Lord, for the intervener Insurance Bureau of Canada.

Wendy Berman, Brandon Kain and Aya Schechner, for the intervener Canadian Chamber of Commerce.

The judgment of Wagner C.J. and Karakatsanis, Rowe, Martin, Kasirer, Jamal, O'Bonsawin and Moreau JJ. was delivered by

Jamal J. —

I. Overview

[1] This appeal requires the Court to address what has been described as "perhaps the most difficult area of securities law" — the distinction between a "material fact" and a "material change" under the Ontario Securities Act, R.S.O. 1990, c. S.5, and equivalent legislation across Canada (Ontario Securities Commission, "Consolidation of Remarks of Peter J. Dey Concerning Disclosure Under the Securities Act Made to Securities Lawyers in Calgary and Toronto on June 7 and 9" (1983), 6 O.S.C. Bull. 2361 ("Dey Remarks"), at p. 2361). The appeal also requires the Court to clarify the test under s. 138.8(1) of the Securities Act for leave to commence an action for breach of an issuer's disclosure obligations.

[2] A "material fact" is defined under the Securities Act as "a fact that would reasonably be expected to have a significant effect on the market price or value of the securities" (s. 1(1) (see Appendix)). Material facts need only be disclosed periodically under the legislation. By contrast, a "material change" is defined in relevant part as "a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer" (s. 1(1)). Material changes must be disclosed immediately, or in the words of the statute, "forthwith" (s. 75(1)), imposing an obligation to make timely disclosure. The test for leave to commence an action under the Securities Act for breach of an issuer's disclosure obligations provides that the court should grant leave only where it is satisfied that "the action is being brought in good faith" and "there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff" (s. 138.8(1)).

[3] This case arises in the wake of a Canadian mining company detecting pit wall instability at its premier mine. Within days, the mine experienced a rockslide that required the company to shut down at least part of the mine for a time and to revise the mine's production forecast downward by 20 percent for the next year. When the company disclosed these developments to investors about a month later, the company's share price dropped 16 percent within a day, resulting in a loss of over $1 billion in market capitalization. Soon afterwards, an investor applied for leave to commence an action for breach of the company's timely disclosure obligations and for certification of a class proceeding.

[4] The motion judge at the Ontario Superior Court of Justice accepted that the pit wall instability and rockslide may have been "material facts", but ruled that there was no reasonable possibility that the investor could establish a "material change" in the company's "business, operations or capital". The motion judge relied on a dictionary definition of the word "change" as "a different position, course, or direction" (2022 ONSC 81, at para. 150, quoting the definition of "change" in the Merriam-Webster Dictionary (online)), and drew on case law to define the terms "business", "operations", and "capital". He ruled that since the company continued its business and operations as a mining company, there was no reasonable possibility that either the pit wall instability or the rockslide resulted in a "change" in the company's "business", "operations", or "capital". As a result, the company had not been required to disclose the developments "forthwith". Leave under s. 138.8(1) was therefore denied. The motion judge went on to determine that if there had been a change, then there was a reasonable possibility that the change would have been material.

[5] The Court of Appeal for Ontario allowed the appeal. It ruled that the motion judge misinterpreted the statutory test for a "material change" by adopting restrictive definitions of the terms at issue, which it said "have not yet been definitively interpreted in the jurisprudence" (2023 ONCA 359, 166 O.R. (3d) 732, at para. 7). The motion judge then erred by applying those restrictive definitions to the test for leave, which the Court of Appeal said required only a "plausible interpretation" of the statutory provisions at issue and sufficient evidence to support granting leave. In the Court of Appeal's view, there was a reasonable possibility that the pit wall instability and rockslide involved "changes" in the company's operations, given the undisputed evidence that these developments impacted the company's phasing of the mine and reduced its next annual production forecast.

[6] I would dismiss the appeal. In my view, the motion judge erred by relying on restrictive definitions of "change", "business", "operations", and "capital", and then erred by applying those definitions to determine whether there was a reasonable possibility that there had been a material change. The Ontario legislature intentionally left these terms undefined to allow the legislation to be applied flexibly and contextually to a wide range of industries and corporate structures. The disclosure standards in the Securities Act should be applied to promote the statutory purpose of preventing and deterring informational asymmetry between issuers and investors, while recognizing that the statutory terms at issue acquire meaning by being applied in concrete factual circumstances. By contrast, adopting rigid definitions would ossify the Securities Act and would frustrate the statutory purpose.

[7] Moreover, as this Court has stated, the test for leave under s. 138.8(1) of the Securities Act requires a "plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim" (Theratechnologies inc. v. 121851 Canada inc., 2015 SCC 18, [2015] 2 S.C.R. 106, at para. 39 (emphasis added), quoted in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, [2015] 3 S.C.R. 801, at para. 121). A "plausible analysis" is not a plausible statutory interpretation, but rather a plausible application of the legislation to the facts. Statutory interpretation is conducted in accordance with the modern principle, both on a motion for leave and at a trial on the merits. A plausible analysis must, however, show how the legislation applies to the facts by accounting for the limited evidence available on a motion for leave, which is brought before there has been documentary production or oral discovery.

[8] Here, the uncontested evidence on the motion was that the pit wall instability and rockslide impacted the company's operations at its mine. Hence, the evidence showed that these events could have resulted in a "change". No one challenges the conclusion of the courts below that there is a reasonable possibility these events could be shown at trial to be "material". Accordingly, a plausible analysis of the applicable legislative provisions and evidence on the motion showed a reasonable or realistic chance that the action could succeed.

II. Background

A. Lundin Mining Corporation and the Candelaria Mine

[9] The appellant, Lundin Mining Corporation, is a federally-incorporated Canadian mining company whose shares trade on the Toronto Stock Exchange. The company has operations in different parts of the world and primarily produces copper, nickel, and zinc. The individual appellants were officers and directors of Lundin at the relevant times.

[10] Lundin held an 80 percent ownership interest in the Candelaria mine in Chile, which produces copper ore from an open pit mine and three underground mines. The Candelaria mine accounted for between 55 percent and 60 percent of Lundin's total sales revenue in 2016 and 2017, with the open pit mine accounting for about 95 percent of all material mined at Candelaria. In 2017, the Candelaria mine had 19 years left in its lifespan and 5 remaining phases, known as Phases 9 to 13. Phase 9 and part of Phase 10 were scheduled to be mined in October 2017. Lundin removed 87 million tonnes of material from the Candelaria open pit mine in 2017.

B. Lundin Detects Pit Wall Instability at the Candelaria Mine and a Rockslide Soon Follows

[11] On October 25, 2017, Lundin detected pit wall instability at the Candelaria open pit mine. Lundin regularly warned investors of the risks of pit wall instability and rockslides, which are common in the mining industry. In this instance, the instability was localized and all personnel were evacuated from that area of the mine. There was no direct evidence before the court as to whether the rest of the open pit mine or the underground mines were evacuated or shut down.

[12] On October 31, 2017, the pit wall instability caused a localized rockslide in the open pit mine. About 600,000 to 700,000 tonnes of waste material fell down a slope, restricting access to Phase 9. This volume of material represented about 0.8 percent of Candelaria's 2017 annual production, roughly equivalent to three days of mining. The rockslide caused no fatalities, injuries, or damage to equipment. There was no direct evidence before the court of the immediate impact on the mine's operations.

C. Lundin Discloses the Pit Wall Instability and Rockslide to Investors a Month Later

[13] Lundin did not disclose the pit wall instability or rockslide to investors immediately. The company did so about a month later, on November 29, 2017, in a news release coinciding with the release of the company's quarterly production report.

[14] The news release described "recent instability in a localized area of the pit's east wall and a slide which occurred October 31, 2017" (A.R., vol. IV, at p. 51). It also disclosed a downward revision of the Candelaria mine's 2017 annual production forecast of approximately 20 percent and changes to the mine's sequencing or phasing (its plan for removing materials from the mine site).

D. Lundin's Share Price Drops 16 Percent

[15] The next day, on November 30, 2017, Lundin's share price dropped 16 percent from the previous day's closing price — representing a loss of more than $1 billion in market capitalization.

[16] After the close of trading, Lundin released a technical report describing the rockslide, the changes to the life of the mine, the future reduction of ore extraction at the mine, and the associated changes to the mine's estimated future annual production and sequencing.

E. Lundin Hosts a Conference Call with Investors

[17] On December 1, 2017, before the market opened and trading resumed, Lundin hosted a conference call with investors and stock analysts to provide additional information about the pit wall instability and rockslide.

F. An Investor Commences a Proposed Class Action for Failure to Make Timely Disclosure

[18] The respondent, Dov Markowich, is an investor who purchased 10,000 shares of Lundin between November 15 and 27, 2017. In January 2018, Mr. Markowich commenced a proposed class proceeding alleging that Lundin and the individual appellants failed to make timely disclosure of the pit wall instability and rockslide, contrary to their obligations under the Securities Act, since these events each resulted in a "material change" in Lundin's "business, operations or capital" that should have been disclosed "forthwith" under s. 75(1).

[19] Mr. Markowich brought a motion under s. 138.8(1) of the Securities Act for leave to pursue the statutory cause of action. He also moved for certification of the proposed class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6.

III. Prior Decisions

A. Ontario Superior Court of Justice, 2022 ONSC 81 (Glustein J.)

[20] The motion judge dismissed the motions for leave to commence an action under the Securities Act and for class certification. He found that while the pit wall instability and rockslide may have been "material facts", neither event resulted in a "material change" in Lundin's business, operations or capital.

[21] The motion judge defined the "business" of an issuer as what it does to generate revenues; "operations" as how or where the company conducts business; and "capital" as the equity or debt capital structure.

[22] Although there was no direct evidence before the court on the effect of the pit wall instability or rockslide on the Candelaria mine's operations, the motion judge observed that circumstantial evidence suggested there was "some type of disruption or 'shut-down'" of at least part of the mine following the events (para. 158). Even so, he concluded that there was no evidence that either event resulted in a change in Lundin's "line of business, how it conducted its operations, or its capital structure" (para. 129).

[23] The motion judge ruled that there was no basis to find that either the pit wall instability or the rockslide involved a "change" in Lundin's business, operations or capital. He applied a standard that required the development in question to cause a "different position, course, or direction" in the issuer's business, operations, or capital, and held that this standard was not met. Lundin had continued its mining operations. The resequencing or re-phasing at the mine that followed the events was part of the ordinary business and operations of a copper mining company.

[24] In the alternative, the motion judge stated that had he found a change in Lundin's business, operations or capital, he would have granted leave. He held that there was a reasonable possibility that, had there been a change, it would have been a material change, given its impact on Lundin's share price.

[25] Had the motion judge granted leave, he would have certified a class proceeding regarding the statutory cause of action, which Lundin and the other defendants had not opposed.

B. Court of Appeal for Ontario, 2023 ONCA 359, 166 O.R. (3d) 732 (Favreau J.A., Simmons and Benotto JJ.A. concurring)

[26] The Court of Appeal allowed the appeal. The court held that the motion judge erred in law by interpreting the terms "change", "business", "operations", and "capital" too restrictively and then applying those definitions to determine whether there was a reasonable possibility that there had been a material change.

[27] In the court's view, based on a more generous interpretation of the words "change in the business, operations or capital", there was a reasonable possibility that the pit wall instability and rockslide involved changes in the company's operations, given the undisputed evidence that these developments impacted the company's phasing of the mine and reduced its next annual production forecast. As a result, Mr. Markowich had advanced a plausible interpretation and sufficient evidence to satisfy the leave test.

[28] Finally, the court noted that although Lundin and the individual defendants agreed that granting leave under s. 138.8(1) to commence an action also entitled Mr. Markowich to pursue certification of the class proceeding, the court remitted the issues of certification to the Superior Court for determination.

IV. Issues

[29] The main issue on this appeal is whether Mr. Markowich should have been granted leave to commence an action against Lundin and the individual appellants for alleged breaches of the timely disclosure obligations under the Securities Act. This requires the Court to address two sub-issues: (1) the interpretation of "material change", and (2) the test for leave under s. 138.8(1) of the Securities Act.

V. Positions of the Parties

[30] The appellants, Lundin and its officers and directors, submit that the Court of Appeal interpreted "material change" too broadly. They claim that "material change" only encompasses changes that are fundamental, core, or key to an issuer's business, operations, or capital. They take the position that a material change should require a development that is significant in the sense of altering the core aspects of the issuer's business, operations, or capital. Importantly, the appellants also submit that the Court of Appeal erred in holding that the test for leave under s. 138.8(1) requires only a "plausible interpretation" of the relevant provisions.

[31] The respondent, Mr. Markowich, claims that the Court of Appeal correctly interpreted the statutory term "material change". He submits that the terms "change", "business", "operations", and "capital" are ordinary undefined words that should be applied in context and according to their ordinary meaning, without importing additional qualifiers. He also submits that the test for leave under s. 138.8(1) requires only a "plausible analysis" of the applicable legislative provisions and some credible evidence in support of the claim, which he met.

VI. Analysis

[32] I will address the issues in three parts. First, I will consider the statutory interpretation of a "material change" in the business, operations or capital of an issuer. Second, I will discuss the test for leave under s. 138.8(1) of the Securities Act. Third, I will apply these analyses to this case.

