The consequences of recent jurisprudence on secondary market
class action limitation periods have recently manifested themselves
in an unusual way in Pennyfeather v Timminco Limited
is a class action for alleged misrepresentations affecting the
value of shares of Timminco Limited (the "Timminco
Action"). The Timminco Action was subject to the ruling in
Sharma v Timminco
("Sharma"),2 in which the Ontario
Court of Appeal held limitation periods in secondary market
misrepresentation class actions were not suspended by section 28 of
the Class Proceedings Act, 1992
("CPA")3 until leave is granted under
the Securities Act.4 As a result of
Sharma, the Timminco Action was statute-barred. After some
criticism, the Court of Appeal overruled Sharma only to be reversed
by the Supreme Court of Canada in Green v CIBC
("Green").5 The SCC majority
confirmed that the Securities Act limitation periods were
not suspended until leave was granted, though an order nunc pro
tunc could be available in some situations to alleviate
limitation period restrictions.
Green led the defendants to move for declarations to
terminate the Timminco Action. In response, Pennyfeather argued for
nunc pro tunc relief. The doctrine of nunc pro
tunc permits some courts, through their inherent jurisdiction,
to effectively backdate orders that they issue. In a secondary
market class action, it is the order granting leave under the
Securities Act that would be made nunc pro tunc.
However, the SCC majority cautioned such an order should only be
permitted if the leave application is brought before the limitation
period could bar the claim. This has come to be called the
The defendants in the Timminco Action opposed any order nunc
pro tunc on the basis of the red-line rule and also argued
res judicata, issue estoppel and abuse of process. Justice
Perell ultimately decided to consider the nunc pro tunc
issue. Consequently, Pennyfeather is one of the first
reported decisions since the release of Green to consider
if a nunc pro tunc order granting leave should be made.
Justice Perell ruled that he would not backdate any order in the
case as the plaintiff did not apply for leave before the expiry of
the limitation period in accordance with the red-line rule.
1 2016 ONSC 3124
2 2012 ONCA 107
3 SO 1992, c 6
4 RSO 1990, c S.5
5 2015 SCC 60
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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