Court File and Parties

Court File No.: CV-14-502316-00CP Date: 2022-03-22 Ontario Superior Court of Justice

Between: The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund and Royce Lee, Plaintiffs And: Barrick Gold Corporation, Aaron W. Regent, Jamie C. Sokalsky, Ammar Al-Joundi and Peter Kniver, Defendants

Counsel: Peter R. Jervis, Golnaz Nayerahmadi and Matthew W. Taylor, for the plaintiffs Kent P. Thomson, Luis Sarabia, Steven G. Frankel and Kristine Spence, for the defendants

Heard: January 17, 18, 19, 20, 21, 2022

Before: J.T. Akbarali J.

Overview

[1] The plaintiffs seek leave under Part XXIII.1 of the Securities Act, R.S.O. 1990, c. S.5 to commence an action against the respondent, Barrick Gold Corporation (“Barrick”), and certain of its officers and directors, for alleged misrepresentations in its public disclosure documents and financial statements relating to a complex mining project in Chile and Argentina.

Brief Background

[2] In May 2009, Barrick announced that it had green-lit a mega-project, known as Pascua-Lama, to develop a gold and silver mine in the High Andes. The Pascua side of the project was in Chile. It was where the open pit mine and crushing facility were intended to be located. The Lama side of the project, across the border in Argentina, was where the processing facility was intended to be located. The greatest share of the expense related to the Lama side of the project. The project was 45,000 hectares in size, or roughly two-thirds the size of the city of Toronto.

[3] The project presented significant engineering, environmental, and regulatory challenges. George Potter, who held the position of Barrick’s Senior Vice President, Capital Projects during the early stages of the project, described some of the complexities in his evidence. For example, being located in the high Andes, the terrain was rugged, the climate was arid, the winter was cold, and strong winds blew during all seasons. Due to its remote location, workers, construction materials, and equipment all had to be transported to the project by road in both Chile and Argentina. The project was not connected to power grids in either country, so electrical substations and transmission lines had to be constructed. Camps had to be built to house the workers.

[4] The bi-national nature of the project gave rise to complications, requiring Barrick to deal with different governments and governmental agencies at multiple levels in both Chile and Argentina. The project had to contend with tax regimes, legal and regulatory systems, and economic conditions in both countries.

[5] The challenges inherent in the project became further complicated by events that occurred while the project was ongoing, including rampant inflationary pressures, a serious earthquake in Chile, and a superboom in construction projects worldwide, across industries, which resulted in an increase in cost and decrease in supply of commodities and labour. In addition, the project was eventually placed on hold after an injunction issued by a Chilean court due to environmental concerns. Ultimately, the project was placed on care and maintenance before completion, the company having concluded that it was no longer financially viable.

[6] Throughout the project’s currency, Barrick made a series of disclosures about its progress in its quarterly and annual reports and in press releases. The plaintiffs allege that Barrick made several misrepresentations in these disclosures. First, they allege that Barrick disclosed misleading forecasts of the project’s capital expenditure (“capex”) budget and of the project’s schedule. They also argue that Barrick both implicitly and explicitly represented that its forecasts were based on assumptions considered reasonable by the company at the time they were made, but that these representations were untrue. They allege that Barrick knew that its forecasts were not based on reasonable assumptions when the forecasts were disclosed.

[7] The plaintiffs also argue that Barrick made misrepresentations in its accounting documents. In particular, they allege that Barrick should have taken an impairment related to the project before it did, and because it failed to do so, its financial statements overstated the value of its assets and understated its expenses, thereby overstating its income. They also allege that Barrick failed to disclose that there were material weaknesses in its disclosure controls and procedures (“DC&P”) and in its internal controls over financial reporting (“ICFR”). Finally, they allege that Barrick misrepresented that it had no undisclosed contingent liabilities relating to the project, when it did, in the form of contingent liabilities alleged to have arisen as a result of what the plaintiffs claim are the project’s serious environmental violations in Chile.

[8] The plaintiffs allege that these misrepresentations were material, and that when they were publicly corrected, Barrick’s share price dropped significantly, causing billions in losses to the class.

[9] The defendants dispute the plaintiffs’ allegations. They argue that Barrick’s disclosure was impeccable throughout. The project was beset by difficulties that it could not have foreseen, and that affected the worldwide economy. Barrick claims its disclosures were accurate and timely. Moreover, the defendants argue there was no public correction of any of the alleged misrepresentations. They claim that the plaintiffs are impermissibly engaging in backwards reasoning, alleging that because the project experienced difficulties, there must be actionable conduct, when in fact there is none.

[10] The defendants deny the materiality of the alleged misrepresentations. Moreover, they dispute that the plaintiffs have met the test for leave to proceed against the individual defendants in any event.

[11] The defendants also rely on the forward-looking information defence in s. 138.4(9) and (9.1) of the Securities Act, arguing that their public disclosures contained adequate cautionary language that meets the requirements of the statutory defence.

Procedural Background

[12] This is the second leave motion that has been argued in these proceedings. The first was decided by Belobaba J. in reasons dated October 9, 2019: DALI Local 675 Pension Fund (Trustees) v. Barrick Gold, 2019 ONSC 4160, 148 O.R. (3d) 755 [“Barrick SCJ”]. In that motion, the plaintiffs alleged three categories of misrepresentations: (i) material understatement of Barrick’s capex budget and project completion schedule dates; (ii) failing to disclose material facts relating to serious environmental non-compliance; and (iii) failing to disclose serious accounting violations relating to the project. Of these, Belobaba J. granted leave to proceed on a single environmental misrepresentation.

[13] Justice Belobaba denied leave with respect to the accounting, scheduling, and capex claims on the basis that the plaintiff had failed to identify a legally sufficient public correction associated with any of those alleged misrepresentations.

[14] The defendants sought leave before the Divisional Court to appeal Belobaba J.’s decision to allow the single environmental misrepresentation to proceed. Leave was denied. The plaintiffs appealed the balance of Belobaba J.’s decision to the Court of Appeal. The Court of Appeal upheld Belobaba J.’s decision with respect to the denial of leave to the other environmental misrepresentation claims, but allowed the appeal in part with respect to the capex, scheduling, and accounting claims, returning the issue of whether leave should be granted with respect to those misrepresentations to this court.

[15] This claim was commenced in 2014. There have been several amendments and proposed amendments to the statement of claim since that time. The plaintiffs do not intend the current issued version of the statement of claim to be the operative version. Rather, they delivered a “Schedule C” (in fact, multiple versions of Schedule C) identifying the alleged misrepresentations and public corrections. They intend to amend the statement of claim once it is clear what the scope of the action will be. With the consent of the defendants, Belobaba J.’s analysis relied on the final version of Schedule C that was presented to him at the leave motion, and which was appended to his reasons. To its reasons, the Court of Appeal attached the same Schedule C.

[16] Before me, the plaintiffs produced a new Schedule C, to which the defendants object. The new Schedule C is appended to an amended notice of motion, which was filed part way through the motion after I requested a notice of motion that would make clear what the plaintiffs were seeking. The plaintiffs have indicated that the new Schedule C was intended to further streamline the issues before the court, while the defendants argue that it is, in fact, an attempt to broaden the potential scope of discovery on any misrepresentation for which leave is granted. The plaintiffs subsequently indicated that they are content to proceed on the basis of either version of Schedule C.

[17] The defendants argue that, although we are years into this action, the plaintiffs have yet to clearly articulate the misrepresentations they allege. The plaintiffs have modified their articulation of the misrepresentations they allege Barrick made twenty separate times now, and still they have failed to meet the requirement that they plead the misrepresentations and the alleged corrections precisely. On this basis alone, the defendants argue the motion should be dismissed.

[18] There is also dispute between the parties with respect to the relevance of the plaintiffs’ environmental violation allegations which were dealt with by Belobaba J. and the Court of Appeal. Each side accuses the other of seeking determinations that are res judicata in connection with these allegations. The defendants argue that the plaintiffs are seeking to impermissibly revive the alleged environmental misrepresentations that were not allowed to proceed by shoehorning them into their accounting and scheduling misrepresentation claims. The plaintiffs deny they have done any such thing, but claim the environmental allegations are relevant to the alleged accounting and scheduling misrepresentations. [^1] They argue that the defendants are seeking to impermissibly relitigate the factual findings made by Belobaba J. with respect to the environmental misrepresentations.

Issues

[19] The issues for determination on this motion are:

a. Should the motion be dismissed because the plaintiffs have failed to meet the requirement that they plead precisely the misrepresentations and corrective statements that they allege?

b. If not, should leave be granted under s. 138.8 of the Securities Act to commence an action based on any or all of the alleged misrepresentations against any or all of the defendants? Determining this issue will require me to consider whether it is reasonably possible that the plaintiffs will succeed in their action because:

i. The individual statements, in their context, are misrepresentations, whether by omission or commission;

ii. The misrepresentations were publicly corrected;

iii. The misrepresentations were material;

iv. The forward-looking information defence will not succeed.

Precision Pleading

[20] While amendments to a statement of claim in a class proceeding like this one are not uncommon, the plaintiffs’ approach to setting out the alleged misrepresentations has been unusual. Twenty different iterations of the alleged misrepresentations have been advanced. That is a great deal too many.

[21] The plaintiffs’ consolidated statement of claim (which was, itself, the fourth version of the claim) was struck by Perell J., who described it as “not compliant with the rules of pleading, being repetitive, verbose and containing copious amounts of argument, rhetorical material and evidence.”

[22] The plaintiffs subsequently delivered a fresh as amended statement of claim, which is the current issued and filed claim. This claim is 150 pages long, and includes three schedules of alleged misrepresentations that total 70 pages, consisting of text copied from Barrick’s public disclosures over time.

[23] Since filing that version of the claim, the plaintiffs have delivered a proposed amended fresh as amended statement of claim, a further proposed amended fresh as amended statement of claim, and a further further proposed amended fresh as amended statement of claim. The most recent version of the proposed pleading is close to 160 pages, including the schedules of alleged misrepresentations totaling 70 pages. Justice Perell’s description of the consolidated statement of claim continues to apply to the latest version.

[24] It was in the plaintiffs’ reply factum on the original leave motion, well after the evidentiary record on this motion was closed, that the plaintiffs first produced a Schedule C of alleged misrepresentations. In total, the plaintiffs produced six versions of Schedule C to get to the final version, if I can call it that, which is the one appended to Belobaba J.’s reasons and the reasons of the Court of Appeal.

[25] I now have yet another version of Schedule C before me, but no properly drafted statement of claim. I do not even know, because the plaintiffs did not identify, which version of the statement of claim they would have me evaluate on this motion — the current issued version, or the latest proposed version.

[26] The jurisprudence, and indeed all common sense, assumes that the court should have a pleading before it when evaluating whether to grant leave to proceed with a claim.

[27] For example, the Court of Appeal has set out the requirements for pleadings in secondary market disclosure cases. In Mask v. Silvercorp Metals, 2016 ONCA 641, 132 O.R. (3d) 161, at para. 15, it held that the statement of claim (not some schedule that could one day be turned into a statement of claim) must set out, with particularity: (a) the specific misrepresentations that are being pursued; (b) the documents or statements containing the alleged misrepresentations; (c) the dates of the alleged misrepresentations; (d) the dates on which the misrepresentations were publicly corrected, and (e) the documents or statements containing the corrections.

[28] These requirements arise from the purposes of the statement of claim in a class action under s. 138.3 of the Securities Act, identified by Strathy C.J.O. in Mask, at para. 14, as twofold: (i) to identify the misrepresentations on which the statutory claim is based, and give particulars of the alleged correction of the misrepresentations; and (ii) to define the scope of the class action.

[29] In Peters v. SNC-Lavalin, 2021 ONSC 5021, at para. 137, Perell J., relying on Mask, specified that, to plead the statutory cause of action for misrepresentations in the secondary market, a plaintiff should: (a) identify the inculpatory statement or omission and when it was made or ought to have been made; (b) specify the falseness of the inculpatory statement; and (c) identify the public correction and when it was made.

[30] As I have noted, at the first leave motion, the defendants agreed to use the Schedule C proposed by the plaintiffs as the basis for the motion. The plaintiffs have now agreed to use either their latest version of Schedule C, or the version that was before Belobaba J. and the Court of Appeal. In its reasons, the Court of Appeal directed that the “categories” of misrepresentation identified as the scheduling and capex misrepresentations and accounting misrepresentations be returned to this court to consider whether leave ought to be granted in relation to them. Those categories were set out in the Schedule C attached to Belobaba J.’s reasons and the Court of Appeal’s reasons.