A. The Interpretation of a Material Change

(1) Legislative and Policy Background

(a) The Role of Disclosure in Securities Regulation

[33] Section 1.1 of the Securities Act identifies four purposes of the legislation: "(a) to provide protection to investors from unfair, improper or fraudulent practices; (b) to foster fair, efficient and competitive capital markets and confidence in capital markets; (b.1) to foster capital formation; and (c) to contribute to the stability of the financial system and the reduction of systemic risk."

[34] Businesses ("issuers") issue a wide range of investment products ("securities"), including shares of stock in corporations, to raise capital from investors. The securities market can be divided into the primary market, where issuers first sell securities directly to investors, and the secondary market, where investors trade securities among themselves.

[35] This Court has recognized that "proper disclosure is the heart and soul of the securities regulations across Canada" and is pivotal for "an effective securities regime" (Kerr v. Danier Leather Inc., 2007 SCC 44, [2007] 3 S.C.R. 331, at para. 1). "Disclosure laws require issuers of securities to provide information relevant to evaluating the issuer's securities to actual and potential investors" (Theratechnologies, at para. 17).

[36] As a result, preventing and deterring informational asymmetry between investors and issuers is essential "to maintain the integrity of the securities system and protect the public interest" (Theratechnologies, at para. 19).

[37] Disclosure also promotes the efficiency of capital markets by helping investors to identify and direct capital to the most deserving public companies (see Kerr, at para. 1; Theratechnologies, at para. 17).

(b) Disclosure of Material Facts in the Primary Market

[38] To illustrate the meaning of a material fact, it is useful to consider the disclosure required when an issuer first sells its securities directly to investors in the primary market. In this context, under s. 56(1) of the Securities Act, the issuer is required to include in its prospectus disclosure "full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed".

[39] A "material fact" is defined under the Ontario Securities Act as "a fact that would reasonably be expected to have a significant effect on the market price or value of the securities" (s. 1(1)). The definition includes a wide range of information, both internal and external to the issuer — a material fact in the primary market context can encompass virtually any fact relevant to evaluating the issuer's securities.

(c) Continuous Disclosure Obligations in the Secondary Market: Periodic Disclosure of Material Facts, but Timely Disclosure of Material Changes

[40] After an issuer has sold securities directly to investors in the primary market, subsequent trades of securities between investors occur in the secondary market. There are important ongoing, or "continuous", disclosure obligations that apply to reporting issuers in the context of secondary market trading.

[41] There are two categories of continuous disclosure obligations. The first is the obligation to make periodic disclosure of every "material fact" about the issuer, typically through documents such as management information circulars, financial statements, and annual reports. These documents must be filed regularly with the securities commission, but they need not be filed and disclosed to investors immediately.

[42] The second category of continuous disclosure obligation is the obligation to make timely disclosure of every "material change" in the issuer's affairs. Specifically, under s. 75(1) of the Securities Act, "[w]here a material change occurs in the affairs of a reporting issuer, it shall forthwith issue and file a news release authorized by a senior officer disclosing the nature and substance of the change" and file a report within ten days. This imposes an obligation to make timely disclosure of material changes.

[43] As previously stated, a "material change" (in relation to an issuer other than an investment fund) is defined in relevant part as "a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer" (s. 1(1)).

[44] As this Court has noted, the statutory definition of a "material change" has two components. First, there must be "a change in the business, operations or capital" of the issuer. Second, the change must be "one that would reasonably be expected to have a significant effect on the market price or value" of the issuer's securities (Kerr, at para. 21 (emphasis in original)).

[45] Since 2004, most continuous disclosure obligations for Canadian reporting issuers have been consolidated in a national instrument adopted by securities regulators across Canada: National Instrument 51-102. Continuous Disclosure Obligations (2004), 27 OSCB 3439.

(2) The Distinction Between a "Material Fact" and a "Material Change"

[46] The distinction between a "material fact" and a "material change", both of which are defined by legislation, must be resolved under the modern principle of statutory interpretation. A statutory provision is interpreted based on its text, context, and purpose to find a meaning that is harmonious with the legislation as a whole (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21; Sullivan, at § 1:02[3]).

[47] The distinction between a material fact and a material change has been described as a "conundrum" (Anand and Condon, at p. 730), and sometimes as "perhaps the most difficult area of securities law" (Dey Remarks, at p. 2361). It has also been described as "a recurring question" that "courts, tribunals, and securities commissions have grappled with . . . many times" (Sarro, at p. 1).

(a) A Material Fact Is Static; A Material Change Is Dynamic

[48] A material fact is "static", because it provides a snapshot of an issuer's affairs at a particular point in time. A material change is "dynamic", because it necessarily compares an issuer's affairs at two points in time.

[49] The distinction between a material fact and a material change "is perhaps best understood from the perspective of the evolution of an issuer's affairs. A material fact is a fact about an issuer at a given moment in time. A material change is a change in the issuer's affairs over time" (Sarro, at p. 24).

(b) A Material Fact Is Defined More Broadly Than a Material Change

[50] A material fact is defined more broadly than a material change. "[O]nly changes in an issuer's 'business, operations or capital' can be material changes . . . whereas a wider range of facts can be material facts" (Kerr, at para. 22).

[51] A material change must be internal to the issuer — there must be a change "in the business, operations or capital of the issuer" (s. 1(1)). External facts or changes beyond the control of an issuer cannot constitute a material change unless they actually result in a change in an issuer's business, operations or capital. A material fact, however, may be internal or external to the issuer.

[52] In Kerr, this Court applied the distinction between internal and external developments and held that Danier Leather Inc., a leather apparel company, was not required to disclose that unseasonably warm weather had affected the company's sales. The Court stated: "The term 'material change' is limited to a change in the business, operations or capital of the issuer. This is an attempt to relieve reporting issuers of the obligation to continually interpret external developments as they affect the affairs of the issuer" (para. 38, quoting Dey Remarks, at p. 2362). The Court also explained that Danier Leather's loss in sales was a material fact, not a material change, since it reflected an external change: "the unseasonably warm weather that was the primary cause of Danier's poor intra-quarter performance was an external condition" (para. 56). The Court added:

It almost goes without saying that poor intra-quarterly results may reflect a material change in business operations. A company that has, for example, discontinued a profitable product line, or has lost the services of a key employee, may well be required to disclose these material changes in business operations when they occur.

(para. 56)

[53] By comparison, in Pezim, this Court held that information contained in drilling results for a company's mine, an internal development, could amount to a material change (p. 591).

[54] An example of an external development that caused a material change in an issuer's affairs arose in Coventree Inc. (2011), 34 OSCB 10209, aff'd 2013 ONSC 1310, 306 O.A.C. 107. The Ontario Securities Commission found that Coventree's inability to issue new asset-backed commercial paper because of an external disruption to the market — the credit crunch of 2007 — caused a "material change" because the external disruption caused Coventree's business to stop operating.

[55] Although a material change is necessarily internal to the issuer, a material fact may be internal or external. In Kerr, for example, the unseasonably warm weather that caused poor financial results was an external material fact that Danier Leather was required to disclose periodically. A material fact may also be external to the issuer, such as a change in a competitor's operations or a market disruption.

[56] The distinction between a material fact and a material change, and particularly the requirement that a material change be internal to the issuer, promotes two main policy rationales.

[57] First, the distinction balances the burdens that disclosure places on issuers with the need for investors to be informed on a timely basis of material developments in an issuer's affairs (see Kerr, at para. 38).

[58] Second, the distinction between a material fact and a material change promotes the purpose of securities law to remedy informational asymmetry between issuers and investors. Issuers are in a better position than investors to know about internal developments. By requiring timely disclosure of internal developments (material changes) while permitting only periodic disclosure of external developments (material facts), the Securities Act reduces informational asymmetry with respect to the information that issuers are best positioned to know.

(d) A Material Change Generally Requires More Than Mere Negotiations or Internal Deliberations

[59] Negotiations and internal deliberations, without more, will not usually amount to a change in the business, operations or capital of the issuer that must be disclosed immediately.

[60] For example, in AiT Advanced Information Technologies Corporation (2008), 2008 ONSEC 3, 31 OSCB 712, the Ontario Securities Commission found that moving through interim stages of a merger negotiation did not amount to a material change.

[61] As a further example, in Theratechnologies, this Court ruled that routine correspondence with a regulator did not amount to a change in the issuer's affairs that needed to be immediately disclosed.

[62] Similarly, in Peters v. SNC-Lavalin Group Inc., 2023 ONCA 360, 166 O.R. (3d) 756, released with the decision under appeal, the Court of Appeal held that SNC-Lavalin's receipt of a message confirming that it would not be invited to participate in remediation agreement negotiations was not a material change because, among other reasons, it was not a change in SNC-Lavalin's affairs but rather a confirmation of the ongoing status quo.

(3) The Motion Judge Erred in Interpreting "Material Change"

[63] In light of the above principles from the jurisprudence and scholarly commentary, in my respectful view, the motion judge erred in interpreting what amounts to a "material change" in an issuer's business, operations or capital.

(a) A "Change" Should Not Be Interpreted Restrictively

[64] I agree with the Court of Appeal's conclusion that the motion judge erred by relying on a dictionary definition of "change" as "a different position, course, or direction" (2022 ONSC 81, at para. 150), and then concluding that neither the pit wall instability nor the rockslide resulted in a "change" in Lundin's business, operations or capital, since Lundin continued as a mining company.

[65] At the outset, I stress that it is not unusual or necessarily wrong to start the process of statutory interpretation with a dictionary definition of a word. But the exercise of statutory interpretation requires much more than that. The text of the statutory provision must be read in its entire context and in its grammatical and ordinary sense, harmoniously with the scheme of the legislation, the object of the legislation, and the intention of the legislature (Rizzo, at para. 21).

[66] At the same time, dictionary definitions cannot determine the meaning of legislation (see, e.g., Telus Communications Inc. v. Federation of Canadian Municipalities, 2025 SCC 15, at para. 60; R. v. Monney, [1999] 1 S.C.R. 652, at para. 23; Sullivan, at § 3:02[3]). Dictionary definitions have at least three shortcomings when applied to words in legislation.

[67] First, the meaning of words "may differ significantly from one dictionary to the next", and "even minor differences in the way words are defined can alter the import of the definition selected" (Sullivan, at § 3:02[4]). Indeed, a different dictionary might have provided a definition of "change" that did not include the narrowing qualifiers of "course" or "direction", such as "the act or instance of making or becoming different" or "make or become different" (The New Oxford Dictionary of English, s.v. "change").

[68] Second, and more fundamentally, dictionary definitions focus on the typical usage of words, rather than on the full range of intended applications of a legislative text (see Sullivan, at § 3:02[3]). As Sullivan explains:

Connotative or inten[s]ional meaning focuses on the common or typical attributes found in the usage of a given sense of a word . . . . Denotative or extensional meaning focuses on the full range of things to which a word refers.

(Sullivan, at § 3:02[3])

[69] Third, dictionary definitions "can say very little about the meaning of a word as used in a particular context" (Sullivan, at § 3:02[4]; see also Burrows, at p. 101; An Informer v. A Chief Constable, [2012] EWCA Civ 197, [2013] Q.B. 579, at para. 20).

[70] Care must therefore be taken in using dictionaries to give definitive meaning to terms that a legislature has intentionally left undefined. In this case, the Ontario legislature intentionally chose to leave the word "change" undefined. This decision to leave "change" undefined — along with the other terms in the phrase "business, operations or capital" — has several consequences for the interpretation of "material change".

[71] First, the legislature intended the word "change" to retain its ordinary meaning. As the Court of Appeal noted, "a change is a change" (para. 80). The ordinary meaning of "change" does not include qualifiers such as "core", "fundamental", or "key".

[72] Second, the legislature used the term "change" in the particular context of securities legislation, where the purpose of continuous disclosure obligations is to level the informational playing field between issuers and investors.

[73] Third, by leaving the term "change" undefined, the legislature has maintained flexibility for the Securities Act to apply to widely varying factual scenarios, including the many different types of industries and financial structures that are subject to securities legislation. Fixing a single definition would risk ossifying the law.

[74] Finally, although the legislature left "change" undefined, regulators and courts have provided helpful interpretive guidance on what constitutes a "material change" in various policy documents and judicial decisions. This guidance informs the application of "change" to specific factual circumstances.

[75] In sum, substituting a dictionary definition for the intentionally undefined term "change" restricts the reach of the legislation, contrary to the legislature's purpose.

(b) A Development Need Not Be "Important and Substantial" To Constitute a "Change"

[76] The motion judge's second error was to couple the dictionary definition of "change" with statements from lower court decisions suggesting that a development must be "important" and "substantial" to constitute a change requiring immediate disclosure (see, e.g., Mask, at para. 57; Green, at para. 133). The first step in the analysis of whether there has been a "material change" is qualitative, in that it involves evaluating the nature of the change. The second step considers the magnitude of the change, which is a question of materiality. The motion judge appears to have conflated these two steps by importing questions of magnitude and significance into the first qualitative step.

[77] I agree with the Court of Appeal that the first step is qualitative, in that it involves evaluating the nature of the change. The second step considers the magnitude of the change, or whether it is "material": whether the change "would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer" (s. 1(1)).

