



COURT OF APPEAL FOR ONTARIO

CITATION: Baldwin v. Imperial Metals
    Corporation, 2021 ONCA 838

DATE: 20211125

DOCKET: C68768

Strathy C.J.O., Pepall and Pardu
    JJ.A.

BETWEEN

Claire Baldwin

Plaintiff (Appellant)

and

Imperial
    Metals Corporation
,
J.
    Brian Kynoch
,
Andrew Deepwell
,

Larry G.
    Moeller
,
Laurie Pare
,
    N. Murray Edwards,

Edco Financial Holdings Ltd. and Edco Capital Corporation

Defendants (
Respondents
)

Michael G.
    Robb, Kevin Richard, Garett Hunter and Bethanie Pascutto, for the appellant

Lawrence E. Thacker, Aoife Quinn and
    Kathleen Glowach, for the respondents

Heard: September 14, 2021 by video conference

On appeal from the order of Justice Edward
    P. Belobaba of the Superior Court of Justice, dated September 23, 2020, with
    reasons reported at 2020 ONSC 5616, 152 O.R. (3d) 774.

Strathy C.J.O.:


A.

introduction

[1]

This appeal considers the role of public
    correction in a shareholders proposed class action for misrepresentation in
    the secondary securities market, pursuant to s. 138.3 of the
Securities Act
,
    R.S.O. 1990, c. S.5.

[2]

That same issue was considered by this court in
    a decision released in February of this year
: Drywall Acoustic Lathing and Insulation,
    Local 675 Pension Fund v. Barrick Gold Corporation
, 2021 ONCA 104 (
Barrick
    OCA
), leave to appeal refused, [2021] S.C.C.A. No. 202, and revg 2019
    ONSC 4160, 148 O.R. (3d) 755 (
Barrick SCJ
).

[3]

The motion judge in this case, who followed his
    own decision in
Barrick SCJ
, did not have the benefit of
Barrick
    OCA
when he dismissed the appellants motion for leave to pursue the
    statutory remedy under s. 138.8 of the
Securities Act
. After the
    release of that decision, and before argument of this appeal, this court requested
    additional written submissions from the parties on the impact of
Barrick
    OCA
on this appeal.

[4]

For the reasons that follow, I would allow the
    appeal and remit the leave motion to the Superior Court for determination.

B.

Background

(1)

The Facts

[5]

The facts necessary for the disposition of this
    appeal can be briefly stated.

[6]

The respondent Imperial Metals Corporation
    (Imperial) is a reporting issuer in Ontario. Its shares trade on the Toronto
    Stock Exchange.

[7]

The appellant is an individual shareholder. She
    pleads that she acquired shares of Imperial during the class period (defined as
    August 15, 2011 to August 4, 2014, inclusive) and held some or all of those
    shares at the end of the class period.

[8]

On August 4, 2014, Imperial issued a press
    release, reporting that the tailings storage facility (the TSF) at its Mount
    Polley gold and copper mine in British Columbia had been breached, releasing an
    undetermined amount of water and tailings. The press release stated that the
    cause of the breach was unknown.

[9]

Following this disclosure, Imperials share
    price declined by 40% and the company lost about $500 million in market
    capitalization.

[10]

As a result of the failure of the TSF, millions of cubic metres of liquid
    mining waste were released into the surrounding environment. Government
    authorities and independent commissions investigated and produced reports on the
    circumstances of the TSF breach.

[11]

This action pursuant to s. 138.3 of the
Securities Act
was
    commenced by notice of action filed three days after the failure of the TSF.
    The statement of claim was issued one month later, on September 8, 2014. The
    appellant alleged that the breach of the TSF was caused by deficiencies in its design,
    construction, and operation.

(2)

The Statutory Cause of Action

[12]

Section 138.3, contained in Part XXIII.1 of the
Securities Act
,
    creates a cause of action for misrepresentation in the secondary securities
    market. It complements ss. 130 and 131, contained in Part XXIII, which create statutory
    causes of action for misrepresentation in the primary market, in a prospectus,
    offering memorandum, or take-over bid circular.

