Court Information

Date: October 7, 2025

Ontario Superior Court of Justice

Between:

Alan Newsome and Carson Wong, Plaintiff/Moving Parties

- and -

Endeavour Mining PLC, Endeavour Mining Corporation, Sébastien De Montessus, Guy Young, Joanna Pearson, Louis Irvine, Vincent Benoit, Henri De Joux, Alison Baker, Livia Mahler and Tertius Zongo, Defendants/Responding Parties

Before: Leiper, J.

Counsel:

• Paul Guy, Serge Kalloghlian, Garett Hunter, Garth Myers and Ellen Yoo, lawyers for the Plaintiff
• Emilie Bruneau, Dana Peebles and Adam Goldenberg, Lawyers for the defendant, Endeavour Mining, Endeavour Mining Corporation, Guy Young, Joanna Pearson, Louis Irvine, Vincent Benoit, Henri De Joux, Alison Baker, Livia Mahler and Tertius Zongo
• Cheryl Woodin, Ilan Ishai and Shaan Tolani, Lawyers for the defendant, Sebastian De Montessus

Read: October 7, 2025

Endorsement

Introduction

[1] This is a motion brought by the Plaintiffs, in writing, in this putative class proceeding for an order requiring the Defendants to:

(a) deliver Statements of Defence by November 21, 2025; and

(b) produce to the Plaintiffs by November 21, 2025 insurance information, that is, any insurance policies under which any insurer may be liable to satisfy all or part of a judgment in this action and to disclose the amount of money available under the policies, and any conditions affecting their availability, including but not limited to any off-coverage position taken by any applicable insurer.

[2] The Defendants oppose both requests. They submit that there is no principled reason to require them to deliver their statement of defence before the court grants leave to proceed under the Securities Act, RSO 1990, c S.5 (the "OSA"). The Defendants also submit that they have produced sufficient information as to insurance coverage to inform any settlement discussions or trial matters and oppose any order for production of further insurance information at this stage of the proceedings.

[3] For the reasons that follow, I dismiss the Plaintiff's motion.

Background and Procedural History

[4] In this proposed class proceeding, the Plaintiffs, Alan Newsome and Carson Wong have brought claims against "Endeavour", a publicly-traded west African gold producer, its corporate predecessor and its directors and officers, including its former CEO, Sébastian de Montessus, asserting statutory rights of action under Part XXIII (primary market misrepresentation) and Part XXIII.1 (secondary market misrepresentation) of the OSA. They also claim in common law for negligent misrepresentation.

[5] The genesis of this action is from the January 4, 2024 disclosure by Endeavour that it had terminated its CEO Sébastian de Montessus for misconduct. Endeavour disclosed that Mr. de Montessus had given an "irregular payment instruction" for US$5.9 million in relation to an asset disposal undertaken by the Company.

[6] In a second public disclosure issued by Endeavour on March 27, 2024, it announced that, at the end of its investigation of the former CEO, his financial irregularities totalled $20.9 million.

[7] On March 31, 2024, Endeavour released its 2023-year end annual filings in which it disclosed that, following an internal investigation, it had found further misconduct by Mr. de Montessus, including two additional undisclosed payments totalling US$15 million; an undisclosed investment in an entity that bought a mine from Endeavour; unclear commercial rationales for writing off amounts owing to Endeavour and potentially inadequate steps taken to pursue such amounts; and new questions about the commercial rationale for a number of other transactions.

[8] Mr. de Montessus issued a public statement disputing the findings of Endeavour's investigation. In his statement, Mr. de Montessus stated that the US$15 million payment was made to an "established Endeavour contractor." He alleged that Endeavour suffered no losses from the arrangement and the sums paid were "properly offset" against invoices from that contractor.

[9] In early-2024, the Plaintiffs each initiated proposed securities class actions against Endeavour and its directors and officers, including former CEO, Mr. de Montessus.

