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Thursday
Oct102013

October 10, 2013

TOPICS

I’m halfway through my travel month from hell, having completed stops in TorontoX2, EdmontoX2 and HalifaxX1. Wish me luck for surviving the balance of the month: EdmontonX3, Toronto, Baltimore and Pittsburgh. The last two stops are to see if my daughter likes Johns Hopkins or Carnegie Mellon best for her university career. Hence the need to keep flying to pay the tuition!

In the meantime, enjoy the update. Any errors or omissions are due to Air Canada’s failure to feed me promptly or well.

CERTIFICATION

Hi! Neighbor Floor Covering Co. Limited v. Hickory Springs Manufacturing Company et al., 2013 ONSC 4968: Polyurethane foam class action certified against certain defendants for settlement purposes. Parallel actions were certified in Quebec and British Columbia. The writer was co-counsel for the plaintiffs.

Agostino v. Allstate du Canada, cie d'assurance, 2013 QCCS 3049: Motion for authorization denied in case asking to institute class action relating to Allstate Insurance constructive dismissal. The court found that a claim for constructive dismissal was ultimately an individual claim. A petitioner in a claim for constructive trust had to demonstrate, based on her own unique circumstances, that changes were implemented unilaterally by her employer and without reasonable notice of the change, and without her agreement or the employer’s entitlement to do so pursuant to the terms of the employment contract. At a minimum, the petitioner had to establish that changes were made to essential terms and conditions of the employment contracts and that the impact of these changes was substantial and to her disadvantage. The petitioner also had to establish, based on her own individual circumstances, that she resigned or left employment with the employer as a result of these changes within a reasonable period of time, and without condoning or acquiescing to the changes. Finally, there would have to be further individual assessment of whether the petitioner failed to stay in her position which constituted a failure to mitigate and whether or not the individual mitigated any claimed damages through employment or self-employment after she left. In sum, the common issues could not be resolved at once for the benefit of all the proposed class members, and would not avoid duplication of fact finding and legal analysis. The individual issues to be adjudicated for the successful prosecution of the cause of action were predominant and significant. As such, the motion for authorization was denied.

Albilia c. Apple inc., 2013 QCCS 2805: Motion for authorization granted in Apple Apps privacy class action. The class was limited to Quebec residents and split into those residents who purchased or acquired an iDevice and who downloaded free Apps from the App Store onto their iDevice during the class period, and all resident who purchased or otherwise acquired an iPhone and turned Location Services off on their iPhone prior to April 27, 2011 and unwittingly and without notice or consent transmitted location data to the defendants’ servers.

Andriuk v. Merrill Lynch Canada Inc., 2013 ABQB 422: The plaintiffs brought motion for certification of a class action against Merrill Lynch Canada for how it conducted itself in relation to its clients’ investments in a speculative biotech stock. The court dismissed the plaintiffs’ motion. It found that, on the facts pleaded, the plaintiffs had established that a cause of action could be grounded in contract law and agency, negligence and perhaps even unjust enrichment. However, even a generous interpretation of the pleadings could not fill the many gaps in the claim. Therefore, while the court found several possible foundations for the plaintiffs’ claims, in which it was not plain and obvious that the cause of action would fail, the pleadings as a whole did not provide properly detailed statements of the material facts to form a proper basis for these claims.

The court also found that the class was overbroad (although it noted this would not be fatal if the other requirements for certification had been met). Moreover, while it found that there were undoubtedly factual questions in common in this case, the resolution of which would advance the litigation and promote judicial economy and efficiency, the court was unwilling to “pick and choose the appropriate common issues for certification from the plaintiffs’ differing proposed lists”. The court rejected the common issues requirement on the basis that the common issues needed to be more clearly stated and adequately grounded in clear pleadings.

With respect to the preferable procedure requirement, the court found that without a clear articulation of what must be determined to establish liability on the part of Merrill Lynch, and in the absence of evidence of a methodology to assess class-wide causation and damage as common issues, it was impossible to find that common issues predominated over individual ones.

Despite the fact that the plaintiff and 11 other persons had come forward stating an interest in pursuing the litigation, the court concluded that the evidence did not establish any basis on which to suggest that there was a significant number of individuals who sought to bring separate actions. Further, the court found that there were a variety of alternative procedures for the resolution of group claims (including multiple separate actions, consolidation, test cases), and that in the absence of a clear articulation of this case as a whole, it was impossible to find that a class proceeding was the most

Chapman v. Benefit Plan Administrators, 2013 ONSC 3318: Motion for certification granted in Eastern Canada Car Carriers Pension Plan class action.

Charlton v. Abbott Laboratories, Ltd., 2013 BCSC 1712: Application for certification granted in Meridia (prescription weight loss drug) class action. The action was certified as a national class proceeding, with the class definition including all persons in Canada who were prescribed and ingested Meridia, and all spouses, parents or children of these class members who were entitled to compensation under dependents legislation in BC and in other provinces.

The court certified the action without excluding Quebec residents despite the lack of success by a Quebec petitioner in obtaining authorization to institute a class action for the same drug for Quebec residents. In doing so, the court noted that the Quebec class proceedings legislation had broad similarities but technical difference to the British Columbia legislation. Moreover, the court noted that it did not consider the failure to exclude Quebec residents as members of the class to be an abuse of process because the Quebec court had refused to certify the action brought by a different plaintiff, based on different evidence, some of which the Quebec court found internally contradictory.

Crisante v. DePuy Orthopaedics, 2013 ONSC 5186: Certification granted in proposed class action against manufacturers of hip replacements.

Dugal v. Manulife Financial, 2013 ONSC 4083: The plaintiff applied for leave to commence an action against the defendants for secondary market representation, and sought an order certifying the action as a class proceeding. With respect to application for leave, the key dispute was over whether the plaintiffs had established a reasonable possibility of success at trial (a requirement under the test for leave under the Ontario Securities Act). The court recognized that Ontario courts seemed to be satisfied with a “relatively low threshold” for leave – that the plaintiff show something more than a de minimis possibility or change that the plaintiff will succeed at trial. However, the language of the Ontario Law Reform Commission’s report on class actions, and the recent findings of the BC Supreme Court in Round v. MacDonald, suggested that establishing a reasonable possibility of success at trial involved more than merely raising a triable issue or articulating a cause of action. The test was meant to do more than screen out clearly frivolous, scandalous and vexatious actions.

But in the court’s view, regardless of whether it adopted the relaxed Ontario approach or the more demanding BC/OLRC approach, it would have concluded that the requirement for leave was met in this case. On each of the main issues – what was known in the market, the need for more than a 10% impact disclosure, the foreseeability of the market downturn and Manulife’s disclosures – the plaintiffs had demonstrated on the evidence before the court that they had raised seriously arguable issues that had a reasonable possibility of success at trial. Leave was therefore granted. The court went on to find that the requirements for certification were met. Accordingly, the action was certified as a class proceeding. 

Jasmin c. Société des alcools du Québec, 2013 QCCS 4162 : Petitioner’s application for leave to bring an action for damages against Liquor Quebec (“SAQ”) for high liquor prices dismissed. The court found that SAQ was within its mandate under the Quebec Liquor Act which granted it a monopoly on the sale of alcohol products. The petitioner’s criticism was the direct result of the implementation of the Act, and it was for the legislature to address this issue.  Request for authorization to institute a class action was dismissed.