[31] In the circumstances, given the direction from the Court of Appeal, I conclude that, however undesirable, I must proceed to consider the leave motion having regard to the Schedule C on which the first leave motion and the appeal proceeded. I am not prepared to proceed on the latest Schedule C without the consent of the defendants, when the plaintiffs have no inherent right to have their leave motion determined on the basis of anything other than a statement of claim. However, while Schedule C [^2] must be read having regard to the limitations inherent in it being a schedule and not a pleading, it must nevertheless meet the precision pleading standard set out above.

[32] In my view, the scheduling and capex misrepresentations are properly identified and pleaded in Schedule C. While there are opportunities for greater precision in identifying the documents, in particular with respect to statements made by the company in its cautionary statements and the alleged undisclosed information rendering each individual statement false, I am satisfied that the necessary elements are identified with sufficient clarity to enable the defendants to respond and the court to undertake the leave analysis.

[33] I find that the accounting misrepresentations set out in Schedule C do not meet the precision pleading standard, for the reasons that follow.

[34] The plaintiffs have failed to identify with precision the documents in which the alleged misrepresentations are made. In Schedule C, they allege that “in all disclosures during the class period”, Barrick made misrepresentations that its financial reporting complied with the applicable accounting standards and fairly and accurately represented the financial situation of the company. They then identify “the annual financial reports released during the class period”. One can draw some assumptions about what the plaintiffs might mean by this, but they do not identify these documents by name and date, a requirement which is really the bare minimum. By iteration twenty, the alleged misrepresentations ought to have been nailed down.

[35] The plaintiffs cite a specific quote, which appears to be from an annual financial report released during the class period, indicating that the company’s consolidated financial statements had been prepared in accordance with IFRS (International Financial Reporting Standards) and reflected management’s best estimates and judgments based on currently available information. The statement also indicates that the company had developed and maintained a system for internal controls to ensure the reliability of its financial information. This quote is referenced to “p. 81”, but again without identifying the source document specifically.

[36] The plaintiffs allege that “Barrick and its CEO and CFO certified in each financial report that the company’s ICFR and DC&P were ‘effective’”. Again, one can make educated guesses about what the phrase “each financial report” might mean, but the specific documents should be identified by name and date. The use of the word “effective” is in quotes in Schedule C. The plaintiffs presumably got it from somewhere. It is not onerous — and certainly not by version twenty — to require them to specify where it came from.

[37] The plaintiffs go on to identify three alleged material facts that they claim were necessary to be disclosed to make the statements referred to above not misleading. These are that (i) Barrick’s ICFR and DC&P were ineffective with respect to Pascua-Lama; (ii) Barrick failed to take necessary and timely impairment writedowns no later than Q2 2012 on the carrying value of Pascua-Lama; and (iii) Barrick failed to record contingent liabilities relating to the risk of serious regulatory sanctions against Pascua-Lama, including suspension, permit revocation, and closure, among others.

[38] The plaintiffs then allege three partial corrections of the accounting misrepresentations:

a. July 26, 2012, Q2 2012 – in its quarterly report for Q2 2012, Barrick announced that preliminary results indicated that gold production was now expected in mid-2014 with an approximately 50-60% increase in capital costs.

b. April 10, 2013 – in press releases (two from Barrick, one from Dow Jones Newswire), the market was advised of a preliminary injunction that had been granted in Chile, and that construction on the Chilean side of the project had been suspended while the company worked to address environmental and regulatory requirements.

c. June 28, 2013 – in a press release, Barrick announced it was conducting impairment testing as a result of recent and continued significant declines in gold and silver prices, and the delay of first gold production in Pascua-Lama, and that preliminary analysis indicated an after-tax impairment charge in the range of $4.5-5.5 billion in Q2 for the Pascua-Lama project would be required.

[39] There is a lack of pleaded nexus between some of the alleged misrepresentations, the material facts that are alleged to have been omitted, and the alleged corrections.

[40] The delay in gold production in Pascua-Lama is clearly related to the capex and scheduling misrepresentations alleged, but the connection with the alleged accounting misrepresentations is not clearly identified in Schedule C.

[41] The press releases advising of the suspension of the project in Chile due to the injunction are related to the alleged scheduling misrepresentations, but there is no clearly pleaded connection with the accounting misrepresentations.

[42] None of the above alleged corrections have any pleaded relationship to the alleged material undisclosed facts.

[43] There is a clearly pleaded nexus between the press release regarding impairment testing and the alleged correction indicating that impairment testing was ongoing and a writedown was expected. There is also a clearly pleaded nexus between the misrepresentation, the alleged undisclosed material fact that an impairment was required, and the alleged correction. However, this nexus relates to alleged misrepresentations that, as I have already noted, have not been clearly identified in Schedule C.

[44] In my view, this is sufficient to dismiss the motion for leave with respect to the accounting misrepresentations. After twenty tries at clearly pleading the claim, I agree with the defendants that enough is enough.

[45] For clarity, in reaching this conclusion, I am not relying on any analysis of public correction. Rather, I find that the pleading, or Schedule C in this case, is not sufficiently precise to grant leave with respect to the alleged accounting misrepresentations, and after the plaintiffs’ repeated attempts to get it right, I am not inclined to allow them leave to make another run at it. The court does not have endless resources to allow counsel to keep honing their claim in the hopes that the next one will be precise enough to obtain leave to proceed. Nor would it be fair to the defendants to subject them to a third leave motion (with a record that, even pared down for this motion given the reduced scope of the issues from those that were before Belobaba J., occupies approximately 30,000 pages in CaseLines, and for which counsel collectively prepared 20 volumes of compendia).

[46] In the event that I am wrong, and this is not a sufficient basis on which to deny leave, I will consider briefly whether the accounting misrepresentations would otherwise have met the requirements for leave, after I deal with the analysis of the scheduling and capex claims.

The Scheme Under the Securities Act

[47] Section 138.3(1) of the Securities Act creates the statutory claim for misrepresentation in the secondary market. It provides, in part:

Where a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of the 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 contained in the document 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; …

[48] The Securities Act, s. 1(1) defines “misrepresentation” to be (a) “an untrue statement of material fact, or (b) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made”.

[49] “Material fact”, when used in relation to securities issued, is defined as “a fact that would reasonably be expected to have a significant effect on the market price or value of the securities”.

[50] Under s. 138.8(1), leave is required to commence a claim under s. 138.3(1) of the Securities Act. Section 138.8(1) provides that 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.

[51] The defendants do not challenge the good faith requirement. They argue that there is no reasonable possibility that a misrepresentation action based on the alleged capex, scheduling, and accounting misrepresentations will be resolved in favour of the plaintiff.

[52] The defendants also rely on the forward-looking information defence in the Securities Act. Section 138.4(9) provides that a person or company is not liable in an action under s. 138.3 for a misrepresentation in forward-looking information if the person or company proves all of the following:

1. The document or public oral statement containing the forward-looking information contained, proximate to that information,

i. reasonable cautionary language identifying the forward-looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information, and

ii. a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.

2. The person or company had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward-looking information.

The Jurisprudential Framework

[53] In Baldwin v. Imperials Metals Corporation, 2021 ONCA 838, at para. 16, the Court of Appeal described the purpose of Part XXIII.1 of the Securities Act as being “aimed at deterring corporate nondisclosure, protecting investors, and incentivizing accurate and timely disclosure by public issuers, while avoiding the American experience of predatory ‘strike suits’”.

[54] In Theratechnologies Inc. v. 121851 Canada Inc., 2015 SCC 18, [2015] 2 S.C.R. 106, at paras. 36-38, the Supreme Court of Canada held that the leave requirement gives courts “an important gatekeeping role” in determining whether an action could be said to have a reasonable possibility of success. The Court found that the threshold should be more than a “speed bump”, and the courts must “undertake a reasoned consideration of the evidence to ensure that the action has some merit.” The Court described the legislative objective of the leave requirement as creating “a robust deterrent screening mechanism so that cases without merit are prevented from proceeding”. In Bradley v. Eastern Platinum Ltd., 2016 ONSC 1903, at para. 51, Rady J. held that the leave test “is not a low bar”.

[55] To establish a reasonable possibility of success, the claimant must “offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim.” The threshold requires that there be a “reasonable or realistic chance that the action will succeed.” However, the leave stage should not be treated as a mini-trial: Theratechnologies, at paras. 38-39.

[56] In Paniccia v. MDC Partners Inc., 2018 ONSC 3470, 142 O.R. (3d) 421, at paras. 89-91, Perell J. held that a judge on a leave motion must be cognizant of the fact that full production has not been made. While the court is entitled to weigh the evidence of both parties having regard to the affidavits and cross-examinations, the court must also take into account that the leave motion “involves merely a paper record and that the statutory leave test sets a low evidentiary threshold.”

[57] In Rahimi v. SouthGobi Resources, 2017 ONCA 719, 137 O.R. (3d) 241, at para. 48, the Court of Appeal held that the motion judge “is also obligated to consider what evidence is not before her.” Moreover, where there are contentious issues of credibility that impact on the decision whether to grant leave, “the motion judge must ask herself whether they can be resolved on the existing record”: SouthGobi, at para. 49.

[58] The defendants argue that the reasoning in SouthGobi must be taken with a grain of salt. The SouthGobi defendants took the remarkable position of attacking their own corrective disclosure, arguing that it was unnecessary, and relied solely on their affirmative reasonable investigation defence. Barrick argues that the unusual approach to the motion in SouthGobi puts a different gloss on the Court of Appeal’s discussion with respect to the gaps in the evidence.

[59] If the defendants are suggesting that the direction in SouthGobi to be cognizant of gaps in the evidence is limited to defences where the defendant bears the onus of proof, I disagree. The Court of Appeal did not restrict its discussion about gaps in the evidence only to evidence related to affirmative defences. Rather, its statement about considering the evidence that is not before the court followed a quoted passage from Theratechnologies, at para. 39, which deals with the leave screening mechanism more generally. It is logical, and consistent with the interests of justice, that a court approach the leave test mindful of the fact that the defendant may have chosen not to produce relevant evidence to which the plaintiff has no access. As the Court of Appeal wrote in SouthGobi, at para. 48, “[c]onsideration of these evidential limitations of the leave stage is important because they can work to the prejudice of plaintiffs who have potentially meritorious claims.”

[60] The plaintiffs rely on the decision in Barrick SCJ, where Belobaba J. held that a 10-20 per cent chance of success for the plaintiff is enough to clear the “reasonable possibility” hurdle. With great respect to Belobaba J., I do not find this approach helpful. First, I note that when Barrick was appealed to the Court of Appeal, that court did not adopt the “10-20 per cent” language, but instead emphasized the need for the motion judge to undertake a reasoned consideration of the evidence on a motion for leave: Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund v. Barrick Gold Corporation, 2021 ONCA 104, at paras. 73 and 76. Second, in Theratechnologies, at paras. 4 and 38, Abella J. described the threshold for leave as requiring “more than a mere possibility of success” and that there must be a “reasonable or realistic chance that the action will succeed”.

[61] I accept that the reasonable possibility, or, put another way, more than a mere possibility, threshold is lower than the balance of probabilities threshold, and that a court may grant leave on this lower threshold even if the motion judge believes that the defendant has a strong chance of success at trial. In my view, however, it is not helpful to ascribe percentages to what is fundamentally a qualitative analysis: see also O’Brien v. Maxar Technologies Inc., 2022 ONSC 1572, at paras. 95-96.

[62] I also note that the qualitative analysis as to whether there is a reasonable possibility that the claim will be resolved at trial in favour of the plaintiff must be undertaken for each alleged misrepresentation: Paniccia, at para. 86; Kauf v. Colt Resources, Inc., 2019 ONSC 2179, at paras. 70-72.

[63] With this framework in mind, I turn to the analysis of the issues.

But First, a Word about the Record

[64] The record before me is enormous. Through 20 volumes of compendia, lengthy factums, and five days of argument, counsel have worked hard to ensure I understand the events underlying this motion, and I appreciate their efforts.

[65] In argument, much was made about “gaps” in the evidence. I recognize that this proceeding, despite its age, remains at an early stage in the litigation process. Documentary discovery has not been made. Oral discoveries have not been held.

[66] At the same time, the volume of documents produced on this motion dwarfs what the court sees in almost all of the trials that it hears. The record before me was pared down from that which was before Belobaba J. Lengthy cross-examinations have been held. Multiple expert reports have been exchanged.

[67] Thus, while I am cognizant that production and discovery are not complete, and that there are categories of documents over which the plaintiffs sought production but were refused, I am also cognizant that the record in this case is unusually well developed for a leave motion.

[68] I have concluded that there are no obvious gaps in the evidence before me that affect my analysis below, notwithstanding the plaintiffs’ lengthy request to inspect documents that was refused by the defendants.