[78] Contrary to the appellants' submission, this approach will not require issuers to evaluate whether every minor internal event within a company is a material change requiring immediate disclosure. The threshold that a change must be "reasonably expected to have a significant effect on the market price or value" of the issuer's securities provides a meaningful and necessary filter. The first step is qualitative — "was there a change?" — whereas the second step is more quantitative — "was the change material?". Conflating these steps, as the motion judge did, effectively merges the entire inquiry into a single question about significance.

[79] I also agree with Professor Sarro that two rival standards have developed in the jurisprudence. The first standard sticks closely to the relevant statutory language and focuses on whether there was a "change" in the issuer's "business, operations or capital". The second standard, which has been called the "narrower disclosure standard", additionally requires the development in question to be "important" and "substantial" (see Green, at para. 133; Mask, at para. 57) or, put slightly differently, involves a material change that alters the "fundamental, core, or key aspects of the issuer's business" (Sarro, at p. 9).

[80] In my view, the narrower disclosure standard is inconsistent with the text of the legislation, which, apart from the question of materiality, simply uses the undefined term "change" without any additional qualifiers. This standard also runs counter to the purpose of securities legislation, which is to remedy informational asymmetry between issuers and investors. Additionally, the definition of "material change" in subcl. (a)(ii) — which defines the term to also mean "a decision to implement a change referred to in subclause (i)" (s. 1(1)) — contemplates only a "decision to implement" a change, not a requirement that the change be particularly important or substantial. This language does not support reading in a requirement of substantiality or importance.

[81] As Professor Sarro correctly explains, the narrower disclosure standard, requiring that a development be "important and substantial" to result in a "material change", appears to originate in the Superior Court's decision in Green v. Canadian Imperial Bank of Commerce, 2012 ONSC 3637, 29 C.P.C. (7th) 225 (rev'd 2014 ONCA 90, 118 O.R. (3d) 641; aff'd 2015 SCC 60, [2015] 3 S.C.R. 801), at para. 133. The Court's statement in Green that "there must be a change important enough and substantial enough to alter the fundamental, core or key aspects of [the issuer]'s business, operations or capital" added a heightened threshold that is not found in the statutory text of the Securities Act (see Sarro, at pp. 9-10). Notably, this statement was not necessary to the outcome of Green, since the Court of Appeal and then this Court disposed of the case on different grounds.

[82] Further, the language of "important and substantial", which was adopted from the Superior Court's decision in Green, was clearly obiter in that case, since it was not necessary to the decision. Green was an application for authorization under the Quebec Act, not for leave under the Ontario Securities Act. The Superior Court's reliance on the Green statement in Mask as a description of the standard for what constitutes a "material change" in Ontario therefore incorporated an obiter statement from a Quebec authorization proceeding into the Ontario legislative framework.

[83] The language from the Superior Court's decision in Green was, however, then followed and elaborated upon by that court in Mask, as requiring "a change that would alter the fundamental, core, or key aspects of the issuer's business, operations or capital" (para. 57). With respect to the motion judge and the Court of Appeal, the standard set out in Mask is inconsistent with the text of the Securities Act.

[84] The narrower disclosure standard is also mistaken as a matter of policy. In the brief discussion of the material change standard in Green, the court set out the "important and substantial" language while also giving as an example a case where a "company . . . moves in an entirely different direction, is involved in a totally different business, or suffers a fundamental change to its business, operations, or capital" (para. 133). This language appears to confuse a "material change" with a change in the fundamental nature of an entire business, rather than an internal change that significantly affects the issuer's business, operations, or capital.

[85] By contrast, the broader disclosure standard is sound as a matter of policy because it promotes the fundamental purposes of the Securities Act to protect investors and remedy informational asymmetry:

Without disclosure requirements that mitigate this asymmetry, market participants are less well-placed to make informed decisions about whether to buy, hold, or sell securities.

(Theratechnologies, at para. 17)

[86] Relatedly, the Ontario Securities Commission has repeatedly advised that technical interpretations of the language of the legislation would not support the goal of promoting disclosure or protecting the investing public (see, e.g., Cornish, at para. 48).

[87] In my view, therefore, the motion judge erred by applying the narrower disclosure standard for a material change, effectively requiring that a development alter the fundamental, core, or key aspects of the issuer's business, operations or capital. This standard is not found in the Securities Act and is inconsistent with the purposes of the legislation.

(c) The Phrase "Business, Operations or Capital" Should Not Be Interpreted Restrictively

[88] Finally, the motion judge drew on case law to adopt restrictive definitions of the undefined terms appearing in the phrase "business, operations or capital". Specifically, he defined "business" as referring to the company's lines of business; "operations" as referring to how and where the company conducts business; and "capital" as referring to the equity or debt structure of the company (2022 ONSC 81, at paras. 130 and 145-150).

[89] There is nothing wrong in principle in drawing on case law to illustrate the meaning of the terms appearing in the phrase "business, operations or capital". But similar to the term "change", the Ontario legislature intentionally chose not to define these terms. Given the legislature's decision not to define these terms, courts and regulators must be careful not to crystallize definitions of these terms that would have the effect of rigidly excluding specific contexts or factual circumstances from the terms' reach.

[90] Not only are the terms "business", "operations", and "capital" not defined in the Securities Act, they are also not defined in the leading judicial decisions, regulatory decisions, securities law textbooks or in the key regulatory instruments or policy statements. The legislature has not adopted any of the various definitions that have been proposed in the jurisprudence and academic commentary for these terms.

[91] There are several reasons why the legislature left the terms "business", "operations", and "capital" undefined.

[92] First, "business", "operations", and "capital" are widely understood commercial concepts. The Securities Act relies on the ordinary commercial meaning of these widely understood commercial concepts, rather than creating rigid statutory definitions. These terms have conventional commercial meanings that the legislature would have assumed parties would understand and apply in context (see Canada Trustco, at para. 10; Sullivan, at § 5:04).

[93] Second, securities legislation must be applied to a wide range of industries and financial structures. Leaving the terms undefined allows courts and regulators to apply the legislation as broadly and flexibly as the context and circumstances require without being constrained to particular industries or structures.

[94] Finally, in the context of continuous disclosure obligations, "change in the business, operations or capital" is a holistic standard for assessing whether an issuer's affairs have changed. The phrase is not to be parsed into its separate elements. The inquiry is whether the issuer's "business, operations or capital" have changed — a holistic question of whether the issuer's affairs are materially different than before.

[95] To conclude, importing regulatory or judicial definitions for the intentionally undefined terms "business, operations or capital" would ossify the Securities Act in a way that the legislature did not intend, and would result in a rigid definition that could frustrate the statutory purpose.

(4) Summary

[96] Material changes are dynamic, related to changes in the issuer's business, operations or capital, internal rather than external to the issuer, and usually involve more than mere negotiations or internal deliberations. Like material facts, however, material changes must be reasonably expected to have a significant effect on the market price or value of securities.

[97] Whether there has been a material change in a given case is a highly contextual question of mixed fact and law (see Cornish, at paras. 51 and 53). It is not possible to identify a bright line test that distinguishes material changes from material facts in every case, since whether a development constitutes a material change must be determined in its factual context. This is consistent with the legislature's deliberate choice to leave undefined the key terms of "change", "business", "operations", and "capital".

[98] The contextual exercise of identifying a material change is guided by the purpose of disclosure obligations to level informational asymmetry between issuers and investors, which serves to maintain the integrity of the securities system and protect the public interest.

B. The Test for Leave To Commence an Action Under the Securities Act

(1) Background

[99] The second issue on this appeal concerns the test for leave under s. 138.8(1) of the Securities Act, which requires the court to be satisfied that the action is brought "in good faith" and that there is "a reasonable possibility that the action will be resolved at trial in favour of the plaintiff".

[100] This Court reviewed the background to the creation of a statutory cause of action for secondary market misrepresentation in both Theratechnologies, at paras. 20-37, and Green, at paras. 10-93. I will briefly summarize the relevant background.

[101] After several high-profile disclosure scandals in the 1990s, the Toronto Stock Exchange created the Allen Committee to re-evaluate the secondary market disclosure regime. The committee recommended introducing a statutory cause of action for misrepresentation or omissions in secondary market disclosure. The committee was concerned that, without a statutory cause of action, investors were left with little recourse where the common law was not applicable or was too difficult to establish.

[102] In 2000, the Canadian Securities Administrators, the umbrella organization for Canada's provincial and territorial securities regulators, adopted a model code that was intended to be enacted across Canada. The model code included a statutory cause of action and a leave requirement.

(2) Section 138.8(1) of the Ontario Securities Act

[103] In 2002, Ontario became the first province to adopt a statutory cause of action for breach of continuous disclosure obligations with a leave requirement. In Theratechnologies, this Court held that the equivalent provision in the Quebec Securities Act had the same purpose and should be interpreted consistently.

[104] Section 138.8(1) of the Ontario Securities Act provides:

138.8 (1) No action may be commenced under section 138.3 without leave of the court granted upon motion with notice to each defendant. The court shall grant leave only where it is satisfied that:

(a) the action is being brought in good faith; and

(b) there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

(3) Applying the Test for Leave

[105] In Theratechnologies, this Court interpreted the test for leave under s. 225.4 of the Quebec Securities Act (paras. 38-39). In Green, the Court applied this test to the Ontario Securities Act (paras. 120-129).

[106] A leave motion under s. 138.8(1) involves a "preliminary merits test" (Theratechnologies, at para. 36, quoting Ironworkers Ontario Pension Fund (Trustee of) v. Manulife Financial Corp. (2013), 2013 ONSC 4083, 44 C.P.C. (7th) 80, at para. 28). However, it does not require the plaintiff to prove on a balance of probabilities that the action will succeed at trial. It is a threshold screening mechanism intended to deter meritless litigation brought to coerce unjust settlements.

(a) Assessing Whether the Plaintiff Has Made Out a Reasonable Possibility of Success

[107] In assessing whether the threshold for leave has been met, courts must "undertake a reasoned consideration of the evidence to ensure that the action has some merit" (Theratechnologies, at para. 39). The test for leave is more than a simple "some merit" standard; it requires that the action have a "reasonable possibility" of success. The court's task is not to adjudicate the merits of the claim, but rather to determine whether it has enough merit to justify putting the defendants to the cost and burden of a full trial. As the Court stated in Theratechnologies (at para. 38):

A full analysis of the evidence is unnecessary. If the goal of the screening mechanism is to prevent costly strike suits and litigation with little chance of success, the court must undertake a reasoned consideration of the evidence to ensure that the action has some merit.

[108] I would underscore several points on how courts should apply the test for leave and regarding the admonition against lapsing into a "mini-trial" in the leave motion.

[109] First, because the standard on a leave motion under s. 138.8(1) involves a preliminary merits test, it is more stringent than the test for authorization or certification of a class action. Unlike an authorization or certification motion, which focuses on the form of the proceeding rather than its merits, a leave motion under s. 138.8(1) requires the plaintiff to demonstrate a reasonable or realistic chance — and not merely a possibility — that the action will succeed at trial.

[110] Instead, s. 138.8(1) calls for a "qualitative evaluation of the proposed action" (Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675) v. Barrick Gold Corporation, 2024 ONCA 105, at para. 26) — meaning the court must evaluate the substance and merits of the plaintiff's claim to ensure it has genuine prospects of success.

[111] Second, the plaintiff's evidence on a leave motion must not only be "credible", but must also demonstrate a realistic or reasonable chance that the action will succeed. The plaintiff must show some basis for this: the leave motion is not a pro forma exercise or a mere formality (see Theratechnologies, at para. 39). In assessing the evidence, courts must take care not to make findings of fact or adjudicate the merits of the claim. The goal is to identify whether there is some credible evidence to support a reasonable chance of success.

[112] The requirement to "undertake a reasoned consideration of the evidence to ensure that the action has some merit" (Theratechnologies, at para. 39) means that the court cannot rubber-stamp a leave motion without actually evaluating the evidence. The court must be satisfied that the claim is not frivolous or manifestly without merit. At the same time, the court must not conduct a mini-trial or decide factual disputes. The standard is somewhere between these extremes.

[113] The motion judge must also consider to some extent the comparative strength of the competing evidence tendered by the parties (Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675), at para. 26), but must be mindful that this is a preliminary review of the evidence, not a final adjudication.

[114] Third, a court must evaluate the evidence on the leave motion mindful that the motion will be decided before the plaintiff has had the benefit of documentary production and oral discoveries. The plaintiff's evidence will therefore be thinner than at trial, and the court should not hold the thinness of the evidence at this early stage against the plaintiff as such.

(b) A Plausible Analysis of the Applicable Legislative Provisions Does Not Equate to a Plausible Interpretation of Those Provisions

[115] Both the motion judge and the Court of Appeal read the requirement in Theratechnologies of a "plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim" as amounting to a standard of "plausible interpretation" of the statutory provisions (motion judge, at para. 148; Court of Appeal, at para. 72).

[116] I respectfully disagree with these approaches.

[117] Contrary to the Court of Appeal's observation, the terms "business", "operations", and "capital" have been extensively interpreted in the jurisprudence, as I have discussed above. It was therefore wrong for the Court of Appeal to say that these terms "have not yet been definitively interpreted in the jurisprudence".

