[ 131] Belobaba J. noted the significant loss in share value
between the October 9 and 22 press releases which referred to
Strathcona’s resignation. That loss formed the basis of the plaintiff’s claim for damages (at paras. 17-18):
In a news release on October 9, Pretium announced Strathcona’s resignation
and in a further news release on October 22, Pretium summarized the reasons
provided by Strathcona for its withdrawal and then added its own views that
these concerns were unfounded. Over these 13 days in October, Pretium share
prices plummeted by more than 50 per cent from $7.01 to $3.45.
The plaintiff, who resides in Richmond Hill, Ontario, had purchased 1000
shares on August 21, 2013. He says he sustained losses over the time period in
question and commenced this proposed class action.
[ 132] Belobaba J. considered the representations made by Pretium in its prior documents that ( i) Strathcona had been hired to
oversee and report on the bulk sample project; ( ii) Strathcona was
a “reputable firm” and “recognized expert”; and ( iii) the sample
tower was an integral part of the testing procedure (at paras. 32-33).
[ 133] Belobaba J. held that there was a reasonable possibility
that the plaintiff could succeed on a statutory misrepresentation
claim based on the omission to disclose Strathcona’s findings and
[ 134] Consequently, Belobaba J. granted leave to proceed under
s. 138.8(1). He held (at para. 40):
In my view, given that the primary goal of the OSA is investor protection,
given that the surrounding circumstances as set out above in paragraphs 32
to 35 and viewed objectively favoured disclosure, and given that Pretium
could very easily have satisfied both the statutory disclosure obligation and its
own desire to make clear that Strathcona’s findings were unfounded by doing
(in each of the seven releases) exactly what it did in the October 22 news
release, I find there exists a reasonable possibility that the plaintiff’s
submission — that Strathcona’s concerns were material and should have been
disclosed — will succeed at trial.
(Emphasis added; footnotes omitted)
[ 135] The Defendants submit that the effect of the decision in
Wong was that while leave would have been granted to plead
a misrepresentation arising from the October 9, 2013 press
release, the “time-post” for a public correction would only run
from the October 22, 2013 press release, which set out the
reasons for Strathcona’s resignation. Under the Defendants’
submission, any shareholder who sold shares after October 9,
2013 would not be able to rely on the “more than 50 per cent”
price decrease “over these [next] 13 days”, because it was only on
October 22, 2013 that the company disclosed the reasons for
[ 136] I do not agree.