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Friday
Oct292010

October 2010

LIFE ON THE ROAD

I thought you might enjoy this excerpt from Alberta Justice's Litigation Bulletin, courtesy of Alan Meikle Q.C.:

"Embarrassing moment for our out of town consultant, Ward Branch. Ensconced in an unfamiliar hotel in an unfamiliar neighbourhood in West Edmonton, Ward went out on foot in search of supper. Seeing a KFC outlet, he went in to check it out. While standing in line he overheard what he thought was a statement that they were out of a certain cut of chicken, and so as not to waste time and be disappointed, he leaned out of line and asked the young female employee, "Is it true that you have no breasts?" Raucous laughter erupted amongst the waiting customers and our consultant slunk out the door and ended up eating at Macdonald's."

COSTS

Attis v. Ontario (Minister of Health), 2010 ONSC 4508: Court ordered plaintiffs' lawyer to pay costs of failed action personally stating "Mr Legge and his firm have not discharged the burden of showing that they had adequately apprised the plaintiffs of their potential liability for costs awarded to the defendant in the event that the motion for certification, and the appeals therefrom, were unsuccessful. Independently of the burden of proof, I am of the opinion, and find, that the balance of probabilities is that the plaintiffs did not receive sufficient disclosure of these material facts to enable them to make a free, full and informed decision on whether to act as representative plaintiffs in the proposed action. In consequence, and in accordance with the principles I have referred to earlier in these reasons, I am satisfied that Mr Legge and his firm should be responsible for the costs awarded by Winkler R.S.J., by the Court of Appeal and the Supreme Court of Canada, together with the interest accrued to the date of payment and applicable taxes."

The court did commented, but did not rule, on the question of whether class counsel had been correct in his view that giving an indemnity himself was champerty and maintenance. The court stated: "The question whether indemnities provided by class counsel constitute officious meddling in a client's litigation - or, on the other hand, are to be considered as a perfectly legitimate quid pro quo for the prospect of a counsel fee significantly in excess of a quantum meruit - under a procedure designed to enhance access to justice - has not yet to my knowledge been squarely confronted in any reported decision. When that occurs, the effect of sections 28.1(12)(c), (d) and (e) of the Solicitors Act, and section 3.3 (ii) of O. Reg. 195/04, will no doubt need to be considered. So, too, will the important decision of MacKenzie J. in Poulin v. Ford Motor Co. Of Canada, [2007] O.J. No. 4988 (S.C.J.) in which the failure of class counsel to provide an indemnity was considered to be at least a relevant factor in deciding whether to award costs against counsel personally." (at para.101)

Cecile v. Retrofoam of Canada Inc., 2001 ONSC 4541: Court ordered federal government to pay costs of $10,000 to the parties who successfully opposed effort to have federal government's summary judgment motion heard prior to certification. The writer was counsel for one of the successful parties.

CERTIFICATION

Alberta Municipal Retired Police Officers' Mutual Benefit Society v. Alberta 2010 ABQB 458: Pension case denied certification. Court held that case turned on representations to individual pensioners. The court also rejected the suggestion that the Society was an appropriate representative. The court noted that the Society was only created in order to bring the lawsuit. Further there was no reason why the individually named plaintiffs could not be the representatives. The writer was counsel for the Province.

Graham v. Imperial Parking Canada Corp., 2010 ONSC 4982: Parking violation fee class action conditionally certified, but proposed scope was dramatically reduced. Only a misrepresentation claim by owners who paid the fee and who did not park their own cars was certified. The class definition was also constrained to reflect the applicable limitation period. The court declined to certify a punitive damages issue. The court found that the reps were not appropriate since neither of them were owners who did not park their own cars. The Plaintiff had leave to add a proper representative. The court did not apply the defendant's proposed holistic approach stating: "Having regard to the outcome of this motion, this is not the case to discuss the gatekeeping role played by the five certification criteria and whether those criteria should be augmented by a holistic approach that would measure whether it was a "good" class action that should be certified or a "bad" class action that would not serve the purposes of the class proceedings legislation and should not be certified. I simply say that I have not applied a holistic approach. Rather, I have attempted to measure the proposed class action against the various statutorily mandated criteria and I have come to a conclusion that there is an action worthy of certification as a class proceeding albeit a narrower action than proposed by the Plaintiffs." (at para.205-206)

Boyer c. Agence métropolitaine de transport (AMT, )2010 QCCS 4079: Train delay class action certified. The court was not prepared to conclude at this early stage that the published train schedule was not a term of the contract with passengers.

