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Oct042012

October 4, 2012

What efficiency gains you can obtain with more help! Thanks once again to Ahmad's ground work, here is the latest news.

Conferences

A reminder about the Western Canadian Class Action Conference on Jan 24/25. The link is:

http://www.cle.bc.ca/onlinestore/productdetails.aspx?cid=670

Certification

Association Pour la Protection Automobie c. Ultamar Ltee., 2012 QCCS 4199: Application for authorization as class action granted in this gas price fixing case.

Brunelle c. La Banque Toronto Dominion, 2012 QCCS 4107, Option Consommateurs c. Banque de Montreal, 2012 QCCS 4106: Authorization granted for two proposed class action against Toronto Dominion bank and Bank of Montreal for certain penalty charges paid by consumers.

Coalition Contre le Bruit c. Shawinigan (Ville de), 2012 QCCS 4142: Application for authorization of proposed class action against city for noise pollution resulting from seaplane operations granted.

Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees) v. SNC-Lavalin Group Inc., 2012 ONSC 5288: Unopposed motion for leave and certification in SNC-Lavalin securities class action. Leave was granted to commence an action for secondary market misrepresentation. The proceeding was certified as a class action. The plaintiffs discontinued their claims for an oppression remedy and for damages for common law negligence. This was approved by the Court, even though the claim under the Securities Act, unlike the claims for oppression and negligence, was associated with a "cap" on damages. In this regard, Justice Perell stated: "Speaking metaphorically, I agree that in the circumstances of this case, a cause of action in the hand is worth far more than two appealable causes of action in the bush. Accordingly, I grant leave to discontinue".

Gould v. Western Coal Corp., 2012 ONSC 5184: Application for leave to commence an action for secondary market misrepresentation was dismissed. Motion to certify proceeding as a class action was denied.

Carriage

Wainberg c. Zimmer Inc., 2012 QCCS 4276: The Quebec Superior Court relied on the "First to File" principle to grant carriage of the action to the law firm that was the first to file its claim against the defendant. In doing so, the Court held that, unlike Ontario, where a set of criteria have been developed to assess the competing actions, the starting point for a carriage analysis in Quebec was that the first plaintiff to file should have carriage of the action. "The Court's role of ombudsman for the putative class members is exercised on the basis of the proceedings filed before it and, between two motions appearing to adequately protect the best interests of the putative class members, the "First to File" rule prevails to determine which one ought to proceed and which one ought to be stayed." The court noted that the first to file approach was about to be considered by the Quebec Court of Appeal however.

Communications with Class Members

Lundy v. VIA Rail Canada Inc., 2012 ONSC 4152: Following the commencement of a proposed class action, the defendants made settlement offers to several putative class members. The plaintiffs brought a motion for disclosure of the releases signed by the putative class members, an order rescinding the settlements, and an order enjoining communications between the defendants and putative class members.

Justice Perell ordered the defendants to disclose the releases to the plaintiffs, but held that the defendants could complete the settlements for which releases had been signed and could communicate with putative class members provided that the plaintiff was given a copy of the correspondence and provided that there be no communications to the putative class members known to be clients of the lawyers of record. In doing so, Justice Perell took the opportunity to explore the developing legal territory of regulating the communications to putative class members during the period before a proposed class action is certified. He noted that communications between defendants and putative class members were problematic because these communications could interfere with a nascent lawyer and client relationship and could dismember the putative class by persuading putative class members not to participate, which could in turn discourage the representative plaintiff or class counsel from prosecuting the proposed class action. At the same time, regulating communications with putative class members was also problematic for three reasons:

"First, the legal nature of the relationship between some putative class members and the lawyer for the proposed representative plaintiff is unclear. In many proposed class actions, a putative class member will not even know that there is a proposed class action until after the certification hearing, and, practically speaking, during the pre-certification phase, the putative class member may be a distant stranger to the lawyer. Thus whether and how the traditional rules and privileges about communications between lawyer and client apply pre-certification is unclear in the context of a proposed class action and, accordingly, how to govern those communications is problematic.

Second, although the legal nature of the relationship between putative class members and the lawyer for the proposed representative plaintiff is unclear, some putative class members will have a traditional lawyer and client relationship with the lawyer for the representative plaintiff or these putative class members will have independent legal representation from other lawyers. In other words, putative class members may have diverse legal relationships with lawyers during the pre-certification phase, and, accordingly, how to govern communications in these circumstances is not clear and is problematic.

Third, the attitude of the putative class member to the proposed class action is also unclear during the pre-certification phase. Some class members may not even know about the proposed class action, and those that do know may have a range of attitudes about participating in the class action. How to regulate communications with a group of persons who might benefit from participating in the class action but who have a widely diverse attitude towards participating is not clear and hence is problematic."

After reviewing Canadian and American case law on point and setting out the overarching legal principles, Justice Perell opined that while the regulation of communications with putative class members before certification arose in circumstances of some traditional lawyer/client relationships and some sui generis lawyer and putative class member relationships, it was unnecessary to sanction all communications between a defendant and putative class members. In his Honor's view, this was one of those cases where there was nothing inappropriate about the communications that took place between the defendant and the putative class members.

1250264 Ontario Inc. v. Pet Valu Canada Inc., 2012 ONSC 4317: The Court granted the plaintiff's motion to set aside the opt-out notices received from class members on the ground that the process had been corrupted by a campaign, launched by the defendant's franchisee association, which deceived the class members and encouraged them to opt-out of the action.

