COURT FILE NO.: CV-06-3257-00
DATE: 2012 08 27
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARVIN NEIL SILVER and CLIFF COHEN
Plaintiffs
- and -
IMAX CORPORATION, RICHARD L. GELFOND, BRADLEY J. WECHSLER, FRANCIS T. JOYCE, NEIL S. BRAUN, KENNETH G. COPLAND, GARTH M. GIRVAN, DAVID W. LEEBRON and KATHRYN A. GAMBLE
Defendants
Proceeding under the Class Proceedings Act, 1992
BEFORE: K. van Rensburg J.
COUNSEL: D. Lascaris, W. Sasso, D. Bach and M. Robb, for the Plaintiffs
P. Steep and D. Peebles, for the Defendants
Reasons for Decision re: Limitations Defence
Introduction
[1] The defendants move for an order dismissing the claims of the plaintiffs for secondary market misrepresentation pursuant to Part XXIII.1, section 138.3 of the Ontario Securities Act (“OSA”), on the ground that they are barred by section 138.14 of the OSA. The plaintiffs move for an order nunc pro tunc that the leave order be deemed to have been granted and the Statement of Claim deemed amended to have included the claim under s. 138.3, as of the commencement of this proceeding or as of such other date as this court may deem just.
[2] Section 138.14(a) of the OSA provides a limitation period with respect to actions based on misrepresentation in a document as follows:
No action shall be commenced under section 138.3,
a) in the case of misrepresentation in a document, later than the earlier of,
i) three years after the date on which the document containing the misrepresentation was first released,
ii) six months after the issuance of a news release disclosing that leave has been granted to commence an action under section 138.3 or under comparable legislation in the other provinces or territories in Canada in respect of the same misrepresentations;…
[3] According to section 138.8 of the OSA, no action may be commenced under s. 138.3 without leave of the court, granted upon motion with notice to each defendant.
[4] These motions were brought because leave was granted to proceed with the statutory claims more than three years after the misrepresentations alleged in the Statement of Claim.
Relevant Procedural History
[5] On September 20, 2006 the plaintiffs commenced this action, alleging that misrepresentations to the secondary market were made by IMAX between February 17 and March 9, 2006. The Statement of Claim asserted common law claims and pleaded that the plaintiffs intended to bring a motion for an order to seek leave to proceed with claims pursuant to s. 138.3 of the OSA. The defendants to the action were IMAX, its two chief executive officers and its chief financial officer. The Statement of Claim identified as “proposed defendants”, members of IMAX’s board of directors and the company’s Vice-President, Finance.
[6] The prayer for relief, among other things, requested leave to amend the Statement of Claim to assert the cause of action pursuant to s. 138.3 of the OSA and to add the proposed defendants as defendants to the action.
[7] A notice of motion seeking such leave was served on the defendants and the proposed defendants on or about November 28, 2006, with the motion record served in February 2007. Attached to the notice of motion for leave was a draft Fresh Statement of Claim, adding all of the proposed defendants as parties to the action and pleading additional paragraphs with respect to the statutory cause of action.
[8] The leave motion was originally scheduled to be heard in December 2007, however from time to time the litigation schedule was amended at the request of the parties.
[9] While the plaintiffs suggest that the defendants were responsible for a significant part of the delay in having the motion heard, it would be more accurate to observe that the delays resulted from the fact that the record on the motion, which included affidavits, expert reports, documentary production and examination transcripts, became complex and voluminous. As participants in the first motion for leave to assert a statutory claim for secondary market misrepresentation that reached a hearing, the parties had no procedural or substantive precedent to follow, and left no stone unturned as they prepared both the record for the application and their legal arguments. Further, at the request of the parties, the leave motion was heard together with the motion seeking certification of the action as a class proceeding, as well as a Rule 21 motion seeking to strike various common law causes of action asserted in the Statement of Claim.
[10] Ultimately all three motions were heard for five days, from December 15 to 19, 2008. There was an additional attendance in May 2009 and further written submissions in July 2009, all in respect of issues concerning the Rule 21 and certification motions. As such, the leave motion had been fully argued as of December 19, 2008.
[11] In my decision of December 14, 2009,[^1] the plaintiffs were granted leave to proceed with the section 138.3 claim against all but two of the proposed defendants. In a companion decision released the same day,[^2] the Rule 21 motion was addressed and the action was certified as a class proceeding. The defendants initially sought to appeal the leave order to the Court of Appeal, however that appeal was quashed in May 2010 on the basis that leave under s. 138.8 of the OSA was an interlocutory issue[^3]. A motion for leave to appeal both the certification and leave orders was argued to the Divisional Court in July 2010. On February 14, 2011 leave to appeal from those decisions was refused.[^4]
[12] Following the dismissal of the motion for leave to appeal, the defendants’ counsel requested a draft of the Amended Statement of Claim to ensure that the amendments conformed to the terms of the order granting leave. The draft was provided, and on December 8, 2011 they advised that they had no comments on the draft.
[13] On December 12, 2011 the plaintiffs filed a Fresh Statement of Claim which amended their Statement of Claim to plead the Part XXIII.1 cause of action. The Fresh Statement of Claim is considerably longer and more factually detailed than the draft that accompanied the plaintiffs’ notice of motion, pleading some additional facts, such as the restatement of IMAX’s 2005 financial results (which occurred in 2007, after the action had been commenced). The paragraphs pleading Part XXIII.1 of the OSA are consistent with the draft pleading that was attached to the notice of motion, with some additional details added to the pleading.
[14] A Statement of Defence was delivered on February 6, 2012. An Amended Statement of Defence was delivered on February 16, 2012. The only substantive change to the Defence was the assertion of the limitation period under section 138.14 of the OSA.
[15] The latest misrepresentation by IMAX upon which the statutory claim is based, is alleged to have occurred on March 9, 2006. The defendants submit that, because leave under s. 138.8 of the OSA was not granted, and the Statement of Claim was not amended to assert such claims, before March 9, 2009, the statutory claims for secondary market misrepresentation in this action are statute-barred.
The Court of Appeal Decision in Sharma v. Timminco Ltd.
[16] The defendants rely on the decision of the Court of Appeal in Sharma v. Timminco Ltd., 2012 ONCA 107, 109 O.R. (3d) 569, which was released February 16, 2012. (Leave to appeal this decision to the Supreme Court of Canada has since been refused: Sharma v. Timminco Ltd., [2012] S.C.C.A. No. 157.)
[17] In Timminco, Goudge J.A. dealt with an appeal of the order of Perell J. that held that section 28 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, (the “CPA”) could operate to suspend the limitation period applicable to the statutory cause of action for secondary market misrepresentation where the statutory claim was referred to in the statement of claim in a pending proposed class proceeding.
