Is a $5 million fine a less severe punishment than a night in jail? Are hefty financial penalties for quasi-criminal or regulatory offences able to trigger the procedural protections of the Canadian Charter of Rights and Freedoms when combined with the threat of imprisonment? The Supreme Court of Canada had the opportunity to address these questions when it recently released the twin decisions of R v Peers, 2017 SCC 13 and R v Aitkens, 2017 SCC 14.… Continue Reading
The Supreme Court of Canada has released a number of significant decisions since our last update that are of interest to Canadian businesses and professions, addressing the level of evidence required of a material change to support a securities class action in Quebec, damages for wrongful conviction, and requirements for expert evidence.… Continue Reading
The Supreme Court of Canada this week issued a judgment in one case, granted leave to appeal in one case, and denied leave to appeal in one case of interest to Canadian businesses.
In Thibodeau v. Air Canada, 2014 SCC 67, the Supreme Court of Canada ruled that the claims of airline passengers arising from a breach of an airline’s obligation to provide services in French under the federal Official Languages Act was precluded by the Convention for the Unification of Certain Rules for International Carriage by Air.… Continue Reading
The Ontario Court of Appeal’s decision in Green represents yet another plaintiff-friendly class action development from the Canadian courts, this time in the context of limitation periods. Less than two years after its watershed decision in Timminco, Ontario’s highest court reversed itself and in a decision authored by Feldman J.A. re-cast the limitation period regime governing secondary market civil liability under the Ontario Securities Act. In Green v. CIBC, 2014 ONCA 90, a five-member panel of the Court overturned Sharma v. Timminco, 2012 ONCA 107 and gave class action plaintiffs the protection of s. 28… Continue Reading
On July 17, 2013, the Quebec Court of Appeal rendered its first decision on the statutory secondary market liability regime adopted in 2007 pursuant to a reform of the Quebec Securities Act (“QSA”). Although the QSA regime facilitates a plaintiff’s burden, it also imposes an authorization process under which a claimant must establish that its action is brought in good faith and has a reasonable possibility of success. In Theratechnologies inc. v. 121851 Canada inc., 2013 QCCA 1256 (“Theratechnologies”), the Court of Appeal upheld the Superior Court’s decision to authorize a claim pursuant to… Continue Reading
If disclosure of information has no effect on a company’s share price, was that information really material to investors? A recent Ontario Divisional Court ruling suggests that the answer may be “Yes” if the information is of the kind that a reasonable investor would want to rely on in making an investment decision. In Cornish, the Court considers the test for when a “material change” has occurred and concludes that the market impact test for materiality can be satisfied even if the share price is not impacted following disclosure of the information. The case is an important one about… Continue Reading
In an important new ruling with national implications, the Supreme Court of Canada has denied leave to appeal from the Ontario Court of Appeal’s watershed decision in Sharma v. Timminco Limited, thereby establishing Sharma as the governing law for the statutory limitation period for secondary market securities class actions in Ontario, and possibly throughout Canada. Read together with Justice Strathy’s recent decision in Green v. Canadian Imperial Bank of Commerce, these decisions are likely to impose a new regime upon the conduct of secondary market class actions.
There is little law in Canada regarding if and how limitation periods applicable to statutory causes of actions in securities legislation can be tolled. For many public companies, this can create uncertainty regarding whether investor lawsuits are statute-barred.
For example, the limitation period in s. 138 of the Ontario Securities Act, which covers causes of action brought in respect of misrepresentations in prospectuses, offering memoranda and circulars, is the earlier of 180 days after the plaintiff first had knowledge of the facts giving rise to the cause of action, or three years after the date of the transaction that… Continue Reading
Public issuers in Canada, and their directors and officers, will benefit from a recent ruling of the Court of Appeal for Ontario, which puts a strict time limit on investors seeking to advance a statutory cause of action for allegedly misleading secondary market disclosure.
In Ontario, as in all provinces, an investor seeking to commence such an action must have leave of the Court to proceed with claims brought under the secondary market misrepresentation provisions (Part XXIII.1) of the Ontario Securities Act. A specific provision in the Act states that no action under Part XXIII.1 may be commenced more