[69] I also note that, given the size of the record, there are facts and evidence to which I have not referred. Were I to take each fact or piece of evidence in the record and explain why it is either consistent with my conclusions, why I accorded it no weight, or why it was irrelevant to my conclusions, these reasons would be unworkably long, and the delay in releasing them would be significant. In dealing with a record of 30,000 pages, I have chosen to focus on the facts I consider to be key to the parties’ positions and to my analysis. Really, there was no other option.

The Alleged Capex and Scheduling Misrepresentations

[70] The first alleged misrepresentation in this category arose in October 2011, the month after the earliest date the class period can begin, being September 22, 2011, due to the operation of the statutory limitation period. However, the story begins earlier than that. To provide the necessary context about the company’s public disclosures, and the information that would have been available to the market, I begin with some information about Barrick, and then look at the company’s public disclosures about Pascua-Lama, beginning in May 2009, when Barrick announced that it was green-lighting the project. In the course of doing so, on occasion I will make passing reference to some of the events happening behind the scenes at Barrick, and also some events happening in the world economy and mining industry. I do so to assist the reader in understanding the totality of events. However, where I do so, I do not intend to suggest that any events internal to the company would have been publicly known at the time the disclosures in question were made.

[71] Barrick is one of the largest mining companies in the world. In its Annual Information Form (“AIF”) for the year ended December 31, 2010, it described itself as “the leading gold mining company in the world in terms of production, reserves and market capitalization.” It disclosed that it was engaged in the production and sale of gold, copper, and oil and gas. It disclosed that it held other interests, including a nickel development project. It described its activities as including exploration and mine development. According to its 2010 AIF, Barrick employed about 16,000 people at the time, plus an additional 2,500 people at operations it jointly owned.

[72] In its 2010 AIF, Barrick disclosed sole or part ownership in 24 gold mines in Africa, Australia Pacific, South America, and North America, plus interests in copper mines. The record includes an organizational chart of Barrick’s significant subsidiaries only, from which one can confidently conclude that Barrick’s corporate operations were complex and broad in scope.

[73] In the 2010 fiscal year, Barrick produced 7.77 million ounces of gold, and had total proven and probable gold mineral reserves of 139.8 million ounces. It produced 368 million pounds of copper and had proven and probable copper reserves of 6.5 billion pounds.

[74] As of March 28, 2011, there were almost 1 billion shares of Barrick issued and outstanding. With a share price of roughly $50.00/share, its market capitalization at this point in time was around $50 billion.

[75] Barrick announced the Pascua-Lama project had been green-lit in a press release dated May 9, 2009. According to the press release, Pascua-Lama was expected to be one of the lowest cost gold mines in the world. The company estimated pre-production construction costs of $2.8-3.0 billion. Production of first gold was expected in early 2013.

[76] In this press release, as in virtually all of the press releases and disclosure documents at issue in this motion, Barrick included a cautionary statement on forward-looking information. [^3] Among other things, the statement said:

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company’s estimated future results. Performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of gold, silver, copper or certain other commodities (such as fuel and electricity); fluctuations in currency markets; … legislative, political or economic development in the jurisdictions in which the company carries on business, including Chile and Argentina; operating or technical difficulties in connection with mining or development activities; employee relations; availability and costs associated with mining inputs and labor; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits … the risks involved in the exploration, development and mining business. …

[77] The company directed readers to its most recent AIF where certain of these factors were discussed in greater detail. It also explicitly disclaimed any intention or obligation to update or revise any forward-looking statements except as required by applicable law.

[78] The AIF for the year ended December 31, 2008 set out a lengthy discussion of risk factors which was repeated in subsequent AIFs in the same, or substantially the same, language. Over approximately nine pages, the company discussed risk factors in detail. Below I summarize the risks that are relevant for the purposes of this motion (including some relevant to the alleged accounting misrepresentations), and some details about the nature of Barrick’s cautions:

a. Metal price volatility: Barrick warned that its business is strongly affected by the world market price of gold and copper. Barrick warned that depending on the market price of the relevant metal, it may determine that it is not economically feasible to continue the development of some or all of its current projects.

b. Risks inherent in projects: Barrick warned that there are risks and unknowns inherent in all projects including capital and operating costs of the projects, and the future price of the relevant metals. It indicated that the capital expenditures and time required to develop new mines are considerable, and changes in the costs or construction schedules can affect project economics. It specifically warned that it was possible for actual costs to increase significantly, and economic returns to differ materially, from its estimates. It warned about the risk of failure to obtain the necessary government approvals for a project in which case the project may not proceed on its original timing or at all. It warned that projects may require more capital than anticipated.

c. Mineral reserves and resources: Barrick warned that quantities of its mineral reserves and mineral resources were estimates and there was no guarantee that they were accurate. It warned that it could take years from the initial phase of drilling before production was possible, and that the economic feasibility of exploiting a discovery might change. It repeated risks relating to the market price fluctuations of metals and risks relating to failure to obtain or maintain necessary permits or government approvals.

d. Price volatility and availability of other commodities: Barrick warned that the cost and availability of commodities which are consumed or used in connection with its projects, including fuel, electricity, steel, and concrete, can be subject to volatile price movements, which can be material and occur over short periods of time. An increase in the cost, or decrease in the availability, of construction materials may affect the timing and cost of Barrick’s projects, and, among other things, may lead Barrick to determine that it is not economically feasible to continue development of some or all of its current projects.

e. Mining risks and insurance risks: Barrick warned of risks relating to environmental hazards, labour force disruptions, unavailability of materials and equipment, weather conditions, and seismic activity, which could result in, among other things, environmental damage, delays in mining, and possible legal liability. Barrick warned that it could incur significant costs or experience significant delays that could have a material adverse effect on its financial performance.

f. Production and cost estimates: Barrick warned that no assurance could be given that its estimates of cash costs and capital costs would be achieved. It disclosed that its actual production and costs might vary from estimates for a variety of reasons including risks and hazards associated with mining, natural phenomena including earthquakes, and unexpected labour shortages. It noted that cost of production may be affected by a variety of factors including labour costs, the costs of commodities, general inflationary pressures, and currency exchange rates.

g. Environmental and health and safety regulations and permits: Barrick warned that its ability to obtain permits and approvals may be adversely impacted by real or perceived detrimental events associated with its activities. In turn, this may adversely affect Barrick’s operations. It warned that future changes in applicable laws, regulations and permits, or changes in their enforcement or regulatory interpretation, could have an adverse impact on Barrick. It also warned that failure to comply with applicable laws and regulations may result in injunctions, fines, suspension or revocation of permits, and other penalties. It stated that there can be no assurance that Barrick has been, or will at all times be, in full compliance with all such laws and regulations and with its environmental and health and safety permits.

h. Foreign investments and operations: Barrick noted that mining investments are subject to the risks associated with any conduct of business in foreign countries including uncertain political and economic environments, changes in laws or policies, cancellation or renegotiation of contracts, the inability to maintain necessary government permits, currency fluctuations, and import and export regulations. These risks may require Barrick to spend more funds than previously expected.

i. Government regulation and changes in legislation: Barrick disclosed that its business is subject to various levels of government controls and regulations. It is unable to predict what legislation or revisions may be proposed that might affect its business, but such changes could require increased capital and operating expenses, and could prevent or delay operations by the company.

j. Currency fluctuations: Barrick noted that currency fluctuations may affect the costs it incurs in its operations.

k. Employee relations: Barrick warned that labour disruptions may have a material adverse impact on its operations.

l. Shortage of critical parts, equipment and skilled labour: Barrick warned that an increase in worldwide demand for critical resources such as input commodities, drilling equipment, tires, and skilled labour may cause unanticipated cost increases in delays.

m. Litigation: Barrick noted that it may be involved in disputes with others and the results of litigation cannot be predicted with certainty.

n. Disclosure and internal controls: Barrick disclosed that it has documented and analyzed its system of disclosure controls and its internal controls over financial reporting, but a control system, no matter how well designed, can only provide reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation.

o. Ability to support the carrying value of goodwill: Barrick noted that the carrying value of its goodwill was approximately $5.3 billion. It noted that the company evaluates the carrying amount of goodwill on an annual basis, at least. It noted that the timing and amount of future goodwill impairment charges is dependent on a multitude of factors that impact evaluations of mineral properties, including changes in geopolitical risk, changes in market gold prices and total cash costs, and future capital requirements, among others.

[79] Thus, at the outset of the project, the market was aware of Barrick’s estimated capex budget and expected first gold production date of early 2013, but it was warned that mining is a complex and high-risk business, and any number of factors, including many factors outside of Barrick’s control, could affect the project’s budget, timeline, and feasibility, among other things.

[80] Indeed, some of these concerns came to pass by February 17, 2011, when Barrick released its Q4 and year-end report in which it announced an estimated increase in its capex budget to $3.3-3.6 billion, and production of first gold in the first half of 2013. Reasons for the increase included a stronger Chilean peso, increases to labour, commodity, and other input costs in both Chile and Argentina, and higher inflation rates, particularly in Argentina. To foreshadow some of the evidence related to these factors, which I address in greater detail below, the financial crisis of 2007-2008 had been followed by a superboom in construction projects, including Pascua-Lama, leading to competition for labour and commodities. Moreover, a 2010 earthquake in Chile had wrought damage leading to significant infrastructure projects in Chile, creating additional local demand for labour and commodities. These factors drove up the costs of commodities and labour. In particular, skilled labourers in Chile preferred to work close to home, repairing the infrastructure in their communities, rather than travel away from home to work in the harsh conditions of the high Andes. Moreover, the workers Barrick was able to hire and retain were, overall, not as skilled as the company would have liked, leading to less productivity on the job site.

[81] The company’s revised capex forecast and schedule were accompanied by cautionary language like that I have already reviewed.

[82] New leadership on the Pascua-Lama project came on board in March 2011. In April 2011, they determined they would undertake a cost review and reforecast of the costs of the project. Having done so, in its Q2 2011 quarterly report dated July 28, 2011, the company disclosed a further increased capex budget in the amount of $4.7-5.0 billion, and indicated that the schedule would be maintained to deliver first gold in mid-2013. The report made reference to factors impacting the mining industry, and Pascua-Lama more particularly, including a higher commodity price environment, stronger local currencies, tighter labour markets, higher inflation, and the Chilean earthquake. It indicated that higher metal prices had improved the economics and overall rates of return for Pascua-Lama notwithstanding the higher than previously estimated capex costs.

[83] In the context of reporting its revised capex forecast, Barrick indicated that it had “engaged an independent, globally recognized engineering consultant who has reviewed the robustness of our processes and methodology in deriving this updated capital estimate.” The plaintiffs allege that this statement is a misrepresentation. They argue that the independent consultant found significant problems with Barrick’s methodology, but the statement in the quarterly report makes it seem as if the company’s methodology was validated by the consultant. The defendants deny that the statement is inaccurate, or that there were significant problems with the company’s forecasting methodology.

[84] The statement about the independent consultant is an alleged misrepresentation in the plaintiffs’ common law claims, but it falls outside of the statutory limitation period, so it does not form part of the alleged misrepresentations for which leave is sought on this motion. Rather, the plaintiffs argue that the concerns raised by the independent consultant should have been disclosed to make the capex forecasts that were disclosed by the company within the class period not misleading. I deal with those arguments when I analyze whether leave ought to be granted to commence a claim on the impugned statements.

[85] The company also reported in its Q2 2011 quarterly report that it had reorganized its capital projects group, including making personnel changes at Pascua-Lama. Those changes refer to the new leadership.

[86] As with the company’s other disclosures, the Q2 2011 quarterly report included the cautionary language I have already described.

[87] The company’s Q3 quarterly report marks the first of its disclosures within the class period. In the report, Barrick repeated that Pascua-Lama was expected to achieve first production in mid-2013, and repeated that its estimated total mine construction capital was $4.7-5.0 billion. It also repeated its cautionary language, including the statement that its forward-looking statements are based upon estimates and assumptions that, “while considered reasonable by the Company”, are inherently subject to significant business, economic and competitive uncertainties and contingencies.

[88] The plaintiffs allege that the Q3 report contained misrepresentations by (i) stating that Pascua-Lama was expected to achieve first production in mid-2013; and (ii) stating that total mine construction capital was estimated at $4.7-5.0 billion. They also argue that Barrick made misrepresentations in the Q3 2011 report by failing to disclose facts required to be stated to make those express statements not misleading, including that (i) the capex forecast was neither reasonable nor accurate; (ii) the budget was based on a flawed methodology as disclosed in the report of the independent consultant referred to in the Q2 2011 quarterly report; (iii) the estimate was derived using estimates prepared by significant sub-contractors Barrick had engaged on the project, the largest of whom had delivered estimates that Barrick considered to be highly unreliable; (iv) the cost escalation related significantly to ongoing problems with the approach Barrick had taken to management of the project; and (v) the estimate was based on a schedule that called for pre-stripping of surface rock on the Chilean side of the project to begin by mid-2011, and Barrick knew that problems with the completion of its Water Management System (“WMS”) were placing that timeline in jeopardy.

