On February 9, 2015, the Supreme Court heard appeals in a
trilogy of Ontario securities class action cases: Green v. CIBC,
Silver v. IMAX and Celestica v. Millwright Regional Council of
Ontario Pension Trust Fund. These long-awaited appeals will have a
significant impact on the application of limitation periods under
both the Securities Act, R.S.O. 1990, c. S.5, s. 138.3 (the
"Securities Act") and the Class Proceedings Act, 199,
S.O., 1192, c. 6.
In each case, plaintiffs have commenced class actions pursuant
to PART XXIII.1 of the Securities Act for alleged
misrepresentations in respect of trades in securities being made in
the secondary market. The Securities Act requires a plaintiff to
obtain leave before pursuing his or her statutory claim, and
provides for a limitation period of three years from the time of
the alleged misrepresentation. At the heart of the appeals is
whether the limitation period requires the plaintiff to simply
commence the claim within three years, or whether it requires the
plaintiff to commence the claim and obtain leave in order to avoid
the claim becoming statute barred. In all three cases, a class
action had been commenced and a motion for leave had been brought,
but not decided, within the three-year statutory limited
The debate over these provisions began with the release of the
Ontario Court of Appeal's decision in Sharma v. Timminco, 2012
ONCA 107 leave to appeal to S.C.C. refused,  S.C.C.A. No. 157
("Timminco"). In a decision that took the securities
class action bar by surprise, the Court in Timminco held that the
statutory claim is statute-barred if leave to commence the action
has not been obtained within the three-year limitation period.
Several class actions were statute-barred as a result of this
decision. Prior to Timminco, most plaintiffs had been operating
under the assumption that s. 28 of the CPA, which has the ability
to suspend a limitation period in favour of a class member if
"a cause of action is asserted in a class proceeding",
insulated plaintiffs from the limitation period under the
Securities Act. The provision is designed to protect plaintiffs
from a limitation period when at least one plaintiff has commenced
an action within a limitation period.
In February 2014, with the release of Green v. CIBC, a special
five-member panel of the Court of Appeal made the unprecedented
move of overturning its own decision in Timminco. The Court of
Appeal decided that it had wrongly interpreted s. 28 of the CPA. It
was critical of the Court's analysis in Timminco which held
that because the cause of action could not be enforced without
leave being obtained, the statutory claim could not be considered
to have been "asserted" until leave was obtained. The
Court held that this reasoning was inconsistent with the purpose of
s. 28 of the CPA and s. 138.3 of the Securities Act. It held that
the purpose of these sections – to facilitate access to
justice and deter corporate misconduct – would be thwarted if
plaintiffs cannot use class actions as a vehicle for advancing
statutory causes of action for misrepresentation. Moreover, if s.
28 of the CPA and s. 138.3 Securities Act cannot work together,
class members would have to commence individual claims in order to
ensure that their class action is brought within the three-year
limitation period. This would run contrary to the intention of s.
28 of CPA.
In its decision, the Court of Appeal also addressed the reality
that timing is not always within the control of counsel. Due to
logistics, procedural steps and court availability, three years is
usually not enough time for plaintiffs' counsel to commence a
claim, bring a motion for leave and obtain leave. This is
particularly illustrated in the case of Silver v. Imax in which a
claim had been commenced, a leave motion had been served and argued
but the decision itself was not released prior to the expiration of
the limitation period.
Given the Court of Appeal's reversal in CIBC v. Green, the
Supreme Court's decision in this area will provide much needed
certainty with respect to securities class actions and the impact
of the limitation provision in the Securities Act.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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