Longair v. Akumin Inc.: The next chapter in the partial correction story and Ontario’s long-arm jurisdiction for secondary market purchasers

  • October 10, 2024
  • Matthew Taylor

In Longair v. Akumin Inc. et al., 2024 ONSC 3675, Justice Akbarali (the “Motion Judge”) granted a number of claims against an Ontario issuer leave to proceed under Part XXIII.1 of the Securities Act, R.S.O. 1990, c. S.5. Her analysis is noteworthy for several reasons: she explicitly accepts that there was a reasonable possibility that the Plaintiff could establish the alleged misrepresentations were corrected through a series of partial corrections. The concept of partial public corrections has been a contentious one in the Ontario jurisprudence that is the subject of conflicting jurisprudence and that the Court of Appeal in Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund v. Barrick Gold Corporation, 2021 ONCA 104 (“Barrick Gold”) explicitly declined to address (at para. 76, FN 9).

The Motion Judge’s analysis contains what is one of the most, if not the most, detailed analysis of econometric expert evidence in the secondary market leave jurisprudence. Specifically, she engages in a detailed consideration of the statistical significance of alleged share price declines and differences in the event windows used by different experts in evaluating the alleged share price declines. Ultimately, she opts not to resolve these differences out of concern that to do so would amount to engaging in an impermissible mini-trial contrary to the Supreme Court of Canada’s guidance in Theratechnologies Inc. v. 121851 Canada Inc., 2015 SCC 18 (at para. 39). The Motion Judge also gives careful consideration to conflicting analysts’ reports relating to certain of the alleged public corrections.

Finally, the Motion Judge also provides a detailed recitation of the law relating to when purchasers on foreign exchanges can be included in Part XXIII.1 proceedings. She declines to adopt a place of trading rule and finds that the Part XXIII.1 scheme allows Ontario courts to exercise long-arm jurisdiction and potentially determine the claims of foreign shareholders, who purchased securities on a foreign exchange, when the issuer has a real and substantial connection to Ontario.