CITATION: DALI Local 675 Pension Fund (Trustees) v. Barrick Gold Corporation,  
2022 ONSC 1767  
COURT FILE NO.: CV-14-502316-00CP  
DATE: 20220322  
ONTARIO  
SUPERIOR COURT OF JUSTICE  
)
BETWEEN:  
)
The Trustees of the Drywall Acoustic  
Lathing and Insulation Local 675 Pension  
Fund and Royce Lee  
) Peter R. Jervis, Golnaz Nayerahmadi and  
) Matthew W. Taylor, for the plaintiffs  
)
)
Plaintiffs )  
)
) Kent P. Thomson, Luis Sarabia, Steven G.  
and –  
) Frankel and Kristine Spence, for the  
Barrick Gold Corporation, Aaron W.  
Regent, Jamie C. Sokalsky, Ammar Al-  
Joundi and Peter Kniver  
) defendants  
)
)
)
Defendants )  
)
)
)
) HEARD: January 17, 18, 19, 20, 21, 2022  
J.T. AKBARALI J.:  
Overview  
[1]  
The plaintiffs seek leave under Part XXIII.1 of the Securities Act, R.S.O. 1990, c. S.5 to  
commence an action against the respondent, Barrick Gold Corporation (“Barrick”), and certain  
of its officers and directors, for alleged misrepresentations in its public disclosure documents and  
financial statements relating to a complex mining project in Chile and Argentina.  
Brief Background  
[2]  
In May 2009, Barrick announced that it had green-lit a mega-project, known as Pascua-  
Lama, to develop a gold and silver mine in the High Andes. The Pascua side of the project was  
in Chile. It was where the open pit mine and crushing facility were intended to be located. The  
Lama side of the project, across the border in Argentina, was where the processing facility was  
Page: 2  
intended to be located. The greatest share of the expense related to the Lama side of the project.  
The project was 45,000 hectares in size, or roughly two-thirds the size of the city of Toronto.  
[3]  
The project presented significant engineering, environmental, and regulatory challenges.  
George Potter, who held the position of Barrick’s Senior Vice President, Capital Projects during  
the early stages of the project, described some of the complexities in his evidence. For example,  
being located in the high Andes, the terrain was rugged, the climate was arid, the winter was  
cold, and strong winds blew during all seasons. Due to its remote location, workers, construction  
materials, and equipment all had to be transported to the project by road in both Chile and  
Argentina. The project was not connected to power grids in either country, so electrical  
substations and transmission lines had to be constructed. Camps had to be built to house the  
workers.  
[4]  
The bi-national nature of the project gave rise to complications, requiring Barrick to deal  
with different governments and governmental agencies at multiple levels in both Chile and  
Argentina. The project had to contend with tax regimes, legal and regulatory systems, and  
economic conditions in both countries.  
[5]  
The challenges inherent in the project became further complicated by events that  
occurred while the project was ongoing, including rampant inflationary pressures, a serious  
earthquake in Chile, and a superboom in construction projects worldwide, across industries,  
which resulted in an increase in cost and decrease in supply of commodities and labour. In  
addition, the project was eventually placed on hold after an injunction issued by a Chilean court  
due to environmental concerns. Ultimately, the project was placed on care and maintenance  
before completion, the company having concluded that it was no longer financially viable.  
[6]  
Throughout the project’s currency, Barrick made a series of disclosures about its progress  
in its quarterly and annual reports and in press releases. The plaintiffs allege that Barrick made  
several misrepresentations in these disclosures. First, they allege that Barrick disclosed  
misleading forecasts of the project’s capital expenditure (“capex”) budget and of the project’s  
schedule. They also argue that Barrick both implicitly and explicitly represented that its forecasts  
were based on assumptions considered reasonable by the company at the time they were made,  
but that these representations were untrue. They allege that Barrick knew that its forecasts were  
not based on reasonable assumptions when the forecasts were disclosed.  
[7]  
The plaintiffs also argue that Barrick made misrepresentations in its accounting  
documents. In particular, they allege that Barrick should have taken an impairment related to the  
project before it did, and because it failed to do so, its financial statements overstated the value  
of its assets and understated its expenses, thereby overstating its income. They also allege that  
Barrick failed to disclose that there were material weaknesses in its disclosure controls and  
procedures (“DC&P”) and in its internal controls over financial reporting (“ICFR”). Finally, they  
allege that Barrick misrepresented that it had no undisclosed contingent liabilities relating to the  
project, when it did, in the form of contingent liabilities alleged to have arisen as a result of what  
the plaintiffs claim are the project’s serious environmental violations in Chile.  
Page: 3  
[8]  
The plaintiffs allege that these misrepresentations were material, and that when they were  
publicly corrected, Barrick’s share price dropped significantly, causing billions in losses to the  
class.  
[9]  
The defendants dispute the plaintiffs’ allegations. They argue that Barrick’s disclosure  
was impeccable throughout. The project was beset by difficulties that it could not have foreseen,  
and that affected the worldwide economy. Barrick claims its disclosures were accurate and  
timely. Moreover, the defendants argue there was no public correction of any of the alleged  
misrepresentations. They claim that the plaintiffs are impermissibly engaging in backwards  
reasoning, alleging that because the project experienced difficulties, there must be actionable  
conduct, when in fact there is none.  
[10] The defendants deny the materiality of the alleged misrepresentations. Moreover, they  
dispute that the plaintiffs have met the test for leave to proceed against the individual defendants  
in any event.  
[11] The defendants also rely on the forward-looking information defence in s. 138.4(9) and  
(9.1) of the Securities Act, arguing that their public disclosures contained adequate cautionary  
language that meets the requirements of the statutory defence.  
Procedural Background  
[12] This is the second leave motion that has been argued in these proceedings. The first was  
decided by Belobaba J. in reasons dated October 9, 2019: DALI Local 675 Pension Fund  
(Trustees) v. Barrick Gold, 2019 ONSC 4160, 148 O.R. (3d) 755 [“Barrick SCJ”]. In that  
motion, the plaintiffs alleged three categories of misrepresentations: (i) material understatement  
of Barrick’s capex budget and project completion schedule dates; (ii) failing to disclose material  
facts relating to serious environmental non-compliance; and (iii) failing to disclose serious  
accounting violations relating to the project. Of these, Belobaba J. granted leave to proceed on a  
single environmental misrepresentation.  
[13] Justice Belobaba denied leave with respect to the accounting, scheduling, and capex  
claims on the basis that the plaintiff had failed to identify a legally sufficient public correction  
associated with any of those alleged misrepresentations.  
[14] The defendants sought leave before the Divisional Court to appeal Belobaba J.’s decision  
to allow the single environmental misrepresentation to proceed. Leave was denied. The plaintiffs  
appealed the balance of Belobaba J.’s decision to the Court of Appeal. The Court of Appeal  
upheld Belobaba J.’s decision with respect to the denial of leave to the other environmental  
misrepresentation claims, but allowed the appeal in part with respect to the capex, scheduling,  
and accounting claims, returning the issue of whether leave should be granted with respect to  
those misrepresentations to this court.  
[15] This claim was commenced in 2014. There have been several amendments and proposed  
amendments to the statement of claim since that time. The plaintiffs do not intend the current  
Page: 4  
issued version of the statement of claim to be the operative version. Rather, they delivered a  
“Schedule C” (in fact, multiple versions of Schedule C) identifying the alleged  
misrepresentations and public corrections. They intend to amend the statement of claim once it is  
clear what the scope of the action will be. With the consent of the defendants, Belobaba J.’s  
analysis relied on the final version of Schedule C that was presented to him at the leave motion,  
and which was appended to his reasons. To its reasons, the Court of Appeal attached the same  
Schedule C.  
[16] Before me, the plaintiffs produced a new Schedule C, to which the defendants object. The  
new Schedule C is appended to an amended notice of motion, which was filed part way through  
the motion after I requested a notice of motion that would make clear what the plaintiffs were  
seeking. The plaintiffs have indicated that the new Schedule C was intended to further streamline  
the issues before the court, while the defendants argue that it is, in fact, an attempt to broaden the  
potential scope of discovery on any misrepresentation for which leave is granted. The plaintiffs  
subsequently indicated that they are content to proceed on the basis of either version of Schedule  
C.  
[17] The defendants argue that, although we are years into this action, the plaintiffs have yet  
to clearly articulate the misrepresentations they allege. The plaintiffs have modified their  
articulation of the misrepresentations they allege Barrick made twenty separate times now, and  
still they have failed to meet the requirement that they plead the misrepresentations and the  
alleged corrections precisely. On this basis alone, the defendants argue the motion should be  
dismissed.  
[18] There is also dispute between the parties with respect to the relevance of the plaintiffs’  
environmental violation allegations which were dealt with by Belobaba J. and the Court of  
Appeal. Each side accuses the other of seeking determinations that are res judicata in connection  
with these allegations. The defendants argue that the plaintiffs are seeking to impermissibly  
revive the alleged environmental misrepresentations that were not allowed to proceed by  
shoehorning them into their accounting and scheduling misrepresentation claims. The plaintiffs  
deny they have done any such thing, but claim the environmental allegations are relevant to the  
alleged accounting and scheduling misrepresentations.1 They argue that the defendants are  
seeking to impermissibly relitigate the factual findings made by Belobaba J. with respect to the  
environmental misrepresentations.  
1
Barrick’s alleged non-compliance with its environmental obligations and permit form part of some of  
the alleged capex, scheduling, and accounting misrepresentations by omission, in that the plaintiffs argue  
that facts related to the environmental issues ought to have been disclosed to make statements in Barrick’s  
disclosure not misleading.  
Page: 5  
Issues  
[19] The issues for determination on this motion are:  
a. Should the motion be dismissed because the plaintiffs have failed to meet the  
requirement that they plead precisely the misrepresentations and corrective  
statements that they allege?  
b. If not, should leave be granted under s. 138.8 of the Securities Act to commence  
an action based on any or all of the alleged misrepresentations against any or all  
of the defendants? Determining this issue will require me to consider whether it is  
reasonably possible that the plaintiffs will succeed in their action because:  
i. The individual statements, in their context, are misrepresentations,  
whether by omission or commission;  
ii. The misrepresentations were publicly corrected;  
iii. The misrepresentations were material;  
iv. The forward-looking information defence will not succeed.  
Precision Pleading  
[20] While amendments to a statement of claim in a class proceeding like this one are not  
uncommon, the plaintiffs’ approach to setting out the alleged misrepresentations has been  
unusual. Twenty different iterations of the alleged misrepresentations have been advanced. That  
is a great deal too many.  
[21] The plaintiffs’ consolidated statement of claim (which was, itself, the fourth version of  
the claim) was struck by Perell J., who described it as “not compliant with the rules of pleading,  
being repetitive, verbose and containing copious amounts of argument, rhetorical material and  
evidence.”  
[22] The plaintiffs subsequently delivered a fresh as amended statement of claim, which is the  
current issued and filed claim. This claim is 150 pages long, and includes three schedules of  
alleged misrepresentations that total 70 pages, consisting of text copied from Barrick’s public  
disclosures over time.  
[23] Since filing that version of the claim, the plaintiffs have delivered a proposed amended  
fresh as amended statement of claim, a further proposed amended fresh as amended statement of  
claim, and a further further proposed amended fresh as amended statement of claim. The most  
recent version of the proposed pleading is close to 160 pages, including the schedules of alleged  
misrepresentations totaling 70 pages. Justice Perell’s description of the consolidated statement of  
claim continues to apply to the latest version.  
Page: 6  
[24]  
It was in the plaintiffs’ reply factum on the original leave motion, well after the  
evidentiary record on this motion was closed, that the plaintiffs first produced a Schedule C of  
alleged misrepresentations. In total, the plaintiffs produced six versions of Schedule C to get to  
the final version, if I can call it that, which is the one appended to Belobaba J.’s reasons and the  
reasons of the Court of Appeal.  
[25] I now have yet another version of Schedule C before me, but no properly drafted  
statement of claim. I do not even know, because the plaintiffs did not identify, which version of  
the statement of claim they would have me evaluate on this motion the current issued version,  
or the latest proposed version.  
[26] The jurisprudence, and indeed all common sense, assumes that the court should have a  
pleading before it when evaluating whether to grant leave to proceed with a claim.  
[27] For example, the Court of Appeal has set out the requirements for pleadings in secondary  
market disclosure cases. In Mask v. Silvercorp Metals, 2016 ONCA 641, 132 O.R. (3d) 161, at  
para. 15, it held that the statement of claim (not some schedule that could one day be turned into  
a statement of claim) must set out, with particularity: (a) the specific misrepresentations that are  
being pursued; (b) the documents or statements containing the alleged misrepresentations; (c) the  
dates of the alleged misrepresentations; (d) the dates on which the misrepresentations were  
publicly corrected, and (e) the documents or statements containing the corrections.  
[28] These requirements arise from the purposes of the statement of claim in a class action  
under s. 138.3 of the Securities Act, identified by Strathy C.J.O. in Mask, at para. 14, as twofold:  
(i) to identify the misrepresentations on which the statutory claim is based, and give particulars  
of the alleged correction of the misrepresentations; and (ii) to define the scope of the class action.  
[29] In Peters v. SNC-Lavalin, 2021 ONSC 5021, at para. 137, Perell J., relying on Mask,  
specified that, to plead the statutory cause of action for misrepresentations in the secondary  
market, a plaintiff should: (a) identify the inculpatory statement or omission and when it was  
made or ought to have been made; (b) specify the falseness of the inculpatory statement; and (c)  
identify the public correction and when it was made.  
[30] As I have noted, at the first leave motion, the defendants agreed to use the Schedule C  
proposed by the plaintiffs as the basis for the motion. The plaintiffs have now agreed to use  
either their latest version of Schedule C, or the version that was before Belobaba J. and the Court  
of Appeal. In its reasons, the Court of Appeal directed that the “categories” of misrepresentation  
identified as the scheduling and capex misrepresentations and accounting misrepresentations be  
returned to this court to consider whether leave ought to be granted in relation to them. Those  
categories were set out in the Schedule C attached to Belobaba J.’s reasons and the Court of  
Appeal’s reasons.  
