Ontario Legislature Clarifies Securities Limitation Period

Less than one month after the Supreme Court of Canada announced that it will hear appeals in a trilogy of Ontario securities class action cases that address how the three years limitation period under the Ontario Securities Act applicable to secondary market class actions should be applied, the Ontario Legislature has taken it upon itself to clarify the matter going forward.

In 2012, the Ontario Court of Appeal had interpreted the statutory limitation period to mean that plaintiffs must have obtained leave from the court to commence the action within the three-year period (Sharma v Timminco). Earlier this year, in Green v CIBC, a rare five-judge panel of the Court of Appeal reversed its own decision in Timminco (with two companion decisions in Silver v IMAX and Celestica v Millwright). The Court of Appeal found that articulating an intention to seek leave to commence the secondary market claim under the Securities Act was sufficient to suspend the limitation period,