Executive Summary: Key Legal and Evidentiary Issues

• Aurora Cannabis appealed a case management judge's refusal to strike an amended statement of claim in a proposed securities class action involving alleged misrepresentations about financial performance.

• Disputed class membership of Mr Landry hinged on whether he acquired or disposed of Aurora shares during the period between the alleged misrepresentations (September 11–12, 2019) and the final public correction (December 21, 2019).

• Viability of the negligent misrepresentation claim was challenged on the basis that Mr Landry purchased his shares before the misrepresentation date and therefore could not establish reliance.

• Limitation period arguments centered on whether the tolling provisions under the Securities Act and Class Proceedings Act protected Mr Fruchter, who was added as a proposed representative plaintiff more than three years after the alleged misrepresentations.

• Statutory interpretation of tolling provisions required the Court to assess whether suspension of limitation periods applied to all potential class members or only the original applicant.

• The standard of review afforded significant deference to the case management judge's findings on striking applications, abuse of process, and limitation period determinations.

The misrepresentations and the decline in Aurora's share price

Prior to September 11, 2019, Robert Landry owned 225,000 shares of Aurora Cannabis, Inc., then worth approximately $1.9 million. On September 11, 2019, Aurora issued its financial statements and Management Discussion and Analysis for the fourth quarter of 2019, and its 2019 annual information form, reporting a successful June 30, 2019 year end and a projected bullish forecast for the first quarter of 2020, ending September 30, 2019. On September 12, 2019, Aurora executives stated during an investor conference call that they expected Aurora to see growth in its core business and anticipated a "plateau" of demand between then and the end of the year. On September 20, 2019, Aurora released its 2019 Annual Report reiterating the company's representations of September 11 and 12, 2019.

The public correction and share price decline

On November 14, 2019, Aurora announced its quarterly financial statements and Management Discussion and Analysis for the first quarter of 2020, which were materially worse than represented — sales had declined by 25%, and Aurora's share price immediately declined approximately 18%. On November 18, there was a second partial correction through a published article in which an analyst said "it would be fair for investors not to believe" Aurora management. On December 21, 2019, Aurora announced that the executive who had made the September 12 oral statement that the company's first quarter 2020 earnings would "plateau" was abruptly resigning, and Aurora's share price declined 10% following this announcement. Mr Landry and Mr Fruchter say this announcement constituted the final full public correction. By December 21, 2019, Mr Landry held 150,000 shares with an approximate value of $500,000. The second proposed representative plaintiff, Gill Fruchter, purchased shares in Aurora on September 25, 2019 — after the representations of September 11 and 12, 2019 — and held those shares through the period of November 14 through December 21, 2019. It is said he discovered his loss in value per share in December, 2019.

Mr Landry's trading activity during the class period

On November 20, 2019, Mr Landry sold 75,000 Aurora shares, leaving him with 150,000 shares. On November 21, 2019, Mr Landry purchased and sold 175,000 shares in two separate transactions. There is a dispute as to whether he purchased and then sold the same shares on that date or if he sold old shares that he purchased prior to September 11, 2019, and then purchased new shares. On November 22, 2019, Mr Landry purchased and sold 169,000 shares, and again, there is a dispute as to which shares were purchased and which shares sold.

The litigation history and procedural dispute

Mr Landry filed a statement of claim on August 10, 2020, asserting a negligent misrepresentation common law claim and a statutory claim under section 211.03 of the Securities Act, RSA 2000, c S-4, liability for secondary market disclosure. On January 31, 2022, Mr Landry filed his application for permission to proceed under section 211.08 of the Securities Act, with affidavit in support, attaching his trading records. On December 12, 2023, Aurora filed its brief of argument on the permission to proceed application, submitting that Mr Landry was not a proper class member given the timing of his purchases and sales of Aurora shares. In response, Mr Landry requested an adjournment for the purpose of adding a second proposed representative plaintiff, and on March 8, 2024, the amended statement of claim was filed in its current form. On March 21, 2024, Aurora brought its application to strike the amended statement of claim or in the alternative to disallow Mr Fruchter as a proposed representative plaintiff and to strike the indicated paragraphs of the claim, under r 3.68, striking of a claim, and r 3.64, disallowing an amendment, of the Alberta Rules of Court. The case management judge, Justice M. E. Burns, dismissed Aurora's application on June 25, 2025, and notice of appeal was filed on July 24, 2025.

