



COURT OF APPEAL FOR ONTARIO

CITATION: Drywall Acoustic Lathing and
    Insulation, Local 675 Pension Fund v. Barrick Gold Corporation, 2021 ONCA 104

DATE:  20210219

DOCKET: C67681

Hoy, Brown and Thorburn JJ.A.

BETWEEN

The Trustees of the Drywall Acoustic Lathing and Insulation Local

675 Pension Fund and Royce Lee

Plaintiffs (Appellants)

and

Barrick Gold Corporation, Aaron W. Regent, Jamie C. Sokalsky,

Ammar Al-Joundi and Peter Kinver

Defendants (Respondents)

Joel P. Rochon, Peter R. Jervis and Golnaz
    Nayerahmadi, for the appellants

Kent E. Thomson, Luis Sarabia and Steven
    G. Frankel, for the respondents

Heard: November 9 and 10, 2020 by video
    conference, with further written submissions filed on November 23, 2020.

On appeal from the order of Justice Edward
    P. Belobaba of the Superior Court of Justice, dated October 9, 2019, with
    reasons reported at 2019 ONSC 4160, 148 O.R. (3d) 755.

Hoy J.A.:


I.        OVERVIEW

[1]

This appeal arises out of secondary market
    misrepresentations allegedly made by Barrick Gold Corporation during the
    construction of Pascua-Lama, a multi-billion-dollar gold mining project in the high
    Andes of Chile and Argentina.

[2]

The appellants  the proposed representative
    plaintiffs in a putative securities class action  appeal the order of the
    motion judge, granting them leave to proceed under s. 138.3 of the Ontario
Securities Act
, R.S.O. 1990, c. S.5 (OSA) with one proposed
    misrepresentation claim against Barrick and the individual respondents, but
    denying them leave to proceed with all other claims they proposed to assert
    under Part XXIII.1 of the OSA.

[3]

Under s. 138.3(1) of the OSA, a person or
    company who acquires or disposes of securities during the period between the
    time when a document containing a misrepresentation is released and the time
    when the misrepresentation is publicly corrected has a right of action for
    damages against the responsible issuer, each director of the responsible issuer
    at the time the document was released, and each officer of the responsible
    issuer who authorized, permitted or acquiesced in the release of the document,
    among others. However, pursuant to s. 138.8(1) of the OSA, an action may not be
    commenced without leave of the court, which must be satisfied that the action
    is being brought in good faith and that there is a reasonable possibility that
    the action will be resolved at trial in favour of the plaintiff.

[4]

The motion judge denied leave to proceed with
    most of the alleged misrepresentations because, even if they were
    misrepresentations, they were not publicly corrected.

[5]

The primary issues on appeal are whether the
    motion judge erred in principle (i) by effectively assuming the falsity of most
    of the alleged misrepresentations and determining whether leave to proceed
    should be granted by focusing on whether the misrepresentations had been
    publicly corrected or (ii) by taking an impermissibly narrow approach to
    determining whether the alleged misrepresentations were publicly corrected.

[6]

A secondary issue is whether this court should
    interfere with his conclusion that four alleged environmental
    misrepresentations by omission were not even arguably misrepresentations.

[7]

For the following reasons, I would allow the
    appeal in part and return the issue of whether leave should be granted in
    respect of the categories of alleged misrepresentations  described below as
    the capital expense (or, capex) and scheduling misrepresentations, and the accounting
    and financial reporting misrepresentations  to the court below.

II.       BACKGROUND

[8]

In brief, Pascua-Lama, straddling the border of
    Chile and Argentina at the headwaters of the Estrecho river system, was a
    complex and environmentally sensitive project. The motion judge described the
    Estrecho as a life force for the thousands of people, including indigenous
    communities, that lived downstream from the mining site. Barrick began work on
    the project in October 2009. The estimated cost of the project escalated, and
    environmental issues arose. In October 2013, Barrick concluded that the project
    was no longer financially viable and decided to shut it down. Barrick recorded
    a write-off of around $5 billion.

[9]

Over the proposed two-year class period, there
    were five negative disclosures of information that resulted in significant
    declines in Barricks share price. In total, shareholders lost billions of
    dollars.

[10]

The list of alleged misrepresentations and
    public corrections appended to the motion judges reasons is similarly appended
    to these reasons. The alleged misrepresentations were made in annual financial
    statements, interim financial statements, managements discussion and analysis,
    or in an annual information form (AIF). Some of the alleged
    misrepresentations are alleged untrue statements of material fact. Others are
    alleged misrepresentations by omission; that is, alleged omissions to state a
    material fact that was required to be stated or that was necessary to make a
    statement not misleading in the light of the circumstances in which it was
    made.
[1]

[11]

The subject matter of these alleged
    misrepresentations, set out in full in the Appendix, essentially falls into
    three categories.

[12]

First, misrepresentations by omission relating
    to when Barrick expected initial gold production to commence at Pascua-Lama and
    to the estimated capital expense budget for Pascua-Lama.

[13]

Between October 27, 2011 and October 31, 2013,
    the date for first gold production moved from mid-2013, to mid-2014, and then
    to the second half of 2014. In the same period, Barrick increased its estimated
    capex budget for Pascua-Lama from $5.0 billion to $8.0 billion to $8.5 billion.
    Barrick argued that each of these changes reflected unanticipated increases in
    construction costs, including skyrocketing labour and commodity prices in the
    aftermath of an earthquake, unexpected currency fluctuations,
    government-imposed tariffs, and falling gold and silver prices.

[14]

The appellants allege that Barrick knew that its
    scheduling and capex estimates were unreliable and misleading. The appellants
    argue that each of the statements Barrick issued about its scheduled date for
    initial gold production and its estimated capex budget omitted to state a
    material fact that was either required to be stated or that was necessary to
    make a statement not misleading in the light of the circumstances in which it
    was made.

[15]

Second, the appellants allege that Barrick made
    a series of misrepresentations relating to environmental compliance at the
    Pascua-Lama project.

[16]

The motion judge granted the appellants leave to
    proceed with what he described as their core environmental claim, namely that
    on July 26, 2012 the respondents misrepresented that Barrick had completed the
    comprehensive water management system, required by the Resolución de
    Calificación Ambiental 024/2006 (the RCA), the primary Chilean environmental
    permit, and was therefore able to commence the mining activity described as
    pre-stripping. The appellants allege that this was an untrue statement of a
    material fact. The motion judges grant of leave to proceed with this core
    environmental claim is not at issue on this appeal.

[17]

What is at issue are four alleged
    misrepresentations by omission with respect to environmental compliance set out
    in the Appendix and discussed later in these reasons. The motion judge denied
    leave in respect of those alleged misrepresentations on the basis that there
    was no reasonable possibility of success.

[18]

Third, the appellants allege that Barrick made misrepresentations
    by omission relating to accounting and financial reporting. Essentially, the
    appellants claim that Barricks internal controls were ineffective, it should
    have written the project down more than a year before it did, and that it
    failed to record contingent liabilities.

[19]

The materials on the leave motion were
    voluminous. The total body of evidence exceeds 50,000 pages of materials. The
    motion was argued over seven days.

III.      THE MOTION JUDGES REASONS ON
    PUBLIC CORRECTIONS

[20]

Section 138.3(1) of the OSA provides that:

Where a responsible issuer or a person or
    company with actual, implied or apparent authority to act on behalf of a
    responsible issuer releases a document that contains a misrepresentation, a
    person or company who acquires or disposes of the issuers 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 [the issuer and
    various related parties]. [Emphasis added.]

[21]

The motion judge explained that the public
    correction serves as a time-post for the purposes of the proposed class period
    and any eventual damages calculation. He indicated that it is also a
    constituent element of the secondary market misrepresentation cause of action:

In the absence of a discrete and identifiable
    public correction (whether provided by the defendant company or a third party)
    there is no basis for a s. 138.3 misrepresentation action  the absence of a
    public correction is dispositive and there is no need to proceed further and
    consider whether leave should be granted under s. 138.8. [Citations omitted.]