[31] In the circumstances, given the direction from the Court of Appeal, I conclude that,  
however undesirable, I must proceed to consider the leave motion having regard to the Schedule  
Page: 7  
C on which the first leave motion and the appeal proceeded. I am not prepared to proceed on the  
latest Schedule C without the consent of the defendants, when the plaintiffs have no inherent  
right to have their leave motion determined on the basis of anything other than a statement of  
claim. However, while Schedule C2 must be read having regard to the limitations inherent in it  
being a schedule and not a pleading, it must nevertheless meet the precision pleading standard set  
out above.  
[32] In my view, the scheduling and capex misrepresentations are properly identified and  
pleaded in Schedule C. While there are opportunities for greater precision in identifying the  
documents, in particular with respect to statements made by the company in its cautionary  
statements and the alleged undisclosed information rendering each individual statement false, I  
am satisfied that the necessary elements are identified with sufficient clarity to enable the  
defendants to respond and the court to undertake the leave analysis.  
[33] I find that the accounting misrepresentations set out in Schedule C do not meet the  
precision pleading standard, for the reasons that follow.  
[34] The plaintiffs have failed to identify with precision the documents in which the alleged  
misrepresentations are made. In Schedule C, they allege that “in all disclosures during the class  
period”, Barrick made misrepresentations that its financial reporting complied with the  
applicable accounting standards and fairly and accurately represented the financial situation of  
the company. They then identify “the annual financial reports released during the class period”.  
One can draw some assumptions about what the plaintiffs might mean by this, but they do not  
identify these documents by name and date, a requirement which is really the bare minimum. By  
iteration twenty, the alleged misrepresentations ought to have been nailed down.  
[35] The plaintiffs cite a specific quote, which appears to be from an annual financial report  
released during the class period, indicating that the company’s consolidated financial statements  
had been prepared in accordance with IFRS (International Financial Reporting Standards) and  
reflected management’s best estimates and judgments based on currently available information.  
The statement also indicates that the company had developed and maintained a system for  
internal controls to ensure the reliability of its financial information. This quote is referenced to  
“p. 81”, but again without identifying the source document specifically.  
[36] The plaintiffs allege that “Barrick and its CEO and CFO certified in each financial report  
that the company’s ICFR and DC&P were ‘effective’”. Again, one can make educated guesses  
about what the phrase “each financial report” might mean, but the specific documents should be  
identified by name and date. The use of the word “effective” is in quotes in Schedule C. The  
2
From now on, when I refer to Schedule C, I mean the one appended to the reasons of the Court of  
Appeal and Belobaba J. I have also appended a copy of it to these reasons.  
Page: 8  
plaintiffs presumably got it from somewhere. It is not onerous and certainly not by version  
twenty to require them to specify where it came from.  
[37] The plaintiffs go on to identify three alleged material facts that they claim were necessary  
to be disclosed to make the statements referred to above not misleading. These are that (i)  
Barrick’s ICFR and DC&P were ineffective with respect to Pascua-Lama; (ii) Barrick failed to  
take necessary and timely impairment writedowns no later than Q2 2012 on the carrying value of  
Pascua-Lama; and (iii) Barrick failed to record contingent liabilities relating to the risk of serious  
regulatory sanctions against Pascua-Lama, including suspension, permit revocation, and closure,  
among others.  
[38] The plaintiffs then allege three partial corrections of the accounting misrepresentations:  
a. July 26, 2012, Q2 2012 in its quarterly report for Q2 2012, Barrick announced  
that preliminary results indicated that gold production was now expected in mid-  
2014 with an approximately 50-60% increase in capital costs.  
b. April 10, 2013 in press releases (two from Barrick, one from Dow Jones  
Newswire), the market was advised of a preliminary injunction that had been  
granted in Chile, and that construction on the Chilean side of the project had been  
suspended while the company worked to address environmental and regulatory  
requirements.  
c. June 28, 2013 in a press release, Barrick announced it was conducting  
impairment testing as a result of recent and continued significant declines in gold  
and silver prices, and the delay of first gold production in Pascua-Lama, and that  
preliminary analysis indicated an after-tax impairment charge in the range of  
$4.5-5.5 billion in Q2 for the Pascua-Lama project would be required.  
[39] There is a lack of pleaded nexus between some of the alleged misrepresentations, the  
material facts that are alleged to have been omitted, and the alleged corrections.  
[40] The delay in gold production in Pascua-Lama is clearly related to the capex and  
scheduling misrepresentations alleged, but the connection with the alleged accounting  
misrepresentations is not clearly identified in Schedule C.  
[41]  
The press releases advising of the suspension of the project in Chile due to the injunction  
are related to the alleged scheduling misrepresentations, but there is no clearly pleaded  
connection with the accounting misrepresentations.  
[42] None of the above alleged corrections have any pleaded relationship to the alleged  
material undisclosed facts.  
[43] There is a clearly pleaded nexus between the press release regarding impairment testing  
and the alleged correction indicating that impairment testing was ongoing and a writedown was  
Page: 9  
expected. There is also a clearly pleaded nexus between the misrepresentation, the alleged  
undisclosed material fact that an impairment was required, and the alleged correction. However,  
this nexus relates to alleged misrepresentations that, as I have already noted, have not been  
clearly identified in Schedule C.  
[44] In my view, this is sufficient to dismiss the motion for leave with respect to the  
accounting misrepresentations. After twenty tries at clearly pleading the claim, I agree with the  
defendants that enough is enough.  
[45] For clarity, in reaching this conclusion, I am not relying on any analysis of public  
correction. Rather, I find that the pleading, or Schedule C in this case, is not sufficiently precise  
to grant leave with respect to the alleged accounting misrepresentations, and after the plaintiffs’  
repeated attempts to get it right, I am not inclined to allow them leave to make another run at it.  
The court does not have endless resources to allow counsel to keep honing their claim in the  
hopes that the next one will be precise enough to obtain leave to proceed. Nor would it be fair to  
the defendants to subject them to a third leave motion (with a record that, even pared down for  
this motion given the reduced scope of the issues from those that were before Belobaba J.,  
occupies approximately 30,000 pages in CaseLines, and for which counsel collectively prepared  
20 volumes of compendia).  
[46] In the event that I am wrong, and this is not a sufficient basis on which to deny leave, I  
will consider briefly whether the accounting misrepresentations would otherwise have met the  
requirements for leave, after I deal with the analysis of the scheduling and capex claims.  
The Scheme Under the Securities Act  
[47] Section 138.3(1) of the Securities Act creates the statutory claim for misrepresentation in  
the secondary market. It provides, in part:  
Where a responsible issuer or a person or company with actual, implied or apparent  
authority to act on behalf of the responsible issuer releases a document that  
contains a misrepresentation, a person or company who acquires or disposes of the  
issuer’s 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; …  
Page: 10  
[48] The Securities Act, s. 1(1) defines “misrepresentation” to be (a) an untrue statement of  
material fact, or (b) an omission to state a material fact that is required to be stated or that is  
necessary to make a statement not misleading in the light of the circumstances in which it was  
made.  
[49] “Material fact”, when used in relation to securities issued, is defined as “a fact that would  
reasonably be expected to have a significant effect on the market price or value of the securities”.  
[50] Under s. 138.8(1), leave is required to commence a claim under s. 138.3(1). Section  
138.8(1) provides that 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.  
[51] The defendants do not challenge the good faith requirement. They argue that there is no  
reasonable possibility that a misrepresentation action based on the alleged capex, scheduling, and  
accounting misrepresentations will be resolved in favour of the plaintiff.  
[52] The defendants also rely on the forward-looking information defence in the Securities  
Act. Section 138.4(9) provides that a person or company is not liable in an action under s. 138.3  
for a misrepresentation in forward-looking information if the person or company proves all of the  
following:  
1. The document or public oral statement containing the forward-looking information  
contained, proximate to that information,  
i. reasonable cautionary language identifying the forward-looking  
information as such, and identifying material factors that could cause  
actual results to differ materially from a conclusion, forecast or projection  
in the forward-looking information, and  
ii. a statement of the material factors or assumptions that were applied in  
drawing a conclusion or making a forecast or projection set out in the  
forward-looking information.  
2. The person or company had a reasonable basis for drawing the conclusions or making  
the forecasts and projections set out in the forward-looking information.  
The Jurisprudential Framework  
[53] In Baldwin v. Imperials Metals Corporation, 2021 ONCA 838, at para. 16, the Court of  
Appeal described the purpose of Part XXIII.1 of the Securities Act as being “aimed at deterring  
corporate nondisclosure, protecting investors, and incentivizing accurate and timely disclosure  
by public issuers, while avoiding the American experience of predatory ‘strike suits’”.  
Page: 11  
[54] In Theratechnologies Inc. v. 121851 Canada Inc., 2015 SCC 18, [2015] 2 S.C.R. 106, at  
paras. 36-38, the Supreme Court of Canada held that the leave requirement gives courts “an  
important gatekeeping role” in determining whether an action could be said to have a reasonable  
possibility of success. The Court found that the threshold should be more than a “speed bump”,  
and the courts must “undertake a reasoned consideration of the evidence to ensure that the action  
has some merit.” The Court described the legislative objective of the leave requirement as  
creating “a robust deterrent screening mechanism so that cases without merit are prevented from  
proceeding”. In Bradley v. Eastern Platinum Ltd., 2016 ONSC 1903, at para. 51, Rady J. held  
that the leave test “is not a low bar”.  
[55] To establish a reasonable possibility of success, the claimant must “offer both a plausible  
analysis of the applicable legislative provisions, and some credible evidence in support of the  
claim.” The threshold requires that there be a “reasonable or realistic chance that the action will  
succeed.” However, the leave stage should not be treated as a mini-trial: Theratechnologies, at  
paras. 38-39.  
[56] In Paniccia v. MDC Partners Inc., 2018 ONSC 3470, 142 O.R. (3d) 421, at paras. 89-91,  
Perell J. held that a judge on a leave motion must be cognizant of the fact that full production has  
not been made. While the court is entitled to weigh the evidence of both parties having regard to  
the affidavits and cross-examinations, the court must also take into account that the leave motion  
“involves merely a paper record and that the statutory leave test sets a low evidentiary  
threshold.”  
[57] In Rahimi v. SouthGobi Resources, 2017 ONCA 719, 137 O.R. (3d) 241, at para. 48, the  
Court of Appeal held that the motion judge “is also obligated to consider what evidence is not  
before her.” Moreover, where there are contentious issues of credibility that impact on the  
decision whether to grant leave, “the motion judge must ask herself whether they can be resolved  
on the existing record”: SouthGobi, at para. 49.  
[58] The defendants argue that the reasoning in SouthGobi must be taken with a grain of salt.  
The SouthGobi defendants took the remarkable position of attacking their own corrective  
disclosure, arguing that it was unnecessary, and relied solely on their affirmative reasonable  
investigation defence. Barrick argues that the unusual approach to the motion in SouthGobi puts  
a different gloss on the Court of Appeal’s discussion with respect to the gaps in the evidence.  
[59] If the defendants are suggesting that the direction in SouthGobi to be cognizant of gaps in  
the evidence is limited to defences where the defendant bears the onus of proof, I disagree. The  
Court of Appeal did not restrict its discussion about gaps in the evidence only to evidence related  
to affirmative defences. Rather, its statement about considering the evidence that is not before  
the court followed a quoted passage from Theratechnologies, at para. 39, which deals with the  
leave screening mechanism more generally. It is logical, and consistent with the interests of  
justice, that a court approach the leave test mindful of the fact that the defendant may have  
chosen not to produce relevant evidence to which the plaintiff has no access. As the Court of  
Appeal wrote in SouthGobi, at para. 48, [c]onsideration of these evidential limitations of the  
Page: 12  
leave stage is important because they can work to the prejudice of plaintiffs who have potentially  
meritorious claims.”  
[60] The plaintiffs rely on the decision in Barrick SCJ, where Belobaba J. held that a 10-20  
per cent chance of success for the plaintiff is enough to clear the “reasonable possibility” hurdle.  
With great respect to Belobaba J., I do not find this approach helpful. First, I note that when  
Barrick was appealed to the Court of Appeal, that court did not adopt the 10-20 per cent”  
language, but instead emphasized the need for the motion judge to undertake a reasoned  
consideration of the evidence on a motion for leave: Drywall Acoustic Lathing and Insulation,  
Local 675 Pension Fund v. Barrick Gold Corporation, 2021 ONCA 104, at paras. 73 and 76.  
Second, in Theratechnologies, at paras. 4 and 38, Abella J. described the threshold for leave as  
requiring “more than a mere possibility of success” and that there must be a “reasonable or  
realistic chance that the action will succeed”.  
[61] I accept that the reasonable possibility, or, put another way, more than a mere possibility,  
threshold is lower than the balance of probabilities threshold, and that a court may grant leave on  
this lower threshold even if the motion judge believes that the defendant has a strong chance of  
success at trial. In my view, however, it is not helpful to ascribe percentages to what is  
fundamentally a qualitative analysis: see also O’Brien v. Maxar Technologies Inc., 2022 ONSC  
1572, at paras. 95-96.  
[62] I also note that the qualitative analysis as to whether there is a reasonable possibility that  
the claim will be resolved at trial in favour of the plaintiff must be undertaken for each alleged  
misrepresentation: Paniccia, at para. 86; Kauf v. Colt Resources, Inc., 2019 ONSC 2179, at  
paras. 70-72.  
[63] With this framework in mind, I turn to the analysis of the issues.  
But First, a Word about the Record  
[64] The record before me is enormous. Through 20 volumes of compendia, lengthy factums,  
and five days of argument, counsel have worked hard to ensure I understand the events  
underlying this motion, and I appreciate their efforts.  