[89] The plaintiffs also allege that Barrick misrepresented as a matter of current fact that its estimates were “considered reasonable by management” when in fact Barrick knew they were unreliable and materially understated. They allege that Barrick omitted to disclose known material information relevant to the unreliability and understatement of the capex budget and schedule, including that Barrick had decided to use an in-house team rather than experienced project construction management to save costs, but Pascua-Lama was beyond the expertise of its in-house capabilities, resulting in increased costs and delay.

[90] As I review in greater detail below, in October 2011, Barrick began the process of trying to obtain a “definitive estimate” (“DE”) and schedule from its most significant sub-contractor, Fluor-Techint, [^4] to allow it to quantify the capex budget amid ongoing pressures to the project. Over the months that followed, Fluor-Techint delivered multiple iterations of its DE and schedule, all of which were beset by problems, and that the company judged to be unreliable, albeit improving with each version.

[91] By the time the Q4 and 2011 year-end report was released on February 16, 2012, the company remained unsatisfied with Fluor-Techint’s DE and schedule. The company made the following statements in the report:

At the Pascua-Lama project, approximately 55% of the previously announced pre-production capital of $4.7 to 5.0 billion has been committed and first production is expected in mid-2013. The project is being impacted by labor and commodity cost pressures as a result of inflation, competition for skilled labor, the impact of increased Argentinian customs restrictions on equipment procurement and lower than expected labor productivity.

[92] The plaintiffs argue that the first sentence of the paragraph above is a misrepresentation, for the reasons I have already identified with respect to the October 2011 Q3 report.

[93] The Q4 and 2011 year-end report included the cautionary language I have already described. The plaintiffs allege that the statement in the cautionary language — that the forecasts were considered reasonable by management — remained a misrepresentation of current fact, for the reasons I have already described. In addition, the plaintiffs allege that by this time, Barrick knew of anticipated internal capex budget increases, to $6.4 billion in January 2012 and $7.5 billion by Q1 2012 (both numbers net of contingency), and also knew that increasing inflationary trends were likely to cause a material increase to the estimate, but did not disclose this.

[94] On March 28, 2012, Barrick released its 2012 AIF. In it, the company stated:

Approximately 55% of the previously announced pre-production capital of $4.7-5.0 billion has been committed and first production is expected in mid-2013. … The project is being impacted by labor and commodities cost pressures as a result of inflation, competition for skilled labor, the impact of increased Argentinean customs restrictions on equipment procurement and lower than expected labor productivity.

[95] Again, the company included cautionary language in its 2012 AIF, including the statement that forward-looking statements are based on a number of estimates and assumptions that, “while considered reasonable by [the company]”, are inherently subject to significant business, economic and competitive uncertainties and contingencies.

[96] The plaintiffs impugn the statements listed above for the same reasons I have already described.

[97] On May 2, 2012, the company released its Q1 2012 quarterly report. By this time, it remained dissatisfied with the DE and schedule provided by Fluor-Techint and continued to press Fluor-Techint for more accurate estimates.

[98] The quarterly report stated:

At the Pascua-Lama project, about 70 percent of the previously announced in construction capital of $4.7-5.0 billion has been committed. First production is anticipated in mid-2013. The project is being impacted by labor and commodity cost pressures, primarily as a result of: high inflation in Argentina, and to a lesser extent, Chile, competition for skilled labor and lower than expected labor productivity in underground development. Barrick has added experienced supervisors and miners from its North American and South American regions to the project team, increased oversight of external contractors, accelerated procurement of long lead items and necessary equipment. In conjunction with these activities, the company intends to complete a detailed capital cost and schedule review in the second quarter of 2012.

[99] Once again, the report included cautionary language with the same statement that the forecast was based on estimates and assumptions that were considered reasonable by management.

[100] The plaintiffs impugn both the repeated capex budget and schedule to first gold estimates, as well as the statement that the forecast was based on estimates and assumptions considered reasonable by management, for the reasons I have already described.

[101] According to the plaintiffs, the company’s Q2 2012 quarterly report, released on July 26, 2012, contains both a misrepresentation and a partial correction of the earlier misrepresentations. In this report, the company stated that:

As previously disclosed with our first quarter results, due to lower than expected productivity and persistent inflationary and other cost pressures, the company initiated a detailed review of Pascua-Lama’s schedule and cost estimate in the second quarter. While the review is not yet complete, preliminary results currently indicate that initial gold production is now expected in mid-2014, with an approximate 50-60 percent increase in capital costs from the top end of the previously announced estimate of $4.7-5.0 billion. Approximately $3 billion has been spent to date. …

[102] The company went on to discuss challenges with the project, and noted that it had:

determined that we needed to re-align the project management structure between Barrick and our [Engineering, Procurement and Construction Management (“EPCM”)] partners, Fluor and Techint. We have taken immediate action to address these issues. We are strengthening the project management structure by seeking to have Fluor take over a greater proportion of the construction management of the project. Barrick is also working with Fluor and Techint to develop an integrated action plan that ensures the scope of remaining work is well planned and executed and has also engaged a leading EPCM organization to provide an independent assessment of the status of the project. We will provide a further progress update with third quarter results.

[103] The company identified key factors contributing to the capex increase as lower than expected contractor productivity, engineering and planning gaps, cost escalation, and schedule extension. It noted that the delay arose primarily from delays to completing the camps, the tunnel between the Pascua and Lama sides of the project, and the processing plant.

[104] Again, the Q3 2012 report included the same cautionary language, with the same assurance that forecasts are based on estimates and assumptions considered reasonable by the company.

[105] The plaintiffs argue that the revised budget and schedule were partially corrective of the earlier, inaccurate and materially understated capex budget and schedule. They also argue that the revised budget and schedule continued to be misrepresentations, and the statement that the assumptions and estimates underlying the forecast were considered reasonable by the company was a misrepresentation.

[106] In support of this contention, they argue that Barrick failed to disclose that in engaging Fluor in a larger role, and in engaging a leading EPCM organization, Bechtel, to provide an independent assessment of the project, Barrick knew it would incur costs of likely more than $400 million which had not been factored into its revised budget. They also argue that Barrick knew costs were likely to increase materially as a result of Fluor’s analysis of the budget. Finally, they argue that Barrick had commenced pre-stripping surface rock on the Pascua side of the project despite not having fully completed its WMS, and in violation of its environmental permit, exposing the project to serious risk of suspension and the resulting increase to capex costs if it were suspended.

[107] In its Q3 2012 quarterly report, released on November 1, 2012, Barrick addressed the capex budget and schedule of the Pascua-Lama project:

As disclosed with Barrick’s second quarter report, preliminary results of a review indicated an increase in capital costs to $7.5-8.0 billion and a delay in first production to mid-2014. Since then, the company has been working with Fluor to carry out a more comprehensive top-to-bottom review. This review will be complete by our 2012 year-end results release; however work to date suggests capital costs will be closer to $8.0-$8.5 billion, with first production in the second half of 2014.

[108] Barrick identified the causes of the increase in capital costs to include the impact of delay of first gold to the second half of 2014, increased labour hours and installation rates, and incremental payments to Fluor to assume project and additional construction management, as well as increased incentives for Fluor and other contractors to come in on time and on budget.

[109] Once again, the Q3 2012 report contained cautionary language with respect to forward-looking information, including the explicit statement that the forecasts were based on estimates and assumptions considered reasonable by the company.

[110] The plaintiffs argue that the revised budget and schedule were partially corrective of the earlier misrepresentations, but also an ongoing misrepresentation. They argue that Barrick continued to withhold material information that the capex estimate and schedule were unreliable and materially understated, including that (i) Barrick had commenced pre-stripping in May 2012 in violation of its environmental permit, exposing the project to a serious risk of suspension, and resulting in delay and significant increase to the capex budget; and (ii) Barrick had used an in-house team to manage Pascua-Lama until 2012 although the project was beyond the team’s capabilities, resulting in ongoing costs. For the same reasons they argue that the statement that the forecast was based on estimates and assumptions considered reasonable by management was a misrepresentation of current fact.

[111] The plaintiffs also argue that Barrick’s 2012 AIF, dated March 28, 2013, contained misrepresentations. In that document, Barrick stated:

During the fourth quarter, the cost estimate and schedule for the project was finalized. Expected total mine construction capital remains unchanged in the range of $8.0 to $8.5 billion, and includes a contingency of 15-20 percent of remaining capital. First gold production continues to be targeted for the second half of 2014. Incentives for both Fluor and Techint, our Engineering, Procurement, and Construction Management (“EPCM”) partners, are based on the completion of the project in line with this estimate and schedule.

[112] Although not directly relevant for the purposes of the motion before me, I note that the 2012 AIF also discloses that, in September 2012, a constitutional rights protection action was filed in Chile by representatives of four Diaguita Indigenous communities against Barrick’s Chilean subsidiary and against the Chilean regulatory body with oversight authority over the project. In October 2012, a second constitutional rights protection action was filed. A preliminary injunction to halt pre-stripping activities was not granted, but the actions proceeded in the Chilean courts, where the representatives of the Indigenous communities asserted Barrick was not in compliance with its environmental approvals, resulting in negative impacts on water sources and contamination. They sought relief in the form of the suspension of the construction until all of Barrick’s environmental obligations were fulfilled.

[113] The AIF continued the company’s usual cautionary language.

[114] The plaintiffs allege that the capex estimate and schedule constitute misrepresentations for the reasons already set out, and that the representation that the company’s estimates were considered reasonable by management was a misrepresentation of current fact, again, for the reasons already described.

[115] According to the plaintiffs, in addition to the partial corrections the company had already made (which I have identified above), the capex and schedule misrepresentations were finally corrected in the following documents:

a. A press release dated June 28, 2013, in which Barrick indicated that, as a result of recent and continued significant declines in gold and silver prices, and the delay in first gold production, Barrick was conducting impairment testing. Barrick stated that preliminary analysis indicated an after-tax asset impairment charge in the range of approximately $4.5-5.5 billion in the second quarter for the Pascua-Lama project; and

b. The Q3 2013 press release and quarterly report, dated October 31, 2013, in which Barrick reported that it had decided to temporarily suspend construction activities at Pascua-Lama, except those required for environmental protection and regulatory compliance.

[116] In addition, as I noted above in my analysis of precision pleading, with respect to the accounting representations, the plaintiffs also allege that a public correction was made in the two Barrick press releases and the Dow Jones Newswire release of April 10, 2013, which disclosed that the Chilean court had issued an injunction suspending construction of the Pascua side of the project.

[117] In considering whether to grant leave for the misrepresentations identified above, I will consider each individually in the context of the evidence to determine if the threshold is met. I note that the parties have not joined issue on whether the plaintiffs have advanced a plausible analysis of the applicable legislative provisions (except with respect to an aspect of the defence). The real question is whether there is some credible evidence in support of the claim to establish a reasonable possibility, or to use Abella J.’s other description of the standard, a realistic chance, of success.

Is there some credible evidence in support of the claimed capex budget and scheduling misrepresentations?

The Alleged October 2011 Misrepresentations

[118] The plaintiffs claim that, in disclosing its forecasted capex budget of $4.7-$5.0 billion, and a schedule that would see first production at Pascua-Lama in mid-2013 in its Q3 2011 report, Barrick made misrepresentations. Moreover, they claim that it made misrepresentations by omission by failing to disclose facts that would make clear that its capex budget and schedule were unreasonable. In effect, as the plaintiff indicated during oral argument, these claims amount to the same allegation: that the forecasts were misstated because Barrick omitted to state material information. There is no magic in whether the misrepresentations alleged were made by commission or omission, because the argument in support of each turns on the same allegations and evidence. The alleged misrepresentations by omission are better particularized, so I concentrate on those in my analysis.

[119] In addition, the plaintiffs allege that Barrick’s representation that its forecasts were considered reasonable by management was a misrepresentation of current fact. This claim also relies on the same allegations and evidence as the misrepresentations by omission.