[118] In addition, statutory interpretation is not conducted less stringently on a motion for leave under s. 138.8(1). The interpretation of the provisions at issue must still be correct; the plaintiff cannot rely on a merely "plausible" interpretation of the statutory provisions at issue as a substitute for proper statutory interpretation. Statutory interpretation is conducted in accordance with the modern principle, both on a motion for leave and at a trial on the merits.

[119] Instead, there must be a "plausible analysis", or a plausible application, of the relevant legislative provisions, based on the limited evidence available on the leave motion. In other words, the plaintiff must show how the evidence on the motion plausibly maps onto the statutory provisions at issue — that is, how the proven facts meet the elements of the statutory definition — bearing in mind that the evidence will be limited at this early stage of the proceedings.

[120] Section 138.8(1) of the Securities Act requires a plaintiff to show that "the action is being brought in good faith" and that there is "a reasonable possibility that the action will be resolved at trial in favour of the plaintiff". This does not contemplate that the plaintiff is only required to show a "plausible interpretation" of the statutory provisions at issue. Statutory interpretation is the same on a leave motion as at a trial on the merits; what may differ is the evidentiary record.

[121] A plausible analysis of the applicable legislative provisions is not simply a plausible interpretation of those provisions. Statutory interpretation is not conducted differently, or in a more relaxed fashion, at a leave motion compared to at trial. A correct interpretation of the relevant statutory provisions is required on a leave motion, just as it is at trial. What may differ is the strength of the evidence: on a leave motion, the evidence may be limited, since documentary production and examinations for discovery have not yet occurred. This is what the Court meant in Theratechnologies when it stated that the plaintiff must provide a "plausible analysis" of the applicable legislative provisions and some credible evidence — the plaintiff must demonstrate how the evidence plausibly satisfies the elements of the statutory claim, given that the evidence is thinner at the leave stage than at trial.

C. Application to This Case

[122] There was no dispute before this Court that Mr. Markowich's action was brought in good faith. Nor was there any dispute that, if Mr. Markowich could establish that the pit wall instability or rockslide resulted in a "material change", there was a reasonable possibility that the change could have been "material" — i.e., that the change could have been "reasonably expected to have a significant effect on the market price or value" of Lundin's securities.

[123] In my respectful view, the motion judge erred in law in his statutory interpretation of what constitutes a "change" in the "business, operations or capital" of an issuer. As I have explained, the terms "change", "business", "operations", and "capital" should not be interpreted restrictively. The ordinary undefined terms should be applied in context, consistently with the purpose of the legislation to prevent and deter informational asymmetry between issuers and investors. Accordingly, the motion judge's interpretation of "change" and "business, operations or capital" was too restrictive.

[124] Based on this erroneous interpretation of "change", the motion judge ruled that Mr. Markowich could not establish that the pit wall instability or rockslide were "changes" in Lundin's business, operations or capital. Since the company continued its mining operations, the motion judge reasoned, there was no "change". This reasoning also overlooked the evidence that the events impacted Lundin's operations at the mine.

[125] I agree with the Court of Appeal that, had the motion judge correctly interpreted a change in business, operations or capital, and applied that interpretation to the evidence on the motion, he would have concluded that there was a reasonable possibility that Mr. Markowich could establish that either the pit wall instability or the rockslide was a change in Lundin's business, operations or capital. The undisputed evidence showed that these events impacted Lundin's operations at the mine — specifically, they impacted the mine's phasing and caused a downward revision of the mine's 2017 annual production forecast by approximately 20 percent.

[126] Like the Court of Appeal, I therefore conclude that there was a reasonable possibility that Mr. Markowich could succeed at trial in showing that either the pit wall instability or the rockslide was a "material change" in Lundin's business, operations or capital that Lundin was required to disclose "forthwith" under s. 75(1). Accordingly, Mr. Markowich should have been granted leave to commence an action against Lundin and the individual appellants.

VII. Disposition

[127] I would dismiss the appeal with costs.

The following are the reasons delivered by

Côté J. —

TABLE OF CONTENTS

	Paragraph
I. Introduction	128
II. Facts	141
III. Judicial History	149
A. Ontario Superior Court of Justice, 2022 ONSC 81 (Glustein J.)	149
B. Court of Appeal for Ontario, 2023 ONCA 359, 166 O.R. (3d) 732 (Favreau J.A., Simmons and Benotto JJ.A. Concurring)	168
IV. Issues	180
V. Analysis	181
A. A "Material Change" Must Be a Change in the Core or High-Level Aspects of the Issuer's Business, Operations, or Capital	181
(1) Four Common Law Exclusions From the Ambit of "Change"	186
(a) External Developments	188
(b) Fluctuations in Revenue or Production	195
(c) Uncertain Internal Developments	201
(d) Maintenance of the Status Quo	206
(2) Statutory Interpretation of "Material Change"	210
(a) The Text of Section 1(1) Supports the Motion Judge's Interpretation	212
(b) The Context and Purpose of the Act Support the Interpretation That a "Material Change" Must Be More Than a Mere Event Affecting an Issuer's Affairs	226
(i) The Deliberate Legislative Distinction Between "Material Fact" and "Material Change" Must Be Respected	226
(ii) Overbroad Disclosure Obligations Run Contrary to the Act's Delicate Policy Balancing	244
(c) Conclusion on the Definition of "Material Change"	257
B. The Definition of "Material Change" Must Be Consistent at all Stages of the Proceedings	262
C. Application	271
VI. Conclusion	281

[128] This appeal concerns a distinction at the heart of the securities disclosure regime shared throughout Canada: the difference between a "material fact" and a "material change". This distinction determines what issuers must disclose and, crucially, when they must do so. The outcome of this appeal will shape when corporate officers must decide — on pain of civil liability — whether to immediately disclose particular events to investors.

[129] However, the expansive interpretation of "material change" adopted by the Court of Appeal for Ontario and upheld by my colleague provides little guidance to issuers and their officers facing disclosure decisions in real time. That lack of guidance matters: companies and their officers and directors need to be able to make timely disclosure decisions with certainty that they are complying with their obligations.

[130] Securities law has evolved significantly over the past half century in response to the growth of the economy, technological advances, the globalization of investment activity, and the experiences of several significant capital market disruptions. The Ontario Securities Act, R.S.O. 1990, c. S.5, which I will call simply "the Act", is regularly reviewed and updated to address these changes.

[131] An essential part of the Act is its disclosure regime, which creates both periodic and immediate disclosure obligations for issuers and a statutory cause of action in the case of misrepresentations or failures to make timely disclosures.

[132] Yet the disclosure obligations imposed by the Act are not without limits. Instead, they hinge on a carefully drawn distinction between a "material fact" and a "material change". The distinction is deliberate: the legislature required different categories of information to be disclosed on different schedules. Material facts must be disclosed periodically. Material changes must be disclosed immediately.

[133] The approach taken by the Court of Appeal — and now endorsed by my colleague — effectively conflates that legislative distinction. While my colleague maintains that his approach preserves the distinction between a "material fact" and a "material change", in practice his approach will render the distinction effectively meaningless.

[134] This conflation will have far-reaching impacts. Expanding the scope of immediate disclosure presents risks for investors, issuers, and directors and officers. Overbroad disclosure obligations increase the regulatory burden on issuers, require more resources to sort out what has to be disclosed and what does not, and risk generating market noise that may impair investors' ability to assess an issuer's securities.

[135] In my view, it is clear that in drawing the distinction it did between "material fact" and "material change", the legislature intended to oblige issuers to assess only changes that alter the nature of their business, operations, or capital, understood at a high level of generality, for materiality and potential disclosure.

[136] Using this approach, the motion judge concluded that there was no reasonable possibility that the respondent, Dov Markowich, could successfully establish that the pit wall instability or rock slide constituted a change in Lundin Mining's business, operations or capital.

[137] By contrast, the Court of Appeal held, and my colleague affirms, that a "change" to an issuer's business, operations, or capital that must be assessed for materiality and potential disclosure encompasses virtually any event that has some effect on an issuer's affairs. So long as the event affects the issuer in some way — even if it is routine, inherent to the nature of the industry, or a minor fluctuation — it must be assessed for materiality and, potentially, disclosed immediately.

[138] In rejecting the motion judge's approach, my colleague refers to what he says is the motion judge's "narro[w]" or "restrictive" interpretation. With respect, this framing implies that any interpretation that imposes a threshold is impermissibly narrow. My colleague's interpretation imposes no such threshold. In my view, the text, context, and purpose of the Act support interpreting "change" as imposing a threshold at the first step of the material change analysis.

[139] This appeal also relates to the standard to be met for granting leave to a plaintiff who argues that an issuer has failed to immediately disclose a material change. I agree with my colleague on several aspects of the leave standard, but not on the definition of "material change" or the application of the leave standard in this case.

[140] I would restore the motion judge's order denying Mr. Markowich's motion for leave to bring the action against Lundin Mining and its directors and officers.

II. Facts

[141] Lundin Mining is a multinational mining corporation incorporated in Canada. It is headquartered in Canada but has offices in multiple locations around the world. It is listed on the Toronto Stock Exchange ("TSX").

[142] Lundin Mining jointly owns the Candelaria mining complex in Chile with Sumitomo Corporation. Lundin Mining owns 80 percent of Candelaria while Sumitomo Corporation owns the other 20 percent. The Candelaria mining complex contains both an open-pit and three underground mines, with the open-pit mine representing about 95 percent of all extracted material. For 2016 and 2017, Candelaria accounted for 55 to 60 percent of Lundin Mining's total sales revenue.

[143] On or about October 25, 2017, Lundin Mining detected pit wall instability in a localized area of the Candelaria mine arising from a wedge of unstable rock in the east wall of the open pit mine. Personnel were evacuated from the affected area. No other part of the mine was closed.

[144] The respondent, Mr. Markowich, is a Toronto-based businessman who purchased 10,000 shares of Lundin Mining between November 15, 2017 and November 27, 2017.

[145] On November 29, 2017, roughly a month after the above-described events, Lundin Mining issued a news release advising investors of the pit wall instability and the resulting rock slide that occurred on October 31, 2017. The same news release disclosed that Candelaria's copper production for 2017 would be down approximately 20 percent from earlier guidance. Lundin Mining's share price on the TSX fell from approximately $8.85 on November 29 to approximately $7.52 on November 30 — a drop of about 16 percent.

[146] The day after Lundin Mining disclosed the pit wall instability and the rock slide, its shares on the Toronto Stock Exchange closed at $7.52, a decline of $1.33 from the previous closing price.

[147] On the same day, pursuant to National Instrument 43-101, Standards of Disclosure for Mineral Projects (2001), 24 OSCB 304, Lundin Mining delivered an updated technical report based on the revised life of mine plan. This report was incorporated into a material change report filed pursuant to s. 75(2) of the Act.

[148] Following these events, Mr. Markowich, as a shareholder of Lundin Mining, sought leave under s. 138.8 of the Act to bring a statutory claim against Lundin Mining and its directors and officers for failure to make timely disclosure.

III. Judicial History

A. Ontario Superior Court of Justice, 2022 ONSC 81 (Glustein J.)

[149] The motion judge dismissed Mr. Markowich's motion for leave to bring the statutory claim, finding that there was no reasonable possibility that Mr. Markowich could establish at trial that the pit wall instability or the rock slide constituted a "material change" in Lundin Mining's business, operations, or capital.

[150] In arriving at this conclusion, the motion judge considered the guidance of our Court in Theratechnologies inc. v. 121851 Canada inc., 2015 SCC 18, [2015] 2 S.C.R. 106. He found that s. 138.8(1)(b) of the Act required that there be "a reasonable possibility that the action will be resolved at trial in favour of the plaintiff", and that the leave motion calls for a "preliminary merits assessment" rather than a "mini trial". He noted that the plaintiff must provide a "plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim" (quoting Theratechnologies, at para. 39).

[151] The motion judge confirmed that Lundin Mining was both a "reporting issuer" and a "responsible issuer" as defined in ss. 1(1) and 138.1 of the Act. He also confirmed that neither the "good faith" requirement nor the "materiality" element were genuinely in dispute.

[152] The motion judge then turned to the question of what constitutes a "material change". He noted that s. 1(1) of the Act is clear that there are two elements to a "material change": first, the event in question must be a "change" in the "business, operations or capital of the issuer"; and second, that change must be "reasonably expected to have a significant effect on the market price or value of any of the securities of the issuer".

[153] He reviewed the case law on "material change" and extracted applicable principles. First, he remarked that the distinction between a material change and material fact is a deliberate legislative distinction that must be respected. He quoted from Theratechnologies that:

Consequently, if a development is material and causes a change in the business, operations or capital, it must be disclosed immediately. If the development is material but does not cause such a change, it need only be disclosed as part of a reporting issuer's ongoing obligations of periodic disclosure.

(para. 24)

[154] Second, relying on Peters and the sources it cited, he noted that there is no bright line test for change. Instead, this assessment is a fact-specific inquiry that will depend on the circumstances of each case.

[155] Third, again relying on Peters, the motion judge acknowledged that the market impact of an event, or its materiality, is not determinative of change. Such an understanding would be inconsistent with the clear legislative distinction between "material fact" and "material change".