[18] In Timminco the proposed class action was commenced on May 14, 2009. The misrepresentations were alleged to have occurred between March 17, 2008 and November 11, 2008. By the end of February 2011 the plaintiffs had not yet sought leave to assert the statutory cause of action. The plaintiffs moved for an order declaring that the limitation period had been suspended under section 28 of the CPA, which provides as follows:
28(1) Subject to subsection (2) any limitation period applicable to a cause of action asserted in a class proceeding is suspended in favour of a class member on the commencement of the class proceeding and resumes running against the class member when,
(a) the member opts out of the class proceedings;
(b) an amendment that has the effect of excluding the member from the class is made to the certification order;
(c) a decertification order is made under section 10;
(d) the class proceeding is dismissed without an adjudication on the merits;
(e) the class proceeding is abandoned or discontinued with the approval of the court; or
(f) the class proceeding is settled with the approval of the court, unless the settlement provides otherwise.
[19] Goudge J.A., for a unanimous court, reversed the decision of Perell J. and dismissed the motion for an order declaring that the limitation period had been suspended. He concluded that, for a s.138.3 cause of action to be asserted in a class proceeding, so as to trigger the suspension provision in s. 28(1) of the CPA, leave must have been granted. Since leave had not yet been granted, s. 28(1) had not been activated.
[20] With respect to the leave provision, Goudge J.A. observed at para. 26:
The purpose of section 138.14 of the OSA is also served by the interpretation of section 28(1) of the CPA that I have described. Section 138.14 was clearly designed to ensure that secondary market claims be proceeded with dispatch. That requires the necessary leave motion to be brought expeditiously. To suspend that limitation period with no guarantee that the section 138.3 cause of action, including the prerequisite leave motion, will be proceeded with expeditiously is inconsistent with that purpose.
[21] Timminco addresses the question of whether the limitation period under s. 138.14 is extended by operation of the CPA before leave has been obtained. In Timminco, the plaintiff had not yet brought a motion for leave under the OSA and accordingly was seeking an order recognizing that s. 28(1) suspended the OSA limitation period. The question on this motion, by contrast, is whether the limitation period in fact would apply as an absolute defence to the statutory claims.
[22] Unlike the situation in Timminco, the plaintiffs in this case moved expeditiously to advance the motion for leave, and had not only delivered their notice of motion and completed the record, but had argued the motion within three years of the alleged misrepresentations. There was nothing more the plaintiffs could have done to comply with the limitation period. The reasons for the delay were outside the control of the plaintiffs, having to do with the complexity of the issues that were being considered by the court for the first time, and delays occasioned during the leave motion, in particular the fact that the decision was under reserve when the limitation period expired. No one adverted to the fact that there was a limitations issue; presumably it was understood that the limitation period had been suspended in accordance with the reasoning of Perell J. in Timminco at first instance.
[23] The parties disagree about the effect of the Timminco decision and whether in fact the limitation period has expired in this case. If the limitation period has expired, then the plaintiffs argue that the court should do justice by amending the order to grant leave nunc pro tunc and making the amendments to the Statement of Claim asserting the statutory cause of action effective as well within the three year limitation period. The plaintiffs rely on the doctrine of special circumstances and the authority of the court to make orders nunc pro tunc.
[24] The defendants submit that Timminco dictates that the limitation period under s. 138.14 of the OSA has run against the plaintiffs in a case such as the present, where leave was not obtained to assert the statutory cause of action and the Statement of Claim was not amended, within the three year limitation period. The defendants assert that there is no authority for the court to apply the special circumstances doctrine and that the nunc pro tunc power is limited and would not apply to circumstances such as these. In any event, it is submitted that the relief sought by the plaintiffs would subvert the clear intention of the applicable limitation period under the OSA.
[25] After this motion was argued, Strathy J. released his decision in Green and Bell v. Canadian Imperial Bank of Commerce, 2012 ONSC 3637, [2012] O.J. No. 3072. In that case he dismissed a motion for leave under s. 138.8 of the OSA when the motion was argued after the s. 138.14 limitation period had already expired. The court rejected the plaintiffs’ arguments to apply the doctrine of special circumstances to extend the limitation period or to grant leave nunc pro tunc.[^5]
[26] In supplementary written arguments in this case, defendants’ counsel urged the court to follow the reasoning in Green and Bell. Plaintiffs’ counsel sought to distinguish the case on its facts and argued that, to the extent Green and Bell stands for the proposition that there is no jurisdiction to grant nunc pro tunc relief where the s. 138.3 cause of action is engaged, the decision should not be followed.
Decision
[27] For the reasons that follow, the order granting leave under s. 138.8 of the OSA dated December 14, 2009 is amended nunc pro tunc, to grant leave effective December 19, 2008, and to authorize the plaintiffs to amend the Statement of Claim to assert the statutory claims under s. 138.3 of the OSA against the defendants and the proposed defendants, except for Messrs. Utay and Fuchs, with such amendments also effective December 19, 2008. The defendants’ motion for summary judgment is dismissed.
Issues
[28] My reasons for this decision will address the following issues:
Is there a limitation period issue at all? Was the limitation period in this case defeated by the facts pleaded in the Statement of Claim?
Does the court have authority to amend the order granting leave so that its effective date is within the limitation period? Is the ability to grant nunc pro tunc relief precluded by recent decisions of the Court of Appeal considering the special circumstances doctrine, by the provisions of the OSA or by the Timminco decision?
If the order granting leave is effective within the limitation period, what is the effective date of the amendment to the Statement of Claim to assert the statutory cause of action?
Issue 1: Is there a limitation period issue at all?
[29] The plaintiffs submit that this court should distinguish Timminco on its facts, or should interpret that case narrowly, to conclude that, as a matter of law, the claims under Part XXIII.1 of the OSA in this case are not barred by s. 138.14.
[30] The plaintiffs argue that the essential facts to support a statutory cause of action for secondary market misrepresentation were pleaded in their original Statement of Claim, and as such the defendants had full notice of their claim so that the limitation period stopped running when the Claim was issued. They point to the decision of Rady J. in McCann v. CP Ships Ltd., 2008 CarswellOnt 9629, [2008] O.J. No. 5957 (S.C.), where the court permitted a plaintiff to amend a statement of claim to add a claim for prospectus misrepresentation under s. 130 of the OSA after the expiry of the limitation period because the original pleading of secondary market misrepresentation could be fairly read to encompass a primary market claim.
[31] This argument cannot prevail. The situation confronting the court in Timminco also involved a pleading of common law secondary market misrepresentation, where the statutory cause of action had been referred to in the statement of claim, and the defendants thereby had notice of the claim. Implicit in the court’s decision is the rejection of what the plaintiffs argue here – that a pleading of common law secondary market misrepresentation is sufficient to stop the running of the limitation period in respect of the statutory claim. Timminco is clear that the essential element is for the plaintiff to obtain leave. That must occur in order for the statutory claim to be advanced within the three year limitation period. As Goudge J.A. stated at para. 18 of Timminco:
Without leave having been granted, a s. 138.3 cause of action cannot be enforced. It cannot be invoked as a legal right. Section 138.14 says as much.