[120] Unfortunately, the plaintiffs’ Schedule C lumps together the misrepresentations regarding the capex budget and schedule over time without identifying which alleged statements of material facts were omitted in each relevant time frame. As a result, I have identified the alleged omissions that are logically connected to each time frame in my analysis. With respect to the October 2011 misrepresentations, the plaintiffs make the following allegations relevant to this time frame:

a. The independent expert who Barrick engaged in June 2011, Turner & Townsend, had highlighted problems with the methodology Barrick used to develop the capex budget that it first disclosed in its Q2 2011 report (before the class period) and repeated in its Q3 2011 report (within the class period). Moreover, the $650 million contingency in the budget reflected a high level of risk or unreliability in the base estimate.

b. The capital costs were escalating due to Barrick’s decision to use an in-house management team rather than an EPCM approach, when the project was outside the in-house team’s capabilities. Barrick thus knew its budget was subject to material increase.

c. Sometime in October 2011, and most likely before the release of the Q3 2011 report on October 27, 2011, Barrick had begun a reforecasting process by asking Fluor-Techint, the subcontractor with the largest role in the project, for its DE and schedule. The plaintiffs allege that this indicates that Barrick knew its earlier capex budget and schedule were unreliable when it repeated them in the Q3 2011 report. They also allege that Barrick believed the estimates provided by Fluor-Techint to be unreliable, and therefore it knew that the budget and schedule for the project were unreliable.

d. The schedule to first production contemplated that pre-stripping on the Chilean side of project would begin by mid-2011, but Barrick knew that problems in the completion of the WMS placed that timeline in jeopardy.

[121] I will consider each of these arguments in turn.

[122] First, to understand the arguments regarding Turner & Townsend, it is necessary to understand something of Barrick’s forecasting process. When new project management took over in March 2011, they decided to review and reforecast the project’s capex budget and schedule. The evidence indicates it is not unusual to do so when there is a change in leadership of a project, to allow new leadership to assess what is and is not working for the project, re-evaluate goals, and set new ones.

[123] The final capex budget estimate was made up of two parts: the base forecast, or Barrick’s forecast of the costs of developing the project, plus a contingency to account for unexpected costs or risks. The contingency itself was separated into a project contingency, which would be available to the project team, and a management reserve, which would be available to the project team at the direction of management.

[124] Forecasting the capital costs of the development of Pascua-Lama was a significant and complex undertaking. Both the contingency and the base forecast were developed through a lengthy process. The evidence indicates that Barrick took great care in preparing its budgets.

[125] Barrick began the process of reforecasting shortly after the project management changed over in March 2011. To develop the base forecast, Barrick considered information including: (i) existing bidding information; (ii) its original budget from April 2009; (iii) information concerning costs that had been incurred on the project; (iv) updated estimates related to indirect costs; (v) updated estimates related to mining costs; (vi) trends relevant to the project; (vii) key contracts; (viii) approved, pending and potential changes to contracts; and (ix) updated estimates related to engineering, procurement and construction management services costs. Assembling this information required, among other things, seeking updated estimates, including scheduling estimates, from the many sub-contractors that Barrick had engaged on the project.

[126] The evidence indicates that Turner & Townsend, an external consultant, was engaged in two capacities to assist Barrick with the reforecasting that led to the forecast disclosed in Barrick’s Q2 report in July 2011. First, led by Paul Disley from its London office, Turner & Townsend was charged with assisting Barrick with creating an appropriate contingency for the budget. This process involved identifying significant risks to the project and determining the amount of contingency required to bring the project budget to a certain confidence level. The greater the contingency amount, the higher the confidence level that the project can be built for the base forecast plus contingency. Ultimately, Barrick added a contingency to its base forecast that brought the confidence level to more than 95% — higher than the 85% confidence level the Pascua-Lama project team had recommended to Barrick’s Senior Leadership Team, which was already a high level of confidence for a project of this nature.

[127] The plaintiff’s allegation that the contingency was high because of unreliability in the base forecast is not supported by the evidence. Rather, the evidence suggests Barrick wanted a high degree of confidence for the project to avoid further reforecasts. The plaintiffs’ theory is pure speculation.

[128] Second, led by Augustus Calder from its South Africa office, Turner & Townsend was engaged to do a high-level review of the base forecast Barrick had developed. The plaintiffs argue that Mr. Calder’s report indicates there were serious flaws in Barrick’s base forecast.

[129] Mr. Calder’s report is in evidence, and he also provided affidavit evidence on this motion. Mr. Calder does not agree with the plaintiffs’ characterization of his report.

[130] The evidence indicates that Mr. Calder’s review of the base forecast took place over four to five days in mid-July 2011. The report is described in its text as a “high-level audit of the original (2009 Estimate) and forecasted estimate (June 2011).” The report also notes the time constraints associated with preparing it.

[131] The report concludes that the June 2011 forecasted estimate required some adjustments, which would be implemented by Barrick over the next four to six weeks. Mr. Calder indicated that this time frame had been identified by Barrick as its intended schedule for making any changes to the forecast; it was not Turner & Townsend’s estimate of how long the adjustments would take.

[132] Mr. Calder’s report indicates that he had identified that the June 2011 estimate forecast was wholly based on data from the February 2009 estimate. He raised concerns that the methodology of escalating market rates as a straight-line adjustment to the 2009 estimate did not adhere to general estimating principles and caused the estimate to no longer conform to the estimating standard Barrick sought to meet.

[133] Mr. Calder’s report also indicates that his team was unable to conduct a benchmark of rates because they were awaiting rates of typical projects at altitude, which they did not receive.

[134] The plaintiffs rely on these statements to argue that Barrick knew its methodology in developing the $4.7-$5.0 billion capex budget was flawed, and therefore, that its budget was unreliable.

[135] However, Mr. Calder deposes in his affidavit that the Turner & Townsend report does not conclude that the base forecast was inaccurate, unreliable, or prepared improperly. It did not opine on whether the forecasted estimate was too low, or too high for that matter. Rather, it documented the initial views Turner & Townsend reached with respect to potential concerns and areas for improvement, based on a high-level review completed in less than a week of a forecast that took months to develop. Mr. Calder indicated that he and his colleague only reviewed a portion of the data and information underlying the forecasted estimate, so he would not be surprised if members of Barrick’s project team or capital projects group disagreed with some of his conclusions. He deposed that Turner & Townsend’s opinion was that the forecasted estimate could be brought up to the standard that Barrick sought to meet by making four “relatively minor adjustments”.

[136] In addition, evidence from witnesses who were involved in the months-long process of preparing the revised base forecast which Mr. Calder reviewed indicated that Mr. Calder was in error when he suggested that the revised forecast was prepared by making straight line adjustments to the original 2009 estimate. Mr. Calder’s conclusion that it was is inconsistent with copious and detailed evidence in the record as to the careful and painstaking process Barrick went through to reforecast its budget.

[137] Given the speed and limited scope of Mr. Calder’s review, and the detailed evidence of multiple Barrick witnesses about the forecasting process Barrick went through, the evidence is overwhelming that the budget disclosed in July 2011 was reasonable. Nothing in the Turner & Townsend report from July 2011 detracts from that conclusion.

[138] But did the budget and schedule become unreasonable by the time the October 2011 disclosures were made? The plaintiff notes that in October 2011, Barrick began asking Fluor-Techint for an updated DE and schedule. The plaintiff argues that this request indicates that Barrick knew that the costs and schedule of its most significant sub-contractor had become unreliable, and thus the capex budget and schedule had also become unreliable.

[139] Barrick argues that, by seeking the DE and schedule from Fluor-Techint, it was merely trying to “lock down” Fluor-Techint for certainty; it denies this request reveals an indication that it was unsure about the capex budget or schedule. The plaintiffs, however, note Barrick’s evidence that it signed a Notice to Proceed with Fluor-Techint in June 2011, following a reforecasting process it went through beginning with the change in the Pascua-Lama project management in Q2 2011 because it wanted to “lock down” Fluor-Techint at that time.

[140] It is reasonably possible that by sometime in October 2011, Barrick may have begun to wonder whether the ongoing pressures on the project might result in an increase in Fluor-Techint’s budget or schedule. However, especially given the significant contingency associated with the project, the record does not reveal any evidence to support the plaintiffs’ argument that, in October 2011, Barrick was concerned about the accuracy of the overall capex budget or schedule. Barrick’s internal reports for November 2011, December 2011, January 2012 and February 2012 continued to use the capex budget that Barrick disclosed in October 2011. Moreover, Barrick’s documents suggest that the schedule could be adjusted to ensure that the target for first production remained reasonable. That target continued to be reflected in Barrick’s internal reports.

[141] To the extent that the plaintiffs rely on Barrick’s concerns with Fluor-Techint’s DE and schedule, these concerns had not arisen by October 2011. Although sometime in October 2011 Barrick asked Fluor-Techint for a DE and schedule, it was not expecting one until December 2011.

[142] The plaintiffs also argue that the cost escalation of the project related in significant measure to ongoing problems with the approach Barrick had taken to the management of the project. At the outset, Barrick decided to use an in-house team to develop the project. This was meant as a cost-saving measure. However, as was apparent by July 2011 when the revised budget and schedule were disclosed, the project had not proceeded smoothly. In approximately March 2011, Barrick brought new project leadership on board. The plaintiffs may be correct that the March 2011 change in leadership was designed to get the project back on track, and the first in-house team may have acted in a way as to increase the costs of the project. However, there is no evidence to indicate that, in October 2011, Barrick knew that further changes would have to be made to the management of the project, or that continuing with the in-house team (run by new leadership since March 2011) would escalate capital costs such that, together with other increases, the capex budget or schedule was no longer reasonable.

[143] The plaintiffs also argue that Barrick knew its schedule to first production was unreasonable because the schedule called for pre-stripping of surface rock on the Chilean side of the project to begin by mid-2011, but problems in the completion of its WMS had made it impossible for Barrick to start pre-stripping in accordance with that schedule. A delay in first production necessarily meant that capital costs would need to increase to keep the project going longer than anticipated before it started generating cash flow.

[144] The problem with this argument is that pre-stripping was not on the critical path for the project. Although it was a key milestone, and a substantial delay in pre-stripping could impact the production of first gold, pre-stripping activities could be truncated to minimize the impact of delay and thus preserve the date for first gold.

[145] For example, although the original schedule anticipated pre-stripping in mid-2011, by October 2011, no pre-stripping had begun. Barrick’s internal reports for October 2011 estimated that pre-stripping would begin in January 2012 and conclude in March 2013, with first gold in Q2 2013. By December 2011, internal reports were showing that pre-stripping would begin in March 2012 and conclude in March 2013, with first gold still projected for Q2 2013.

[146] There is no evidence in the record to suggest that in October 2011 there was any basis for Barrick to have concluded that a delay in pre-stripping would delay production of first gold beyond Q2 2013.

[147] In reaching this conclusion, I have not delved into the parties’ arguments about whether the WMS had to be operational or fully complete before pre-stripping could begin. This distinction is relevant to the environmental misrepresentation for which the plaintiffs were granted leave by Belobaba J. However, whatever the requirement was that would allow Barrick to commence pre-stripping, there is no evidence in the record to support a conclusion that in October 2011, delays in the WMS were going to mean a delay in production of first gold.

[148] In support of their argument, the plaintiffs led evidence from two proposed experts, Peter Jones and Stephen Smith. These experts are both challenged by the defendants. Perhaps in some recognition of the validity of the defendants’ concerns, in oral argument the plaintiffs relied principally on Barrick’s internal documents to make their case, with barely a mention of their proposed experts’ evidence.

[149] Nevertheless, I will consider the admissibility of the evidence of Mr. Jones and Mr. Smith, particularly in light of the defendants’ concerns, which I share.

[150] Determining whether to admit expert evidence involves a two-stage analysis. In the first stage, there are four threshold requirements that must be established (White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182, at paras. 19 and 23, citing R. v. Mohan, [1994] 2 S.C.R. 9, at pp. 20-25; see also R. v. Abbey, 2017 ONCA 640, 140 O.R. (3d) 40, at para. 48):

a. Relevance, which at this stage means logical relevance;

b. Necessity in assisting the trier of fact;

c. Absence of an exclusionary rule; and

d. A properly qualified expert, which includes the requirement that the expert be willing and able to fulfil the expert’s duty to the court to provide evidence that is impartial, independent and unbiased.

[151] If the threshold requirements are met, the court moves on to the second stage of the analysis. There, the judge, as gatekeeper, determines whether the benefits of admitting the evidence outweigh the potential risks of doing so, considering factors such as legal relevance, necessity, reliability, and absence of bias.

[152] Mr. Smith is a quantity surveyor based in Ireland. His evidence is proffered to analyze Barrick’s capital budget process and its announced budget and budget increases.