Jer v. Samji, 2013 BCSC 1671: Application for certification granted in class action challenging alleged ponzi scheme.

Lebrasseur c. Hoffmann-La Roche ltée, 2013 QCCS 3024: Motion for authorization to institute a class action against the manufacturer of Accutane (“Roche”) denied. The basis for the decision was that the petitioner had failed to meet the requirements under section 1003 (b) (that the facts alleged seem to justify the conclusions sought) and (d) (that the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately) of the Civil Code.

With respect to section 1003 (b), the court found that, despite making serious allegations about the increased risk of developing Crohn’s disease as a result of ingesting Accutane, the petitioner did not file any evidence to support such a finding. Nor did the petitioner file any evidence that would support a finding that Roche was at fault for failing to disclose in its monographs the actual risks of developing Crohn’s disease. The court pointed out that the Accutane monographs did warn patients of certain inflammatory bowel diseases, rectal bleeding, abdominal pain and signs of inflammation of the liver, pancreas and intestines as “adverse reactions” observed. The petitioner had not provided any explanation of how this information was insufficient..

The Court also stressed that in this case, Health Canada still allowed the sale of Accutane in Canada, that the monograph had essentially remained the same since 1983, and there was no allegation that Health Canada was reviewing the maintenance of Accutane on the market or that Roche was in the process of changing the content of the monograph. The petitioner had not provided any information as to the reasons for which the product had been withdrawn from the US market.

Finally, the petitioner’s medical records did not contain any facts, statements or other evidence that, if taken as true, would establish a causal relationship between taking Accutane and the Crohn’s disease diagnosed in the petitioner three years later. Therefore, the allegation of the petitioner with respect to the link between consuming Accutane and developing Crohn’s disease was pure speculation or suspicion.

In the court’s view, it was unacceptable for the plaintiff to argue his theory of the cause (fault, damage and causal link) and have the opportunity to try to establish the merits of the fault by evidence to be obtained at some later date (which evidence may or may not exist). There had to be some minimal evidence establishing some wrongdoing on the part of Roche and some evidence of a causal link between that wrongdoing and the injury complained of.

With respect to section 1003 (d), the court found that while the petitioner had some initial involvement with the case, the role of the representative was subsequently assumed by his attorneys. The evidence suggested that the petitioner had not conducted any research about the seriousness of his claims about the existence of a causal link between the use of Accutane and Crohn’s disease and Roche’s failure to warn patients. The petitioner had not provided his counsel with sufficient information to demonstrate the appearance of his personal right to claim. He had taken no steps to contact potential class members or even inquire about the existence of a group. Nor could he explain why he brought this action as a national class action in 2010, while other class actions related to the same drug had been established in other provinces to represent particular Quebec consumers. He did not know why his request for authorization had been amended several times, particularly in relation to the diseases identified or the territorial scope of the class. In sum, the court concluded that (without denying the expertise, resources and advisory role of counsel), it was for the petitioner to take the responsibilities of a representative and be able to direct the necessary steps to remedy. He could not leave the entire control to his counsel. The court found that, while the bar for the adequacy of a representative was not very high, the petitioner had not been shown to have met the requirements to act as a representative.

Lévesque c. Vidéotron, s.e.n.c., 2013 QCCS 3868: Motion for authorization to commence class action against defendant Videotron for reducing, without warning, the 24-hour lease term of the contents of a television channel providing adult movies, while its advertisements continued to suggest that the rental period of 24 hours applied to all Videotron content. Request for authorization denied. Specifically, the court found that the plaintiff had not demonstrated that he could be an adequate representative of the group. He had not investigated the subject of the application, and did not try to find other subscribers with a situation similar to his. He did not know the identity of any subscribers who could be members of the class. Further, authorization did not meet the proportionality test.

Lord c. Montréal (Ville de), 2013 QCCS 4406: Application for authorization to institute a class proceeding granted in action relating to mass arrests which took place in Montreal on May 23, 2012. The key issue in the action is whether the City of Montreal police officers violated the constitutional rights of arrested and detained persons, as provided in the Charter of Rights and Freedoms, the Canadian Charter of Rights and Freedoms and the International Convention on Civil and Political Rights.

Pellan c. Québec (Agence du revenu), 2013 CarswellQue 8608: Motion for authorization granted to institute class action granted in Canadian Forces tax remission class action (applicable to Quebec residents only).

Trépanier Bouchard c. AIMTA, 2013 QCCS 3012:  Motion for authorization to institute a class action granted in action against union for an illegal labour strike that resulted in delays and cancellation of certain Air Canada and Air Canada Jazz flights in Montreal, Quebec City and Toronto.

APPEALS

121851 Canada inc. c. Theratechnologies inc., 2013 QCCA 1256: Leave to appeal from the decision of the Superior Court of Quebec granting leave to the applicant to institute a securities class action for secondary market misrepresentation granted. However, the Court of Appeal found that the lower court made no palpable or overriding errors in applying the authorization criteria to the facts of the case. As such, appeal was dismissed.

Arenson v. City of Toronto, 2013 ONSC 5837: Appeal from the decision of motion judge dismissing the plaintiff’s certification motion on the basis that the plaintiff had not met the class definition and common issues requirements under the Ontario Class Proceedings Act, 1992. Shortly after the release of the motion judge’s decision, the appellant served a fresh motion requesting consideration of an amended class definition in order to address defects identified by the motion judge. Rather than proceeding with that motion, the appellants pushed forward with the appeal asking the Divisional Court to certify the class proceeding on the basis of a new class definition and restated common issues.

The Divisional Court relied on the words of the Ontario Court of Appeal in Perez v. Salvation Army, at paras. 11: “In the normal course, appeals are not the proper forum in which to raise brand new issues which significantly expand or alter the landscape of litigation. On occasion, such issues can be raised on appeal where the party seeking to raise the new issue demonstrates that the interests of justice require an exception to the normal and accepted course of litigation.” The court rejected the appellant’s position that this was a case which required an exception based on interests of justice. The changes proposed were fundamental ones addressing essential elements of the test for certification.

The Divisional Court went on to dismiss the appeal, concluding as follows:

“[6]  … In this case there is an absence of a defined class, a fundamental element for certification.  It is not our task to be a court of first instance in respect of a certification motion.  We express no opinion as to whether a motions judge has jurisdiction to hear a second motion for certification based on a reconstituted class definition and/or reframed common issues.  Given our disposition of this appeal, any such motion in this case should be returnable at first instance before Perell J.”

Biondi c. Syndicat des cols bleus regroupés de Montréal (SCFP-301),  2013 CarswellQue 9106 , 2013 CarswellQue 9107: Motion for leave to appeal to the Supreme Court of Canada. The case involves an action by members of the public who slipped and fell on Montreal city sidewalks after the city union, as a means of placing pressure on the city to negotiate a new collective bargaining agreement, decided to delay snow removal around the city. Authorization to institute a class action was granted, and the representative subsequently brought an action against the city and the union on behalf of all persons who had slipped on the sidewalks during the union’s pressure tactics. The trial judge, based on the evidence before him found that there was a presumption of causation. It found that the union had acted wrongfully and should be held liable for injuries sustained by the victims. It also concluded that the city should be held responsible as principal of the offending employees and should be liable for its own wrongdoing. The trial judge awarded compensatory and punitive damages against the defendants. The defendants were unsuccessful on their appeal to the Quebec Court of Appeal, and motion for leave to the Supreme Court of Canada was dismissed.

