The Court of Appeal for Ontario, 2014 ONCA 90, has determined that the commencement of a class action for statutory misrepresentation in the secondary market within the three year limitation period provided in Part XXIII.I of the Securities Act, and which pleads the intention to seek leave to proceed with the secondary market statutory misrepresentation claim again under Part XXIII.I of the Securities Act, will suspend the running of that limitation period for all class members until the motion for leave to proceed can be heard and determined.
Today's decision – by a 5 member panel of the court who heard three appeals – explicitly overturns the Court of Appeal's previous decision in Sharma v. Timminco, 2012 ONCA 107 (previously discussed in our blog: Without Leave, There is No Action Under s. 138.3 of the Securities Act). Today's decision permits claims to proceed against CIBC and Celestica, which were effectively in limbo while the issue was being determined on appeal. (Today's decision also deals with what remains of the Silver v. IMAX class action previously discussed in our blog: Silver v. IMAX – You Can't Have Your Cake and Eat it Too).
The effect of this decision will be to permit proposed representative plaintiffs in securities' secondary market statutory misrepresentation cases to schedule leave motions as appropriate for the particular case, working with defendants, and their class action case management judge – similar to the practice for scheduling certification motions. Parties and the court will not be held to the confines of the operation of the three year limitation period to proceed with the motion for leave under the Securities Act.
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