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ARTICLE · 08 NOVEMBER 2011

New Guidance On The Test For Leave To Bring A Secondary Market Misrepresentation Action

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On October 21, 2011, the Supreme Court of British Columbia released the reasons of Justice Harris in Round v. MacDonald, Dettwiler and Associates Ltd., 2011 BCSC 1416. Round is the first decision from British Columbia to apply the leave test under Part 16.1 of the province’s Securities Act (BCSA), which creates a civil liability regime for secondary market disclosure.

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Daniel Holden
Jonathan Bell
Jonathan Bell
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On October 21, 2011, the Supreme Court of British Columbia released the reasons of Justice Harris in Round v. MacDonald, Dettwiler and Associates Ltd., 2011 BCSC 1416. Round is the first decision from British Columbia to apply the leave test under Part 16.1 of the province's Securities Act (BCSA), which creates a civil liability regime for secondary market disclosure.

Justice Harris concluded that the petitioner had failed to meet the requirements for leave. In so doing, he offered guidance on the proper standard to be applied to a leave application, supplementing the prior jurisprudence from Ontario.

The Leave Requirement

Under section 140.8 of the BCSA, an action cannot be commenced under Part 16.1 without leave of the court. The court may only grant leave where it is satisfied both that the action is brought in good faith and that there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

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