[156] In addition to these specific guideposts, the motion judge adopted a number of general principles from a decision of the Ontario Divisional Court (Cornish v. Ontario Securities Commission, 2013 ONSC 1310, 306 O.A.C. 107):

(i) "[A] supercritical interpretation of the meaning of material change does not support the goal of promoting disclosure or protecting the investing public": at para. 48;

(ii) "[A] technical interpretation of the language of the [Securities Act] should not be relied upon to justify non-disclosure of material changes": at para. 48;

(iii) "[I]f the decision is borderline, then the information should be considered material and disclosed": at para. 48;

(iv) "No single factor will be determinative of whether a material change occurred": at para. 51;

(v) Management's subjectively optimistic hopes or attempts to mitigate the issue do not alleviate the requirement for immediate disclosure of an otherwise objectively-determined material change: at para. 52;

(vi) It is important "to recognize the dangers of hindsight in coming to this conclusion and to be careful not to look at the situation based on what subsequently happened": at para. 49; and

(vii) If a "business managed to continue [its operations] in a lesser form, despite these changes" it "does not detract from" the reality that a "material change" still occurred: at para. 116. [Citations omitted.]

[157] In the absence of a statutory definition of "change", the motion judge turned to its grammatical definition. He held that "a change will occur in the context of s. 1(1) and the disclosure obligation if the event results in a different position, course, or direction for the business, operations, or capital of the issuer" (para. 150).

[158] While some case law, such as Green and Mask v. Silvercorp Metals Inc., 2015 ONSC 5348, aff'd 2016 ONCA 641, 132 O.R. (3d) 161, held that the "change" had to be "substantial" or "important", the motion judge declined to follow that higher threshold. He simply applied the definition quoted above.

[159] In the absence of a statutory definition of "business, operations or capital", the motion judge provided definitions of each word. Concerning the word "business", he noted that it has been described as referring to the activities or lines of business of the company — what the company does to generate revenues.

[160] As regards the term "operations", he considered a Commission decision that held that the meaning of operations was "where" the company conducted business, but he provided his own summary at para. 146 of his decision:

Put differently, the term "operations" is used to refer to the activities conducted by the company to engage in its lines of "business". If a company changes its position, course or direction as to how it conducts business, that would constitute a change in "operations".

[161] Regarding "capital", the motion judge rejected a suggestion by Mr. Markowich that, because the statute formerly read "business, operations, assets or ownership of the issuer", the meaning of capital should be broader than debt or equity structure and should include assets and ownership.

[162] Applying these interpretations of the Act, the motion judge found that Mr. Markowich did not satisfy the court that he had a reasonable possibility of establishing at trial that a "change" had occurred in Lundin Mining's business, operations, or capital.

[163] The motion judge noted that there was no evidence that the events changed Lundin Mining's "lines of business, how it conducted its operations, or its capital structure" (para. 29). Because he found that neither the pit wall instability nor the rock slide resulted in a change in Lundin Mining's lines of business, how it conducted its operations, or its capital structure, he concluded that there was no reasonable possibility of establishing a material change. He explained:

There was no evidence that either the Pit Wall Instability or the Rock Slide raised any threat to Lundin [Mining]'s economic viability, as acknowledged by Thomas on cross-examination. At all times, Lundin [Mining] continued to engage in the same lines of business — the extraction of copper and other metals. The evidence is clear that Lundin [Mining] remained economically viable throughout the events. Any deferred mining was not lost, but remained to be mined in later years. As for the Rock Slide's impact on the Company's capital, there was no evidence of a capital expenditure or change in the Company's equity or debt structure.

(para. 148)

[164] The motion judge, on the evidence, could not ascertain whether or not a shutdown had occurred following the events. However, he found that even assuming that there was such a shutdown, it would still not constitute a material change in Lundin Mining's business, operations or capital.

[165] The motion judge also took note of the "inherent risks in open pit mining" (para. 179), including pit wall instability and rock slides. In his view, the evidence demonstrated that "Lundin [Mining] was well aware of the likelihood of such events" (para. 179). The company's annual reports disclosed "ongoing risk of pit wall failure, slope instabilities and land subsidence" and "continuously monitored pit wall stability using advanced ground radar" (para. 179). He concluded that "dealing with inherent risks in its open pit mining operation is an ordinary activity of Lundin [Mining]'s business operations and not a change in its business, operations or capital" (para. 179).

[166] The motion judge further dismissed the argument advanced by Mr. Markowich that the increased costs incurred by Lundin Mining associated with the rock slide were a "capital" expenditure that should constitute a material change. He found that the costs were of a routine operating nature, not a capital expenditure.

[167] However, the motion judge accepted expert evidence tendered by both parties that supported that there was a reasonable possibility that Mr. Markowich could establish that the pit wall instability or rock slide could reasonably be expected to have had a significant effect on Lundin Mining's share price — that is, could constitute a "material" fact or change had there been an underlying "change".

B. Court of Appeal for Ontario, 2023 ONCA 359, 166 O.R. (3d) 732 (Favreau J.A., Simmons and Benotto JJ.A. Concurring)

[168] Favreau J.A. concluded for the court that the motion judge erred in his application of the test for leave and in his interpretation of the words "change", "business", "operations", and "capital".

[169] She concluded that, when "a more generous interpretation" of the words of the statute is adopted and applied to the available evidence, it is clear that the motion judge ought to have found there to be a reasonable possibility that the investor could establish that the events constituted a material change. The evidence on the motion was sufficient to grant leave.

[170] Concerning the motion judge's definition of "change" as being a "different position, course, or direction", Favreau J.A. found that it "[n]otably" derives from a definition of "change" in the Merriam-Webster dictionary and is inconsistent with existing case law and the statute's purpose.

[171] Favreau J.A. found the motion judge's interpretation of "change in the business, operations or capital of the issuer" to be inconsistent with existing case law and the purpose of the Act. She emphasized that "the terms 'change', 'business', 'operations', and 'capital' have not yet been definitively interpreted in the jurisprudence" (para. 7).

[172] Favreau J.A. also took issue with what she saw as the motion judge importing consideration of the magnitude of a change into the determination of what constitutes a "material change". To this, she quoted from Kerr:

the distinction between material change and material fact does not focus on the magnitude of the change but, rather, on whether the change was external to the company as opposed to whether the change is internal to the company.

(C.A. reasons, at para. 76, quoting Kerr, at para. 24.)

[173] In her view, the motion judge's reliance on our Court's decision in Kerr did not properly account for the "primary constraint which Kerr imposed on the definition of 'change'", which was that the change must be internal to the issuer.

[174] Contrary to the motion judge's approach, Favreau J.A. preferred the "much more expansive definition of 'change'" (para. 77) provided by Perell J. in Peters. She drew on his emphasis that the word "change" should be understood broadly:

In that case, at paras. 151-152, Perell J. emphasized the distinction between a material change and a material fact, recognizing that this distinction was "a deliberate and policy-based legislative decision to distinguish between [them]", and that the "disclosure obligations" related to both but were distinct. He highlighted that a "change" under the Act should be understood broadly, as it encompasses a wide range of events that affect the issuer.

[175] Favreau J.A. endorsed this "very expansive definition" of "change" (para. 78) as being more consistent with the wording of the provision and the guidance of our Court in Kerr. The definition she endorsed was:

Change encompasses alteration, amendment, conversion, contraction, development, difference, discovery, detection, disruption, divergence, expansion, innovation, makeover, metamorphosis, modernization, modification, mutation, revolution, shift, transformation, transition, variation and vicissitude.

(C.A. reasons, at paras. 78-79, quoting Peters, at para. 155.)

[176] She stated that she agreed with Perell J. in Peters that "a change is a change, and it should be defined broadly, especially in the context of a leave motion under s. 138.8 of the Securities Act" (para. 80).

[177] The case law, Favreau J.A. said, makes it clear that the definition of "change" was not intended to include consideration of the magnitude of an event, but rather its "qualitative nature" (para. 83).

[178] Favreau J.A. also rejected the motion judge's interpretation of the word "operations". She found his definition to be overly restrictive and stated that "operations" "does not refer only to the business model or process" but is "broader and includes those activities directly related to the issuer's line of business" (para. 89).

[179] Applying her interpretation of "change" and "operations", Favreau J.A. held that, had the motion judge applied the proper legal test, the available evidence would have led him to conclude there was a reasonable possibility that the pit wall instability and the rockslide each constituted a material change in Lundin's operations.

IV. Issues

[180] The issues in this appeal are:

1. What is a "material change" for the purposes of the Act?

2. Should the leave requirement in s. 138.8 of the Act modify or lessen the burden to establish a "material change"?

V. Analysis

A. A "Material Change" Must Be a Change in the Core or High-Level Aspects of the Issuer's Business, Operations, or Capital

[181] Disclosure obligations are at the heart of securities law, but they are not without limits. Their scope and timing are bounded by concern over the regulatory burden that such requirements impose on issuers and the importance of capital formation. Whether a particular event triggers an immediate disclosure obligation depends on whether it constitutes a "material change" in the issuer's business, operations, or capital.

[182] The Act defines "material change" as "a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer" (s. 1(1)).

[183] To date, courts and securities tribunals have articulated two rival standards for determining whether a "material change" has occurred, and therefore when that change must be immediately disclosed. Under the broader standard, the first step requires only the identification of whether a change occurred — i.e., any event affecting an issuer — and the second step determines whether that change was material. Under the narrower standard, the first step requires not only a change, but a change that is important and significant in the core aspects of the issuer's business, and the second step determines whether such change is material.

[184] At the core of this appeal, then, is which of these two standards is correct. More specifically, when did the legislature intend an event affecting an issuer to be reviewed for materiality and potentially disclosed immediately?

[185] Even so, I agree with both of the courts below and with my colleague that it is not desirable to attempt to create a bright line test for material change. To decipher whether a "material change" has occurred, the inquiry will always be fact-specific. This preserves the flexibility that courts require to consider the unique facts of each case.

(1) Four Common Law Exclusions From the Ambit of "Change"

[186] Before turning to the statutory interpretation exercise, I want to first address four of those principles, which are in the form of "exclusions" that have emerged from the common law and that help to define the outer bounds of what constitutes a change. These exclusions help identify when an event affecting an issuer does not require immediate disclosure.

[187] The existing case law can be read to create four "exclusions" for events affecting an issuer that do not come within the definition of "change". Because these exclusions apply regardless of the magnitude or materiality of the event — i.e., even if the events in question may reasonably be expected to have a significant effect on an issuer's share price — they support the conclusion that the legislature intended a first step in the material change analysis that goes beyond simply identifying any event affecting an issuer.

(a) External Developments

[188] As both my colleague and Favreau J.A. note, courts have repeatedly adopted an exclusion to the scope of "change" for an "external" fact or change. This exclusion is primarily based on the statutory language, which specifies that a material change is one that is "in the business, operations or capital of the issuer", making clear that external developments — unless they cause an actual change in the issuer's business, operations, or capital — cannot constitute a "material change".

[189] This exclusion was recognized by our Court in Kerr, which addressed whether a material change occurred when Danier Leather realized that unusually hot weather would result in reduced sales and lower-than-anticipated quarterly earnings. Writing for the Court, Bastarache J. explained the rationale for this exclusion:

The term "material change" is limited to a change in the business, operations or capital of the issuer. This is an attempt to relieve reporting issuers of the obligation to continually interpret external developments as they affect the affairs of the issuer.

(para. 38, quoting Ontario Securities Commission, "Consolidation of Remarks of Peter J. Dey Concerning Disclosure Under the Securities Act Made to Securities Lawyers in Calgary and Toronto on June 7 and 9" (1983), 6 O.S.C. Bull. 2361 at p. 2362.)

[190] Emphasizing the distinction between external conditions and internal developments, our Court noted that Danier Leather's sales fluctuated in response to a factor that was external to it — the weather — rather than as a result of any change in its business, operations, or capital. The Court explicitly rejected the suggestion that a change in financial results can alone constitute a material change.

[191] The Commission also addressed the exclusion of external facts from the material change analysis in Coventree Inc. (2011), 34 OSCB 10209. In that case, Coventree could no longer issue asset-backed commercial paper because of a disruption in the asset-backed commercial paper market — the credit crunch of 2007. The Commission found that this was a material change because the external disruption had the effect of causing Coventree's business to stop operating — a change in the issuer's business that went beyond simply recording the external disruption.

[192] While Coventree acknowledges the external facts exclusion, it differs from Kerr in two ways: first, the external phenomenon in Coventree was not readily cognizable to the public, unlike the weather in Kerr; and second, the external phenomenon in Coventree had the practical effect of causing the business to stop, unlike in Kerr where the business merely recorded reduced revenues.

[193] There are at least two policy rationales for the exclusion of external events. First, external events are not within the province of the issuer. When external events exist for all to see, investors and other market participants are just as well positioned as the issuer to be aware of those events and to assess their implications for the issuer's business.

[194] Second, as alluded to in our Court's statement in Kerr, quoted above, reliance on external facts as constituting potential changes would place an unworkable and unnecessary burden on issuers.