Charland c. Hydro-Québec, 2010 QCCS 3731: Interest rate calculation class action certified. Only the cause of action aspect of the test was contested.

Brown c. Roy, 2010 QCCS 3657: Investment class action certified, save against four defendants for whom the cause of action test was not met. Against one defendant, the court held that the case failed because the representative had no legal claim against that defendant, relying on Bouchard v. Agropur. The court interpreted Bouchard as "establishing the necessity for a cause of action of the representative against each defendant" [translation] (para.184)

McCracken v. Canadian National Railway Co., 2010 ONSC 4520: Certification sought of action alleging unlawful classification of certain employees as managers, thus depriving them of overtime and holiday pay. Defendant brought a parallel Rule 21 motion. The court did certify the case, but struck certain causes of action. Justice Perrell summarized his decision as follows:

"The discussion of the issues will lead to the following main conclusions or orders:

* The Superior Court has subject matter jurisdiction to decide Mr. McCracken's claims for overtime and holiday wages.* The provisions of the Code about overtime and holiday wages are terms of the contracts of employment of the first line supervisors by force of statute.* Mr. McCracken's proposed causes of action for negligence and breach of a duty of good faith should be struck from his statement of claim. The pleadings of the material facts in support of these causes of action should be struck from the pleadings except to the extent that these material facts are pleaded in support of the remaining causes of action.* Mr. McCracken's claim for failure to pay holiday pay should be dismissed.* With qualifications or conditions, Mr. McCracken has satisfied all five criteria for certification of his action as a class proceeding.* One of the qualifications or conditions is that Mr. McCracken's claims for breach of an express or implied contract term should be stayed, but the claims for unjust enrichment and for breach of a contract term implied by force of statute may proceed.* A consequence of the certification and Rule 21 motions is that several common issues will have been determined.* The main common issue and the focus of the common issues trial will be the question: "In accordance with the meaning under s. 167(2) of the Code, of 'employees who are managers or superintendents or exercise manage-ment functions' what are the minimum requirements to be a managerial employee at CN?"

578115 Ontario Inc. v. Sears Canada Inc., 2010 ONSC 4571: Certification of franchise class action. The court was prepared to certify a "good faith" common issue, inter alia stating: "Depending on the nature of the decision of the common issues judge, it may or may not be necessary to engage in further individual inquiries. For example, if the common issues judge decided that the duty of good faith and fair dealing had been met as a result of the language of the franchise agreement itself, or as a result of some other document that was provided to all franchisees, the issue could be determined without individual inquiry. If, on the other hand, the common issues judge were to find that the duty had not been met in that fashion, but that it may have been met in relation to specific franchisees (as Sears appears to suggest on this motion), then trials of appropriate individual issues could be ordered." (para. 48)

The court also certified damages common issues stating "The same is true of common issues, 2(b), 4(c), 7(c) and 8(d), which asks how damages are to be assessed. While individual assessments may be required, the determination of a common method of assessment will advance the claim of every class member."The court also certified a punitive damage issue.

On the representative plaintiff, the court stated that "I respectfully adopt the observation of Lax J. in Fresco v. Canadian Imperial Bank of Commerce (2009), above, at para. 101, that because the evidence on a certification is not directed to the merits of the plaintiff's claim, the plaintiff's credibility should not be assessed on certification except in the clearest of cases. That said, where the court is satisfied that the representative plaintiff is a manifestly unreliable witness, he or she will likely be an unsuitable representative" (at para.74)

On a limitations challenge to the representative plaintiff, the court stated: "It is not obvious on the face of the pleading that the plaintiff's claim is time-barred...There is no evidentiary basis, at this time, on which I could conclude that McKee's claim is time-barred. If the defendants wish to bring a motion for summary judgment, based on the expiry of the limitation period, they may do so after certification." (at para.79)

