Is restatement of its financial statements an acknowledgment by the company that it has made material misrepresentations in relation to its audited financial statements valid for a cause of action?

In several cases, including one of my own, it has been held that a company’s restatement of its financial statements is an acknowledgment by the company that it has made material misrepresentations in relation to its audited financial statements that justifies granting leave to bring a statutory cause of action.[25] In Middlemiss v Penn West Petroleum,[26] Justice Belobaba, citing his own decision in Rahimi v. South Gobi Resources,[27] said: “it is hard to imagine a scenario where a publicly-traded company restates its financials and in doing so allegedly causes shareholder loss and leave under s. 138.8 is not granted.” As I shall explain below, while those holdings were correct for those cases, the legal proposition is overstated and the “is” should be more accurately be replaced by a “may be.”