COURT OF APPEAL FOR ONTARIO

CITATION:
Bayens v. Kinross Gold Corporation, 2014 ONCA 901

DATE: 20141217

DOCKET: C57988

Hoy A.C.J.O., Cronk and Pepall JJ.A.

BETWEEN

E. Eddy
    Bayens, John Sinclair, Luc Fortin, Pierre Racicot

and
    Stanley Shortt, in their capacity as Trustees

of the
    Musicians Pension Fund of Canada

Appellants

and

Kinross
    Gold Corporation, Tye W. Burt, Paul H. Barry,

Glen J.
    Masterman and Kenneth G. Thomas

Respondents

Kirk M. Baert, Celeste Poltak and Garth Myers, for the
    appellants

Mark A. Gelowitz, Allan D. Coleman and Robert Carson,
    for the respondents

Heard: June 11, 2014

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated November 5, 2013, with reasons reported at
    2013 ONSC 6864.

Cronk J.A.:

A.      Introduction

[1]

The appellants, the trustees of the Musicians Pension Fund of Canada, are
    representative plaintiffs in a putative class proceeding against the
    respondents, Kinross Gold Corporation (Kinross), a Toronto-based international
    mining company, and four of its current or former officers.  Kinross shares
    trade on the Toronto and New York Stock Exchanges.  The appellants purchased
    Kinross shares, in their capacity as trustees of the pension fund.  In 2012,
    they commenced a class action against the respondents on their own behalf and
    on behalf of other specified persons who acquired Kinross shares during the
    period February 16, 2011 to January 16, 2012, claiming damages in the amount of
    $4 billion for alleged common law and statutory misrepresentations pertaining
    to two gold mines owned by Kinross: the Tasiast mine in Mauritania, West
    Africa and the Chirano mine in Ghana.  The statutory claims are based on the
    statutory cause of action for misrepresentation created under s. 138.3
[1]
of Part XXIII.1 of the Ontario
Securities Act
(the
Securities Act
)
[2]
.

[2]

The appellants assert that Kinross public disclosure concerning the
    mines was misleading in two key respects.  First, they allege that Kinross
    overstated the value of goodwill for the mines by failing to record a goodwill
    impairment charge relating to the Tasiast mine on a timely basis (the Goodwill
    Impairment Claim).
[3]
In particular, the appellants say that adverse drilling results at the Tasiast
    mine in 2011 constituted a triggering event under applicable accounting
    standards, requiring Kinross to record a goodwill impairment charge that year.
    Although Kinross did record a goodwill impairment charge of $2.94 billion in
    early 2012, the appellants maintain that this recording occurred much too late.

[3]

Second, the appellants submit that Kinross wrongly represented that its planned
    expansion project for the Tasiast mine remained on schedule when, in fact, the
    schedule was unrealistic (the Expansion Claim).

[4]

The appellants brought a motion for an order granting them leave under
    s. 138.8(1) of the
Securities Act
to proceed with the statutory action
    and for an order certifying their action as a class proceeding under the
Class
    Proceedings Act, 1992
(the
CPA
).
[4]

[5]

The motion judge dismissed the leave and certification motion.  He ruled
    that there was no possibility, let alone a reasonable possibility, that the Goodwill
    Impairment Claim would succeed at trial because the expert accounting evidence
    relied on by the appellants to support this claim was fatally flawed.  As a
    result, in his view, there was no factual basis for this claim.

[6]

The motion judge declined to consider the Expansion Claim because it was
    not pleaded by the appellants.  In addition, he refused to certify the
    statutory or common law misrepresentation claims under the
CPA
because
    he had denied leave to proceed with the statutory claims and, in his view, it
    necessarily follow[ed] that both the statutory claim and the common law
    negligence claim fail[ed] to satisfy the certification criteria of the [
CPA
]:
    at para. 11.  In light of these rulings, all that remained of the appellants
    claims was their uncertified action for common law damages.

[7]

The appellants appeal from the motion judges leave and certification rulings.
    They make three main submissions.  First, the motion judge erred, in several
    respects, by finding that there was no reasonable possibility that the Goodwill
    Impairment Claim could succeed at trial.  Second, the motion judge erred by
    refusing to consider the Expansion Claim on the basis that it was not pleaded.
    Finally, the motion judge also erred by denying certification of the common law
    negligent misrepresentation claims solely on the basis of his refusal to grant leave
    to proceed with the statutory claims, especially where, the appellants say, he
    concluded that the common law claims met all criteria for certification under
    the
CPA
.

[8]

For the reasons that follow, I would dismiss the appeal from the motion
    judges leave and certification rulings.

B.      Background in Brief

(1)

Acquisition of the Gold Mines

[9]

In September 2010, Kinross acquired Red Back Mining Inc. (Red Back),
    which owned the Tasiast and Chirano gold mines, for an aggregate purchase price
    of $8.72 billion.  The purchase price included a substantial premium beyond the
    established value of the mines:
e.g.
$6.58 billion of the purchase
    price was allocated to the Tasiast mine, although its net asset value (NAV)
    at acquisition was $1.92 billion.  Of the $8.72 billion purchase price, $5.54
    billion was attributed to goodwill, $4.62 billion of which related to the
    Tasiast mine.

(2)

Kinross Drilling Programs and Results at the Tasiast Mine

[10]

The
    record before the motion judge established that there are three categories of
    mineral resources:

1)

Inferred
    mineral resources
 the existence of which is estimated with a low
    degree of confidence, based on limited drilling.  Due to the restricted degree
    of confidence attaching to inferred mineral resources, estimates of these
    resources are excluded from estimates grounding mine feasibility studies;

2)

Indicated
    mineral resources
 the existence of which is estimated with a level
    of confidence sufficient to support mine planning and the evaluation of mine
    economic viability, based on reasonable assumptions of geological and grade or
    quality continuity of resources derived from infill drilling; and

3)

Measured
    mineral resources
 the existence of which is estimated with a higher
    level of confidence than those applicable to inferred and indicated mineral
    resources, based on drilling that confirms geological and grade or quality continuity
    of mineral deposits.

[11]

When
    Kinross acquired Red Back, it publicly announced that the acquisition created a
    transformational opportunity for the company, and that the Tasiast mine had
    the potential to be one of the worlds great gold deposits.  It also stated that
    it would engage in an extensive drilling program at the Tasiast mine,
    culminating in an economic feasibility study for the mine by July 2011 and the
    commencement of mine construction by mid-2012 and mine production by early
    2014.

[12]

At
    the time of these announcements, Red Back had reported approximately 9.3
    million ounces of estimated proven and probable mineral reserves and measured
    and indicated mineral resources at Tasiast, plus an additional 1.9 million
    ounces of estimated inferred mineral resources.

[13]

In
    the months following the September 2010 Red Back acquisition, Kinross sought to
    expand the mineral resource estimates at the Tasiast mine by undertaking exploration
    drilling.  On the motion judges uncontested findings, this type of drilling
    involves the search for new mineral deposits in previously unexplored or
    underexplored areas.

[14]

On
    February 16, 2011, Kinross issued a press release indicating that, as at
    December 31, 2010, its post-acquisition exploration drilling at the Tasiast
    mine had added approximately 7.1 million ounces of estimated mineral reserves
    and mineral resources to previous estimates.

[15]

Commencing
    in 2011, Kinross shifted its drilling program at the Tasiast mine to infill
    or expansion drilling.  The motion judge accepted that this type of drilling is
    conducted in areas adjacent to or below existing, known ore deposits with the
    view to increasing confidence in the characteristics of the known
    mineralization.

[16]

Based
    on the results of its 2011 infill drilling, Kinross upgraded about 6.4 million
    ounces of estimated inferred mineral resources at the Tasiast mine to the
    indicated and measured resource categories.  There was evidence before the
    motion judge that by the end of 2011, the amount of mineral resources available
    for use in the intended Tasiast mine feasibility study had almost doubled.

[17]

From
    February 2011 to January 16, 2012, Kinross continued to report that its
    drilling program at the Tasiast mine was meeting or exceeding expectations,
    that the Tasiast feasibility study was progressing positively, and that the
    planned commencement of construction at the mine was on-target for mid-2012,
    with production to follow in early 2014.

[18]

Kinross
    claims that nothing came to light in the first three fiscal quarters (Q1 to Q3)
    of 2011 to suggest that it should test for goodwill impairment in connection with
    the Tasiast mine.  Nonetheless, in each fiscal quarter, it evaluated whether
    any indicators of goodwill impairment for the mine were present.  It also
    conducted a formal goodwill impairment test as at December 31, 2011, in
    accordance with applicable International Financial Reporting Standards
    (IFRS).

(3)

2012 Announcements

[19]

Kinross
    hired an investment banking firm, Duff & Phelps LLC, to undertake valuations
    of the Tasiast and Chirano mines at the time of acquisition and to perform
    goodwill impairment analyses for Kinross 2010 and 2011 fiscal years.

[20]

In
    early January 2012, based on Duff & Phelps LLCs preliminary valuation
    work, Kinross determined that it should disclose a possible future goodwill
    impairment charge relating to the Tasiast mine.

[21]

On
    January 16, 2012, Kinross issued a press release announcing that it expected to
    record a goodwill impairment charge for the Tasiast mine and that the Tasiast
    expansion project would be delayed.  In its news release, Kinross stated in
    part concerning goodwill:

Goodwill impairment assessment

As required by [IFRS], the Company is in the process of
    carrying out its annual impairment assessment and expects to release the
    results of this assessment with its year-end financial results.
In view of
    the Companys evolving understanding of Tasiast project parameters, and

market conditions,

including industry-wide increases in capital and operating
    costs, the Company expects to record a material non-cash accounting charge,
    primarily relating to the goodwill recorded for the Tasiast mine in connection
    with the 2010 Red Back acquisition
.  As disclosed in the 2011 third
    quarter financial statements, as at September 30, 2011, the book value of total
    assets of Tasiast was $7.1 billion, of which $4.6 billion was goodwill.
The
    Company has not finalized the Tasiast feasibility study or mine plan, and
    drilling results processed to date continue to demonstrate significant
    exploration potential supporting a world class mine
.  [Emphasis added.]

[22]

The
    appellants allege in their pleading that this announcement precipitated a
    dramatic decline in the value of Kinross shares, causing more than $3.4
    billion in lost shareholder value (at para. 8).

[23]

In
    early 2012, Duff & Phelps LLC completed their valuation of the Tasiast mine.
    In its 2011 valuation report, dated February 15, 2012,
[5]
Duff & Phelps LLC explained that the reduced value for the mine was based
    on market factors, especially, the contraction of market NAV multiples.