[32] McCann is not apposite. In that case Rady J. held that, by their pleading of secondary market misrepresentation, the plaintiffs gave notice of a claim for primary market misrepresentation, and an amendment to the pleading was permitted to assert that cause of action. Rady J. concluded that the pleading was sufficient to stop the running of the limitation period, a conclusion that was open to the court in part because there is no requirement for leave to advance a s. 130 claim.
[33] In this case, simply pleading facts that might support a claim for statutory secondary market misrepresentation, no matter how detailed and comprehensive such pleading may be, is not sufficient. The effect of Timminco is that, no matter what the plaintiff pleads in the original Statement of Claim in relation to the statutory cause of action, the limitation period continues to run at least until leave is granted. It is not sufficient to defeat the limitation period that the claim is pleaded and that leave may be obtained at some later point. If that were the case, there would never had been any question of the operation of s. 28 of the CPA or suspending the limitation period in Timminco.
[34] While the facts of this case are more sympathetic, Timminco did not simply turn on the fact that no motion for leave had been commenced by the plaintiffs. The decision was expressed more broadly, and leads to the inevitable conclusion that, unless the order granting leave and the amendment to the claim to assert the statutory cause of action can be given effect within the limitation period, the statutory claims in these proceedings would be statute-barred.
Issue 2: Can the court amend the leave order so that it is effective within the limitation period?
[35] The issue confronting this court, is whether there is something that can be done now to avoid the harsh result of an intervening limitation period barring the statutory claim, where there was never any question that the statutory claim was being pursued and the plaintiffs proceeded with dispatch. This issue was also before Strathy J. in Green and Bell. I turn now to a brief summary of that decision.
(a) Green and Bell v. Canadian Imperial Bank of Commerce
[36] In Green and Bell, Strathy J. dismissed a motion for leave in a proceeding involving a statutory claim for secondary market misrepresentation on the basis that the limitation period under s. 138.14 of the OSA had expired. He concluded for this reason that the OSA claim had no possibility of success, and since no other cause of action was available to the plaintiffs, the motion for certification was also dismissed. But for the application of the limitation period, he would have granted leave to the plaintiffs to pursue the statutory claim, and he would have certified the action as a class proceeding.
[37] In that case the alleged misrepresentations occurred between May 31, 2007 and December 6, 2007. The statement of claim was issued on July 22, 2008, claiming common law damages and pleading a claim under s. 138.3 of the OSA, and in the prayer for relief, requesting an order granting leave nunc pro tunc. The notice of motion for leave was delivered January 21, 2010, and the record completed January 15, 2011. The motion was heard in February 2012, together with the motion for certification. As Strathy J. observed, three and a half years had elapsed between the commencement of the action and the hearing of the motions. While the action had moved slowly, there had never been any doubt as to the plaintiffs’ intentions to seek leave, nor could it be said that the defendants had suffered prejudice as a result of the delay. At no stage during the case management process had an issue been raised concerning the potential expiry of the limitation period prior to the hearing of the leave motion.
[38] While recognizing the unfairness of the result, Strathy J. considered himself bound, by the decision in Timminco, to dismiss the action for statutory secondary market misrepresentation.
[39] Strathy J. concluded that he had no jurisdiction to make an order granting leave nunc pro tunc or extending the limitation period to the date of his decision when, by the time the motion was before him, the limitation period under s. 138.14 had already expired. He noted that Part XXIII.1 of the OSA is a complete code governing the statutory remedy of civil liability for secondary market disclosure, with unique procedural requirements including leave and a special and “rather unusual” limitation period. The commencement of the limitation period is defined by the occurrence of specific, objective events, and there is nothing in the statute to suggest that the limitation period can be extended as a result of common law principles such as discoverability or special circumstances. There is nothing in the judicial interpretation of Part XXIII.1 to suggest that the special circumstances doctrine applies. The Court of Appeal in Timminco decided that three years is a sufficient time within which a leave motion can be brought and decided. Finally, the general philosophy of the Limitations Act, 2002 S.O. 2002, c. 24 reflects the desirability that limitation periods be clearly defined and not subject to judicially-crafted exceptions that can lead to the uncertainty and unfairness they are designed to prevent (at paras. 522 to 526).
[40] Strathy J. observed that, if he had jurisdiction to extend the limitation period, he would have done so (setting out the relevant factors at paras. 540 to 545 of his decision).
[41] Before commencing my own analysis, I note that there is a material difference between the procedural chronology in this case and in Green and Bell. When the motion for leave was argued in Green and Bell, the limitation period had already expired, although the plaintiffs had pursued the motion without delay. In the present case, by contrast, the limitation period expired while the decision on the leave application was under reserve. As will become apparent, this factual distinction may provide a narrow basis, that was not available to the court in Green and Bell, for the court in this case to amend the leave order to give it retroactive effect. In any event, I would take a more expansive approach than Strathy J. to the court’s authority to grant orders nunc pro tunc. In so doing I would interpret Timminco as not foreclosing leave being granted nunc pro tunc under s. 138.8 of the OSA, where the circumstances of the case would warrant such relief.
(b) The Court’s Authority to Grant Orders Nunc Pro Tunc
[42] My own analysis will begin with the authority or jurisdiction of the court to grant orders nunc pro tunc (then for now). I will then consider whether the exercise of such authority in the context of this case would be precluded or constrained by Court of Appeal decisions considering the special circumstances doctrine, the provisions of the OSA or the court’s decision in Timminco.
[43] The authority to make an order nunc pro tunc is part of the court’s inherent jurisdiction, and is recognized in the Rules of Civil Procedure: Crown Zellerbach Canada Ltd. v. British Columbia (1979), 1979 611 (BC CA), 13 B.C.L.R. 276 (C.A.). In Ontario, rule 59.01 states: “An order of the court is effective from the date on which it is made, unless it provides otherwise”. This is the authority under the Rules to antedate an order of the court, or to give the order retroactive effect.
[44] Our courts grant orders nunc pro tunc, or with retroactive effect, in a variety of circumstances, sometimes on consent, in order to do justice between the parties. Many such orders are made in motions court, where typically a time limit will have passed to take certain action, either before the motion is argued, or while the motion is pending. Without a nunc pro tunc order, a party’s rights are defeated without regard to the merits of the dispute. Examples include orders validating service of a writ or statement of claim, and extending time and granting leave to appeal or to take other actions governed by the Rules. In such circumstances a nunc pro tunc order is consistent with rule 2.01, providing that a failure to comply with the Rules is an irregularity and not a nullity and permitting the court to grant amendments or other relief on such terms as are just “to secure the just determination of the real matters in dispute”.
