Timminco Has Broad Implications

Jennifer Dolman

Apr 16, 2012

By Julius Melnitzer, Law Times

Plaintiffs’ and defence lawyers agree that a recent Ontario Court of Appeal ruling requiring plaintiffs in secondary-market securities class actions to seek the required leave to commence the lawsuit from the court within three years of the date of the impugned misrepresentation could have broad-reaching implications for other types of matters.

Indeed, some defence lawyers are calling Sharma v. Timminco Ltd. the most important decision yet on secondary-market class actions.

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Both plaintiffs’ and defendant lawyers say that the decisions impact goes beyond securities law cases.

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Jennifer Dolman of Osler, Hoskin & Harcourt LLP agrees. “There are other statutes with preconditions to litigation, such as the requirement to give notice or obtain leave,” she says. “The Timminco decision is certainly open to the broader interpretation that the Class Proceedings Act does not suspend time limits for satisfying the preconditions that are found in these particular statutes.”

By way of example, Dolman cites Ontario’s Arthur Wishart Act that governs franchise agreements. The legislation requires a party that asks the court to rescind a franchise agreement to give notice within certain time limits.

“As in Timminco, where the court rules that the right to sue did not arise until leave was obtained, courts have ruled that the right to seek rescission in a franchise case does not arise unless notice was given in a timely fashion,” says Dolman.

Ontario’s Consumer Protection Act has a similar notice provision for consumers who want to rescind their contracts. So does the Proceedings Against the Crown Act. It requires citizens who want to sue the government to give notice before starting their lawsuits.

“The Court of Appeal has emphasized that time-limited preconditions to suing apply to class actions,” Dolman notes.