[13]

Section 138.3(1) provides:

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
    responsible issuer, directors, certain officers, influential persons and
    experts.] [Emphasis added.]

[14]

Section 138.8(1) contains a screening mechanism: no action may be
    commenced under s. 138.3 without leave of the court and the court shall only
    grant leave where it is satisfied that (a) the action is being brought in good
    faith; and (b) there is a reasonable possibility that the action will be
    resolved at trial in favour of the plaintiff. In
Theratechnologies inc. v.
    121851 Canada inc.
, 2015 SCC 18, [2015] 2 S.C.R. 106, Abella J. stated
    that the leave requirement was intended to be more than a speed bump and
    requires a reasoned consideration of the evidence to ensure the action has a
    reasonable possibility of success.

[15]

For the purpose of this appeal, it is unnecessary to describe the
    genesis or content of the statutory scheme in any detail. This ground has been thoroughly
    covered by the decision of the Supreme Court in
Canadian Imperial Bank of
    Commerce v. Green
, 2015 SCC 60, [2015] 3 S.C.R. 801, at paras. 63-69 and
    the decision of this court in
Rahimi v. SouthGobi Resources Ltd.
, 2017
    ONCA 719, 137 O.R. (3d) 241,
per
Hourigan J.A., at paras 35-49, leave
    to appeal refused, [2017] S.C.C.A. No. 443.

[16]

Based on the recommendations of the Allen Committee in 1997,
[1]
Part XXIII.1 was aimed at
    deterring corporate non-disclosure, protecting investors, and incentivizing
    accurate and timely disclosure by public issuers, while avoiding the American
    experience of predatory strike suits. It was designed to be implemented
    through class actions, so as to realize the goals of access to justice for
    shareholders and behaviour modification in relation to public issuers of securities.

[17]

Unlike the common law action for misrepresentation, which requires
    the plaintiff to prove that they relied on the misrepresentation, the statutory
    remedy does not require the plaintiff to prove reliance. A causal link between
    the misrepresentation and the plaintiffs damages is presumed, and the
    defendant bears the onus of proving that some or all of the damages are
    attributable to a change in the market price of securities that is unrelated
    to the misrepresentation or the failure to make timely disclosure:
Securities
    Act
, s. 138.5(3). The statute contains caps on corporate and individual
    liability (s. 138.7(1)) and a defence of reasonable investigation (s.
    138.4(6)).

[18]

There has been some debate in the case law concerning the role of
    public correction in the statutory scheme. Section 138.3(1) provides the remedy
    to anyone who acquires or disposes of the issuers security during the period
    between the time when the document [containing the misrepresentation] was
    released and the time when the misrepresentation contained in the document was
    publicly corrected. The case law diverges on the question of whether public
    correction is an element of the statutory cause of action or simply a time-post
    to identify and delimit the members of the class.

[19]

In
Barrick OCA
, Hoy J.A. did not find it necessary to
    resolve this question, finding that in any event public correction is a
    necessary part of the statutory scheme: at para. 41. Later in her reasons,
    she observed that the Allen 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:
Barrick
    OCA
, at para. 66. She noted that the Committee appears to have assumed
    that the misrepresentation would be corrected or that the necessary disclosure
    would be made. She concluded that [i]f 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:
Barrick OCA
, at para. 67.

(3)

Allegations in the Statement of Claim

[20]

In her second fresh as amended statement of claim, the appellant
    seeks, among other things, leave to commence a statutory action pursuant to s.
    138.3 of the
Securities Act
, and an order certifying the action as a
    class action under the
Class Proceedings Act, 1992
, S.O. 1992, c. 6
    and appointing her as the representative plaintiff.

[21]

The appellant asserts that Imperial was negligent in the design,
    construction, and operation of the TSF. She claims that Imperials disclosure
    documents contained untrue representations, omitted material facts that were
    required to be stated, and omitted material facts that were necessary to make
    other statements not misleading in light of the circumstances in which they
    were made. She alleges that the truth was revealed by the breach of the TSF
    and the press release on August 4, 2014, which she pleads were corrective of
    the misrepresentations.