[45] The courts have recognized that nunc pro tunc orders are also available where there is a statutory requirement for leave before an action can be commenced. While earlier cases had struggled with the question of whether an action commenced without leave was a nullity (and not subject to revival by a nunc pro tunc order) or simply irregular, the Court of Appeal in Re New Alger Mines Limited (1986), 1986 2530 (ON CA), 54 O.R. (2d) 562 (C.A.) and Re Montego Forest Products Ltd. (1998), 1998 2640 (ON CA), 37 O.R. (3d) 651 (C.A.), recognized that proceedings commenced without leave may be regularized by an order granting leave nunc pro tunc, unless the statute in question precludes such relief. Both cases dealt with leave required to pursue an action under the Bankruptcy Act.
[46] In McKenna Estate v. Marshall, 2005 CarswellOnt 5028, [2005] O.J. No. 3494 (S.C.), the court’s authority to make orders nunc pro tunc was considered and explained. The plaintiff’s action, commenced prior to the expiry of the time period stipulated in its notice of sale under mortgage, contravened section 42 of the Mortgages Act which prohibited such actions without leave of the court.
[47] Following the above-noted decisions of the Court of Appeal, and referring to other case authorities, Sproat J. explained how the ability to grant orders nunc pro tunc enables a court to do justice between the parties, at paras. 23 and 24:
…[P]olicy considerations weigh in favour of finding that a nunc pro tunc order is available. As a general principle the jurisdiction to make an order nunc pro tunc in appropriate circumstances allows the Court to do justice in accordance with the facts of a particular case. A narrow interpretation which denies the Court the option of a nunc pro tunc order may exalt form over substance, result in increased costs and cause injustice.
Take the case of a statutory requirement for leave to commence an action. Assume a saintly plaintiff, a meritorious claim, a dastardly defendant with assets and the intervention of a limitation period. If a nunc pro tunc order is available justice is done.
[48] Sproat J. described the authority of the court to grant orders nunc pro tunc, at para. 27:
The authority of the Court to issue an order nunc pro tunc is not of recent origin and certainly all current legislation that requires a Court order prior to taking action has been drafted in the recognition that the Court has this jurisdiction. In my opinion, therefore, a simple statutory requirement for a Court order contemplates that the order may be made nunc pro tunc. The question, therefore, becomes whether there is something in the statute that, properly interpreted, indicates that a nunc pro tunc order is not permitted. In other words, to paraphrase Associate Chief Justice MacKinnon in New Alger Mines Ltd., Re, does the statute “contain an absolute prohibition against a nunc pro tunc order…”.
[49] In McKenna Estate, the failure to obtain leave was due to an oversight by counsel, and there was no prejudice to the defendants other than the loss of the ability to argue that leave was not obtained. If leave were not granted, the claim would be dismissed for that reason alone. Leave was granted nunc pro tunc to permit the plaintiff’s motion for summary judgment to proceed on its merits.
[50] The authority of the court to grant an order with retroactive effect is not limited to cases of correcting a slip or oversight by counsel, although that is an example of a situation where the court might consider exercising its discretion to make such an order, after considering the relative prejudice to the parties: Hogarth v. Hogarth (1945), 1945 396 (ON SC), 3 D.L.R. 78; [1945] O.J. No. 165 (H.C.J.); and see Re Cadillac Fairview Inc., [1995] O.J. No. 623 (Gen. Div.) at para. 7, where Farley J. observed that the court’s nunc pro tunc jurisdiction is not limited to the specific examples cited in Hogarth, but that “inherent jurisdiction is a useful tool in an evolving common law matrix to fill gaps and avoid injustice”.
[51] Hogarth cites as an example of nunc pro tunc relief, the ability of the court to make an order as of the date when argument before the court has terminated and the decision is reserved, “so as to protect the litigant against injustice resulting from the delay in rendering the judgment” (at para. 4). This is consistent with a line of cases recognizing that an order nunc pro tunc may be granted to avoid an injustice that otherwise would flow from delay in the courts which is beyond the control of the parties. The Latin maxim is “actus curiae neminem gravabit”: what the court does ought not to prejudice a litigant.
[52] The leading case considering this basis for nunc pro tunc relief, which has been cited frequently by courts in our jurisdiction, is Turner v. London & South-Western Railway Co. (1874) 17 L.R. Eq. 561. A plaintiff died between the date his case was heard and the delivery of judgment, which had been reserved. Judgment could not issue in the plaintiff’s favour effective the date of its release, because of the common law rule that a personal cause of action dies with a litigant. The court held that judgment should be entered nunc pro tunc as of the day when argument was completed, as no prejudice would be caused to any party by doing so. Vice-Chancellor Hall noted that, “generally the court would permit a judgment to be entered nunc pro tunc when the signing of the judgment has been delayed by the act of a court” (at p. 566).
[53] In Couture v. Bouchard (1892), 1892 73 (SCC), 21 S.C.R. 281, the Supreme Court of Canada applied the maxim, invoking the Turner decision, in quashing an appeal for want of jurisdiction. At the time the decision of the court below was reserved, the amount of the judgment was below the monetary threshold for an appeal, although legislation had been passed by the date of judgment that would render the decision appealable. Taschereau J. held that the judgment was to be treated as if it had been given the day the case had been placed en délibéré, that is, when argument was complete. To conclude otherwise would take away from the respondents a right that had existed at the time the case was argued.
[54] Other cases considering the court’s authority to antedate an order to avoid injustice resulting from an action of the court include:
• Gunn v. Harper et al. (1902), 3 O.L.R. 693 (C.A.) (invoking the former rule 629, which is in substance the same as rule 59.01, to date a judgment as of the date of final argument where the plaintiff had died between trial and judgment, stating at para. 14, “for the reservation of judgment is for the convenience of the Court, and should not be permitted to operate to the prejudice of any of the parties”);
• Young v. Town of Gravenhurst (1911), 24 O.L.R. 467 (C.A.) (following Gunn v. Harper, to order that judgment on appeal would take effect as of the date of the conclusion of argument, where the plaintiff had died in the interim);
• Crown Zellerbach, recognizing the authority of the court to antedate an order “in exceptional circumstances”, but reversing a trial judgment backdated to a date predating the commencement of the action;
• Loyie (Representative of) v. Erickson Estate (1994), 1994 330 (BC SC), 94 B.C.L.R. (2d) 33 (S.C.), where the plaintiff was entitled to pre-judgment interest on non-pecuniary damages although the right to interest had been revoked by statute between the dates of trial and judgment;
• Monahan Estate v. Nelson, 2000 BCCA 297, 76 B.C.L.R. (3d) 109 (C.A.), where the actus curiae rule was applied to backdate judgment to the last day of trial where the plaintiff died in the interim;
• Medina v. Bravo, 2008 BCSC 1307, 87 B.C.L.R. (4th) 369 (S.C.) where a judgment for interim support was backdated to the date of the hearing when the support payor died between argument and judgment; and
• Attorney General of Canada v. Hislop, 2007 SCC 10, [2007] 1 S.C.R. 429, where the Supreme Court, invoking the actus curiae principle, ordered in a class proceeding that the estate of any class member who was alive on the date that argument concluded in the court of first instance, and was otherwise eligible to receive damages, was entitled to the benefit of the judgment.