Dennis v. Ontario Lottery and Gaming Corporation, 2013 ONCA 501: Appeal from the decision of the Ontario Divisional Court upholding the decision of the motion judge denying certification. The action concerned a problem gambler who signed a self-exclusion form provided by the Ontario Lottery and Gaming Corporation (OLG). In the self-exclusion form, the OLG undertook to use its best efforts to deny signatories entry to its facilities, but excluded liability if it failed to do so. Despite signing the form, the plaintiff returned to OLG facilities on a regular basis for over three years to gamble and lost significant sums of money.

The Court of Appeal dismissed the appeal noting that that there are some cases in which a class action will be an appropriate procedure to deal with a “systematic wrong” (ex. overtime policies, defective products, unauthorized credit card charges or residential school cases). In these cases, the determination of significant elements of the claims of individual class members could be decided on a class-wide basis, and individual issues relating to issues such as causation and damages could be dealt with later on an individual basis, especially when the assessment of damages could be accomplished by application of a simple formula. However, the court found that the claim at issue did not fit that category:

“[55] …The central problem is that the alleged fault of OLG does not turn solely on the execution of the contract. It is inextricably bound up with the vulnerability of the individual class members. The complaint against OLG is that it failed to prevent them from harming themselves…

[56]      The entire premise of the statement of claim and the causes of action pleaded is that because they signed the self-exclusion form Dennis and the other Class A Members are different from other OLG gamblers: they are vulnerable and OLG was obliged to protect them because of their vulnerability. In my view, it is inescapable that to assess whether OLG was at fault and liable to them for the self-inflicted harm they suffered, the court could not decide the case simply on the basis that they had signed the form. Rather, the court would have to engage in a detailed inquiry into the particular circumstances of individual gamblers including: their gambling history; the nature and severity of their addiction and vulnerability to gambling; whether and to what extent they experienced moments of clarity; whether they returned to OLG facilities to gamble despite signing the self-exclusion form; if they did return, the nature and extent of their gambling and whether they returned because of their addiction; whether they could have been prevented from gambling or suffering losses; whether and to what extent their failure to self-exclude contributed to the loss; and whether the exclusion of liability clause is enforceable against the particular individual.

[57]      The issue of OLG’s alleged fault cannot usefully or fairly be considered in the abstract and without reference to the circumstances of each individual class member. As the motion judge observed, assessment of each Class A Member’s claim will necessarily involve careful, individualized consideration of legal and factual issues relating to his or her personal autonomy and responsibility. Without answers to those specific and individualized questions, it would be impossible to assess whether OLG was at fault or whether OLG bears any legal responsibility to protect them from their own actions. Similarly, whether a Class B Member sustained damages and the quantum thereof involves an individual inquiry and depends on a finding that OLG is liable to the Class A Member from whom the claim derives.”

The Court of Appeal also concluded that the proposed class definition was fatally over-inclusive, that the proposed common issues would not significantly advance the litigation, and that a class action was not the preferable procedure (particularly in light of the Court’s finding that a general finding of systematic wrong would not avoid the need for protracted individualized proceedings). Accordingly, the appeal was dismissed.

Ducharme v. Solarium De Paris Inc., 2013 ONSC 5098: Application for leave to appeal the decision of the motion judge in which he ordered notice to class members by newspaper advertisements, and for a common issue to be added concerning whether there was an appropriate remedy for the class. The Divisional Court denied leave to appeal as there was no basis for interfering with the motion judge’s decision.

Imperial Tobacco Canada Ltd. c. Létourneau, 2013 QCCA 1139: In the ongoing tobacco class action, leave to appeal from four separate judgments authorizing filing of certain documents into evidence dismissed. The Court of Appeal noted that, unlike the Superior Court, it had no inherent jurisdiction, and the right of appeal existed only in relation to cases under the Code of Civil Procedure or a particular law. In this case, it was not open to the Court of Appeal to intervene in the decision.

Ramdath v. George Brown College of Applied Arts and Technology, 2013 ONCA 468: Appeal from the successful common issues trial dismissed. There were no errors in the trial judge’s decision that would justify interference by the appellate court.

Sino-Forest Corp., Re, 2013 ONCA 456: This motion for leave to appeal related to the supervising judge’s approval of a settlement releasing EY from any claims arising from its auditing of Sino-Forest. The EY settlement was part of Sino-Forest’s plan of compromise and reorganization following a bankruptcy triggered by allegations of corporate fraud. The settlement had the support of all parties to the CCAA proceedings, including the monitor, creditors and a group of plaintiffs seeking to recover their investment losses in a proposed class action. The motion for leave to appeal was brought by a single group of Sino-Forest investors (the Invesco group) who held approximately 1.6% of Sino-Forest’s outstanding shares at the time of its collapse.

The Invesco group sought leave to appeal from two separate orders. First, with respect to the CCAA court’s order sanctioning a plan of compromise and reorganization, the Court of Appeal noted that the CCAA court had initially dismissed Invesco’s arguments opposing the sanction order on the ground that since the settlement was not part of the plan at that point, its objections were premature. The CCAA Court found that Invesco could raise those objections when the court considered whether or not to approve the settlement. Invesco did not move to stay that order and the plan had since been implemented. Therefore, the Court of Appeal found that this proposed appeal was moot. And in any event, the Court saw no basis to interfere with the supervising judge’s decision.

Second, with respect to the motion for leave to appeal from the order of the CCAA court approving the settlement, the Court of Appeal again concluded that there was no basis to interfere with the CCAA court’s decision, which was based on a proper consideration of the case authorities and the policy underlying the CCAA process.

COMMON ISSUES DETERMINATIONS

O’Neill v. General Motors of Canada, 2013 ONSC 4654: Motion for summary judgment relating to four common issues in certified retirement benefits class action. The common issues related to certain contractual provisions in the class members’ retirement plans, and whether the defendant was entitled to rely on the contractual provisions to reduce the insurance benefits of class members. The court concluded that, in light of the representations and assurances made by the defendant in the benefit documents, the ambiguities in the reservation of rights clauses, and the applicable principles of contractual interpretation, the defendant was not contractually entitled to reduce the health care and basic life insurance benefits of the salaried retirees (who made up the vast majority of the class).

Daneau c. General Motors Acceptance Coporation du Canada ltée (GMAC); 2013 CarswellQue 7649: Action by plaintiff challenging PPSA registration charges imposed by General Motors at the time of purchase or lease of GM vehicles. The plaintiff claimed that the fees as represented by GM in the standard contracts amounted to false and misleading representation of the tariffs actually charged for PPSA registration. The court found that the representations made by GM in the standard contracts gave the impression that the fees pertained to the cost of enshrining the customer’s right to PPSA without disclosing that the fees included both the payable tariffs and the cost to GM for using a service provider to proceed with publication of the customers’ personal property rights. GM’s representations were therefore misleading.

