November 19, 2012
Monday, November 19, 2012
Ward Branch

A reminder of the upcoming January 24/25 Western Canadian Class Action conference. Register below:

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

Whistler and Cypress Mountain are already open for those of you on the edge!

http://cypressmountain.com/

http://www.whistler.com/weather/?gclid=CO-P99Xf27MCFUlxQgodNzMAsQ

Note a technological improvement below, in that you can now link directly to the Canlii decision, where such a link is available.

Finally, a reminder that for further class action news, you can follow us on twitter at twitter.com/wbranch99 

CERTIFICATION

Thorburn v. British Columbia (Public Safety and Solicitor General), 2012 BCSC 1585: Vancouver Jail strip search class action dismissed. The writer was counsel for the defendants, City of Vancouver and the Vancouver Police Board. The court held that the assessment as to whether a search was proper required an individual determination.

Labrecque c. General Motors of Canada Ltd., 2012 QCCS 4746: Motion for authorization of proposed class action for defective transmissions in certain GM vehicles dismissed. The applicant failed to demonstrate a prima facie case of a class of individuals whose transmissions would have a similar defect and who would have suffered a similar injury, as required by the Quebec Civil Code.

Lee v. Georgia Properties Partnership, 2012 BCSC 1484: Certification denied in proposed real estate class action.

Leblanc v. United Parcel Service du Canada ltée, 2012 QCCS 4619: Motion for authorization denied in proposed class action for custom brokerage fees charged by UPS and FedEx.

APPEALS

Logan v. Dermatech, Intradermal Distribution Inc., 2012 BCCA 399: The British Columbia Court of appeal granted leave to appeal to the applicant physicians from an order of the lower Court requiring the physicians to disclose personal information of patients to class counsel for the purpose of implementing the notice campaign in a certified medical product class action. In doing so, the Court recognized the potential privacy concerns of the patients whose names would be given to class counsel, noting:

“From my reading of the reasons for judgment it appears that the chambers judge did not fully consider, perhaps because it was not raised squarely with him, that perhaps 95% of the patients whose information was ordered divulged would not be class members; that communications between physician and patient are presumptively privileged; that the privilege attaching to the information revealed by the patient to the doctor is the patient’s privilege to waive; and all of the patients who were not likely to be class members had no submissions made to the chambers judge on their behalf with respect to their legitimate privacy issues.  The chambers judge did not fully consider whether there were other means of notifying class members which though less effective, would not breach the rights of non class members.”

The Court of Appeal went on to conclude as follows:

“In my view the applicants have more than met the first criteria in the test I must apply.  I am of the view that the proposed appeal is of significant importance generally.  How far a court may go in making an order which affects the privacy rights of non-parties is something this court should examine, particularly if the chambers reasons in this case are to stand as a precedent for other applications in CPA proceedings. The other proposed grounds of appeal seek to examine the limits of the CPA, particularly whether it permits a court acting under its jurisdiction to make orders affecting non-parties outside the province.  In my view the applicants have made a case that all of their grounds are appropriate and have sufficient merit to pursue on an appeal to this Court.”.”

The writer was counsel for the physicians on the application for leave to appeal.

Simmonds v. Armtec Infrastructure Inc., 2012 ONSC 5228 [not yet on Canlii]: Leave to appeal granted to the Divisional Court from the decision of Ontario Superior Court of Justice granting carriage of proposed securities class action to Sutts Strosberg LLP. The court noted that there are conflicting decisions with respect to the principles to be applied when determining carriage motions. “Some decisions suggest that competing theories are to be assessed only to weed out those that are patently weak, while others support a more rigorous review, albeit on a preliminary basis.”

Moreover, the court found that the lower court’s analysis and hence its decision were open to serious debate. Specifically, it could be argued that the lower court’s analysis was internally inconsistent because “[b]readth of the proceeding was determined to be an advantage when it came to naming of defendants and the class period but a disadvantage with respect to the inclusion of “early sellers” and causes of action founded on waiver of tort and unjust enrichment”. In other words, “comprehensiveness and cohesiveness each prevailed half the time.” 

Bellan v. Fillmore Riley LLP, 2012 MBCA 84: Appeal from the decision of the motion judge refusing to certify proposal class action dismissed. He held that a representative action under Manitoba Queens Bench Rule 10.01(1)(f) would be less complicated, more efficient, quicker and cheaper. The Court of Appeal agreed with the motion judge that class actions and representation orders were intended to co-exist, and that it was possible that a particular action could be brought under either regime and in each case a procedural preferability analysis would have to be concluded. “While theClass Proceedings Act, 1992, offers advantages with respect to notification procedures and opting-out, these rules may sometimes be ‘overkill’ and Rule 10, with its more relaxed procedures, may be more appropriate.”