[153] I have the following concerns with respect to Mr. Smith’s evidence:

a. Mr. Smith has no experience with a mining project anywhere near the size, scale, or complexity of Pascua-Lama. To the extent he has been involved in costing projects from mines, almost all of that involvement took place over two decades ago.

b. Mr. Smith has no experience in scheduling, yet he offered evidence on Barrick’s schedule. In exceeding the scope of his expertise, he was acting as an advocate, not an impartial witness.

c. In his evidence, Mr. Smith repeatedly made statements without foundation, including speculating that Barrick committed fraud.

d. Mr. Smith engaged in cherry-picking bits from the documentary evidence and using them out of context. This is not the behaviour of an impartial expert, but rather is consistent with inappropriate advocacy.

e. As a result of Mr. Smith repeatedly taking evidence out of context and making statements without foundation, his evidence is skewed and unreliable. Unreliable evidence is not helpful to the court, and thus cannot be said to be necessary.

[154] I thus conclude that Mr. Smith is neither a qualified expert, nor does he offer necessary evidence. In my view, it is not necessary to reach the second stage of the test for the admission of expert evidence, as Mr. Smith does not clear the first hurdle. If I am wrong, and he does clear the first hurdle, as gatekeeper I would find that the benefits of admitting his evidence does not outweigh the potential risks of doing so, given his partiality and the fact that his evidence, being unreliable, is not necessary.

[155] Mr. Jones is the former CEO of Hudbay Minerals. He is an engineer by training who has worked exclusively in the mining industry. He has been involved in the development of, among other things, two underground mines in northern Manitoba and, as a director of public companies, the redevelopment of a mine in Chile. He has never been involved in the development of a megaproject like Pascua-Lama.

[156] The record reveals that Mr. Jones embellished his curriculum vitae by suggesting he had won a certain award when in fact he had not. On cross-examination, Mr. Jones’s response to counsel’s question about the award was disingenuous. Rather than acknowledge the error (which, the evidence reveals, has been repeated multiple times in press releases and on websites of companies he has been involved with), he tried to suggest that his curriculum vitae did not imply what it very clearly implies — that he won the award he did not win. I am troubled, not so much about the inflation of his qualifications (although that is certainly not desirable in an expert, but the award in question is not central to his mining industry qualifications), but more so by his failure to respond fairly to the questions put to him on cross-examination about it.

[157] In addition, in a preliminary report delivered by Mr. Jones in October 2014, he indicated that it had been reported to him that Bechtel, a well-regarded EPCM firm, had proposed a capex budget to Barrick of over $5 billion related to Pascua-Lama at the outset of the project.

[158] There is not a single document that corroborates this allegation and no source is cited to support it. On cross-examination, Mr. Jones indicated he could not remember where he had learned of this proposed budget. Plaintiffs’ counsel argues that this allegation was pleaded in a related American proceeding, and perhaps in one of the many versions of the claim in this proceeding. I have no idea where the allegation originated, but assuming counsel is correct, Mr. Jones offered his opinion based on allegations, rather than based on the publicly available documents (which, at the time of the preliminary report, would have been the only documents available to him). Mr. Jones went on to conclude that Barrick launched the Pascua-Lama project based on a capex budget of about half the estimate Bechtel had supposedly provided. That is a serious allegation without any foundation. Evidence without foundation is not helpful to the court. Unattributed allegations in expert reports stray into advocacy. Opinions without foundation also stray into advocacy.

[159] In my view, while Mr. Jones likely passes the first branch of the Mohan test such that his evidence is admissible, in view of the concerns I have identified above, I would not admit his evidence under the second stage of the test, due to my concerns about its reliability and the limits to his mining experience that impact on his qualifications in this case. If I am wrong, and his evidence should be admitted, I would assign it no weight due to those same concerns.

[160] It is thus not necessary to consider the evidence of Mr. Jones or Mr. Smith on this motion. The determination of whether leave ought to be granted in respect of the alleged misrepresentations made in October 2011 thus turns on the fact evidence in the record.

[161] In the result, I conclude that there is no realistic chance that the plaintiffs will succeed on the alleged October 2011 misrepresentations at trial. There is no reasonable possibility that a court will find that, in October 2011, Barrick made a misrepresentation of current fact when it indicated that its forecasts were based on assumptions that management considered reasonable. Nor is there a realistic chance that the plaintiffs will be able to prove that the budget or schedule was known to Barrick, or should have been known to Barrick, to be inaccurate at that time.

[162] Rather, Barrick was operating on the basis of the budget it had carefully prepared and finalized in the summer of 2011. It continued to use that budget internally in its monthly reports and flash reports. In the context of the efforts Barrick made to produce the forecast, the concerns raised in the Turner & Townsend report did not undermine the validity of the forecasts, and in fact, Mr. Calder was in error about the most significant of these concerns. There was no reason for Barrick to be concerned about ongoing costs from its ECM strategy to manage the project in October 2011, nor any concern that a delay in pre-stripping would delay first gold production at Pascua-Lama.

[163] Moreover, there is no evidence in the record to suggest that, in October 2011, Barrick had any reason to be concerned about the accuracy of Fluor-Techint’s DE or schedule, as it was not expecting a DE and schedule from Fluor-Techint until December 2011.

[164] I thus find there is no reasonable possibility that the plaintiffs can establish a misrepresentation was made, either by commission or omission, in October 2011. It is thus unnecessary to consider whether the impugned statements were material, whether they were publicly corrected, or the application of the statutory defence.

[165] In conclusion, I decline to grant leave to commence an action with respect to the scheduling and capex budget misrepresentations alleged to have been made in October 2011.

The Alleged February 2012 and March 2012 Misrepresentations

[166] The plaintiffs allege that, in its Q4 and 2011 year-end report released in February 2012, and its 2011 Annual Information Form dated March 28, 2012, Barrick misrepresented its capex budget and schedule, both by commission and omission, and misrepresented that its forecasts were based on estimates it considered reasonable. Here, I repeat the key passage relating to the forecasts for ease of reference:

At the Pascua-Lama project, approximately 55% of the previously announced pre-production capital of $4.7 to 5.0 billion has been committed and first production is expected in mid-2013. The project is being impacted by labor and commodity cost pressures as a result of inflation, competition for skilled labor, the impact of increased Argentinian customs restrictions on equipment procurement and lower than expected labor productivity. [^5]

[167] The plaintiffs rely on the same allegations as they did with respect to the October 2011 disclosures, some of which I have already rejected, like the allegations around the Turner & Townsend report. However, other allegations they make about omitted facts must be viewed in light of the circumstances as they existed in February 2012 when the statements were made. In particular, it is necessary to examine whether, by February 2012, Barrick had material information to indicate that the $4.7-$5 billion capex budget estimate or the schedule were neither reasonable nor accurate, or were preliminary and likely to increase materially. The plaintiffs allege the following material information was known to Barrick which rendered the forecasts unreasonable in this time frame:

a. The estimates prepared by Barrick’s sub-contractors, and particularly Fluor-Techint, were unreliable and subject to material increase;

b. Barrick’s internal estimates by January 2012 indicated that the capex budget was then estimated at $6.4 billion, and up to $7.5 billion by Q1 2012, and Barrick knew increasing inflation trends were likely to cause a material increase to the estimate;

c. The cost escalation related to Barrick’s in-house management of the project was a serious problem, affecting the reasonableness of the budget;

d. The project schedule, and particularly the pre-stripping, was delayed due to the delay in finishing the WMS system.

[168] What was happening between October 2011 and March 2012 with respect to the capex budget and scheduling? As I have noted, Barrick asked Fluor-Techint for an updated DE and schedule sometime in October 2011, and was expecting to receive it in December 2011. Barrick received a first DE and schedule from Fluor-Techint, but concluded it was inaccurate and unreliable. Over the next several months, all the way into the end of May 2012, Barrick received five different versions of Fluor-Techint’s DE, and three different versions of its schedule. Barrick considered each version an improvement over the previous one, but even by the last version it received, it remained unsatisfied.

[169] This was problematic for Barrick because Fluor-Techint was a significant sub-contractor whose work was at least 40%, and possibly up to 60%, of the project’s capex commitments. In addition, Fluor-Techint was responsible for the processing facility in Argentina, and delays in its completion could put the projected date for first gold at risk.

[170] By the end of 2011, members of the project team and the capital projects group began raising concerns that the then-current capex budget of $4.7-$5 billion could be “under pressure” — that is, too low. There was also concern that projected first gold may have slipped to September 2013. Barrick has delivered a great deal of evidence and law to support its argument that, given the importance of Fluor-Techint’s work to the project, it could not prepare an accurate revised forecast until it was comfortable that the DE and schedule from Fluor-Techint were reliable. Barrick’s witnesses deposed to Barrick’s frustration with Fluor-Techint, and to the efforts Barrick went to in order to obtain a more reliable DE and schedule from Fluor-Techint.

[171] There is no evidentiary basis, and no legal basis, to support a conclusion that Barrick was in a position to release a better estimate of the capex budget or schedule in February or March 2012. Any different forecasts that Barrick could have released at that stage would have been based on Fluor-Techint’s unreliable estimates, and given the key role Fluor-Techint had in the project, they would undermine the reliability of any revised capex budget or forecast.

[172] But the plaintiffs’ argument is not that Barrick should have released a different budget or schedule in February or March 2012. Rather, they argue that it was incumbent on Barrick to tell the market that its capex budget and schedule were no longer reliable.

[173] Barrick suggests that it did so, because in the February and March 2012 disclosures, it plainly said that “the project is being impacted by labor and commodity cost pressures as a result of inflation, competition for skilled labor, the impact of increased Argentinian customs restrictions on equipment procurement and lower than expected labor productivity.” When the statement is looked at as a whole, the defendants argue, there is no reasonable possibility that the statements it made about the budget and schedule can be found to be a misrepresentation. Rather, Barrick disclosed the risk to the market.

[174] That conclusion is far from a certainty. There is evidence to suggest the company had internal numbers in January and February 2012 reflecting a capex budget of $6.4 billion or higher. It might not have considered that number reliable, but the evidence is sufficient to establish a reasonable possibility that Barrick knew the budget and schedule that it repeated in February and March 2012 were not reliable.

[175] I note that Barrick did not expressly adopt the capex budget in repeating it. Rather, it indicated how much of the previously announced budget had been committed, or spent. However, it is reasonably possible that statement could be considered to be an affirmation of the capex budget, particularly having regard to Barrick’s express statement that the forecasts were based on estimates it considered reasonable. Moreover, Barrick clearly reaffirmed its forecast that first gold was expected in mid-2013.

[176] The qualifying language that the project was impacted by costs pressures was undoubtedly a signal to the market that the capex budget might be too low. Barry Cooper, a mining equity analyst from the Canadian Imperial Bank of Commerce who covered Barrick at the relevant time, deposed that Barrick warned the market in February 2012 that the capex budget was under review. David Haughton, an equities research analyst covering Barrick for the Bank of Montreal at the relevant time, deposed that based on Barrick’s statements in February 2012 and May 2012, he expected that Barrick would likely announce a capital cost increase and/or a schedule delay with the release of its Q2 2012 financial results.

[177] The analysts have mashed together their evidence regarding the February, March, and May 2012 disclosures. In fact, it was not until Barrick’s Q1 2012 quarterly filing in May 2012 that Barrick explicitly stated that its capex budget was under review. It disclosed that the project was being impacted by labour and commodity cost pressures, and explained some of the steps it was taking to address costs pressures, including by adding experienced supervisors and miners to the project team, increasing oversight of external contractors, and accelerating procurement of long lead items and necessary equipment. It then disclosed that, in conjunction with those steps, it intended to complete “a detailed capital cost and schedule review in the second quarter of 2012.”

[178] But the contrast between the language used in May 2012 and that used in February and March 2012 is important. The qualifying language in the February and March 2012 disclosure, especially when coupled with the reiteration of the budget and forecast, suggests that the project costs may be coming in higher, but perhaps within the project’s contingency, or perhaps not. It is not a clear warning signal in the way that the May 2012 language clearly indicates that a review of the budget and schedule is necessary. As Mr. Haughton said, he expected that by the end of Q2 2012, the capex budget would increase and/or the schedule to first gold would be delayed. There is a reasonable possibility that the plaintiffs will prove that expectation would not have arisen after the February and March 2012 disclosures.

[179] While the plaintiffs couple their allegation that Barrick knew of undisclosed internal estimate increases by no later than January 2012 to $6.4 billion, and to $7.5 billion by Q1 2012, with their allegation that Barrick knew increasing inflation trends were likely to cause a material increase to the estimate, they did not make argument with respect to increasing inflation trends as a material fact within Barrick’s knowledge that it did not disclose. It is beyond doubt that the project was suffering from increased inflationary costs, but there is no evidence to allow me to separate that from the cost pressures on the project generally. In their factum, the plaintiffs do not use the phrase “inflation trends” once. The word “inflation” appears only in the schedules to the plaintiffs’ factum, quoting Barrick’s cautionary language.

