Leave to appeal denied: Plaintiffs must obtain leave for secondary market class actions within 3 year limitation period

August 2, 2012

Today the Supreme Court of Canada announced that the application for leave to appeal the Court of Appeal for Ontario’s decision in Sharma v. Timminco Limited is to be dismissed, with costs. 

The Court of Appeal’s decision determined that section 28 of the Class Proceedings Act, 1992, which allows for the suspension of a limitation period applicable to a cause of action asserted in a class proceeding, is not triggered until after leave is granted under Part XXIII.1 of the Ontario Securities Act (OSA) to commence a statutory cause of action for misrepresentation.  The OSA provides for a three year limitation period.   

The finding in Sharma v. Timminco was applied earlier last month in Green v. Canadian Imperial Bank of Commerce in which Justice Strathy of the Ontario Superior Court of Justice concluded that, although the plaintiffs met the test for leave under the OSA, the right to pursue an action was time-barred by expiration of the three year limitation period under section 138.14. 

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