[65] In argument, much was made about “gaps” in the evidence. I recognize that this  
proceeding, despite its age, remains at an early stage in the litigation process. Documentary  
discovery has not been made. Oral discoveries have not been held.  
[66] At the same time, the volume of documents produced on this motion dwarfs what the  
court sees in almost all of the trials that it hears. The record before me was pared down from that  
which was before Belobaba J. Lengthy cross-examinations have been held. Multiple expert  
reports have been exchanged.  
Page: 13  
[67] Thus, while I am cognizant that production and discovery are not complete, and that there  
are categories of documents over which the plaintiffs sought production but were refused, I am  
also cognizant that the record in this case is unusually well developed for a leave motion.  
[68] I have concluded that there are no obvious gaps in the evidence before me that affect my  
analysis below, notwithstanding the plaintiffs’ lengthy request to inspect documents that was  
refused by the defendants.  
[69] I also note that, given the size of the record, there are facts and evidence to which I have  
not referred. Were I to take each fact or piece of evidence in the record and explain why it is  
either consistent with my conclusions, why I accorded it no weight, or why it was irrelevant to  
my conclusions, these reasons would be unworkably long, and the delay in releasing them would  
be significant. In dealing with a record of 30,000 pages, I have chosen to focus on the facts I  
consider to be key to the parties’ positions and to my analysis. Really, there was no other option.  
The Alleged Capex and Scheduling Misrepresentations  
[70] The first alleged misrepresentation in this category arose in October 2011, the month  
after the earliest date the class period can begin, being September 22, 2011, due to the operation  
of the statutory limitation period. However, the story begins earlier than that. To provide the  
necessary context about the company’s public disclosures, and the information that would have  
been available to the market, I begin with some information about Barrick, and then look at the  
company’s public disclosures about Pascua-Lama, beginning in May 2009, when Barrick  
announced that it was green-lighting the project. In the course of doing so, on occasion I will  
make passing reference to some of the events happening behind the scenes at Barrick, and also  
some events happening in the world economy and mining industry. I do so to assist the reader in  
understanding the totality of events. However, where I do so, I do not intend to suggest that any  
events internal to the company would have been publicly known at the time the disclosures in  
question were made.  
[71] Barrick is one of the largest mining companies in the world. In its Annual Information  
Form (“AIF”) for the year ended December 31, 2010, it described itself as “the leading gold  
mining company in the world in terms of production, reserves and market capitalization.” It  
disclosed that it was engaged in the production and sale of gold, copper, and oil and gas. It  
disclosed that it held other interests, including a nickel development project. It described its  
activities as including exploration and mine development. According to its 2010 AIF, Barrick  
employed about 16,000 people at the time, plus an additional 2,500 people at operations it jointly  
owned.  
[72] In its 2010 AIF, Barrick disclosed sole or part ownership in 24 gold mines in Africa,  
Australia Pacific, South America, and North America, plus interests in copper mines. The record  
includes an organizational chart of Barrick’s significant subsidiaries only, from which one can  
confidently conclude that Barrick’s corporate operations were complex and broad in scope.  
Page: 14  
[73] In the 2010 fiscal year, Barrick produced 7.77 million ounces of gold, and had total  
proven and probable gold mineral reserves of 139.8 million ounces. It produced 368 million  
pounds of copper and had proven and probable copper reserves of 6.5 billion pounds.  
[74] As of March 28, 2011, there were almost 1 billion shares of Barrick issued and  
outstanding. With a share price of roughly $50.00/share, its market capitalization at this point in  
time was around $50 billion.  
[75] Barrick announced the Pascua-Lama project had been green-lit in a press release dated  
May 9, 2009. According to the press release, Pascua-Lama was expected to be one of the lowest  
cost gold mines in the world. The company estimated pre-production construction costs of $2.8-  
3.0 billion. Production of first gold was expected in early 2013.  
[76] In this press release, as in virtually all of the press releases and disclosure documents at  
issue in this motion, Barrick included a cautionary statement on forward-looking information.3  
Among other things, the statement said:  
Forward-looking statements are necessarily based upon a number of estimates and  
assumptions that, while considered reasonable by management, are inherently  
subject to significant business, economic and competitive uncertainties and  
contingencies. The Company cautions the reader that such forward-looking  
statements involve known and unknown risks, uncertainties and other factors that  
may cause the actual financial results, performance or achievements of Barrick to  
be materially different from the Company’s estimated future results. Performance  
or achievements expressed or implied by those forward-looking statements and the  
forward-looking statements are not guarantees of future performance. These risks,  
uncertainties and other factors include, but are not limited to: changes in the  
worldwide price of gold, silver, copper or certain other commodities (such as fuel  
and electricity); fluctuations in currency markets; legislative, political or  
economic development in the jurisdictions in which the company carries on  
business, including Chile and Argentina; operating or technical difficulties in  
connection with mining or development activities; employee relations; availability  
and costs associated with mining inputs and labor; the speculative nature of  
exploration and development, including the risks of obtaining necessary licenses  
and permits the risks involved in the exploration, development and mining  
business. …  
3
The only documents that did not contain cautionary language about forward-looking information were  
press releases making disclosures that also required a material change report to be prepared, and in those  
cases, the cautionary language was included in the material change report.  
Page: 15  
[77] The company directed readers to its most recent AIF where certain of these factors were  
discussed in greater detail. It also explicitly disclaimed any intention or obligation to update or  
revise any forward-looking statements except as required by applicable law.  
[78] The AIF for the year ended December 31, 2008 set out a lengthy discussion of risk  
factors which was repeated in subsequent AIFs in the same, or substantially the same, language.  
Over approximately nine pages, the company discussed risk factors in detail. Below I summarize  
the risks that are relevant for the purposes of this motion (including some relevant to the alleged  
accounting misrepresentations), and some details about the nature of Barrick’s cautions:  
a. Metal price volatility: Barrick warned that its business is strongly affected by the  
world market price of gold and copper. Barrick warned that depending on the  
market price of the relevant metal, it may determine that it is not economically  
feasible to continue the development of some or all of its current projects.  
b. Risks inherent in projects: Barrick warned that there are risks and unknowns  
inherent in all projects including capital and operating costs of the projects, and  
the future price of the relevant metals. It indicated that the capital expenditures  
and time required to develop new mines are considerable, and changes in the costs  
or construction schedules can affect project economics. It specifically warned that  
it was possible for actual costs to increase significantly, and economic returns to  
differ materially, from its estimates. It warned about the risk of failure to obtain  
the necessary government approvals for a project in which case the project may  
not proceed on its original timing or at all. It warned that projects may require  
more capital than anticipated.  
c. Mineral reserves and resources: Barrick warned that quantities of its mineral  
reserves and mineral resources were estimates and there was no guarantee that  
they were accurate. It warned that it could take years from the initial phase of  
drilling before production was possible, and that the economic feasibility of  
exploiting a discovery might change. It repeated risks relating to the market price  
fluctuations of metals and risks relating to failure to obtain or maintain necessary  
permits or government approvals.  
d. Price volatility and availability of other commodities: Barrick warned that the cost  
and availability of commodities which are consumed or used in connection with  
its projects, including fuel, electricity, steel, and concrete, can be subject to  
volatile price movements, which can be material and occur over short periods of  
time. An increase in the cost, or decrease in the availability, of construction  
materials may affect the timing and cost of Barrick’s projects, and, among other  
things, may lead Barrick to determine that it is not economically feasible to  
continue development of some or all of its current projects.  
Page: 16  
e. Mining risks and insurance risks: Barrick warned of risks relating to  
environmental hazards, labour force disruptions, unavailability of materials and  
equipment, weather conditions, and seismic activity, which could result in, among  
other things, environmental damage, delays in mining, and possible legal liability.  
Barrick warned that it could incur significant costs or experience significant  
delays that could have a material adverse effect on its financial performance.  
f. Production and cost estimates: Barrick warned that no assurance could be given  
that its estimates of cash costs and capital costs would be achieved. It disclosed  
that its actual production and costs might vary from estimates for a variety of  
reasons including risks and hazards associated with mining, natural phenomena  
including earthquakes, and unexpected labour shortages. It noted that cost of  
production may be affected by a variety of factors including labour costs, the  
costs of commodities, general inflationary pressures, and currency exchange rates.  
g. Environmental and health and safety regulations and permits: Barrick warned that  
its ability to obtain permits and approvals may be adversely impacted by real or  
perceived detrimental events associated with its activities. In turn, this may  
adversely affect Barrick’s operations. It warned that future changes in applicable  
laws, regulations and permits, or changes in their enforcement or regulatory  
interpretation, could have an adverse impact on Barrick. It also warned that failure  
to comply with applicable laws and regulations may result in injunctions, fines,  
suspension or revocation of permits, and other penalties. It stated that there can be  
no assurance that Barrick has been, or will at all times be, in full compliance with  
all such laws and regulations and with its environmental and health and safety  
permits.  
h. Foreign investments and operations: Barrick noted that mining investments are  
subject to the risks associated with any conduct of business in foreign countries  
including uncertain political and economic environments, changes in laws or  
policies, cancellation or renegotiation of contracts, the inability to maintain  
necessary government permits, currency fluctuations, and import and export  
regulations. These risks may require Barrick to spend more funds than previously  
expected.  
i. Government regulation and changes in legislation: Barrick disclosed that its  
business is subject to various levels of government controls and regulations. It is  
unable to predict what legislation or revisions may be proposed that might affect  
its business, but such changes could require increased capital and operating  
expenses, and could prevent or delay operations by the company.  
j. Currency fluctuations: Barrick noted that currency fluctuations may affect the  
costs it incurs in its operations.  
Page: 17  
k. Employee relations: Barrick warned that labour disruptions may have a material  
adverse impact on its operations.  
l. Shortage of critical parts, equipment and skilled labour: Barrick warned that an  
increase in worldwide demand for critical resources such as input commodities,  
drilling equipment, tires, and skilled labour may cause unanticipated cost  
increases in delays.  
m. Litigation: Barrick noted that it may be involved in disputes with others and the  
results of litigation cannot be predicted with certainty.  
n. Disclosure and internal controls: Barrick disclosed that it has documented and  
analyzed its system of disclosure controls and its internal controls over financial  
reporting, but a control system, no matter how well designed, can only provide  
reasonable, not absolute, assurance with respect to the reliability of financial  
reporting and financial statement preparation.  
o. Ability to support the carrying value of goodwill: Barrick noted that the carrying  
value of its goodwill was approximately $5.3 billion. It noted that the company  
evaluates the carrying amount of goodwill on an annual basis, at least. It noted  
that the timing and amount of future goodwill impairment charges is dependent on  
a multitude of factors that impact evaluations of mineral properties, including  
changes in geopolitical risk, changes in market gold prices and total cash costs,  
and future capital requirements, among others.  
[79] Thus, at the outset of the project, the market was aware of Barrick’s estimated capex  
budget and expected first gold production date of early 2013, but it was warned that mining is a  
complex and high-risk business, and any number of factors, including many factors outside of  
Barrick’s control, could affect the project’s budget, timeline, and feasibility, among other things.  
[80] Indeed, some of these concerns came to pass by February 17, 2011, when Barrick  
released its Q4 and year-end report in which it announced an estimated increase in its capex  
budget to $3.3-3.6 billion, and production of first gold in the first half of 2013. Reasons for the  
increase included a stronger Chilean peso, increases to labour, commodity, and other input costs  
in both Chile and Argentina, and higher inflation rates, particularly in Argentina. To foreshadow  
some of the evidence related to these factors, which I address in greater detail below, the  
financial crisis of 2007-2008 had been followed by a superboom in construction projects,  
including Pascua-Lama, leading to competition for labour and commodities. Moreover, a 2010  
earthquake in Chile had wrought damage leading to significant infrastructure projects in Chile,  
creating additional local demand for labour and commodities. These factors drove up the costs of  
commodities and labour. In particular, skilled labourers in Chile preferred to work close to home,  
repairing the infrastructure in their communities, rather than travel away from home to work in  
the harsh conditions of the high Andes. Moreover, the workers Barrick was able to hire and  
Page: 18  
retain were, overall, not as skilled as the company would have liked, leading to less productivity  
on the job site.  
[81] The company’s revised capex forecast and schedule were accompanied by cautionary  
language like that I have already reviewed.  
[82] New leadership on the Pascua-Lama project came on board in March 2011. In April  
2011, they determined they would undertake a cost review and reforecast of the costs of the  
project. Having done so, in its Q2 2011 quarterly report dated July 28, 2011, the company  
disclosed a further increased capex budget in the amount of $4.7-5.0 billion, and indicated that  
the schedule would be maintained to deliver first gold in mid-2013. The report made reference to  
factors impacting the mining industry, and Pascua-Lama more particularly, including a higher  
commodity price environment, stronger local currencies, tighter labour markets, higher inflation,  
and the Chilean earthquake. It indicated that higher metal prices had improved the economics  
and overall rates of return for Pascua-Lama notwithstanding the higher than previously estimated  
capex costs.  
[83] In the context of reporting its revised capex forecast, Barrick indicated that it had  
“engaged an independent, globally recognized engineering consultant who has reviewed the  
robustness of our processes and methodology in deriving this updated capital estimate.” The  
plaintiffs allege that this statement is a misrepresentation. They argue that the independent  
consultant found significant problems with Barrick’s methodology, but the statement in the  
quarterly report makes it seem as if the company’s methodology was validated by the consultant.  
The defendants deny that the statement is inaccurate, or that there were significant problems with  
the company’s forecasting methodology.  
[84] The statement about the independent consultant is an alleged misrepresentation in the  
plaintiffs’ common law claims, but it falls outside of the statutory limitation period, so it does not  
form part of the alleged misrepresentations for which leave is sought on this motion. Rather, the  
plaintiffs argue that the concerns raised by the independent consultant should have been  
disclosed to make the capex forecasts that were disclosed by the company within the class period  
not misleading. I deal with those arguments when I analyze whether leave ought to be granted to  
commence a claim on the impugned statements.  