[180] There is no evidence or argument before me to establish that Barrick made a misrepresentation by omitting to disclose inflation-specific information. To the extent that the plaintiffs have made that allegation, they have made no effort to establish it in argument, and I would not grant leave to proceed with it.

[181] With respect to the allegation that Barrick made a misrepresentation by omission by failing to disclose that its decision to use an in-house team to manage the project rather than an EPCM approach was materially and negatively impacting the budget, I note that by July 2012, Barrick had made the decision to move away from an in-house approach to project management and to an EPCM approach, in the hopes of addressing some of the problems the project was encountering. A report to the board on July 25, 2012 indicates that the “OwnersTeam continues to have too much scope” such that the company would “remediate” the “issue” by negotiating with Fluor to “assume full responsibility for Pascua and Lama process”. The report indicates that the complexities of the project proved to be beyond the capabilities of Barrick’s in-house EMC team. However, it also indicates that “the project costs and issues compounded until Executive Management replaced the team in 2011.”

[182] The replacement of the team in 2011 refers to the change in management in the project in March 2011, which was followed by the reforecasting process that led to the forecasts in July 2011. I have concluded there is no reasonable possibility of those forecasts being found to be misrepresentations in October 2011. There is no evidence that indicates that the decision to move to an EPCM approach in mid-2012 was driven by increasing costs since the new leadership took over the project in March 2011. Rather, the decision was driven by the leadership having “too much scope”.

[183] To the extent the plaintiffs allege that Barrick made a misrepresentation by omission in failing to disclose that there were increasing costs relating to its in-house approach in February or March 2012, there is no evidence to support that conclusion, and I would not grant leave to proceed with that claim.

[184] With respect to the allegations about pre-stripping, around this time, Barrick’s internal documents show that it believed it would begin pre-stripping in March 2012, and its internal reports continued to forecast first gold in mid-2013. The dispute between the parties about whether Barrick’s WMS had to be operational or fully complete relates to the environmental misrepresentation that has already been granted leave, in the sense that the question of whether Barrick made a misrepresentation when it stated that its WMS was complete is already at issue. To the extent the plaintiffs seek to argue that Barrick made a misrepresentation by omission in failing to disclose that its schedule was unreasonable — due to an expected delay in the commencement of pre-stripping, caused by the non-completion (as opposed to non-operational status) of the WMS — I would not grant leave. This issue should be explored in the context where it belongs: the environmental misrepresentation for which Belobaba J. granted leave.

[185] In my view, there is a reasonable possibility that the plaintiffs will prove that Barrick made misrepresentations in its February and March 2012 disclosures by:

a. affirming, as a statement of current fact, that its forecasts were based on assumptions that it considered reasonable; and

b. omitting to disclose, with respect to the capex budget and schedule, that:

i. the estimates prepared by Barrick’s sub-contractors, and particularly Fluor-Techint, were unreliable, thus rendering Barrick’s capex budget unreliable and inaccurate; and

ii. Barrick’s internal estimates by January 2012 indicated that the capex budget was then estimated at $6.4 billion, and at $7.5 billion by Q1 2012.

[186] While some of the language above, drafted by the plaintiffs, assumes the materiality of the increase to the estimate, I have not considered that when determining whether the plaintiffs have a realistic chance of proving that the alleged misrepresentations above are material. I have no difficulty concluding that there is a reasonable possibility the plaintiffs may prove that these misrepresentations were material. The evidence of the analysts was clear that an increase in the capex budget of $1.4 billion would be material to the market. Moreover, by the time the February and March 2012 disclosures were made, Barrick was unsatisfied with Fluor-Techint’s DE and schedule, but it knew those estimates had changed significantly from the Notice to Proceed. It is reasonably possible that the plaintiffs will prove that Barrick knew the unreliability of Fluor-Techint’s estimates could materially impact its overall capex budget and the project schedule, and that this could have a material impact on the price of its securities.

[187] I will consider whether these statements were publicly corrected, and the application of the statutory defence, after I analyze the remaining alleged misrepresentations relating to the capex budget and project schedule.

The Alleged May 2012 Misrepresentations

[188] On May 2, 2012, Barrick released its Q1 2012 report. There, it indicated that about 70% of the previously announced capex budget of $4.7-$5.0 billion had been committed and first production was anticipated in mid-2013. However, as I have just reviewed, it made reference to costs pressures on the project and explicitly indicated that the company was undertaking a detailed budget and schedule review.

[189] By this time, Fluor-Techint had delivered further versions of the DE and schedule, but Barrick was continuing to press for better versions of both. Later in May 2012, it received a revised DE and schedule from Fluor-Techint that were significantly different than the previous version, lending validity to Barrick’s concerns about the reasonableness of the DE and schedule it had at the time it released its Q1 2012 report. There is no evidence to suggest Barrick was in a position on May 2, 2012 to release a revised capex budget and schedule with any degree of reasonable certainty that it was accurate.

[190] The plaintiffs allege that Barrick’s statements on May 2, 2012 were misrepresentations by omission and commission. They also allege that Barrick made a misrepresentation of current fact by again stating that its forecasts were based on estimates that it considered reasonable.

[191] The plaintiffs allege a number of omitted material facts relevant to this period of time, but I need not set them out. Even if I were to assume that all of the alleged material facts were known to Barrick and undisclosed, there is no reasonable possibility that disclosure of them would have been necessary to make the forecasts not misleading. This is because the language that accompanied the forecasts did exactly what the plaintiffs say the company should have done: warn the market that its capex budget and schedule were uncertain.

[192] The evidence of the analysts, Mr. Houghton and Mr. Cooper, supports the argument that Barrick’s May 2012 language clearly signaled to the market that the capex budget was likely to grow, and the schedule was likely to be delayed, when the detailed review Barrick intended to undertake was complete.

[193] I would not grant leave to proceed with respect to the alleged May 2012 misrepresentations because there is no reasonable possibility that the plaintiffs will succeed in proving that the statements made in May 2012 were untrue or misleading.

The Alleged July 2012 Misrepresentations

[194] On July 26, 2012, Barrick released its Q2 2012 report in which it indicated that the “preliminary results” of its review of the capex budget and schedule, which it had announced in May 2012, “currently indicate” that first gold was expected in mid-2014, and the capex budget would increase by approximately 50-60%.

[195] The plaintiffs argue that Barrick made misrepresentations by omitting to disclose that:

a. Barrick was abandoning its failed in-house management approach and hiring Fluor to take over full EPCM management, and Bechtel to supplement its Chilean project team, which would cost more than $400 million and had not been factored into its approximate 50-60% increase of the capex budget;

b. Barrick knew the project costs were likely to materially increase as a result of Fluor’s analysis of the budget; and

c. Barrick had commenced pre-stripping in May 2012 in serious violation of its environmental permit in Chile, exposing the project to a serious risk of suspension and significant increase to the capex costs in the event of suspension.

[196] In addition, the plaintiffs argue that Barrick made a misrepresentation of current fact by stating that its forecasts were considered reasonable by management.

[197] In support of their argument that Barrick’s announcement of the preliminary results of its analysis (which reflected a capex budget of $7.5-$8.0 billion) were misrepresentations because they did not account for known costs of $400,000 for Fluor’s EPCM services and Bechtel’s services, the plaintiffs point to Barrick’s disclosure in November 2012 that the capex budget was $8.0-$8.5 billion.

[198] The plaintiffs’ argument is pure speculation. In July 2012, Barrick announced “preliminary results” of its analysis of its forecasts. At that time, it did not yet have the likely costs of Bechtel or Fluor, as those contracts had not yet been negotiated. It disclosed that its estimate was preliminary. The estimate that followed in November 2012 overlapped in its range with the July 2012 estimate. The evidence in support of the plaintiffs’ claim is that the $500 million increase in November 2012 is close to the $400,000 million cost of Fluor and Bechtel. That is not enough credible evidence to establish that these costs were the reason for the understatement in July 2012, or that Barrick had any reason to think that, even including the then-unknown costs of Fluor and Bechtel, the $7.5-8.0 billion budget was materially short.

[199] The plaintiffs’ allegation that Barrick omitted to disclose that it knew the July 2012 capex budget was likely to materially increase as a result of Fluor’s analysis of the budget is an assertion without evidence. Moreover, it is an assertion that is contrary to the plaintiffs’ assertion that the increase in budget between July and November 2012 was related to the costs of Fluor and Bechtel. If the increase was because of unaccounted-for EPCM costs, then the capex budget for the project that Fluor was reviewing (that is, the budget less the EPCM costs) was not materially different than the budget disclosed in November 2012.

[200] The inconsistency between these two positions illustrates that the plaintiffs are engaging in backwards reasoning. They have approached this litigation as if it were a loss in search of a claim.

[201] The third alleged omitted material fact relates to the allegation that Barrick commenced pre-stripping in May 2012 in serious violation of its environmental permit.

[202] The heart of the issue behind the pre-stripping allegation is the substantive question of whether Barrick was entitled to proceed with pre-stripping when it did. The parties disagree on the relevant evidence. For example, there is evidence that indicates that Barrick believed it was entitled to proceed, because the WMS had been operational when it began pre-stripping, and Barrick had gotten the okay to start pre-stripping from one of the Chilean regulators. The plaintiffs point to evidence that suggests Barrick knew it had to complete the entire WMS, not just render it operational, before commencing pre-stripping, and that the permission Barrick had gotten was from the wrong regulator, and not in writing as required.

[203] What does this have to do with scheduling? To get from the pre-stripping allegation to the alleged scheduling and capex misrepresentations, the plaintiffs argue: first, Barrick was not permitted by its permit to commence pre-stripping when it did; second, it knew that; third, it knew that the possible penalties for violating its permit, which could be levied by an agency that had not yet taken over enforcement responsibilities for the project but would do so at the end of 2012, included suspension of the project; fourth, a suspension of the project would affect the project schedule and capex budget.

[204] The plaintiffs are contorting what is in fact an environmental allegation to jam it into the alleged scheduling and capex misrepresentations. The plaintiffs have already been given leave to proceed with the alleged misrepresentation, made in July 2012, that the Pascua-Lama project had achieved critical milestones, including the completion of the WMS, which enabled the commencement of pre-stripping activities.

[205] The heart of the alleged pre-stripping misrepresentation is environmental and falls within the scope of the single environmental misrepresentation that was already granted leave.

[206] I would not grant leave to proceed with this alleged omission of material fact in the context of the alleged capex budget and scheduling misrepresentations. It does not belong in that context. The plaintiffs have had problems with properly focusing their argument in this matter to date, and I am not inclined to open the door for them to expand the scope of the alleged capex budget and scheduling misrepresentations by including misrepresentations that properly belong in other categories. Some practicality and intellectual integrity ought to be brought to bear to the action that proceeds. Doing so ought to assist in better managing the demands of this proceeding on the resources of the parties and the court.

[207] Moreover, I would not grant leave to proceed with the alleged misrepresentation that the forecasts disclosed in July 2012 were based on estimates Barrick considered reasonable. Given that I have concluded that the plaintiffs’ alleged omitted material facts have no reasonable possibility of being established, there is no basis in the evidence to support a reasonable possibility that the alleged misrepresentation of material fact was not true.

The Alleged November 2012 Misrepresentations

[208] In November 2012, Barrick released its Q3 2013 report, in which it disclosed that, since its Q2 2013 report, it had been working with Fluor to carry out a more comprehensive top-to-bottom review of its budget and schedule, which would be complete by the 2012 year-end results release. However, it indicated that the work to date suggested capital costs would “be closer to $8.0-$8.5 billion with first production in the second half of 2014.”

[209] The plaintiffs allege that, in making this statement, Barrick misrepresented that the forecasts presented were based on estimates it considered reasonable. It alleges Barrick omitted to disclose two material facts, with respect to which I have already rejected the plaintiffs’ arguments: first, the allegations around pre-stripping, and second, the allegations around Barrick’s use of an in-house management team rather than an EPCM approach.

[210] Moreover, by the time the November 2012 disclosure was made, Barrick had adopted an EPCM approach. The impacts of the earlier in-house management approach were absorbed by the time of the July 2011 budget, and I have seen no evidence to support the claim that the in-house approach increased costs after the change in leadership in March 2011. Even if it did, by November 2012, with the EPCM approach in place, there were no costs related to a now-abandoned approach that had to be disclosed.

