For the first time, the Ontario Superior Court of Justice released a decision that considered issues of statutory misrepresentation in an offering statement under the Credit Unions and Caisses Populaires Act, 1994 (Act). Polla v. Croatian (Toronto) Credit Union also provides extensive guidance on issues of directors’ and officers’ liability more generally. There is very limited jurisprudence in this area, and this landmark decision is expected to provide valuable guidance to boards and insurers on risk prevention. This insight provides a high-level overview of the decision.
In negligence-based actions, defendants routinely issue third party claims for contribution and indemnity to reduce their liability exposure. As a result, the plaintiff can commence a claim believing certain defendants to have caused the plaintiff’s loss, but, after successive third party claims, learn that several other persons might have contributed to the loss. To increase the prospect of recovery, the plaintiff often moves to add these third parties as defendants, long-after the impugned act or omission took place.
In these circumstances, third parties should consider whether to oppose a motion to be added as a defendant pursuant to section 21(1) of the Limitations Act, 2002:
21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
On October 17, 2018, the lion’s share of the federal Cannabis Act1 and the Ontario Cannabis Act, 20172 took legal effect, marking the legalization of non-medical cannabis across Canada, within defined limits. Directors and officers of federal and provincial corporations in the legal cannabis sector now operate in a new and dynamic regulatory climate.
As with any regulated industry, directors and officers should apprise themselves of the legal pitfalls in the post-legalization world, and liability insurers should prepare carefully for the potential risks that might shadow the cannabis market in its early days.
At a minimum, liability insurers should consider (a) new offences to which directors and officers are exposed, (b) what procedures are in place with respect to those offences, (c) what penalties might a director or officer be liable to pay, and (d) what defences are available, if any.
The Court l has recently confirmed that where there is no statutory provision to the contrary, the window of time in which an individual can sue their insurer remains open for two years. In 2017, the Court held that insurance providers do not have a duty to inform insureds of pending limitation periods.
In the past, it has been uncertain how the courts will interpret the general language of standard form releases in the insurance context (i.e. it was not always clear whether broadly-worded releases would be enforceable against unforeseen claims). Recently, the Ontario Court of Appeal ( “Court”) provided some clarity on this subject. The Court held that express language is required to exclude claims that were not contemplated, provided that the language of the release is sufficiently broad.