Mask V. Silvercorp Metals Inc., 2015 ONSC 5348 And 2015 ONSC 7780
This was a leave and certification motion in a proposed securities class action for secondary market misrepresentation. The Ontario Superior Court denied leave for the statutory misrepresentation claims proposed under s. 138.8 of the Ontario Securities Act on the basis that the plaintiff's case had no reasonable possibility of success. The Court also refused to certify the two common law claims for negligent misrepresentation and negligence.
The plaintiff claimed he suffered financial losses because he purchased Silvercorp shares at an artificially inflated price due to representations made by the company that were subsequently revealed to be allegedly untrue by an anonymous Internet posting that resulted in a significant drop in share price. In denying leave for the misrepresentation claim, the Court observed that anonymous Internet postings could qualify as corrective disclosure for purposes of the Securities Act, an interpretation that the Court found to be consistent with securities class actions law in the United States.
In a subsequent application for costs, the Court held that costs awarded on an unsuccessful leave application under s. 138.8 of the Securities Act "will almost always be higher" than costs awarded on a certification motion. The Court fixed costs at $500,000.00.
Both of the above decisions are under appeal.
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