(b) Fluctuations in Revenue or Production

[195] The second type of change that is excluded from the scope of "material change" is simple fluctuations in revenue or production. In Kerr, our Court held not only that unusually hot weather leading to lower-than-expected sales was not a material change, but also that the resulting decrease in sales itself was not a material change.

[196] The Superior Court reached a similar conclusion in Mask, at para. 57, aff'd 2016 ONCA 641, 132 O.R. (3d) 161. In that case, Belobaba J. commented that "[t]he case law is clear that there must be a change in the business itself, and not just a change in the results of that business" (para. 57). He noted that "[t]here must be a change in how the company conducts its business, not simply a change (up or down) in how it is doing", since "all businesses experience fluctuations in their revenue, production, and profits" (para. 57).

[197] Favreau J.A. recognized this distinction in part when she found that a change under s. 1(1) "cannot simply be an unexplained change in results; rather, it must be a change in the company's business, operations or capital" (para. 86).

[198] This exclusion accords with the statutory language, as neither production nor revenue fit neatly into the categories of "business", "operations", or "capital". Indeed, the term "capital" is included in the relevant phrase, yet capital is not often used synonymously with revenue or production.

[199] There are also strong policy reasons supporting the exclusion of shifts in revenue and production from the definition of "material change". All businesses constantly experience such fluctuations. Requiring issuers to assess and potentially disclose every shift in revenue or production would be both unworkable and contrary to the legislative distinction between "material fact" and "material change".

[200] While my colleague does not frame it in quite the same way, he does take note of this dynamic at para. 52 of his reasons.

(c) Uncertain Internal Developments

[201] The third type of change that may be excluded from the scope of "material change" are uncertain developments in an issuer's business, operations or capital, as my colleague suggests when he states that a "material change generally requires more than mere negotiations or internal deliberations" (para. 59).

[202] As the Mining Association of Canada points out, certain internal developments will fall into the category of material facts, rather than material changes — despite objectively involving change in the issuer's business. As Peter Dey noted in the Dey Remarks (at pp. 2363-2364):

[a]t the conclusion of [the planning stage], the corporate officers will have a pretty good sense of whether the corporate action that is being planned will or will not be carried through and result in a material change in the business, operations or capital of the issuer. . . .

Late in the planning stage the issuer should consider disclosing the proposed material change on a confidential basis to the Chairman, Director or Deputy Director, Enforcement of the Commission. [pp. 2363-2364]

[203] This reflects an understanding that, in addition to the "internality" requirement, there is also a "certainty" or "maturity" requirement. An internal development must in some sense crystalize or mature before it constitutes a "change" requiring immediate disclosure.

[204] The requirement for a sufficient degree of certainty is borne out in AiT Advanced Information Technologies Corporation (2008), 2008 ONSEC 3, 31 OSCB 712, where the Commission held that moving through interim stages of a merger negotiation does not amount to a material change. Since the issuer might not ultimately proceed with the transaction, such discussions do not yet rise to the level of a change in the issuer's business, operations, or capital.

[205] The rationale for this exclusion is that requiring disclosure of nascent and uncertain internal developments would often be more misleading than it would be informative. Two principles serve as guardrails here. First, disclosure may be premature when the development is not yet certain to materialize. Second, disclosing uncertain information could give investors misleading signals about the issuer's business.

(d) Maintenance of the Status Quo

[206] The fourth excluded type of change, which is closely related to the uncertain developments exclusion, is the exclusion for events that only result in the maintenance of the status quo for the issuer.

[207] In Theratechnologies, at issue was whether the referral of questions by the American Food and Drug Administration ("FDA") to an expert advisory committee regarding potential side effects of the company's drug was a material change. The Court found it was not, because the referral was consistent with the FDA's ordinary process and maintained the status quo of the regulatory proceedings. Nothing had changed in the company's fundamental position.

[208] Similarly, in Peters, Perell J. held, and the Court of Appeal for Ontario upheld, that SNC-Lavalin Group Inc.'s receipt of a message indicating that it would not be invited to participate in negotiations for a remediation agreement was not a material change:

There never was a sure thing or a done deal for a Remediation Agreement, and the message received by SNC on September 4, 2018 did not change SNC's prospects of: (a) being convicted and debarred; (b) a Remediation Agreement or a guilty plea . . . or (c) being involved in federal government contracts.

(Peters (ONCA), at para. 81, quoting Peters (ONSC), at para. 212.)

[209] I suggest that this exclusion for events that maintain the status quo of an issuer is uncontroversial, as evidenced by my colleague, who makes virtually the same point — although framed differently — at para. 61.

(2) Statutory Interpretation of "Material Change"

[210] As my colleague Wagner C.J. recently stated in Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43:

It is well settled that "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature" (Sullivan, at § 1:02[3]; E. A. Driedger, Construction of Statutes (2nd ed. 1983), at p. 87, quoted in Rizzo, at para. 21).

(para. 22)

[211] In the present case, an ordinary reading of the text indicates, and the context and purpose strongly support, that only changes to high-level or core elements of an issuer constitute a change in its "business, operations or capital". I will explain why.

(a) The Text of Section 1(1) Supports the Motion Judge's Interpretation

[212] When engaging in statutory interpretation, the text of the provision is always the analytical starting point and anchor. As noted by Wagner C.J. in CDPDJ at para. 28, in "the absence of statutory definitions, words in legislation are given their ordinary meaning" and ordinary words "must be interpreted in light of their . . . context, including the surrounding text". The key terms "change", "business", "operations", and "capital" are not defined in the Act.

[213] Turning to that text and immediate context, s. 1(1) of the Act defines "material change" as follows:

"material change",

(a) when used in relation to an issuer other than an investment fund, means,

(i) a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer, or

(ii) a decision to implement a change referred to in subclause (i) made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, . . .

[214] As noted by the motion judge, this definition has two clear components: first, the event in question must be a "change" in the "business, operations or capital of the issuer"; second, that change must be "reasonably expected to have a significant effect on the market price or value of any of the securities of the issuer". In other words, the change must be "material".

[215] To begin, it is clear that the key terms "change", "business", "operations", and "capital" cannot be interpreted in isolation; their relationships to each other must be examined. The word "change" modifies the phrase "business, operations or capital" — a "change" must be a change in business, operations or capital.

[216] These words, too, cannot be understood in isolation. I agree with the intervener the Canadian Chamber of Commerce when it suggests that the terms "business, operations or capital" ought to be understood under the "associated words" rule of statutory interpretation, which takes the surrounding terms into account (Côté and Devinat, at para. 926; Sullivan, at § 7:03). As Sullivan explains: "Where two or more words or expressions in a series have a clear meaning, an ambiguous one in the same series tends to be given a compatible meaning" (§ 7:03). These terms must be interpreted in light of each other.

[217] Considered as a group, the words "in the business, operations or capital of the issuer" plainly signal an aspect of "internality". That is clear in the jurisprudence reviewed above and in the scholarly commentary. As noted by Professor Nicholls, the definition of "material change" reflects "a deliberate decision on the part of the legislature to limit the immediate or timely disclosure obligation to events that are internal to the reporting issuer" (Securities Law (3rd ed. 2023), at p. 364).

[218] This textual emphasis on high-level alterations is also signalled in subcl. (a)(ii) of the definition of "material change". That subclause defines the term "material change" to also mean "a decision to implement a change referred to in subclause (i) made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer". High-level decision makers are involved in material changes — this is the purview of board directors and senior management, not everyday employees.

[219] My colleague casts doubt on the interpretive value of the use of the word "change" in both subcls. (a)(i) and (a)(ii) (para. 80). In doing so, he overlooks the express statutory language linking the decision made by senior management in subcl. (a)(ii) to the concept of "change" from subcl. (a)(i). The textual significance of the requirement for involvement of directors and senior management in changes subject to subcl. (a)(ii) must be given weight.

[220] This level of generality suggests that the change itself must be significant — but not in the sense that the change must be of a particular magnitude, degree, or materiality. Rather, the change must affect the fundamental, core, or key aspects of an issuer. As the motion judge stated, a "change" in the context of the disclosure obligation "will occur if the event results in a different position, course, or direction for the business, operations, or capital of the issuer" (para. 150, citing Merriam-Webster Dictionary (online), s.v. "change").

[221] None of the interpretative analysis above conflicts with the motion judge's interpretation, and I accept his analysis of the ordinary meaning of the key terms at play. In the absence of statutory definitions, a dictionary definition is a useful starting point, and the definition the motion judge found was tested against, and supported by, his assessment of the purpose of the statute and legislative intent.

[222] As with "change", the motion judge provided his interpretations of "business", "operations", or "capital" in an effort to resolve the matter before him. Drawing on case law, he defined "business" as referring to the activities or lines of business of the company — what the company does to generate revenues; "operations" as referring to the activities conducted by the company to engage in its lines of business, and how it conducts business; and "capital" as the debt and equity capital of the company.

[223] In addition, I see nothing improper with the motion judge's use of the dictionary definition of "change". I take no issue with my colleague's statement that dictionary definitions are not determinative. He is correct about this. Dictionary definitions are a starting point, not the end of the interpretive inquiry.

[224] However, the motion judge did not improperly rely on the dictionary definition of "change". Rather, the definition he found was tested against, and supported by, his assessment of the purpose of the statute and legislative intent.

[225] Read as a whole, the motion judge's reasons disclose that he found a dictionary definition that usefully encapsulated the ordinary meaning of the term "change" as informed by the legislature's goals and intentions and the principles from the case law. He set the definition aside when confronted with conflicting case law and adopted the appropriate standard. He ultimately concluded that there was no change in the fundamental or core aspects of the business, operations, or capital of Lundin Mining.

(b) The Context and Purpose of the Act Support the Interpretation That a "Material Change" Must Be More Than a Mere Event Affecting an Issuer's Affairs

(i) The Deliberate Legislative Distinction Between "Material Fact" and "Material Change" Must Be Respected

[226] The motion judge's interpretation finds additional support in the broader context and purpose of the Act. In particular, his interpretation accords with the legislature's deliberate distinction between "material change" and "material fact", the various policy considerations underlying the distinction, and the purposes that underlie the Securities Act's disclosure regime.

[227] Although disclosure is vital for Canadian securities markets, law, and practice, disclosure obligations are not without limits. The questions of what must be disclosed, and when, involve delicate balancing. As stated in the Act, the purpose of the Act is:

(a) to provide protection to investors from unfair, improper or fraudulent practices;

(b) to foster fair, efficient and competitive capital markets and confidence in capital markets;

(b.1) to foster capital formation; and

(c) to contribute to the stability of the financial system and the reduction of systemic risk.

[228] My colleague acknowledges these varied purposes (at para. 33) and the inherent policy trade off that the legislature crafted in balancing them (at para. 57), including the specific need to balance the burden of disclosure on issuers with investors' need for timely disclosure.

[229] Moreover, and with respect, investor protection, while important, does not override the other objectives of the Act. It is true that our Court has recognized that the Act is remedial in nature (see Theratechnologies, at para. 15). Yet the Act serves multiple objectives, not just investor protection. An interpretation that places excessive weight on investor protection risks advancing only one of the Act's objectives while undermining the others.

[230] The legislature chose to require periodic disclosure of "material facts" and immediate disclosure of "material changes". Our Court has previously recognized and distinguished between these two types of continuous disclosure obligations (Theratechnologies, at paras. 23-24):

Periodic disclosure must be made at regular intervals, typically through the regular provision of documents such as proxy circulars, financial statements and insider trading reports. In these regularly scheduled, publicly available documents, reporting issuers must disclose any "material fact", defined in s. 1(1) as "a fact that would reasonably be expected to have a significant effect on the market price or value of the securities".

Timely disclosure obligations, on the other hand, are imposed only when there has been a material change in the issuer's affairs. Material changes, which arise from changes in the issuers' business, operations or capital, impose more onerous obligations than material facts because they require immediate disclosure.

(Theratechnologies, at paras. 23-24)

[231] Rather than focusing on addressing informational asymmetry alone, the legislature chose to impose balanced disclosure obligations on issuers using the distinction between "material fact" and "material change"; the importance of this distinction has been repeatedly recognized.

[232] Broadly speaking, the distinction is clear. The legislature sought periodic disclosure of a broad array of information affecting an issuer, and immediate disclosure of a narrower subset of changes. As I have explained, through the four exclusions and the other elements of the material change analysis, not every event affecting an issuer will require immediate disclosure.

[233] The importance of this distinction has been repeatedly recognized. Writing for our Court in Theratechnologies, Abella J. rejected the suggestion that a list of "potentially 'material' information" should be presumptively disclosed immediately:

Rather than choosing to impose upon issuers a presumption that any potentially 'material' information must be immediately disclosed, the legislature instead struck a balance between ensuring meaningful investor protection and avoiding undue burdens on issuers. . . . Rather than require immediate disclosure for everything that might arguably be material, the legislature imposed immediate disclosure obligations only upon the occurrence of a "material change".

(paras. 21-22, emphasis in original)

[234] Based on the foregoing, we must be guided by the statute and respect the legislature's choice. We must not "collapse the distinction" or "conflate the concepts" formed by the legislature. However, the majority's broad interpretation risks doing exactly that.

[235] These impacts can be shown by an assessment of the four exclusions noted above using the interpretations provided by the Court of Appeal and affirmed by my colleague. Their definition of "change" is so broad as to preclude meaningful application of any of the exclusions for events affecting an issuer.