[55] In nearly all of these cases, the plaintiff’s claim abated between the date of the hearing and the date judgment was issued, by operation of a statute or otherwise. That is the situation that arose in the present case, where the limitation period expired between the date my decision respecting leave was reserved, and the date the decision was released. Amending the order so that it operates nunc pro tunc would be consistent with the cases I have cited considering actus curiae.
[56] The actus curiae maxim has also been referred to more recently, in cases dealing with the issuance of third party claims for contribution and indemnity, which are now subject to a two year limitation period from the date of service of the original claim on the defendant, under s. 18 of the Limitations Act, 2002. In Numainville v. Nanson, 2006 27868, [2006] O.J. No. 3274 (S.C.), the court granted leave to a defendant to file and serve a third party claim effective the first return date of the motion to add the claim, invoking the actus curiae principle, where the limitation period had expired by the time the motion was determined. Sandrabalan v. Toronto Transit Commission, 2009 18298, [2009] O.J. No. 1610 (S.C.) is to the same effect, although the third party claim that was issued after the expiry of a limitation period was dismissed. Brown J. held that the court could not amend an earlier order of the Master that granted leave to issue the third party claim, where to do so would amount to an appeal of the Master’s order where none had been taken. He observed that nunc pro tunc relief ought to have been requested before the Master at the time that leave was granted (at para. 19).[^6]
[57] The ability of the court to make an order nunc pro tunc ensures that the rights of the parties will not be impacted arbitrarily by the court’s schedule, which is outside the control of the parties. This is not a modern problem. In an English case near the turn of the last century, The Queen v. Justices of County of London and London County Council, [1893] 2 Q.B. 476, Lord Esher, M.R. endorsed the use of nunc pro tunc orders to respond to delays within the courts. He stated at p. 488:
…There might be general illness among the justices, or, as in this case, an extraordinary glut of business, which was a matter with which each person desiring to appeal had nothing to do, and could not help, could not anticipate, and could not obviate or calculate upon…the glut of business in the Court, and the inability of the Court to cope with it, is not to be brought into play against the parties, who as far as they are concerned, have obeyed the imperative enactment of the statute by putting down their appeal at a time which would enable the Court, according to its ordinary course of practice, to hear and determine the case [by the prescribed deadline].
[58] I have referred at some length to relevant case law recognizing the court’s authority under the rules and its inherent jurisdiction to grant orders nunc pro tunc. In my view, the present case fits squarely within authorities for making a nunc pro tunc order where the plaintiffs’ rights have abated through no fault of their own, while a decision has been reserved by the court. If the order granting leave is effective the date of final argument, there is no question of expiry of the limitation period. The prejudice to the plaintiffs caused solely by the court’s own schedule, is avoided.
[59] I turn now to consider the defendants’ arguments that nunc pro tunc relief is not available. The defendants rely on a number of grounds: first, case law to suggest that nunc pro tunc relief cannot be granted where there is an intervening limitation period; second, the argument that such relief would entail the application of the doctrine of special circumstances, which they submit is not available to extend the limitation period under the OSA; and third, that nunc pro tunc relief is inconsistent with the statutory regime and would undermine the intention of the limitation period in s. 138.14 of the OSA.
(c) The Effect of an Intervening Limitation Period
[60] The defendants assert that leave cannot be granted retroactively in this case because, once a limitation period has intervened, the court lacks jurisdiction to make a nunc pro tunc order. They refer to certain cases suggesting that a court does not have authority to authorize an action commenced out of time by granting leave nunc pro tunc. The defendants assert that, since the time has already run against the plaintiffs in this case, granting leave nunc pro tunc would not be possible.
[61] In each of the cases relied upon by the defendants however, by the time the court was asked to grant leave nunc pro tunc, the limitation period had already expired. Whether the action commenced without leave was a nullity or an irregularity (and much of the discussion centred on the distinction and whether the court could ever “revive” an action that was a nullity), the fact that a limitation period had intervened before the application for leave was commenced was considered an insurmountable obstacle.
[62] In Atkinson v. Dominion of Canada Guarantee and Accident Co. (1908), 16 O.L.R. (Div. Ct.), leave to commence an action under an insurance policy nunc pro tunc was refused where the statute provided that an action on a policy could be brought within a specified time only with judicial leave. Leave was not requested until after the limitation period had expired. The court left open the question whether nunc pro tunc relief could have been granted if the motion for leave had been brought within the limitation period. Similarly, in Krueger v. Raccah (1981), 1981 2106 (SK KB), 12 Sask.R. 130, [1981] S.J. No. 1197 (Q.B.), Holst v. Grenier, (1987), 1987 4512 (SK KB), 65 Sask.R. 257, [1987] S.J. No. 766 (Q.B.) and Parker v. Atkinson, (1993), 1993 9404 (ON SC), 104 D.L.R. (4th) 279 (U.F.C.), the applicable limitation periods had expired before any leave application had been commenced.
[63] It is worth recalling the Ontario Court of Appeal decisions considering the nunc pro tunc authority of the court in the context of leave under the Bankruptcy Act, which were referred to in McKenna Estate. In Montego Forest Products, a motion for dismissal and a cross-motion for leave nunc pro tunc were brought on the eve of expiry of the limitation period. Leave was granted nunc pro tunc, notwithstanding that the defendant would have benefited from the expiry of the limitation period. In New Alger Mines Limited, by the time the motion for leave nunc pro tunc was brought, the limitation period had already expired. In fact, the limitation period expired the day after the action had been commenced, without leave.
[64] The defendants also rely on a passage in the concurring decision of Taschereau C.J.C. in Re Trecothic Marsh (1905), 1905 76 (SCC), 37 S.C.R. 79. In that case, the court considered an appeal from an order setting aside a writ of certiorari in a land assessment case, where the relevant statute provided that no such writ could be granted except within six months of the proceeding, or the proprietor’s notice that it was taken. The trial judge heard the application in time, but gave the order after the six months had expired. Taschereau C.J.C. concurred with the majority of the Supreme Court, and concluded that the time limit would not apply where jurisdiction was at issue. In obiter however he would have rejected the argument that the order for certiorari could have been issued nunc pro tunc, as the actus curiae maxim could not apply where the court’s jurisdiction to grant the remedy had expired.