The Court of Appeal went on to conclude as follows:

“Not all multi-party proceedings must proceed by way of class action. There are other tools in the judicial toolbox. Such tools not only include a representation order under Rule 10, but also joinder under Rule 5 and consolidation under Rule 6, all of which deal with multi-party proceedings. Class action legislation is only engaged if it is preferable and more efficient than the alternatives. Indeed, class action legislation was passed to enhance access to justice, judicial efficiency and behaviour modification, not to prolong litigation and increase cost.”

Pellan c. Agence du Revenue du Quebec, 2012 QCCA 1632: Appeal from the decision of Superior Court of Quebec granting the defendant’s motion to dismiss the action and deny authorization to institute a class action on the basis that there was a specific procedure for challenging a tax assessment under the supervision of the Court of Quebec, such that the Superior Court had no jurisdiction to hear the action as a class proceeding. The Court of Appeal granted the appeal, set aside the lower court’s decision, denied the motion to dismiss the action, and referred the matter back to the Superior Court.

Tonnelier c. Quebec (Procureur General), 2012 QCCA 1654: Appeal from the decision of the Quebec Superior Court denying authorization to institute a class action for damages against the Attorney General of Quebec for failing to take measures to ensure proper and adequate pathological tests were carried out to diagnose breast cancer. The Quebec Court of Appeal dismissed the appeal, without costs.

Imperial Tabacco Canada Ltd. c. Conseil Quebecois Sur le Tabac et la Sante, 2012 QCCA 1641: Appeal from decision of the Superior Court of Quebec relating to the production of certain survey data allowed in part.

Conseil québécois sur le tabac & la santé c. JTI-MacDonald Corp., 2012 CarswellQue 10425:  Appeal from the decision of the lower court allowing in part the motion to obtain information about individuals who were registered with class counsel, and permission to meet with those people and access their medical records, dismissed.

Holcim Canada Inc. c. Renaud, 2012 QCCA 1626: Application for leave to appeal dismissed in proposed class action against cement company for “violation of the rules of good neighborliness”.

EXTENSION OF TIME

Richard v. British Columbia, 2012 BCSC 1464: Further extension of time to submit a written claim for compensation granted in settled class action arising out of the class members’ residency at the Woodlands Schools in New Westminster. The writer is counsel for the Defendant. 

FILED APPLICATION FOR LEAVE TO APPEAL TO SCC

Fulawka v. Bank of Nova Scotia, 2012 CarswellOnt 11956: Application for leave to appeal from the decision of the Ontario Court of Appeal filed in unpaid overtime class action.

Kwicksutaineuk/Ah-Kwa-Mish First Nation v. British Columbia (Minister of Agriculture and Lands), 2012 CarswellBC 2938: Application for leave to appeal from the decision of the B.C. Court of Appeal dismissing the proposed class action filed, but was dismissed.

Samoisette c. IBM Canada ltée, 2012 CarswellQue 4941: Application for leave to appeal from the decision of Quebec Court of Appeal authorizing class action filed.

Fresco v. CIBC, 2012 CarswellOnt 12360: Application for leave to appeal to the Supreme Court of Canada filed in CIBC overtime class action.

Koubi v. Mazda Canada Inc., 2012 CarswellBC 3086: Application for leave to appeal to the Supreme Court of Canada filed in defective vehicle door lock class action. The appeal is from the decision of the BC Court of Appeal allowing an appeal and decertifying the class action.

SECURITIES: LEAVE TO COMMENCE SECONDARY MARKET MISREPRESENTATION ACTION

Zaniewicz v. Zungui Haixi Corp., 2012 ONSC 6061: The plaintiffs in this proposed securities class action sought leave under Part XXIII.1 of the Ontario Securities Act against certain defendants who had not defended the action and who were noted in default in August, 2012. The plaintiffs had entered into a standstill agreement with the remaining defendants, and it was agreed that the leave and certification motions relating to those defendants would take place at a later date.

Justice Perell granted the plaintiffs’ motion for leave, noting that the test for leave was “a relatively low threshold” on the evidence that the parties put before the court. Since the defendants in question were noted in default, they were deemed to admit the truth of all allegations of fact made in the plaintiffs’ Fresh as Amended Statement of Claim. These deemed admissions were held to be sufficient to satisfy the test for leave under the Ontario Securities Act. Accordingly, leave to proceed against these defendants under Part XXIII.1 of the Securities Act was granted.