[22]

The interpretation of public correction under s.
    138.3(1) has not received significant consideration at this court. However, a
    body of jurisprudence has developed in the courts below. The trial judge cited
    his prior decisions, and the decisions of other class action judges in the
    Toronto region, at para. 17 of his reasons.
[2]
He summarized the criteria for a proper public correction as follows:

(i)

There must be some linkage or connection between
    the alleged misrepresentation and the alleged public correction;

(ii)

The public correction must share the same
    subject matter and, in some way, relate back to the misrepresentation; and,

(iii)

The public correction must be reasonably capable
    of revealing to the market the existence of an untrue statement of material
    fact or an omission to state a material fact.

[23]

Expanding on the third criterion, he wrote:

If the alleged correction,
on a fair reading
, does not arguably reveal to the
    market the existence of the alleged misrepresentation  that is, the existence
    of the allegedly untrue assertion or the alleged omission in the impugned
    representation  then there is no public correction and no basis for the
    proposed s. 138.3 action.

For example, if the plaintiff alleges that
    Capex disclosure X was misleading because of omission Y, the alleged public
    correction Z must reasonably be capable of revealing the existence of Y. If all
    the plaintiff can do is point to X and allege even an arguable Y but cannot
    identify a Z that reveals the existence of Y, then there is no public
    correction. [Emphasis added.]

[24]

He stated that this makes sense in terms of
    public policy. If the assertion or the omission in the disclosure was never
    corrected, then the reason for the drop in the stock price will have to be
    found elsewhere. In his view, a meaningful public correction requirement
    provides an additional safeguard against unfair and unmeritorious
    misrepresentation claims.

[25]

The motion judge addressed each of the three
    categories of alleged misrepresentations in turn.

The alleged capex and scheduling misrepresentations

[26]

The motion judge concluded that he did not need
    to examine any of the extensive documentary and affidavit evidence, including
    expert reports filed by the appellants, explaining and supporting the alleged
    omissions, and by Barrick, explaining that the disclosures were timely and
    accurate. The motion judge stated that he could assume Barrick had made a
    misrepresentation, and focus his analysis on whether that assumed
    misrepresentation was publicly corrected:

I do not have to examine any of this evidence
    or even explain its meaning or context. Even if the evidence filed by the
    plaintiff provides some support for the proposition that one or more of the
    alleged omissions were needed to make one or more of the alleged
    misrepresentations not misleading, any further analysis of this proposition is
    not required. I can decide the Capex and scheduling representations by focusing
    on the proposed public corrections and asking whether the requirements for a
    public correction have been satisfied.

[27]

He concluded that the requirements for a public
    correction had not been satisfied:

There is nothing in any of these alleged
    corrections that suggests that the earlier estimate was inaccurate or
    unreliable. There is nothing in any of these alleged corrections that reveals
    the existence of an alleged omission.

there is nothing in any of the four partial
    corrections that provides a linkage or connection to any of the alleged
    omissions. And there is certainly nothing that is reasonably capable of
    revealing the existence of any of the alleged omissions.

[28]

He stated that, on the facts before him, the
    determination of what constitutes a proper public correction was not a matter
    that could be improved by further or better evidence at trial.

The alleged environmental
    misrepresentations at issue on this appeal

[29]

As indicated above, the motion judge denied
    leave to proceed with four claims arising from the alleged environmental misrepresentations
    by omission on the basis that that the appellants had no reasonable possibility
    of establishing that they are misrepresentations. I review his reasons for so
    concluding later in these reasons.

[30]

However, the motion judge went on to find that,
    even if wrong in that analysis, claims based on the alleged omissions would
    also fail for lack of any public correction. He wrote that, as with the alleged
    capex and scheduling misrepresentations, he did not have to weigh the evidence
    and assess every allegation of misrepresentation by omission. He could decide
    the omission allegations by assuming Barrick made a misrepresentation and asking
    whether the requirements for a public correction have been satisfied.

[31]

He concluded that the requirements for a public
    correction had not been satisfied: there was nothing in the proposed
    corrections that could fairly be said to reveal the existence of any of the 11
    alleged environmental omissions. He observed that

there is nothing in the four suggested
    partial corrections that provides a linkage or connection to any of the
    alleged omissions. There is nothing that reveals the existence of any of the
    alleged omissions.

The alleged accounting and financial reporting
    misrepresentations

[32]

The motion judge wrote that there was, nothing
    in any of the five supposed corrections about the ineffectiveness of any of
    [Barricks] internal controls; nothing about any failure to take a timely
    impairment write-down; and nothing about any failure to record a contingent
    liability.

[33]

Again, he wrote, the determination of what
    constitutes a proper public correction, on the facts before him, was not a
    matter that could be affected by further or better evidence at trial. He could
    therefore conclude that there was no reasonable possibility that the plaintiff
    can show at trial that any of the suggested public corrections was connected to
    and revealed the existence of the alleged omission.

IV.     AN OVERVIEW OF THE ISSUES REGARDING
    PUBLIC CORRECTIONS RAISED ON APPEAL

[34]

The appellants make two main arguments.

[35]

First, they argue that the motion judge erred in
    principle by determining the public correction issue without first examining
    all the evidence and determining whether there was a reasonable possibility
    that Barrick made a misrepresentation. They say that only after ascertaining
    the nature, subject matter and falsity of the alleged misrepresentation can the
    court appreciate and analyze the extent to which a pleaded public correction
    relates to and corrects the misrepresented facts. They argue that the
    motion judges failure to engage in this process tainted his analysis of
    whether there was a public correction.

[36]

Second, while they do not take issue with the
    three criteria for a public correction summarized by the motion judge, they
    argue the motion judge erred in principle (i) by applying a narrow, purely
    textual, analysis of the alleged public corrections and (ii) by failing to
    consider evidence, including expert economic evidence, about the context in
    which the alleged public corrections were made and how the alleged public
    corrections would be understood in the secondary market.

[37]

In response to the first argument, Barrick
    advises that it did not suggest to the motion judge that he determine the leave
    motion based on whether the requirement for a public correction was met. It
    fully argued the issue of whether there was reasonable possibility that the
    appellants claim that it had made misrepresentations could succeed and
    candidly admits that it would have preferred that the motion judge decide the
    issue. However, it submits that that the motion judge was entitled to
    effectively assume that the alleged misrepresentations had been made out and
    proceed as he did.

[38]

As to the appellants second argument, Barrick
    submits that the motion judge, having heard seven days of argument, was fully
    alive to the context in which the alleged public corrections were made and to
    the appellants expert evidence. For example, at the beginning of his reasons, he
    referred to the fact that, during the proposed class period, five negative
    disclosures resulted in significant declines in the share price. This, Barrick
    says, was in the report of the appellants expert, Cynthia Jones. Barrick
    argues that the motion judge did not refer to the appellants experts evidence
    because it was not probative of whether there was a public correction. Rather,
    the motion judge properly considered the criteria for a proper public
    correction.

[39]

Barrick characterizes the appellants as seeking
    to interfere with a determination of mixed fact and law to which deference is
    owed.

V.      ANALYSIS OF THE ASSUMED MISREPRESENTATIONS
    ISSUE

[40]

I reject the appellants argument that a motion
    judge cannot assume that the alleged misrepresentations are made out and deny
    leave to proceed under s. 138.3 of the OSA on the basis there is no reasonable
    possibility that a trial court would find there has been a public correction of
    those misrepresentations.

[41]

As Barrick argues, in several different contexts
    and different areas of the law, the court has assumed that one constituent
    element of a cause of action or legal test has been satisfied and disposed of
    the case on the basis that a different constituent element has not been
    established. For example, in the context of a claim in unjust enrichment,
    courts have assumed that there has been enrichment and determined the case on
    the issue of whether there is an absence of juristic reason for the enrichment:
Bank of Montreal v. i Trade Finance Inc.
, 2009 ONCA 615, 96 O.R. (3d)
    561 at para. 36, affd on other grounds, 2011 SCC 26, [2011] 2 S.C.R. 360. Whether
    or not a public correction is properly characterized as an element of the
    statutory cause of action of secondary market misrepresentation, as I discuss
    below, it is a necessary part of the statutory scheme.

