Litigation – Securities

Complicating Securities Class Actions

According to the Bennett Jones’ Class Action Litigation Group: “Recent trends towards the globalization of Canada’s class regime have continued. Canadian courts appear primed to accept global classes, apply creative solutions to address complex cross-border class proceedings and take jurisdiction over claims even where a defendant’s connections to Canada are limited. Canadian courts have also taken on claims paralleling those originally seen south of the border, including significant decisions addressing unpaid overtime and … deceptive marketing.”

Leave Applications

To no one’s surprise, plaintiff and defense lawyers differ on the extent to which the threshold leave requirement in Ontario’s Securities Act has proven to be an effective filter against scurrilous secondary market securities class actions. Before such actions can proceed, the plaintiffs must establish that the action is being brought in good faith and that there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

There have been several contested leave motions in Ontario. Leave was granted in part in six cases (Imax, Arctic Glacier, CIBC, Manulife, Canadian Solar, Celestica) and outrightly denied in two (Western Coal, Kinross). The defendants consented to leave in five instances (Agnico Eagle, Canada Lithium, SNC-Lavalin, Sino-Forest, easyHome). Otherwise in Canada there have only been two leave motions in securities class actions. Leave was denied in BC in Round v. McDonald Detwiler and granted in Québec in Theratechnologies, where the leave decision is under appeal to the Supreme Court of Canada.

Leave in Ontario

Meanwhile, the leave cases in Ontario, and in other provinces, continue to evolve or grow more complicated—depending on your point of view. As Matthew Fleming and Thomas Wilson of Dentons LLP wrote: “In Mask v. Silvercorp Metals Inc., the Court of Appeal for Ontario upheld a decision refusing leave to commence an action for secondary market misrepresentation under section 138.8 of the Ontario Securities Act. The Court of Appeal’s decision, released on August 24, 2016, confirms that the test for leave in statutory secondary market claims must be viewed as a substantive hurdle to such claims and that judges considering a motion for leave may weigh and evaluate the evidence before them.”


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