Summary

40853

Lundin Mining Corporation, et al. v. Dov Markowich

(Ontario) (Civil) (By Leave)

Keywords

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.

Summary

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The respondent, Dov Markowich, sought leave under s. 138.8, of Ontario’s Securities Act, to bring a statutory cause of action against the applicant, Lundin Mining Corporation (“Lundin”) and its officers and directors for Lundin’s alleged failure to disclose forthwith a material change in its business, operations or capital, as required under the Securities Act. He also sought certification of the cause of action as a class action. The material changes Mr. Markowich alleged Lundin had an obligation to disclose in a timely manner were pit wall instability detected in part of Lundin’s Candelaria mine in Chile, and a subsequent rockslide at the mine. The motion judge dismissed Mr. Markowich’s motions. He concluded that there was no reasonable possibility that there had been a change to Lundin’s business, operations or capital. He did, however, conclude that if the matters had constituted a change, the change was material. The Ontario Court of Appeal allowed Mr. Markowich’s appeal. It concluded the motion judge interpreted the words “change in the business, operations or capital” too narrowly. Adopting and applying a more generous interpretation to the words, the Court of Appeal granted leave to proceed with the statutory cause of action.

Lower Court Rulings

January 6, 2022
Ontario Superior Court of Justice

2022 ONSC 81
Motion for leave to bring claim for statutory cause of action under s. 138.8 of the Securities Act dismissed
May 24, 2023
Court of Appeal for Ontario

2023 ONCA 359
Appeal allowed; leave granted to bring claim for statutory cause of action under s. 138.8 of the Securities Act; certification of action remitted to the Superior Court of Justice for determination