[24]

On
    February 15, 2012, Kinross announced its 2011 Q4 and year end results as at
    December 31, 2011.  On that date, it wrote down $2.94 billion of its goodwill:
    $2.49 billion for the Tasiast mine and $447.5 million for the Chirano mine.  In
    its February 15th press release, Kinross indicated:

Reported net earnings included a non-cash goodwill impairment
    charge of $2,937.6 million, as outlined on page 12 of this news release.
The
    impairment charge was a result of changes in market conditions, including
    industry-wide increases in capital and operating costs, a decline in
    industry-wide valuations as at year-end and the Companys growing understanding
    of the Tasiast project parameters including its analysis of a draft mine plan.
    The Tasiast project represents $2,490.1 million and Chirano $447.5 million of
    the non-cash goodwill impairment charge recorded
.  [Emphasis added.]
[6]

[25]

Also
    on February 15th, Kinross disclosed that it expected to complete its
    feasibility study for the Tasiast mine in the first half of 2013, and that mine
    construction would commence in mid-2013 and mine production in 2015.  Each of these
    dates was at least one year later than the original estimated date for
    completion of the activity in question.

[26]

Kinross
    subsequently recorded two additional write downs of the value of the Tasiast
    mine, eventually leading to a 100% write down of the goodwill.  By the time of
    the leave and certification motion, the Tasiast mine was valued at about $1.42
    billion, reflecting a 78% decline in value from the $6.58 billion allocated by
    Kinross to the Tasiast mine on the 2010 Red Back acquisition.

(4)

Expert Accounting and Valuation Evidence

[27]

In
    their factum on the leave and certification motion, the appellants described
    their Goodwill Impairment Claim in these terms:

ii.       The
    Strength, Merits and Evidence of the Plaintiffs

Case

Overview
.  When Kinross acquired Red Back and a 100%
    interest in the Tasiast mine in 2010, it paid a premium of $5.5 billion over
    the value of Red Backs identifiable net assets.  The premium reflected
    Kinross expectation of significant yet-to-be confirmed gold reserves being
    found on the Tasiast property.
By March 31, 2011, the infill drilling
    program had been 95% completed, further confirming materially lower than
    expected ore reserves and adverse data
.

As the failure to achieve a predetermined expectation of asset
    performance constitutes a triggering event,
the Tasiast goodwill write
    down ought to have been taken by Kinross in its March 31, June 30 or September
    30, 2011 quarterly financial statements
.  [Emphasis added.]

[28]

In
    support of their Goodwill Impairment Claim, the appellants relied on an expert
    accounting opinion from Alan T. Mak, a chartered accountant, that Kinross
    should have reported a goodwill impairment charge for the Tasiast mine prior to
    the end of 2011.  Mr. Maks initial report, dated October 1, 2012, contains
    this summary of his opinion:

Kinross acquired the Tasiast Mine with an expectation that it
    contained significant, yet-to-be discovered gold deposits.  A purchase price
    premium of over $5.5 billion was paid, over and above Red Backs identifiable
    net assets.

IFRS requires asset impairment evaluations whenever impairment
    indicators exist. If an asset, such as goodwill, is impaired and the carrying
    value exceeds the recoverable value of the asset, a write-down would be
    required.  The purpose is to prevent overstated asset values (and profits),
    which could mislead financial statement readers.

Upon completing a scoping study in December 2011, Kinross
    conducted an infill drilling program to confirm the expected ore.  Kinrosss
    first quarter 2011 report claimed to have 95% completion of its infill drilling
    program by March 31, 2011.  The reserve data that was disclosed by Kinross in
    its first and third quarters of 2011 indicates that the confirmed gold deposits
    at Tasiast remained substantially consistent throughout the relevant period.
    The expected additional reserves were not confirmed by Kinross infill drilling
.

Evidence that an asset will not perform as expected, such as
    adverse drilling results, constitute an impairment indicator.

From an accounting perspective, a serious
    concern is that Kinross ought to have performed an impairment evaluation at
    each of the interim reporting periods in 2011, and that
an impairment
    charge for the goodwill associated with the Tasiast Mine ought to have been
    recorded earlier than the December 31, 2011 financial statement
.
    [Emphasis added.]

[29]

After
    receiving Duff & Phelps LLCs 2011 valuation report and the respondents
    expert evidence on the leave and certification motion, Mr. Mak delivered a
    further report in which he offered the opinion that Kinross had reduced the NAV
    multiple on the Tasiast mine because its drilling data in early 2011 failed to
    confirm its expectations of the existence of additional mineralization at the
    mine.  In his second report, dated May 6, 2013, Mr. Mak said:

We are not persuaded by their remarks to alter our opinions as
    stated in our October Report.  Kinross claims that its December 31, 2011
    write-down of the [Red Back] goodwill asset (announced on or about January 16,
    2012) was motivated by industry-wide Net Asset Value Multiple (NAVM)
    contraction.  Even if this explanation were to be accepted, it does not
    address our concern that a much earlier write-down due to inferior anticipated
    mineralization was necessary and appropriate.
As set out in our October
    Report, the absence of data to confirm pre-determined expectations of asset
    performance (such as the existence of additional or potential gold) constitutes
    a triggering event in accordance with acceptance Canadian accounting
    standards
.

Some of the Defendants witnesses also claim that the
    mineralization at Tasiast was consistent with managements expectations when
    Red Back was acquired.
To the contrary,

the available data in
    early 2011 supports our view that Kinross managements high expectations of
    Red Backs gold potential at the Tasiast and Chirano mines were not supported
    by contemporaneous data.  Triggering events, requiring accounting recognition
    of impairment, include the failure to confirm the existence of expected
    additional ore
.  [Emphasis added.]

[30]

In contrast, Edward Lee of Duff & Phelps LLC provided opinion evidence
    on behalf of Kinross that, contrary to the appellants allegations, the
    reduction or contraction of the NAV multiple for the Tasiast mine was not
    related to mine-specific drilling results prior to Kinross 2011 year-end or diminished
    management expectations concerning ore or exploration potential.  Duff &
    Phelps LLC maintained that the reduction was attributable to market forces,
    that is, to industry-wide, systemic contractions in market NAV multiples.
[7]

C.      Issues

[31]

As argued, the grounds of appeal advanced in respect of the motion
    judges leave ruling may be framed as follows:

1)

Did
    the motion judge err in finding that there was no possibility, let alone a
    reasonable possibility, that the Goodwill Impairment Claim would succeed at
    trial:

a)

by
    misapprehending the nature of the leave test under s. 138.8(1) of the
Securities
    Act
;

b)

by
    exceeding his proper role on the leave motion;

c)

by
    assuming that the entirety of the relevant information regarding Kinross
    2011 drilling program was before the court on the leave motion; and

d)

by
    mischaracterizing the nature of the appellants Goodwill Impairment Claim and,
    consequently, by failing to properly consider Kinross explanation for its
    goodwill write down?

2)    Did the
    motion judge err by failing to consider the Expansion Claim?

[32]

There is one principal issue regarding the motion judges certification
    ruling: did the motion judge err by denying certification of the common law
    misrepresentation claims on the basis that the denial of leave to proceed with
    the statutory claims was dispositive of the certification issue concerning the
    common law claims?

D.      Analysis

(1)

Leave Ruling

[33]

Under s. 138.8(1) of the
Securities Act
, leave of the court is
    required to proceed with a statutory misrepresentation claim under s. 138.3.
    Section 138.8(1) reads:

138.8(1) No action may be commenced under s. 138.3 without
    leave of the court granted upon motion with notice to each defendant.  The
    court shall grant leave only where it is satisfied that,

(a)   the
    action is being brought in good faith; and

(b)   there is
    a reasonable possibility that the action will be resolved at trial in favour of
    the plaintiff.

[34]

The
    narrow but critical issue in this case is whether the appellants met the second
    branch of the leave test, that is, whether they demonstrated a reasonable
    possibility that their action would be resolved at trial in their favour (the
    reasonable possibility requirement).  The respondents do not dispute that the
    appellants brought the action in good faith, satisfying the first branch of the
    test.

(a)

Goodwill Impairment Claim

(i)

Motion Judges Appreciation of the Leave Test

[35]

The appellants first ground concerning the leave ruling is that, in
    light of this courts recent decision in
Green v. Canadian Imperial Bank of
    Commerce
, 2014 ONCA 90, 118 O.R. (3d) 641, leave to appeal to S.C.C.
    granted, [2014] S.C.C.A. No. 137, the motion judge misapprehended the
    reasonable possibility requirement of the leave test.

[36]

Although the appellants attack the motion judges reasons on multiple
    fronts, they take particular aim at two parts of his reasons.  The first part,
    set out at paras. 34 and 38 of the reasons, reads as follows:

[T]he leave test is not a mere road bump threshold and is not
    so low as to be redundant to the notoriously low bar used to test whether a
    plaintiff has disclosed a cause of action (the not plain and obvious test)
    under Rule 21 of the
Rules of Civil Procedure
or under s. 5(1)(a) of
    the [
CPA
]. And, remembering that certification is not to be a test of
    the merits,
in my opinion, the merits-based leave test under the Ontario
    Securities Act sets a higher evidentiary standard than the some basis in fact
    standard used to implement the test for certification under the [CPA]
.

.

However, for my part, I do not think that the debate about the
    measure of the height for the bar for the test for leave is over.
I do not
    see how the Supreme Courts judgment in R. v. Imperial Tobacco Canada, which is
    about a test where the court is obliged to accept the material facts set out in
    the statement of claim as true, is helpful in setting the bar for an
    evidentiary merits-based leave test, where the consensus is that the test is a
    genuine screening mechanism that requires the court to assess and weigh the
    evidence and to determine whether the plaintiffs chance of success is a
    reasonable possibility
.  [Citations omitted; Emphasis added.]

[37]

The
    appellants maintain that these statements conflict with this courts holding in
Green
, at para. 88, that the test for meeting the reasonable
    possibility requirement is the
same test
that is used for determining
    whether the claim has a reasonable prospect of success for the purpose of certification
    [under the
CPA
] (emphasis added).

[38]

The
    second impugned part of the motion judges reasons is found at paras. 43 and
    44.  In these paragraphs, the motion judge set out a negative formulation of
    the reasonable possibility requirement, describing it in part, at para. 44, in this
    fashion:

There is not a reasonable possibility that an action will be
    resolved at trial in favour of the plaintiff, if:

(b)   the plaintiff fails to provide any admissible or
    believable evidence of the material facts of his or her claim;

.

(f)    the defendant disproves the truth of the facts of the
    plaintiffs claim.

