Time To Leave: Supreme Court To Determine Securities Class Action Limitation Period

The Supreme Court of Canada has granted leave to appeal in a case that will determine how to apply the statutory limitation period for investors in Ontario who decide to sue public issuers and their executives under the Securities Act. Given similar legislation in other provinces, the case will be significant for investors and public issuers across Canada.

At issue is the February 2014 decision of a 5-member panel of the Ontario Court of Appeal covering three cases with different fact situations: Green v. CIBC, 2012 ONSC 3637; Silver v. IMAX, 2012 ONSC 4881; and Millwright Regional Council of Ontario Pension Trust Fund (Trustees of) v. Celestica Inc., 2012 ONSC 6083, each brought under Part XXIII.1 of the Ontario Securities Act. The Court of Appeal decision - 2014 ONCA 90 - was a dramatic and unusual reversal of its own decision on the same issue in Sharma v. Timminco, 2012 ONCA 107, less than two years prior.

As discussed in a blog post earlier this year, the three appeals at issue in Green required the Court of Appeal to decide when an investor advancing a proposed securities class action can be properly said to have "commenced" a claim, thus stopping the limitations period. In Green, the Court held that investors enjoyed the benefit of the limitation period suspension under s. 138.14 of the Securities Act once they have issued a common law claim and also pleaded an intention to seek leave to plead the statutory cause of action, even if leave is not then granted within the limitation period. This is in contrast to Timminco ( also discussed in an earlier post), in which the Court had held that leave must be granted within the three-year limitations period, or the claim was statute-barred.

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