On the alleged failure to show a loss necessary to complete the cause of action, the court stated: "This has been identified as a common issue and there is no obligation on McKee's at this stage of the proceeding to establish that it suffered a loss." (at para.81)

Although the litigation plan was very thin on the manner in which the individual issues would be managed, the court stated "It is possible to envisage a scenario in which all these questions can be answered and Sears' liability to class determined without the need to make individual inquiries. It is also possible to envisage scenarios where individual inquires may be required concerning disclosure of rebates or the assessment of damages and potential limitations issues. I am satisfied that this proceeding will work as a class action without requiring the plaintiff to demonstrate, at this time, a specific procedure for the resolution of those individual issues." (at para.92)

Mayotte v. Ontario, 2010 ONSC 3765: Certification granted to private independent contractors providing driver's licence and vehicle registration services to the province who claimed under-compensation. The court declined to limit the class definition based on limitations concerns stating: "where the resolution of the limitations issue depends on a factual inquiry such as an inquiry about when the plaintiff knew or ought to have known the facts constituting the action, the limitations issue should not be resolved on the motion for certification" (para.64)

On representative plaintiff, the court stated: "During his cross-examination, Mr. Mayotte was asked some questions about his understanding of the contracts, of the prevalence of the use of the various contracts, of Ministry policies and procedures, and the interrelationship of the operation of the private issuers with Ontario's policies and procedures in providing services to the public. He was also asked questions about the circumstances and positions of the proposed class members and about when he became aware that Ontario was being unfair to the private issuers. Once again, he did not do well in his answers, but, once again, I do not see why his poor performance on these largely factual matters should disqualify him as a representative plaintiff. The common issues trial is largely about what Ontario knew and did about compensating the private issuers. The evidence for the certification motion, and it may be anticipated the evidence for the common issues trial, will not be much about Mr. Mayotte's individual experience but rather it will focus on the collective circumstances of the private issuers and how Ontario treated them collectively. Mr. Mayotte does not have to show tat he is the best fact witness in order to qualify as a representative plaintiff. "

Robitaille c. Mazda Canada inc. 2010 QCCS 2630: Motor vehicle products liability case certified.

Fournier c. Banque Scotia, 2010 QCCS 120: Consumer class action refused certification based on cause of action aspect of the test.

Therrien c. Compagnie de volailles Maxi ltée, 2010 QCCS 1244: Environmental class action certified.

Dell'Aniello c. Vivendi Canada inc. 2010 QCCS 3416: Certification refused in the context of a dispute involving a change of benefits following change in ownership. The court did signal that it would have been prepared to certify a national class given that one of the head offices was in Quebec.

CLASS ACTIONS AT TRIAL

Pearson v. Inco, 2010 ONSC 3790: The Ontario Superior Court of Justice awarded C$36-million to the class from Inco Limited for having contaminated lands with airborne metals The court estimated that the class was comprised of the owners of approximately 7,000 residential properties. The judge found that because there was no intentional intrusion onto the class members' property, the trespass claim should be dismissed. However, the deposit of nickel onto class members' property did fall within the strict liability requirements of a claim in Rylands v. Fletcher and also in private nuisance as a consequence of material physical damage. The judge found that the overwhelming majority of the class members did not know, and ought not to have known, of the material facts until approximately February 15, 2000. Therefore, the cause of action was not barred by the limitation period. The court found that there had been a drop in property values in Port Colborne starting in the year 2000. The trial judge calculated the loss of the value of the properties to average C$4,514 per property. The court held that Inco's conduct in the case did not justify an award of punitive damages.

May v. Saskatchewan, 2010 SKQB 310: On the merits of this certified pension case, the court rejected the class claims. The court found that there was no implied contractual term under which the class was promised CPI indexing or improved health benefits. Nor was it a case warranting a finding of fiduciary duty, as the government was simply following the applicable legislation.