[39]

The
    appellants contend that by expressing the reasonable possibility requirement in
    a negative fashion, the motion judge misdirected himself by asking the wrong
    question.  It is inappropriate at the leave stage, the appellants say, to try
    to determine why a claim should not proceed.  Rather, the proper inquiry is
    whether there is a reasonable possibility that the claim will succeed at trial.
    In addition, some of the negative propositions articulated by the motion judge,
    for example subparagraphs (b) and (f) above, are clearly inapplicable at the
    leave stage.

[40]

To
    address these complaints, I begin with
Green
.  Before this courts
    decision in
Green
, there were conflicting Superior Court rulings regarding
    the nature of the s. 138.8(1) leave test under the
Securities Act
.
    Predominate in the debate was the question of how high or low the bar
    should be set to meet the reasonable possibility requirement under s. 138.8(1)(b).

[41]

Justice
    Feldman wrote the reasons of the unanimous five-person panel in
Green
.
    She reviewed the history and purpose of ss. 138.3 and 138.8(1) of the
Securities
    Act
, as well as several leading authorities in which the meaning of the term
    reasonable possibility of success or analogous phrases was considered by the
    courts, including in the context of s. 5(1)(a) of the
CPA
.
[8]

[42]

After
    undertaking this review, Feldman J.A. made the following observations regarding
    the leave test, including the reasonable possibility requirement of the test,
    at paras. 40 and 85-88:

[T]wo further protections were later added to the proposed new
    action [under s. 138.3 of the
Securities Act
] to prevent strike suits
    in Canada; one was court-approved settlements.
The other was a screening
    mechanism that required a plaintiff to seek leave of the court to commence an
    action, where the court would consider the merits of the proposed action by
    examining the evidence and determining whether the action was being brought in
    good faith and had a reasonable possibility of success
.  That is the leave
    requirement in s. 138.8 of the
Securities Act
.

.

Fortunately, in the class action context, the reasonable
    possibility concept is very familiar because it is used for determining whether
    the pleading discloses a cause of action as required by the first part of the
    test for certification in s. 5(1)(a) of the
CPA
.  As this court
    recently said in
Arora v. Whirlpool Canada LP
, 2013 ONCA 657, at para.
    14:

Certification is to be denied on the basis that the
    requirement of s. 5(1)(a) is not met only if, assuming the facts pleaded are
    true, it is plain and obvious that the pleading discloses no reasonable cause
    of action, meaning that the plaintiff has no reasonable prospect of success.
    [Citations omitted.]

The phrase reasonable prospect of success was used by
    McLachlin C.J. in
Knight v. Imperial Tobacco Canada Ltd.
, 2011 SCC 42,
    [2011] 3 S.C.R. 45 (also called
R. v. Imperial Tobacco Canada Ltd
.)
    where, in reference to a motion to strike a claim, the Chief Justice stated the
    test to be whether the claim has any reasonable prospect of success.  She
    described its effect as weeding out the hopeless claims and ensuring that
    those that have some chance of success go to trial (para. 19).  Again, at
    para. 20, she refers to claims that have a reasonable prospect of success and
    a reasonable chance of success.

It is apparent that the terms prospect and chance are being
    used by the Chief Justice as synonyms, and I would include the term possibility
    as another one.

The purpose of the leave provision under Part XXIII.1 of the
Securities
    Act
is to discourage and eliminate bad faith strike suits that do not have
    a reasonable possibility of being successful.
The statute asks the leave
    judge to first determine good faith, then whether there is a reasonable
    possibility that the action will be resolved at trial in favour of the
    plaintiff, i.e. that the plaintiffs case will be successful -- a reasonable
    possibility of success.  In order to make that determination, the motion judge
    applies the same test that is used for determining whether the claim has a
    reasonable prospect of success for the purpose of certification
.  As the
    Chief Justice has described it, the purpose is to weed out hopeless claims and
    only allow those to go forward that have some chance of success.  [Emphasis
    added.]

[43]

However,
    Feldman J.A. also cautioned, at para. 89:

Of course, the evidentiary record for the leave and
    certification motions is quite different
.  For the leave motion, each side
    may file affidavit evidence upon which there can be cross-examination.  Butthe
    motion is brought before discovery and production of documents, with the result
    that the evidence may or may not be the same at trial.  In contrast, for the
    certification motion under s. 5(1)(a), there is no evidentiary record but the
    facts as pleaded in the statement of claim are taken to be true.  In both there
    is an evidentiary or deemed evidentiary record to which the test is applied.
    [Emphasis added.]

[44]

Justice
    Feldman thus focused on the purpose of the leave test and the actual words used
    by the legislature in s. 138.8(1)(b).  She stressed that the language employed
    in that section is effectively the same as the language of the test applicable
    to the cause of action criterion for certification under s. 5(1)(a) of the
CPA
and under the test on a pleadings motion to strike a claim.  Under all three
    tests, the operative concept is a reasonable prospect or a reasonable
    chance or a reasonable possibility of success.  The meaning to be accorded
    to all three phrases, therefore, must be the same.

[45]

It
    is in this sense that
Green
holds, at para. 88, that the test for the
    reasonable possibility requirement under s. 138.8(1)(b) is the same test that
    is used for determining whether the statutory claim has a reasonable prospect
    of success for the purpose of certification.  In other words, the standard to
    be applied to the record before the court is identical.  Crucially, however,
    Feldman J.A. also emphasized that this standard is applied in entirely
    different contexts.  As she put it, at para. 89, the evidentiary record for
    the leave and certification motions is quite different.

[46]

On
    a leave motion, the standard is brought to bear on a paper record, consisting
    of affidavit evidence and the transcripts of any cross-examinations on the
    affidavits filed.  The court is not required to make any assumptions about the
    quality of the evidence filed by the plaintiffs.  In contrast, for
    certification purposes, the standard under s. 5(1)(a) of the
CPA
is
    applied to the pleadings.  There is no evidentiary record filed and the facts
    pleaded are assumed to be true, leading to what Feldman J.A. termed in
Green
,
    at para. 89, a deemed evidentiary record.  Thus, the evidentiary bases
    differ, although the test or standard applied to the applicable evidentiary
    base is the same.

[47]

That
    this is the central holding on this issue in
Green
, properly read, is
    made clear by Feldman J.A.s comments at para. 91:

In the securities class action context, there is also a
    significant procedural advantage to having the same test apply to the leave
    motion as to the certification motion.  If the leave motion is heard before the
    certification motion and leave is denied, the claim is at an end.  But if leave
    is granted, it will be unnecessary to reconsider the issue on the certification
    motion.
Because the test is the same, and the evidentiary basis is the
    highest it can be for the plaintiff on the certification motion, once leave is
    granted on the record filed, the claim will also meet the cause of action
    criterion under s. 5(1)(a) of the CPA
.  [Emphasis added.]

[48]

This statement recognizes that, unlike on a leave motion, the plaintiffs
    on a certification motion enjoy the benefit of their case being assessed in the
    most favourable possible factual light: under s. 5(1)(a) of the
CPA
, the
    facts pleaded are assumed to be true unless they are patently ridiculous or
    incapable of proof.  If leave is granted under s. 138.8(1) of the
Securities
    Act
, where no such assumption applies, the claim in respect of which leave
    is granted will inevitably meet the cause of action criterion for
    certification.  Simply put, regardless of the outcome on the leave motion, the
    plaintiffs case is at its strongest on the certification motion.

[49]

Thus, in sum, the reasonable possibility requirement of the leave test
    is a relatively low threshold, merits-based test.  The determination whether a
    plaintiffs statutory action will have a reasonable possibility of success at
    trial requires some critical evaluation of the merits of the action, based on
    all the evidence proffered by the parties on the leave motion.  Further, the
    standard applied to the evidentiary record is the same standard applicable to a
    certification determination under s. 5(1)(a) of the
CPA
or on a motion
    to strike.  However, the standard is applied to different records, in different
    contexts, for entirely different purposes.

[50]

In my view, it does not assist to fashion a negative construct of the
    reasonable possibility requirement under s. 138.8(1)(b).  The important point
    under
Green
is that the relatively low threshold, merits-based leave
    test is to be applied to the entirety of the record before the court, mindful
    of the inherent limitations of a preliminary motion determined in advance of
    discovery and documentary production.  Any further qualification of the leave
    test, including the reasonable possibility requirement, is unnecessary:
Green
at para. 90.

[51]

Applying these principles to the appellants first ground of appeal, I
    am not persuaded that, in the end, the motion judge misapprehended the leave
    test in any material way.  Read as a whole, his reasons confirm that he
    appreciated the essential nature of the leave test under s. 138.8(1) of the
Securities
    Act
, including the reasonable possibility requirement, as outlined by this
    court in
Green
.  I say this for the following reasons.

[52]

First,
    the motion judge did not have the benefit of this courts decision in
Green
.
    However, in his lengthy reasons he relied heavily on the decision of Strathy J.
    (as he then was) in
Green v. Canadian Imperial Bank of Commerce
, 2012
    ONSC 3637, which this court affirmed in part, as well as related cases in which
    the leave test was implicated.  In so doing, he identified the following key
    features of the leave test:

1)

the
    leave test is not purely a procedural or jurisdictional test.  It is a
    low-threshold evidentiary merits-based test using affidavit evidence and
    cross-examinations that requires some weighing of the evidence (paras. 27, 49
    and 51);

2)

the
    test is a genuine screening mechanism and an evidentiary merits-based leave
    test that requires the court to assess and weigh the evidence and to determine
    whether the plaintiffs chance of success is a reasonable possibility (paras.
    27 and 38);

3)

in
    setting the bar for this low evidentiary threshold, the court must take into
    account that the leave motion involves merely a paper record and it is neither
    possible nor desirable to decide reasonably arguable issues of fact or of mixed
    fact and law (para. 41); and

4)

in
    all events, the court must assess the evidentiary record  and measure that
    evidence against a substantive but low threshold test of probity (para. 45).

[53]

These observations capture the core features of the leave test,
    including the reasonable possibility requirement under s. 138.8(1)(b), and they
    are consistent with the
Green
courts interpretation of the test.
    Indeed, they foreshadowed many of Feldman J.A.s comments in
Green
.

[54]

Second,
    both before the motion judge and initially before this court, the appellants
    argued that the leave test does not envisage or permit any weighing of the
    evidence adduced on the leave motion.  They maintained that in weighing the
    evidence, particularly Mr. Maks opinion evidence, the motion judge erred.  However,
    in oral argument, the appellants acknowledged that the leave test involves a
    merits-based review of the evidentiary record on the leave motion and that this
    review necessarily requires some weighing of the evidence, the drawing of
    appropriate inferences, and the finding of facts established by the record.