However, the court found that the class members would have acted in the same manner and entered into the contracts for the purchase or lease of the vehicles regardless of the misleading representations. There was no evidence that the representations were likely to affect the conduct of class members to the contrary, and therefore, the class had suffered no harm. Further, the amounts paid by class members in addition to the registration tariffs were charged legally and paid to a service provider. However, the court did award $150,000 against Nissan in punitive damages.

Dion c. Compagnie de services de financement automobile Primus Canada; 2013 CarswellQue 7652: As above, except that while Primus had funded 57,000 purchase or lease contracts containing the misrepresentation, it had changed its practice and stopped charging the amounts in dispute prior to the judgment authorizing the appeal before service of process. As such, it was inappropriate to award punitive damages.

Dubé c. Nissan Canada Finance, division de Nissan Canada inc.; 2013 CarswellQue 7651: As above and the court did award $150,000 against Nissan in punitive damages.

St-Pierre c. Banque Royale du Canada; 2013 CarswellQue 7650: As above, except that RBC’s standard contract, in addition to stating that the fees included “items not taxable”, notified the consumer that he or she agrees to pay all expenses incidental to the PPSA publication. There was therefore no violation of consumer protection legislation.

Lachapelle c. Bell Canada, 2013 QCCS 3464: Action against Bell for long-distance charges associated with “modem hijacking”. The court concluded that (a) Bell was diligent about its obligation to inform customers about the risk posed by internet browsing and, specifically , about the risk of downloading software that installed without the knowledge of the subscriber and that could result in modem hijacking; (b) Bell provided its customers a safe service for internet browsing; (c) the fact of not blocking calls to certain countries did not constitute a legal or contractual breach by Bell; and (d) the plaintiff had not discharged its burden of proving bad faith on the part of Bell. Accordingly, the action was dismissed with costs to Bell.

MOTIONS SEQUENCING: THE CHICKEN AND THE EGG

Merlo v. Canada (Attorney General), 2013 BCSC 1136: Application for directions as to whether the defendants’ motion to strike certain paragraphs of the plaintiff’s notice of civil claim ought to be heard in advance of the plaintiff’s application for certification, or at the same time. Relying on the decisions of Chief Justice Bauman in Watson v. Bank of America Corporation and Justice Strathy in Cannon v. Funds for Canada Foundation, the Court held that the two applications were to be held at the same time. The issues raised by the defendants’ application were essentially concerned with whether the pleadings disclosed a cause of action, which would be addressed under the s.4(1)(a) analysis at the certification hearing. There was a risk of delays if the application to strike was heard in isolation from the certification hearing. Further, litigation by installments was likely to result in delays and inefficiencies and additional costs in light of the real possibility of an appeal by an unsuccessful party. Finally, there was no advantage in hearing the defendants’ application before the certification hearing. The most efficient approach was to have both applications heard together. Accordingly, the Court approved a proposed certification schedule which provided for the delivery of application materials and arguments and the hearing of the two applications at the same time.

Centre de la communauté sourde du Montréal métropolitain c. Clercs de Saint-Viateur du Canada, 2013 QCCS 3783: Motion seeking to determine the limitation period for each class member prior to common issues trial dismissed. The court found that the motion was premature, as the question of limitation was an individual issue that was to be considered after the determination of liability against the defendants at the common issues trial.

Chatfield v. Bell Mobility Inc, 2013 SKQB 317: Motion by the defendant for an order amending the certification order to exclude claims barred by the limitation statutes of the various provinces and territories. The key issues on this motion was whether the court should, in a summary manner, decide whether certain claims were statute-barred pursuant to limitation legislation, or whether that decision should await the trial. The court found that central to this dispute was the subject of discoverability. Counsel for the defendant argued that upon signing the service agreement, each plaintiff and class member had knowledge of all relevant facts, or alternatively, with reasonable diligence would have known the limitation on the claim. In response, counsel for the plaintiff argued that the limitation period was simply a defence and was to be deferred until the trial of the common issue.

The court agreed with the plaintiff, noting that there was no valid basis upon which to conclude that any individual plaintiff knew or should have known all the relevant facts upon executing the agreement. The court went on to conclude as follows:

“[16]  When I consider the circumstances, it is impossible to know that any plaintiff at the outset knew there was a claim. It is difficult to imagine that a plaintiff would sign the agreement knowing that the system access fee was not a valid charge. Equally, I do not know where or how a plaintiff could have acquired that knowledge. In short, the issue of discoverability cannot be determined with any certainty. It follows that the matter should be deferred and grounded in testimony.”

 

MOTION TO STRIKE/STAY/DISMISS/SUMMARY JUDGMENT

Brittin v. Saskatchewan (Minister of Human Resources and Skills Development Canada), 2013 SKQB 318: This action pertains to the loss of a portable computer hard drive containing the personal information of more than 500,000 Canadian student loan program participants which had been in the possession and control of the defendant. The defendant applied for an order striking or staying the action. Plaintiffs in a parallel action in the Federal Court also applied to stay the action and for an order directing that it be continued under the rubric of their action.

The court found that the Federal Court plaintiffs did not have standing to bring their motion, nor could they be granted intervener status. Relying on the Class Actions Act, the Court concluded that the court should consider these issues at the certification stage in circumstances where a multi-jurisdictional class action had been commenced elsewhere in Canada involving the same or similar subject matter. The court noted that the Federal Court plaintiffs would have every opportunity to be heard on these issues at the certification hearing. For the time being, however, the plaintiff’s objection to the standing of the Federal Court plaintiffs was allowed and the Federal Court plaintiffs’ application was dismissed without costs and without prejudice to advance their arguments at the time of certification.

With respect to the defendant’s motion, which was essentially based on the argument that the Saskatchewan court was without jurisdiction to entertain the within action, the court concluded that it was fitting and just to resolve this issue in advance of the certification motion. Turning to the defendant’s substantive submissions, the court held that as the within action and the Federal action were not brought by the same persons, s.21(2) of the Crown Liability Proceedings Act (which states that no court in a province has jurisdiction to entertain any proceedings taken by a person if proceedings by that person in the Federal Court in respect of the same cause of action are pending) did not have any application. Nor could it be said that the within action was an abuse of process. The Class Actions Act allowed the defendant to raise concerns about preferability of forum, the interest of the plaintiffs, promoting judicial economy and juridical advantage to the plaintiff. But those issues were to be dealt with at the certification stage, and there was no reason why they had to be addressed at this time. Further, the doctrine of abuse of process was aimed at preventing the misuse of the courts and not to shield defendants from the added burden of defending multiple actions.

Finally, the court rejected the defendant’s forum non conveniens argument, noting that the court had to canvass and consider the broad array of issues arising from other multi-jurisdictional class actions at the time of certification of the within action. Moreover, it had the jurisdiction to refuse certification if the action was to proceed as a multi-jurisdictional class action in another jurisdiction having regard to the very concerns raised by the defendant in the within action. However, for the time being, the defendant’s stay application was dismissed with leave to raise those arguments at the time of certification.

The writer acts for the Federal Court plaintiffs in the Federal action.