In Payne v. Eagle Ridge Pontiac GMC Ltd., 2009 BCSC 530: The class sought damages for negligent misrepresentation by the motor vehicle vendor. The court concluded that the defendant did not meet the requisite standard of care and was negligent with respect to a misrepresentation in a newspaper advertisement, which suggested that the defendant was providing a cash back incentive: . However, the court left for individual determination (a) the extent to which members of the class relied upon the defendant's representation, and whether their reliance was reasonable; and (b) whether such reliance was to their detriment in that it resulted in damages to them. In a subsequent hearing, the court considered the appropriate measure of damages, 2010 BCSC 1085. The court concluded that, if the plaintiff and the other class members established reliance and loss, they would be entitled to be restored to the position they would have been in if the misrepresentation had not been made, as opposed to in the position they would have been if the misrepresentation had been true (at para. 16). As the cash rebate which was the subject of the misrepresentation was provided free of charge to the class, their damages were therefore limited to their out-of-pocket losses, and would require the class members to establish the difference, if any, between the price paid for their vehicles, and their market value at the date of purchase.

INSURANCE ISSUES

We've been running into limits issues recently in our class cases. Perhaps you have too. To that end, we attach a link to a paper we wrote a couple of years ago on insurance issues in class actions that we hope may be helpful:

http://tinyurl.com/2ek2cw2 <http://tinyurl.com/2ek2cw2>

Cecile v. Retrofoam of Canada, 2010 ONSC X: The court denied the right of an insurer to pull off the defence of a defendant where (1) the insurer failed to produce a copy of its policy although this was required pursuant to a court order, and (2) the court determined that on the available record there was a duty to defend. The writer is counsel for one of the other defendants.

NOTICE

Myette c. Québec (Commission administrative des régimes de retraite & d'assurances), 2010 CarswellQue 9301: Court dispensed with newspaper publication where the entire class was known and the parties could communicate directly with each class member.

EVIDENCE ON CERTIFICATION

Hazan c. Microsoft Canada cie, 2010 QCCS 4214: Microsoft allowed to file a brief and certain evidence in defence of Xbox class action.

Berkovits v. Canon Canada Inc., 2010 ONSC 3952: Court refused motion to strike affidavit prior to the certification hearing, where the court observed: "[14] . . . it is preferable to decide the admissibility of the evidence in the context of all the other evidence, and with due consideration for the issues that are before the court on the certification motion." The court noted that the novelty of the use of the proffered internet evidence would likely result in appeals, thereby delaying the certification hearing.

Adams v. Canadian Tobacco Manufacturers Council, 2010 SKQB 308: Affidavit filed by articled student at Merchant Law Group struck as improper, and contrary to Law Society rules. The information was not purely formal or uncontroverted.

Rainville c. Montréal (Ville de), 2010 QCCS 2690: Court allowed defendant to file affidavit from engineer in proposed flooding class action. The court confirmed that expert evidence can be proffered on certification in appropriate cases, although the proposed affidavit was not an expert report.

THIRD PARTIES

In L. (T.) v. Alberta (Director of Child Welfare) FN 2010 ABQB 262, the court declined to appoint representative third parties prior to the common issues trial where (a) their addition would "unnecessarily protract the proceedings without adding any significant value to the determination of the common issues which have been certified", (b) the liability of the third parties was inherently individualistic, and (c) none of the proposed representatives appeared nor were likely to defend the interest of the proposed third party class. However, the defendant was given the ability to reapply to add the third parties at the individual issues stage. The court also managed any residual limitation concern by stating that "it is reasonable to observe that the Defendants' claims for contribution could only really arise at the individual issues stage of the litigation." The writer is counsel for the Province in this action.

CHICKEN AND EGGS

Cecile v. Retrofoam of Canada Inc., 2010 ONSC 3457: Court ordered that feds must wait until certification in order to bring their motion to strike. Court noted that action would not end if motion successful, as there were other defendants. Court was also concerned with complicating appeal routes. The writer is counsel for one of the defendants and opposed the feds request.

Bellefontaine v. Purdue Frederick Inc., 2010 NSCA 58: In proposed Oxycontin class action, court upheld pre-certification decision dismissing claims of ex juris representative plaintiffs who had not pleaded a real and substantial connection to Nova Scotia. The court held that the appropriateness of a national opt out class could still be considered at the certification motion using the Nova Scotia resident as representative plaintiff.

Best v. Nunatsiavut Government, [2010] 2 C.N.L.R. 1: Application by government to strike on jurisdictional grounds prior to certification. The court allowed the motion to proceed and did strike it.