[85] The company also reported in its Q2 2011 quarterly report that it had reorganized its  
capital projects group, including making personnel changes at Pascua-Lama. Those changes refer  
to the new leadership.  
[86] As with the company’s other disclosures, the Q2 2011 quarterly report included the  
cautionary language I have already described.  
[87] The company’s Q3 quarterly report marks the first of its disclosures within the class  
period. In the report, Barrick repeated that Pascua-Lama was expected to achieve first production  
in mid-2013, and repeated that its estimated total mine construction capital was $4.7-5.0 billion.  
Page: 19  
It also repeated its cautionary language, including the statement that its forward-looking  
statements are based upon estimates and assumptions that, “while considered reasonable by the  
Company”, are inherently subject to significant business, economic and competitive uncertainties  
and contingencies.  
[88] The plaintiffs allege that the Q3 report contained misrepresentations by (i) stating that  
Pascua-Lama was expected to achieve first production in mid-2013; and (ii) stating that total  
mine construction capital was estimated at $4.7-5.0 billion. They also argue that Barrick made  
misrepresentations in the Q3 2011 report by failing to disclose facts required to be stated to make  
those express statements not misleading, including that (i) the capex forecast was neither  
reasonable nor accurate; (ii) the budget was based on a flawed methodology as disclosed in the  
report of the independent consultant referred to in the Q2 2011 quarterly report; (iii) the estimate  
was derived using estimates prepared by significant sub-contractors Barrick had engaged on the  
project, the largest of whom had delivered estimates that Barrick considered to be highly  
unreliable; (iv) the cost escalation related significantly to ongoing problems with the approach  
Barrick had taken to management of the project; and (v) the estimate was based on a schedule  
that called for pre-stripping of surface rock on the Chilean side of the project to begin by mid-  
2011, and Barrick knew that problems with the completion of its Water Management System  
(“WMS”) were placing that timeline in jeopardy.  
[89] The plaintiffs also allege that Barrick misrepresented as a matter of current fact that its  
estimates were “considered reasonable by management” when in fact Barrick knew they were  
unreliable and materially understated. They allege that Barrick omitted to disclose known  
material information relevant to the unreliability and understatement of the capex budget and  
schedule, including that Barrick had decided to use an in-house team rather than experienced  
project construction management to save costs, but Pascua-Lama was beyond the expertise of its  
in-house capabilities, resulting in increased costs and delay.  
[90] As I review in greater detail below, in October 2011, Barrick began the process of trying  
to obtain a “definitive estimate” (“DE”) and schedule from its most significant sub-contractor,  
Fluor-Techint,4 to allow it to quantify the capex budget amid ongoing pressures to the project.  
Over the months that followed, Fluor-Techint delivered multiple iterations of its DE and  
schedule, all of which were beset by problems, and that the company judged to be unreliable,  
albeit improving with each version.  
[91] By the time the Q4 and 2011 year-end report was released on February 16, 2012, the  
company remained unsatisfied with Fluor-Techint’s DE and schedule. The company made the  
following statements in the report:  
4 Fluor-Techint was a joint venture of two entities, Fluor and Techint.  
Page: 20  
At the Pascua-Lama project, approximately 55% of the previously announced pre-  
production capital of $4.7 to 5.0 billion has been committed and first production is  
expected in mid-2013. The project is being impacted by labor and commodity cost  
pressures as a result of inflation, competition for skilled labor, the impact of  
increased Argentinian customs restrictions on equipment procurement and lower  
than expected labor productivity.  
[92] The plaintiffs argue that the first sentence of the paragraph above is a misrepresentation,  
for the reasons I have already identified with respect to the October 2011 Q3 report.  
[93] The Q4 and 2011 year-end report included the cautionary language I have already  
described. The plaintiffs allege that the statement in the cautionary language that the forecasts  
were considered reasonable by management remained a misrepresentation of current fact, for  
the reasons I have already described. In addition, the plaintiffs allege that by this time, Barrick  
knew of anticipated internal capex budget increases, to $6.4 billion in January 2012 and $7.5  
billion by Q1 2012 (both numbers net of contingency), and also knew that increasing inflationary  
trends were likely to cause a material increase to the estimate, but did not disclose this.  
[94] On March 28, 2012, Barrick released its 2012 AIF. In it, the company stated:  
Approximately 55% of the previously announced pre-production capital of $4.7-5.0  
billion has been committed and first production is expected in mid-2013. … The  
project is being impacted by labor and commodities cost pressures as a result of  
inflation, competition for skilled labor, the impact of increased Argentinean  
customs restrictions on equipment procurement and lower than expected labor  
productivity.  
[95] Again, the company included cautionary language in its 2012 AIF, including the  
statement that forward-looking statements are based on a number of estimates and assumptions  
that, “while considered reasonable by [the company], are inherently subject to significant  
business, economic and competitive uncertainties and contingencies.  
[96] The plaintiffs impugn the statements listed above for the same reasons I have already  
described.  
[97] On May 2, 2012, the company released its Q1 2012 quarterly report. By this time, it  
remained dissatisfied with the DE and schedule provided by Fluor-Techint and continued to  
press Fluor-Techint for more accurate estimates.  
[98] The quarterly report stated:  
At the Pascua-Lama project, about 70 percent of the previously announced in  
construction capital of $4.7-5.0 billion has been committed. First production is  
anticipated in mid-2013. The project is being impacted by labor and commodity  
cost pressures, primarily as a result of: high inflation in Argentina, and to a lesser  
Page: 21  
extent, Chile, competition for skilled labor and lower than expected labor  
productivity in underground development. Barrick has added experienced  
supervisors and miners from its North American and South American regions to the  
project team, increased oversight of external contractors, accelerated procurement  
of long lead items and necessary equipment. In conjunction with these activities,  
the company intends to complete a detailed capital cost and schedule review in the  
second quarter of 2012.  
[99] Once again, the report included cautionary language with the same statement that the  
forecast was based on estimates and assumptions that were considered reasonable by  
management.  
[100] The plaintiffs impugn both the repeated capex budget and schedule to first gold estimates,  
as well as the statement that the forecast was based on estimates and assumptions considered  
reasonable by management, for the reasons I have already described.  
[101] According to the plaintiffs, the company’s Q2 2012 quarterly report, released on July 26,  
2012, contains both a misrepresentation and a partial correction of the earlier misrepresentations.  
In this report, the company stated that:  
As previously disclosed with our first quarter results, due to lower than expected  
productivity and persistent inflationary and other cost pressures, the company  
initiated a detailed review of Pascua-Lama’s schedule and cost estimate in the  
second quarter. While the review is not yet complete, preliminary results currently  
indicate that initial gold production is now expected in mid-2014, with an  
approximate 50-60 percent increase in capital costs from the top end of the  
previously announced estimate of $4.7-5.0 billion. Approximately $3 billion has  
been spent to date. …  
[102] The company went on to discuss challenges with the project, and noted that it had:  
determined that we needed to re-align the project management structure between  
Barrick and our [Engineering, Procurement and Construction Management  
(EPCM)] partners, Fluor and Techint. We have taken immediate action to  
address these issues. We are strengthening the project management structure by  
seeking to have Fluor take over a greater proportion of the construction  
management of the project. Barrick is also working with Fluor and Techint to  
develop an integrated action plan that ensures the scope of remaining work is well  
planned and executed and has also engaged a leading EPCM organization to  
provide an independent assessment of the status of the project. We will provide a  
further progress update with third quarter results.  
[103] The company identified key factors contributing to the capex increase as lower than  
expected contractor productivity, engineering and planning gaps, cost escalation, and schedule  
Page: 22  
extension. It noted that the delay arose primarily from delays to completing the camps, the tunnel  
between the Pascua and Lama sides of the project, and the processing plant.  
[104] Again, the Q3 2012 report included the same cautionary language, with the same  
assurance that forecasts are based on estimates and assumptions considered reasonable by the  
company.  
[105] The plaintiffs argue that the revised budget and schedule were partially corrective of the  
earlier, inaccurate and materially understated capex budget and schedule. They also argue that  
the revised budget and schedule continued to be misrepresentations, and the statement that the  
assumptions and estimates underlying the forecast were considered reasonable by the company  
was a misrepresentation.  
[106] In support of this contention, they argue that Barrick failed to disclose that in engaging  
Fluor in a larger role, and in engaging a leading EPCM organization, Bechtel, to provide an  
independent assessment of the project, Barrick knew it would incur costs of likely more than  
$400 million which had not been factored into its revised budget. They also argue that Barrick  
knew costs were likely to increase materially as a result of Fluor’s analysis of the budget.  
Finally, they argue that Barrick had commenced pre-stripping surface rock on the Pascua side of  
the project despite not having fully completed its WMS, and in violation of its environmental  
permit, exposing the project to serious risk of suspension and the resulting increase to capex  
costs if it were suspended.  
[107] In its Q3 2012 quarterly report, released on November 1, 2012, Barrick addressed the  
capex budget and schedule of the Pascua-Lama project:  
As disclosed with Barrick’s second quarter report, preliminary results of a review  
indicated an increase in capital costs to $7.5-8.0 billion and a delay in first  
production to mid-2014. Since then, the company has been working with Fluor to  
carry out a more comprehensive top-to-bottom review. This review will be  
complete by our 2012 year-end results release; however work to date suggests  
capital costs will be closer to $8.0-$8.5 billion, with first production in the second  
half of 2014.  
[108] Barrick identified the causes of the increase in capital costs to include the impact of delay  
of first gold to the second half of 2014, increased labour hours and installation rates, and  
incremental payments to Fluor to assume project and additional construction management, as  
well as increased incentives for Fluor and other contractors to come in on time and on budget.  
[109] Once again, the Q3 2012 report contained cautionary language with respect to forward-  
looking information, including the explicit statement that the forecasts were based on estimates  
and assumptions considered reasonable by the company.  
[110] The plaintiffs argue that the revised budget and schedule were partially corrective of the  
earlier misrepresentations, but also an ongoing misrepresentation. They argue that Barrick  
Page: 23  
continued to withhold material information that the capex estimate and schedule were unreliable  
and materially understated, including that (i) Barrick had commenced pre-stripping in May 2012  
in violation of its environmental permit, exposing the project to a serious risk of suspension, and  
resulting in delay and significant increase to the capex budget; and (ii) Barrick had used an in-  
house team to manage Pascua-Lama until 2012 although the project was beyond the team’s  
capabilities, resulting in ongoing costs. For the same reasons they argue that the statement that  
the forecast was based on estimates and assumptions considered reasonable by management was  
a misrepresentation of current fact.  
[111] The plaintiffs also argue that Barrick’s 2012 AIF, dated March 28, 2013, contained  
misrepresentations. In that document, Barrick stated:  
During the fourth quarter, the cost estimate and schedule for the project was  
finalized. Expected total mine construction capital remains unchanged in the range  
of $8.0 to $8.5 billion, and includes a contingency of 15-20 percent of remaining  
capital. First gold production continues to be targeted for the second half of 2014.  
Incentives for both Fluor and Techint, our Engineering, Procurement, and  
Construction Management (“EPCM”) partners, are based on the completion of the  
project in line with this estimate and schedule.  
[112] Although not directly relevant for the purposes of the motion before me, I note that the  
2012 AIF also discloses that, in September 2012, a constitutional rights protection action was  
filed in Chile by representatives of four Diaguita Indigenous communities against Barrick’s  
Chilean subsidiary and against the Chilean regulatory body with oversight authority over the  
project. In October 2012, a second constitutional rights protection action was filed. A  
preliminary injunction to halt pre-stripping activities was not granted, but the actions proceeded  
in the Chilean courts, where the representatives of the Indigenous communities asserted Barrick  
was not in compliance with its environmental approvals, resulting in negative impacts on water  
sources and contamination. They sought relief in the form of the suspension of the construction  
until all of Barrick’s environmental obligations were fulfilled.  
[113] The AIF continued the company’s usual cautionary language.  
[114] The plaintiffs allege that the capex estimate and schedule constitute misrepresentations  
for the reasons already set out, and that the representation that the company’s estimates were  
considered reasonable by management was a misrepresentation of current fact, again, for the  
reasons already described.  
[115] According to the plaintiffs, in addition to the partial corrections the company had already  
made (which I have identified above), the capex and schedule misrepresentations were finally  
corrected in the following documents:  
a. A press release dated June 28, 2013, in which Barrick indicated that, as a result of  
recent and continued significant declines in gold and silver prices, and the delay  
Page: 24  
in first gold production, Barrick was conducting impairment testing. Barrick  
stated that preliminary analysis indicated an after-tax asset impairment charge in  
the range of approximately $4.5-5.5 billion in the second quarter for the Pascua-  
Lama project; and  
b. The Q3 2013 press release and quarterly report, dated October 31, 2013, in which  
Barrick reported that it had decided to temporarily suspend construction activities  
at Pascua-Lama, except those required for environmental protection and  
regulatory compliance.  
[116] In addition, as I noted above in my analysis of precision pleading, with respect to the  
accounting representations, the plaintiffs also allege that a public correction was made in the two  
Barrick press releases and the Dow Jones Newswire release of April 10, 2013, which disclosed  
that the Chilean court had issued an injunction suspending construction of the Pascua side of the  
project.  
[117] In considering whether to grant leave for the misrepresentations identified above, I will  
consider each individually in the context of the evidence to determine if the threshold is met. I  
note that the parties have not joined issue on whether the plaintiffs have advanced a plausible  
analysis of the applicable legislative provisions (except with respect to an aspect of the defence).  
The real question is whether there is some credible evidence in support of the claim to establish a  
reasonable possibility, or to use Abella J.’s other description of the standard, a realistic chance,  
of success.  
