In Silver v. Imax, Justice Katherine van Rensburg dismissed Imax’s motion for summary judgment dismissing the statutory claims of the plaintiffs for secondary market misrepresentation.
“I think it’s a great decision and is turning the law back in the direction in which it should have been in the first place,” says Kirk Baert, a partner at Koskie Minsky LLP. “I thought it was quite brave of her to disagree with both the Court of Appeal and Justice Strathy in essence, and say, we’re not going to allow these types of cases to get dismissed when the plaintiff couldn’t have done anything differently than what they did.”
In her decision, van Rensburg wrote: “No public interest would be served by permitting a cause of action to be defeated by delays inherent in the litigation process. As argued by the plaintiffs in Nor-Dor (at para. 4), ‘[the expiry of a limitation period while the leave motion is pending] cannot have been the intention of the legislature when it enacted this section of the Act”.
Last month, plaintiffs in a secondary markets securities class action case involving CIBC and its subprime mortgage exposure were denied certification, even though Ontario Superior Court Justice George Strathy indicated he saw merit in the case.
On July 3, Strathy ruled in Green v. Canadian Imperial Bank of Commerce that the plaintiffs failed to obtain the required leave to proceed with the action within the three-year period mandated by the Ontario Securities Act. The plaintiffs’ request to certify common law claims for negligent misrepresentation was also rejected. However, Strathy indicated that had he found the limitation period hadn't expired, he would have granted leave and certified the action as a class proceeding.
Strathy relied on Sharma v. Timminco Ltd. in rendering his decision in the CIBC case.
“I didn’t think the original Timminco decision was correct for a lot of reasons,” says Baert. “Mainly because it’s forcing people to go through these types of motions for really no purpose whatsoever. It’s also the only example of a limitation period that runs off when a judge makes a decision as opposed to something the plaintiff can actually control.”
The Imax litigation arose from allegations the company made misrepresentations that led to a precipitous decline in its share price a few years ago. The U.S. action was filed in 2007. Shortly after, Dimitri Lascaris of Siskinds LLP in London filed a parallel case in Ontario.
Given the debate created by Timminco, Baert says it may be time to address it in a more formal way, so that case that already complicated, costly and time consuming, aren’t further delayed.
“It’s another diversion to getting to the real issue. The way to fix this is to amend the legislation. Otherwise we’re going to have a lot of motions and appeals over the periphery of the case rather than the merits of the case. If you think the reason there is a three-year time limit is to get the cases disposed of more efficiently having this issue out there just makes the cases take longer,” he says.