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CLASS ACTIONS Appeal in Timminco, which created serious problems for plaintiffs given the complexities of the litigation process," says Lowenwho only discovered a misrepresentation well into the three-year stein, "but the proper remedy for a legislative measure that is not period and then had to encounter the vagaries of a notoriously working is a legislative amendment." slow litigation process abetted by defendants well aware of the Baert says that the debate over extending the limitation period advantages of delaying the hearing of the leave application. that followed Timminco was inevitable. "If relief is not available when courts do not have adequate "It shows that the original rulings that the three-year limitaresources to deal with leave applications expeditiously, defen- tion continued to run until leave was actually obtained made no dants will have an extraordinary economic incentive to delay the sense," he says. "So now we have had to deal with a whole new area proceedings," says Dimitri Lascaris, who represents plaintiffs in of law that makes complicated proceedings even more unnecesSiskinds LLP's London, ON, office. sarily complicated." Indeed, as Justice Perell saw it, the legislature "did not intend For his part, Alan D'Silva in Stikeman Elliott LLP's Toronto to sacrifice access to justice on the altar of expeditiousness." He office, who represented Timminco, maintains that the Court of noted that the special circumstances doctrine was developed to Appeal dealt with the matter correctly in Timminco. "ameliorate the rigors of an absolute limitation period in appro"The Court of Appeal determined that to hold otherwise priate circumstances." would be unfair because it would extend the limitation period But Larry Lowenstein of Osler, Hoskin & Harcourt LLP's for class plaintiffs beyond the period allowed to individual plainToronto office, who represents defendants in class action cases, tiffs or shareholders," he says. "The court also recognized that does not regard Celestica as opening the floodgates. this interpretation was consistent with the legislative purpose of "Justice Perell recognized that the special circumstances doctrine ensuring that secondary market claims proceeded 'with dispatch' is principled and narrow," he says. "It comes down to an inquiry as to whether the plaintiffs, by initiating the litigation within the limitation period albeit not obtaining leave within that period, have put the defendants on proper notice to avoid prejudice." In May 2013, the Ontario Court for Appeal PROCEEDINGS ACT REQUIRES convened a five-member panel to hear the THAT A CLASS ACTION BE THE appeals in Silver and Green. At press time, the PREFERABLE PROCEDURE FOR decision was on reserve. RESOLVING A DISPUTE BEFORE IT CAN Although the central issue before the court was whether relief from the limitation period BE CERTIFIED. SO ARGUABLY FISCHER was available at all and if so, in what circumCOULD APPLY IN ANY CASE WHERE stances, the plaintiffs in Silver and Green COMPANIES ARE HOLDING UP AN asked the Court of Appeal to go further and ALTERNATIVE PROCESS, WHETHER reconsider its own decision in Timminco. "What is apparent is that Timminco is IT'S REGULATORY OR VOLUNTARY, creating difficulties for Superior Court judges AS A PREFERABLE ALTERNATIVE who have to apply it," says Brian Radnoff in TO A CLASS ACTION." Lerners LLP's Toronto office. "At the least, the Court of Appeal has to look at the original decision and determine whether it merits a reconsideration." But Radnoff is skeptical that the court will overrule itself. so they are not held over the heads of the company and other "The Court of Appeal may well accept that exceptions can be potential defendants." Some defense counsel also relish the idea that Timminco could carved into Timminco, but I would not be confident that the decision will be reversed," he says. "While it's clear that the legis- have implications well beyond secondary market class actions. "The decision will have profound implications for many types lation could be read in other ways, the Timminco interpretation is consistent with the wording of the Securities Act. It's certainly not of class actions," says Jennifer Dolman, a franchise law partner in Osler's Toronto office. "There are other statutes with pre-condisome ridiculous statutory interpretation." tions to litigation, such as the requirement to give notice or obtain Radnoff agrees that ultimately the problem is a practical one. "The question is whether plaintiffs in many cases are in a leave, and Timminco is certainly open to the broader interpretaposition to get leave within three years even where they act tion that the Class Proceedings Act does not suspend time limits for satisfying the pre-conditions that are found in these particureasonably and with dispatch," Radnoff says. However that may be, defense counsel argue, the solution is lar statutes." one for the legislature, not the courts. "It may be that a three-year limitation period is not sufficient Julius Melnitzer is a legal affairs writer in Toronto. "THE CLASS www.lexpert.ca | LEXPERT • December 2013 | 19