Sharrock v. Moneyflow Capital Corp., 2010 BCSC 1219: Court ordered that summary judgment application should proceed after certification as (a) set off defence plead was not "clear cut", (b) the proposed defence dealt only with the claims of the one plaintiff, not the class as a whole.

Fairview Donut Inc. v. TDL Group Corp, 2010 ONSC 2845: Court ordered that a summary judgment motion could be heard at the same time as certification given that the motion could dispose of the entire action.

Schneider v. Royal Crown Gold Reserve Inc., 2010 SKQB 382: Court ruled that motion to strike on "frivolous and vexatious" basis should be heard along with certification, as whether there was a proper cause of action was part of the certification test. Laing CJ reflected that he should not have allowed a preliminary motion in Holland v. Sask, given the delays created by that process.

LIMITATIONS

Coulson v. Citigroup Global Markets Canada Inc., 2010 ONSC 1596: Proposed class action dismissed based on limitations. The court commented on how the limitation period should reactivate on dismissal of a class proceeding. The court suggested in obiter that the s.28 suspension would not guard against expiry of an ultimate limitation period. The court stated: "The stricter interpretation of s.28 is that when the limitation period resumes, the calculation of the running of the limitation period resumes at the time when the suspension started - not at the time when the suspension ended. This way of calculating respects or honours ultimate limitation periods and has the effect that limitation periods running from the date of discovery would recommence with some days to run but an ultimate limitation period would be calculated in its normal way with the result that there might not be any days left. Under this methodology, s.28 of the Class Proceedings Act, 1992 has the effect of providing a moratorium stopping the expiry of the limitation period - a window of opportunity to start, if necessary, an individual action or another proposed class proceeding. But once the moratorium is lifted, the effect of s.28 is at an end insofar as an ultimate limitation period is concerned." (This analysis was obiter, as the Plaintiffs were out of time even if the ultimate limitation period was only restarted by the decision refusing certification.) The court did suggest that this effect could be avoided in the appropriate cases however by (1) allowing the substitution of a new plaintiff, (2) staying the operation of the order, (3) appealing the order, or (4) an application by another member to intervene in order to allow an appeal.The court also noted that the extension could be further extended by filing an appeal, but the appeal had to relate to the causes of action raised in the subsequent action. In this case, the appeal was limited in scope, and did not include the claims being advanced in the new litigation. Hence the limitation period had expired.

The court also confirmed that any suspension would apply through a leave to appeal to the SCC, but again only if it the leave application raised the relevant issued (which it did not in this case).

The court went on to consider certification assuming its conclusion was wrong on limitations. The court confirmed that early sellers should be excluded in this securities case. The court also confirmed that the class could only include Ontario residents since the claim only plead the Ontario Securities Act. The court would otherwise have certified the case.

CASE MANAGEMENT OF CERTIFIED ACTIONS

Abdulrahin v. Air France, 2010 ONSC 5173: Court ordered that a legal issue that could avoid the need for a common issues trial be tried in advance of common issues trial.

Robinson v. Rochester Financial Ltd., 2010 ONSC 5116: In this certified class action, the court issued orders:1. appointing a receiver for the defendants;2. invalidating certain opt outs that appeared to have been solicited by someone with a relationship to the defendants;3. Awarding costs in relation to a series of motions.

DISCOVERIES

Sebastian c. English Montreal School Board, 2010 QCCS 3835: In a certified sexual abuse case, court declined to order that rep plaintiff's relatives be examined, but did allow examination of 3 other class members.

Dubé c. Nissan Canada Finance, division de Nissan Canada inc., 2010 QCCS 2653: Court allowed discovery of 5 class members who were referenced in the certification material. Court refused to order that plaintiffs produce a list of class members who had contacted Plaintiff's counsel office, as the court found that defendant should have a better list of all parties with whom they contracted.

Spieser c. Canada (Procureur général), 2010 QCCS 3244: Scope of discovery considered.