[55]

This
    was a proper concession.  It conforms with this courts holdings in
Green
,
    set out above.  The motion judge was alert to this issue when he observed, correctly,
    that the exercise of granting or refusing leave requires some weighing of the
    evidence of both parties within the constraints of a low bar evidentiary
    merits-based test (at paras. 49-51 and 55).

[56]

That
    this is so, is also confirmed by the statute itself.  Under s. 138.8(2) of the
Securities
    Act
, upon a leave application under s. 138.8(1), the plaintiff and each
    defendant may serve and file affidavit evidence setting forth the material
    facts upon which each intends to rely.  Section 138.8(3) explicitly provides
    for the right to cross-examine the deponents of the affidavits filed.  If the
    legislature had intended that the leave test not involve some weighing of the
    evidence adduced on the leave motion, there would be no need for the filing of
    responding affidavits by each defendant, nor any purpose in providing for a
    right of cross-examination on those affidavits.  In those circumstances, as the
    respondents argue, the leave requirement would be hollow indeed.

[57]

I
    would reject this ground of appeal.

(ii)

Other Grounds Concerning Leave Ruling

[58]

The
    appellants other grounds of appeal from the leave ruling concern the motion
    judges treatment of the evidence.  I will address these grounds in turn.

Did the Motion Judge Exceed His Proper Role?

[59]

The
    appellants argument that the motion judge exceeded his proper role on the
    leave motion has two components.  First, as originally cast, it is predicated on
    the proposition that the motion judge was precluded from engaging in any
    weighing of the evidence on the leave motion.  I have already rejected this proposition.
    It collides with the merits-based focus of the leave inquiry as described in
Green
and, additionally, in my view, with the statutory leave scheme itself.

[60]

The
    second component concerns the motion judges assessment of Mr. Maks opinion
    evidence.  As set out in their factum, the appellants maintain that the motion
    judge improperly undertook a trial-like weighing of technical evidence and
    drew inferences that would have only been appropriate at trial or a
    post-discovery summary judgment motion.  During oral argument, the appellants elaborated
    that the motion judges reasons for rejecting Mr. Maks evidence involved
    conclusions on technical evidence that were beyond the scope of the motion
    judges expertise.

[61]

I
    disagree.  In my opinion, the motion judge applied a proper level of scrutiny
    to Mr. Maks evidence and his conclusions regarding the Mak opinion were
    squarely within his domain on the leave motion.

[62]

The
    appellants indicated in their factum on the leave motion that the Goodwill
    Impairment Claim was based on the assertion that, by the spring of 2011,
    Kinross drilling results at the Tasiast mine had confirmed materially lower
    than expected ore reserves and adverse data, which evidenced a failure to
    achieve a predetermined expectation of asset performance in relation to the
    mine.  This, the appellants said, constituted a triggering event under
    applicable accounting standards, necessitating the recording by Kinross of a
    goodwill impairment charge in its Q1 to Q3 2011 financial statements.

[63]

Mr.
    Maks evidence was the only expert accounting evidence led by the appellants on
    the leave motion in support of their Goodwill Impairment Claim.  Mr. Mak offered
    the opinion that evidence that an asset will not perform as expected  such as
    adverse drilling results  constitutes an impairment indicator or a
    triggering event under accepted Canadian accounting standards.  In this case,
    as Kinross allegedly failed to confirm the existence of expected additional ore
    at the Tasiast mine in 2011, a goodwill impairment charge before 2012 was
    required.

[64]

The
    motion judge concluded that this opinion suffered from three fatal flaws.  He
    held, in effect, that in formulating his opinion, Mr. Mak: 1) relied on
    irrelevant data; 2) ignored relevant data that did not support his opinion; and
    3) mischaracterized or misunderstood the import of existing data regarding the
    Tasiast mine.

[65]

It
    is unnecessary to repeat the motion judges detailed analysis of each of these
    flaws, as described in his lengthy reasons.  In brief, he concluded that:

1)

Mr.
    Mak relied on the results of Kinross infill or expansion drilling at the
    Tasiast mine, rather than its exploration

drilling,
    to ground his assertion that expected additional mineralization at the mine was
    not confirmed in 2011.  However, infill drilling, as distinct from exploration
    drilling, is not designed to identify or confirm previously unknown exploration
    potential.  Rather, it is intended to garner additional data about known,
    existing mineral resources;

2)

Mr.
    Mak failed to take account of the results of Kinross 2010 exploration drilling
    at the Tasiast mine (September to December 2010). The evidence indicated that
    Kinross 2010 post-acquisition exploration drilling at the Tasiast mine yielded
    several million additional ounces of estimated mineral reserves and resources,
    beyond those previously reported by Red Back; and

3)

Mr.
    Mak claimed that [t]he expected additional reserves [at the Tasiast mine] were
    not confirmed by Kinross [2011] infill drilling and that this infill drilling
    fail[ed] to confirm the existence of expected additional ore at the mine.
    Mr. Maks misconception of the purpose of infill drilling aside, in the motion
    judges view, these statements did not accurately reflect the results of the
    infill drilling.  Contrary to the suggestion that these results were
    disappointing or adverse, the evidence established that following the infill
    drilling, the Tasiast mine mineral resource estimates were upgraded from merely
    inferred resources, to indicated and measured resources.

[66]

Based on these deficiencies in the Mak opinion, the motion judge held,
    at para. 193, [t]here is, therefore, no factual basis for [the appellants
    Goodwill Impairment Claim] and no reasonable possibility that [this] claim
    could succeed at trial.

[67]

I
    see no reversible error in the motion judges approach to or analysis of the
    Mak opinion.  It is true, as the appellants stress, that the motion judge made
    no adverse credibility finding regarding Mr. Mak.  To the contrary, he accepted
    Mr. Mak as a believable and honest witness.  However, that was not the end of
    the matter.  The motion judge also evaluated the reliability of the Mak
    opinion, as he was entitled to do, and found that it was infected by the three
    critical flaws described above.

[68]

The
    motion judge did not overstep his proper role on the leave motion by examining
    the factual underpinnings of Mr. Maks opinion.  Indeed, this type of scrutiny
    of expert evidence is both required to determine its reliability and common
    place where an asserted claim depends, as here, on expert evidence.  The motion
    judges conclusions were open to him on the evidentiary record.  They derived
    from a logical analysis of the factual contents of Mr. Maks reports, in the
    light of all the expert accounting and valuation evidence led on the leave
    motion.

[69]

In
    my view, this ground of appeal fails.

Sufficiency
    of Evidence of Kinross 2011 Drilling Program

[70]

The
    appellants submit that the motion judge erred by assuming that all relevant
    information about Kinross 2011 drilling program was before the court on the
    leave motion, notwithstanding that discoveries and documentary production had
    not yet occurred.  Again, I disagree.

[71]

The
    motion judge expressly considered whether the normal progress of the action
    through the discovery and documentary production stages of civil litigation might
    furnish additional facts or other evidence that would strengthen the prospects of
    the appellants ultimate success at trial.  He held, at para. 176, that the
    factual foundation for the theory of [the appellants] case is now known and
    does not await further disclosures.  He continued:

Whether there was a triggering event based on the known
    empirical results of the drilling programs at the Tasiast mine are now known
    facts that will not be changed by the discovery process or by a trial. [The
    appellants] case is built on what it says should have been Kinross objective
    response to the results of its drilling programs.

This conclusion focused
    on the facts asserted in the Mak opinion.

[72]

As detailed in their factum, the appellants attack this conclusion on two
    grounds: 1) Mr. Maks opinion was preliminary in nature since it was based
    solely on public information; and 2) the motion judge did not explain how, at
    the leave stage, he knew,
definitively
, that there was no negative
    non-public information about the 2011 drilling program or the Tasiast mine in
    2011 (emphasis in original).

[73]

Neither of these complaints, in my opinion, undermines the motion
    judges conclusion that the evidence on the leave motion was sufficient, even
    without the benefit of discoveries and production, to properly assess whether
    there was a reasonable possibility of the success of the appellants statutory
    action at trial.

[74]

The motion judges task on the leave motion was to determine whether
    there was a reasonable possibility that the appellants statutory action would
    be resolved at trial in their favour.  His reasons confirm his understanding that
    the reasonable possibility requirement is to be addressed in the context of a
    paper evidentiary record, compiled without the benefit of discoveries or
    documentary production.  Within these parameters and for the purpose of the
    leave motion, the motion judge was required to base his reasonableness inquiry
    on the evidentiary record as filed, without speculating about possible future,
    unknown evidence.

[75]

The
    motion judges ruling on the reasonable possibility requirement was based on
    the case advanced by the appellants in support of their Goodwill Impairment
    Claim: that the results of Kinross 2011 infill drilling program constituted a
    triggering event mandating an earlier goodwill write down.  For the reasons set
    out above, the motion judge found that the expert accounting evidence relied on
    by the appellants to establish the foundation for this claim was inherently
    flawed.  The infill drilling expressly relied on by the appellants expert (Mr.
    Mak) was not designed to identify new mineralization or to confirm the
    exploration potential of the Tasiast mine.  In these circumstances, further
    evidence about Kinross infill drilling program, if any, could not enhance the
    case for establishing the Goodwill Impairment Claim.

Nature of the Goodwill Impairment Claim

[76]

The
    appellants next argue that the motion judge erred by mischaracterizing the
    nature of the Goodwill Impairment Claim and, consequently, by holding that it
    was unnecessary for the purpose of the leave motion to assess Kinross
    explanation for its 2012 goodwill write down.  This argument may be dealt with
    summarily.

[77]

The
    motion judge stated, at paras. 169 and 181 of his reasons:

Stripped down to its essence, it is [the appellants] argument
    that Kinross ought to have written down the goodwill for the Tasiast mine
    within six months or eleven months, at the latest, after its purchase of the
    Tasiast mine because the failure to achieve its high expectations was a
    triggering event for a write down.

.

For the purposes of this leave motion, [the appellants] are
    under no obligation to demonstrate that Kinrosss non-culpable explanation for
    the write down was untrue or incorrect, and it is not necessary for me to make
    any findings about the merits of Kinrosss explanation.  What is, however,
    necessary is that I decide whether [the appellants] allegations of
    misrepresentations have a reasonable possibility of success at trial.

See also para. 171 of the reasons.

[78]

I
    fail to see any error in this reasoning.  The motion judge did not suggest that
    Kinross explanation for its goodwill write down was irrelevant.  Rather, he
    noted that the appellants did not need to disprove Kinross explanation in
    order to meet the threshold for leave under s. 138.8(1)(b).