[10] The Plaintiffs and their counsel agreed to consolidate their proposed class actions. Akbarali, J. approved that consolidation on November 18, 2024.

[11] In February 2025, Messrs. Newsome and Wong delivered the consolidated Fresh as Amended Statement of Claim (the "Claim") asserting their claims. In those claims, the Plaintiffs allege that Endeavour's public disclosure contained misrepresentations in relation to:

(a) the effectiveness of Endeavour's governance policies, systems and practices;

(b) the effectiveness of Endeavour's internal controls over financial reporting and disclosure;

(c) workplace safety, harassment and discrimination; and

(d) Endeavour's failure to comply with applicable accounting standards.

[12] The Plaintiffs have moved to certify the action under section 5(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 ("CPA") and for leave to proceed under section 138.8 of the OSA. These motions are presently scheduled to be heard together on June 23, 24, 25 2026.

[13] The Plaintiffs delivered their consolidated motion record in March 2025. The Plaintiffs have filed a fifth version of their pleading in the form of a draft Second Fresh as Amended Claim (the "SFAC").

[14] Under the Court-approved timetable, the Defendants are required to deliver their responding motion records by November 21, 2025. The Defendants have not delivered Statements of Defence and have said that they will not do so before leave to proceed is granted under the OSA, without an order from the court.

[15] The Plaintiffs have also requested the Defendants' insurance policies in advance of the certification and leave motions.

[16] The Defendants have refused to produce the insurance policies, but they have produced:

1. A list of their responsive policies, by insurer and policy limit;

2. The retention sum applicable to them;

3. Information that the retention limit has not yet been reached; and

4. Confirmation that:

   • the primary insurer has issued a reservation of rights with no unusual or special terms; and
   • the excess insurers have all reserved their rights, but none have issued a formal coverage letter.

[17] I analyze these two issues next, beginning with the pleadings issue.

Analysis: Are the Defendants Required to File a Statement of Defence Before the Leave and Certification Motions?

[18] In the early years of class action litigation in Ontario, counsel observed a convention that did not require defendants to serve a defence until after a judge had decided the procedural questions on certification: Pennyfeather v. Timminco Limited, 2011 ONSC 4257, 107 O.R. (3d) 201, at paras. 3, 9, 37 and 84; Labourers' Pension Fund of Central and Eastern Canada v. Sino-Forest Corporation, 2012 ONSC 1924, 110 O.R. (3d) 173, at para. 45; Richard v. The Attorney General of Canada, 2022 ONSC 6847, at paras. 13-16.

[19] This convention was rejected by Perell, J. in Pennyfeather at paras. 86-92 and in Sino-Forest at paras. 49-54. Glustein, J. applied similar reasoning in Richard at para. 21, in the context of certification.

[20] The policy rationale for requiring a defence from putative class action defendants prior to a certification motion can be summarized as follows:

• Requiring a defendant to deliver a statement of defence is consistent with the CPA and the Rules of Civil Procedure: Section 35 of the CPA provides that: "The rules of court apply to proceedings under this Act." Rule 18.01 (a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, requires a defendant to deliver a statement of defence within 20 days after service of the statement of claim, with an additional ten days provided if a defendant serves a notice of intent to defend (r. 18.02(2));

• There are practical advantages to requiring a defendant to comply with the Rules, including:

  • Any challenges by a defendant to the Statement of Claim will become apparent and may resolve or narrow the issues at certification under s. 5(1)(a) of the CPA;
  • The statement of defence can inform the preferable procedure criterion and the plaintiff's litigation plan;
  • The statement of defence may reveal issues worthy of certification in the defendant's statement of defence;
  • Requiring a defendant to file a statement of defence is in keeping with r. 1.04, in that the rules "shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits;
  • Arguments at certification that class membership is overinclusive or under-inclusive, that the proposed common issues are not predominately common, or that the action cannot be managed as a class proceeding, are decisions which will benefit from the defendant demonstrating its position on the alleged facts and claims by pleading.