[42]

I note that the motion judge in this case is not
    the only motion judge to have accepted that this approach is available. In
Drywall
    Acoustic Lathing and Insulation, Local 675 Pension Fund (Trustees of) v. SNC-Lavalin
    Group Inc
, 2016 ONSC 5784 (
SNC-Lavalin
), at para. 48, Perell J.
    accepted, albeit in the context of a summary judgment motion, that it is
    possible to assume the falsity of the alleged misrepresentations for the
    purpose of determining whether a corrective disclosure or public correction
    exists.
[3]


[43]

The appellants offer no authority for their
    position. Contrary to their assertion,
Mask v. Silvercorp Metals Inc.
,
    2015 ONSC 5348, affd 2016 ONCA 641 does not stand for the proposition that
    justices deciding motions for leave to proceed under s. 138.8 of the OSA are
    required to determine whether the plaintiff has a reasonable possibility of
    establishing that impugned disclosures were misrepresentations, and only then
    consider whether the plaintiff also has a reasonable possibility of
    demonstrating the alleged misrepresentations were publicly corrected.
Mask
 a decision of the motion judge in this case  simply sets out the pleading
    requirements applicable to claims brought under s. 138.3(1) of the OSA.

[44]

The appellants also rely on
Theratechnologies
    Inc. v. 121851 Canada Inc.
, 2015 SCC 18, [2015] 2 S.C.R. 106 and
Rahimi
    v. SouthGobi Resources Ltd.
, 2017 ONCA 719, 137 O.R. (3d) 241, leave to
    appeal refused, [2017] S.C.C.A. No. 443. As the appellants note, in
Theratechnologies
,
    at para 38, Abella J., for the Supreme Court, wrote that the leave requirement
    is more than a speed bump and that, at the leave stage, the court must
    undertake a reasoned consideration of the evidence to ensure that the action
    has some merit. This, as Hourigan J.A. wrote for this court in
SouthGobi
,
    must include some weighing of the evidence that both parties are required to
    proffer under ss. 138.8(2) and (3) [i.e. affidavit evidence setting forth the
    material facts on which the parties intend to rely] and scrutiny of the entire
    body of evidence, not just the evidence of the plaintiff viewed in isolation.
    Further, given the fact that at the leave stage full production has not been
    made, the motion judge must be cognizant of the fact that the defendant may
    have relevant evidence that has not been produced or tendered:
SouthGobi
,
    at para. 48.

[45]

Through this reasoned consideration of the
    evidence, a motion judge discharges the competing duties of protecting issuers
    from unmeritorious claims and frivolous strike suits and ensuring that the
    secondary market remedy is not rendered illusory through the elimination of
    potentially meritorious claims:
SouthGobi
, at para. 45. However, in my
    view, read in context,
Theratechnolgies
and
SouthGobi
do not
    prevent a motion judge from taking a plaintiffs case at its highest by
    assuming the falsity of the impugned misrepresentation, and denying leave to
    advance that misrepresentation claim on the basis that there is no reasonable
    possibility that a trial court would find that there has been a public
    correction of the misrepresentation. In a proper case, a motion judge could
    discharge the competing duties in this manner.

[46]

But it is an approach that should be used rarely.
    The existence of a misrepresentation is at the heart of the statutory cause of
    action. When an issuers disclosures are impugned, both the issuer and the
    shareholders have an interest in a finding that restores confidence in the issuers
    ongoing disclosure. Assuming a misrepresentation  that is, assuming a wrong 
    and then finding a second wrong  a failure to correct the misrepresentation  would
    generally do little to restore market confidence.  As I discuss below, it is
    also an approach that should be used with great caution.

VI.     ANALYSIS OF THE APPROACH TO
    DETERMINING WHETHER THERE WAS A PUBLIC CORRECTION

[47]

This leads to the appellants second argument on
    the corrections issue.

[48]

As I will explain, assuming the falsity of the alleged
    misrepresentation does not relieve a motion judge of the obligation to engage
    in a reasoned consideration of evidence of the context in which the alleged
    public correction was made and how the alleged public correction would be
    understood in the secondary market if the alleged public correction does not,
    on its face, reveal the existence of the alleged misrepresentation.

In some cases, that may require the motion
    judge to consider evidence which also goes to the issue of whether there is a
    reasonable possibility that a trial court will find that there was a
    misrepresentation. Thus, caution is required. In some cases, assuming the
    falsity of the alleged misrepresentations  an approach driven by concerns of
    judicial economy  may prove a false economy. Judicial economy likely only outweighs
    the interests of an issuer and its shareholders in a finding as to whether
    there is a reasonable possibility that the trial court would find a
    misrepresentation and the risks entailed in assuming a misrepresentation when:
    the motion judge is faced with an overwhelming record; and the motion judge is
    confident that there is no material overlap between the evidence relevant to
    whether there is a misrepresentation, and the evidence of the context in which
    the alleged public correction was made and how the alleged public correction
    would be understood in the secondary market.

[49]

Moreover, where the motion judge must engage in
    an analysis of the evidence of context, it cannot be said (as the motion judge
    did in this case) that there is no possibility that the matter could be
    improved by further and better evidence at trial.

[50]

In
SNC-Lavalin
, Perell J. correctly
    rejected a purely semantic and mechanical approach to the determination of a
    public correction (referred to, here, as a corrective disclosure). He reasoned,
    at para. 45:

[T]he determination of whether a corrective
    disclosure is corrective depends not only on a semantic analysis of what the
    public correction means but also on an analysis of how the words would be
    understood in an efficient market and also a statistical analysis of the effect
    of those words on the markets evaluation of the value of the securities that
    had been misrepresented to the marketplace. Put somewhat differently, a
    semantic analysis of whether a corrective disclosure was made is necessary, but
    it is not sufficient to determine the existence or non-existence of a
    corrective disclosure. What is required is an analysis of the literal meaning
    of the words, which is in any event not a purely mechanical exercise but one
    that involves, evidence, opinion, and argument, and also an analysis of the
    perceived or effective meaning of the words in the secondary market, which once
    again is not a mechanical exercise, but rather one that involves evidence.

[51]

Perell J. wrote this in reasons concluding that
    whether there had been a public correction could not be determined on a summary
    judgment. But the principle  that, where the alleged public correction does
    not, on its face, clearly reveal the existence of the alleged
    misrepresentation, the judge must engage in a reasoned consideration of
    evidence of the context in which the alleged public corrections were made and
    how the alleged public corrections would be understood in the secondary market
     applies equally on a leave motion.

[52]

In a similar vein, in
Kauf v. Colt Resources
    Inc.
, 2019 ONSC 2179, 145 O.R. (3d) 100, at para. 121, Glustein J. wrote
    of the need for a robust analysis of the evidence:

If there is a reasonable possibility based on
    a robust analysis of the evidence that a trial court could find that the purported
    public correction could serve as time-post for damages, leave ought to be
    granted.

[53]

I turn to the determinative question: Did the
    motion judge in this case err in principle by determining that there was no
    reasonable possibility that the trial court would find that there has been a public
    correction of the misrepresentation based on a purely textual analysis, without
    the requisite reasoned consideration of the evidence?

[54]

In my respectful view, the answer to that
    question is yes. His reasons disclose that his analysis of the proposed
    public corrections was a purely textual one, limited to a fair reading of the
    proposed correction. As Perell J. wrote in
SNC-Lavalin
, this is a
    necessary step. But the analysis cannot end there.

[55]

By way of example, the appellants allege that Barricks
    representation that total construction capital for Pascua-Lama was estimated at
    $4.7-$5 billion, made in the third-quarter interim financial statement dated
    October 27, 2011, is a misrepresentation because, among other things, Barrick
    did not disclose that it had material information indicating that this estimate
    was neither reasonable nor accurate. They allege that Barricks disclosure of a
    50-60 percent increase in capital costs from this estimate, contained in its
    interim financial statements for the second quarter of 2012, dated July 26,
    2012, constitutes a public correction.

[56]

In his analysis, the motion judge effectively
    assumed that, as the appellants allege, Barrick had material information on
    October 27, 2011 indicating that its estimate was neither reasonable nor
    accurate. As stated above, the motion judge found that there was nothing in
    this (or any other) alleged public correction relating to capex that suggests
    that the earlier estimate was inaccurate or unreliable and reveals the
    existence of the omission. He did not consider whether, in the context in which
    the July 26, 2012 statement was made, there was a reasonable possibility that
    the trial court would find that the market would consider a budget increase of
    that magnitude, at that time, as casting doubt on the reasonableness or
    accuracy of the earlier budget. Nor did he consider the evidence of the
    appellants economic expert, Cynthia Jones, that the alleged corrective
    disclosures clearly informed the market that prior misstatements should no
    longer be relied upon.

