Canadian Imperial Bank of Commerce, et al. v. Howard Green, et al.

(Ontario) (Civil) (By Leave)




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Limitation of actions - Legislation - Interpretation - Civil procedure - Class actions - Securities - Statutory claim - Statement of claim in proposed class action indicating that plaintiffs will seek order granting leave to assert statutory cause of action for misrepresentation provided by s. 138.3 of Part XXIII.1 of Ontario Securities Act - Leave not obtained prior to expiry of three-year limitation period set out in s. 138.14 of Securities Act - Whether the s. 138.14 limitation period was suspended by s. 28 of the Class Proceedings Act prior to the grant of leave - Whether a class proceeding based on the common law cause of action can be the preferable procedure for resolving a secondary market misrepresentation claim - Whether the test for granting leave under s. 138.8 was properly interpreted and applied - Securities Act, R.S.O. 1990, c. S.5, ss. 138.3, 138.8, 138.14 - Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 28.

In this class action proceeding, the representative plaintiffs are claiming damages under Part XXIII.1 of the Ontario Securities Act (“OSA”) for misrepresentations alleged to have been made in respect of shares trading in the secondary market. In addition to common law negligent misrepresentation claims, they make a claim based on the new statutory cause of action found at s. 138.3 of the OSA, which can only be commenced with leave of the court. The statutory claim is also subject to a three-year limitation period, found at s. 138.14(1) of the OSA. The class action was commenced within the three-year limitation period and a motion for leave to commence the statutory claim was brought, but leave was not obtained within the limitation period. Applying the Ontario Court of Appeal’s 2012 decision in Sharma v. Timminco, 2012 ONCA 107, the motions judge dismissed the leave application and the statutory action as time-barred. However, on appeal, a five-judge panel of the Court of Appeal concluded that the decision in Timminco should be overturned, and therefore that the action was not statute-barred. The motions judge, had he not found that the action was time-barred, would have certified the action as a class proceeding to assert the statutory cause of action, but not the cause of action for common law misrepresentation. The Court of Appeal, after finding that the action was not time-barred, certified the action as a class proceeding to assert both causes of action.

Lower Court Rulings

July 3, 2012
Ontario Superior Court of Justice

2012 ONSC 3637, CV-08-00359335-0000
Motions by respondents for an order granting leave nunc pro tunc to commence an action under s. 138.3(1) of the Securities Act and for an order certifying as a class proceeding the statutory claim and a common law misrepresentation claim dismissed
February 3, 2014
Court of Appeal for Ontario

C55832, 2014 ONCA 90
Appeal by respondents allowed: leave granted to commence the statutory claim, statutory claim certified as a class proceeding, and common law misrepresentation claim certified as a class proceeding against CIBC only