PRICE FIXING

Irving Paper Ltd. v. Atofina Chemicals Inc.2010 ONSC 2705: Leave to appeal certification decision denied. The court did find that the public importance requirement was met. Notably, the court stated "I am inclined to the view of the moving parties that the statistical evidence provisions in s. 23 and the aggregate damages provisions in s. 24 cannot be utilized to demonstrate that class-wide injury can be proven as a common issue, nor can those provisions allow a plaintiff to avoid proof of class-wide injury. The Divisional Court in 2038724 Ontario Ltd. v. Quizno's-Canada Restaurant Corp. (2008), 89 O.R. (3d) 252 (S.C.J.) at para. 118 referenced Chadha and stated that "Section 24 of the CPA is procedural in nature, and cannot aid in proving an element of liability." However, the court concluded that the Plaintiff had overcome the restrictions in Chadha stating "Unlike the expert opinion in Chadha, Dr. Beyer analyzed the market and, relying on economic theory, industry reports, pricing information and other empirical evidence, concluded that the alleged conspiracy would have had a common impact on all direct purchaser members of the proposed class. Dr. Beyer also considered whether any of the overcharge would have been passed through to indirect purchasers, concluding that, in at least two major applications of hydrogen peroxide, it would have impacted indirect purchasers. Dr. Beyer did not assume pass through, as did the expert in Chadha, but rather analyzed this issue based on the available evidence and concluded that the extent to which any overcharge was passed through could be determined using a regression analysis."

On the question of evidence, the court stated: "I disagree with the moving parties' submission that Chadha requires a certification judge to evaluate the evidence respecting a methodology and make findings as to whether or not the methodology accords with sound principles of economic science." (at para.61)

The court concluded: "As I previously set out, courts have clearly stated that Chadha remains good law and evidence must be presented on a certification motion to demonstrate that class-wide loss will be provable, whereas the certification judge suggested that Markson and Cassano overtook Chadha and interpreted the phrase "potential liability" in Markson in a different way. Nevertheless, I do not doubt the correctness of her certification order. Evidence was before her on the certification motion and she considered it as well as the defendants' expert evidence challenging it."

In Sun-Rype Products Ltd. v. Archer Daniels Midland Co., 2010 BCSC 922, the court certified a price-fixing case. The court found that it was not plain and obvious that indirect purchasers had no cause of action. On class definition, the court found that "it may be difficult or even impossible for some indirect purchaser class members to self-identify", the court concluded that this should not affect the ability of the plaintiffs to calculate the amount of wrongful gains of the defendants (at para. 81).Given the "unique facts" before the court, such as the widespread use of HFCS in products widely purchased by consumers over such length of time that a large number of BC residents may be said to have purchased them, and the fact that only a small amount of the cost of the final product was made up of the cost of the HFSC, the court concluded that less stringent class definition requirements were warranted. On the battle of the experts, the court stated "[The defendants] often refer to a requirement that the plaintiffs show a "credible and plausible basis" for class-wide harm. This is an incorrect statement of the test. The jurisprudence is clear that what is required is a "credible and plausible methodology" for showing class-wide harm and pass-through. If the methodology takes as inputs certain facts or data (such as, for example, the relevant market) then the court is not in a position at the certification stage to weigh conflicting expert opinion establishing these facts or data.". (at para.163)

The court was also prepared to certify limitations common issues stating: "For the indirect purchasers it is still an open question as to whether there exist certain facts or circumstances such that postponement is a common finding for them, or in the alternative, whether the class can be split into sub-classes, each with their own common limitation circumstances. At this point, I am not prepared to say that the limitations question is not a common or collective issue. The defendants' submission that the bulk of the class (the indirect purchasers) has no cause of action irrespective of how the other common issues are determined cannot stand in my view " (at para.182)

The court rejected that there was a conflict of interest between direct and indirect purchasers at this stage stating "The only parties at this time that have an interest in having the direct and indirect purchasers in a conflict of interest are the defendants....At a later stage, the direct and indirect purchasers may be in a conflict when the time comes to divide the money (if a court determines it is to be paid), but that time is not now. Both "prisoners" at this point simply wish to help each other "escape"."

On the representative plaintiff, the court stated: "While recruitment by counsel is not necessarily fatal, it is a factor to be considered in determining whether the plaintiff has the necessary interest, independence and incentive to fulfill his or her duties to the class. It is also a factor to be considered in assessing whether there is indeed an underlying class with an actual grievance, as opposed to an issue "identified by the industry of counsel" (at para.199).