[57]

Barrick argues that no weight should be given to
    what it says is a bald assertion by Ms. Jones. It may be right. But that is an
    issue that remains to be determined, possibly only at trial.

[58]

This court cannot engage in the necessary reasoned
    consideration of the evidence:
Theratechnologies
, at para. 38. It is
    not clear that the 50,000 pages of evidence before the motion judge are before
    this court. Moreover, it is not the role of this court to engage in such a
    review. Regrettably, the question of whether leave should be granted in respect
    of those alleged misrepresentations must be remitted to the court below.

[59]

I will add this. The motion judges narrow
    approach to determining whether a public correction was made out may have been
    driven by his view that the public correction is an additional safeguard
    against unfair and unmeritorious misrepresentation claims. Respectfully, the
    legislative history of the statutory scheme does not support his view that the
    public correction serves as an additional safeguard.

The role of public corrections within the
    statutory scheme

[60]

Part XXIII.1 of the OSA was enacted in 2002,
    following careful consideration by committees of the Toronto Stock Exchange
    (TSE) and the Canadian Securities Administrators (CSA).
[4]


[61]

In the mid-1990s, the TSE established the
    Committee on Corporate Disclosure, chaired by Thomas I.A. Allen, Q.C., to
    address perceived problems in the quality of continuous disclosure from market
    participants (the Allen Committee). In 1995, the Committee published its
    interim report (the Allen Report).
[5]
The CSA supported the recommendations made by the Allen Committee in its final
    report and established its own Civil Remedies Committee (the CSA Committee)
    which, in 1998, adopted in large part  with one notable exception discussed
    below  the recommendations of the Allen Committee.
[6]
Both the Allen Committee and
    the CSA Committee carefully considered the risk of unmeritorious or
    extortionate strike suits in making their recommendations.

[62]

As this court observed in
Kerr v. Danier
    Leather Inc.
, 77 OR (3d) 321, at paras. 119-120, affd 2007 SCC 44, the
    Allen Committee and the CSA Committees reports may provide persuasive evidence
    as to the legislatures intent in enacting s. 138.3.

[63]

The function of a public correction within the
    statutory scheme was not discussed by the Allen Committee in detail. It is
    referred to, obliquely, in the Allen Committees discussion of the persons who ought
    to have a cause of action for secondary market misrepresentations or
    non-disclosure: Allen Report, at paras. 6.11-18. In summarizing its position,
    at para. 6.13, the Committee noted:

[W]e recommend that a cause of action for
    damages resulting from misleading or untimely disclosure be available
to any person who acquires or disposes of a security of the
    issuer in question in a secondary market between the date when the misleading
    disclosure was made and the date when it was corrected
, or in the case
    of untimely disclosure or non-disclosure, between the date when the disclosure
    ought to have been made and the date when it was in fact made. [Emphasis added;
    emphasis in original omitted.]

[64]

The function of a public correction was also discussed
    with reference to the scope and calculation of damages: Allen Report, at paras.
    6.58, 6.63, fn. 12.

[65]

I draw several observations from these limited comments,
    taken in the context of the entire Allen Report.

[66]

First and foremost, the Committee appears to
    have viewed a public correction simply as part of the statutory scheme  a necessary
    time-post for the proposed class period and any eventual damages calculation. The
    public correction delimits who may bring a claim for secondary market
    misrepresentation and makes damage calculations for secondary market claims
    standardized and predictable.
[7]


[67]

Second, throughout, the Committee appears to
    have assumed the misrepresentation would be corrected or that the necessary
    disclosure would be made. If the Committee intended to limit the proposed
    statutes applicability only to those misrepresentations later explicitly
    corrected, it is surprising that it did not so indicate in its otherwise
    extensively canvassed report.

[68]

Third, the Committee did not list a public
    corrections requirement among the safeguards against open[ing] the floodgates
    to U.S. type securities litigation: Allen Report, at para. 6.72; see also
    paras. 4.18-4.20. The Committee considered sufficient the significant
    differences in class action procedures, the limitations on liability recommended
    (including the limited class of plaintiff, several liability, and monetary
    limits on liability); and other differences between US and Canadian legal
    culture and courts (including the comparative rarity of civil jury trials and
    the loser pays rule).

[69]

In addition to the safeguards against unmeritorious
    litigation considered or proposed by the Allen Committee, the CSA Committee proposed
    requirements for leave to proceed and court approval of settlements. The regime
    subsequently enacted by Ontario as Part XXIII.1 of the OSA  and other Canadian
    provinces securities acts  closely followed the CSAs proposal.

[70]

Not treating the public correction as an
additional
safeguard against unfair and unmeritorious
    misrepresentation claims makes sense.

[71]

First, recall that, at the leave stage, a
    consideration of whether there has been a public correction of a
    misrepresentation follows a finding that there is a reasonable possibility that
    it will be found at trial that the defendant has released a document or made a
    public oral statement containing a misrepresentation (or, in rare cases, the
    making of an assumption that there was a misrepresentation). When that
    threshold has been cleared (or the misrepresentation assumed), the plaintiffs
    claim is potentially meritorious. Where there is a reasonable possibility of a
    misrepresentation, the plaintiffs claim can hardly be characterized as a
    strike suit. Furthermore, the clearing of the misrepresentation threshold,
    combined with the fact that the plaintiff brought an action, suggests that
    there was a public correction. The plaintiff must have learned of the
    misrepresentation somewhere.
[8]


[72]

Second, the supposed public policy rationale identified
    at para. 21 of the motion judges reasons  that, in the absence of a strict
    public correction requirement, the cause of any decline in the market value of
    the security may be properly attributed to factors other than the correction of
    the alleged misrepresentation  is anticipated and addressed elsewhere in Part
    XXIII.1. Section 138.5(3) provides that assessed damages shall not include any
    amount that the defendant proves is attributable to a change in the market
    price of securities that is unrelated to the misrepresentation or the failure
    to make timely disclosure. The motion judge properly averted to the role of s.
    138.5(3) in his discussion of the core environmental misrepresentation claim
    for which he granted leave.

Public correction of a misrepresentation
    by omission

[73]

Finally, the fact the alleged misrepresentations
    are misrepresentations by omission does not change the need for reasoned
    consideration of the evidence in the context of a motion for leave.

[74]

In expanding on the third of the criteria for a
    proper public correction, articulated at para. 19 of his reasons, the motion
    judge stated that the alleged public correction, on a fair reading, must
    arguably reveal to the market the alleged omission of the material fact that
    was necessary to make the statement at issue not misleading in light of the
    circumstances in which it was made.

[75]

In my view, this sets the bar too high.

[76]

The public correction need not specifically
    identify the omitted material fact or specifically relate the information in
    the correction to the omitted material fact. As stated earlier, if the alleged
    public correction does not, on its face, reveal the existence of the alleged
    misrepresentation, the motion judge must engage in a reasoned consideration of
    evidence concerning the context in which the alleged public corrections were
    made and how the alleged public corrections would be understood in the
    secondary market.
The
    critical question for the motion judge is whether the alleged public correction
    was reasonably capable of being understood in the secondary market as
    correcting what was misleading in the impugned statement
.
[9]


[77]

What the motion judge outlined as the other
    criteria for a proper public correction were not at issue on this appeal.
    Whether they are better described as characteristics rather than criteria,
    and their precise wording, are issues for another day.

[78]

I turn now to the alleged environmental
    misrepresentations which the motion judge did not permit to proceed.

VII.    THE ALLEGED ENVIRONMENTAL
    MISREPRESENTATIONS WHICH THE MOTION JUDGE DID NOT PERMIT TO PROCEED

[79]

The motion judge reviewed the evidence with
    respect to the allegations of environmental misrepresentations. He granted the
    appellants leave to proceed with their core environmental claim. However, as
    indicated above, the motion judge concluded that leave to proceed with the four
    alleged environmental misrepresentations by omission should not be granted.

[80]

The first three alleged environmental
    misrepresentations suffered from fatal chronology issues. In short, he
    concluded that the material facts that the appellants allege should have been
    disclosed to make the three representations at issue not misleading arose after
    the representations were made. Since they arose after the representations were
    made, Barrick could not have been required to state them at the time it made
    the representations.

[81]

The fourth alleged environmental
    misrepresentation by omission failed because the motion judge found that the
    material facts that Barrick allegedly omitted to disclose were not even
    arguably required to make the representation at issue not misleading.