Trustees of Millwright Regional Council of Ontario Pension Trust Fund v. Celestica Inc., 2012 ONSC 6083: This decision concerns the defendants’ motion to dismiss the claim against them on the basis that the plaintiffs failed to obtain leave within the three year limitation period stipulated s.138.14 of the Ontario Securities Act, and that the plaintiffs’ claim did not disclose a cause of action. The main question before the court was whether it had jurisdiction to relieve against the prescribed limitation period pursuant to the doctrine of special circumstances.

Justice Perell commenced his analysis by acknowledging that he was bound by the decision of the Ontario Court of Appeal in Sharma v. Timminco, which stands for the proposition that s.28 of the Ontario Class Proceedings Act, 1992 did not suspend the limitation period for obtaining leave to commence an action for secondary market misrepresentation under Part XXIII.1 of the OntarioSecurities Act. He also accepted the reality that the plaintiffs’ Part XXIII.1 claims were statute-barred. However, he went on to conclude that, as a matter of statutory interpretation, the limitation period associated with Part XXIII.1 claims was subject to the special circumstances doctrine, that the special circumstances doctrine provided a limited jurisdiction to make orders nunc pro tunc that had the effect of reviving a still-borne and statute-barred cause of action, and that the special circumstances doctrine could be applied to the circumstances of this case.

In coming to these conclusions, Justice Perell expanded the scope of application of the special circumstances doctrine, which had previously been adopted by Justice van Rensburg in Silver v. Imax:

“As I will discuss further below, I agree with Justice Van Rensburg’s ultimate conclusion that the jurisdiction associated with the Latin maxim actus curiae neminem gravabit (“an act of the court shall not prejudice no man”) along with the court’s power to make orders nunc pro tunc can be used to extend the time for bringing a Part XXIII.1 claim, for which leave is required under s. 138.8 of the Ontario Securities Act. However, I do not agree with her that the special circumstances doctrine is not also available in appropriate circumstances.

In the above passage, which is obiter dictum from Imax, Justice Van Rensburg would limit the special circumstances doctrine to circumstances where a plaintiff seeks to amend his or her pleading to add a genuinely new, i.e. different, cause of action that does not require leave to be asserted. Given, as will be explained further below, the special circumstances doctrine considers whether the defendant was aware or ought to have been aware of the likelihood of the claim, the difference of the new claim is not a reason to preclude the availability of the doctrine nor is the factor that leave is required a reason to preclude the special circumstances. The leave requirement just intensifies the operation of the limitation period, and thus a leave requirement is not a reason for precluding the operation of the special circumstances doctrine, assuming it was otherwise available.

Indeed, I would argue that the presence of the factors that Justice Van Rensburg identifies as precluding the availability of the special circumstances are a fortiori factors that justify extending the doctrine if it were necessary to do so. If the special circumstances can be fairly employed in circumstances where a genuinely different cause of action is being added by amendment to the plaintiff’s pleading, then, a fortiori, it should be employed in circumstances where the defendant is confronting a claim that he or she expected to confront if leave were granted.”

Further, Justice Perell held that van Rensberg’s reasoning with respect to the availability of orders nunc pro tunc was equally applicable to orders under the special circumstances doctrine:

“Thus, in Imax, having concluded that the jurisdiction to make orders nunc pro tunc was available, and having concluded earlier in her judgment […] that the case fit within authorities for making a nunc pro tunc order where the plaintiffs' rights have abated through no fault of their own, Justice Van Rensburg made an order nunc pro tunc with the result that the plaintiffs’ action was not statute-barred.

Although the case was decided on the basis of the court’s nunc pro tunc jurisdiction, I think that the Imax case equally could have been decided the same way based on the special circumstances doctrine. I also think that the Imax decision supports my own analysis in the case at bar.

I conclude that the special circumstances doctrine potentially applies to the limitation period in s. 138.14 of the Ontario Securities Act.”

This decision illustrates the continued tug of war with respect to the question of how our courts should approach the prescribed limitation period for commencing secondary market misrepresentation claims in Canada. This is a fascinating and rapidly developing area of class action law. This and other recently issued decisions of the Ontario courts in various proposed securities class actions will help evolve the way securities litigation is prosecuted and defended in Canada over the coming years.

