SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: CV-12-448410-CP
DATE: 20130418
RE: AFA LIVFÖRSÄKRINGSAKTIEBOLAG, AFA SJUKFÖRSÄKRINGSAKTIEBOLAG, AFA TRYGGHETSFÖRSÄKRINGSAKTIEBOLAG, KOLLEKTIVAVTALSSTIFTELSEN TRYGGHETSFONDEN TSL and WILLIAM LESLIE / Plaintiffs
AND: AGNICO-EAGLE MINES LIMITED, SEAN BOYD, EBERHARD SCHERKUS and AMMAR AL-JOUND / Defendants
Proceeding under the Class Proceedings Act, 1992
BEFORE: Justice Edward Belobaba
COUNSEL: Dimitri Lascaris, Michael Robb and Anthony O’Brien for the Plaintiffs
James Doris and Luis Sarabia for the Defendants
HEARD: April 17, 2013
Consent certification
[1] I granted this consent motion for certification of the action as a class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 and for leave to advance a claim under Part XXIII.1 of the Ontario Securities Act, R.S.O. 1990, c. S.5. I advised counsel that brief reasons would follow. These are the reasons.
Certification
[2] The plaintiffs allege that the defendant gold miner, with producing properties in Canada, Finland and Mexico, misrepresented the scope and effect of certain “water inflow” problems at one of its gold mining properties in Quebec causing share purchasers to sustain losses. They seek certification of their proposed class action.
[3] Section 5(1) of the Class Proceedings Act requires that a court certify a proceeding as a class proceeding if: (a) the pleadings disclose a cause of action; (b) there is an identifiable class; (c) the claims of the class members raise common issues of fact or law; (d) a class proceeding would be the preferable procedure; and (e) there is a representative plaintiff who would adequately represent the interests of the class without conflict of interest and who has produced a workable litigation plan.
[4] Having reviewed the motion record and having regard to the fact that the parties have consented to certification, I am satisfied that each of these prerequisites have been established. It is always important to remember, however, that the certification of a class action is simply a procedural measure that has nothing to do with the merits of the action. The merits of the plaintiffs’ claims will be adjudicated at the common issues trial.
Leave under Part XXIII.1 of the Securities Act
[5] Under s. 138.1 of the Ontario Securities Act, where certain types of documents contain a misrepresentation, a person or company who acquires or disposes of a corporation's security instrument between the release of the document and the time when the misrepresentation is publicly corrected has 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; and (c) each officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document.
[6] The Securities Act requires that the plaintiffs seek leave before commencing an action under Part XXIII.1, and in order to obtain leave, the court must be 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.
[7] I am satisfied, based on the filed material, that these two prerequisites have been established. Leave shall be granted to the plaintiffs to commence an action as proposed under Part XXIII.1 of the Securities Act.
Class definition and common issues
[8] The parties have agreed to the following class definition:
All persons, wherever they may reside or be domiciled, who acquired the securities of Agnico
(i) over the TSX, Chi-X, Alpha, Omega, TriAct, TMX Select, Pure Trading, Liquidnet and Instinet Canada trading platforms during the Class Period; or
(ii) in exchange for securities of Comaplex Minerals Corp. by way of a plan of arrangement pursuant to the Alberta Business Corporations Act completed on or around July 6, 2010, and continued to hold some or all of those securities on one or both of July 28, 2011 and October 19, 2011, except for: (1) the Excluded Persons; and (2) those persons resident or domiciled in the Province of Québec at the time they purchased or acquired such securities, who are not precluded from participating in a class action by virtue of Article 999 of the Québec Code of Civil Procedure, RSQ, c C-25.
[9] The parties have also agreed to a list of defined terms and the following proposed common issues:
Statutory Secondary Market Liability
Did the Impugned Documents, or any of them, contain a misrepresentation within the meaning of the OSA?
If the answer to (1) is yes, then when and by what means were the misrepresentations contained in the Impugned Documents corrected?
Did Al-Joundi authorize, permit or acquiesce in the release of the Impugned Documents which contained one or more misrepresentations?
What damages per share are payable by each of the Defendants in respect of the misrepresentations contained in the Impugned Documents?
Unjust Enrichment
- Was Agnico unjustly enriched through the issuance of Agnico shares in connection with the acquisition of Comaplex Minerals Corp. during the Class Period?
Administration Costs
- Should the Defendants pay the costs of administering and distributing the recovery? If so, which Defendants should pay, and how much?
The compromises that led to this consent motion
[10] The parties made two “compromises” that resulted in this consent motion for certification and leave. One was on the scope of the defined class: the definition was narrowed from “global” purchasers to secondary-market purchasers who purchased shares in Canada (excluding Quebec where a parallel class action is proceeding.) The other compromise was the plaintiffs’ agreement to delete the claims in negligence and negligent misrepresentation and focus only on the remedies under the Securities Act and the statutorily-capped damage awards, and on the claim for unjust enrichment. Counsel for the plaintiffs is satisfied that the potential damage award available under the Securities Act even with the statutory caps will be more than adequate on the facts herein.
[11] In my view, both of the compromises are sensible and will help expedite the proceeding for the benefit of both class members and defendants.
Disposition
[12] The consent motions for certification and leave are granted.
[13] Orders to go as per the draft Orders signed yesterday.
Belobaba J.
Date: April 18, 2013