[82]

As I will explain, I would not interfere with
    the motion judges decision to deny the appellants leave to proceed with the
    four alleged misrepresentations by omission with respect to environmental
    compliance.

[83]

In their 50-page factum, the appellants
    concentrated solely on the motion judges approach to determining whether the
    public correction was made out and made no reference to the motion judge having
    erred in concluding that their allegations of environmental misrepresentations
    by omission could not arguably constitute misrepresentations.

[84]

In its responding factum, Barrick noted that the
    appellants did not take issue with the motion judges conclusion that the
    alleged environmental misrepresentations by omission could not arguably
    constitute misrepresentations and concentrated solely on the public corrections
    issue. However, it argued that the motion judges conclusion was amply
    supported by the evidence and was open to him.

[85]

In oral submissions, in their outline of the
    errors they alleged that the motion judge had made, the appellants did not
    refer to his having erred in concluding that the alleged environmental
    misrepresentations by omission could arguably constitute misrepresentations.
    They again focused on the public corrections issue. However, in response to
    questions from the panel, the appellants indicated that they take issue with
    the motion judges findings with respect to the alleged environmental
    representations by omission.

[86]

In their Notice of Appeal, the appellants refer
    to only two of the four alleged environmental misrepresentations for which the
    motion judge denied leave: those made November 1, 2012 and March 28, 2013. With
    respect to those two alleged misrepresentations, the appellants state at para.
    10(b) of their Notice of Appeal that the motion judge failed to properly
    consider the applicable principles to determine the existence of
    misrepresentation by omission. Their other articulated grounds of appeal in
    relation to those alleged misrepresentations relate to the public correction
    issue.

[87]

After the appeal was heard, the court asked the
    parties for written submissions, limited to five pages on this issue.

[88]

In their written submissions, the appellants
    argue that the motion judge erred in concluding that the alleged environmental
    misrepresentations by omission could not arguably constitute
    misrepresentations. Barrick submits that it would be unfair to permit the
    appellants to challenge those findings at this juncture. Among other reasons,
    Barrick has not had the opportunity to respond to what the appellants now argue
    are errors. In any event, Barrick argues, the motion judges findings are not
    tainted by reversible legal error or palpable and overriding errors of fact.

Some additional context

[89]

Unlike the portions of his reasons addressing
    the alleged capex and scheduling misrepresentations and the alleged accounting
    and financial reporting misrepresentations, in his reasons addressing the
    alleged environmental compliance misrepresentations the motion judge summarized
    what he characterized as the key points of evidence relating to those alleged
    misrepresentations. Some additional background, drawn from that summary, will
    help understand his reasons for denying leave to proceed with the four alleged
    environmental misrepresentations by omission and the parties arguments.

[90]

As noted above, Pascua-Lama, located at the
    headwaters of the Estrecho river system, was environmentally sensitive. In the
    motion judges words, [i]t was imperative that toxic by-products of the mining
    process, such as acid rain drainage, did not contaminate that river system. To
    this end, Chilean authorities required that Barrick construct a comprehensive
    water management system (WMS) as part of the RCA.

[91]

Barrick began pre-stripping at Pascua-Lama on
    May 4, 2012. Although the WMS was not fully constructed, Barrick considered
    itself entitled to do so as, in its view, the WMS was operational within the
    meaning of that term in the RCA.

[92]

In September and October 2012, local indigenous
    groups filed two constitutional rights lawsuits in a Chilean court to stop
    the pre-stripping and other alleged environmental violations. The court refused
    to grant the requested preliminary injunction.

[93]

Because of excessive road dust and other related
    problems, the pre-stripping operation was temporarily halted by government
    order in October 2012.

[94]

Among other things, the WMS collected descending
    mountain water, using a system of horizontal channels and natural ravines, and carried
    that water around Pascua-Lamas waste dump and onward to the river system. The
    RCA required that the WMS be capable of receiving water flows equivalent to a
    1000-year flood. If the terrain carrying descending mountain water was not
    carved in rock, the RCA required that terrain to be lined with an appropriate material
    to prevent erosion and mudslides.

[95]

Unlike the horizontal channels, one of the
    ravines  the Q-9 ravine  was not lined in concrete or other material. Several
    months following the pause of pre-stripping operations, in December 2012 and
    January 2013, two massive mudslides occurred after large volumes of descending
    water hit the loose rock, soil and silt present at the outlet work that
    directed the water into Q-9 and in Q-9 itself.

[96]

Barricks Chilean subsidiary filed a self-report
    with the primary environmental agency, referred to as the SMA in the motion
    judges reasons, admitting that it had breached the RCA by not building the
    outlet work at the opening of Q-9 according to the RCAs specifications. The
    SMA rejected the self-report because it was incomplete and conducted its own
    investigation. It laid environmental charges against Barrick. In its charging
    document, released in March 2013, the SMA accused Barrick of 23 environmental
    violations. In a letter to the SMA in April 2013, Barrick acknowledged and
    accepted 13 of the 14 violations relating to the WMS. The SMA fined Barrick
    $16 million, which was reduced to $12 million for early payment.

[97]

The two constitutional lawsuits made their way
    back to the Chilean court soon after the SMA released its charging document. On
    April 9, 2013, the Chilean court,
ex parte
, suspended all construction
    work on the Chilean side of the Pascua-Lama project.

[98]

In June 2013, Barrick announced that it would
    try to rebuild the WMS in compliance with permit conditions and then resume
    pre-stripping. However, four months later, in October 2013, it decided to shut
    the project down.

The March 28, 2012 alleged misrepresentations
    by omission

[99]

The motion judge explained that two of the four
    representations at issue, dated March 28, 2012 (contained in Barricks 2011 AIF
    and Annual Report and set out in the Appendix), contain broad language
    intended to reassure the interested reader that Barrick takes environmental
    compliance seriously and that Barrick believes that it is in substantial
    compliance with all applicable environmental laws and regulations at its mining
    sites.

[100]

He set out the seven material facts that the appellants allege
    Barrick was required to state to make those two March 28, 2012 representations
    not misleading:

1.

Barricks environmental permits required it to complete all elements
    of its WMS and have it fully operational prior to the commencement of
    pre-stripping;

2.

Contrary to Barricks misstatement that its WMS was complete,
    enabling pre-stripping to commence, Barrick was aware that its WMS was not
    complete and was not fully operational;

3.

Barrick commenced pre-stripping in violation of its RCA permits in
    May 2012;

4.

By committing this act, Barrick was in violation of Article 24 of
    Law 20,417 enacted on January 28, 2010 that required strict compliance with the
    RCA;

5.

Barricks RCA violations would be considered serious under Chilean
    law, and Barrick knew that under the new strict compliance legal regime, it
    specifically risked suspension or permit revocation;

6.

Barrick knew that a suspension of pre-stripping until the WMS was
    complete in accordance with the RCA could delay the project by at least an
    additional year or more beyond the one-year delay in completion until mid-2014
    announced on July 26, 2012; and,

7.

Barrick had decided to follow a highly risky strategy of commencing
    pre-stripping in violation of its permit to maintain its schedule and risk the
    consequent sanctions.

[101]

He concluded that the alleged omissions are precluded by obvious
    chronology problems:

The alleged omissions that pertain to the two
    March 28, 2012 representations relate to a pre-stripping event that actually
    took place several weeks later in May 2012. Therefore, there is zero chance that
    any of these alleged omissions (in a March disclosure about an event that did
    not occur until May) can even arguably be described as omissions that should
    have been disclosed to make the [March] representations not misleading.

[102]

I agree with Barrick that there is no basis to interfere with this
    conclusion.

[103]

First, to the extent that the appellants Notice of Appeal could be
    argued as having opened the door to the appellants making arguments that the
    motion judge erred in concluding that some of the alleged environmental
    misrepresentations by omission did not arguably constitute misrepresentations,
    the Notice of Appeal makes no reference to these alleged environmental
    misrepresentations by omission. The appellants at no point sought leave to rely
    on an error in concluding that the alleged March 28, 2012 misrepresentations
    did not arguably constitute misrepresentations as a ground of appeal.