[236] It is unclear how the exclusions noted above, or the distinction between a material fact and a material change more broadly, can survive the expansive definitions adopted by the Court of Appeal and by my colleague. My colleague defines "change" as having its "ordinary meaning" with no additional requirements, and having already rejected the requirement that there be an "important and substantial" change, any change in the "business, operations or capital" of an issuer might necessitate a materiality review.

[237] Under my colleague's interpretation, it is uncertain when a relevant external event would not be a change in the issuer's business, operations, or capital that must be assessed for materiality. For instance, in Kerr, the unseasonably warm weather led to a decrease in revenues. My colleague states that the "change" in that case was "external" (para. 55) and therefore would not require timely disclosure. He states that "[e]xternal facts or changes beyond the control of an issuer cannot constitute a material change unless they actually result in a change in an issuer's business, operations or capital" (para. 51). But under his broad interpretation, it is difficult to conceive of any relevant external event that would not affect an issuer's business, operations, or capital in some material way. The warm weather in Kerr did lead to a change in revenues — and revenues are part of "operations". If that type of event does not constitute a change in operations, then the word "operations" in the broad interpretation must carry some content beyond mere fluctuations, which my colleague does not provide.

[238] The substantive difference between events that merely affect an issuer's affairs and those that constitute or result in a change to an issuer's business, operations, or capital was alluded to by Bastarache J. in Kerr:

(Kerr, at para. 38, quoting Dey Remarks.)

This excerpt supports the view that the external change exclusion is based on a distinction between "developments as they affect the affairs of the issuer" and developments resulting in changes in the "business, operations or capital" of the issuer. This is consistent with my understanding that the first step requires more than a demonstration of some effect on the issuer's affairs.

[239] Similarly, under these broad definitions, fluctuations in revenue or production may also not be exempted from the need to conduct a materiality assessment and potential immediate disclosure. Any shift in operations that leads to any change in revenue — even if it is a routine fluctuation — could constitute a "change" under my colleague's interpretation. A decrease in revenues is an "alteration", or a "contraction" in the broader sense of those words.

[240] Uncertain developments may also constitute a "material change" under the expansive interpretation adopted by the Court of Appeal and my colleague. If a change includes a "development" or a "discovery", as the quote from Peters, at para. 155, suggests, it could well encompass uncertain internal developments that have merely been discovered. This risks conflating material facts — such as the fact that a company is considering a transaction — with material changes, since any material event that is discovered by management could be treated as a "change" requiring immediate disclosure.

[241] Similarly, the exclusion for events that maintain the status quo would be unlikely to survive and serve its purpose of diminishing the regulatory burden on issuers. A message confirming that a company will not proceed with a transaction could constitute a "change" under the broad definition if it results in an alteration in the company's expected business operations, even if that change was expected.

[242] The above consequences demonstrate the result of favouring an overbroad definition of "change", failing to provide any guidance concerning the terms "business", "operations", and "capital", and not imposing a qualitative threshold at the first step of the material change analysis. These consequences are the practical result of my colleague's approach.

[243] Instead, the words "business", "operations" and "capital" must be given sufficient definitional content to accord with the legislature's choice of specifying that changes must be in the "business, operations or capital" of the issuer. Some events affecting an issuer will not require a materiality assessment or immediate disclosure. These are events that do not rise to the level of changes in the high-level aspects of the issuer's business, operations, or capital.

(ii) Overbroad Disclosure Obligations Run Contrary to the Act's Delicate Policy Balancing

[244] Conflating "material change" and "material fact" does more than risk obscuring legislated distinctions; it ignores some and may run contrary to others of the many purposes involved in crafting the Act's disclosure regime.

[245] Beginning with the impact on issuers, to accept the approach taken by the Court of Appeal — to essentially invite running materiality analyses for events affecting an issuer's affairs and a runaway disclosure obligation — would not be in keeping with the Act's purpose of fostering "fair, efficient and competitive capital markets" (s. 1.1).

[246] First, I agree with the intervener the Canadian Chamber of Commerce that this "market noise" may very well prevent investors from assessing the true character and activities of an issuer, valuing its securities, and making informed investment decisions, resulting in increased costs in corporate transactions. The goal of investor protection does not necessarily require that issuers immediately disclose every relevant change.

[247] Second, over-disclosure or premature disclosure may also frustrate the goal of directing capital to the most deserving issuers. As our Court recognized in Kerr, the Act's promotion of fair disclosure should not be interpreted in a manner that makes it impossible for issuers to manage and resolve internal issues before disclosing them, which could prematurely alarm investors.

[248] Issuers will also be required to undertake internal changes that could prove costly to respond to the upholding of the Court of Appeal's broad interpretation. By suggesting that "a change is a change" without qualification, issuers will also be required to assess every event affecting their affairs for materiality. This is not practicable, nor is it just when civil liability may follow from a failure to disclose.

[249] My colleague discounts the appellant's warning that adopting the Court of Appeal's expansive interpretation will require issuers to assess every internal development for materiality, asserting that "[t]he threshold that a change must be 'reasonably expected to have a significant effect on the market price or value' of the issuer's securities provides a meaningful and necessary filter" (para. 78). But the materiality threshold is applied at the second step. The question before us is the scope of the first step: what counts as a "change" at all.

[250] Moreover, my colleague's contention also ignores a further key issue. Not only will it be more likely that issuers will have to report on events whose disclosure does not conform with the balance struck by the legislature, but they will also need to assess every event for materiality. There will be an increase in the number of events that will need to be reviewed for materiality, since more events will reach the second step of the analysis. This in itself will impose a greater burden on issuers. And in situations where issuers are uncertain as to whether an event will qualify as material, they may decide to over-disclose or disclose prematurely to mitigate compliance and liability risk.

[251] Requiring an issuer's senior management to assess the materiality of every event that affects their affairs and the potential need to immediately disclose each event is not practicable, nor is it just when civil liability may follow from a failure to disclose. As the Canadian Chamber of Commerce stated:

Expanding the definition of "material change" will likely increase issuers' use of precautionary disclosures to manage litigation risk, which may not always reflect what the issuer believes is significant, creating "market noise" that is not useful to investors and impairs the efficient operation of capital markets.

[252] My colleague disagrees with this concern about the liability of issuers, officers, and directors. He argues that their liability is unaffected by his interpretation because it "reflects the legislature's considered judgment" (para. 85), i.e., that the current interpretation merely reflects what the legislature intended. As my colleague acknowledges, the legislature struck a careful balance between promoting investor protection and avoiding "undue burdens on issuers" (para. 57). My colleague's broad interpretation, however, upsets that balance.

[253] Finally, directors and officers will be impacted by excessive disclosure obligations in at least two ways.

[254] First, as argued by the intervener the Insurance Bureau of Canada, adopting the Court of Appeal's broad interpretation of "material change" will "elevate the risk profile for corporate Directors and Officers ('D&O') and significantly impact the D&O insurance market". The Insurance Bureau of Canada makes reference to the following statement in the literature about the potential impacts of expanded director and officer liability on the D&O insurance market:

The statutory expansions of directors' and officers' liability could lead to a withdrawal of insurance supply if, in addition to expanding the need for liability insurance, they increase the uncertainty of coverage.

(Quoting R. J. Daniels and S. M. Hutton, "The Capricious Cushion: The Implications of the Directors' and Officers' Insurance Liability Crisis on Canadian Corporate Governance" (1993), 22 Can. Bus. L.J. 182, at pp. 204-205.)

[255] Second, the heightened risks of litigation against directors and officers imperils the prospective recruitment of qualified individuals to serve in those critical positions. Civil liability attached to disclosure decisions is a particularly acute problem. As pointed out by the Insurance Bureau of Canada, expanded disclosure obligations create a dilemma for directors: if they disclose too little, they face liability for inadequate disclosure; if they disclose too much, they may face liability for premature or unnecessary disclosure that ultimately proves to have created investor or market harm.

[256] While my colleague rightly points out that disclosure decisions are a matter of "legal obligation", he fails to engage with the significant liability concerns that his broad interpretation will create.

(c) Conclusion on the Definition of "Material Change"

[257] "Material change" has two components that must be kept distinct: whether a change in the business, operations, or capital of the issuer has occurred and whether it is material. A change occurs when an event alters the fundamental, core, or key aspects of an issuer — when it puts an issuer in a different position, or sends it on a different course or direction. While this is admittedly a difficult standard to apply in all cases, it is consistent with the text, context, and purpose of the Act and with the approach of the motion judge.

[258] Moreover, I fail to see how the interpretation of the motion judge is either "restrictive" or prone to "ossif[y]" the statute or imposes a "strict legal formula" that runs counter to "ordinary and flexible" language. His interpretation does not preclude all ordinary and flexible usage. The motion judge provided a useful working definition of "change" that accommodates the need for flexibility to consider the unique facts of each case while still requiring more than a demonstration of some effect on the issuer's affairs.

[259] As a final note on the definition of "material change", I agree with my colleague that it is unnecessary to import the standard articulated in some Ontario case law that requires that a "change" must be "important and substantial" to come within the definition of "material change". This was stated in Green and Mask. In my view, these cases are not saying that a change must be "important and substantial" before it reaches the first step. Rather, they are supporting the view that a "change" requires an event that puts the issuer in a qualitatively different position:

Whether or not the change is considered to be "substantial" or "important", the key conclusion from both Green . . . and Mask is that a change occurs when the event results in a different position, course or direction in the issuer's business, operations or capital — a qualitative change in the issuer's affairs that reflects an alteration of the issuer's fundamental, core, or key aspects.

In my view, the motion judge does not adopt the higher standard from Green or Mask but rather adopts a definition of "change" that situates that word within qualitative parameters and ties it to the goal of levelling informational asymmetry by requiring disclosure when a change puts the issuer in a materially different position.

[260] In line with this, I disagree with the assertion of the Court of Appeal (at paras. 82 and 84) and my colleague (at paras. 76-78) that the motion judge's interpretation collapses the assessment of magnitude into the question of whether there is a "change" in the first place. What the motion judge did was to apply the word "change" to the qualitative nature of the event — a step that asks whether the event puts the issuer in a different position in any meaningful way. The materiality component still considers the magnitude of the change's potential impact on the market price or value of the issuer's securities.

[261] As my colleague rightly notes (at para. 77), the materiality component must still consider the magnitude of the change's potential impact on the market price or value of the issuer's securities. The first step asks whether there is a qualitative "change" in the issuer's affairs; the second step assesses whether that change is material.

B. The Definition of "Material Change" Must Be Consistent at all Stages of the Proceedings

[262] My colleague is of the view that the definition of "material change" is not altered by virtue of the stage of the proceedings (para. 120). He writes: ". . . statutory interpretation is not conducted less stringently on a motion for leave under s. 138.8(1). The interpretation of the provisions at issue must still be correct; the plaintiff cannot rely on a merely 'plausible' interpretation of the statutory provisions at issue as a substitute for proper statutory interpretation." I agree.

[263] To bring a claim against an issuer for failing to disclose a material change as is required, the plaintiff must apply for leave under s. 138.8(1) of the Act, which states:

138.8 (1) No action may be commenced under section 138.3 without leave of the court granted upon motion with notice to each defendant. The court shall grant leave only where it is satisfied that:

(a) the action is being brought in good faith; and

(b) there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

[264] In Theratechnologies, our Court addressed the leave requirement found in Quebec's securities legislation, which is similar to that of Ontario and other provinces. In that case, Abella J., writing for the Court, held as follows (at para. 39):

the claimant to offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim. This approach, in my view, best realizes the legislative intent behind the leave requirement. . . .

[265] In the present case, only s. 138.8(1)(b) — the requirement that there be "a reasonable possibility that the action will be resolved at trial in favour of the plaintiff" — is implicated. In Theratechnologies, the Court interpreted this requirement as follows (at para. 39):

the claimant to offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim. This approach, in my view, best realizes the legislative intent behind the leave requirement. . . .

[266] This excerpt makes it clear that our Court set out a two-part test to determine what constitutes "a reasonable possibility that the action will be resolved at trial in favour of the plaintiff": (1) a plausible analysis of the applicable legislative provisions; and (2) some credible evidence in support of the claim.

[267] The appellants ask our Court to clarify whether the leave requirement in s. 138.8 modifies or lessens the burden to establish a "material change". This comes after the Court of Appeal's comment that the terms "change", "business", "operations", and "capital" "have not yet been definitively interpreted in the jurisprudence" (para. 7), suggesting the plaintiff need only advance a "plausible interpretation" of the Act.

[268] In my view, the Court of Appeal erred in framing the test in this manner, which is inconsistent with Theratechnologies. In Theratechnologies, our Court used the language "plausible analysis of the applicable legislative provisions" and not "plausible interpretation" of those provisions. And importantly, our Court also required "some credible evidence in support of the claim".

[269] The Court of Appeal's language raises the question of whether plaintiffs need only present a "plausible interpretation" of the term "material change" or whether the statute's interpretation remains fixed at the leave stage. On this question, I agree with my colleague: the definition of "material change" remains consistent regardless of the stage of proceedings. At the leave stage, as at trial, the proper interpretation of the statute should be applied. However, the strength of the evidence required is different at each stage; the plaintiff need only demonstrate some credible evidence in support of the claim at the leave stage.

