Case information

Contracts — Non-performance — Representations and warranties — Securities law — Material Adverse Change — Torts — Intentional torts — Misrepresentation — Does Canadian securities law require the disclosure of a contingent risk — When do contingent risks (including environmental and social governance issues) become material for the purpose of Canadian securities laws — To what extent must environmental and social governance issues be disclosed to the marketplace — Does contemporary jurisprudence on securities disclosure provide adequate guidance for Canadian investors about contingent risks — When and how can Canadian courts use post-contract evidence in contractual interpretation — To what extent can post-contract conduct be used in contractual interpretation and what safeguards should apply to the use of such evidence?

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant negotiated the sale to the respondent of a Peruvian gold and copper project (“Pinaya”) owned by its wholly-owned subsidiary. During the negotiations the parties entered into a Non-Disclosure Agreement, a term of which provided that the respondent could not visit Pinaya without the prior consent of the applicant. The applicant ultimately sold its shares in its subsidiary to the respondent in exchange for $500,000 plus over 15,000,000 common shares in the respondent. The respondent’s share value subsequently devalued after some of its projects were considered impaired and attributed zero value. The applicant brought an action against the respondent alleging that it had failed to disclose material information or had made misrepresentations about its business and the commercial viability of its projects, and specifically one in Nunavut. The applicant also claimed that the respondent had breached the Non-Disclosure Agreement and had trespassed by visiting Pinaya and taking soil and water samples for environmental testing. The Supreme Court of British Columbia dismissed the applicant’s action and the Court of Appeal for British Columbia dismissed the appeal.