The Court of Appeal for Ontario announced this week that it will
convene a special five-judge panel to hear appeals considering the
statutory limitation period applicable to securities class actions
for secondary market misrepresentations commenced under Part
XXIII.1 of the Ontario Securities Act. The
specially-convened panel underscores the importance of the issue
and may well provide clarification in the area of securities class
actions both in Ontario and across Canada.
This issue comes before the Court of Appeal by way of appeal
from recent decisions of the Ontario Superior Court of Justice that
took varying approaches to interpreting the Court of Appeal's
decision in Timminco.1 In Timminco,
the Court of Appeal held that the limitation period in Part XXIII.1
requires a plaintiff to obtain leave to proceed with his statutory
cause of action within three years of the date that the alleged
misrepresentation is made – otherwise, the claim would be
statute-barred. In CIBC,2 the first decision to
applyTimminco, Justice Strathy found that the court has no
discretion to extend the limitation period once it had expired.
However, two subsequent decisions held that the court can grant
relief against the limitation period in limited circumstances. In
Imax,3 Justice van Rensburg held that the court
has the authority to grant leave nunc pro tunc in
appropriate circumstances such that the effective date of the
granting of leave will be deemed to fall within the limitation
period. And in Celestica,4 Justice Perell held
that relief could be granted from strict application of the
limitation period on a somewhat different basis, namely the
discretion retained by the court pursuant to the common law
doctrine of "special circumstances".5
The issue was to be considered before a three-judge panel of the
Court of Appeal in the joint hearing of the appeals in
CIBC and Imax. However, the Court of Appeal
determined that it would adjourn the hearing until May to convene a
rare five-judge panel. This may be due to the fact that the
plaintiffs would be asking the Court of Appeal to take the unusual
step of reconsidering its own decision in Timminco. The
result of these appeals will be of considerable interest to
issuers, directors and officers.
1 Sharma v. Timminco
Ltd., 2012 ONCA 107. The Supreme Court of Canada
denied leave to appeal, thereby upholding the Court of Appeal's
decision. For a summary ofTimminco,
please see our
Osler Update of August 2, 2012.
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