To Grant Leave Or Not To Grant Leave, That Is The Question - In Two Recent Ontario Secondary Market Securities Class Actions

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To Grant Leave Or Not To Grant Leave, That Is The Question - In Two Recent Ontario Secondary Market Securities Class Actions

Silver v. IMAX Corporation et al., 2011 ONSC 1035 and Dobbie v. Arctic Glacier Income Fund et al, 2011 ONSC 25 On February 14, 2011, the Ontario Superior Court dismissed a motion by the defendants seeking leave to appeal both the certification and leave decisions of Justice van Rensburg in Silver v. IMAX Corporation et al. (the "IMAX Decision") which, until recently, had been the first and only case to have been both certified and granted leave to commence an action under the provisions of the Ontario Securities Act (the "OSA") enacted just over five years ago which provide for a statutory cause of action for secondary market investors. The motion was of interest as, if successful, it would have allowed the Divisional Court to address the leave and certification issues in this case. On March 3, 2011, Justice Tausendfreund of the Ontario Superior Court of Justice in Dobbie v. Arctic Glacier Income Fund et al. (the "Arctic Glacier Income Fund Decision") granted both certification and leave to commence an action under the secondary market provisions in what is now the second case to have done so.

Background in the IMAX Decision

The class action commenced against IMAX Corporation ("IMAX") and certain of its officers and directors (collectively the "IMAX defendants"), concerns allegations about the company's revenue and revenue-recognition practices. The plaintiffs, shareholders of IMAX, sued with respect to a decline in the price of their shares that they argue was caused by alleged misrepresentations in IMAX's 2005 Form 10-K, in its 2005 Annual Report and in press releases issued in February and March of 2006. The plaintiffs allege that certain of the IMAX de...

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