Is there some credible evidence in support of the claimed capex budget and scheduling  
misrepresentations?  
The Alleged October 2011 Misrepresentations  
[118] The plaintiffs claim that, in disclosing its forecasted capex budget of $4.7-$5.0 billion,  
and a schedule that would see first production at Pascua-Lama in mid-2013 in its Q3 2011 report,  
Barrick made misrepresentations. Moreover, they claim that it made misrepresentations by  
omission by failing to disclose facts that would make clear that its capex budget and schedule  
were unreasonable. In effect, as the plaintiff indicated during oral argument, these claims amount  
to the same allegation: that the forecasts were misstated because Barrick omitted to state material  
information. There is no magic in whether the misrepresentations alleged were made by  
commission or omission, because the argument in support of each turns on the same allegations  
and evidence. The alleged misrepresentations by omission are better particularized, so I  
concentrate on those in my analysis.  
[119] In addition, the plaintiffs allege that Barrick’s representation that its forecasts were  
considered reasonable by management was a misrepresentation of current fact. This claim also  
relies on the same allegations and evidence as the misrepresentations by omission.  
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[120] Unfortunately, the plaintiffs’ Schedule C lumps together the misrepresentations regarding  
the capex budget and schedule over time without identifying which alleged statements of  
material facts were omitted in each relevant time frame. As a result, I have identified the alleged  
omissions that are logically connected to each time frame in my analysis. With respect to the  
October 2011 misrepresentations, the plaintiffs make the following allegations relevant to this  
time frame:  
a. The independent expert who Barrick engaged in June 2011, Turner & Townsend,  
had highlighted problems with the methodology Barrick used to develop the  
capex budget that it first disclosed in its Q2 2011 report (before the class period)  
and repeated in its Q3 2011 report (within the class period). Moreover, the $650  
million contingency in the budget reflected a high level of risk or unreliability in  
the base estimate.  
b. The capital costs were escalating due to Barrick’s decision to use an in-house  
management team rather than an EPCM approach, when the project was outside  
the in-house team’s capabilities. Barrick thus knew its budget was subject to  
material increase.  
c. Sometime in October 2011, and most likely before the release of the Q3 2011  
report on October 27, 2011, Barrick had begun a reforecasting process by asking  
Fluor-Techint, the subcontractor with the largest role in the project, for its DE and  
schedule. The plaintiffs allege that this indicates that Barrick knew its earlier  
capex budget and schedule were unreliable when it repeated them in the Q3 2011  
report. They also allege that Barrick believed the estimates provided by Fluor-  
Techint to be unreliable, and therefore it knew that the budget and schedule for  
the project were unreliable.  
d. The schedule to first production contemplated that pre-stripping on the Chilean  
side of project would begin in mid-2011, but Barrick knew that problems in the  
completion of the WMS placed that timeline in jeopardy.  
[121] I will consider each of these arguments in turn.  
[122] First, to understand the arguments regarding Turner & Townsend, it is necessary to  
understand something of Barrick’s forecasting process. When new project management took  
over in March 2011, they decided to review and reforecast the project’s capex budget and  
schedule. The evidence indicates it is not unusual to do so when there is a change in leadership  
of a project, to allow new leadership to assess what is and is not working for the project, re-  
evaluate goals, and set new ones.  
[123] The final capex budget estimate was made up of two parts: the base forecast, or Barrick’s  
forecast of the costs of developing the project, plus a contingency to account for unexpected  
costs or risks. The contingency itself was separated into a project contingency, which would be  
Page: 26  
available to the project team, and a management reserve, which would be available to the project  
team at the direction of management.  
[124] Forecasting the capital costs of the development of Pascua-Lama was a significant and  
complex undertaking. Both the contingency and the base forecast were developed through a  
lengthy process. The evidence indicates that Barrick took great care in preparing its budgets.  
[125] Barrick began the process of reforecasting shortly after the project management changed  
over in March 2011. To develop the base forecast, Barrick considered information including: (i)  
existing bidding information; (ii) its original budget from April 2009; (iii) information  
concerning costs that had been incurred on the project; (iv) updated estimates related to indirect  
costs; (v) updated estimates related to mining costs; (vi) trends relevant to the project; (vii) key  
contracts; (viii) approved, pending and potential changes to contracts; and (ix) updated estimates  
related to engineering, procurement and construction management services costs. Assembling  
this information required, among other things, seeking updated estimates, including scheduling  
estimates, from the many sub-contractors that Barrick had engaged on the project.  
[126] The evidence indicates that Turner & Townsend, an external consultant, was engaged in  
two capacities to assist Barrick with the reforecasting that led to the forecast disclosed in  
Barrick’s Q2 report in July 2011. First, led by Paul Disley from its London office, Turner &  
Townsend was charged with assisting Barrick with creating an appropriate contingency for the  
budget. This process involved identifying significant risks to the project and determining the  
amount of contingency required to bring the project budget to a certain confidence level. The  
greater the contingency amount, the higher the confidence level that the project can be built for  
the base forecast plus contingency. Ultimately, Barrick added a contingency to its base forecast  
that brought the confidence level to more than 95% higher than the 85% confidence level the  
Pascua-Lama project team had recommended to Barrick’s Senior Leadership Team, which was  
already a high level of confidence for a project of this nature.  
[127] The plaintiff’s allegation that the contingency was high because of unreliability in the  
base forecast is not supported by the evidence. Rather, the evidence suggests Barrick wanted a  
high degree of confidence for the project to avoid further reforecasts. The plaintiffs’ theory is  
pure speculation.  
[128] Second, led by Augustus Calder from its South Africa office, Turner & Townsend was  
engaged to do a high-level review of the base forecast Barrick had developed. The plaintiffs  
argue that Mr. Calder’s report indicates there were serious flaws in Barrick’s base forecast.  
[129] Mr. Calder’s report is in evidence, and he also provided affidavit evidence on this  
motion. Mr. Calder does not agree with the plaintiffs’ characterization of his report.  
[130] The evidence indicates that Mr. Calder’s review of the base forecast took place over four  
to five days in mid-July 2011. The report is described in its text as a “high-level audit of the  
Page: 27  
original (2009 Estimate) and forecasted estimate (June 2011).” The report also notes the time  
constraints associated with preparing it.  
[131] The report concludes that the June 2011 forecasted estimate required some adjustments,  
which would be implemented by Barrick over the next four to six weeks. Mr. Calder indicated  
that this time frame had been identified by Barrick as its intended schedule for making any  
changes to the forecast; it was not Turner & Townsend’s estimate of how long the adjustments  
would take.  
[132] Mr. Calder’s report indicates that he had identified that the June 2011 estimate forecast  
was wholly based on data from the February 2009 estimate. He raised concerns that the  
methodology of escalating market rates as a straight-line adjustment to the 2009 estimate did not  
adhere to general estimating principles and caused the estimate to no longer conform to the  
estimating standard Barrick sought to meet.  
[133] Mr. Calder’s report also indicates that his team was unable to conduct a benchmark of  
rates because they were awaiting rates of typical projects at altitude, which they did not receive.  
[134] The plaintiffs rely on these statements to argue that Barrick knew its methodology in  
developing the $4.7-$5.0 billion capex budget was flawed, and therefore, that its budget was  
unreliable.  
[135] However, Mr. Calder deposes in his affidavit that the Turner & Townsend report does not  
conclude that the base forecast was inaccurate, unreliable, or prepared improperly. It did not  
opine on whether the forecasted estimate was too low, or too high for that matter. Rather, it  
documented the initial views Turner & Townsend reached with respect to potential concerns and  
areas for improvement, based on a high-level review completed in less than a week of a forecast  
that took months to develop. Mr. Calder indicated that he and his colleague only reviewed a  
portion of the data and information underlying the forecasted estimate, so he would not be  
surprised if members of Barrick’s project team or capital projects group disagreed with some of  
his conclusions. He deposed that Turner & Townsend’s opinion was that the forecasted estimate  
could be brought up to the standard that Barrick sought to meet by making four “relatively minor  
adjustments”.  
[136] In addition, evidence from witnesses who were involved in the months-long process of  
preparing the revised base forecast which Mr. Calder reviewed indicated that Mr. Calder was in  
error when he suggested that the revised forecast was prepared by making straight line  
adjustments to the original 2009 estimate. Mr. Calder’s conclusion that it was is inconsistent with  
copious and detailed evidence in the record as to the careful and painstaking process Barrick  
went through to reforecast its budget.  
[137] Given the speed and limited scope of Mr. Calder’s review, and the detailed evidence of  
multiple Barrick witnesses about the forecasting process Barrick went through, the evidence is  
Page: 28  
overwhelming that the budget disclosed in July 2011 was reasonable. Nothing in the Turner &  
Townsend report from July 2011 detracts from that conclusion.  
[138] But did the budget and schedule become unreasonable by the time the October 2011  
disclosures were made? The plaintiff notes that in October 2011, Barrick began asking Fluor-  
Techint for an updated DE and schedule. The plaintiff argues that this request indicates that  
Barrick knew that the costs and schedule of its most significant sub-contractor had become  
unreliable, and thus the capex budget and schedule had also become unreliable.  
[139] Barrick argues that, by seeking the DE and schedule from Fluor-Techint, it was merely  
trying to “lock down” Fluor-Techint for certainty; it denies this request reveals an indication that  
it was unsure about the capex budget or schedule. The plaintiffs, however, note Barrick’s  
evidence that it signed a Notice to Proceed with Fluor-Techint in June 2011, following a  
reforecasting process it went through beginning with the change in the Pascua-Lama project  
management in Q2 2011 because it wanted to “lock down” Fluor-Techint at that time.  
[140] It is reasonably possible that by sometime in October 2011, Barrick may have begun to  
wonder whether the ongoing pressures on the project might result in an increase in Fluor-  
Techint’s budget or schedule. However, especially given the significant contingency associated  
with the project, the record does not reveal any evidence to support the plaintiffs’ argument that,  
in October 2011, Barrick was concerned about the accuracy of the overall capex budget or  
schedule. Barrick’s internal reports for November 2011, December 2011, January 2012 and  
February 2012 continued to use the capex budget that Barrick disclosed in October 2011.  
Moreover, Barrick’s documents suggest that the schedule could be adjusted to ensure that the  
target for first production remained reasonable. That target continued to be reflected in Barrick’s  
internal reports.  
[141] To the extent that the plaintiffs rely on Barrick’s concerns with Fluor-Techint’s DE and  
schedule, these concerns had not arisen by October 2011. Although sometime in October 2011  
Barrick asked Fluor-Techint for a DE and schedule, it was not expecting one until December  
2011.  
[142] The plaintiffs also argue that the cost escalation of the project related in significant  
measure to ongoing problems with the approach Barrick had taken to the management of the  
project. At the outset, Barrick decided to use an in-house team to develop the project. This was  
meant as a cost-saving measure. However, as was apparent by July 2011 when the revised  
budget and schedule were disclosed, the project had not proceeded smoothly. In approximately  
March 2011, Barrick brought new project leadership on board. The plaintiffs may be correct that  
the March 2011 change in leadership was designed to get the project back on track, and the first  
in-house team may have acted in a way as to increase the costs of the project. However, there is  
no evidence to indicate that, in October 2011, Barrick knew that further changes would have to  
be made to the management of the project, or that continuing with the in-house team (run by new  
leadership since March 2011) would escalate capital costs such that, together with other  
increases, the capex budget or schedule was no longer reasonable.  
Page: 29  
[143] The plaintiffs also argue that Barrick knew its schedule to first production was  
unreasonable because the schedule called for pre-stripping of surface rock on the Chilean side of  
the project to begin by mid-2011, but problems in the completion of its WMS had made it  
impossible for Barrick to start pre-stripping in accordance with that schedule. A delay in first  
production necessarily meant that capital costs would need to increase to keep the project going  
longer than anticipated before it started generating cash flow.  
[144] The problem with this argument is that pre-stripping was not on the critical path for the  
project. Although it was a key milestone, and a substantial delay in pre-stripping could impact  
the production of first gold, pre-stripping activities could be truncated to minimize the impact of  
delay and thus preserve the date for first gold.  
[145] For example, although the original schedule anticipated pre-stripping in mid-2011, by  
October 2011, no pre-stripping had begun. Barrick’s internal reports for October 2011 estimated  
that pre-stripping would begin in January 2012 and conclude in March 2013, with first gold in  
Q2 2013. By December 2011, internal reports were showing that pre-stripping would begin in  
March 2012 and conclude in March 2013, with first gold still projected for Q2 2013.  
[146] There is no evidence in the record to suggest that in October 2011 there was any basis for  
Barrick to have concluded that a delay in pre-stripping would delay production of first gold  
beyond Q2 2013.  
[147] In reaching this conclusion, I have not delved into the parties’ arguments about whether  
the WMS had to be operational or fully complete before pre-stripping could begin. This  
distinction is relevant to the environmental misrepresentation for which the plaintiffs were  
granted leave by Belobaba J. However, whatever the requirement was that would allow Barrick  
to commence pre-stripping, there is no evidence in the record to support a conclusion that in  
October 2011, delays in the WMS were going to mean a delay in production of first gold.  
[148] In support of their argument, the plaintiffs led evidence from two proposed experts, Peter  
Jones and Stephen Smith. These experts are both challenged by the defendants. Perhaps in some  
recognition of the validity of the defendants’ concerns, in oral argument the plaintiffs relied  
principally on Barrick’s internal documents to make their case, with barely a mention of their  
proposed experts’ evidence.  
[149] Nevertheless, I will consider the admissibility of the evidence of Mr. Jones and Mr.  
Smith, particularly in light of the defendants’ concerns, which I share.  
