Case information

Securities – Actions for damages – Secondary market liability – Prior authorization – Document discovery – Nature of the order – Whether the order granting document disclosure is appealable – If so, whether the appeal falls under art. 31 or 32 of the Code of Civil Procedure, CQLR c. C-25.01 – Whether a plaintiff bringing an application for leave to institute an action for secondary market misrepresentation pursuant to s. 225.4 of the Securities Act, CQLR c. V-1, can obtain documentary discovery from a public issuer defendant.

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The applicants are the proposed class representatives of the respondent Amaya Inc.’s aggrieved security holders. They allege that some of Amaya’s officers and directors engaged in insider trading and share-price manipulation in a manner that caused them to lose money on their investments. In the course of proceedings for authorization to bring a class action and for authorization pursuant to s. 225.4 of the Securities Act to bring an action in damages for secondary market misrepresentation, the Superior Court ordered the disclosure of certain confidential documents which the security holders alleged they required in order to establish that their action had a reasonable chance of success. Amaya appealed that decision, arguing that notwithstanding the differences in statutory language between Quebec’s securities legislation and that of the other provinces, the regime rests on the Canada-wide securities policy according to which discovery-like measures at the authorization stage are prohibited. The Court of Appeal agreed. It granted leave to appeal and allowed the appeal in part.