On August 2, 2012, the Supreme Court of Canada, denied leave to appeal the Court of Appeal decision in Sharma v. Timminco. In so doing, the Supreme Court upheld the appeal court’s restrictive interpretation of the three year limitation period set out in section 138.14 of the Ontario Securities Act to seek leave to proceed with a section 138.8 claim (misrepresentation in the secondary market). Failure to seek leave to proceed within the three year limitation period for section 138.8 claims will render even a meritorious claim statute barred.
Indeed in Green v. CIBC 2012 ONSC 3637 (released shortly after and applying the Court of Appeal decision in Sharma v. Timminco) the restrictive interpretation articulated by the Court of Appeal for Ontario in Sharma v. Timminco was applied even though, as Justice Strathy explained, but for the statutory limitation period he would have granted leave to proceed with the section 138.8 claim.
These developments are sure to bring comfort to directors and officers of issuers and serve to caution investors to seek leave to proceed with dispatch. The class action playbook continues to be written.
For a discussion on how Pennyfeather v. Timminco 2011 ONSC 4257 S.C.J. and Sharma v. Timminco 2012 ONCA 107 have revised the class action play book in Ontario see Class Action Law In Ontario Canada – A New Playbook 20 Years In The Making.
FOR MORE INFORMATION, PLEASE CONTACT:
Thomas Arndt, is a partner in Dickinson Wright’s Toronto office. Tom has acted on both sides of class actions and in all levels of litigation including multi-billion dollar enterprise risk litigation. Tom can be reached at 416.777.4037 or firstname.lastname@example.org.