Finally – The First Merits Decision In A Securities Class Action For Secondary Market Misrepresentation

After years of waiting and several near misses, the Ontario Superior Court of Justice has finally decided the merits of a class action under the secondary market liability provisions of Part XXIII.1 of the Ontario Securities Act. Justice Belobaba's decision in Wong v. Pretium Resources Inc., 2021 ONSC 54 dismissed the plaintiff's claims, finding that there had been no misrepresentation, and in any event, the defendants were entitled to a reasonable investigation defence. 

As the first of its kind, Wong provides valuable insight into the relationship between leave to proceed, certification, and judgment on the merits. The decision also provides clarity on the structure of the defences to statutory liability. The take-away is that clearing the hurdle of leave to proceed does not count for much in the final arithmetic.