[22]

On behalf of herself and all other class members, the appellant
    asserted the statutory remedy in s. 138.3(1), the remedy for primary market
    misrepresentation in s. 132.1(1) of the British Columbia
Securities Act
,
    R.S.B.C. 1996, c. 418 in relation to an offering memorandum, negligence
simpliciter
,
    and common law negligent misrepresentation.

(4)

The Motion Judges Reasons

[23]

Relying on his reasons in
Barrick SCJ
, the motion judge
    dismissed the appellants motion for leave under s. 138.8(1) of the
Securities
    Act
. He found that to obtain leave under the
Act
, the plaintiff
    must allege not only a misrepresentation but also
some
    discrete and identifiable public correction
. That correction, he said,
    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. At
    the outset of his reasons, he stated, at para. 1:

In a motion for leave under s. 138.8 of the
Securities
    Act
, it is not enough to allege a secondary market misrepresentation.
    There must also be some evidence of a public correction. Absent a public
    correction, the statutory action for damages is not available and the motion
    for leave must be dismissed. [Footnote omitted.]

[24]

Later, the motion judge observed that s. 138.3(1) makes it clear
    that the statutory right of action does not arise unless the plaintiff can
    point to
both
an alleged misrepresentation
and
a public correction of the misrepresentation.
    Relying on his decision in
Barrick SCJ
, he stated, at para. 10:

Absent 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. [Footnotes omitted.]

[25]

He continued, at paras. 11-13:

In the
Barrick Gold
leave motion, I
    summarized how this court has defined "public correction." It is
    sufficient for the purposes of this motion to focus on what in my view is the
    key requirement: 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.

In other words, there must be some indication
    in the alleged public correction (when compared to an earlier material
    disclosure) that the earlier material disclosure contained a misstatement or
    was misleadingly incomplete.

If the alleged public correction, on a fair
    reading (and in comparison to an earlier disclosure) does not provide some
    indication that the earlier disclosure was not truthful or was misleadingly
    incomplete, then there is no public correction and no basis for the proposed s.
    138.3 action. [Footnotes omitted.]

[26]

The motion judge did not find it necessary to determine whether
    Imperials public statements about the safe design, construction, or operation of
    the mine contained misrepresentations, because Imperial argued  and the motion
    judge agreed  that none of the statements had been publicly corrected.

[27]

The motion judge found that the press release issued on August 4,
    2014 could not be a public correction because it said nothing more than (1) the
    TSF had been breached; (2) the cause of the breach was unknown; and (3) the
    company was working with the authorities to assess the damage. There was
    nothing in the press release to indicate that the breach of the TSF was caused
    by deficient design, defective construction, or problems in operation. There
    was nothing to correct any misrepresentation or to indicate to an informed
    reader or analyst that what the company had previously said about the subjects
    was untrue or misleading. Nor was there anything in the press release that, on
    a fair reading, could be linked to any of the alleged misrepresentations. Put
    simply, the motion judge said, the news that the TSF has failed for reasons
    that are unknown does not amount to a correction of anything that was stated
    previously: at para. 28.

[28]

The motion judge said that the press release could only have served
    as a correction if the earlier misrepresentation had stated, The TSF is built
    to be failproof, and will never, ever fail. Had that been the misrepresentation,
    the press release advising that the TSF had indeed failed would arguably have
    been a public correction of the earlier misstatement.

[29]

The motion judge concluded that the required public correction had
    not been established and there was no reasonable possibility that the appellant
    could show otherwise at trial.

(5)

The
Barrick
Decisions

[30]

To frame the analysis of the issues in this appeal, it is necessary
    to review the motion judges reasons in
Barrick SCJ
and this courts
    reasons for directing a new hearing in that case.

[31]

In
Barrick SCJ
, as in this case, the motion judge dealt
    with a motion for leave under s. 138.8 of the
Securities Act
. The
    plaintiffs sought to bring a class action against Barrick Gold on the basis of alleged
    misrepresentations and omissions in its public disclosures concerning a mining
    project in Chile and Argentina. The motion judge denied leave for most of the
    alleged misrepresentations on the basis that they had not been publicly
    corrected.