[270] While a different evidentiary standard is employed at this stage, the definition of "material change" should not and does not differ based on the stage of the proceeding. Therefore, the motion judge was correct to apply his own interpretation of the term "material change" rather than leaving the interpretation open for the parties to settle at trial.

C. Application

[271] Having adopted the interpretation of "material change" advanced by the motion judge, I proceed on the basis that the Court of Appeal's role was to review his application of the operative legal standard. I will address whether the Court of Appeal correctly found an error in the motion judge's application.

[272] I find that the Court of Appeal erred in concluding that Mr. Markowich could satisfy the leave requirement set out in s. 138.8 of the Act. To succeed, Mr. Markowich had to satisfy the court that there was a reasonable possibility of establishing at trial that either the pit wall instability or the rock slide constituted a change in Lundin Mining's business, operations, or capital.

[273] None of the four exclusions that circumscribe the meaning of change that I outlined earlier apply in this case. I must therefore consider the facts specific to this case, mindful that the Court of Appeal's role was to determine if there was a palpable and overriding error in the motion judge's factual findings and a legal error in his application of the law to the facts.

[274] The motion judge made a number of factual findings, to which the Court of Appeal owed deference. These include his description of the Candelaria mine plan as being completed in several phases, and that there was evidence of a plan to resequence mining activities following the rockslide. The motion judge found that the resequencing was an ordinary business activity and did not change the fundamental, core, or key aspects of Lundin Mining's business, operations, or capital.

[275] More substantively, the motion judge considered whether the facts of Lundin Mining's resequencing in response to the events were anything but routine or were out of the ordinary. He found that they were not:

The only effect was that 15,200 tonnes of copper mining was deferred until 2020 or 2021, with some increased costs and decreased revenues arising from milling lower quality copper. The deferred copper mining was not lost as it remained to be mined in later years. The Court can speculate that some ore, not the waste rock, may have been removed by the Slide, but the evidence does not support this. The decrease of 20% in 2017 production was partially offset by the early mining of Phase 10 ores.

. . . Changes to [a life of mine plan] to address resequencing are part of the ordinary business and operation of a copper mining company. Such resequencing was already planned before the Pit Wall Instability and the Rock Slide.

Unlike Rex Diamond or Cornish, there is no evidence that either the Pit Wall Instability or the Rock Slide had any effect on Lundin [Mining]'s "line of business". Lundin [Mining] continued to engage in the same lines of business — the extraction of copper and other metals. [Citations omitted.]

(paras. 178-180)

[276] Further, he considered and found that there are inherent risks to the industry in which Lundin Mining conducted its business, a factor which, as I outlined above, is appropriate to consider:

The evidence is that the Pit Wall Instability and the Rock Slide were inherent risks in open pit mining operation, and that Lundin [Mining] managed those risks with advanced ground radar technology and evacuation of personnel. Dealing with inherent risks in its open pit mining operation is an ordinary activity of Lundin [Mining]'s business operations and not a change in its business, operations or capital.

(para. 179)

[277] Even so, he appropriately found that "routine disclosure" of the inherent risks of mining to shareholders did not "inoculate" Lundin Mining from disclosing a particular event if the impact of that event was significant enough to constitute a material change (para. 181). He went on to find that neither event was a material change.

[278] Taking this all into account, the motion judge found that the pit wall instability and the rock slide themselves were not changes in Lundin Mining's business, operations, or capital.

[279] Unlike the Court of Appeal, I can see no error in his analysis. The events merely necessitated modestly adjusting already planned "resequencing". Pit wall instability and rock slides are fairly common occurrences in open pit mining operations. The motion judge properly considered the impact of the events on the mine and found that the events did not cause any fundamental, core, or key change in Lundin Mining's affairs. The Court of Appeal substituted its own assessment for that of the motion judge, without identifying any palpable and overriding error in the motion judge's factual findings.

[280] Therefore, unlike the Court of Appeal, I would uphold the motion judge's decision and deny Mr. Markowich leave to proceed by way of s. 138.8 of the Act.

VI. Conclusion

[281] In sum, the interpretation of "material change" advanced by the motion judge properly reflects the text, context, and purpose of the Act. It preserves the legislature's careful distinction between "material fact" and "material change", protects issuers and their officers and directors from the imposition of overbroad disclosure obligations, and provides some guidance to issuers, officers, and directors making real-time disclosure decisions.

[282] I agree with Lundin Mining that the standard as laid out by the Court of Appeal — and now adopted by my colleague — effectively conflates the question of whether a change has taken place with the question of materiality, rendering the first component of the definition of "material change" a formality.

[283] This approach may have far-reaching impacts that strike at the heart of the Act's objectives to promote not only fair but also efficient and competitive markets and to foster capital formation. These impacts include increased regulatory burden on issuers, expanded liability for directors and officers, and the potential that investors will be flooded with immaterial information as issuers respond to the incentive to over-disclose.

[284] For these reasons, I would allow the appeal, set aside the judgment of the Court of Appeal, and restore the motion judge's order dismissing the motion for leave to bring the action. In so doing, I respectfully dissent from my colleague's conclusion to dismiss the appeal.

Appendix

Relevant Statutory Provisions

Ontario Securities Act, R.S.O. 1990, c. S.5

Definitions

1 (1) In this Act,

"issuer" means a person or company who has outstanding, issues or proposes to issue, a security;

"material change",

(a) when used in relation to an issuer other than an investment fund, means,

(i) a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer, or

(ii) a decision to implement a change referred to in subclause (i) made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable,

(b) when used in relation to an issuer that is an investment fund, means,

(i) a change in the business, operations or affairs of the issuer that would be considered important by a reasonable investor in determining whether to purchase or continue to hold securities of the issuer, or

(ii) a decision to implement a change referred to in subclause (i) made,

(A) by the board of directors of the issuer or the board of directors of the investment fund manager of the issuer or other persons acting in a similar capacity,

(B) by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, or

(C) by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the board of directors of the investment fund manager of the issuer or such other persons acting in a similar capacity is probable;

"material fact", when used in relation to securities issued or proposed to be issued, means a fact that would reasonably be expected to have a significant effect on the market price or value of the securities;

"reporting issuer" means an issuer,

(a) that has issued voting securities on or after the 1st day of May, 1967 in respect of which a prospectus was filed and a receipt therefor obtained under a predecessor of this Act or in respect of which a statement of material facts was filed under a predecessor of this Act,

(b) that has filed a prospectus and for which the Director has issued a receipt under this Act,

(b.1) that has filed a securities exchange take-over bid circular under this Act before December 14, 1999,

(c) any of whose securities have been at any time since the 15th day of September, 1979 listed and posted for trading on any exchange in Ontario recognized by the Commission, regardless of when such listing and posting for trading commenced,

(d) to which the Business Corporations Act applies and which, for the purposes of that Act, is offering its securities to the public,

(e) that is the company whose existence continues following the exchange of securities of a company by or for the account of such company with another company or the holders of the securities of that other company pursuant to,

(i) a statutory amalgamation or arrangement, or

(ii) a statutory procedure under which one company takes title to the assets of the other company that in turn loses its existence by operation of law, or under which the existing companies merge into a new company,

where one of the amalgamating or merged companies or the continuing company has been a reporting issuer for at least twelve months, or

(f) that is designated as a reporting issuer in an order made under subsection 1(11);

Publication of material change

75 (1) Subject to subsection (3), where a material change occurs in the affairs of a reporting issuer, it shall forthwith issue and file a news release authorized by a senior officer disclosing the nature and substance of the change.

Report of material change

(2) Subject to subsection (3), the reporting issuer shall file a report of such material change in accordance with the regulations as soon as practicable and in any event within ten days of the date of the material change.

Exception

(3) A reporting issuer may, instead of complying with subsection (1), promptly file with the Commission the report required under subsection (2), marked as confidential, and its written reasons for doing so, if,

(a) the reporting issuer reasonably believes that a disclosure required under subsections (1) and (2) would be unduly detrimental to its interests; or

(b) the material change consists of a decision made by the senior management of the reporting issuer to implement a change and the senior management,

(i) believes that confirmation by the board of directors of the decision to implement the change is probable, and

(ii) has no reason to believe that any person or company with knowledge of the material change has purchased or sold the reporting issuer's securities or traded a related derivative.

(4) Where a report has been filed with the Commission under subsection (3), the reporting issuer shall advise the Commission in writing where it believes the report should continue to remain confidential and shall state the reasons therefor.

Requirement to disclose subsequently

(5) A reporting issuer that has filed a report under subsection (3) shall promptly disclose the material change in the manner referred to in subsection (1) if the reporting issuer becomes aware or has reason to believe that a person or company has purchased or sold the reporting issuer's securities or traded a related derivative with knowledge of the material change.

Liability for secondary market disclosure

Documents released by responsible issuer

138.3 (1) Where a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person or company who acquires or disposes of the issuer's security during the period between the time when the document was released and the time when the misrepresentation was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against,

(a) the responsible issuer;

(b) each director of the responsible issuer at the time the document was released;

(c) each officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document;

(d) each influential person, and each director and officer of an influential person, who knowingly influenced,

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer to release the document, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the release of the document; and

(e) each expert where,

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released by a person or company other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document.

Public oral statements by responsible issuer

(2) Where a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer's security during the period between the time when the public oral statement was made and the time when the misrepresentation was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against,

(a) the responsible issuer;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the public oral statement;

(d) each influential person, and each director and officer of the influential person, who knowingly influenced,

(i) the person who made the public oral statement to make the public oral statement, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the public oral statement; and

(e) each expert where,

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the person making the public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the public oral statement.

Influential persons

(3) Where an influential person or a person or company with actual, implied or apparent authority to act or speak on behalf of the influential person releases a document or makes a public oral statement that relates to the business or affairs of a responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of the issuer's security during the period between the time when the document was released or the public oral statement was made and the time when the misrepresentation was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against,

(a) the responsible issuer, if a director or officer of the responsible issuer, or where the responsible issuer is an investment fund, the investment fund manager, authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(b) the influential person;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(d) the influential person;

(e) each director and officer of the influential person who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement; and

(f) each expert where,

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document or public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document or public oral statement.

Failure to make timely disclosure

(4) Where a responsible issuer fails to make a timely disclosure, a person or company who acquires or disposes of the issuer's security between the time when the material change was required to be disclosed and the time when the material change was disclosed has, without regard to whether the person or company relied on the failure to make timely disclosure, a right of action for damages against,

(a) the responsible issuer;

(b) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make timely disclosure; and

(c) each influential person, and each director and officer of an influential person, who knowingly influenced,

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer in the failure to make timely disclosure, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make timely disclosure.

Multiple roles

(5) In an action under this section, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.

Multiple misrepresentations

(6) In an action under this section,

(a) multiple misrepresentations having common subject matter or content may, in the discretion of the court, be treated as a single misrepresentation; and

(b) multiple instances of failure to make timely disclosure of a material change or material changes concerning common subject matter may, in the discretion of the court, be treated as a single failure.

No implied or actual authority

(7) In an action under subsection (2) or (3), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the issuer, no other person or company is liable under subsection (2) or (3) for the misrepresentation.

Leave to proceed

138.8 (1) No action may be commenced under section 138.3 without leave of the court granted upon motion with notice to each defendant. The court shall grant leave only where it is satisfied that:

(a) the action is being brought in good faith; and

(b) there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

(2) Upon an application under this section, the plaintiff and each defendant shall serve and file one or more affidavits setting forth the material facts upon which each intends to rely.

(3) The maker of such an affidavit may be examined on it in accordance with the rules of court.

Copies to be sent to the Commission

(4) A copy of the application for leave to proceed and any affidavits and factums filed with the court shall be sent to the Commission when filed.

Requirement to provide notice

(5) The plaintiff shall provide the Commission with notice in writing of the date on which the application for leave is scheduled to proceed, at the same time such notice is given to each defendant.

Same, appeal of leave decision

(6) If any party appeals the decision of the court with respect to whether leave to commence an action under section 138.3 is granted,

(a) each party to the appeal shall provide a copy of its factum to the Commission when it is filed; and

(b) the appellant shall provide the Commission with notice in writing of the date on which the appeal is scheduled to be heard, at the same time such notice is given to each respondent.

Appeal dismissed, Côté J. dissenting.

Solicitors for the appellants: Cassels Brock & Blackwell, Toronto.

Solicitors for the respondent: Groia & Company, Toronto; Strosberg Wingfield Sasso, Windsor.

Solicitors for the intervener Canadian Coalition for Good Governance: Torys, Toronto.

Solicitor for the intervener Ontario Securities Commission: Ontario Securities Commission, Toronto.

Solicitors for the intervener Mining Association of Canada: Davies Ward Phillips & Vineberg, Toronto.

Solicitors for the intervener CFA Societies Canada Inc.: Lenczner Slaght, Toronto.

Solicitors for the intervener LiUNA Pension Fund of Central and Eastern Canada: Koskie Minsky, Toronto.

Solicitors for the intervener Insurance Bureau of Canada: McCarthy Tétrault, Toronto.

Solicitors for the intervener Canadian Chamber of Commerce: McCarthy Tétrault, Toronto.