CANADA – In a recent post we described the Ontario Court of Appeal’s finding, in Kaynes v. BP, PLC, that Ontario was not the most convenient forum for a class action commenced by an Ontario resident who had purchased the defendant’s securities on the NYSE. The claim alleged market misrepresentation under section 138.3(1) of the Securities Act, R.S.O. 1990, c. S.5. The proposed class included those who purchased securities on the TSX, NYSE and LSE (though the vast majority of securities had been purchased on the NYSE and LSE) and were not participating in parallel proceedings underway in the United States District Court for the Southern District of Texas.
We noted in our recent post that the plaintiff had sought leave to appeal this decision to the Supreme Court of Canada, the highest court in the country. On March 26, 2015, the Supreme Court of Canada dismissed the plaintiff’s application for leave to appeal, upholding the Court of Appeal’s finding that the principal of comity and the avoidance of the multiplicity of proceedings trump the underlying jurisdiction to commence the class action in Canada. Going forward, this decision will be invoked by the class action defence bar in Canada to challenge overlapping securities class actions, at least where a sizeable proportion of the securities at issue were purchased on foreign exchanges.
We will continue to monitor this space and the impact of this decision on cross-border securities class actions.