Costs

Smith v. Inco Ltd., 2012 ONSC 5094: Following the Ontario Court of Appeal's decision dismissing the action against Inco on the merits, Inco applied for costs of the proceeding from the date of certification until the date of trial. Inco requested its costs on a partial indemnity basis from the date of certification until the date of Inco's offer to settle to the plaintiff, and on a substantial indemnity basis thereafter. As the plaintiff had received funding from the Class Proceeding Fund since the time of certification, Inco sought its costs from the Fund.

The Court determined that, as the successful party in the action, Inco was entitled to its costs. However, there was no basis for awarding costs on a substantial indemnity basis following the offer to settle. The Court assessed costs and disbursements in the amount of $3,532,000, but reduced the cost award by 50% (down to $1,766,000). In doing so, the Court held as follows:

"In this case, there are both private and public interest factors present. I accept that this proceeding was based on the tort claims of 7,000 private property owners for damage occasioned to their properties. Inco can correctly submit that it has been monetarily damaged by the unsuccessful claims of these private individuals, and therefore that Inco is entitled to some reparation. On the other hand, this action involved matters of public interest and was novel in many respects, as discussed earlier in this decision. It is important in our society to ensure that those who have a public interest and/or a novel claim have access to the courts for the purpose of resolving the claim. This is one of the objectives of the CPA.

Further, in any costs award the court must balance the chilling effect of a large costs award against the need to discourage frivolous and unnecessary litigation [...] The Fund is available for the purpose of facilitating access to justice for large groups of the population who may wish to pursue a class proceeding. However, the Fund is not bottomless and a costs order that would cripple the Fund should not be made as it could unduly stifle subsequent claims.

In that respect, I must also consider that Inco does not have a bottomless supply of money with which to defend claims. Inco is clearly out-of-pocket for its legal fees and for its legal disbursements. Inco should not be made to suffer the consequences of an inadequate costs order.

For these reasons, the award of costs to Inco should be reduced, but should not be eliminated. In my view a fair approach is for Inco to have 50% of the costs that would have been awarded but for the application of s.31(1) of the CPA. Therefore, the costs awarded to Inco will be 50% of $3,532,000.00, for a total award of $1,766,000.00."

1250264 Ontario Inc. v. Pet Valu Canada Inc., 2012 ONSC 5029: As noted above, the plaintiff successfully applied to set aside opt-out notices delivered by class members on the basis that the process had been corrupted by a deceptive campaign that encouraged class members to opt-out of the class. On the plaintiff's subsequent motion for costs, the Court awarded $60,000 against the defendant and the executives of the group that had launched the campaign (members of the defendant's franchisee association). The Court noted that, while the defendant was not the one that had launched the campaign, in opposing the plaintiff's motion, the Defendant was supporting the opt-out process which had been perverted. It was hence fair and reasonable that it share the burden of paying the costs.

Allen v. Aspen Group Resources Corp., 2012 ONSC 5028: Following an unsuccessful motion for summary judgment by the defendant, the Court fixed the plaintiff's costs at $100,000 all inclusive, but made the costs payable to the plaintiff in the cause as between the plaintiff and the moving party.

Settlements

Monckton v. C.B.S. Interactive Multimedia Inc., 2012 ONSC 5227: Settlement approved. Class counsel fees in the amount of $60,000 approved.

Bratton v. Samsung Electronics Co., 2012 ONSC 5231: Static Random Access Memory price-fixing class action certified for settlement. The motion was unopposed. Approval hearing to follow.

Appeals

Hoclaim Canada Inc. c. Renaud, 2012 QCCA 1625: Appeal from the decision of the lower Court refusing the applicant's motion to have the judge recuse himself dismissed.

Option Consommateurs c. Meubles Léon ltée, 2012 QCCA 1534: Leave to appeal the decision of the Superior Court of Quebec dismissed. The lower court approved a class action and, at the same time, denied a motion to dismiss a portion of the application. On appeal, the Court of Appeal held that the lower court's judgment was not appealable because it did not create a hopeless situation for the applicant if the Court did not intervene immediately. The applicant had the opportunity to argue the same points at the merits trial. A loose and rough translation of the Court's conclusion from Google Translate reads: "In my view, the proper administration of justice clearly favors the return of the parties to the Superior Court for debate on the merits as the judge allowed. The applicant does not mention the existence of disadvantages in practice, and will not lose the benefit of his right to appeal on the issue of res judicata partial, but only during an appeal on the merits."

Other Motions

Banks c Sony Canada ltee, 2012 CarswellQue 8979: Court granted defendants' motion to cross-examine the plaintiffs following a filing of an amended application for authorization.

Fraser Papers Inc., Re, 2012 ONSC 4882: A class action was filed in Quebec, and the defendant subsequently filed for CCAA protection in Ontario. An amended CCAA plan was sanctioned by the Ontario Superior Court of Justice, Commercial List. On this motion, the Court held that it had exclusive jurisdiction to decide any issues relating to the amended CCAA plan (including issues arising from the class action). Further, the Court held that the claims pleaded in the class action had been released under the CCAA Releases.

Zwaniga v. Johnvince Foods Distribution L.P., 2012 ONSC 5234: Motion for summary judgment dismissing the action against one defendant was granted.

Ward Branch, Partner Branch MacMaster LLP 1410 - 777 Hornby Street Vancouver, B.C. V6Z 1S4 P: 604.654.2966 | F: 604.684.3429 Web: www.branchmacmaster.com/ward-branch<http://www.branchmacmaster.com/ward-branch> Twitter: http://twitter.com/#!/wbranch99

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