2017 QCCA 1892, 2017 QCCA 1892

Valeant Pharmaceuticals International Inc. c. Catucci 2017 QCCA 1892 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027093-178 (500-06-000783-163) DATE: November 30, 2017 IN THE PRESENCE OF THE HONOURABLE ROBERT M. MAINVILLE, J.A. VALEANT PHARMACEUTICALS INTERNATIONAL INC. ROBERT L. ROSIELLO ROBERT A. INGRAM RONALD H. FARMER THEO MELAS-KYRIAZI G. MASON MORFIT LAURENCE PAUL ROBERT N. POWER NORMA A. PROVENCIO LLOYD M. SEGAL KATHARINE B. STEVENSON FRED HASSAN COLLEEN GOGGINS ANDERS O. LONNER JEFFREY W. UBBEN APPLICANTS — Respondents v.

CELSO CATUCCI NICOLE AUBIN, ès qualités trustee of the Aubin trust RESPONDENTS — Applicants and J. MICHAEL PEARSON HOWARD B. SCHILLER PRICEWATERHOUSECOOPERS LLP GOLDMAN, SACHS & CO. GOLDMAN SACHS CANADA INC. DEUTSCHE BANK SECURITIES INC. BARCLAYS CAPITAL INC. HSBC SECURITIES (USA) INC. MITSUBISHI UFJ SECURITIES (USA) INC. DNB MARKETS INC. RBC CAPITAL MARKETS LLC MORGAN STANLEY & CO. LLC SUNTRUST ROBINSON HUMPHREY INC. CITIGROUP GLOBAL MARKETS INC. CIBC WORLD MARKETS CORP. SMBC NIKKO SECURITIES AMERICA INC. TD SECURITIES (USA) LLC J.P.

MORGAN SECURITIES LLC MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED BMO CAPITAL MARKETS CORP. IMPLEADED PARTIES — Respondents JUDGMENT [ 1 ] Valeant Pharmaceutical International Inc. and Robert L. Rosiello, Robert A. Ingram, Ronald H. Farmer, Theo Melas-Kyriazi, G. Mason Morfit, Laurence Paul, Robert N. Power, Norma A. Provencio, Lloyd M. Segal, Katharine B. Stevenson, Fred Hassan, Colleen Goggins, Anders O. Lonner and Jeffrey W.

Ubben (collectively referred to as “ Valeant ”), seeks leave to appeal a judgment of the Honourable Madam Justice Chantal Chatelain of the Superior Court, District of Montreal (the “ Judge ”), rendered on August 29, 2017 ( 2017 QCCS 3870 ), granting Celso Catucci and Nicole Aubin (the “ Respondents ”) authorisations pursuant to

section 225.4 of the Quebec Securities Act , CQLR, c. V-1.1 (the “ QSA ”) and under articles 574 to 577 of the Quebec Code of civil procedure (“ CPP ”) for

instituting a class action against Valeant and various other parties, including Valeant’s underwriters and auditor. [ 2 ] Valeant’s leave application was heard at the same time as similar applications seeking leave to appeal the same judgment submitted respectively by it underwriters, its auditor, and two of its former directors, J. Michael Pearson and Howard B. Schiller. [ 3 ] The description of the classes and sub-classes to the class action, the issues identified by the judge to be dealt with collectively in the class action, the conclusions sought by the class action, the claims of the Respondents under (

a) Division I of

Chapter II of Title VIII of the QSA , (

b) Division II of

Chapter II of Title VIII of the QSA , and (

c) under general civil liability principles set out in

article 1457 of the Quebec Civil Code , as well as the test for granting leave to appeal pursuant to

article 578 CCP are all set out in the judgment dismissing Valeant’s underwriters’ application for leave to appeal and released at the same time as this judgment, and need not be reiterated here. [ 4 ] Valeant raises two grounds of appeal which are described as follows in the application for leave to appeal: 4.

Indeed, the judge in first instance committed an apparent and overriding error by failing to conclude that an action on behalf of individual qualified investors who acquired securities of the Appellant Valeant Pharmaceuticals International Inc. (“Valeant”) in primary offerings (the “Primary Market Sub-Class”) could not be sustained on the basis of the record before her, for the following reasons:

a) No appearance of right because no possible statutory liability for offering memorandum or prospectus misrepresentation : It is clear as a matter of law that the Appellants can have no liability under the Securities Act for misrepresentation in an offering memorandum or a prospectus where the offering memoranda in question were not “prescribed by regulation”, or where was no “distribution effected with a prospectus” in Canada;

b) No appearance of right or sufficient interest because no personal cause of action : Neither Respondent is a member of the Primary Market Sub-Class, nor has a sufficient interest in the primary market-based causes of action, because neither purchased securities on the primary market in any of the offerings in question (nor has any other person who falls within the definition of the Primary Market Sub- Class been identified). [ 5 ] These grounds of appeal are basically the same as those raised by Valeant’s underwriters and which were rejected by the undersigned in the judgment dismissing the underwriters’ application for leave to appeal.

As a result, these grounds of appeal will also be rejected with respect to Valeant. The reasons for rejecting those grounds are set out in the judgment respecting the underwriters’ application for leave to appeal and are incorporated herein by reference. They need not be reiterated here. FOR THESE REASONS, THE UNDERSIGNED JUDGE: [ 6 ] DISMISSES the Application for leave to appeal from a Judgment Authorizing a Class Action and an Action pursuant to

Section 225.4 of the Québec Securities Act brought by Valeant Pharmaceutical International Inc., Robert L. Rosiello, Robert A. Ingram, Ronald H. Farmer, Theo Melas-Kyriazi, G. Mason Morfit, Laurence Paul, Robert N. Power, Norma A. Provencio, Lloyd M. Segal, Katharine B. Stevenson, Fred Hassan, Colleen Goggins, Anders O. Lonner and Jeffrey W. Ubben, with legal costs. ROBERT M. MAINVILLE, J.A. Mtre Éric Préfontaine Mtre Allan David Coleman OSLER, HOSKIN & HARCOURT For Applicants Mtre Shawn Faguy Mtre Vincent Doré FAGUY & CIE, AVOCATS INC.

Mtre Michael George Robb SISKINDS Mtre Garth Fraser Myers Mtre Jonathan Elliot Ptak KOSKIE MINSKY For Respondents Mtre Robert Torralbo Mtre Simon Jun Seida BLAKE, CASSELS & GRAYDON For J. Michael Pearson Mtre André Ryan Mtre Shaun E. Finn BCF Mtre Jessica M. Starck BENNETT JONES For Howard B. Schiller

Mtre Pierre Y. Lefebvre LANGLOIS AVOCATS Mtre Noah Michael Boudreau FASKEN MARTINEAU DuMOULIN For Pricewaterhousecoopers LLP Mtre William McNamara Mtre Marie-Eve Gingras SOCIÉTÉ D’AVOCATS TORYS For Goldman, Sachs & Co., Goldman Sachs Canada Inc., Deutsche Bank Securities Inc., Barclays Capital Inc., HSBC Securities (USA) Inc., Mitsubishi UFJ Securities (USA) Inc., DNB Markets Inc., RBC Capital Markets LLC, Morgan Stanley & Co. LLC, Suntrust Robinson Humphrey Inc., Citigroup Global Markets Inc., CIBC World Markets Corp., SMBC Nikko Securities America Inc., TD Securities (USA) LLC, J.P.

Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and BMO Capital Markets Corp. Date of hearing: November 22, 2017