There is a statutory cause of action in the Securities Act for misrepresentation in secondary market disclosure documents, which is subject to a three year limitation period:
[2] Under s. 138.3(1) of Part XXIII.1, a person or company who acquires or disposes of an issuer’s security between a document’s release and public correction of a misrepresentation in the document has a right of action for damages, without regard to whether the person or company relied on the misrepresentation. However, in order to limit meritless litigation or “strike suits”[1], s. 138.8(1) of the OSA requires leave of the court to commence an action under s. 138.3. Section 138.14(1) also imposes a three-year limitation period for the commencement of the action, measured from the date the document containing the misrepresentation was first released.
In Drywall Acoustic Lathing and Insulation, Local 675 v. SNC-Lavalin Group, (quoted above), the appellants argued that because they commenced their action and pleaded misrepresentations in the impugned documents within the limitation period, any related misrepresentation claim arising out of the same documents was not statute-barred. In other words, “if a plaintiff commences an action asserting misrepresentation in a disclosure document within the limitation period, the plaintiff can, at any time thereafter, assert any related misrepresentation claims arising out of the same documents” (para. 73).
Note so, held the Court of Appeal:
[74] The appellants were granted leave to commence a particular action, namely one asserting that representations in the impugned documents were false because of evidence that amounts had been paid to agents and that SNC was engaged in criminal activity with respect to the Padma Bridge Project in Bangladesh. As I concluded above, the appellants did not obtain leave to pursue claims founded on other misrepresentations, and therefore those other claims are not part of the action. As the impugned documents are now more than three years old, those claims are statute-barred.
[75] If leave is required to advance further misrepresentation claims arising out of previously impugned documents, then those further misrepresentation claims are a different “action”, and are subject to the limitation period in s. 138.14(1).