[150] Determining whether to admit expert evidence involves a two-stage analysis. In the first  
stage, there are four threshold requirements that must be established (White Burgess Langille  
Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182, at paras. 19 and 23,  
citing R. v. Mohan, [1994] 2 S.C.R. 9, at pp. 20-25; see also R. v. Abbey, 2017 ONCA 640, 140  
O.R. (3d) 40, at para. 48):  
a. Relevance, which at this stage means logical relevance;  
Page: 30  
b. Necessity in assisting the trier of fact;  
c. Absence of an exclusionary rule; and  
d. A properly qualified expert, which includes the requirement that the expert be  
willing and able to fulfil the expert’s duty to the court to provide evidence that is  
impartial, independent and unbiased.  
[151] If the threshold requirements are met, the court moves on to the second stage of the  
analysis. There, the judge, as gatekeeper, determines whether the benefits of admitting the  
evidence outweigh the potential risks of doing so, considering factors such as legal relevance,  
necessity, reliability, and absence of bias.  
[152] Mr. Smith is a quantity surveyor based in Ireland. His evidence is proffered to analyze  
Barrick’s capital budget process and its announced budget and budget increases.  
[153] I have the following concerns with respect to Mr. Smith’s evidence:  
a. Mr. Smith has no experience with a mining project anywhere near the size, scale,  
or complexity of Pascua-Lama. To the extent he has been involved in costing  
projects from mines, almost all of that involvement took place over two decades  
ago.  
b. Mr. Smith has no experience in scheduling, yet he offered evidence on Barrick’s  
schedule. In exceeding the scope of his expertise, he was acting as an advocate,  
not an impartial witness.  
c. In his evidence, Mr. Smith repeatedly made statements without foundation,  
including speculating that Barrick committed fraud.  
d. Mr. Smith engaged in cherry-picking bits from the documentary evidence and  
using them out of context. This is not the behaviour of an impartial expert, but  
rather is consistent with inappropriate advocacy.  
e. As a result of Mr. Smith repeatedly taking evidence out of context and making  
statements without foundation, his evidence is skewed and unreliable. Unreliable  
evidence is not helpful to the court, and thus cannot be said to be necessary.  
[154] I thus conclude that Mr. Smith is neither a qualified expert, nor does he offer necessary  
evidence. In my view, it is not necessary to reach the second stage of the test for the admission of  
expert evidence, as Mr. Smith does not clear the first hurdle. If I am wrong, and he does clear the  
first hurdle, as gatekeeper I would find that the benefits of admitting his evidence does not  
outweigh the potential risks of doing so, given his partiality and the fact that his evidence, being  
unreliable, is not necessary.  
Page: 31  
[155] Mr. Jones is the former CEO of Hudbay Minerals. He is an engineer by training who has  
worked exclusively in the mining industry. He has been involved in the development of, among  
other things, two underground mines in northern Manitoba and, as a director of public  
companies, the redevelopment of a mine in Chile. He has never been involved in the  
development of a megaproject like Pascua-Lama.  
[156] The record reveals that Mr. Jones embellished his curriculum vitae by suggesting he had  
won a certain award when in fact he had not. On cross-examination, Mr. Jones’s response to  
counsel’s question about the award was disingenuous. Rather than acknowledge the error (which,  
the evidence reveals, has been repeated multiple times in press releases and on websites of  
companies he has been involved with), he tried to suggest that his curriculum vitae did not imply  
what it very clearly implies that he won the award he did not win. I am troubled, not so much  
about the inflation of his qualifications (although that is certainly not desirable in an expert, but  
the award in question is not central to his mining industry qualifications), but more so by his  
failure to respond fairly to the questions put to him on cross-examination about it.  
[157] In addition, in a preliminary report delivered by Mr. Jones in October 2014, he indicated  
that it had been reported to him that Bechtel, a well-regarded EPCM firm, had proposed a capex  
budget to Barrick of over $5 billion related to Pascua-Lama at the outset of the project.  
[158] There is not a single document that corroborates this allegation and no source is cited to  
support it. On cross-examination, Mr. Jones indicated he could not remember where he had  
learned of this proposed budget. Plaintiffs’ counsel argues that this allegation was pleaded in a  
related American proceeding, and perhaps in one of the many versions of the claim in this  
proceeding. I have no idea where the allegation originated, but assuming counsel is correct, Mr.  
Jones offered his opinion based on allegations, rather than based on the publicly available  
documents (which, at the time of the preliminary report, would have been the only documents  
available to him). Mr. Jones went on to conclude that Barrick launched the Pascua-Lama project  
based on a capex budget of about half the estimate Bechtel had supposedly provided. That is a  
serious allegation without any foundation. Evidence without foundation is not helpful to the  
court. Unattributed allegations in expert reports stray into advocacy. Opinions without  
foundation also stray into advocacy.  
[159] In my view, while Mr. Jones likely passes the first branch of the Mohan test such that his  
evidence is admissible, in view of the concerns I have identified above, I would not admit his  
evidence under the second stage of the test, due to my concerns about its reliability and the limits  
to his mining experience that impact on his qualifications in this case. If I am wrong, and his  
evidence should be admitted, I would assign it no weight due to those same concerns.  
[160] It is thus not necessary to consider the evidence of Mr. Jones or Mr. Smith on this  
motion. The determination of whether leave ought to be granted in respect of the alleged  
misrepresentations made in October 2011 thus turns on the fact evidence in the record.  
Page: 32  
[161] In the result, I conclude that there is no realistic chance that the plaintiffs will succeed on  
the alleged October 2011 misrepresentations at trial. There is no reasonable possibility that a  
court will find that, in October 2011, Barrick made a misrepresentation of current fact when it  
indicated that its forecasts were based on assumptions that management considered reasonable.  
Nor is there a realistic chance that the plaintiffs will be able to prove that the budget or schedule  
was known to Barrick, or should have been known to Barrick, to be inaccurate at that time.  
[162] Rather, Barrick was operating on the basis of the budget it had carefully prepared and  
finalized in the summer of 2011. It continued to use that budget internally in its monthly reports  
and flash reports. In the context of the efforts Barrick made to produce the forecast, the concerns  
raised in the Turner & Townsend report did not undermine the validity of the forecasts, and in  
fact, Mr. Calder was in error about the most significant of these concerns. There was no reason  
for Barrick to be concerned about ongoing costs from its ECM strategy to manage the project in  
October 2011, nor any concern that a delay in pre-stripping would delay first gold production at  
Pascua-Lama.  
[163] Moreover, there is no evidence in the record to suggest that, in October 2011, Barrick had  
any reason to be concerned about the accuracy of Fluor-Techint’s DE or schedule, as it was not  
expecting a DE and schedule from Fluor-Techint until December 2011.  
[164] I thus find there is no reasonable possibility that the plaintiffs can establish a  
misrepresentation was made, either by commission or omission, in October 2011. It is thus  
unnecessary to consider whether the impugned statements were material, whether they were  
publicly corrected, or the application of the statutory defence.  
[165] In conclusion, I decline to grant leave to commence an action with respect to the  
scheduling and capex budget misrepresentations alleged to have been made in October 2011.  
The Alleged February 2012 and March 2012 Misrepresentations  
[166] The plaintiffs allege that, in its Q4 and 2011 year-end report released in February 2012,  
and its 2011 Annual Information Form dated March 28, 2012, Barrick misrepresented its capex  
budget and schedule, both by commission and omission, and misrepresented that its forecasts  
were based on estimates it considered reasonable. Here, I repeat the key passage relating to the  
forecasts for ease of reference:  
At the Pascua-Lama project, approximately 55% of the previously announced pre-  
production capital of $4.7 to 5.0 billion has been committed and first production is  
expected in mid-2013. The project is being impacted by labor and commodity cost  
pressures as a result of inflation, competition for skilled labor, the impact of  
Page: 33  
increased Argentinian customs restrictions on equipment procurement and lower  
than expected labor productivity.5  
[167] The plaintiffs rely on the same allegations as they did with respect to the October 2011  
disclosures, some of which I have already rejected, like the allegations around the Turner &  
Townsend report. However, other allegations they make about omitted facts must be viewed in  
light of the circumstances as they existed in February 2012 when the statements were made. In  
particular, it is necessary to examine whether, by February 2012, Barrick had material  
information to indicate that the $4.7-$5 billion capex budget estimate or the schedule were  
neither reasonable nor accurate, or were preliminary and likely to increase materially. The  
plaintiffs allege the following material information was known to Barrick which rendered the  
forecasts unreasonable in this time frame:  
a. The estimates prepared by Barrick’s sub-contractors, and particularly Fluor-  
Techint, were unreliable and subject to material increase;  
b. Barrick’s internal estimates by January 2012 indicated that the capex budget was  
then estimated at $6.4 billion, and up to $7.5 billion by Q1 2012, and Barrick  
knew increasing inflation trends were likely to cause a material increase to the  
estimate;  
c. The cost escalation related to Barrick’s in-house management of the project was a  
serious problem, affecting the reasonableness of the budget;  
d. The project schedule, and particularly the pre-stripping, was delayed due to the  
delay in finishing the WMS system.  
[168] What was happening between October 2011 and March 2012 with respect to the capex  
budget and scheduling? As I have noted, Barrick asked Fluor-Techint for an updated DE and  
schedule sometime in October 2011, and was expecting to receive it in December 2011. Barrick  
received a first DE and schedule from Fluor-Techint, but concluded it was inaccurate and  
unreliable. Over the next several months, all the way into the end of May 2012, Barrick received  
five different versions of Fluor-Techint’s DE, and three different versions of its schedule.  
Barrick considered each version an improvement over the previous one, but even by the last  
version it received, it remained unsatisfied.  
[169] This was problematic for Barrick because Fluor-Techint was a significant sub-contractor  
whose work was at least 40%, and possibly up to 60%, of the project’s capex commitments. In  
5 The passage in the 2011 AIF is slightly different, but the difference is immaterial for the purpose of this  
analysis.  
Page: 34  
addition, Fluor-Techint was responsible for the processing facility in Argentina, and delays in its  
completion could put the projected date for first gold at risk.  
[170] By the end of 2011, members of the project team and the capital projects group began  
raising concerns that the then-current capex budget of $4.7-$5 billion could be “under pressure”  
that is, too low. There was also concern that projected first gold may have slipped to  
September 2013. Barrick has delivered a great deal of evidence and law to support its argument  
that, given the importance of Fluor-Techint’s work to the project, it could not prepare an accurate  
revised forecast until it was comfortable that the DE and schedule from Fluor-Techint were  
reliable. Barrick’s witnesses deposed to Barrick’s frustration with Fluor-Techint, and to the  
efforts Barrick went to in order to obtain a more reliable DE and schedule from Fluor-Techint.  
[171] There is no evidentiary basis, and no legal basis, to support a conclusion that Barrick was  
in a position to release a better estimate of the capex budget or schedule in February or March  
2012. Any different forecasts that Barrick could have released at that stage would have been  
based on Fluor-Techint’s unreliable estimates, and given the key role Fluor-Techint had in the  
project, they would undermine the reliability of any revised capex budget or forecast.  
[172] But the plaintiffs’ argument is not that Barrick should have released a different budget or  
schedule in February or March 2012. Rather, they argue that it was incumbent on Barrick to tell  
the market that its capex budget and schedule were no longer reliable.  
[173] Barrick suggests that it did so, because in the February and March 2012 disclosures, it  
plainly said that “the project is being impacted by labor and commodity cost pressures as a result  
of inflation, competition for skilled labor, the impact of increased Argentinian customs  
restrictions on equipment procurement and lower than expected labor productivity.” When the  
statement is looked at as a whole, the defendants argue, there is no reasonable possibility that the  
statements it made about the budget and schedule can be found to be a misrepresentation. Rather,  
Barrick disclosed the risk to the market.  
[174] That conclusion is far from a certainty. There is evidence to suggest the company had  
internal numbers in January and February 2012 reflecting a capex budget of $6.4 billion or  
higher. It might not have considered that number reliable, but the evidence is sufficient to  
establish a reasonable possibility that Barrick knew the budget and schedule that it repeated in  
February and March 2012 were not reliable.  
[175] I note that Barrick did not expressly adopt the capex budget in repeating it. Rather, it  
indicated how much of the previously announced budget had been committed, or spent.  
However, it is reasonably possible that statement could be considered to be an affirmation of the  
capex budget, particularly having regard to Barrick’s express statement that the forecasts were  
based on estimates it considered reasonable. Moreover, Barrick clearly reaffirmed its forecast  
that first gold was expected in mid-2013.  
Page: 35  
[176] The qualifying language that the project was impacted by costs pressures was  
undoubtedly a signal to the market that the capex budget might be too low. Barry Cooper, a  
mining equity analyst from the Canadian Imperial Bank of Commerce who covered Barrick at  
the relevant time, deposed that Barrick warned the market in February 2012 that the capex  
budget was under review. David Haughton, an equities research analyst covering Barrick for the  
Bank of Montreal at the relevant time, deposed that based on Barrick’s statements in February  
2012 and May 2012, he expected that Barrick would likely announce a capital cost increase  
and/or a schedule delay with the release of its Q2 2012 financial results.  
[177] The analysts have mashed together their evidence regarding the February, March, and  
May 2012 disclosures. In fact, it was not until Barrick’s Q1 2012 quarterly filing in May 2012  
that Barrick explicitly stated that its capex budget was under review. It disclosed that the project  
was being impacted by labour and commodity cost pressures, and explained some of the steps it  
was taking to address costs pressures, including by adding experienced supervisors and miners to  
the project team, increasing oversight of external contractors, and accelerating procurement of  
long lead items and necessary equipment. It then disclosed that, in conjunction with those steps,  
it intended to complete “a detailed capital cost and schedule review in the second quarter of  
2012.”  
[178] But the contrast between the language used in May 2012 and that used in February and  
March 2012 is important. The qualifying language in the February and March 2012 disclosure,  
especially when coupled with the reiteration of the budget and forecast, suggests that the project  
costs may be coming in higher, but perhaps within the project’s contingency, or perhaps not. It is  
not a clear warning signal in the way that the May 2012 language clearly indicates that a review  
of the budget and schedule is necessary. As Mr. Haughton said, he expected that by the end of  
Q2 2012, the capex budget would increase and/or the schedule to first gold would be delayed.  