[65] At issue in Re Trecothic Marsh was the jurisdiction of the court to grant a particular remedy that existed by statute for a period of only six months after a decision had been made. The particular statutory regime involving land assessment provided a time limit of only six months for the court to grant certiorari. The court concluded that an order nunc pro tunc could not be used to override the statute and to defeat its intention so as to extend indefinitely the court’s jurisdiction to grant the relief in question. The case does not stand for the proposition argued by the defendants, that a court will lack jurisdiction to grant a nunc pro tunc order whenever a limitation period is engaged.
[66] I turn now to the argument that the court’s ability to make a nunc pro tunc order would require the application of the special circumstances doctrine, and the defendants’ contention that such discretion is foreclosed since the passage of the Limitations Act, 2002, by recent decisions of the Court of Appeal.
(d) The Doctrine of Special Circumstances
[67] Counsel for both sides argued the motions in this case on the basis that “special circumstances” may have to be shown before the court could grant nunc pro tunc relief, and assuming therefore that the court would have to determine the effect of recent decisions of the Court of Appeal respecting the doctrine of special circumstances.
[68] For reasons I will attempt to explain briefly, I do not believe that the doctrine of special circumstances has any actual or potential application to the operation of the limitation period under s. 138.14 of the OSA or is relevant to the relief sought by the plaintiffs in this case. As such, it is irrelevant whether and to what extent the Court of Appeal has left open the operation of the doctrine of special circumstances for all limitation periods exempted from the Limitations Act, 2002, or only for those that traditionally were subject to the special circumstances doctrine. What is relevant however is whether the OSA and the Limitations Act, 2002 would preclude the court from granting nunc pro tunc relief. I will turn to that issue, after a brief digression to explain my conclusions on the special circumstances issue.
[69] The special circumstances doctrine developed under common law and is used in connection with motions to amend pleadings to add parties or new causes of action under rules 5.04(2) and 26.01, after the expiry of a limitation period. The doctrine does not provide general authority to extend a limitation period: Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, 90 O.R. (3d) 401 and Chimienti v. Corporation of the City of Windsor, 2011 ONCA 16, 105 O.R. (3d) 72.
[70] The doctrine applies to the amendment of a statement of claim to permit a new claim to be sheltered under the umbrella of an existing pleading. While the cases usually do not speak of an amendment “nunc pro tunc”, in fact that is precisely what is at issue in the special circumstances cases.[^7] If the motion to amend is allowed, the statement of claim is amended as though it included the new claim when it was first issued.
[71] The leading case, Basarsky v. Quinlan, 1971 5 (SCC), [1972] S.C.R. 380, recognized that the power to allow an amendment based on the doctrine of special circumstances is “infrequently invoked as the circumstances warranting its use will not often occur”. The issue before the court in the “special circumstances” cases is therefore whether an amendment to an existing statement of claim should be permitted. As such, “special circumstances” include factors such as: the relationship between the proposed claim and the existing action; the true nature of all of the claims; the progress of the action; and the knowledge of the parties: Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3, 88 O.R. (3d) 401, at para. 23.
[72] The special circumstances doctrine operates in the context of a limitation period that is suspended by the commencement of an action. By adding the new claim to an existing statement of claim nunc pro tunc, the limitation period can be avoided. By contrast, the limitation period in s. 138.14 of the OSA includes a leave requirement, so that it cannot be defeated simply by the commencement of an action, or the amendment of an existing statement of claim to include the statutory claim.
[73] There is another difference between the usual case where a party seeks to invoke the special circumstances doctrine, and the present case. Typically, a plaintiff arguing special circumstances will seek to add an entirely new cause of action after the expiry of a limitation period, where the claim ought to have been included in the original pleading. If the original pleading had included the facts relevant to the amendment, and only sought, for example, to include a new head of damages or claim for relief, there would be no need for special circumstances, as there is no question of the expiry of a limitation period. It is only when the amendment seeks to add a new cause of action (or party) that the question of special circumstances arises.[^8]
[74] In the present case, by contrast, the original pleading sets out the facts in support of the s. 138.3 claim. Unlike Dugal v. Manulife Financial Corp., 2011 ONSC 1764, [2011] O.J. No. 1240, where the plaintiff sought to add a claim under s. 130 for prospectus misrepresentation to an action based on secondary market misrepresentation, the common law and statutory claims in this case are based on substantially the same facts. Leave was required in Dugal to add a truly “new” claim to an existing pleading, which in turn required consideration of special circumstances.
[75] In Dugal Strathy J. declined to apply the doctrine of special circumstances. In arriving at his decision, he considered a line of cases from the Court of Appeal, including Joseph v. Paramount, which held that the doctrine of special circumstances no longer exists for limitation periods governed by the Limitations Act, 2002; and Bikur Cholim Jewish Volunteer Services v. Langston, 2009 ONCA 196, 94 O.R. (3d) 401 and Chimienti, which held that limitation periods exempted from the Act (under s. 38(3) of the Trustee Act and s. 7 of the Public Authorities Protection Act respectively) retained their common law status such that the common law doctrine of special circumstances continued to apply. While he did not have to decide the issue, Strathy J. was of the view that the special circumstances doctrine should be confined to cases where the statutory provision in the schedule to the Limitations Act, 2002 either contained its own discretionary extension provision or had historically been subject to a special circumstances exception. He would not have found special circumstances in any event.
[76] The question whether special circumstances was available to permit the amendment of a statement of claim, was directly engaged in the Dugal case because the limitation period for a s. 130 cause of action runs from the earlier of when the plaintiff knew of the misrepresentation and three years from the transaction giving rise to the claim, and is suspended as soon as an action is commenced. The addition of the new cause of action to the existing claim would have avoided the intervening limitation period.
[77] By contrast, the plaintiffs in this case cannot seek to add the statutory claim to the Statement of Claim nunc pro tunc, so as to shelter under the original claim, because that would ignore the leave requirement. They are not seeking to add a new and unrelated claim to an existing action, but to add a related claim (arguably an additional form of relief based on substantially the same facts), which requires leave of the court. The limitation period for a statutory secondary market misrepresentation claim requires leave to have been granted, so that the existence, or not, of “special circumstances” is analytically irrelevant. The special circumstances doctrine does not fit within the framework of a limitation period such as that provided for in s. 138.14.
[78] For these reasons, it is unnecessary to determine whether and to what extent the doctrine of special circumstances would be available for limitation periods that are exempt from the two year basic limitation period under the Limitations Act, 2002.
[79] Nevertheless, while not expressed as a question of special circumstances, there is still the need to determine whether the court’s authority to grant nunc pro tunc relief is affected by the terms of the OSA and the Timminco decision. That question was at the centre of the court’s analysis in Green and Bell.