[32]

The motion judge observed that public correction plays an important
    role in the statutory scheme under Part XXIII.1. It not only serves to identify
    the nature and extent of the misrepresentation allegation, but also gives
    notice to the defendant of the case it has to meet, and acts as a time-post for
    the proposed class period and the calculation of damages:
Barrick SCJ
,
    at para. 15.

[33]

In the motion judges view, expressed at paras. 16 and 19 of
Barrick
    SCJ
, public correction is also a constituent element of the statutory
    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.



If the alleged public 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. [Footnotes omitted.]

[34]

As he did in this case, the motion judge said that the leave
    application could be determined by assuming misrepresentations had been made
    and focusing on whether the public correction requirement had been satisfied.
    He dismissed most of the claims on the basis that there was nothing in the
    alleged corrections that provided a link to the alleged misrepresentations or
    omissions or that was capable of revealing their existence.

[35]

This court, speaking through Hoy J.A., allowed an appeal from the
    motion judges order:
Barrick OCA
. It directed that the issue of leave
    with respect to certain alleged misrepresentations should be remitted to a
    judge of the Superior Court.

[36]

As mentioned, Hoy J.A. did not find it necessary to determine
    whether public correction is an element of the statutory cause of action, but
    she observed that it is a necessary part of the statutory scheme:
Barrick
    OCA
, at para. 41. She said that the approach taken by the motion judge 
    assuming the alleged misrepresentations are made out and denying leave on the
    basis that there is no reasonable possibility that a trial court would find that
    there was a public correction  is an approach that should be used rarely and
    with great caution:
Barrick OCA
, at para. 46. She added, at para.
    48, that:

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.

[37]

Hoy J.A. also found that the motion judge erred in engaging in a
    purely textual reading of the proposed public correction:
Barrick OCA
,
    at paras. 53-54. A proper analysis would also require an examination of the
    context in which the alleged public correction was made and how the alleged public
    correction would have been understood in the secondary market if it does not,
    on its face, reveal the existence of the alleged misrepresentation:
Barrick
    OCA
, at para. 48.

[38]

Moreover, Hoy J.A. found that assuming the falsity of the
    misrepresentation may not be appropriate where the misrepresentation is not
    facially obvious. That may require the judge to consider evidence relevant to
    whether there is a reasonable possibility that a trial court will find a
    misrepresentation:
Barrick OCA
, at para. 48.

[39]

Hoy J.A. explained that the same reasoned consideration of the
    evidence is necessary when the alleged misrepresentations are
    misrepresentations by omission. She disagreed with the motion judges statement
    that the alleged public correction, on a fair reading, must arguably reveal to
    the market the alleged omission of the material fact. She stated, at para. 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.
    [Footnote omitted.]

C.

issues and Submissions on Appeal

[40]

The primary issue before us is the role of public correction in the
    statutory remedy and whether the motion judge took an impermissibly narrow
    approach to determining whether the alleged misrepresentations were publicly
    corrected:
Barrick OCA
, at para. 5.

[41]

The appellant submits that the motion judge erred by adopting the
    same approach this court disapproved of in
Barrick OCA
. The motion
    judge misapprehended the role of public correction in the statutory cause of
    action under s. 138.3, which caused him to undertake a purely textual analysis
    of the correction, without regard to the evidentiary context of the
    misrepresentation and of the public correction. He construed public correction
    as an element of the right of action that must be pleaded and proven, rather
    than as a time-post to identify those shareholders who are class members entitled
    to the benefit of the statutory cause of action.

[42]

The appellant contends the motion judge erred in requiring that the public
    correction be effectively the mirror-image of the misrepresentation, an
    approach she says would incentivize public issuers to make vague, incomplete,
    and piecemeal disclosure.

[43]

The appellant submits that there is at least a reasonable
    possibility that she will satisfy the statutory test: the public correction made
    by the press release was the direct manifestation of the specific and
    identifiable risk that the appellant alleges ought to have been disclosed 
    namely, the risk that the TSF might fail. The statutory right of action should
    be read in a manner that will incentivize both the avoidance of
    misrepresentations, and their prompt and thorough public correction where
    identified.