[211] Nor is there a shred of evidence that the final announced budget of $8.0-$8.5 billion was unreasonable in November 2012.

[212] Nothing about the fact that I am now considering these alleged misrepresentations in the November 2012 timeframe changes my earlier analysis. There is no reasonable possibility that the plaintiffs will succeed at trial to prove these alleged misrepresentations.

The Alleged March 28, 2013 Misrepresentations

[213] I have finally arrived at the last alleged time frame for the alleged capex budget and scheduling misrepresentations. In its 2012 Annual Report, released on March 28, 2013, Barrick disclosed that, during Q4 2012, it finalized the capex budget and schedule for the project. It repeated the $8.0-$8.5 budget it had disclosed in November 2012, and indicated that the budget included a contingency of 15-20% of the remaining capital. It continued to target first gold production for the second half of 2014.

[214] The alleged misrepresentations in this time frame are identical to those alleged with respect to the alleged November 2012 misrepresentations. For the same reasons I have already expressed, I would not grant leave to proceed with these alleged misrepresentations.

Public Correction

[215] I turn next to consider whether the two alleged misrepresentations which I determined the plaintiffs have a reasonable possibility of proving were publicly corrected. This first requires some consideration of the role of public correction on a leave motion.

[216] In Imperial Metals, the Court of Appeal did not find it necessary to determine whether public correction is an element of the statutory cause of action or simply a time-post to identify and delimit the members of the class. Rather, at para. 49, the court reiterated Hoy J.A.’s conclusion in its decision on the appeal in this case from Belobaba J.’s leave decision that in any event, public correction is a necessary part of the statutory scheme. The Court of Appeal went on to say, at para. 50, that “misrepresentation does the heavy lifting in the statutory cause of action. It is the wrong at issue”.

[217] In Imperial Metals, the Court of Appeal described the overarching question with respect to public correction for the purposes of the leave motion as “whether the alleged public correction was reasonably capable of being understood in the secondary market as correcting what was misleading in the impugned statement”: at para. 47. There need only be some link or connection between the pleaded public correction and the misrepresentation: at para. 54.

[218] Here is the problem in this case. I have found that the February and March 2012 misrepresentations were not repeated in May 2012, because Barrick clearly warned the market at that time that its capex budget and project schedule were undergoing a detailed review. That statement put the market on notice that the forecasts were not reliable.

[219] However, the plaintiffs have not alleged that the May 2012 statement was corrective of anything. They allege that the May 2012 statement is a misrepresentation, an allegation I have found there is no realistic chance of proving.

[220] But the impact of the May 2012 disclosure on the alleged February and March 2012 misrepresentations was not argued by anyone. At the very least, the question of the public correction has important ramifications for the class period if those misrepresentations are granted leave.

[221] I thus require additional submissions from the parties on the issue. I direct the parties to schedule a case conference with me to determine the most efficient way to proceed to address the public correction issue.

The Statutory Defences

[222] The Securities Act provides for certain statutory defences. Of these, the forward-looking information defence at issue is contained in s. 138.4(9). It provides that a person or company is not liable in an action under s. 138.3 for misrepresentation in forward-looking information if the person or company proves all of the following things:

1. that the document or public oral statement containing the forward-looking information contained, proximate to that information,

i. reasonable cautionary language identifying the forward-looking information as such, and identifying material factors that could cause actual results to differ materially from a conclusion, forecast or projection in the forward-looking information, and

ii. a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.

2. The person or company had a reasonable basis for drawing the conclusion or making the forecasts and projections set out in the forward-looking information.

[223] In the context of a leave motion, to reflect the fact that burden of proving the defence is on the defendant, the question is whether there is no reasonable possibility that the defendants will fail to make out the defence. Or, put more simply, if there is a reasonable possibility that the defendants will not make out the defence, the plaintiffs have prevailed on this aspect of the leave motion.

[224] Recall that the misrepresentations at issue for purposes of this defence are whether Barrick’s forecasts, that is, the capex budget and schedule disclosed in the 2011 Q4 and year-end report released in February 2012 and the 2011 AIF released in March 2012, were misrepresentations because Barrick knew, but omitted to disclose, that:

a. the estimates prepared by Barrick’s sub-contractors, and particularly Fluor-Techint, were unreliable, thus rendering Barrick’s capex budget unreliable and inaccurate; and

b. Barrick’s internal estimates by January 2012 indicated that the capex budget was then estimated at $6.4 billion, and at $7.5 billion by Q1 2012.

[225] Because I have found a reasonable possibility that the plaintiffs may succeed in establishing these alleged misrepresentations, there is, by necessity, a reasonable possibility that the defendants may fail to establish that they had a reasonable basis for making the forecasts they made in the forward-looking information.

[226] The last misrepresentation I identified — that Barrick misrepresented that its forecasts were based on assumptions that it considered reasonable — is a statement of current fact which is not subject to the defence in s. 138.4(9).

[227] Thus, the question of whether leave ought to be granted in respect of these misrepresentations remains subject only to the remaining issue — the public correction of the alleged misrepresentations, which I have indicated must be the subject of further argument.

The Alleged Accounting Misrepresentations

[228] Recall that I have already dismissed these alleged misrepresentations on the basis that, despite twenty tries, they have not been pleaded with sufficient particularity.

[229] However, I will briefly address the alleged misrepresentations in the event that I am wrong. Despite their lack of particularity, there are certain obvious problems with the allegations.

Alleged Impairment Misrepresentation

[230] The plaintiffs allege that Barrick failed to take necessary and timely impairment writedowns, which it should have done by Q2 2012, on the carrying value of its Pascua-Lama asset in its financial statements.

[231] This argument relies on the environmental allegations made by the plaintiffs. They argue that the project was in serious non-compliance with its environmental permit, as pre-stripping had begun before the WMS was complete. The plaintiffs argue that Barrick knew it was risking suspension of the project, and permit revocation, and therefore an impairment was required. They allege that Barrick’s accounting department was not made aware of these problems and risks.

[232] As I have already found in the context of the alleged capex budget and scheduling misrepresentations, the plaintiffs are trying to shoehorn the alleged environmental misrepresentations into the accounting misrepresentations. To the extent leave has been granted with respect to the environmental allegations, those allegations should be dealt with in their proper context, and their proper context is not the impairment analysis.

[233] In any event, the evidence in the record with respect to Barrick’s impairment processes is detailed. It includes quarterly monitoring of potential indicators of impairment, and annual goodwill impairment tests. The plaintiffs have not alleged any defect in Barrick’s processes. Barrick received clean audit opinions throughout. The evidence also indicates that there was significant headroom — that is, the fair value of the project exceeded the carrying value by a large margin.

[234] This is another alleged misrepresentation based on speculation and backwards reasoning. It is not reasonably possible the plaintiffs will succeed at trial with respect to this alleged misrepresentation.

Alleged ICFR and DC&P Misrepresentation

[235] The plaintiffs allege that Barrick omitted to disclose that its ICFR and DC&P were ineffective with respect to the Pascua-Lama project and that disclosing this alleged ineffectiveness was necessary to make its statements “in all disclosures during the class period” that “the company has developed and maintains a system for internal controls in order to ensure, on a reasonable cost-effective basis, the reliability of its financial information” not misleading.

[236] Leaving aside that it is intertwined with the environmental allegations, this ICFR and DC&P allegation is again driven entirely by backwards reasoning. This is apparent from the plaintiffs’ factum, which makes reference to the plaintiffs’ proposed expert on this point and describes his opinion “that material weaknesses in ICFR and DC&P were indicated by the circumstances that resulted in the non-disclosure of material information, either because these were not communicated effectively to the Disclosure Committee and the Board, or the Disclosure Committee and the Board failed to properly assess the materiality of, and disclose, [information relating to Barrick’s alleged environmental violations].”

[237] Barrick received clean audit opinions throughout. Its auditors identified no weaknesses in its ICFR.

[238] Moreover, there is detailed evidence in the record of Barrick’s processes relating to identification of financial information relevant to its reporting and its disclosure processes. The plaintiffs do not argue that Barrick’s controls were deficient in operation or design. Rather, they argue that Barrick’s failure to disclose environmental compliance issues must mean that its DC&P and ICFR were materially weak. I agree with the defendants that this argument conflates process with outcome, and demands perfect assurance rather than reasonable assurance, which is all Barrick ever offered.

[239] I do not propose to review the evidence of the experts on this issue for purposes of admissibility. I need not. The speculative nature of the argument regarding ICFR and DC&P is plain on its face.

[240] I do note, however, that the plaintiffs’ expert’s evidence on the point relies on what the defendants accurately describe as the expert’s obvious misreading of a document issued by the Securities and Exchange Commission in the United States. In particular, the expert deposed that “an ineffective regulatory compliance function” is a strong indicator that a material weakness in ICFR exists. In doing so, the expert relied on an interpretive release issued by the U.S. Securities and Exchange Commission entitled “Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporting”. That version of the guidance was not finalized. In its final version, the guidance was amended to remove reference to “strong indicators” in favour of “indicators” of material weakness. Notably, the amendment also removed the reference to “effective regulatory compliance function” as an indicator of material weakness, something of which the expert was unaware.

[241] Speculation is not evidence. Backwards reasoning does not establish a reasonable possibility of success at trial. I would not grant leave to proceed with respect to this alleged misrepresentation.

The Alleged Contingent Liabilities Misrepresentation

[242] The last category of alleged accounting misrepresentations relates to contingent liabilities. The plaintiffs argue that Barrick failed to record contingent liabilities relating to the risk of serious regulatory sanctions against Pascua-Lama which could include lengthy suspension, permit revocation and closure and the associated cost implications from Q2 2012 through to Q2 2013.

[243] Again, leaving aside the plaintiffs’ problematic reliance on the environmental allegations to make this argument, it suffers from two other significant defects. First, the first time the plaintiffs raised allegations concerning contingent liabilities was on June 13, 2019, in their proposed Amended Fresh as Amended Statement of Claim, more than five years after the original pleading was issued. No version of the claim setting out these allegations has ever been issued. The claim is thus statute-barred.

[244] Second, the defendants argue that the plaintiffs have fundamentally misunderstood the nature of contingent liabilities to assert that Barrick was obligated to disclose alleged future increases in estimated construction costs associated with alleged environmental non-compliances. Increased capital costs are not contingent liabilities.

[245] In response to these arguments, the plaintiffs essentially shrugged their shoulders, and indicated they did not need to rely on the alleged misrepresentations with respect to contingent liabilities anyway. They made no attempt to argue that I should reject the defendants’ arguments on this issue, and articulated no basis on which I could do so.

[246] I would not grant leave to proceed with this alleged misrepresentation.

The Individual Defendants

[247] The defendants argue that the plaintiffs have not properly identified their claims against the individual defendants. The plaintiffs did not engage with this argument either.

[248] Given that the scope of the alleged misrepresentations for which leave may be granted are limited to those made in February and March 2012, I am aware of no basis on which the defendant Mr. Al-Joundi, who was only appointed Barrick’s Chief Financial Officer on June 26, 2012, could be a proper defendant.

[249] Moreover, the defendant Mr. Kinver was not a director or certifying officer during his tenure with Barrick. The plaintiffs have adduced no evidence to establish that Mr. Kinver personally authorized, permitted or acquiesced in the release of the 2011 Q4 and year-end report in February 2012, or the 2011 AIF in March 2012. Mr. Kinver is not a proper defendant.

[250] I do not grant leave to pursue any claims against Mr. Al-Joundi and Mr. Kinver.

[251] The question as to whether, given the scope of the misrepresentations for which leave may be granted, there would be a valid claim against Mr. Regent or Mr. Sokalsky may be addressed by the parties at the same time as the question of the public correction of those misrepresentations are addressed.

Costs

[252] Because further submissions are required, the determination of costs shall be deferred until all the issues arising on this leave motion are adjudicated on the merits.

J.T. Akbarali J.

Released: March 22, 2022

Footnotes

[^1]: Barrick’s alleged non-compliance with its environmental obligations and permit form part of some of the alleged capex, scheduling, and accounting misrepresentations by omission, in that the plaintiffs argue that facts related to the environmental issues ought to have been disclosed to make statements in Barrick’s disclosure not misleading. [^2]: From now on, when I refer to Schedule C, I mean the one appended to the reasons of the Court of Appeal and Belobaba J. I have also appended a copy of it to these reasons. [^3]: The only documents that did not contain cautionary language about forward-looking information were press releases making disclosures that also required a material change report to be prepared, and in those cases, the cautionary language was included in the material change report. [^4]: Fluor-Techint was a joint venture of two entities, Fluor and Techint. [^5]: The passage in the 2011 AIF is slightly different, but the difference is immaterial for the purpose of this analysis.