Secondary Market Liability in Ontario: Interpreting the Leave Test Before and After Theratechnologies

• Author: Denisa Mertiri
• Pages: 39-68



SECONDARY MARKET LIABILITY

IN ONTARIO: INTERPRETING

THE LEAVE TEST BEFORE AND

AFTER

THER ATEC HNOLOGIES

Denisa Mertir i

Abstract: This art icle reviews the evolution of the leave test for

securities cl ass actions for secondary market m isrepresentations

under Part XXIII.1 of Ontario’s Securities Act. The article will

explore whether the courts’ cu rrent application of the test ad-

equately meets the legislative purposes of this Part of the Act

in securing t he dual goals of access to justice for aggrieved

investors while preventing unmeritorious claim s from being

launched to pressure defendants into settlement. Given the

legislative purposes underlying Part XXIII.1, this article w ill

analyze the courts’ historical application of the leave test, the

challenges to secondary market class actions that the test

creates for litigants, a nd the ways that the test may be applied

in future case s to prevent such challenges. The article argues

that important lessons from cases applying a low threshold

burden to the leave test can still serve court s in adjudicating

leave motions in ways that are fair to participants, and that

meet the legislative goals of Par t XXIII.1 of the OSA.