[79]

I
    agree.  Even assuming that Kinross could ultimately establish that its
    professed reasons for taking the goodwill write down in 2012 were accurate and
    complete, this would not meet the appellants claim that a triggering event for
    a goodwill write down had occurred earlier, in 2011.

[80]

Nor,
    in my view, did the motion judge misconceive or misstate the nature of the
    appellants Goodwill Impairment Claim.  The appellants pleading and factum on
    the leave motion belie this contention.

[81]

The
    motion judge observed, at para. 183, that the appellants action is based on a
    theory of a case developed by Mr. Mak.  This statement was correct, as far as
    it went.  But the reasons also reveal that, before turning to the Mak opinion,
    the motion judge articulated his understanding of the nature of the Goodwill
    Impairment Claim based on the appellants pleading, their factum and their submissions
    on the leave motion.  It is difficult to conceive how the motion judge could
    properly have approached his task of assessing whether there was a reasonable
    possibility that the Goodwill Impairment Claim would succeed at trial any
    differently.  It was the appellants own characterization of the Goodwill
    Impairment Claim, as pleaded and argued, that framed the motion judges
    analysis of the reasonable possibility requirement.

[82]

Accordingly,
    as I see it, this ground of appeal cannot succeed.

(b)

Expansion Claim

[83]

The
    appellants final complaint about the leave ruling is that the motion judge
    erred by failing to consider the Expansion Claim because the appellants failed
    to plead this claim.  The appellants maintain that this was an overly
    technical and erroneous basis on which to deny leave to proceed with the
    Expansion Claim.

[84]

I
    disagree.  As this court has consistently emphasized, it is central to the
    litigation process that issues in a civil action be decided within the
    boundaries of the pleadings.  Fundamental fairness and the efficacy of the
    civil litigation process demand no less.  See for example,
Rodaro v. Royal
    Bank of Canada
(2002), 59 O.R. (3d) 74 (C.A.), at paras. 59-63;
Place
    Concorde East Ltd. Partnership v. Shelter Corp. of Canada Ltd.
(2006), 270
    D.L.R. (4th) 181 (Ont. C.A.), at para.
60;
Lewi v. Lewi
(2006), 80 O.R. (3d) 321 (C.A.), at paras. 89-90
.

[85]

This
    foundational principle applies with no less force to a leave motion in a class action
    involving statutory securities market claims.  Indeed, the s. 138.8(1) leave
    requirement is premised on an assessment of the good faith and reasonable
    possibility of success of the action,
as framed by the plaintiffs
.
    Where the plaintiffs elect not to plead a potential claim, they cannot be heard
    to complain when a late-breaking claim is not considered on the leave motion.

[86]

That
    is what occurred in this case.  The Expansion Claim was not pleaded.  Nor did
    the appellants amend their pleading before the leave motion or seek leave to
    amend their leave notice of motion to include it.
[9]
Instead, they advanced the claim for the first time in their factum on the
    leave motion, even though the material facts necessary to assert this claim
    were contained in Kinross public announcements and press releases dating from
    well before the motion.

[87]

In
    these circumstances, the motion judge ruled, at para. 201, that the court
    should not grant leave to proceed with a misrepresentation claim that had not
    been pleaded.  In his view, it would be procedurally improper and unfair to
    allow [the appellants] to advance this claim for the leave motion: at para.
    204.  This was the motion judges call to make.  The appellants have failed to
    establish any basis for interference with his discretionary ruling on this
    issue.

(c)

Conclusion on Leave Ruling

[88]

For
    the reasons given, I would confirm the motion judges leave ruling.

(2)

Certification Ruling

[89]

Section
    5(1) of the
CPA
provides:

The Court shall certify a class proceeding on a motion under
    section 2, 3 or 4 if,

(a)    the pleadings or the notice of application discloses a cause
    of action;

(b)   there is an identifiable class of two or more persons
    that would be represented by the representative plaintiff or defendant;

(c)   the claims or defences of the class members raise common
    issues;

(d)   a class proceeding would be the preferable procedure for
    the resolution of the common issues; and

(e)   there is a representative plaintiff or defendant who,

(i) would fairly and adequately represent the
    interests of the class,

(ii) has produced a plan for the proceeding that sets
    out a workable method of advancing the proceeding on behalf of the class and of
    notifying class members of the proceeding, and

(iii) does not have, on the common issues for the
    class, an interest in conflict with the interests of other class members.

[90]

The
    parties accept that if leave to proceed with the statutory misrepresentation claims
    was properly refused under s. 138.8(1) of the
Securities Act
, the
    statutory claims cannot be said to meet the criteria for certification under
    the
CPA
.  I agree.  See
Green
at para. 91.

[91]

Since
    I would uphold the motion judges leave ruling, the issue whether the statutory
    claims should be certified is at an end.  The remaining question is whether the
    motion judge erred by declining to certify the common law negligent
    misrepresentation claims under the
CPA
.

[92]

The
    appellants argue that the motion judge erred by refusing to certify the common
    law claims solely on the basis of his denial of leave to proceed with the
    statutory claims.  They submit that the outcome of a leave motion under the s. 138.8(1)
    merits-based leave test is irrelevant to the question whether an associated common
    law action should be certified.  The appellants maintain that, but for his
    improper reliance on the refusal of leave for the statutory claims, the motion
    judge concluded that the common law claims met all five criteria for
    certification under s. 5(1) of the
CPA
.  Accordingly, those common
    issues found by the motion judge to apply to the common law claims should have
    been certified as a class proceeding.

(a)     Motion Judges Certification Analysis

[93]

The
    motion judge began his certification analysis with a description of the principles
    that, in his view, apply for the purpose of a certification motion when a
    statutory misrepresentation claim is combined with a common law negligent
    misrepresentation claim.  His starting point is set out at para. 208 of his
    reasons:

[I]n my opinion, the normal certification criterion [
sic
]
    for a class action must be adapted or restructured to the circumstance that the
    plaintiff is advancing a class action claim using Part XXIII.1 of the Ontario
Securities
    Act
.

[94]

The
    motion judge then held, at paras. 209-10, that this adaption or
    restructuring of the normal certification criteria has two aspects.  First,
    if leave is granted under s. 138.8(1) of the
Securities Act
, it
    follows that the court should certify a class action for both the statutory and
    the common law negligent misrepresentation claim[s].  This finding is not
    contested before this court.

[95]

The
    motion judge next considered the implications for the certification of the
    common law claims of the denial of leave for the statutory claims.  He held, at
    para. 211, that if leave is not granted for the statutory claims, the action
    will not be certified for both the statutory claim and also the common law
    claim which, however, may proceed as an individual claim by the plaintiff.  He
    reasoned, at paras. 212 and 218-220:

If leave is not granted

under the Ontario

Securities
    Act
, the statutory claim obviously cannot be certified, and
the common
    law claim will fail to satisfy three of the five certification criteria
(class definition, common issues, and preferable procedure) largely for the
    reason that
there will be no basis in fact for these certification
    criterion [sic] and because the common law claim standing alone will not
    satisfy the preferable procedure criterion
.

.

In making these adaptions to the approach to certification of
    an action in which there is a statutory claim under Part XXIII.1 of the Ontario
Securities Act
,
it must be kept in mind that the evidentiary
    footprint, save for the issue of reliance
(which I will discuss later in
    these reasons for decision)
for the statutory action and the common law
    action will essentially be the same.  If the plaintiff is granted leave for the
    statutory claim, it would and should naturally follow that there is some basis
    in fact for each of the certification criterion for the common law claim
.

Conversely, it would and should naturally follow that if
    leave is denied that there would be no basis in fact for the certification
    criterion [sic]
.

I will adopt this restructuring in discussing the certification
    criterion [
sic
] for [the appellants] proposed class action and
thus
    it follows that because I have refused leave for the statutory claim, it
    follows that [the appellants] motion for certification should be dismissed
.
    [Emphasis added.]

[96]

Thus,
    on the motion judges approach, when statutory and common law misrepresentation
    claims are combined, the evidentiary footprint for the two types of claims will
    essentially be the same, except for the issue of reliance.  On this basis, the
    motion judge concluded that if leave to proceed with the statutory claims is
    denied, the refusal of certification for the common law claims is effectively
    axiomatic.

[97]

In
    my opinion, this approach to certification of the common law claims reflects an
    error in principle.  It does not automatically follow from the denial of leave
    for the statutory claims that there will be no basis in fact for all of the
    class definition, common issues and preferable procedure certification
    criteria.

[98]

The
    focus on a certification motion is on the form of the action and whether the asserted
    claims are suitable to proceed as a class proceeding:
AIC Limited v.
    Fischer
, 2013 SCC 69, [2013] 3 S.C.R. 949, at paras. 39-42;
Pro-Sys
    Consultants Ltd. v. Microsoft Corporation
, 2013 SCC 57, [2013] 3 S.C.R.
    477, at paras. 99 and 102;
Hollick v. Toronto (City)
, 2001 SCC 68, [2001]
    3 S.C.R. 158, at para. 16;
Cloud v. Canada (Attorney General)
(2004),
    73 O.R. (3d) 401, at para. 50, leave to appeal to S.C.C. refused, [2005]
    S.C.C.A. No. 50.  All that is required to succeed on a certification motion is
    that the plaintiff show some basis in fact for each of the
CPA
certification requirements, other than the requirement under s. 5(1)(a) that
    the pleadings disclose a cause of action:
Fischer
at paras. 1, 30,
    39-42;
Pro-Sys Consultants
at paras. 99-100;
Hollick
at para.
    25.

[99]

The
    fact that the court, on a leave motion, has determined that the statutory
    claims have no reasonable possibility of success and that the evidence supporting
    the statutory and common law actions would essentially be the same does not
    mean that there is not some basis in fact: 1) that there is an identifiable
    class of two or more persons that would be represented by the representative
    plaintiff or defendant (the class definition criterion at s. 5.1(b)); or 2)
    that the claims or defences of the class members raise common issues (the
    common issues criterion at s. 5.1(c)).  The courts determination of the merits
    of the statutory claims has no place in the analysis of these certification
    criteria.  However, as I discuss later in these reasons, in cases like this
    one, the denial of leave for the statutory claims is a relevant factor in the
    preferability analysis.