There is a reasonable possibility that the plaintiffs will prove that expectation would not have  
arisen after the February and March 2012 disclosures.  
[179] While the plaintiffs couple their allegation that Barrick knew of undisclosed internal  
estimate increases by no later than January 2012 to $6.4 billion, and to $7.5 billion by Q1 2012,  
with their allegation that Barrick knew increasing inflation trends were likely to cause a material  
increase to the estimate, they did not make argument with respect to increasing inflation trends as  
a material fact within Barrick’s knowledge that it did not disclose. It is beyond doubt that the  
project was suffering from increased inflationary costs, but there is no evidence to allow me to  
separate that from the cost pressures on the project generally. In their factum, the plaintiffs do  
not use the phrase “inflation trends” once. The word “inflation” appears only in the schedules to  
the plaintiffs’ factum, quoting Barrick’s cautionary language.  
[180] There is no evidence or argument before me to establish that Barrick made a  
misrepresentation by omitting to disclose inflation-specific information. To the extent that the  
plaintiffs have made that allegation, they have made no effort to establish it in argument, and I  
would not grant leave to proceed with it.  
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[181] With respect to the allegation that Barrick made a misrepresentation by omission by  
failing to disclose that its decision to use an in-house team to manage the project rather than an  
EPCM approach was materially and negatively impacting the budget, I note that by July 2012,  
Barrick had made the decision to move away from an in-house approach to project management  
and to an EPCM approach, in the hopes of addressing some of the problems the project was  
encountering. A report to the board on July 25, 2012 indicates that the “OwnersTeam continues  
to have too much scope” such that the company would “remediate” the “issue” by negotiating  
with Fluor to assume full responsibility for Pascua and Lama process. The report indicates that  
the complexities of the project proved to be beyond the capabilities of Barrick’s in-house EMC  
team. However, it also indicates that “the project costs and issues compounded until Executive  
Management replaced the team in 2011.”  
[182] The replacement of the team in 2011 refers to the change in management in the project in  
March 2011, which was followed by the reforecasting process that led to the forecasts in July  
2011. I have concluded there is no reasonable possibility of those forecasts being found to be  
misrepresentations in October 2011. There is no evidence that indicates that the decision to move  
to an EPCM approach in mid-2012 was driven by increasing costs since the new leadership took  
over the project in March 2011. Rather, the decision was driven by the leadership having “too  
much scope”.  
[183] To the extent the plaintiffs allege that Barrick made a misrepresentation by omission in  
failing to disclose that there were increasing costs relating to its in-house approach in February  
or March 2012, there is no evidence to support that conclusion, and I would not grant leave to  
proceed with that claim.  
[184] With respect to the allegations about pre-stripping, around this time, Barrick’s internal  
documents show that it believed it would begin pre-stripping in March 2012, and its internal  
reports continued to forecast first gold in mid-2013. The dispute between the parties about  
whether Barrick’s WMS had to be operational or fully complete relates to the environmental  
misrepresentation that has already been granted leave, in the sense that the question of whether  
Barrick made a misrepresentation when it stated that its WMS was complete is already at issue.  
To the extent the plaintiffs seek to argue that Barrick made a misrepresentation by omission in  
failing to disclose that its schedule was unreasonable due to an expected delay in the  
commencement of pre-stripping, caused by the non-completion (as opposed to non-operational  
status) of the WMS I would not grant leave. This issue should be explored in the context  
where it belongs: the environmental misrepresentation for which Belobaba J. granted leave.  
[185] In my view, there is a reasonable possibility that the plaintiffs will prove that Barrick  
made misrepresentations in its February and March 2012 disclosures by:  
a. affirming, as a statement of current fact, that its forecasts were based on  
assumptions that it considered reasonable; and  
b. omitting to disclose, with respect to the capex budget and schedule, that:  
Page: 37  
i. the estimates prepared by Barrick’s sub-contractors, and particularly  
Fluor-Techint, were unreliable, thus rendering Barrick’s capex budget  
unreliable and inaccurate; and  
ii. Barrick’s internal estimates by January 2012 indicated that the capex  
budget was then estimated at $6.4 billion, and at $7.5 billion by Q1 2012.  
[186] While some of the language above, drafted by the plaintiffs, assumes the materiality of  
the increase to the estimate, I have not considered that when determining whether the plaintiffs  
have a realistic chance of proving that the alleged misrepresentations above are material. I have  
no difficulty concluding that there is a reasonable possibility the plaintiffs may prove that these  
misrepresentations were material. The evidence of the analysts was clear that an increase in the  
capex budget of $1.4 billion would be material to the market. Moreover, by the time the  
February and March 2012 disclosures were made, Barrick was unsatisfied with Fluor-Techint’s  
DE and schedule, but it knew those estimates had changed significantly from the Notice to  
Proceed. It is reasonably possible that the plaintiffs will prove that Barrick knew the unreliability  
of Fluor-Techint’s estimates could materially impact its overall capex budget and the project  
schedule, and that this could have a material impact on the price of its securities.  
[187] I will consider whether these statements were publicly corrected, and the application of  
the statutory defence, after I analyze the remaining alleged misrepresentations relating to the  
capex budget and project schedule.  
The Alleged May 2012 Misrepresentations  
[188] On May 2, 2012, Barrick released its Q1 2012 report. There, it indicated that about 70%  
of the previously announced capex budget of $4.7-$5.0 billion had been committed and first  
production was anticipated in mid-2013. However, as I have just reviewed, it made reference to  
costs pressures on the project and explicitly indicated that the company was undertaking a  
detailed budget and schedule review.  
[189] By this time, Fluor-Techint had delivered further versions of the DE and schedule, but  
Barrick was continuing to press for better versions of both. Later in May 2012, it received a  
revised DE and schedule from Fluor-Techint that were significantly different than the previous  
version, lending validity to Barrick’s concerns about the reasonableness of the DE and schedule  
it had at the time it released its Q1 2012 report. There is no evidence to suggest Barrick was in a  
position on May 2, 2012 to release a revised capex budget and schedule with any degree of  
reasonable certainty that it was accurate.  
[190] The plaintiffs allege that Barrick’s statements on May 2, 2012 were misrepresentations  
by omission and commission. They also allege that Barrick made a misrepresentation of current  
fact by again stating that its forecasts were based on estimates that it considered reasonable.  
[191] The plaintiffs allege a number of omitted material facts relevant to this period of time, but  
I need not set them out. Even if I were to assume that all of the alleged material facts were  
Page: 38  
known to Barrick and undisclosed, there is no reasonable possibility that disclosure of them  
would have been necessary to make the forecasts not misleading. This is because the language  
that accompanied the forecasts did exactly what the plaintiffs say the company should have done:  
warn the market that its capex budget and schedule were uncertain.  
[192] The evidence of the analysts, Mr. Houghton and Mr. Cooper, supports the argument that  
Barrick’s May 2012 language clearly signaled to the market that the capex budget was likely to  
grow, and the schedule was likely to be delayed, when the detailed review Barrick intended to  
undertake was complete.  
[193] I would not grant leave to proceed with respect to the alleged May 2012  
misrepresentations because there is no reasonable possibility that the plaintiffs will succeed in  
proving that the statements made in May 2012 were untrue or misleading.  
The Alleged July 2012 Misrepresentations  
[194] On July 26, 2012, Barrick released its Q2 2012 report in which it indicated that the  
“preliminary results” of its review of the capex budget and schedule, which it had announced in  
May 2012, “currently indicate” that first gold was expected in mid-2014, and the capex budget  
would increase by approximately 50-60%.  
[195] The plaintiffs argue that Barrick made misrepresentations by omitting to disclose that:  
a. Barrick was abandoning its failed in-house management approach and hiring  
Fluor to take over full EPCM management, and Bechtel to supplement its Chilean  
project team, which would cost more than $400 million and had not been factored  
into its approximate 50-60% increase of the capex budget;  
b. Barrick knew the project costs were likely to materially increase as a result of  
Fluor’s analysis of the budget; and  
c. Barrick had commenced pre-stripping in May 2012 in serious violation of its  
environmental permit in Chile, exposing the project to a serious risk of suspension  
and significant increase to the capex costs in the event of suspension.  
[196] In addition, the plaintiffs argue that Barrick made a misrepresentation of current fact by  
stating that its forecasts were considered reasonable by management.  
[197] In support of their argument that Barrick’s announcement of the preliminary results of its  
analysis (which reflected a capex budget of $7.5-$8.0 billion) were misrepresentations because  
they did not account for known costs of $400,000 for Fluor’s EPCM services and Bechtel’s  
services, the plaintiffs point to Barrick’s disclosure in November 2012 that the capex budget was  
$8.0-$8.5 billion.  
Page: 39  
[198] The plaintiffs’ argument is pure speculation. In July 2012, Barrick announced  
“preliminary results” of its analysis of its forecasts. At that time, it did not yet have the likely  
costs of Bechtel or Fluor, as those contracts had not yet been negotiated. It disclosed that its  
estimate was preliminary. The estimate that followed in November 2012 overlapped in its range  
with the July 2012 estimate. The evidence in support of the plaintiffs’ claim is that the $500  
million increase in November 2012 is close to the $400,000 million cost of Fluor and Bechtel.  
That is not enough credible evidence to establish that these costs were the reason for the  
understatement in July 2012, or that Barrick had any reason to think that, even including the  
then-unknown costs of Fluor and Bechtel, the $7.5-8.0 billion budget was materially short.  
[199] The plaintiffs’ allegation that Barrick omitted to disclose that it knew the July 2012 capex  
budget was likely to materially increase as a result of Fluor’s analysis of the budget is an  
assertion without evidence. Moreover, it is an assertion that is contrary to the plaintiffs’ assertion  
that the increase in budget between July and November 2012 was related to the costs of Fluor  
and Bechtel. If the increase was because of unaccounted-for EPCM costs, then the capex budget  
for the project that Fluor was reviewing (that is, the budget less the EPCM costs) was not  
materially different than the budget disclosed in November 2012.  
[200] The inconsistency between these two positions illustrates that the plaintiffs are engaging  
in backwards reasoning. They have approached this litigation as if it were a loss in search of a  
claim.  
[201] The third alleged omitted material fact relates to the allegation that Barrick commenced  
pre-stripping in May 2012 in serious violation of its environmental permit.  
[202] The heart of the issue behind the pre-stripping allegation is the substantive question of  
whether Barrick was entitled to proceed with pre-stripping when it did. The parties disagree on  
the relevant evidence. For example, there is evidence that indicates that Barrick believed it was  
entitled to proceed, because the WMS had been operational when it began pre-stripping, and  
Barrick had gotten the okay to start pre-stripping from one of the Chilean regulators. The  
plaintiffs point to evidence that suggests Barrick knew it had to complete the entire WMS, not  
just render it operational, before commencing pre-stripping, and that the permission Barrick had  
gotten was from the wrong regulator, and not in writing as required.  
[203] What does this have to do with scheduling? To get from the pre-stripping allegation to  
the alleged scheduling and capex misrepresentations, the plaintiffs argue: first, Barrick was not  
permitted by its permit to commence pre-stripping when it did; second, it knew that; third, it  
knew that the possible penalties for violating its permit, which could be levied by an agency that  
had not yet taken over enforcement responsibilities for the project but would do so at the end of  
2012, included suspension of the project; fourth, a suspension of the project would affect the  
project schedule and capex budget.  
[204] The plaintiffs are contorting what is in fact an environmental allegation to jam it into the  
alleged scheduling and capex misrepresentations. The plaintiffs have already been given leave to  
Page: 40  
proceed with the alleged misrepresentation, made in July 2012, that the Pascua-Lama project had  
achieved critical milestones, including the completion of the WMS, which enabled the  
commencement of pre-stripping activities.  
[205] The heart of the alleged pre-stripping misrepresentation is environmental and falls within  
the scope of the single environmental misrepresentation that was already granted leave.  
[206] I would not grant leave to proceed with this alleged omission of material fact in the  
context of the alleged capex budget and scheduling misrepresentations. It does not belong in that  
context. The plaintiffs have had problems with properly focusing their argument in this matter to  
date, and I am not inclined to open the door for them to expand the scope of the alleged capex  
budget and scheduling misrepresentations by including misrepresentations that properly belong  
in other categories. Some practicality and intellectual integrity ought to be brought to bear to the  
action that proceeds. Doing so ought to assist in better managing the demands of this proceeding  
on the resources of the parties and the court.  
[207] Moreover, I would not grant leave to proceed with the alleged misrepresentation that the  
forecasts disclosed in July 2012 were based on estimates Barrick considered reasonable. Given  
that I have concluded that the plaintiffs’ alleged omitted material facts have no reasonable  
possibility of being established, there is no basis in the evidence to support a reasonable  
possibility that the alleged misrepresentation of material fact was not true.  
The Alleged November 2012 Misrepresentations  
[208] In November 2012, Barrick released its Q3 2013 report, in which it disclosed that, since  
its Q2 2013 report, it had been working with Fluor to carry out a more comprehensive top-to-  
bottom review of its budget and schedule, which would be complete by the 2012 year-end results  
release. However, it indicated that the work to date suggested capital costs would “be closer to  
$8.0-$8.5 billion with first production in the second half of 2014.”  
[209] The plaintiffs allege that, in making this statement, Barrick misrepresented that the  
forecasts presented were based on estimates it considered reasonable. It alleges Barrick omitted  
to disclose two material facts, with respect to which I have already rejected the plaintiffs’  
arguments: first, the allegations around pre-stripping, and second, the allegations around  
Barrick’s use of an in-house management team rather than an EPCM approach.  
