A "Core" Decision: Lessons On The Leave Test For Alleged Misrepresentations In U.S. Disclosure Documents

In providing a statutory right of action  in respect of misrepresentations contained in secondary market disclosure, the Ontario Securities Act (OSA) distinguishes between those misrepresentations contained in "core documents" and misrepresentations contained in non-core documents. In the latter case, a person or company will only be liable where the plaintiff proves knowledge of the misrepresentation, willful blindness to the misrepresentation, or  gross misconduct.  The recent decision of the Ontario Superior Court in Abdula v. Canadian Solar Inc.  addressed the question  whether "core documents" are limited to documents that are required to be filed with the Ontario Securities Commission ("OSC") or whether they also include similar types of documents filed with the SEC. The court also further clarified how the test for leave will be applied in circumstances where only the plaintiff has filed evidence.