• Courts in other provinces have adopted similar practices and require defendants to show good reason why they should not deliver a statement of defence prior to certification: see Shaver v. Mallinckrodt Canada ULC, 2021 BCSC 404, at paras. 28-30, 37; Langevin v. Aurora Cannabis Inc., 2021 ABQB 887, at para. 14; Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2015 BCSC 74, at paras. 31-34; British Columbia v. Apotex Inc., 2020 BCSC 412, rev'd on other grounds 2021 BCCA 219, 52 B.C.L.R. (6th) 211, at para. 90; and Gay v. New Brunswick (Regional Health Authority 7), 2014 NBCA 10, 421 N.B.R. (2d) 1, at para. 25.

• Concerns about wasted effort in preparing a statement of defence before certification are overstated: "It cannot be said that every fact must be investigated and every document reviewed before a defence is filed. The Rules expressly militate against such a result by requiring the defence be filed within 20 to 30 days after service of the statement of claim, well before production of documents or discovery": Richard at para. 30.

[21] I agree with these principles. If this case was at the certification stage, without the intervening substantive review required under the OSA, different considerations would apply.

[22] However, since the decision in Sino-Forest, the Supreme Court of Canada considered three appeals in which it considered the nature of an action pursuant to s.138.8 of the OSA, where leave has not yet been granted, and the parties raised limitation periods issues: Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, [2015] 3 S.C.R. 801.

[23] In CIBC v. Green, at para. 48, writing for the majority, Côté, J. stated:

… under s.138.8(1) OSA, a statutory action commenced without having first obtained leave is a nullity and a statutory claim under Part XXIII.1 OSA cannot be validly commenced without leave of the court.

[24] The majority confirmed that the leave step under the OSA is a substantive one, designed to deter and screen out "unmeritorious actions as early as possible in the litigation process": CIBC, at paras. 68-69.

[25] Prior to the decision in CIBC v. Green, Perell, J. required only those defendants who would be serving affidavits on the leave motion to file their statements of defence, reasoning that delivering an affidavit for an OSA leave motion was akin to filing a statement of defence: Sino-Forest at para. 65. Even prior to CIBC v. Green, this approach supports a different procedural approach to the question of pleadings required before a motion for leave versus what pleadings are necessary before a motion for certification.

[26] Later, in Vaeth v North American Palladium Ltd., 2016 ONSC 5015, a case decided after CIBC v. Green, Perell J. noted that in hybrid actions involving both a common law action and an OSA statutory claim requiring leave, "the defendant can refuse to deliver a statement of defence to the statutory cause of action because that action, technically speaking, does not exist until leave to commence it is granted.": Vaeth at para. 13. This finding is consistent with the Supreme Court's characterization of a claim prior to OSA leave.

[27] The Defendants have tendered evidence based on a search of the Court files, a search of defence counsel's own files, and the review of the reported decisions for all contested leave motions, in support of its position that in these cases it is the exception and not the common practice for a defence to be served prior to the OSA hearing. According to the Defendants' evidence, a defence was filed in only one of the 31 contested leave applications: Longair v. Akumin Inc. et al., 2024 ONSC 3675, aff'd 2025 ONCA 606.

[28] I find that where leave has not been granted under the OSA, there is not yet a validly commenced claim to which a defendant must respond with a defence. The word chosen by the Supreme Court of Canada in CIBC v. Green is that it is a "nullity": CIBC v. Green at para. 41. While the Plaintiffs argue that this is a triumph of mere form over substance, I disagree. The leave step is more than procedural; it is a substantive requirement that must be met. Indeed, even in the absence of a statement of defence, the Plaintiffs' have assembled and served multiple volumes of material on the leave motion.

[29] I decline to order that the Defendants serve and file their statements of defence in advance of the OSA leave motion.