[210] Moreover, by the time the November 2012 disclosure was made, Barrick had adopted an  
EPCM approach. The impacts of the earlier in-house management approach were absorbed by  
the time of the July 2011 budget, and I have seen no evidence to support the claim that the in-  
house approach increased costs after the change in leadership in March 2011. Even if it did, by  
November 2012, with the EPCM approach in place, there were no costs related to a now-  
abandoned approach that had to be disclosed.  
[211] Nor is there a shred of evidence that the final announced budget of $8.0-$8.5 billion was  
unreasonable in November 2012.  
Page: 41  
[212] Nothing about the fact that I am now considering these alleged misrepresentations in the  
November 2012 timeframe changes my earlier analysis. There is no reasonable possibility that  
the plaintiffs will succeed at trial to prove these alleged misrepresentations.  
The Alleged March 28, 2013 Misrepresentations  
[213] I have finally arrived at the last alleged time frame for the alleged capex budget and  
scheduling misrepresentations. In its 2012 Annual Report, released on March 28, 2013, Barrick  
disclosed that, during Q4 2012, it finalized the capex budget and schedule for the project. It  
repeated the $8.0-$8.5 budget it had disclosed in November 2012, and indicated that the budget  
included a contingency of 15-20% of the remaining capital. It continued to target first gold  
production for the second half of 2014.  
[214] The alleged misrepresentations in this time frame are identical to those alleged with  
respect to the alleged November 2012 misrepresentations. For the same reasons I have already  
expressed, I would not grant leave to proceed with these alleged misrepresentations.  
Public Correction  
[215] I turn next to consider whether the two alleged misrepresentations which I determined the  
plaintiffs have a reasonable possibility of proving were publicly corrected. This first requires  
some consideration of the role of public correction on a leave motion.  
[216] In Imperial Metals, the Court of Appeal did not find it necessary to determine whether  
public correction is an element of the statutory cause of action or simply a time-post to identify  
and delimit the members of the class. Rather, at para. 49, the court reiterated Hoy J.A.’s  
conclusion in its decision on the appeal in this case from Belobaba J.’s leave decision that in any  
event, public correction is a necessary part of the statutory scheme. The Court of Appeal went on  
to say, at para. 50, that “misrepresentation does the heavy lifting in the statutory cause of action.  
It is the wrong at issue”.  
[217] In Imperial Metals, the Court of Appeal described the overarching question with respect  
to public correction for the purposes of the leave motion as “whether the alleged public  
correction was reasonably capable of being understood in the secondary market as correcting  
what was misleading in the impugned statement”: at para. 47. There need only be some link or  
connection between the pleaded public correction and the misrepresentation: at para. 54.  
[218] Here is the problem in this case. I have found that the February and March 2012  
misrepresentations were not repeated in May 2012, because Barrick clearly warned the market at  
that time that its capex budget and project schedule were undergoing a detailed review. That  
statement put the market on notice that the forecasts were not reliable.  
[219] However, the plaintiffs have not alleged that the May 2012 statement was corrective of  
anything. They allege that the May 2012 statement is a misrepresentation, an allegation I have  
found there is no realistic chance of proving.  
Page: 42  
[220] But the impact of the May 2012 disclosure on the alleged February and March 2012  
misrepresentations was not argued by anyone. At the very least, the question of the public  
correction has important ramifications for the class period if those misrepresentations are granted  
leave.  
[221] I thus require additional submissions from the parties on the issue. I direct the parties to  
schedule a case conference with me to determine the most efficient way to proceed to address the  
public correction issue.  
The Statutory Defences  
[222] The Securities Act provides for certain statutory defences. Of these, the forward-looking  
information defence at issue is contained in s. 138.4(9). It provides that a person or company is  
not liable in an action under s. 138.3 for misrepresentation in forward-looking information if the  
person or company proves all of the following things:  
1. that the document or public oral statement containing the forward-looking  
information contained, proximate to that information,  
i. reasonable cautionary language identifying the forward-looking  
information as such, and identifying material factors that could cause  
actual results to differ materially from a conclusion, forecast or projection  
in the forward-looking information, and  
ii. a statement of the material factors or assumptions that were applied in  
drawing a conclusion or making a forecast or projection set out in the  
forward-looking information.  
2. The person or company had a reasonable basis for drawing the conclusion or making  
the forecasts and projections set out in the forward-looking information.  
[223] In the context of a leave motion, to reflect the fact that burden of proving the defence is  
on the defendant, the question is whether there is no reasonable possibility that the defendants  
will fail to make out the defence. Or, put more simply, if there is a reasonable possibility that the  
defendants will not make out the defence, the plaintiffs have prevailed on this aspect of the leave  
motion.  
[224] Recall that the misrepresentations at issue for purposes of this defence are whether  
Barrick’s forecasts, that is, the capex budget and schedule disclosed in the 2011 Q4 and year-end  
report released in February 2012 and the 2011 AIF released in March 2012, were  
misrepresentations because Barrick knew, but omitted to disclose, that:  
a. the estimates prepared by Barrick’s sub-contractors, and particularly Fluor-  
Techint, were unreliable, thus rendering Barrick’s capex budget unreliable and  
inaccurate; and  
Page: 43  
b. Barrick’s internal estimates by January 2012 indicated that the capex budget was  
then estimated at $6.4 billion, and at $7.5 billion by Q1 2012.  
[225] Because I have found a reasonable possibility that the plaintiffs may succeed in  
establishing these alleged misrepresentations, there is, by necessity, a reasonable possibility that  
the defendants may fail to establish that they had a reasonable basis for making the forecasts they  
made in the forward-looking information.  
[226] The last misrepresentation I identified that Barrick misrepresented that its forecasts  
were based on assumptions that it considered reasonable is a statement of current fact which  
is not subject to the defence in s. 138.4(9).  
[227] Thus, the question of whether leave ought to be granted in respect of these  
misrepresentations remains subject only to the remaining issue the public correction of the  
alleged misrepresentations, which I have indicated must be the subject of further argument.  
The Alleged Accounting Misrepresentations  
[228] Recall that I have already dismissed these alleged misrepresentations on the basis that,  
despite twenty tries, they have not been pleaded with sufficient particularity.  
[229] However, I will briefly address the alleged misrepresentations in the event that I am  
wrong. Despite their lack of particularity, there are certain obvious problems with the allegations.  
Alleged Impairment Misrepresentation  
[230] The plaintiffs allege that Barrick failed to take necessary and timely impairment  
writedowns, which it should have done by Q2 2012, on the carrying value of its Pascua-Lama  
asset in its financial statements.  
[231] This argument relies on the environmental allegations made by the plaintiffs. They argue  
that the project was in serious non-compliance with its environmental permit, as pre-stripping  
had begun before the WMS was complete. The plaintiffs argue that Barrick knew it was risking  
suspension of the project, and permit revocation, and therefore an impairment was required.  
They allege that Barrick’s accounting department was not made aware of these problems and  
risks.  
[232] As I have already found in the context of the alleged capex budget and scheduling  
misrepresentations, the plaintiffs are trying to shoehorn the alleged environmental  
misrepresentations into the accounting misrepresentations. To the extent leave has been granted  
with respect to the environmental allegations, those allegations should be dealt with in their  
proper context, and their proper context is not the impairment analysis.  
[233] In any event, the evidence in the record with respect to Barrick’s impairment processes is  
detailed. It includes quarterly monitoring of potential indicators of impairment, and annual  
Page: 44  
goodwill impairment tests. The plaintiffs have not alleged any defect in Barrick’s processes.  
Barrick received clean audit opinions throughout. The evidence also indicates that there was  
significant headroom that is, the fair value of the project exceeded the carrying value by a  
large margin.  
[234] This is another alleged misrepresentation based on speculation and backwards reasoning.  
It is not reasonably possible the plaintiffs will succeed at trial with respect to this alleged  
misrepresentation.  
Alleged ICFR and DC&P Misrepresentation  
[235] The plaintiffs allege that Barrick omitted to disclose that its ICFR and DC&P were  
ineffective with respect to the Pascua-Lama project and that disclosing this alleged  
ineffectiveness was necessary to make its statements “in all disclosures during the class period”  
that “the company has developed and maintains a system for internal controls in order to ensure,  
on a reasonable cost-effective basis, the reliability of its financial information” not misleading.  
[236] Leaving aside that it is intertwined with the environmental allegations, this ICFR and  
DC&P allegation is again driven entirely by backwards reasoning. This is apparent from the  
plaintiffs’ factum, which makes reference to the plaintiffs’ proposed expert on this point and  
describes his opinion “that material weaknesses in ICFR and DC&P were indicated by the  
circumstances that resulted in the non-disclosure of material information, either because these  
were not communicated effectively to the Disclosure Committee and the Board, or the  
Disclosure Committee and the Board failed to properly assess the materiality of, and disclose,  
[information relating to Barrick’s alleged environmental violations].”  
[237] Barrick received clean audit opinions throughout. Its auditors identified no weaknesses in  
its ICFR.  
[238] Moreover, there is detailed evidence in the record of Barrick’s processes relating to  
identification of financial information relevant to its reporting and its disclosure processes. The  
plaintiffs do not argue that Barrick’s controls were deficient in operation or design. Rather, they  
argue that Barrick’s failure to disclose environmental compliance issues must mean that its  
DC&P and ICFR were materially weak. I agree with the defendants that this argument conflates  
process with outcome, and demands perfect assurance rather than reasonable assurance, which is  
all Barrick ever offered.  
[239] I do not propose to review the evidence of the experts on this issue for purposes of  
admissibility. I need not. The speculative nature of the argument regarding ICFR and DC&P is  
plain on its face.  
[240] I do note, however, that the plaintiffs’ expert’s evidence on the point relies on what the  
defendants accurately describe as the expert’s obvious misreading of a document issued by the  
Securities and Exchange Commission in the United States. In particular, the expert deposed that  
“an ineffective regulatory compliance function” is a strong indicator that a material weakness in  
Page: 45  
ICFR exists. In doing so, the expert relied on an interpretive release issued by the U.S. Securities  
and Exchange Commission entitled “Commission Guidance Regarding Management’s Report on  
Internal Control Over Financial Reporting”. That version of the guidance was not finalized. In its  
final version, the guidance was amended to remove reference to “strong indicators” in favour of  
“indicators” of material weakness. Notably, the amendment also removed the reference to  
“effective regulatory compliance function” as an indicator of material weakness, something of  
which the expert was unaware.  
[241] Speculation is not evidence. Backwards reasoning does not establish a reasonable  
possibility of success at trial. I would not grant leave to proceed with respect to this alleged  
misrepresentation.  
The Alleged Contingent Liabilities Misrepresentation  
[242] The last category of alleged accounting misrepresentations relates to contingent  
liabilities. The plaintiffs argue that Barrick failed to record contingent liabilities relating to the  
risk of serious regulatory sanctions against Pascua-Lama which could include lengthy  
suspension, permit revocation and closure and the associated cost implications from Q2 2012  
through to Q2 2013.  
[243] Again, leaving aside the plaintiffs’ problematic reliance on the environmental allegations  
to make this argument, it suffers from two other significant defects. First, the first time the  
plaintiffs raised allegations concerning contingent liabilities was on June 13, 2019, in their  
proposed Amended Fresh as Amended Statement of Claim, more than five years after the  
original pleading was issued. No version of the claim setting out these allegations has ever been  
issued. The claim is thus statute-barred.  
[244] Second, the defendants argue that the plaintiffs have fundamentally misunderstood the  
nature of contingent liabilities to assert that Barrick was obligated to disclose alleged future  
increases in estimated construction costs associated with alleged environmental non-  
compliances. Increased capital costs are not contingent liabilities.  
[245] In response to these arguments, the plaintiffs essentially shrugged their shoulders, and  
indicated they did not need to rely on the alleged misrepresentations with respect to contingent  
liabilities anyway. They made no attempt to argue that I should reject the defendants’ arguments  
on this issue, and articulated no basis on which I could do so.  
[246] I would not grant leave to proceed with this alleged misrepresentation.  
The Individual Defendants  
[247] The defendants argue that the plaintiffs have not properly identified their claims against  
the individual defendants. The plaintiffs did not engage with this argument either.  
Page: 46  
[248] Given that the scope of the alleged misrepresentations for which leave may be granted are  
limited to those made in February and March 2012, I am aware of no basis on which the  
defendant Mr. Al-Joundi, who was only appointed Barrick’s Chief Financial Officer on June 26,  
2012, could be a proper defendant.  
[249] Moreover, the defendant Mr. Kinver was not a director or certifying officer during his  
tenure with Barrick. The plaintiffs have adduced no evidence to establish that Mr. Kinver  
personally authorized, permitted or acquiesced in the release of the 2011 Q4 and year-end report  
in February 2012, or the 2011 AIF in March 2012. Mr. Kinver is not a proper defendant.  
[250] I do not grant leave to pursue any claims against Mr. Al-Joundi and Mr. Kinver.  
[251] The question as to whether, given the scope of the misrepresentations for which leave  
may be granted, there would be a valid claim against Mr. Regent or Mr. Sokalsky may be  
addressed by the parties at the same time as the question of the public correction of those  
misrepresentations are addressed.  
Costs  
[252] Because further submissions are required, the determination of costs shall be deferred  
until all the issues arising on this leave motion are adjudicated on the merits.  
J.T. Akbarali J.  
Released: March 22, 2022  
CITATION: DALI Local 675 Pension Fund (Trustees) v. Barrick Gold Corporation,  
2022 ONSC 1767  
COURT FILE NO.: CV-14-502316-00CP  
DATE: 20220322  
ONTARIO  
SUPERIOR COURT OF JUSTICE  
BETWEEN:  
The Trustees of the Drywall Acoustic Lathing and  
Insulation Local 675 Pension Fund and Royce Lee  
Plaintiffs  
and –  
Barrick Gold Corporation, Aaron W. Regent, Jamie C.  
Sokalsky, Ammar Al-Joundi and Peter Kniver  
Defendants  
REASONS FOR JUDGMENT  
Akbarali J.  
Released: March 22, 2022.  



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