(e) Nunc Pro Tunc Relief, the OSA and Timminco
[80] In Green and Bell, Strathy J. offered three principal reasons for his decision: First, Part XXIII.1 of the OSA is a complete code governing the statutory remedy of civil liability for secondary market disclosure which includes unique procedural requirements including leave and a “special and rather unusual limitation period”, and there is nothing in the statute to suggest that the limitation period can be extended as a result of common law principles. Second, there is nothing in the judicial interpretation of the statutory remedy to suggest that the doctrine applies. Timminco “contains no suggestion at all that there may be scope for judge-made exceptions”. Third, the general philosophy of the Limitations Act, 2002 reflects the desirability that limitation periods be clearly defined and not subject to judicially-crafted exceptions that can lead to the uncertainty and unfairness they are designed to prevent: paras. 521 to 526.
[81] The defendants urge this court to follow Strathy J.’s analysis to conclude the there is no authority to grant nunc pro tunc relief in this case. I would however come to a different conclusion as to the ability of the court to grant nunc pro tunc relief when dealing with the limitation period under s. 138.14 of the OSA. I regard the authority of the court to make an order granting leave nunc pro tunc as an inherent jurisdiction which is also rooted in rule 59.02 and is subject to the principles described earlier in this decision. In my view that jurisdiction is not inconsistent with the provisions of the Limitations Act, 2002, as interpreted by the Court of Appeal and Part XXXIII.1 of the OSA, as interpreted in Timminco.
[82] Section 138.14 is a limitation period listed in the schedule to the Limitations Act, 2002. As such, its common law status is preserved and it continues to be governed by common law principles: Bikur Cholim and Chimienti. This is the effect of s. 20 of the Limitations Act, 2002, which provides:
This Act does not affect the extension, suspension or other variation of a limitation period or other time limit by or under another Act (emphasis added).
As Feldman J.A. noted at para. 22 of Joseph, the extension in question need not be provided only “by” an Act, but can also be provided “under” an Act.
[83] To the extent that a nunc pro tunc order would serve to vary or extend the s. 138.14 limitation period, in my view such relief is not precluded by the Limitations Act, 2002 and the Joseph v. Paramount line of cases.
[84] There is also nothing in Part XXIII.1 of the OSA that would preclude the court’s jurisdiction to grant leave nunc pro tunc, where appropriate to do so. The court has authority under rule 59.01 to make an order with retroactive effect. The nunc pro tunc authority is also recognized under common law to permit the court to do justice between the parties. The question is whether the statute itself that provides for the granting of leave contains a prohibition against an order nunc pro tunc: Re New Alger Mines Limited and McKenna Estate. If not, the court is not obliged to grant such relief, but can do so if warranted “in the interests of justice”.
[85] The defendants assert that recognizing the authority of the court to grant leave nunc pro tunc in a leave application under s. 138.8, would defeat the very purpose of the limitation period in s. 138.14. I disagree. Limitation periods exist to ensure that lawsuits are brought within a reasonable period of time so that defendants are not subject to liability for an unlimited duration, so that cases do not proceed on stale evidence, and as incentives to plaintiffs to pursue their claims in a timely fashion: K.M. v. H.M., 1992 31 (SCC), [1992] 3 S.C.R. 6, at paras. 21 to 24. In Timminco, Goudge J.A. described the purpose of the limitation period in s. 138.14 to “ensure that secondary market claims be proceeded with dispatch” (at para. 26). Limitation periods are not intended to arbitrarily bring to an end a cause of action that has been actively and vigorously pursued. The finality that a limitation period may offer is not an end in itself.
[86] Recognizing the ability to grant leave nunc pro tunc does not mean that such relief would be warranted in every case. As Robins J.A. observed in the Montego Forest Products case, in response to a floodgates argument by appellants’ counsel, at para. 7:
It is not every case that will lend itself to the granting of [an order] nunc pro tunc. Circumstances alter cases: the facts presented in many cases may not engage the discretion of the court to make such an order, whereas the facts presented in others may invite the exercise of that discretion.
[87] Finally, I do not regard Timminco as precluding an order granting leave nunc pro tunc, where the question of such relief was not before the court. The Court of Appeal considered only the specific question of the interplay between s. 28 of the CPA and s. 138.14 of the OSA. The result was a determination of the issue before the court, namely whether the limitation period had been suspended when the action was first commenced, and not what the defendants are seeking here, which is a complete dismissal of the statutory claim.
(f) Nunc Pro Tunc Relief in the Circumstances of this Case
[88] I have concluded that the court has the authority to grant nunc pro tunc relief. The next question is whether such relief is warranted in the circumstances of this case.
[89] The statutory cause of action was referenced in the original Statement of Claim, and is based on essentially the same facts as the common law claims (although the statutory claims are against a broader array of defendants). Pursuant to s. 138.8 of the OSA, the plaintiffs were required to swear affidavits in support of the leave motion, so that the extent of actual notice afforded to the defendants and proposed defendants respecting the statutory claims far exceeded the detail of what would have been pleaded in a statement of claim. The defendants and the proposed defendants had notice of all of the claims against them, including the statutory claim, well within the limitation period.
[90] The motion for leave to assert the statutory cause of action was brought promptly and pursued vigorously and without any inappropriate delay on the part of the plaintiffs (or the defendants for that matter). The expiry of the limitation period had nothing to do with any act or default by any party. Rather it occurred while the case was under reserve by the court. Had the parties turned their minds to the issue of the looming limitation period, there is no question that I would have agreed to antedate the order granting leave to an earlier date, such as the date that argument on the motion had been completed. From that point on the case was out of the parties’ hands, and was only awaiting my decision.
[91] Unless the court is able to grant leave nunc pro tunc, there is nothing a plaintiff with a s. 138.3 cause of action can do to ensure that the limitation period under s. 138.14 will be met. In Nor-Dor Developments Ltd. v. Redline Communications Group Inc., 2011 ONSC 591, [2011] O.J. No. 4993 (S.C.J.), out of concern for the potential expiry of the limitation period, the plaintiffs sought permission to file their proposed Part XXIII.1 claim prior to the leave motion, without prejudice to the defendants’ argument that leave should be denied. Rady J. decided that she had no authority to do so, which is consistent with the Court of Appeal’s reasoning in Timminco. Instead, she concluded that, if leave were to be granted, the court could make the order nunc pro tunc.
[92] The result in this case is, in my view, consistent with the observations of Goudge J.A. in Timminco with respect to the policy behind s. 138.14 of the OSA, “to ensure that secondary market claims be proceeded with dispatch…that requires the necessary leave motion to be brought expeditiously” (at para. 26). Relief nunc pro tunc would in no measure defeat the intention of the limitation period; without such relief, the assertion of the statutory claim could be defeated in most cases by the time required to pursue and complete the leave motion. No public interest would be served by permitting a cause of action to be defeated by delays inherent in the litigation process. As argued by the plaintiffs in Nor-Dor (at para. 4), “[the expiry of a limitation period while the leave motion is pending] cannot have been the intention of the legislature when it enacted this section of the Act”.
