( ii) BlackBerry was changing its revenue recognition practice on
BB Z10 devices from sell-in to sell-through — that is, it was
deferring revenue recognition on new shipments of BB Z10
products until those products were sold through to end cus-
( iii) BlackBerry was pursuing “strategic alternatives”.
[ 110] The market price of BlackBerry’s shares dropped by 15
per cent after the press release was issued (at para. 19).
[ 111] The issue before the court was whether leave should be
granted to plead that the press release was a public correction to
the alleged misrepresentation that the prior “sell-in” method was
GAAP23 compliant. The plaintiff alleged that the sell-in method
did not comply with GAAP.
[ 112] Belobaba J. applied the leave test from Theratechnologies
to all of the requirements under s. 138.3. He reviewed both the
misrepresentation and the public correction requirements under
s. 138.3 by determining “after considering all of the evidence presented by the parties, does any part of the plaintiffs’ case have
a reasonable or realistic chance of success at trial” (at para. 30)?
[ 113] Belobaba J. concluded that “for all the reasons stated . . .
there is a reasonable possibility that this action will be resolved in
favour of the plaintiff” (at para. 74).
[ 114] Consequently, with respect to both the misrepresentation
and public correction requirements, the “reasonable possibility”
test applies on a motion for leave. It is not a motion for summary
judgment or a mini-trial. While the court is required to provide
a robust deterrent screening mechanism, the court does not make
a final determination of whether the public correction (or misrepresentation) requirement will be satisfied at trial, and only considers whether there is a [at para. 28] “reasonable possibility
of success” based on a “plausible analysis of the applicable legislative provisions, and some credible evidence in support of the
ii. The role of a public correction under the Act
[ 115] In Swisscanto, Belobaba J. conducted a review of existing
case law which had considered a public correction under s. 138.3
(even though the leave issue was not before the court in those
23 Generally accepted accounting principles.