[100]

In this case, recognizing
    that his decision may be appealed, the motion judge commented on each of the certification
    criteria in relation to the common law claims.  Apart from the preferability
    criterion under s. 5(1)(d) of the
CPA
, which I will discuss shortly,
    he held as follows:

1)

cause
    of action criterion
 assuming that the appellants pleading was
    amended to properly plead the reliance and causation elements of the tort of
    negligent misrepresentation, the common law claims would satisfy the cause of
    action criterion for certification under s. 5(1)(a) (at paras. 225, 228 and
    230);

2)

class
    definition criterion
 if leave had been granted for the statutory
    claims, the appellants proposed

class

definition

would

meet the
    identifiable class criterion under s. 5(1)(b) (at paras. 233 and 236);

3)

commonality
    criterion
 again, if leave had been granted, the common law claims
    would have met

the s. 5(1)(c) common
    issues criterion, with two exceptions relating to inferred reliance by the
    class members on Kinross alleged misrepresentations and the determination of
    their consequential damages on an aggregate basis (at paras. 239-242); and

4)

representative
    plaintiff criterion
 as Kinross essentially conceded that the
    appellants would be appropriate representative plaintiffs for the common law
    action, the s. 5(1)(e) representative plaintiff criterion would also have been
    satisfied if leave had been granted (at paras. 249-50).

[101]

Thus, with respect
    to the s. 5(1)(b), (c) and (e) certification criteria  the class definition, common
    issues and representative plaintiff requirements  the motion judges
    certification findings were contingent on leave having been granted to proceed
    with the statutory claims.  In other words, his analysis of these criteria was
    anchored on the premise that since the evidentiary footprint for the
    statutory and common law claims will essentially be the same, there was no
    basis in fact for these certification criteria.  Since, as I discuss above,
    this premise is flawed, the motion judges evaluation of the s. 5(1)(b),
    (c) and (e) certification criteria was infected by error.

[102]

The motion
    judges evaluation of the preferability criterion under s. 5(1)(d) of the
CPA
suffers from the same defect.  Recall that, at para. 212 of his reasons, the
    motion judge stated that if leave is denied under s. 138.8(1) of the
Securities
    Act
for a statutory misrepresentation claim, a companion common law claim
    will fail to satisfy three of the five certification criteria under s. 5(1) of
    the
CPA
 the class definition, common issues, and preferable
    procedure criteria  largely for the reason that there will be no basis in
    fact for these certification [criteria] and because the common law claim
    standing alone will not satisfy the preferable procedure criterion.

[103]

Later in his
    reasons, at paras. 246-47, when specifically addressing the preferability
    criterion in relation to the common law claims, the motion judge stated:

As I explained above, in my view, if leave is not granted for
    the statutory claim then there is no basis in fact for the common law
    negligence claim which has the same evidentiary footprint.  In other words, in
    circumstances where most of the constituent element[s] of the common law
    negligence claim are scrutinized by a genuine merits test and are found
    wanting, it is not necessary to determine whether a class action is the
    preferable procedure because there will be no basis in fact for the common
    issues.

I, therefore, conclude that, in the case at bar, the preferable
    procedure criterion is not satisfied.  [Emphasis added.]

[104]

The
    difficulty with this reasoning is that the motion judge approached his certification
    analysis from the perspective that if the evidentiary base for the statutory
    claims failed to establish a basis in fact for those claims, there could be no
    basis in fact for the certification criteria.  I have already concluded that
    this approach is in error.

[105]

The motion
    judges preferability analysis also suffers from an additional flaw.  In
Fischer
,
    the Supreme Court reiterated that the preferabiltiy inquiry is to be conducted
    through the lens of the three principal goals of class actions, namely,
    judicial economy, behaviour modification and access to justice.
Fischer
holds that within the proper scope of the certification process, both
    substantive and procedural aspects of access to justice must be assessed in
    determining whether a class action is the preferable procedure.  By reason of
Fischer
,
    that assessment is conducted under the rubric of a series of specific questions
    identified by the Supreme Court.

[106]

Unfortunately,
    the motion judge did not have the benefit of the Supreme Courts decision in
Fischer
.
    As a result, his preferability analysis does not conform with the analytical
    approach to the preferability inquiry now mandated by
Fischer
.

[107]

In light of the
    motion judges error in his approach to the certification inquiry for the
    common law claims, coupled with the failure of his certification analysis to
    comport with
Fischer
, the deference normally owed to a motion judges
    certification analysis is not engaged.  It therefore falls to this court to
    undertake the necessary evaluation whether the common law claims are
    appropriate for certification under the
CPA
.

(b)     Certification
    Revisited

(i)
Cause of Action, Class Definition, Commonality,

and Representative Plaintiff Criteria

[108]

Before
    this court, the respondents do not dispute that the proposed class action for
    negligent misrepresentation meets the certification requirements of the
CPA
,
    except for the contested issue whether a class action is the preferable
    procedure.

Accordingly, only brief
    comment regarding the undisputed certification criteria is necessary.

[109]

Turning first to
    the cause of action criterion at s. 5(1)(a) of the
CPA
, the motion
    judge noted, at para. 159, that the appellants failed to plead two required elements
    of the tort of negligent misrepresentation  reliance and consequential
    damages.  Having scrutinized the appellants pleading, the motion judge
    observed, at para. 160, that the closest the appellants came to pleading these
    constituent elements of the tort is at para. 99 of their Amended Statement of
    Claim.  That paragraph reads:

The plaintiffs and Class Members relied on these
    misrepresentations to their detriment by the act of purchasing or acquiring
    Kinross shares.  They also relied on the defendants obligation to make timely
    disclosure of all material facts, to comply with securities law and to prepare
    financial statements, MD & As and Kinrosss other filings in accordance
    with GAAP or IFRS.  The defendants violated these obligations.

[110]

This averment is
    not a claim that the plaintiffs relied on Kinross alleged representations in
    deciding to purchase Kinross shares.  Rather, it is an allegation that the act
    of acquiring shares was itself an act of detrimental reliance.  The motion
    judge, therefore, held that the appellants pleading failed to properly plead both
    reliance and causation (at para. 226).

[111]

Nonetheless, the
    motion judge concluded that the appellants could deliver a proper pleading for
    negligent misrepresentation that included all the constituent elements of the
    tort.  Based on this assumption, he ruled that the cause of action criterion
    for certification was met: at paras. 228 and 230.

[112]

Accepting his assumption,
    I see no error in the motion judges reasoning or in his conclusion on the
    cause of action criterion.  The appellants pleading is susceptible to
    appropriate amendments to assert the required elements of the common law tort.
    This criterion, therefore, presents no insurmountable hurdle to certification.

[113]

The second
    criterion for certification, at s. 5(1)(b) of the
CPA
, requires that
    there is an identifiable class of two or more persons that would be
    represented by the representative plaintiff or defendant.  Section 5(1)(e)
    additionally requires that there is an appropriate representative plaintiff.

[114]

These
    certification criteria are readily met in this case.  The class definition
    proposed by the appellants clearly identifies the persons who have a potential
    claim against the respondents and adequately defines the class period.  And, before
    the motion judge, the respondents essentially conceded the s. 5(1)(e)
    representative plaintiff criterion.  Accordingly, the class definition and the
    representative plaintiff criteria pose no impediment to certification of the
    common law claims.
[10]

[115]

The commonality
    certification requirement is set out at s. 5(1)(c) of the
CPA
.  Under
    this section, an action shall be certified as a class proceeding if the claims
    or defences of the class members raise common issues.  An issue will be
    common only where its resolution is necessary to the resolution of each class
    members claim, the class members claims share a substantial common
    ingredient, and all members of the class would benefit from the successful
    prosecution of the action, although perhaps not to the same extent:
Pro-Sys
    Consultants
at para. 108.

[116]

I have set out
    the common issues proposed by the appellants in Schedule B to these reasons.
    The respondents did not contest the commonality of these questions before the
    motion judge.  Like the motion judge, with two exceptions, I conclude that
    these questions meet the common issues criterion.  In my view, the resolution
    of the questions posed as common issues is necessary to the resolution of the
    claims of each class member.  Moreover, the resolution of these questions would
    appear to advance the claims of the entire class and, if commonly determined,
    will avoid duplication of legal and factual analysis.  See
Western Canadian
    Shopping Centres Inc. v. Dutton
, 2001 SCC 46, [2001] 2 S.C.R. 534, at
    para. 39.

[117]

The first exception
    concerns the issue of reliance.  Reliance is a claimant-specific issue,
    requiring individualized evaluation and fact-finding.  See
Green
, at
    paras. 100-103.  In most cases of negligent misrepresentation, therefore,
    issues of individual reliance have been regarded by the courts as inherently
    unsuitable for certification.  In this case, in my view, the question of
    reliance is not a common issue.

[118]

The second exception
    concerns the question whether damages for negligent misrepresentation may properly
    be quantified on an aggregate basis.  In some cases, the courts have held that,
    once liability has been established, s. 24 of the
CPA
provides a
    method to assess the quantum of damages on a global basis.
[11]
In
Pro-Sys
, at paras. 127-134, the Supreme Court clarified that while
    the question whether damages can be determined on an aggregate basis can be
    certified as a common issue in a proper case, provincial statutory provisions
    that permit the calculation of aggregate damages in a class action (for example,
    s. 24 of the
CPA
), are procedural in nature and cannot be used to
    establish liability.  Thus, the common issue whether damages assessed in the
    aggregate are an appropriate remedy is only determined at the common issues
    trial, after a finding of liability has been made.

[119]

Here, the motion
    judge disagreed with the notion that damages for negligent misrepresentation could
    be calculated on an aggregate basis in this case (at para. 242).

[120]

I agree.  As I
    have already said, the issue of reliance is not a common issue in this case.
    And, as I discuss later in these reasons, individual trials of some complexity
    will be required to determine the question of reliance and, hence, liability.
    In these circumstances, the associated issue of consequential damages, should
    liability be found, must be determined in those individual trials rather than
    on a global basis.

(ii)
Preferability Criterion

[121]

The real
    certification battleground between the parties in relation to the common law
    claims concerns the issue whether a class action is the preferred procedure for
    the resolution of the common issues.  The respondents argue that the common
    questions do not meet the preferable procedure criterion.  They contend that if
    the action were certified, the resulting proceeding would involve a vast number
    of individual trials on the critical issues of reliance, causation and damages,
    thus undermining two of the key goals of a class action  judicial economy and
    access to justice  and imposing an unmanageable, inefficient, and unfair
    process on the parties and the court.  For the following reasons, I agree.