1146845 Ontario Inc. v. Pillar to Post Inc., 2013 ONSC 4374: Motion to strike portions of amended statement of claim dismissed in home inspection franchise class action.

Ari v. Insurance Corporation of British Columbia, 2013 BCSC 1308: The defendant ICBC brought motion to strike the amended notice of civil claim in proposed class action alleging that the plaintiff and class members had their personal information accessed by an ICBC employee for an unauthorized purpose. The causes of action advanced included breach of privacy under the Privacy Act and the common law (i.e. vicarious liability), and negligent protection of privacy (i.e. negligent implementation of a legislative decree to protect private information). The court’s attention was focused on whether it was plain and obvious, assuming the facts pleaded were true, that the claims for vicarious liability and negligence failed to disclose a reasonable claim.

With respect to vicarious liability, the court noted at the outset that, assuming the facts pleaded were true, it was not plain and obvious that there was no reasonable claim in breach of privacy against the employee. While the employee was authorized to access the plaintiff’s personal information, the purpose for which the access was exercised was unauthorized. Further, while the only factor pleaded to establish a sufficient connection between the wrongful act and the conduct authorized by the employer was “the opportunity the enterprise afforded the Employee to abuse his or her power”, it was not plain and obvious that the claim failed to disclose a claim in vicarious liability. Accepting the facts pleaded as true, the employee as part of her employment duties was required to access the personal information of ICBC customers. Certainly, this authorization created an opportunity for the employee to abuse her position of power. Accordingly, the court declined to strike the pleading in vicarious liability for breach of the Privacy Act. The claim for common law invasion of privacy was truck in light of “the clear status of the law in British Columbia that the tort for invasion of privacy does not exist.”

The plaintiff’s claim for negligence for breach of legislative decree was based on s.30 of the Freedom of Information and Protection of Privacy Act, which states that a public body must protect personal information in its custody or under its control by making reasonable security arrangements against such risks as unauthorized access, collection, use, disclosure or disposal. The court noted that while the plaintiff had attempted to case s.30 of FIPPA as a legislative decree, in substance, her claim was that ICBC negligent failed to implement a statutory provision. Relying on the rule in Saskatchewan Wheat Pool, the court held that the law has not recognized an action for negligent breach of statutory duty. As such, it was plain and obvious that the plaintiff had failed to disclose a reasonable claim for negligent protection of private information.

Costs were granted in favour of ICBC.

Briones v. National Money Mart Co., 2013 MBQB 168: Motion to stay or dismiss proposed class action to compel plaintiff to proceed with arbitration or mediation of dispute denied. The consumer protection statutes allowed pursuit of a civil claim, following Seidel. Further the claims against the co-defendant were not covered by the clause. Finally, with respect to the claims that were subject to the clause, the court exercised its discretion of s.7(5) of Manitoba’s Act to proceed in a civil action (a provision that did not exist in BC for the Seidel decision).

Committee for Monetary and Economic Reform v. Canada,  2013 FC 855: Application by the Crown to strike the claim. The action relates to claims by the plaintiff that the Bank of Canada and Crown have refused to provide interest-free loans for capital expenditures, the Crown has used flawed accounting methods in describing public finances which has provided the rationale for refusing to grant interest-free loans, and these and other harms are caused by the Bank of Canada being controlled by private foreign interests. The court truck the pleading in its entirety.

Fisher v. Coral Hill Energy Inc., 2013 ABQB 437: The plaintiff commenced this action on behalf of a proposed class of former shareholders of Wave Energy Ltd., alleging that the defendants colluded in a scheme to divert themselves certain assets belonging to Wave. The defendants brought a motion for summary dismissal. The court, after a careful review of the facts, found that the defendants had tendered evidence that provided a cogent, non-nefarious explanation of the events in question. That evidence satisfied the court that there was no genuine issue of material fact requiring trial.

Harrison v. XL Foods Inc., 2013 ABQB 502: Motion by third party for summary dismissal of Third Party Notice dismissed as the third party had not satisfied the high tests for summary dismissal of the actual claims advanced. Motion by the plaintiff for an order staying the third party proceeding dismissed. The court concluded that the issues between the defendants and the third party were inter-related to the common issues between the plaintiff and the defendants, and were to be considered part of the issues for determination at the certification hearing. In other words, to the extent that the plaintiff was granted a certification order as between him and the defendants, it would also be considered that the same class proceeding was the appropriate procedure to determine any common issues between the defendants and the third party, unless that result was challenged at the certification hearing. To the same end, any issues between the defendants and third party that were to be determined at the certification hearing to be litigated during any common issues trial between the plaintiff and the defendants were to form part of the certification order.

Lebel c. P & B Entreprises ltée, 2013 QCCS 3316: Motion to strike certain allegations in the application for authorization to institute a class action dismissed on the basis that the motion to strike was premature and without prejudice to the right of the defendant to argue, at the hearing of the merits, the objections to the record.

Scott v. Canada (Attorney General), 2013 BCSC 1651: This action concerns allegations by the plaintiff that pension and compensation received from Veterans Affairs Canada pursuant to the provisions of the Canadian Forces Members and Veterans Re-Establishment and Compensation Act (“NVC”) was arbitrary, substandard and inadequate for supporting themselves and their family. The plaintiff’s allegations were framed in breach of fiduciary duty, breach of Charter rights, breach of a public duty, breach of property rights contrary to the Canadian Bill of Rights, the Charter and the UN Universal Declaration of Human Rights, as well as allegations relating to the doctrine of the Honour of the Crown, Statutory Instruments Act and the Table of Disabilities under the NVC.

The defendant applied for an order striking the plaintiffs’ claim in its entirely on the basis that it does not disclose a reasonable cause of action. The court struck the claims for breach of the Universal Declaration of Human Rights and s.26 of the Charter, as well as the claim based on the Table of Disabilities of the NVC and breach of public duty of care. However, the balance of the defendant’s application was dismissed.

 

DISCONTINUANCE

Dunlop c. Stryker Canada, l.p., 2013 QCCS 3837: Motion for permission to discontinue the motion to authorize the bringing of a class action was granted. The court ordered that the petitioner’s counsel to undertake certain steps to notify the class members of the discontinuance of the proposed class action, including sending an email with a copy of the judgment to class members who had contacted the petitioner’s counsel, posting information on the petitioner’s counsel’s website, and publishing the discontinuance judgment on the class actions registry of the Superior Court of Quebec and on the CBA class action registry. 

Westland v. Ontario Hospital Association, 2013 ONSC 4631: The plaintiff in this proposed class proceeding applied for leave to discontinue the class action. The case concerned an early retirement program offered by the Ontario Blue Cross in 1992. The proposed class consisted of a small group of employees who took early retirement, and the action only involved claims for spouses of those retirees. Further, the claim would only arise if the retiree predeceased his or her spouse. The plaintiff’s spouse predeceased him, and he was therefore no longer a member of the proposed class (he no longer had a cause of action as he outlived his spouse). The plaintiff was unsuccessful in finding another member of the proposed class to replace him. Further, class counsel had advised the plaintiff that they did not believe the proposed class action was economically viable. On their advice, the plaintiff moved to discontinue the action without notice to the class.