[44]

The respondent submits that this is, in fact, one of those cases
    contemplated by this court in
Barrick OCA
, where a judge
can
resolve the motion and deny leave because there is
    no reasonable possibility that a trial court would find that there has been a
    public correction of the pleaded misrepresentation.

[45]

The respondent submits that whether public correction is a feature
    of the statutory cause of action or an element of the statutory cause of action
    is a distinction without a difference. The threshold test in s. 138.3 requires
    that a correction be pleaded and proven by the plaintiff. The respondent
    submits that the issue of whether public correction is an element of the
    statutory cause of action was not disputed before the motion judge and should
    not be addressed in this court. The respondent submits that the motion judges
    determination that the press release could not constitute a public correction
    was a determination of mixed fact and law and is entitled to deference.

D.

Analysis

[46]

I do not propose to address the issue of whether public correction
    is an element of the statutory cause of action. It was not fully argued in the
    court below and it is unnecessary to resolve it in order to dispose of this
    appeal. As Hoy J.A. observed in
Barrick OCA
, however, public
    correction is a necessary part of the statutory scheme: at para. 41.

[47]

The overarching question for the purpose of the leave motion 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:
Barrick OCA
, at para. 76. See also:
Swisscanto
    v. Blackberry
, 2015 ONSC 6434
, at para. 65;
The
    Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund
    v. SNC-Lavalin Group Inc.
, 2016 ONSC 5784, at para. 147;
Cappelli v.
    Nobilis Health Corp.
, 2019 ONSC 2266, at para. 143;
Kauf v. Colt
    Resources, Inc.
, 2019 ONSC 2179, 145 O.R. (3d) 100, at para. 124.

[48]

In my respectful view, the motion judge set the bar too high by
    requiring that the public correction be express and directly linked to a
    specific misrepresentation, which, he said, would have to have been something
    like: The TSF is built to be failproof, and will never, ever fail. To paraphrase
    the observation of Hoy J.A. in
Barrick OCA
, there need not be facial
    symmetry between the public correction and the alleged misrepresentation or
    omission: at para. 76.

[49]

I adopt the observations of Hoy J.A. in
Barrick OCA
with
    respect to the role of public correction in the statutory cause of action.
    Unlike the common law action for misrepresentation, which is theoretically
    available in this case and in other claims for misrepresentation in the
    securities context, the plaintiff and class members asserting statutory claims
    for secondary market misrepresentation are not required to plead or establish
    causation  that is, that they relied on the misrepresentation in acquiring the
    securities. The statute effectively deems reliance.

[50]

Absent the need to prove causation, misrepresentation does the heavy
    lifting in the statutory cause of action. It is the wrong at issue and it forms
    part of the context in which the public correction operates and would be
    understood by the market. In most cases, the trial judge (or the judge on the
    s. 138.8 leave motion) will be required to consider the misrepresentation(s) or
    omission(s), the alleged public correction, and the context of both to
    determine whether the misrepresentation was corrected. It will remain open to
    the defendant to establish that the drop in the share price was caused by
    general market conditions, or by a specific development in the issuers
    business or the industry that was not a consequence of the inadequate
    disclosure: see Committee on Corporate Disclosure,
Toward Improved
    Disclosure: A Search for Balance in Corporate Disclosure
, interim report (Toronto:
    Toronto Stock Exchange, 1995), at para. 6.43.

[51]

While public correction is a necessary part of the statutory scheme,
    its role, at least at the leave stage, is a modest one. Hoy J.A. clearly considered
    this to be the case when she observed in
Barrick OCA
, at para. 71,
    that:

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. [Footnote omitted.]

[52]

The role of public correction was not set out by the Allen Committee
    and, as Hoy J.A. observed, the committee appears to have assumed that the
    misrepresentation would be corrected or the necessary disclosure would be made:
Barrick OCA
, at para. 67.

[53]

In many cases, perhaps most, the public correction will clearly
    reveal the existence of the alleged misrepresentation and the Allen Committee
    may have assumed that would be the case. Indeed, most of the secondary market
    misrepresentation cases that have come before the courts in Canada have
    involved express public corrections. But that does not necessitate an express
    correction or preclude the plaintiff from asking the court to infer a
    correction based on something other than an express statement by the company,
    coupled with the markets response.

