COURT FILE NO.: CV-18-609766-00CP
DATE: 2019/08/19
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Peter Gradja
Plaintiff
- and -
BARRICK GOLD CORPORATION
Defendant
Hadi Davarinia for the Plaintiffs
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
PERELL, J.
REASONS FOR DECISION
[1] Pursuant to the Class Proceedings Act, 1992,[^1] on July 24, 2018, the Plaintiff Peter Gradja commenced a proposed class action against the Defendant Barrick Gold Corporation.
[2] Pursuant to s. 29 (1) of the Act, Mr. Gradja now moves for a consent order dismissing the action without costs.
[3] Mr. Gradja’s action was a common law and a statutory secondary market misrepresentation claim pursuant to s. 138.3 of the Ontario Securities Act.[^2] He alleges that Barrick Gold released core and non-core documents containing misrepresentations regarding its business operations in Argentina, as well as pertaining to an environmental accident at its mine in Argentina that resulted in the company being unable to meet its pro forma gold production targets and publicly-forecasted cash costs.
[4] The proposed Class is comprised of all persons and entities, other than certain Excluded Persons (as identified in the Statement Claim) who purchased shares of Barrick’s equity securities between February 15, 2017 and April 24, 2017 (the “Class Period”) and who held some or all of those securities at the close of trading on April 24, 2017.
[5] By order of this Court dated October 29, 2018 as amended by order dated March 12, 2019, I ordered Mr. Gradja to serve his motion for leave to assert the statutory cause of action pursuant to s. 138.8 of the Ontario Securities Act by June 3, 2019.
[6] In preparing to deliver the motion, Mr. Gradja’s lawyers retained legal counsel in Argentina to assist with obtaining documents filed with the Argentine courts and tribunals that were believed to be crucial for the successful prosecution of the proposed class action.
[7] The legal counsel in Argentina, however, advised that they have been unable to retrieve all of the documents because of pending criminal and regulatory investigations arising from the environmental accident.
[8] Although some documents have been produced, Mr. Gradja’s lawyers believe that the remaining documents will not be recovered and that in these circumstance it would be ill-advised to proceed with the proposed class action. Mr. Gradja has, therefore, given his lawyers instructions to ask the court’s leave to dismiss his proposed class action on a without-costs basis.
[9] Barrick Gold consents to this request. As a condition of the agreement with Barrick Gold, Mr. Gradja has agreed to provide it with a full and final release of his claims against Barrick Gold.
[10] The action never having been certified, the release does not bind the putative Class Members.
[11] If the action is dismissed, putative Class Counsel will update its website to indicate that the action has been dismissed, and it will post on its website a Notice of Dismissal and the Dismissal Order. The text of the proposed notice is set out below:
NOTICE OF DISMISSAL OF ONTARIO SUPERIOR COURT OF JUSTICE COURT FILE NO. CV-18-609766-00CP AGAINST BARRICK GOLD CORPORATION
A shareholder lawsuit commenced in July of 2018 against Barrick Gold Corporation (“Barrick”) in the Ontario Superior Court of Justice was dismissed by Order of the Court on *.
The lawsuit was commenced as a proposed securities class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6, alleging claims under the Securities Act, R.S.O. 1990, c. S.5 and pursuant to the common law. The proposed Class was defined as all persons and entities, other than certain Excluded Persons, who purchased shares of Barrick’s equity securities between February 15, 2017 and April 24, 2017 (the “Class Period”) and who held some or all of those securities at the close of trading on April 24, 2017.
The Plaintiff, Peter Gradja, claimed damages arising from alleged misrepresentations in disclosure documents released by Barrick during the Class Period pertaining to its operations in Argentina and corresponding gold production and cash cost guidance, which were allegedly corrected beginning on April 24, 2017.
A dismissal of the lawsuit means that it is not going forward or being pursued.
If you are/were relying on this action to protect your rights, you should seek your own legal advice immediately.
Dismissal of the action means that any applicable limitation periods in respect of these claims, which may have been suspended, began running again on the date of the Order, and will ultimately expire (if they have not already done so).
Should you have any questions, please do not hesitate to contact Morganti & Co., P.C. at info@morgantilegal.com or (647) 344-1900.
[12] Section 29 of the Class Proceedings Act, 1992 requires court approval for the discontinuance, abandonment, or settlement of a class action. Section 29 states:
Discontinuance, abandonment and settlement
- (1) A proceeding commenced under this Act and a proceeding certified as a class proceeding under this Act may be discontinued or abandoned only with the approval of the court, on such terms as the court considers appropriate.
Settlement without court approval not binding
(2) A settlement of a class proceeding is not binding unless approved by the court.
Effect of settlement
(3) A settlement of a class proceeding that is approved by the court binds all class members.
Notice: dismissal, discontinuance, abandonment or settlement
(4) In dismissing a proceeding for delay or in approving a discontinuance, abandonment or settlement, the court shall consider whether notice should be given under section 19 and whether any notice should include,
(a) an account of the conduct of the proceeding;
(b) a statement of the result of the proceeding; and
(c) a description of any plan for distributing settlement funds.
[13] Practically speaking, the relief sought in the immediate case is equivalent to an abandonment or discontinuance of the proposed class action. Before giving approval of discontinuance or an abandonment, the court must be satisfied that the interests of the putative class members will not be prejudiced.[^3]
[14] A motion for discontinuance or abandonment should be carefully scrutinized, and the court should consider, among other things: whether the proceeding was commenced for an improper purpose, whether if necessary there is a viable replacement party so that putative class members are not prejudiced, or whether the defendant will be prejudiced.[^4]
[15] The policy rationales for requiring court approval for the discontinuance of a proposed class action include: (1) deterring plaintiffs and class counsel from abusing the class action procedure by bringing a meritless class proceeding (a so-called strike suit) to extract a payment as the price of discontinuing the class proceeding; and (2) providing an opportunity to ameliorate any adverse effect of the discontinuance on class members who might be prejudiced by the discontinuance.
[16] Under s. 29 of the Class Proceedings Act, 1992, in approving a discontinuance, the court is required to consider whether notice of the discontinuance should be given to the putative class members.
[17] I am satisfied that it is appropriate to grant the relief requested. Order accordingly.
Perell, J.
Released: August 19, 2019
COURT FILE NO.: CV-18-609766-00CP
DATE: 2019/08/19
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PETER GRADJA
Plaintiff
- and -
BARRICK GOLD CORPORATION
Defendant
REASONS FOR DECISION
PERELL J.
Released: August 19, 2019
[^1]: S.O. 1992, c. 6. [^2]: R.S.O. 1990, c. S.5. [^3]: Cappelli v. Nobilis Health Corp. 2019 ONSC 4521; Castrillo v. Workplace Safety and Insurance Board, 2018 ONSC 4421; Frank v. Farlie, Turner & Co., LLC, 2011ONSC 7137; Durling v. Sunrise Propane Energy Group Inc., [2009] O.J. No. 5969 at paras. 14-29 (S.C.J.); Sollen v. Pfizer, 2008 ONCA 803, [2008] O.J. No. 4787 (C.A.), aff’g 2008 8618 (ON SC), [2008] O.J. No. 866 (S.C.J.); Coleman v. Bayer Inc., [2004] O.J. No. 1974 at paras. 30-39 (S.C.J.) and [2004] O.J. No. 2775 (S.C.J.). [^4]: Logan v. Canada (Minister of Health), [2003] O.J. No. 418 (S.C.J.), aff’d (2004), 2004 184 (ON CA), 71 O.R. (3d) 451 (C.A.).