Aurora's arguments on class membership and abuse of process

On appeal, Aurora argued that there was no evidence Mr Landry purchased shares between September 11 and November 14, 2019, and that the public corrective statement on November 14 was the "principal" public corrective statement and should be treated as the end date for the claim period. Aurora therefore contended Mr Landry had no statutory or common law claim, was not a member of either class, and the action was an abuse of process. The Court of Appeal noted, however, that Mr Landry sold and purchased shares on November 20, 21, and 22, 2019, before the final correction of December 21, 2019. The case management judge had held that the class definitions should allow for initial identification of potential class members without reference to the merits of their claims and should not depend on the outcome of the litigation. The Court of Appeal found no basis to interfere with her conclusion that Mr Landry is a member of the class and that the action is not an abuse of process.

The negligent misrepresentation claim

Aurora also submitted that Mr Landry's revised negligent misrepresentation claim was untenable because his trading records disclosed he had already purchased his Aurora shares before September 11 and 12, 2019, and he could not show he suffered damages because he purchased shares prior to the misrepresentation and sold them after it was corrected. Mr Landry replied it is not plain and obvious that his claim in negligent misrepresentation is bound to fail, noting that on an application to strike, pleadings should be read generously and the court must assume the facts pleaded are true. Mr Landry said he bought, sold, and continued to hold shares throughout the class period in reliance on Aurora's negligent representations and elected the recessionary measure of damages. The Court of Appeal agreed with the case management judge that the substantive issues in determination of the validity of the negligent misrepresentation claim, and determination of damages, ought to be left for the certification or trial stages of the litigation.

The limitations and tolling dispute

A central issue on appeal was whether Mr Fruchter's claims were time-barred, as the amended statement of claim adding him was filed on March 8, 2024, three years and six months after the final date in the alleged class period. Under section 211.095(2) of the Securities Act, a limitation period is suspended "in respect of an action" on the date an application for leave under section 211.08 is filed with the court. The application for permission to proceed was filed on January 31, 2022, within the three-year period. Aurora argued that this tolling provision only protected the person who served the application, Mr Landry, and not any other potential class members, including Mr Fruchter. The case management judge disagreed, finding that there is only one action and the limitation period was tolled in respect of that action. The Court of Appeal upheld this interpretation, relying on the Supreme Court of Canada's reasoning in Green v Canadian Imperial Bank of Commerce, 2015 SCC 60, which held that once the umbrella of the right exists and is established by a potential class representative in asserting a cause of action, class members are entitled to take shelter under it as long as the right remains actively engaged. Alberta courts have also held that section 40 of the Class Proceedings Act suspends the operation of the limitation period for all potential class members, regardless of whether they have subjective knowledge of the proceeding. The Court of Appeal concluded that the limitation period in respect of Mr Fruchter's common law misrepresentation claim was tolled under section 40 of the Class Proceedings Act when the common law action was commenced, and the limitation period in respect of his statutory claim was tolled by virtue of the Alberta Class Proceedings Act and Securities Act when the permission to proceed application was brought. Regarding the Limitations Act, the case management judge held that the amendments related to the same sequence of events and the same relationship between the prospective claimants and would not constitute added claims, as they merely particularized details raised in the original pleadings and were not outside the limits established by the Limitations Act. The Court of Appeal found no error in that decision.

The ruling and outcome

The Court of Appeal of Alberta, comprising Justices Feehan, Woolley, and Friesen, dismissed Aurora's appeal in its entirety on April 23, 2026. The respondents, Mr Landry and Mr Fruchter, were the successful parties, as the Court upheld every aspect of the case management judge's order — preserving Mr Landry's standing as a class member, allowing the negligent misrepresentation claim to proceed, and confirming that Mr Fruchter's claims were within time. No specific monetary award was determined at this stage, as the application was brought at a very early stage in the class action proceedings, before permission to proceed had been argued or granted, and the quantum of damages, if any, will be addressed at later stages of the litigation.