[54]

As the motion judge himself noted in
Swisscanto
, the public
    correction need not be a mirror-image of the alleged misrepresentation or a
    direct admission that a previous statement is untrue: at para. 62, citing
Ironworkers
    Ontario Pension Fund (Trustee of) v. Manulife Financial Corp.
, 2013 ONSC
    4083, at paras. 64-71. There need only be 
some linkage or connection
between the pleaded public correction and the alleged misrepresentation:
Swisscanto
,

at para. 65;
SNC-Lavalin
, at para. 147;
Cappelli
,
    at para. 143;
Kauf
, at para. 124. That linkage or connection will
    assist the judge in determining how the alleged corrective disclosure would be
    understood in the secondary market.

[55]

Moreover, as the motion judge also observed in
Swisscanto
, the
    public correction need not be issued by the company itself and can emanate from
    third parties: at para. 62; see also
Mask v. Silvercorp Metals Inc.
,
    2015 ONSC 5348, at para. 29.

[56]

The modest role of public correction in the statutory cause of
    action is consistent with s. 138.5(3) of the
Securities Act
, mentioned
    earlier, which places the onus on defendants to prove that some or all of the
    plaintiffs damages are attributable to a change in the market price of
    securities that is unrelated to the misrepresentation. This would leave it open
    to the defendants to prove that the alleged public correction is not a
    correction at all, because the change in market price was due to other factors.

[57]

Focusing on the markets understanding of the alleged correction is
    also consistent with one of the core purposes of the statutory framework  to
    incentivize fair and accurate disclosure by public issuers. Permitting an
    issuer to escape liability by making vague or general disclosures (something
    has happened and we are looking into it) is inconsistent with that core
    purpose. It would undermine confidence in the securities market and deprive
    shareholders of compensation.

[58]

I conclude that, in light of
Barrick OCA
, the motion judge
    erred by imposing an unduly onerous standard for establishing public
    correction. This was an error of law and is reviewable on a correctness
    standard: see
Mask v. Silvercorp Metals Inc.
, 2016 ONCA 641, 132 O.R.
    (3d) 161, at paras. 36-37.

[59]

Furthermore, this was not one of those rare cases alluded to by Hoy
    J.A. in
Barrick OCA
, in which the motion judge could fairly and safely
    dispose of the requirement to determine whether the issuer released a document
    that contains a misrepresentation and conclude that there is no reasonable
    possibility that the action will be resolved at trial in favour of the
    plaintiff.

[60]

As the motion judge observed, the record was voluminous, and the
    allegations of misrepresentations and omissions were hotly contested. The
    motion judge decided, however, that he did not have to deal with the
    misrepresentation issues because he found, based on a purely facial reading of
    the press release, that there was no public correction.

[61]

Without an examination of the evidence concerning the alleged misrepresentations
    or omissions  what they were, when they occurred, and the context in which
    they were made  it would be impossible for the motion judge to determine
    whether the alleged public correction was reasonably capable of being
    understood in the market as correcting what was misleading in the impugned
    statement. Depending on what had been said, or not said, in Imperials public
    disclosures over the years concerning its waste management practices and
    environmental compliance measures, and the context in which the representations
    and the alleged public correction were made, a motion judge could find that the
    press release could be understood by the market as corrective and that there
    was a reasonable possibility that the action would be resolved in favour of the
    plaintiff at trial.

E.

Disposition

[62]

For these reasons, I would allow the appeal and remit the motion for
    leave to a judge selected by the Regional Senior Judge for the Toronto Region.

[63]

The parties may make written submissions on costs. The appellant
    shall serve and file their submissions within 15 days of the release of these
    reasons and the respondent shall have 15 days to respond. The submissions shall
    not exceed 5 double-spaced pages in length, exclusive of costs outlines.

Released: November 25, 2021  G.R.S.

George R. Strathy
    C.J.O.

I agree. S.E. Pepall
    J.A.

I agree. G. Pardu
    J.A.





[1]

Committee on Corporate Disclosure,
Responsible Corporate
    Disclosure: A Search for Balance
, final report (Toronto: Toronto
    Stock Exchange, 1997).