The court noted that, in granting an order for leave to discontinue a proposed class action, the court had to strike a balance between protecting the interests of absent class members and permitting the low cost resolution of marginal cases where the motion for leave to discontinue was made in good faith and on reasonable grounds. After reviewing the circumstances of the case (class size of approximately 19 people, no apparent interest in the action, no steps to bring motion for certification since 2006, poor economics and lack of representative plaintiff), the court was satisfied that this was a proper case for granting leave to discontinue without prior notice to the class. However, it held that the class must be given notice of this discontinuance.

EVIDENCE

Abdula v. Canadian Solar, 2013 ONSC 5035: Motion by the plaintiff for an order that the defendants answer questions and produce documents that were refused during the cross-examination of the defendant’s affiant. The defendants had filed an affidavit in response to the plaintiff’s motion for certification, but had intentionally refrained from filing an affidavit in response to the plaintiff’s motion for leave to commence a secondary market misrepresentation action. During the cross-examination of the defendant’s affiant, defence counsel objected to any questions pertaining to the leave requirement. The objections resulted in the application at hand. The plaintiff essentially argued that if a defendant wishes to deliver an affidavit in response to the motion for certification, that defendant will be compelled to answer questions in relation to the leave motion even though that defendant does not file an affidavit pursuant to s.138.8(2) of the Ontario Securities Act

The court relied on several decisions of the Ontario courts which held that a defendant is only required to serve and file an affidavit if it intends to lead evidence of material facts in response to the motion for leave. Having done so, the court concluded that the defendants were not required to deliver an affidavit in response to the motion for leave, and having elected not to do so, they could not be compelled to answer questions which would be used by the plaintiff on the argument that it should be permitted leave to pursue a cause of action pursuant to the secondary market misrepresentation provisions of the Ontario Securities Act.

Dick c. Johnson & Johnson inc., 2013 QCCS 3050: Motion to administer evidence granted in Depuy hip implant class action in advance of the authorization hearing.

Elwin v. Nova Scotia Home for Coloured Children, 2013 NSSC 196: The AG of Nova Scotia moved to strike a number of statements from the motion of the plaintiffs in support of their motion for class certification. The plaintiffs proposed to amend the affidavits to respond to some of the AG’s concerns, but maintained that many of the statements proposed to be struck were appropriate and should not be struck. The court permitted most of the proposed amendments by the plaintiffs, but struck the portions of the affidavits it deemed inappropriate.

Fantl v. Transamerica Life Canada, 2013 ONCA 507: The respondent sought directions in the appeal respecting certain documentary issues. Specifically, the respondent complained that the appeal book and compendium included certain extrinsic evidence to which the appellant’s factum referred, and sought an order excluding this extrinsic evidence form the record even though it was in the record before the motion judge, on the basis that the evidence was inadmissible on the narrow appeal before the Court of Appeal. The Court refused to make the order requested, noting that it would be preferable for the panel hearing the appeal to have before it all of the same material as the motion judge, as was customary. It went without saying that before the panel the parties were free to dispute the admissibility of the evidence in the record.

THIRD PARTY FINANCING

Bayens v. Kinross Gold Corporation, 2013 ONSC 4974Motion for approval of litigation funding agreement with Harbour Fun II, L.P. granted. In doing so, the court noted that indemnity agreements have become the norm between representative plaintiffs and class counsel in Canada, and that the approach of an indemnity from class counsel was likely unforeseen by the Law Reform Commission and by the Ontario Legislature when it enacted the Class Proceedings Act, 1992 and established the Class Proceedings Fund. It also acknowledged that the promoters of class proceedings did not foresee the astronomical size of the adverse costs awards that have been awarded in class proceedings, which have substantially intensified the risk and the associated barrier to access to justice. The court went on to state as follows:

“[33]  The impact of these astronomical costs awards is apparently now having an impact on whether Class Counsel is prepared to provide the indemnity the representative plaintiff usually needs in order to bring a class action on behalf of the class members. The impact is that Class Counsel are no longer as willing to assume both the risks associated with a contingency fee agreement and also the risk of the indemnity for a catastrophically high adverse costs award. As a consequence, and as illustrated by the case at bar, plaintiffs and class counsel have looked for an alternative to the Class Proceedings Fund and to indemnities from Class Counsel. (Another alternative is to start a class action in another jurisdiction that does not impose a loser pays costs regime.)

[34]   The new alternative is funding from a third party funder, and the current state of affairs in that courts in Ontario have come to accept and have approved the use of third party funders. Third party funding of class proceedings is permitted in Ontario as an appropriate manner of allowing plaintiffs and class counsel to mitigate the substantial litigation risks in class proceedings. There have been two Ontario class proceedings where the court has approved third party funding arrangements [citations omitted].

[35]  It may be wise for the Legislature to revisit whether any of this is what it intended when it rejected the Law Reform Commission’s recommendation that class actions not be governed by the loser pays principle. In the meantime, the court is now challenged with developing the jurisdiction to determine when third party funding should be approved for a particular case.”

Stanway v. Wyeth Canada Inc., 2013 BCSC 1585: Application for directions concerning the availability and privilege over litigation financing agreement in certified class proceeding. The court commenced its analysis by reviewing the state of the law relating to third party financing in other provinces and considering the potential criticisms of litigation financing agreements (particularly perverting the goal of increasing access to justice through class proceeding). It went on to reject the defendants’ position that because the BC legislature had not specifically referred to litigation financing agreements in the Class proceedings Act, they were not available in BC. Section 12 of the Act gave the court broad jurisdiction to make appropriate orders, and similar provisions had been relied upon by the courts in Ontario and other provinces to approve litigation financing agreements provided that certain conditions were met.

The court went on to find that the defendants’ input relating to a litigation financing agreement would be of crucial assistance to the court, and that it was appropriate to give the defendants an opportunity to make submissions. Having made this finding, the court also concluded that the entire agreement was not privileged. Certainly, the confidential communications between the plaintiff, her counsel and the private financer in respect of the merits of the litigation and the litigation budget would be privileged, as well as highly sensitive topics relating to the plaintiffs’ strategy and trial stamina. However, there were other features of the agreement which the defendants were entitled to access, specifically those addressing the specific concerns which the defendant had raised, including concerns that the implied undertaking rule was observed and that the private financer was not controlling the litigation.

SETTLEMENT

405341 Ontario Limited v. Midas Canada Inc., 2013 ONSC 5714: Settlement of $8.5 million approved in Midas franchise class action. Counsel fees of $2.125 million (25% of settlement amount) approved.

Blair v. Toronto Community Housing Corp., 2013 ONSC 4237: Settlement approved. Terms of settlement included payment of $5.5 million for all claims, as well as $1.4 million for legal fees, disbursements and distribution costs. Class counsel fees of $1.15 million approved, with $500,000 of the legal fees coming out of the legal fees and disbursements fund and the remaining $650,000 coming out of the claims fund.

Clark c. 4107781 Canada inc., 2013 QCCS 4164; 2013 QCCS 4165: Settlement in the amount of $375,000 approved; Counsel fees of $93,750 (25% of total settlement amount) approved.

