The "Mention Of An Intention" Won't Stop The Clock For Secondary Market Class Actions

The Ontario Court of Appeal recently released its decision in Sharma v Timminco Limited.¹ Sharma confirms the limitation period to bring a claim under the Ontario Securities Act² for misrepresentations alleged to affect the value of secondary market securities will not be suspended merely because the action takes the form of a proposed class proceeding. All plaintiffs wanting to assert such causes of action must obtain leave to do so within three years of the date of the alleged misrepresentation or they will be barred from bringing their claim.

The key statutory provisions at issue in Sharma are as follows:

• Section 138.3 of the OSA, which provides a statutory, civil cause of action against an issuer and those acting on its behalf for persons who acquire or dispose of the issuer's securities in the secondary market where misrepresentations have been made that adversely affect the value of those securities;