SETTLEMENTS/DISTRIBUTION

Markson v. MBNA Canada Bank, 2012 ONSC 5891 : Proposed settlement of MBNA credit card interest rate class action for $8 million approved. Counsel fees approved at 30% of total recovery.

Sigouin c. Merck & Co. Inc., 2012 QCCS 2014, 2012 QCCS 4732, 2012 QCCS 4733: Settlement of Vioxx class action approved by Quebec Court. Counsel fees of $6 million approved, subject to the right of class counsel to request additional fees once the transaction was completed and the total amount of claims was known.

Association pour la protection des automobilistes inc. c. Toyota Canada inc., 2012 QCCS 4316: The Court ordered the distribution of the remaining settlement funds between the Assistance Fund and the plaintiff association.

Claim Number 2629 c. Canada (Attorney General), 2012 QCCS 4449: More than a decade after the approval of the settlement in the Hepatitis C class action, a class member appealed to the court from the decision of the class action referee who had denied the applicant’s claim for compensation. The referee had denied the applicant’s claim on the basis that there was no evidence that the claimant received a blood transfusion during the class period. The applicant submitted that she had received a blood transfusion during the class period, but records of this transfusion no longer existed as the hospital she attended had closed down in 1997. The court noted that, under the terms of the settlement agreement, in the absence of records establishing blood transfusion, a claimant had to present two independent witnesses confirming the transfusion in order to be entitled to compensation. As the applicant had failed to present such evidence, the Court held that there was no error in the referee’s decision. The referee’s decision was hence confirmed.

THIRD PARTY FINANCING

Allen v. Direct Energy Marketing Ltd.: Third party financing by Bridgepoint Financial Services Limited Partnership Inc. approved by Alberta Court of Queen’s Bench.

DECERTIFICATION/SUSPENSION OF CLASS ACTION

911 Guy Embedded Services Inc. c. Cie de téléphone Bell du Canada, 2012 QCCS 4620: The court allowed the motion for decertification of a class action on the basis that the action was directed at the wrong defendant.

Menard v. Matteo, 2012 QCCS 4899: The court refused to suspend the class action at the request of the defendant, who had been accused in a related criminal matter pertaining to an alleged Ponzi-scheme.

Young v. Dollar Financial Group Inc., 2012 ABQB 601: Defendants’ motion to stay related representative action and class action on the basis of mediation, arbitration and no class action clauses dismissed.

MOTIONS TO DISMISS/STRIKE PLEADINGS/SUMMARY JUDGMENT

Spina v. Shoppers Drug Mart Inc., 2012 ONSC 5563: The plaintiffs brought a motion to certify a proposed class action alleging a myriad of causes of action against the corporate defendants including breach of contract, unjust enrichment, breach of fiduciary duty, breach of a common law duty of good faith, and breach of statutory duties of good faith and fair dealing. The defendants brought a Rule 21 cross-motion, alleging that some of the claims in the proposed class action did not disclose a cause of action. The defendants also opposed certification generally. Due to a number of “odd turns” in the course of the certification hearing, the Rule 21 motion and the certification motion with respect to the cause of action criterion (s.5(1)(a) of the Ontario Class Proceedings Act, 1992) went ahead, but the balance of the certification motion was adjourned to await the outcome of the Rule 21 motion and the determination of the cause of action criterion.

Justice Perell concluded that the plaintiffs satisfied the s.5(1)(a) criterion for certification with respect to the professional allowance claim, the costs recovery fees claims, the budgeting practices claim and the inventory practices claim. He further concluded that it was plain and obvious that the plaintiffs’ claim for rebates, interference with association, breach of fiduciary duty and duty of disclosure were untenable. These claims were struck from the Statement of Claim, without leave to amend. Justice Perell ordered a case conference to schedule the completion of the certification motion.

Frank v. Farlie, Turner & Co., LLC, 2012 ONSC 5519: This decision pertains to a procedural motion in a securities class action. The court struck out claim of punitive damages against directors and officers. In their action against the directors and officers of the company, the plaintiffs had agreed to withdraw their common law claims and only pursue their statutory claims under Part XXIII.1 - the secondary market misrepresentation provisions - of the Ontario Securities Act. They also claimed $20 million in punitive damages. The court held that Part XXIII.1 of the Securities Act did not support a claim for punitive damages and that holding otherwise would allow plaintiffs to circumvent the cap on liability under the Act:

“[…] the argument that persuades me is the officers and directors' argument that it is plain and obvious that a claim for punitive damages supported only be the predicate wrongdoing of a breach of Part XXIII.1 of the Ontario Securities Act is inconsistent with the scheme of Part XXIII.1, which carefully calibrates and achieves a balance between compensation for a director's or officer's contraventions of the Act and discouraging persons from becoming officers and directors.

