On July 22, 2022, the Ontario Court of Appeal upheld the dismissal of a class action under the secondary market liability provisions of the Ontario Securities Act in Wong v. Pretium Resources Inc.1 In her decision, Justice van Rensburg confirmed that reliability of information may play a part in an issuer’s analysis of misrepresentation of a material fact.

History of the case

Dentons previously reported on the facts of the case and the Ontario Superior Court decision here and here.

Decision

In this particular case, objective reliability was properly considered in the assessment of materiality because the omission in question was the expression of an adverse opinion from a consultant regarding the validity of a key mining sample rather than an undisputed fact.2 Further, in all cases the disclosure standards require “an objective determination – considering what was occurring and known by the issuer within the context of the total mix of information – of what would have been important to a reasonable investor, and whether the failure to disclose the information would render misleading something already stated in the issuer’s disclosure.”3 The objective reliability of the opinion had to be evaluated to determine whether the substance of the opinion was material. The Court also confirmed that a public correction, in this case, a decline in market price, is a factor in the determination but is not itself determinative.

The decision provides a roadmap of the current case law and standards for issuers determining materiality, making it clear that the statutory and common law standard remains a fact-specific inquiry determined on a case-by-case basis.