[93] If, as I have concluded, the court had jurisdiction in December 2009 to grant leave effective December 19, 2008, when argument was concluded on the leave motion, I should have no difficulty amending the order at this stage to provide for such relief. Rule 59.06 authorizes a court to amend an order “that requires amendment in any particular on which the court did not adjudicate”. The court did not adjudicate on the question of the effective date of the order so as to address the limitation period. As such, the order is capable of being amended at this time. Accordingly, the order of December 14, 2009 granting leave to the plaintiffs to proceed with the s. 138.3 claim under the OSA is hereby amended to provide that leave is effective December 19, 2008. The order contains four paragraphs referring to leave, and each paragraph is amended accordingly.
Issue 3: What is the effective date of the amendment to the statement of claim to assert the statutory cause of action?
[94] The defendants argue that an order nunc pro tunc for leave does not solve the entire problem. The plaintiffs, relying on the original order and without concern for the limitations issue, amended their pleading in the normal course on December 12, 2011, which was more than two and a half years outside the limitation period. As such, even if leave is effective within three years, the limitation period continued to run to defeat the claim until the Statement of Claim was in fact amended.
[95] Such a result would be arbitrary and unfair, resulting as it would from circumstances beyond the control of the plaintiffs. The defendants sought to appeal the leave decision, such that it was only on February 14, 2011, with the release of the decision refusing leave to appeal, that the order granting leave under s. 138.8 became final. Any attempt to amend the Statement of Claim in the interim would have been premature. Considering the issues, and the attempt to obtain the defendants’ approval to the amendments, many of which were in relation to aspects of the claim other than the pleading of the statutory cause of action, the plaintiffs moved promptly to make the amendments as soon as they reasonably could have done so.
[96] I do not consider it fatal to the plaintiffs’ claim that the amendments to the Statement of Claim asserting the statutory cause of action were made outside the limitation period. Provided leave was granted effective within the three year period to amend the Statement of Claim to assert the statutory cause of action, the actual date the amendments were made is not material.
[97] First, it is possible that the limitation period is suspended as soon as leave is obtained, where a statement of claim has already been issued. Section 138.14 prohibits the commencement of an action under s. 138.3 later than three years after the release of the misrepresentation. Timminco suggests that s. 28 of the CPA comes into play in such cases once leave is granted by the court. At para. 27 of the decision, Goudge J.A. stated:
Finally, the interpretation I have given for s. 28(1) of the CPA does not make it inapplicable to a s. 138.3 cause of action under Part XXIII.1 of the OSA. It simply requires that leave be granted before that happens….
[98] This suggests that, where the intention to move for leave to assert the statutory cause of action has been pleaded in the original statement of claim, together with the material facts, once an order for leave has been granted with effect within the time period required, the statutory cause of action is asserted and s. 28(1) of the CPA applies. The effective date of the amendment of the pleading is immaterial.
[99] In any event, I would order that the effective date of all amendments of the Statement of Claim to assert the statutory cause of action is December 19, 2008. An order for the effective date of an amendment is within the scope of rule 26.01, which provides that a court shall grant leave to amend a pleading “on such terms as are just” at any stage of an action, unless prejudice would result that could not be compensated for by costs or an adjournment. To conclude otherwise would place the plaintiffs in an intolerable “catch 22”, where there would be no way to give effect through an amendment of the Statement of Claim to the court’s order granting leave nunc pro tunc.
Disposition of the Motions
[100] Accordingly, the defendants’ motion for summary judgment dismissing the statutory claims is dismissed. The plaintiffs’ motion to amend the December 14, 2009 leave order is allowed on the terms set out in these reasons. Both leave to amend the Statement of Claim and the relevant amendments are effective December 19, 2008, the date argument on the leave motion was concluded.
[101] If the parties are unable to agree on the costs of this motion, I will receive brief written submissions as follows: the plaintiffs’ submissions within 30 days of this decision; the defendants’ submissions within 20 days of receipt of the plaintiffs’ submissions, and reply submissions, if any within ten days of receipt of the responding submissions.
K. van Rensburg J.
DATE: August 27, 2012
[^1]: 2009 72342 (ON SC), [2009] O.J. No. 5573
[^2]: 2009 72334 (ON SC), [2009] O.J. No. 5585
[^3]: [2010] O.J. No. 6242 (C.A.)
[^4]: 2011 ONSC 1035, [2011] O.J. No. 656
[^5]: In Green and Bell the court also rejected the plaintiffs’ argument that the limitation period had been waived by the defendants, an argument not advanced in the present case.
[^6]: In Sandrabalan, the main issue before the court was whether the court could extend time for the issuance of the third party claim. Following the Joseph v. Paramount Canada line of cases, Brown J. held that the doctrine of special circumstances was not available to avoid the expiry of the limitation period.
[^7]: See for example Glassman v. Honda, 1996 8008 (ON SC), [1996] O.J. No. 2012 (Gen. Div.); aff’d on appeal at (1998), 1998 7192 (ON CA), 41 O.R. (3d) 649 (C.A.), where Philp J. authorized the amendment of a statement of claim to add a defendant, and in later reasons at 1997 12283 (ON SC), [1997] O.J. No. 2461, in response to the defendant’s argument that the claim should be dismissed because of a limitation period, he clarified that the addition of the defendant to the statement of claim was intended to be nunc pro tunc. The limitations issue had already been considered when leave was granted to amend the claim, applying the special circumstances doctrine; therefore it was understood that the amendment had been made nunc pro tunc.
[^8]: In Dee Ferraro Ltd. v. Pellizzari, 2012 ONCA 55, [2012] O.J. No. 355 (C.A.) the court distinguished amendments pleading new causes of action which would entail limitations issues from additional forms of relief based on the same facts already pleaded, where an amendment could be made in the absence of non-compensable prejudice. In McCann, Rady J. concluded that facts pleaded in the statement of claim for secondary market misrepresentation were sufficient to support a claim under s. 130 of the OSA for prospectus misrepresentation, while Strathy J. concluded that the pleading in Dugal could not support such a claim. As such, it was necessary in that case that he consider the potential application of the special circumstances doctrine, as the limitation period had expired for asserting claims under s. 130 of the OSA.
COURT FILE NO.: CV-06-3257-00
DATE: 2012 08 27
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARVIN NEIL SILVER and CLIFF COHEN
Plaintiffs
- and –
IMAX CORPORATION, RICHARD L. GELFOND, BRADLEY J. WECHSLER, FRANCIS T. JOYCE, NEIL S. BRAUN,
KENNETH G. COPLAND, GARTH M. GIRVAN, DAVID W. LEEBRON and KATHRYN A. GAMBLE
Defendants
Reasons for Decision re: Limitations Defence
K. van Rensburg J.
Released: August 27, 2012