[30] However, having reviewed the written argument filed on this motion and the potential for a statement of defence to inform the test on certification, I am considering bifurcating the motion for certification from the motion for leave, to permit time for that step to occur if leave is granted. I invite counsel to advise of their position on that question within 15 days from the date of release of this endorsement.

Analysis: Should the Defendants be Ordered to Produce the Insurance Information?

[31] Section 15 of the CPA grants to class action parties the same rights of discovery under the rules of court against one another as they would have in any other proceeding.

[32] Rules 30.02(3) and 31.06(4) of the Rules of Civil Procedure provide for disclosure of insurance information during documentary and oral discovery, respectively as follows:

[33] Rule 30.02(3) of the Rules of Civil Procedure states that defendants are required to disclose and produce for inspection any insurance policy under which an insurer may be liable:

(a) to satisfy all or part of a judgment in the action; or

(b) to indemnify or reimburse a party for money paid in satisfaction of all or part of the judgment;

[34] Rule 31.06(4) of the Rules of Civil Procedure states that a party may obtain disclosure of any insurance policy under which an insurer may be liable to satisfy all or part of a judgment or to indemnify or reimburse a party for money paid in satisfaction of all or part of a judgment. Furthermore, a party may obtain disclosure of the amount of money available under the policy and any conditions affecting its availability.

[35] The Court has interpreted these provisions broadly to compel parties to produce insurance information before discovery so that parties can be able to determine how to appropriately litigate (and potentially settle) claims: Seaway Trust Co. v. Markle, [1992] 11 C.P.C. (3d) 62 (Ont. Gen. Div), pp. 2-3; Sabatino et al. v. Gunning et al., [1985] 50 O.R. (2d) 171 (ON CA), p. 2.

[36] However, prior to receiving leave and certification, this action is not yet at the written or oral discovery stage. There is some precedent for making orders to produce insurance information prior to certification, which I consider next.

[37] In Sharma v. Timminco Ltd., 2010 ONSC 790, leave to appeal refused, 2010 ONSC 2395 (Div. Ct.), 95 C.P.C. (6th) 1, at paras 18-23, Perell, J. ordered production of insurance policies prior to certification and leave under the OSA. Perell, J. concluded that early production of the policies was appropriate because that would allow the parties to make pragmatic decisions as to the likelihood of recovery.

[38] Perell, J. also rejected the policy argument that ordering insurance disclosure prior to motions for leave under the OSA, and motions for certification, would encourage speculative or "strike suits" designed to fish out facts in advance of those motions. Perell, J. rejected this reasoning on the basis that insurance coverage is irrelevant to the questions on leave and certification: Sharma at para. 35.

[39] The Plaintiffs submit there is no prejudice to the Defendants in disclosing the policies and they have undertaken to hold them in confidence. The Defendants have provided some information and rely on the stage of the litigation to support waiting until discovery (if that ever comes, which it might not) to produce the policies.

[40] The parties have provided no indication that they are engaged in settlement discussions or are narrowing the issues on the leave application. Leave has not yet been granted. I have invited the parties to consider bifurcating the motions so that leave can be determined first. I acknowledge the utility of a plaintiff having complete information about insurance coverage for the purposes of settlement conversations. But there is no indication that such negotiations are taking place. The action has not received leave under the OSA. The Defendants have produced partial information about their insurance coverage, and their assets are publicly reported. I decline to make the order sought by the Plaintiffs. The Plaintiffs may renew their request for this material if the circumstances change.

Conclusion

[41] I dismiss the Plaintiffs' motion for production of the insurance policies and requiring the Defendants to file statements of defence on the basis that both orders are premature.

Leiper, J.

Date Released: October 7, 2025

Footnote

[1] "Endeavour" in these reasons refers to Endeavour Mining plc after the scheme of arrangement by which Endeavour Mining Corporation became the wholly owned subsidiary of Endeavour Mining plc. Prior to that restructuring, "Endeavour" refers to Endeavour Mining Corporation.