On August 7, 2014, the Supreme Court of Canada granted leave in three
securities class actions: Canadian Imperial Bank of Commerce et
al. v. Howard Green et al., IMAX Corporation et al. v. Marvin Neil
Silver et al. and Celestica Inc. et al. v. Trustees of the
Millwright Regional Council of Ontario Pension Trust Fund et
al. All three appeals will be heard together.
These three cases raise the question of how the three-year
limitation period under Ontario's Securities Act
should be applied.
Prior to the release of the Ontario Court of Appeal's
decision in Green v. CIBC, the consequence of failing to seek
leave before the limitation period expired was dictated by the
Ontario Court of Appeal's decision in Sharma v. Timminco
In Timminco, the Court of Appeal held that class
actions for secondary market misrepresentation under the
Ontario Securities Act were barred unless the Plaintiffs
were granted leave to proceed within three years of the
Ontario judges struggled with the Court's decision in
Timminco. Conflicting case law emerged on whether the
limitation period could be extended, or whether leave could be
granted retroactively to circumvent the harsh effect of
Although leave to appeal the Timminco decision was
dismissed, a five judge panel was appointed to reconsider the
effect of Timminco based on an appeal of Green v.
CIBC, Silver v. IMAX and Trustees of the Millwright
Regional Council of Ontario Pension Trust Fund v.
Ultimately, the panel concluded that Timminco should be
overturned, and therefore that action was not statute-barred. The
effect of the Court of Appeal's decision is that a statutory
secondary misrepresentation claim will be "within time"
so long as the following requirements are met:
A representative plaintiff has commenced a class action within
the limitation period provided for by the Securities
The representative plaintiff has pled secondary market
misrepresentation as a cause of action;
The representative plaintiff has plead the facts to found the
secondary market misrepresentation claim; and
The representative plaintiff pleds the intent to seek leave to
commence an action under the Securities Act.
In addition to overruling Timminco and addressing the
limitations issue, Green v. CIBC further clarified that
the threshold a plaintiff must meet to obtain leave of the Court is
a relatively low threshold. Furthermore, the Court of Appeal
partially certified the Plaintiffs' common law
misrepresentation claim (leaving reliance and damages to be
determined outside the class action) and overturned Strathy
J.'s decision not to certify the action as a whole. In light of
the SCC's recent decision to grant leave in this trilogy of
cases, it is reasonable to expect that these issues will be argued
before the SCC. However, the SCC does not provide reasons in
granting leave to appeal; therefore, it is difficult to read into
the decision with precision.
In any event, a decision from the SCC, which will be several
months away, has the potential to provide some long-awaited and
welcomed clarity to this area of the law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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