Cornellier c. Province canadienne de la Congrégation de Ste-Croix, 2013 QCCS 3385: Settlement compensation process approved; compensation process liquidated; counsel fees of $3.01 million approved; payment of $1.31 million to the Class Action Assistance Fund approved.

Lépine c. Boehringer Ingelheim (Canada) Ltd., 2013 QCCS 2795: Mirapex settlement approved by the Quebec Superior Court. Counsel fees and disbursements approved in the amount of $2.74 million.

Maksimovic v. Sony of Canada Ltd., 2013 CarswellOnt 9043: Settlement approved in Sony PlayStation/Qriocity network access class action. Along with reimbursing credit balances and making online game and service benefits available to class members, the settlement included reimbursement of up to a maximum of $2,500 per claim for class members who could demonstrate that they suffered identity theft. Counsel fees of $265,000 approved.

Morin c. Bell Canada, 2013 QCCS 3026: Settlement approved. Terms of settlement included the payment of $572,000 by Bell, compensation to class members who had paid termination fees, and the nullification of unpaid termination fees. Class counsel fees of $226,000 approved.

Option Consommateurs c. Infineon Technologies, a.g., 2013 QCCS 3323, 2013 QCCS 3324: Settlement with the defendants Samsung and Hynix approved.

Petit c. New Balance Athletic Shoe Inc., 2013 QCCS 3569: Authorization to institute class action granted for settlement purposes. Settlement (based on a $100 cash reimbursement for each pair of shoes up to a maximum of $200, for an estimated total value of $155,000) was approved. Counsel fees of $95,000 approved. Honorarium of $1,000 to the petitioner approved.

Roy c. Cadbury Adams Canada inc., 2013 QCCS 4297: Distribution protocol approved.

Lormier v. Pioneer Energy LP, 2013 ONSC 5369: Motion for certification granted for settlement purposes.

 

COSTS

Berry v. Pulley, 2013 CarswellOnt 12311: The action was commenced in 1997, certified as a class proceeding in 2011 and tried in 2011. The defendants were successful in resisting the plaintiffs’ action at trial, and subsequently claimed costs of $1.5 million.

The court commenced its analysis by dealing with the factors outlined in s.31(1) of the Ontario Class Proceedings Act, 1992. It noted that this was not a test case and did not involve a matter of public interest. Nor did it raise a novel point of law. Even so, the court concluded that an award that the defendants bear their own costs was fair and reasonable in the circumstances of the case. In doing so, the court relied on the “shabby and high-handed” conduct of the defendants throughout the litigation, noting that “the Defendants are not deserving of a cost award in their favour”.

Fantl v. Transamerica Life Canada, 2013 ONSC 5198: By reasons for decision reported as Fantl v. Transamerica Life Canada, 2013 ONSC 2298, the court had certified this action as a class proceeding. The court had tentatively indicated that costs should be in the cause. The plaintiff, supported in its argument by the Law Foundation of Ontario, opposed costs in the cause and submitted that there was no principled reason to depart from the normal rule that a successful party on a certification motion should receive his or her costs forthwith and not in the cause. The plaintiff sought costs (and disbursements) on a partial indemnity scale of $200,000. The defendant also opposed costs in the cause, arguing that as the plaintiff’s success was limited to claims for certification that were unopposed, the defendant was the overwhelmingly successful party on the certification motion. The defendant sought its own costs of $265,000, payable forthwith (although it agreed to defer some of the costs until the conclusion of the litigation). 

Having considered the submissions of the parties, the court concluded that the costs of the certification motion and the quantum of them should remain in the cause. In doing so, the court noted as follows:

“[33]  By and large, I agree with the tenor of Transamerica’s submissions that it is a candidate for costs notwithstanding that Mr. Fantl was successful in certifying a class action. I also agree with the tenor of Mr. Fantl’s submissions that he is a candidate for costs because he was successful in certifying a class action. When I indicated in my certification Reasons for Decision that the case at bar might be an appropriate case for costs in the cause, it was precisely because I anticipated that both parties would be claiming success, and since situations of divided success have traditionally been occasions for courts to order costs in the cause, I gave the parties the heads-up that this might be the appropriate award in the circumstances of this case. I was asking them for reasons not to apply this traditional approach to costs. 

[34]  Having considered the written submissions of the parties, which respectively pooh-pooh their opponent’s success, I conclude that my sentiment was correct, and I shall, therefore, order all the costs to be in the cause. I see no advantage in fixing the amount of those costs in the cause now.

[35]  I believe this costs award to be fair and just in the circumstances of this case. If it turns out that Mr. Fantl is eventually successful in his truncated class action, then it would be fair for him to recover his costs for his failed attempt to advance a larger class action. In the case at bar, the claims on the 48 insurance policies were not frivolous and vexatious, and it was reasonable and socially useful for Mr. Fantl to present all of the possibly related claims before the court. The putative class members of these claims have learned that it is plain and obvious that there is no legal basis to prosecute these claims as a class action. While that does not create a res judicata binding on the class members, it is useful precedent that provides access to justice. If Mr. Fantl ultimately succeeds on the 5 remaining policies for which there are legally viable claims, then in my opinion, subject to the discretion of the trial judge, he should have his costs for the claims that were struck out at certification. However, if he fails totally, then subject to the discretion of the trial judge, Transamerica should have its costs for successfully litigating the certified and the non-certified claims.

[36]  It seems unfair to award either party costs forthwith for their divided success at the certification motion.”

Kang v. Sun Life Assurance Company of Canada, 2013 ONSC 4800: Following a successful appeal by the plaintiffs from the decision of the lower court striking out numerous paragraphs of the plaintiff’s claim (including numerous causes of action), the cost award for the pleadings motion was remitted to the lower court for reconsideration. During the original motion, the plaintiff had argued that success was divided and that there should have been no order as to costs. The court, however, concluded that the defendant was the successful party and awarded $73,000 costs against the plaintiff.

On the costs motion resulting from the appeal, the plaintiff submitted that he was the overwhelmingly successful party, and that the court should set aside the original costs award and make a new award in his favour in the amount of $75,000, payable forthwith. The defendant disputed that the plaintiff had overwhelming success on the original motion as it had emerged after the appeal to the Court of Appeal. It noted that two causes of action remained removed and 42 paragraphs remained struck out without leave to amend, and that this remained a substantial defeat for the plaintiff. The defendant further noted that the plaintiff’s limited success on appeal did not alter the defendant’s status as the successful party and that the appropriate order would be to reduce the original cost award to the defendant by $20,000.

The court rejected both submissions, noting:

“As I now reconsider the matter, the outcome of the motion was one of divided success. Sun Life’s success is no longer overwhelming, but it secured a substantial victory, and in defending 18 more paragraphs and the various causes of action, Mr. Kang also secured a substantial victory. Success was divided.”

The court further noted that it remained to be seen whether the plaintiff would achieve certification, and if he did, it remained to be seen whether he would succeed on the three causes of action that he preserved. In these circumstances, the court concluded that the fairest award was to fix costs at $75,000, and make those costs in the cause.

