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

AuthorDenisa Mertiri
Pages39-68

SECONDARY MARKET LIABILITY
IN ONTARIO: INTERPRETING
THE LEAVE TEST BEFORE AND
AFTER
THER ATEC HNOLOGIES
Denisa Mertiri
Abstract: This article 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 the dual goals of access to justice for aggrieved
investors while preventing unmeritorious claims from being
launched to pressure defendants into settlement. Given the
legislative purposes underlying Part XXIII.1, this article will
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 courts in adjudicating
leave motions in ways that are fair to participants, and that
meet the legislative goals of Part XXIII.1 of the OSA.

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