I agree that allowing a claim for punitive damages would circumvent the policies of Part XXIII.1 of the Act of having caps on the quantum of purely compensatory damages and lifting those caps in exceptional circumstances.

The case at bar demonstrates how both policies of the Act would be circumvented by an award of compensatory damages. Visualize: if the court were to determine that a director contravened Part XXIII.1 of the Act, the director's liability would be capped, but that cap would be lifted if the court were persuaded that the contravention of the Act deserved the condemnation of punitive damages. If the court were to determine that a director contravened Part XXIII.1 knowingly, then the cap on compensatory damages would be lifted and then the exposure to liability of the director would be further extended beyond compensatory damages to add a claim for punitive damages, which are non-compensatory but serve a different purpose.”

The Court also struck out the claims against one defendant – an ex-director of the company – for failure to plead the constituent elements of a cause of action, without leave to amend, and stayed the action against another defendant on the ground that Ontario did not have jurisdiction simpliciter over the claim against them.

Krantz c. Le Precureur General du Quebec et al., 2012 QCCS 4522: Motion to dismiss granted against one defendant and denied against the others in noise pollution class action. 

Morin c. Bell Canada, 2012 QCCS 4191: Defendant’s motion to dismiss certain claims relating to the abusive nature of fees in Bell Canada cancellation fee class action dismissed.

Weldon v. Teck Metals Ltd., 2012 BCSC 1386: Application of the Defendant, Cominco Pension Fund Coordinating Society, for summary judgment in proposed pension plan class action allowed. The plaintiffs’ claim against the Society raised no genuine issue for trial. Application for summary judgment by other defendants was dismissed.

Engler-Stringer c. Montréal (Ville), 2012 QCCS 4413: Motion to dismiss proposed wrongful arrest and detention class action allowed in part, but a portion of the proposed action was allowed to go ahead.

MOTIONS FOR EXAMINATION/CROSS-EXAMINATION

Allstate du Canada, Compagnie D’Assurances c. Agostino, 2012 QCCA 678: Motion to examine respondent on specified topics granted.

 

Jasmin c. Societe des Alcools du Quebec, 2012 QCCS 4686: Defendant’s motion to cross-examine the proposed representative plaintiff prior to the hearing of the authorization motion granted.

OTHER MOTIONS

Asselin c. Fiducie Desjardins inc., 2012 QCCS 4461: The plaintiff applied to expand the class definition to include persons who purchased Desjardins products within an additional three month period. In response, Desjardin sought to introduce evidence challenging the expansion of the class definition. The court determined that the Quebec Rules of Civil Procedure required Desjardins to apply for leave of the court for this evidence to be heard. However, the court determined that it would neither be necessary nor useful to have Desjardins adduce any further evidence. The test to modify a class definition had a low threshold. In order to amend the class definition, the plaintiff simply had to show that the amendment was in the interests of justice and created efficiency by consolidating claims. The plaintiff met this test, and the proposed amendment was hence accepted by the court.  

Frey v. Bell Mobiility Inc., 2012 SKQB 407: The court ordered that the second amended statement of claim be served upon the defendants and filed with the court in accordance with the litigation plan.  In doing so, the Court rejected the notion that the pleadings were not relevant post-certification, or that the common issues will drive the action. Rather, the common issues must be grounded in the pleadings. “They do not become a substitute or replacement.”

Anderson v. Canada (Attorney General), 2012 NLTD(G) 147: The court refused the defendant’s motion to add four proposed defendants to five certified class actions. It held that the applicable Rules of Court required the defendant to establish either the “ought to” or “necessary” branches of the test. The defendant failed to meet either branch and accordingly, there was no discretion under the Rules to add the proposed defendants. Further, the court held that, to the extent that an independent basis to add the proposed defendants was available under the Contributory Negligence Act, doing so would cause substantial prejudice to the plaintiffs. As such, the court refused to exercise its discretion under the legislation.

Lloyd’s Brown c. Lloyd’s Underwriters, 2012 QCCS 5231: The Quebec Superior Court held that, except in a few specific cases (ex. lis pendens, jurisdiction and res judicata), preliminary objections were not eligible prior to the authorization hearing.

Article originally appeared on Branch MacMaster LLP: Barristers & Solicitors (http://www.branchmacmaster.com/).
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