In Sharma v. Timminco Limited, the Ontario Court of Appeal held that for an Ontario Class Proceedings Act ("CPA") section 183.3 cause of action to be asserted and be able to trigger the suspension provision of section 28 of the CPA, leave must be granted.
This case stems from a securities class action raising allegations of negligence and negligent misrepresentation that affected the values of the shares of Timminco, between March 17, 2008 and November 11, 2008. The class representative indicated that he would seek leave to assert that there was a statutory cause of action for misrepresentation under section 138.3 of Part XXIII.1 of the Securities Act. The statute of limitations in this part of the act is three years from the alleged misrepresentation. In February 2011 the plaintiff, who had not yet obtained leave sought an order declaring the limitation period of three years to be suspended by use of section 28 of the Class Proceedings Act.
The issue before the Ontario Court of Appeal was whether mentioning an intention to seek leave, as per section 138.3 of the Ontario Securities Act, is sufficient to suspend the limitation period by using section 28 of the CPA. The court looked to the ordinary meaning and use of the words used in section 28 of the CPA and found that the words “assert” mean more than simply mentioning, and as such the court finds that the section 138.3 cause of action is not asserted in the class proceeding because no leave has been granted by the court. The court found that for a section 138.3 cause of action to be asserted in a class proceeding resulting in the ability to trigger the suspension provision of section 28 of the CPA, leave of the court must be granted and since no such leave was granted, section 28 cannot be utilized.
The appeal was allowed and the respondent’s motion for an order declaring the limitation period set out in section 138.13 of the Securities Act not applicable is dismissed.
February 16, 2012
Link to Decision
Sierra Robart
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