[104]

Second, and in any event, I reject the appellants argument that
    there is no chronology problem because, effectively, an issuer is deemed to
    make the impugned representation anew when related material facts requiring
    disclosure subsequently arise. This is contrary to s. 1(1) of the OSA, which
    defines a misrepresentation by omission as 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
 (emphasis added). The definition is clear. The circumstances
    in which it was made do not include circumstances which arose after the
    statement was made. The appellants framed their claim as one based solely on
    misrepresentation. Their argument confounds liability for failure to make
    timely disclosure under s. 138.3(4) of the OSA with liability for
    misrepresentation under ss. 138.3(1) and (2) of the OSA.

[105]

Finally, while alleged omission 1  and possibly 2, 5, 6 and 7 
    might appear to relate to Barricks alleged intention
prior
to the May 2012 pre-stripping event to act in violation of environmental law by
    commencing pre-stripping in breach of the RCA, knowing of the risks of doing
    so, Barrick points to evidence that the decision to begin pre-stripping was not
    made until the day before pre-stripping began and the appellants do not point
    to any evidence to the contrary.

The November 1, 2012 and March 28, 2013 misrepresentations
    by omission

[106]

The motion judge explained that the other two alleged
    misrepresentations are the disclosures of November 1, 2012 in Barricks interim
    financial statements for the third quarter of 2012 and of March 28, 2013 in
    Barricks 2012 AIF, set out in the Appendix and below. They report on the two
    constitutional rights lawsuits brought in Chile by indigenous communities
    affected by the Pascua-Lama project:

November 1, 2012: In September and October
    2012, two constitutional rights protections actions were filed in Chile by
    representatives of an indigenous community and certain other individuals,
    seeking the suspension of the construction of the Chilean portion of the
    Pascua-Lama project due to alleged non-compliance with the requirements of the
    Projects Chilean environmental approval. The Court declined to issue an
    immediate injunction suspending pre-stripping activities, but both cases have
    been admitted for review by the Court. We intend to vigorously defend these
    actions.

March 28, 2013: In September and October
    2012, two constitutional rights protections actions were filed in Chile by
    representatives of an indigenous community and certain other individuals,
    seeking the suspension of the construction of the Chilean portion of the Pascua-Lama
    project due to alleged non-compliance with the requirements of the Projects
    Chilean environmental approval. The Court declined to issue an immediate
    injunction suspending pre-stripping activities. The first action has been admitted
    for review by the court and the second action has been abandoned for lack of
    prosecution. We intend to vigorously defend these actions.

[107]

The motion judge set out the following four material facts that the
    appellants say should have been disclosed to make the above representations not
    misleading:

1.

Barrick had commenced pre-stripping in violation of the RCA prior to
    the completion of the WMS;

2.

Barrick admitted to the SMA in its self-report to serious RCA
    violations related to the WMS;

3.

The self-report had been rejected for failing to provide specific,
    truthful and demonstrable information on January 31, 2013 after an SMA
    investigation uncovered other serious RCA violations beyond those admitted by
    Barrick; and,

4.

Barrick had committed 13 of 14 of the RCA violations alleged by the
    SMA, which it admitted to on April 29, 2013.

[108]

With respect to the November 1, 2012 statement, he concluded, again,
    that there were chronology issues:

The alleged omissions that deal with a
    supposed violation of the RCA, Barricks self-report about the WMS, the SMAs
    rejection of the self-report, and Barricks April 29, 2013 letter of
    acceptance all post-date the November 1, 2012 statement and would not have
    been known to Barrick at that time.

[109]

The alleged March 28, 2013 misrepresentation by omission failed for
    a different reason:

The alleged omissions that pre-date the March
    28, 2013 AIF such as the self-report and its rejection by the SMA are not
    omissions that should have been disclosed to make the March 28, 2013 update
    about the constitutional rights litigation not misleading. There was nothing
    in this latter update that even arguably required information about the
    self-report or its rejection to make the constitutional rights update (that
    referred only to pre-stripping and not the WMS in any event) not misleading.

[110]

In their written submissions, the appellants argue that Barricks
    statements on November 1, 2012 and March 28, 2013, in which it claimed that it
    would vigorously defend these actions, could only be interpreted by the
    market as a denial of the allegations in the constitutional litigation that it
    had violated the RCA, which Barrick, in fact, knew to be true. In addressing
    the motion judges conclusion with respect to the November 1, 2012 statement,
    they say that the motion judge misapprehended the substance of the pleaded
    omissions, which was that in May 2012 Barrick violated the RCA  including by
    carrying out pre-stripping activities prior to full completion of the WMS, as
    alleged in the constitutional litigation  and knew it had violated the RCA,
    not that Barrick admitted to those violations a year later. This
    misapprehension, they argue, resulted because the motion judge failed to
    consider their omission claims through the lens of all the relevant evidence.

[111]

I reject the appellants argument that the motion judge failed to
    consider their allegations of environmental compliance misrepresentation by
    omission in the context of the relevant evidence. It is apparent from his
    reasons (including the portion of his reasons granting the appellants leave to
    proceed with their core environmental claim) that he carefully considered the
    significant body of evidence relevant to the alleged environmental
    misrepresentations, including Barricks belief about the completion of the WMS
    and the right to start pre-stripping. The appellants point to no evidence that
    Barrick did not, in fact, intend to vigorously defend the constitutional
    litigation. The impugned statements were made in documents which, elsewhere,
    cautioned that the outcome of the constitutional litigation was uncertain and
    that if Barrick were unable to resolve these disputes favourably, it may have a
    material adverse impact on its financial condition and results of operations. The
    argument that the appellants now advance about the real substance of the
    alleged omissions is inconsistent with their having plead alleged omissions 2
    and 3 with respect to both the November 12, 2012 and March 28, 2013.

[112]

I am not persuaded that there is any basis for this court to
    interfere with the motion judges conclusions with respect to the November 1,
    2012 and March 28, 2013 disclosures.

VIII.   DISPOSITION

[113]

I would allow the appeal in part and return the issue of whether
    leave should be granted in respect of the categories of alleged
    misrepresentations described above as the capex and scheduling misrepresentations
    and the accounting and financial reporting misrepresentations to the court
    below, to be determined by a judge selected by the administrative judge of the
    class actions team in Toronto.

[114]

I would order that if the parties are unable to agree on costs of
    the appeal and the motion below, the appellants shall make written submissions
    not exceeding five pages within 14 days of release of these reasons, and the
    respondent shall make written submissions not exceeding five pages within 10
    days after the appellants make their submissions.

Released: AH FEB 19 2021

Alexandra
    Hoy J.A.

I
    agree. David Brown J.A.

I
    agree. Thorburn J.A.


APPENDIX

Plaintiffs Allegations of Misrepresentation
    (by Assertion or Omission)
[10]

Part I:
Capex and scheduling misrepresentations (by omission)

è

The $4.7 to $5.0 billion Capex estimate and schedule

October 27, 2011 (Q3 2011)

Pascua-Lama
    is... expected to achieve first production in mid-2013... Total mine
    construction capital is estimated at $4.7-$5.0 billion, with approximately 50%
    of the capital committed at the end of the third quarter. (p.

5)

February 16, 2012 (Q4 2011)

At the Pascua-Lama project,
    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.
    (p.

19)

March 28, 2012 (2011 AIF)

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. (p. 88)

May 2, 2012 (Q1 2012)

At the
    Pascua-Lama project, about 70 percent of the previously announced mine
    construction capital of $4.7-$5.0 billion has been committed. First production
    is anticipated in mid-2013... [T]he company intends to complete a detailed
    capital cost and schedule review in the second quarter of 2012. (p.

