Law Times

PAGE 12 FOCUS Defence lawyers hopeful after B.C. leave ruling Secondary-market misrepresentation Columbia judge will spark a juris- prudential trend making it harder for plaintiffs to commence class proceedings for secondary-market misrepresentation. B.C. Supreme Court Justice C BY JULIUS MELNITZER For Law Times lass action defence law- yers in the securities field are hopeful that recent comments from a British from the court to commence a secondary-market liability claim under the B.C. Securities Act. The B.C. statute, like its Ontario counterpart, requires plaintiffs to demonstrate a reasonable possibil- ity that the claim will end in their favour at trial as a condition of pro- ceeding with the matter. Harris dismissed the applica- David Harris' remarks came in Round v. MacDonald, Dettwiler and Associates Ltd., a case in which plaintiff Lesley Round sought leave tion because there was no prospect of the plaintiff succeeding at trial. He ruled the legislation wasn't ret- roactive and therefore didn't apply to the facts of the case that arose before its passage. He also con- cluded that as Round' s shares came directly from the company trea- sury and not from the secondary market, the legislation didn't apply to her circumstances. Although these rulings were sufficient to dispose of Round's less precedential value than they otherwise might. Still, some defence lawyers sug- application for leave, Harris noted "it would be helpful to the parties" to address the legal test for grant- ing leave, especially because there was "little existing guidance in the few cases in other jurisdictions that have considered the leave test in their equivalent statutes." But because Harris' were unnecessary to dispose of the case before him, his comments have remarks gest Harris' guidelines represent a more stringent interpretation of the leave test than the one currently in vogue in Ontario courts. For the most part, Ontario judges have tended to follow the Superior Court decision in the case of Silver v. Imax. It suggests that courts shouldn't delve into the evidence in deciding a leave application. By contrast, Harris concludes that the legislation requires a merit- based analysis. "In this case, it is clear that 'It is our view that hopefully Imax is not the last word in the leave test,' says Alan D'Silva. the court must weigh evidence to assess the likelihood of success at trial, SKILLS-BASED STRATEGIES FOR EFFECTIVE MALPRACTICE LITIGATION NEW PUBLICATION A PRACTICAL GUIDE TO MEDICAL MALPRACTICE LITIGATION: A PLAINTIFF'S PERSPECTIVE THE HONOURABLE JUDGE HEATHER LAMOUREUX AND BRIAN DEVLIN, Q.C. Get the benefit of more than 50 years of combined medical litigation experience as The Honourable Judge Heather Lamoureux and Brian Devlin, Q.C. share their insight on the most effective plaintiff defense strategies. You'll get expert, real-world advice on everything from evaluating the case and finding the right expert witness to understanding your opponent and preparing for trial. TAKE ON A MEDICAL MALPRACTICE CASE WITH CONFIDENCE • Understand how to evaluate a case – and whether it's worth taking • Plan and prepare for litigation by leveraging unique insight acquired from more than 50 years of combined experience • Choose the right expert witness that will help you support your case • Increase your chance of success by avoiding the most common mistakes Stikeman Elliott LLP, Harris' com- ments could be helpful. "It is our view that hopefully Imax is not the last word in the leave test," he says. "The jurisprudence should con- According to Alan D'Silva of " he wrote. April 16, 2012 • lAw Times tinue to develop in this area." Dana Peebles of McCarthy Tétrault LLP says Harris has also raised the bar on what constitutes a "reasonable possibility" of success. "Imax left it open for the plaintiff to argue that the bar was so low that a toddler couldn't trip over it," he says. "Other Ontario cases have sug- gested that a reasonable possibility is more than a mere possibility but lower than a probability or some- where between one per cent and 50 per cent. That' Harris has set a floor that doesn't exist in Imax. At the very least, he has certainly moved that floor up above one per cent in the sense that just because a case has some merit does not in and of itself satisfy the leave requirement." But that' s a vast gap but at least Anderson of Vancouver's Farris ORDER # 983840 $85 Softcover approx. 150 pages February 2012 978-0-7798-3840-0 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. s not the view of Robert Vaughan Wills & Murphy LLP. He, along with colleagues Teresa Tomchak and Nicholas Hooge, rep- resented the defendants in Round. "The test that Justice Harris AVAILABLE RISK-FREE FOR 30 DAYS Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order online at www.carswell.com applied is in my view no more or less onerous than the Imax test," he says. James Sullivan of Blake Cassels & Graydon LLP is of similar mind. "The test is still one of reason- ableness, and in my view the claim in Round would not have survived in Ontario even if Imax is seen as a lower test," he says. Ultimately, the argument seems to be about whether the leave appli- cation is a part of remedial securities legislation and should therefore be subject to liberal interpretation or whether it' division among trial judges as to the purpose of the leave application," says Peebles. LT Recruiting? Post your position on GREAT RATES. GREAT REACH. GREAT RESULTS. Contact Sandy Shutt at sandra.shutt@thomsonreuters.com for details. www.lawtimesnews.com JobsInLaw 1-8 pg 5X.indd 1 2/15/11 4:12:27 PM "Even in Ontario, there's a real s a gatekeeper provision.

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