In Bradley v. Eastern Platinum Ltd., the Ontario Superior Court of Justice denied the plaintiff leave to commence a class action under the Securities Act, affirming the requirement established in s. 138.8 of the Act, pursuant to which the plaintiff must establish a "reasonable possibility that the action will be resolved in the plaintiff's favour." The court examined the case law in securities legislation in Quebec and Ontario, citing Dugal v. Manulife Financial Corp., in which Justice Belobaba wrote that the test requires "not just a triable issue but a seriously arguable claim."
The applicant in the action had purchased shares of the respondent corporation, which are listed on several stock exchanges, including the TSX. He commenced the application initially alleging that a complete or partial shutdown of the respondent's mining operation was a material change that required disclosure and, subsequently, that the reduction in production in the first quarter of 2011 was the result of a change in mine roof support methods, which also required disclosure. The Court wrote that the bar for obtaining leave is not low and although it is not a motion for summary judgment, there are parallels as both require the weighing of evidence. Ultimately, the Court found that there is no reasonable prospect of success at trial. It is worth noting that the test for leave under the Securities Act was found by the Court of Appeal to be the same as that for certification in s. 5(i)(a) of the Class Proceedings Act and Rule 21 of the Rules of Civil Procedure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