[122]

Considerable
    guidance has been afforded by the Supreme Court in
Hollick
,
Pro-Sys
and
Fischer
and by this court in
Cloud
concerning the
    principles that govern the application of the preferability requirement, and
    the proper approach to assessing preferability.  These authorities confirm that
    there must be some basis in fact for the claim that a class proceeding is the
    preferable procedure to resolve the class members claims.  This obliges the
    representative plaintiff to show that: 1) a class proceeding would be a fair,
    efficient and manageable method of advancing the claim; and 2) a class
    proceeding would be preferable to any other reasonably available means of
    resolving the class members claims:
Fischer
at para. 48, citing
Hollick
at paras. 28 and 31;
Cloud
at paras. 73-75.

[123]

To establish
    some basis in fact for the preferable procedure criterion, the court does not
    consider whether the claim is likely to succeed; rather, it asks whether the
    claim should be permitted to proceed as a class action because that procedure
    would facilitate the three principal goals of class proceedings  judicial economy,
    behaviour modification and access to justice:
Fischer
at para. 22;
Hollick
at para. 27.

[124]

However, it is
    not necessary to prove that the proposed class action will in fact achieve
    these goals:
Fischer
at para. 22.  Rather, the court must consider the
    common issues in the context of the action as a whole and, when undertaking the
    comparative analysis that is contemplated by the preferability criterion,
    focus on the statutory requirement of preferability and not impose on the
    representative plaintiff the burden of proving that all of the beneficial
    effects of the class action procedure will in fact be realized:
Fischer
at paras. 21-22.

[125]

Importantly,
Fischer
also provides guidance as to when a class action will be found to serve the
    goal of achieving access to justice.
Fischer
instructs, at para. 25,
    that the correct approach to the preferability inquiry must include both
    substantive and procedural aspects in relation to access to justice.  To
    determine whether a class proceeding will facilitate access to justice, the
    court should address the following questions:

1.    What are the barriers to access
    to justice?

2.    What is
    the potential of the class proceedings to address those barriers?

3.    What are the alternatives to
    class proceedings?

4.    To what
    extent do the alternatives address the relevant barriers to access to justice?

5.    How do the two proceedings compare?

Fischer
, at
    paras. 27-38.

[126]

These questions must
    be addressed within the confines of the certification process; the court
    cannot engage in a detailed assessment of the merits or likely outcome of the
    class action or any alternatives to it:
Fischer
at paras. 39-44.

[127]

In this case, I
    conclude that a class proceeding is not the preferable procedure for
    prosecution of the common law claims.  In my view, a class proceeding would not
    represent a fair, efficient and manageable procedure that is preferable to any
    alternative method of resolving the common law claims.

[128]

First, proof of
    reliance, causation and damages poses particular difficulties in this case.  To
    establish these elements of the common law tort, individualized inquiries and
    fact-finding will be both necessary and unavoidable.  For example, to establish
    reliance on Kinross alleged misrepresentations regarding the goodwill
    associated with the Tasiast mine and consequential damages, numerous
    investor-specific questions arise.  These include: 1) what representations were
    communicated or made known to each investor, and when; 2) what was the
    comparative experience level and degree of investment sophistication of each
    investor at the relevant times; 3) what investment recommendations were made to
    each investor; 4) what connection, if any, exists between Kinross alleged
    misrepresentations and each investors acquisition of Kinross shares; 5) how
    many Kinross shares were held, and when, by each investor; and 6) what was the
    date of acquisition, the acquisition price and the sale price for each
    investors shares?

[129]

Resolution of
    these questions does not lend itself to a class action.  Rather, the need for a
    host of individual inquiries regarding reliance, causation and damages renders
    the common law claims unsuitable for certification.  See for example,
Green
(S.C.J.), at paras. 599-601.  At a minimum, the need for numerous individual
    inquiries undercuts the goal of judicial economy and could overwhelm the
    resolution of the common issues, producing an inefficient and unmanageable
    class proceeding.

[130]

Second, it has
    already been determined in this case that the appellants statutory
    misrepresentation claims have no reasonable prospect of success at trial.  This
    assessment of the merits was made on the basis of the comprehensive record on
    the leave motion.  In my opinion, in the unique circumstances where 1)
    statutory misrepresentation claims and common law misrepresentation claims,
    based on the same evidentiary foundation, are combined, and 2) the former
    claims have been found to have no reasonable possibility of success under a
    statutory mechanism that is directed at access to justice, it is appropriate to
    consider the outcome of the leave motion for the statutory claims in the preferability
    inquiry regarding the common law claims.  This conclusion is reinforced, in my
    view, by the fact that the courts have recognized that reliance-based claims
    are particularly unsuitable for resolution in a class proceeding.

[131]

With the
    exception of the cause of action criterion, the class representative on a
    certification motion must demonstrate some basis in fact for each of the
    certification criteria, including the preferability criterion.  In this case,
    the appellants advanced the same theory of misrepresentation, grounded on the
    same factual matrix, for the purpose of both leave and certification.  The
    motion judge scrutinized the evidentiary record relied on by the appellants in
    support of the Goodwill Impairment Claim in detail, concluding that the
    appellants statutory misrepresentation claims had no reasonable possibility of
    success.

[132]

In these
    circumstances, in my opinion, it is inappropriate to simply ignore the denial
    of leave for the statutory claims.  The motion judges leave decision is a
    relevant consideration in determining whether the class representative has
    demonstrated some basis in fact that a class proceeding is the preferable
    procedure to resolve the class members claims.  It, too, favours the
    conclusion that a class action is not the preferred method of advancing the
    common law claims in this case.

[133]

Third, it does
    not assist the appellants that this court certified common law
    misrepresentation claims in
Green
.  In
Green
, this court was
    willing to certify the common law claims alongside associated statutory
    misrepresentation claims.   Nothing in
Green
suggests that the common
    law misrepresentation claims, standing alone, would have been certified.

[134]

Nor is this a
    case like
Carom v. Bre-X Minerals Ltd.
(2000), 51 O.R. (3d) 236
    (C.A.), leave to appeal to S.C.C. refused, [2000] S.C.C.A. No. 660, cited by
    the appellants.  In
Bre-X
, the motion judge granted certification of a
    fraudulent misrepresentation claim but denied certification of a companion
    negligent misrepresentation claim on the basis that the individual trials
    required to determine reliance, causation and damages would be complex and
    lengthy:
Carom v. Bre-X Minerals Ltd.
(1999), 44 O.R. (3d) 173
    (S.C.J.), at pp. 202, 221 and 239-40, affd (1999), 46 O.R. (3d) 315 (Div.
    Ct.).  On appeal to this court, the latter ruling was reversed and
    certification of the negligent misrepresentation claim was granted.  No appeal
    was taken from the motion judges ruling on certification of the fraudulent
    misrepresentation claim.

[135]

As

in

Green
,

nothing in
Bre-X
suggests that
    the negligent misrepresentation claim, standing alone, was suitable for
    certification.  It was only in the face of the certification of the fraudulent
    misrepresentation claim that the goals of judicial economy and access to
    justice justified certification of the negligent misrepresentation claim.  As
    MacPherson J.A. of this court said, at para. 42:

Given the accepted definitions of the torts of fraudulent
    misrepresentation and negligent misrepresentation, I can see no logical or
    principled basis for treating them differently on the question of
    certification.  I could understand the order certifying, or refusing to
    certify, both claims.  I do not, however, understand why opposite orders were
    considered appropriate for the two claims.

Accordingly, as the
    fraudulent misrepresentation claim was certified and that ruling was not
    appealed, the need for individual inquiries did not prevent certification of
    the negligent misrepresentation claim either.

[136]

I
    therefore do not read the decisions of this court in
Green
and
Bre-X
as retreating from the proposition that, generally, common law negligent
    misrepresentation claims in securities cases are not suitable for
    certification.  As Strathy J. (as he then was), indicated in
Green
, (S.C.J.),
    at para. 610, a class proceeding is not the preferable procedure for resolving
    such reliance-based claims, which give rise to individual issues of causation
    and reliance that would be unmanageable.  In contrast, of course, there is no
    need to prove reliance in statutory misrepresentation claims under the
Securities
    Act
.  For this and other reasons, the statutory action under s. 138.3,
    which was enacted in part due to the difficulty in proving reliance-based
    common law claims, is tailor-made for a class action:
Green
(S.C.J.)
    at paras. 595 and 611.

[137]

Finally,
    I am mindful of
Fischer
s holding that the access to justice
    evaluation under the preferability inquiry is to be approached by reference to
    a series of questions directed at identifying the barriers to access to justice
    that a class action could address and determining whether those concerns would
    remain even when alternative avenues of redress are considered:
Fischer
at para. 26.

[138]

In the case at
    bar, as I have stressed, numerous individual trials will be required to
    establish reliance, causation and damages.  If a class action were to be
    certified, those trials would proceed against the backdrop of an existing
    judicial determination that the appellants core claims of misrepresentation,
    in particular, the Goodwill Impairment Claim, hold no reasonable prospect for
    success at trial.  Yet the same claim is said to warrant a class action for
    common law negligent misrepresentation claims grounded on the same alleged
    facts.  In these circumstances, encumbering the parties and the courts with a
    complex class action that is destined to fail hardly promotes the goals of
    judicial economy and access to justice.

[139]

That said, I
    recognize that there may well be economic barriers to the pursuit of the common
    law claims on an individual basis.  I also acknowledge that the option of
    individual actions to pursue securities misrepresentation claims is unappealing,
    costly and cumbersome.  But that is precisely the access to justice impediment
    sought to be remedied by s. 138.3 of the
Securities Act
.  To permit a
    class action to proceed in the circumstances of this case, in my view, would
    render access to justice more illusory than real and would significantly
    undercut the goal of judicial economy.  The goal of behaviour modification does
    not alter this conclusion.

(c)     Conclusion on Certification
    Ruling

[140]

For the reasons given,
    I conclude that the common law claims do not satisfy the preferable procedure
    certification criterion.  While the motion judges certification analysis is
    tainted by error, I agree with his ultimate holding that certification of the
    common law negligent misrepresentation claims should be denied.

E.      Disposition

[141]

Accordingly, I
    would dismiss the appeal and confirm the motion judges leave and certification
    rulings.  As the respondents have been successful on appeal, they are entitled
    to costs of the appeal.  I would fix those costs in the sum of $85,000,
    inclusive of disbursements and all applicable taxes.

Released:

AH                                                   E.A.
    Cronk J.A.

DEC 17 2014                                   I agree
    Alexandra Hoy A.C.J.O.

I
    agree S.E. Pepall J.A.

