On December 4, 2015, the Supreme Court of Canada (the
"SCC") issued its decision in Canadian Imperial Bank of Commerce v.
Green, 2015 SCC 60. In the highly anticipated decision, a
deeply divided Court rendered their reasons for a trilogy of
appeals that arose from securities class action cases against CIBC,
IMAX Corporation, and Celestica Inc. In each case the plaintiff
respondents sought damages under the common law tort of negligent
misrepresentation as well as under the new statutory cause of
action found at s. 138.8 of the Ontario Securities Act (the
"OSA") in respect of shares trading in the secondary
market. In split decisions, the SCC dismissed the appeals of CIBC
(4-3) and IMAX (4-3) and allowed the appeal of Celestica (4-3).
The CIBC decision clarifies two key issues in relation
to commencing securities class actions that seek damages for
alleged secondary market misrepresentations. The first issue
relates to the appropriate limitation period for commencing such
claims, as it was previously unclear whether the three-year period
extended until the application for leave (or permission to advance
the claim) was filed or until permission was granted. The second
issue clarifies what standard is required for a court to grant a
plaintiff leave to proceed with a claim for damages under the
secondary market provisions found in the OSA.
Limitation Period: Clarifying the Confusion
The SCC found that Part XXIII.1 of the OSA was drafted as a
comprehensive scheme and was therefore intended to work
harmoniously with s. 28 of the Class Proceedings Act (the
"CPA"). The purpose of s. 28 CPA is to suspend the
limitation period in order to protect potential class members until
the feasibility of the class action is determined. Accordingly, the
SCC held that the Ontario legislature drafted the OSA to strike a
delicate balance between efficiency and fairness for various market
participants. To interpret the OSA otherwise, as the Ontario Court
of Appeal had in their decision in the instant cases, would
frustrate the legislative structures and their purposes at issue in
Consequently, the SCC held that while the three-year limitation
period is only suspended once the plaintiffs obtain leave to
proceed under s. 138.8 OSA, the recent changes to the law indicate
a need for judicial discretion and interpretation in determining
the trio of cases. In July 2014 the Ontario legislature amended the
OSA in order to clarify that the limitation period is suspended
when a notice of motion seeking leave to proceed is filed in court,
not when leave is granted. As these clarifying amendments were
enacted while these three cases were before the courts, the SCC
allowed claims to proceed against CIBC and IMAX through the
court's inherent jurisdiction to issue orders nunc pro
tunc, a remedy which allows the court to "backdate"
to a time prior to the expiry of the limitation period. This remedy
was not available in Celestica, as leave had not been
filed prior to the expiry of the limitation period and thus the
limitation period would not have been suspended.
Given the legislative amendments to the OSA, future claims under
Part XXIII.1 will not face the previously strict interpretation of
the three-year deadline. As such, it is unlikely that this element
of the SCC's decision will have any major impact on future
securities class action cases.
Leave Requirement: Reasonable and Realistic
Though divided on the issue of limitation periods, the SCC
unanimously held the threshold that must be met by a plaintiff
applying for leave under s. 138.8 OSA requires only a reasonable or
realistic chance that the action will succeed. This decision
affirmed the SCC's prior ruling in Theratechnologies inc. v. 121851 Canada
inc., which set a reasonably low bar for leave and
certification of class actions. Though Theratechnologies
was on appeal from the Quebec Court of Appeal and was based in
Quebec's Securities Act, the SCC noted that there is no
difference in language between Quebec's Act and the OSA. For
this reason, the same threshold test for granting leave will apply
in other common law provinces that have similar legislative
schemes, as does British Columbia (see s. 140.8 Securities Act).
By reaffirming a low threshold to attain leave, the SCC has
provided more certainty for statutory securities actions in common
law provinces. As a result, the SCC's decision signals that
investors will have greater access to bring claims for alleged
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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