14)

representing
as a matter of present fact in its Cautionary Statements on
    Forward-Looking Information that these estimates were considered reasonable by
    management or the company (Q3 2011, p. 112; Q4 2011 and 2011 Annual, pp. 10,
    167; 2011 AIF, p. 88; 2012 Annual, pp. 30 and 175).

omitting to disclose
the following material facts necessary to make the above statements
    relating to the $4.7 to $5 billion Capex budget and first gold production by
    mid-2013 not misleading

in

light

of

the

circumstances

in

which

they

were

made:

Barrick had material information
    that indicated that the
$4.7
to $5
    billion budget estimate was neither reasonable nor

accurate;

The estimate was at best preliminary,
    subject to further review and would increase materially based on the assessment
    of known information;

Turner & Townsend (T&T)
    had advised that the June estimate, used as the basis for the $4.7 to $5
    billion estimate, had been prepared using an incorrect straight line
    methodology (from the original 2009 estimate) and was not even reliable up to a
    Class III feasibility level estimate;

T&T
was unable to determine if the estimate was reasonable
    due to the lack of critical benchmark data;

The $650 million contingency in
    the budget reflected a high level of unreliability in the base estimate;

T&T-led risk workshops concluded that
    the project estimate was high risk and required a very high contingency to
    reflect that

risk;

Internal information, which indicated that the Capex budget was
    unreasonable and unreliable:

The estimate was dependent on estimates prepared by the projects EPC
    contractors and Barrick considered the estimates received from its largest
    contractor, Fluor-Techint (amounting to 40% of the Capex cost), to be highly
    unreliable throughout the period until July 26,

2012;

The cost escalation related significantly to ongoing problems with
    Barrick's first ever attempt at total EPC management of the project, which
    continued to be a very serious problem until the approach was abandoned in July

2012;

The estimate was based on a project schedule which called for 18
    months of pre-stripping to commence in mid-2011 in order to permit completion
    of construction and first production by mid-2013, while Barrick knew of the
    risk of significant schedule delay in the commencing of pre-stripping because
    of the significant delays in completion of the Water Management System (WMS),
    which was still not complete by Q2,

2012;

Barrick knew of undisclosed
    internal estimate increases by no later than January 2012 to $6.4 billion (plus
    contingency) and then $7.5 billion (plus contingency) by Q1 2012 and knew that
    increasing inflation trends were likely to cause a material increase to the

estimate.

è

The $7.5 to $8.0 billion Capex estimate and schedule

July 26, 2012 (Q2 2012)


Preliminary results [of the review]
    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. (pp. 5 and 15).

representing
as a matter of present fact in its cautionary statements that these
    estimates were "considered reasonable by management;

omitting
to disclose material information necessary to be disclosed to make their
    representations relating to the Capex budget and expected schedule to first
    gold, specifically:

Barrick
    was abandoning its failed EPC approach and hiring the international construction
    engineering consulting firm Fluor (to take over full EPCM management) and the
    engineering firm Bechtel (to supplement its Chilean Project Team). Barrick did
    not disclose that the fees for these two firms being hired would likely be more
    than $400 million that had not been included in the $7.5 to $8 billion budget
    estimate;

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

Barrick
    had commenced pre-stripping in May 2012 in serious violation of the RCA permit,
    exposing the project to a serious risk of suspension and significant increase
    to the Capex costs in the event of such suspension.

è

The $8.0 to $8.5 billion Capex estimate and schedule

November
    1, 2012 (Q3 2012)

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. (pp. 5

and

14)

March
    28, 2013 (2012 Annual)

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
    competition of the project in line with this estimate and schedule. (p. 37)

representing
as a matter of present fact in its cautionary statements that these
    estimates were "considered reasonable by management;

omitting
to disclose known material information that the publicly disclosed
    Capex estimate and schedule were unreliable and materially understated:

Barrick had commenced
    pre-stripping in May 2012 in serious violation of the RCA permit and exposing
    the project to a serious risk of suspension, resulting delay and significant
    increase to the Capex costs in the event of such

suspension;

Barrick had decided in 2009
    through 2012 to utilize EPC rather than traditional EPCM construction
    management in order to save costs, that it had no previous experience or
    expertise in doing so and that Pascua-Lama was beyond the expertise of its
    in-house EPC

capabilities.

Partial Corrections of Capex and
    Schedule Misrepresentations

July
    26, 2012 (Q2 2012)

[D]ue to lower than expected productivity and persistent
    inflationary and other cost pressures, the company initiated a detailed review
    of Pascua­Lama'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. (pp.

5
and 15)

November
    1, 2012 (Q3 2012)

Pascua-Lama Project Update... [C]apital costs will be closer to
    $8.0-$8.5 billion with first production in the second half of 2014. (p. 1)

June
    28, 2013 (Press Release)

Impairment Charges ... As a
    result of recent and continued significant declines in gold and silver prices,
    and the delay in first gold production, Barrick is conducting impairment
    testing. Preliminary analysis indicates 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.

October
    31, 2013 (Q3 2013 Press Release and MD&A)

Barrick has decided to
    temporarily suspend construction activities at Pascua-Lama, except those
    required for environmental protection and regulatory compliance. (pp. 1 and
    15)

Part II:

Environmental
    Compliance Misrepresentations

July
    26, 2012 (Q2 2012)

During the second quarter, the project achieved critical
    milestones with completion of Phase 1 of the pioneering road and also the water
    management system in Chile, both of which enabled the commencement of pre­
    stripping activities. (pp. 6 and 16)

Omitting
to disclose material facts necessary to be stated to make the
    following statements not untrue:

March
    28, 2012 (2011 AIF)

The [Pascua-Lama] project has been designed
    to manage the handling of ore and rock to reduce the potential volume of acid
    rock drainage. Such considerations include diversion and containment systems
    for the collection, storage and treatment of drainage and closure and
    reclamation plans designed to minimize water infiltration. (p. 91)

Barrick has
    a policy of conducting environmental audits of its business activities, on a
    regular and scheduled basis, in order to evaluate compliance with: applicable

laws and regulations; permit and license
    requirements; company policies and management standards including

guidelines and procedures; and adopted codes
    of practice. (p.

97)

"The Company's
    operating facilities have

been designed
    to mitigate environmental impacts. The operations have processes, procedures or
    facilities in place to manage substances that have the potential to be harmful

to the environment. In order to prevent
    and control spills and protect

water quality,
    Barrick utilizes multiple levels of spill containment procedures and routine
    inspection and monitoring of its facilities." (p.

98)

"The
    Company believes that it is in substantial compliance with all current
    government controls and regulations at each of its material properties."
    (p. 105)

March
    28, 2012 (2011 Annual Report)


License to Operate ... Our license to operate is a
    critical asset and contributes directly to the achievement of our strategic
    objectives and value creation for our shareholders.

Risk Factor:
    In order to main our license to operate, it is essential that we: Protect the
    environment [and] Comply with all regulatory standards (p. 51)

In order to
    mitigate risks associated with our license to operate, Barrick places a strong
    focus on CSR and safety and environmental

performance...

Responsible
    environmental management is central to our success as a leading gold mining
    company. Environmental Management Systems have been fully implemented at twenty
    of our mines with full implementation at the remaining six mines to be
    completed in 2012. (p. 52)

In particular,
omitting to disclose
the following material facts necessary to be stated to make the
    above statements not untrue:

Barrick's environmental permits
    required it to complete all elements of its WMS and have it fully operational
    prior to the commencement of pre­stripping;

Contrary to Barrick's misstatement
    that its WMS was complete, enabling pre-stripping to commence, Barrick was
    aware that its WMS was not complete and was not fully operational;

Barrick commenced pre-stripping in
    violation of its RCA permits in May 2012;

By committing this act, Barrick
    was in violation of Article 24 of Law 20,417 enacted on January 28, 2010 that
    required strict compliance with RCA

compliance;

Barrick's RCA violations would be
    considered serious under Chilean law, and Barrick knew that under the new
    strict compliance legal regime, it specifically risked suspension or permit

revocation;

Barrick knew that a suspension of
    pre-stripping until the WMS was complete in accordance with the RCA could delay
    the project by at least an additional year or more beyond the one-year delay in
    completion until mid- 2014 announced on July 26, 2012;

and

Barrick decided to follow a highly
    risky strategy of commencing pre­stripping in violation of its permit in order to
    maintain its schedule and risk the consequent

sanctions.

Omitting
    to disclose
the following material facts
    necessary to be stated in order to make its statements in its Q3 2012 and 2012
    AIF relating to the two constitutional rights actions commenced in September
    and October 2012 not inaccurate or misleading:

November
    1, 2012 (Q3 2012)

In September and October 2012, two constitutional rights
    protection actions were filed in Chile by representatives of an indigenous
    community and certain other individuals, seeking the suspension of construction
    of the Chilean portion of the Pascua-Lama project due to alleged non-compliance
    with the requirements of the Project's Chilean environmental approval. The
    Court declined to issue an immediate injunction suspending pre­ stripping
    activities, but both cases have been admitted for review by the Court. We

intend

to

vigorously

defend

these

actions.

(pp.

