The Supreme Court Of Canada Clarifies "Material Change" And The Leave Test In Securities Legislation In Lundin Mining Corp. v Markowich, 2025 SCC 39

• Published date: 24 February 2026
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Directors and Officers, Trials & Appeals & Compensation, Securities
• Law Firm: CLC (Canadian Litigation Counsel)
• Author: Serena Saini (McDougall Gauley LLP) and Jonathan Milani (McDougall Gauley LLP)

In Lundin Mining Corp. v Markowich, 2025 SCC 39 [Lundin Mining], an 8-1 majority of the Supreme Court of Canada determined that the definition of "material change" in securities legislation should be interpreted broadly, and that the leave test for bringing an action under such legislation requires a reasonable likelihood of success at trial.

Facts

Lundin Mining Corp ("Lundin") is a Canadian mining company, which is a reporting issuer with its shares listed on the Toronto Stock Exchange. In October of 2017, Lundin detected pit wall instability in an area forming part of Lundin's open pit copper mine in Chile. A few days later, the pit wall instability caused a rockslide, which led to the mine slowing its operations and lowering its production forecast for the next year by 20%. Lundin did not disclose the pit wall instability or rockslide immediately to investors. Instead, Lundin revealed the news a month later, in November of 2017, as part of its regularly scheduled updates. The day after Lundin's disclosure, its share price fell by 16%.

An investor who purchased shares in Lundin after the instability was detected, but before disclosure was provided, sought leave to commence a secondary market claim under Ontario's Securities Act, RSO 1990, c S.5 ("Securities Act"), and applied to certify the action as a class proceeding under Ontario's Class Proceedings Act, 1992, SO 1992, c 6. A secondary market claim is a statutory cause of action that allows investors who trade securities on the open market (rather than directly from the issuer) to seek compensation from issuers, or the directors and officers of an issuer, for losses caused by misrepresentations or disclosure failures by the issuers.

The investor alleged the pit wall instability and rockslide were "material changes" to the company's "business, operations or capital", which required immediate disclosure under the Securities Act.

Lower Court Decisions

The motion judge denied leave to commence the lawsuit. The judge concluded there was no reasonable possibility that the pit wall instability or rockslide created a material change in Lundin's business, operations or capital.

The Ontario Court of Appeal reversed the motion judge's decision, and granted the investor leave to commence the action. The Court of Appeal found that the motions judge interpreted "change", "business", "operations", and "capital" too narrowly, which led him to err in refusing leave to commence the lawsuit. The Court of Appeal found...