Schedule A

Securities Act
, R.S.O. 1990, c. S.5

138.3  (1)
Where
    a responsible issuer or a person or company with actual, implied or apparent
    authority to act on behalf of a responsible issuer releases a document that
    contains a misrepresentation, a person or company who acquires or disposes of
    the issuers security during the period between the time when the document was
    released and the time when the misrepresentation contained in the document was
    publicly corrected has, without regard to whether the person or company relied
    on the misrepresentation, a right of action for damages against,

(a) the responsible issuer;

(b) each director of the responsible issuer at the time the document was
    released;

(c) each officer of the responsible issuer who authorized, permitted or
    acquiesced in the release of the document;

(d) each influential person, and each director and officer of an
    influential person, who knowingly influenced,

(i) the responsible issuer or any person or company acting on behalf of
    the responsible issuer to release the document, or

(ii) a director or officer of the responsible issuer to authorize, permit
    or acquiesce in the release of the document; and

(e) each expert where,

(i) the misrepresentation is also contained in a report, statement or
    opinion made by the expert,

(ii) the document includes, summarizes or quotes from the report,
    statement or opinion of the expert, and

(iii) if the document was released by a person or company other than the
    expert, the expert consented in writing to the use of the report, statement or
    opinion in the document.

Public oral statements by responsible issuer

(2)
Where
    a person with actual, implied or apparent authority to speak on behalf of a
    responsible issuer makes a public oral statement that relates to the business
    or affairs of the responsible issuer and that contains a misrepresentation, a person
    or company who acquires or disposes of the issuers security during the period
    between the time when the public oral statement was made and the time when the
    misrepresentation contained in the public oral statement was publicly corrected
    has, without regard to whether the person or company relied on the
    misrepresentation, a right of action for damages against,

(a) the responsible issuer;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized,
    permitted or acquiesced in the making of the public oral statement;

(d) each influential person, and each director and officer of the
    influential person, who knowingly influenced,

(i) the person who made the public oral statement to make the public oral
    statement, or

(ii) a director or officer of the responsible issuer to authorize, permit
    or acquiesce in the making of the public oral statement; and

(e) each expert where,

(i) the misrepresentation is also contained in a report, statement or
    opinion made by the expert,

(ii) the person making the public oral statement includes, summarizes or
    quotes from the report, statement or opinion of the expert, and

(iii) if the public oral statement was made by a person other than the
    expert, the expert consented in writing to the use of the report, statement or
    opinion in the public oral statement.

Influential persons

(3)
Where
    an influential person or a person or company with actual, implied or apparent
    authority to act or speak on behalf of the influential person releases a
    document or makes a public oral statement that relates to a responsible issuer
    and that contains a misrepresentation, a person or company who acquires or
    disposes of the issuers security during the period between the time when the
    document was released or the public oral statement was made and the time when
    the misrepresentation contained in the document or public oral statement was
    publicly corrected has, without regard to whether the person or company relied
    on the misrepresentation, a right of action for damages against,

(a) the responsible issuer, if a director or officer of the responsible
    issuer, or where the responsible issuer is an investment fund, the investment
    fund manager, authorized, permitted or acquiesced in the release of the
    document or the making of the public oral statement;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized,
    permitted or acquiesced in the release of the document or the making of the
    public oral statement;

(d) the influential person;

(e) each director and officer of the influential person who authorized,
    permitted or acquiesced in the release of the document or the making of the
    public oral statement; and

(f) each expert where,

(i) the misrepresentation is also contained in a report, statement or
    opinion made by the expert,

(ii) the document or public oral statement includes, summarizes or quotes
    from the report, statement or opinion of the expert, and

(iii) if the document was released or the public oral statement was made
    by a person other than the expert, the expert consented in writing to the use
    of the report, statement or opinion in the document or public oral statement.

Failure to make timely disclosure

(4)
Where
    a responsible issuer fails to make a timely disclosure, a person or company who
    acquires or disposes of the issuers security between the time when the
    material change was required to be disclosed in the manner required under this
    Act or the regulations and the subsequent disclosure of the material change
    has, without regard to whether the person or company relied on the responsible
    issuer having complied with its disclosure requirements, a right of action for
    damages against,

(a) the responsible issuer;

(b) each director and officer of the responsible issuer who authorized,
    permitted or acquiesced in the failure to make timely disclosure; and

(c) each influential person, and each director and officer of an
    influential person, who knowingly influenced,

(i) the responsible issuer or any person or company acting on behalf of
    the responsible issuer in the failure to make timely disclosure, or

(ii) a director or officer of the responsible issuer to authorize, permit
    or acquiesce in the failure to make timely disclosure.

Multiple roles

(5)
In
    an action under this section, a person who is a director or officer of an
    influential person is not liable in that capacity if the person is liable as a
    director or officer of the responsible issuer.

Multiple misrepresentations

(6)
In
    an action under this section,

(a) multiple misrepresentations having common subject matter or content
    may, in the discretion of the court, be treated as a single misrepresentation;
    and

(b) multiple instances of failure to make timely disclosure of a material
    change or material changes concerning common subject matter may, in the
    discretion of the court, be treated as a single failure to make timely
    disclosure.

No implied or actual authority

(7)
In
    an action under subsection (2) or (3), if the person who made the public oral
    statement had apparent authority, but not implied or actual authority, to speak
    on behalf of the issuer, no other person is liable with respect to any of the
    responsible issuers securities that were acquired or disposed of before that
    other person became, or should reasonably have become, aware of the
    misrepresentation.

Schedule B

Proposed Common Issues

(a)   Did the Defendants make
    representations that were untrue, inaccurate or misleading, including
    omissions, and if so, what are the misrepresentations, who made these
    representations, when, where and how?

(b)   If

the

answer

to

(a)

is

yes,

do

the

misrepresentations

constitute

misrepresentations
    within the meaning of the
OSA
or the equivalent provisions of
    securities legislation in other provinces?

(c)   Did the Defendants fail to
    make timely disclosure within the meaning of the
OSA
or the equivalent
    provisions of securities legislation in other provinces?

(d)   If the answer to (b) or (c)
    is yes,

(i)    when and by what means were the misrepresentations publicly
    corrected or in the case of failure to make timely disclosure, when and by what
    means was the disclosure made?

(ii)    did the individual Defendants authorize, permit or
    acquiesce in the release of documents containing the misrepresentations, in the
    making of a public oral statement containing misrepresentations or in the
    failure to make timely disclosure?

(iii)   for public oral statements containing such
    misrepresentations, did the person who made the statement do so with actual
    implied or apparent authority to speak on behalf of Kinross?

(iv)   for the misrepresentations in non-core document[s] or in
    a public oral statement, did the Defendants know of the misrepresentations at
    the time they were made?  If not, did the Defendants deliberately avoid
    acquiring such knowledge or were they guilty of gross misconduct in connection
    with the misrepresentations?

(v)   before the release of the documents and the public oral
    statements containing misrepresentations and before the failure to make timely
    disclosure first occurred, did the Defendants conduct or cause to be conducted
    a reasonable investigation in accordance with subsection 138.4(6) of the
OSA
or the equivalent provisions of securities legislation in other provinces?

(vi)   at the time of the release of the document[s] and public
    oral statements containing misrepresentations or at any time for a failure to
    make timely disclosure, as the case may be, did the Defendants have reasonable
    grounds to believe that the documents or oral statement[s] contained the
    misrepresentations or that the failure to make timely disclosure would occur?

(e)   If the answer to (a) is
    yes, did the Defendants owe a duty of care to the class members?

(f)    If the answer to (e) is
    yes, did the Defendants act negligently in making the misrepresentations?

(g)   If the answer to (f) is
    yes, can each class members reliance be inferred from the fact of the class
    member having acquired Kinross shares in an efficient market?

(h)   Can the amount of damages
    for negligent misrepresentation or the statutory claims under Part XXIII.1 of
    the
OSA
or the equivalent provisions of securities legislation in
    other provinces be determined on an aggregate basis?  If so, in what amount and
    who should pay it to the class?

(i)    What are the applicable
    limits on damages, if any, for each Defendant under section 138.7 of the
OSA
or the equivalent provisions of securities legislation in other provinces?

(j)    For each Defendant found
    liable for claims under Part XXIII.1 of the
OSA
or the equivalent
    provisions of securities legislation in other provinces, what is the
    Defendants respective responsibility for assessed damages?

(k)   Is Kinross vicariously
    liable or otherwise responsible for the acts of the individual Defendants?

[1]
The full text of s. 138.3 is reproduced in Schedule A to these reasons.

[2]
R.S.O. 1990, c. S.5.

[3]
Although, as pleaded, the appellants Goodwill Impairment Claim applies to both
    mines, the focus of their submissions on the leave motion and this appeal was
    the goodwill associated with the Tasiast mine.

[4]
S.O. 1992, c. 6.

[5]
On October 11, 2013, the motion judge ordered that the Duff & Phelps LLC
    reports be sealed, kept confidential and not form part of the public record,
    with access to the reports being made available only to specified persons or
    entities, including the court.  The motion judge also directed that the sealing
    order continue after the final disposition of the leave and certification
    proceedings.  Accordingly, while this court reviewed the full version of the
    reports, reference in these reasons is made only to part of the contents of the
    reports as disclosed on the public record.

[6]
Although Kinross February 15, 2012 press release refers to a goodwill write
    down of $2.94
million
, this appears to have been a typographical
    error.  In a February 16, 2012 Q4 earnings conference call, Kinross reported a
    goodwill impairment charge of $2.9
billion
.  The latter figure is the
    amount referenced by the motion judge, at para. 142 of his reasons, by the
    appellants in their facta on appeal and on the leave motion, and by the
    appellants accounting expert (Alan T. Mak) in his reports filed on the leave
    motion.

[7]
Where additional facts are relevant to the issues on appeal, I will discuss
    those facts in the context of the issues to which they relate.

[8]
Section 5(1)(a) of the
CPA
provides: The court shall certify a class
    proceedingif, (a) the pleadings or the notice of application discloses a cause
    of action.

[9]
It was not until January 7, 2014, after the release of the motion judges
    reasons on the leave motion, that the appellants amended their statement of
    claim to plead the Expansion Claim.

[10]
I note that the question whether the appellants have proposed an acceptable
    litigation plan is not an issue on appeal.

[11]
See for example,
Markson v. MBNA Canada Bank
, 2007 ONCA 334, 85 O.R.
    (3d) 321, at para. 40, leave to appeal to S.C.C. refused, [2007] S.C.C.A. No.
    346, citing
Chadha v. Bayer Inc.
(2003), 63 O.R. (3d) 22, at para. 49,
    leave to appeal to S.C.C. refused, [2003] S.C.C.A. No. 106.  See also
Gilbert
    v. Canadian Imperial Bank of Commerce
, 2004 CanLII 34176 (S.C.J.).