14

and

15)

2012
    Annual Information Form (March 28, 2013)

In September and October 2012,
    two constitutional rights protection actions were filed in Chile by
    representatives of an indigenous community and certain other individuals,
    seeking the suspension of construction of the Chilean portion of the project
    due to alleged non-compliance with the requirements of the project's Chilean
    environmental approval. The court declined to issue an immediate injunction
    suspending pre­ stripping activities. The first action has been admitted for review
    by the court and the second action has been abandoned for lack of prosecution. Barrick
    intends to vigorously defend these actions. (p.

82)

In particular,
omitting to disclose
the following material facts required to be disclosed to make the
    above statements not misleading:

Barrick had commenced
    pre-stripping in violation of Pascua Lama's RCA prior to the completion of the
    WMS;

Barrick admitted to the SMA in its
    Self-Report to serious RCA violations related to the WMS;

Barrick's Self-Report had been
    rejected for failing to provide "specific, truthful, and
    demonstrable" information on January 31, 2013 after an SMA investigation
    uncovered other serious RCA violations beyond those admitted to by Barrick;

and

Barrick had committed 13 of 14 of
    the RCA violations alleged by the SMA, which it admitted to on April 29, 2013.

Partial
    Correction of Environmental Misrepresentation

April
    10, 2013 Barrick First Press Release

Pascua-Lama preliminary injunction in Chile; major construction of
    works in Argentina unaffected .
..
Barrick
    Gold Corporation (NYSE:ABX) (TSX:ABX) (Barrick or the "company") is
    aware of media reports indicating that a Chilean court has issued a preliminary
    injunction pending a full hearing halting construction activities on the
    Chilean side of the Pascua-Lama project. The company has not yet been formally
    notified of the court order and will assess the potential implications once it
    has received official notification. Construction activities in Argentina, where
    the majority of Pascua-Lama's critical infrastructure is located, including the
    process plant and tailings storage facility, are not

affected.

April
    10, 2013 Barrick Second Press Release

Barrick to suspend construction on Chilean side of Pascua-Lama ...
    Barrick Gold Corporation (NYSE:ABX) (TSX:ABX) (Barrick or the
    "company") today announced that the company is suspending
    construction work on the Chilean side of the Pascua-Lama project while working
    to address environmental and other regulatory requirements to the satisfaction
    of Chilean authorities. In the interim, activities deemed necessary for
    environmental protection will continue as

authorized.

Construction activities in
    Argentina, where the majority of Pascua-Lama's critical infrastructure is
    located, including the process plant and tailings storage facility, are not
    affected. It is too early to assess the impact, if any, on the overall capital
    budget and schedule of the project. (p. 1)

April
    10, 2013 Dow Jones Newswire

The complaint against the project launched in 2009 by Canadian
    mining company Barrick Gold Corp., the world's largest gold producer, cited
    concerns over possible damage to a river, according to the ruling by the
    Santiago Appeals Court, which was seen by AFP and issued Tuesday

night.

The unfinished Pascua Lama gold
    mine straddles the Chilean-Argentine border. The project has seen stiff
    resistance from environmental groups and local communities. Barrick had
    expected production to begin in the first six months of 2014. The order
    suspends construction of the open-pit mine while the court studies the broader
    environmental issues. The complaint was filed by the Diaguita Indians, a small
    community based in northern Chile. It said that the construction work has
    generated a situation of imminent environmental danger for the Estrecho River.

June
    28, 2013 Barrick Press Release


Schedule

Re-sequencing

and

Reduction

of 2013-2014 Capital Spending ... The company has submitted a
    plan, subject to review by Chilean regulatory authorities, to construct the
    project's water management system in compliance with permit conditions for
    completion by the end of 2014, after which Barrick expects to complete
    remaining construction works in Chile, including pre­ stripping. Under this
    scenario, ore from Chile is expected to be available for processing by

mid-2016.

In line with this timeframe and in
    light of challenging market conditions and materially lower metal prices, the
    company intends to re-sequence construction of the process plant and other
    facilities in Argentina in order to target first production by

mid-2016 (compared to the previous
    schedule of the second half of 2014)."

October
    31, 2013 (Q3 2013)


Barrick
    has decided to temporarily suspend construction activities at Pascua-Lama,
    except those required for environmental protection and regulatory compliance. This
    decision will postpone and reduce near term cash outlays and allows the company
    to proceed with development at the appropriate time under a more effective,
    phased approach. The decision to re-start will depend on improved project
    economics such as go-forward costs, the outlook for metal prices, and reduced
    uncertainty associated with legal and other regulatory requirements. (pp. 1
    and 15)

Part III:

Accounting
    Misrepresentations

Plaintiff alleges that in all
    disclosures during the class period, Barrick misrepresented that its financial
    reporting complied with applicable accounting standards and fairly and
    accurately represented the financial situation of the company. The annual
    financial reports released during the class period contained the following statements:

Management's Responsibility for
    Financial Statements ... The consolidated financial statements have been
    prepared in accordance with International Financial Reporting Standards and
    reflect Management's best estimates and judgments based on currently available
    information. 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.

(p. 81)

Barrick and its CEO and CFO certified in
    each financial report that the company's ICFR and DC&P were effective

Barrick
omitted to disclose
material facts necessary to be disclosed to make these statements
    not misleading. Specifically, Barrick omitted to disclose:

That its ICFR and DC&P were
    ineffective with respect to the Pascua-Lama project;

That it had failed to take
    necessary and timely impairment writedowns no later than Q2 2012 on the
    carrying value of its Pascua-Lama asset in its financial statements;

That it 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.

Partial Correction of Accounting
    Misrepresentations

July
    26, (2012 Q2 2012)

While the review was 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. (pp. 5 and 15);

April
    10, 2013 (Press Releases and Dow Jones Newswire)

[See above in the Environmental
    misrepresentations section.]

June
    28, 2013 (Press Release)

[See above in the Capex misrepresentations section.]





[1]

See the definition of misrepresentation in s. 1(1) of the
    OSA.



[2]

See
Mask v. Silvercorp Metals Inc.
,

2015 ONSC
    5348;
Swiss Canto v. Blackberry
, 2015 ONSC 6434;
DALI
    Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc.
, 2016 ONSC 5784;
Cappelli v. Nobilis Health Corp.
,
2019 ONSC 2266
; and
Kauf v. Colt Resources Inc.
,
2019 ONSC 2179
.



[3]
A
public correction has sometimes been referred to as a
    corrective disclosure. Corrective disclosure is a term imported from the United
    States, not found in the OSA. As the motion judge remarked in
Swisscanto
,
    at para. 59, [t]here is no harm in [referring to a public correction as a corrective
    disclosure], provided that both court and counsel understand that corrective
    disclosure as used in American case law carries additional (causation) baggage
    and for this reason this American usage should be handled with care.



[4]
At the time,
the CSA was composed of members of the
    securities commissions of Alberta, British Columbia, Ontario, and Quebec, all
    Canadian provinces and territories.



[5]

See Committee on Corporate Disclosure,
Towards Improved
    Disclosure: A Search for Balance in Corporate Disclosure
, interim report
    (Toronto: Toronto Stock Exchange, 1995).



[6]

The CSA Committee was comprised of staff from the securities
    commissions of Alberta, British Columbia, Ontario, Quebec, and Saskatchewan.



[7]

As enacted,
the price following the public correction
    is integral to the statutory damages formula for secondary market
    misrepresentation in all situations except where there is no published market
    for the shares: OSA, s. 138.5. This is in contrast to damages in cases for
    prospectus misrepresentation or damages for insider trading, where there is
    either no formula or alternative modes of calculation outside a statutory
    formula are contemplated: see OSA, ss. 130 and 134(6).



[8]

See Adil Abdulla, Correcting Corrections: Resolving
    Confusion over the Public Corrections Requirement in the Ontario
Securities
    Act
 (2019) 62:3 Can. Bus. L.J. 310, at p. 315, n. 16.



[9]

In his reasons, the motion judge suggested that a partial
    correction of a misrepresentation cannot constitute a public correction for
    the purposes of the statutory scheme. That issue was not argued on appeal and I
    should not be taken as endorsing his view. It remains an issue for another day.



[10]

This appendix reproduces the appendix to the motion judges
    reasons. The motion judges appendix was based on the plaintiffs Revised
    Schedule C as amended August 15, 2019.


