Case information

Securities — Civil procedure — Commencement of proceedings — Statutory cause of action for failure to make timely disclosure — Leave to proceed — Mining company disclosing occurrence of pit wall instability and subsequent rockslide in periodic disclosure rather than at time of occurrence — Shareholder seeking to institute class action for company’s failure to make timely disclosure — Commencement of action requiring leave of the court based on whether there is reasonable possibility that the action will be resolved in favour of the plaintiff at trial — Motion judge dismissing motion for leave — Court of Appeal allowing appeal and granting motion for leave — What is a “material change” for the purpose of Canadian securities law? — Should the leave requirement modify or lessen the burden to show a “material change”? — Securities Act, R.S.O. 1990, c. S.5, ss. 138.3(4) and 138.8.

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The respondent, Dov Markowich, is a shareholder of the appellant, Lundin Mining Corporation (“Lundin”). He sought leave under s. 138.8 of Ontario’s Securities Act, to bring a statutory cause of action against Lundin and its officers and directors for Lundin’s alleged failure to make timely disclosure of pit wall instability and a subsequent rockslide at a mine in Chile (“events”). He also sought to certify the action as a class action under s. 5 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, advancing claims on behalf of certain shareholders of Lundin.

Lundin did not publicly disclose the events at the time they occurred on October 25 and October 31, 2017, respectively. It advised investors about them approximately a month later, on November 29, in its regularly scheduled update. The next day, the price of Lundin’s securities fell 16 per cent on the TSX.

The issue at the heart of the appeal involves the competing interpretations of whether there is a reasonable possibility that Mr. Markowich’s action will be resolved in his favour at trial based on his claim that Lundin’s lack of disclosure was contrary to its obligations to disclose forthwith a “material change” in its “business, operations or capital”.