Kowch v. Gibraltar Mortgage Ltd., 2013 ABQB 498: Cost application arising from the defendants’ successful application to strike a proposed class action. Relying on the roadmap established in Papaschase Indian Band No. 136 b. Canada (Attorney General), and noting that the case did not raise a novel point of law of matter of public interest and was not a test case, the court awarded costs to the successful defendants.

JURISDICTION

Mouaikel c. Facebook, 2013 QCCS 4176: This proposed class action arose from Facebook’s IPO. The plaintiff alleged misrepresentations by Facebook and its underwriters which induced her and the class members to overpay for Facebook shares in the IPO. Facebook moved to dismiss the petitioner’s motion to institute a class action on the ground that the Quebec superior Court lacks jurisdiction, or alternatively, that the Quebec court should decline jurisdiction in favour of the New York District Court which is already seized of a number of class actions relating to Facebook’s IPO.

The evidence demonstrated that all of the defendants were domiciled in the US. Facebook filed its offering documents with the SEC and its stock was traded on the NASDAQ. All of the defendants’ alleged activities occurred in the US, not in Quebec. In sum, the petitioner conceded that the only connecting factor with Quebec was that she and other members of the proposed group suffered damage in this province as a result of having purchased Facebook shares at an inflated price. The petitioner relied on Article 3148 of the Civil Code of Quebec, which granted jurisdiction on a Quebec court where damage was suffered in Quebec.

Upon its review of the case law, the court concluded that a distinction had to be made between cases where a party suffered damage in Quebec solely because his patrimony was located in this province and cases where damage was suffered in Quebec based on an event that occurred there. In this case, although the petitioner’s TD Waterhouse statement recorded her purchase and sale of shares, it did not indicate where the transaction occurred or where she paid for her shares. Nothing in the record indicated that the sales transactions occurred in Quebec. It was likely that the shares would have been notionally delivered either at the NASDAQ exchange in New York or at Facebook’s head office in California. According to the Civil Code, the petitioner’s payment would therefore have been owed at one of these two US locations. Accordingly, and in the absence of proof that the petitioner suffered damage in Quebec as a result of a material event that occurred here, there was no basis to conclude that a real and substantial connection existed between the alleged facts of the motion and the Quebec court. The Quebec court had no jurisdiction to hear this matter.

While the court found it unnecessary to deal with the forum non conveniens submissions, the court noted that it would have declined its jurisdiction in favor of the District Court for the Southern District of New York. In this regard, the evidence suggested that 41 US lawsuits relating to the IPO had been centralized and were proceeding before the NY court. The consolidated actions involved the same defendants and raised the same allegations of wrongdoings as the present action. Most importantly, the lead plaintiff in the consolidated actions was seeking to represent all persons and entities who purchased Facebook shares in the IPO. Therefore, if approved, the proposed class would include Quebec residents. Further, as Facebook had issued its prospectus under the rules of the SEC and traded its shares on the NASDAQ, there was little question that NY law would apply to the actions against the respondents.  Finally, the majority of the underwriters were domiciled in NY and much of the relevant discovery would be conducted there. In sum, the NY court appeared to be the natural forum to hear the actions against the defendant, and Quebec shareholders had no advantage in proceeding by way of a duplicative and costly action in this province.

 

MISCELLANEOUS

Belley c. TD Auto Finance Services Inc./Services de financement auto TD iNC., 2013 QCCS 3014: The defendant brought a motion for an order dismissing the motion of the petitioner (B) to authorize the bringing of a class action on the basis that a judgment rendered in an essentially identical class action had the authority of a final judgment (i.e. constituted res judicata) on the question of the petitioner’s individual claim. The proposed class action concerned the alleged loss by the defendant of a data tape containing personal information relating to its clients. A motion for authorization of a class action brought by another petitioner (M) against the defendant had already been dismissed by the Quebec Superior Court.

The court held that its previous judgment did not constitute res judicata on the question of the petitioner’s individual claim. It noted that whether a pre-authorization class action petitioner addresses the court for himself or for the group he seeks to represent will depend on the nature of the proceeding. The earlier judgment of the court disposed of a motion by M to amend her motion to institute a class action by adding some 50 new or modified paragraphs to what was already a re-re-amended motion. One of the proposed new paragraphs purported to enlighten the Court on the type of damages allegedly suffered by members of the group that M sought to represent. This paragraph made mention of a news article about B and the damages he had suffered. The Court had refused the addition of this paragraph on the basis that B may or may not be a member of the class in M’s action and that the circumstance peculiar to B as reflected in the news article would not be useful to M on her own motion.

Given these circumstances, it could not be said that the court’s judgment against M in M’s action was in effect a judgment against B. The judgment in question merely concluded that it was not proper, in the context of M’s motion, to allow the proposed amendment. This fact sufficed to dispose of the motion to dismiss on the basis of res judicata.

Chatfield v Bell Mobility Inc., 2013 SKQB 293: The plaintiff, represented by Tony Merchant, commenced this proposed action in August 2004. In February 2008, the action was certified as a class action (the “Chatfield Action”). When Saskatchewan’s Class Actions Act was first enacted, non-residents of Saskatchewan could op into a class action certified in the province. In 2007, amendments to the Act created an opt-out regime in Saskatchewan. The plaintiff brought an application to amend the certification order in the Chatfield Action to certify the class action as multi-jurisdictional. The application to amend was rejected on May 7, 2009 and leave to appeal was granted on March 15, 2010 on condition that a formal notice of appeal be filed within 10 days of the date of the fiat. That was never done. In the meantime, a second multi-jurisdictional action was commenced in Canada (the “Collins Action”). The Collins Action was met with a motion by the defendants for an order that the action be dismissed or stayed. A stay in the Collins Action was granted in December 2009. That stay was conditional and was without prejudice to the plaintiffs to pursue their claims “if circumstances are different in the future and warrant such a course of action.”

Some 28 months after leave to appeal was granted, the plaintiff brought an application in the Chatfield Action for an order extending the time to serve and file a notice of appeal from the order refusing to amend the certification. That application was dismissed on March 8, 2013. The plaintiff then brought the within application, seeking  an order lifting the stay in the Collins Action, setting a date for a certification schedule to be set, and clarifying the meaning of the words “date of this Order” in the Chatfield Action certification order. The defendants launched motions dismissing the plaintiff’s claim.

The court rejected the plaintiff’s application to lift the stay in the Collins Action, noting:

“[8]   It is correct that the stay was conditional. The action could be pursued “... if circumstances are different in the future and warrant such a course of action”. The reality is that the circumstances are no different. Counsel has tried to change the landscape, but has failed. That does not constitute a change in circumstance.

[9]    Counsel for the plaintiffs argue that a refusal to lift the stay will deny many the opportunity to participate. That is not entirely accurate. They can opt into the existing class action. A multi-jurisdictional action may be commenced in another jurisdiction. They may already be participants in such an action.

[10]  As stated earlier, there has been no change of circumstance. As well, the future is unknown. Accordingly, I am not prepared, at this time, to vary the order already made. More particularly, that stay is not lifted. At the same time, it is not made permanent nor is the “Collins Action” dismissed. The stated conclusion makes it needless to fix a date for setting a certification schedule.”

Union des consommateurs c. Magasins Best Buy ltée, 2013 QCCS 3067: Application for leave to amend application to authorize class action granted.