In rejecting the defendants' "air of reality" submission flowing out of the fact that there was no complaint from a major industry segment, the court stated: " Firstly, evidence of complaints of other class members, while adjudged to be necessary for an air of reality to have existed in both Hollick and Samos, is not an appropriate general test for all class actions. The air of reality test must have a relation to the causes of action pleaded. For example, if the cause of action is nuisance, as it was in Hollick, or economic intimidation and misrepresentation, as it was in Samos, then the air of reality test may very well be complaints from putative class members. However, this is not a claim in nuisance. The conspiracy in this case is alleged to have been secret. Thus it is not surprising that there is no evidence of complaints having been made. It seems to me from an overview of the jurisprudence in the area of price-fixing class actions that involve indirect purchasers, that the required "air of reality" for these special types of class action certifications consists of a credible and plausible methodology for establishing pass-through of losses to the indirect purchasers, a credible and plausible methodology for calculating the defendants' alleged wrongful gains, and pleaded facts which, if later judged to be true, would establish the defendants' wrongful conduct and would provide sufficient data such that these methodologies would work. I have found all of these to be present in this case. I note that this is not the only requirement for certification, the requirements of the CPA must still be met." (paras.209-210)

STAYS

Sun-Rype Products Ltd. v. Archer Daniels Midland Co., 2010 BCSC 1210: The court had to consider the timing of notice of a settlement made with certain defendants pending appeals of the settlement and certification. One of the non-settling defendants argued that notice should await disposition of the appeals. The court disagreed, noting that there was no likelihood of irreparable harm to the non-settling defendants arising from the distribution of the notice. Interestingly, the defendants' argument at certification that the data available to make claims was aging worked against the defendants at this stage, as the court noted the class would be well served with prompt notice.

SETTLEMENTS

Richard v. British Columbia, 2010 BCSC 773: Court approved settlement of abuse class action. The writer was co-counsel for the defendant. The court approved a $10,000 payment to the representative plaintiff to compensate him for "the extraordinary efforts made on behalf of the class" (at p.48). The court appointed supernumerary judges to be the claims adjudicators.

Main v. Cadbury Schweppes plc, 2010 BCSC 1302, Roy c. Cadbury Adams Canada inc.2010 QCCS 4453: Fees approved in BC and Quebec arms of chocolate settlement. Writer is co-counsel for the class in B.C.

Parsons v. Coast Capital Savings Credit Union, 2010 BCCA 311: The issue of whether any additional payments should be made to representative plaintiffs in connection with settlement of class actions was considered. An award of $10,000 was sought on behalf of the representative plaintiff, but not allowed on settlement approval. On appeal, Madam Justice Saunders reviewed the jurisprudence, which she found pitted two principles against one another: the restitutionary principle that service on behalf of others is compensable and the principle eschewing potential conflict of interest situations. She concluded that it was not necessary for the representative plaintiff to provide services of "special significance beyond the usual responsibilities of the Act' in order to justify a separate award for the representative plaintiff, and, that a "modest award" could be made where the representative plaintiff has fulfilled his or her duties, including attendance for examination for discoveries and providing instructions (at para. 20). In support of this conclusion, Madam Justice Saunders pointed to the "exposure to costs assumed by the representative plaintiff in commencing the action", which she also acknowledged was "mitigated upon certification" as B.C. is a "no costs" regime. Madam Justice Saunders approved a payment of $3,500 to the representative plaintiff on the basis that (a) $5,000 was the highest award made to a representative plaintiff in B.C. thus far and (b) there was no affidavit evidence before the Court from the plaintiff showing the amount of time she spent acting as representative plaintiff.

In MacKinnon v. National Money Mart Co., 2010 BSCS 1008, class counsel submitted affidavits from each of the two representative plaintiffs in support of requests for additional payments to each of them. The affidavits provided detailed information as to the involvement of each of them in the litigation, and their personal concerns with respect to exposure to costs. A supporting affidavit from class counsel indicating that the representative plaintiffs helped shape the settlement agreement "in a significant way", coupled with the fact that the litigation "was the vanguard of the class action payday loan litigation and was pursued vigorously for over seven years" (at para. 59) persuaded the Court to award $7,500 to each of the representative plaintiffs.

Fischer v. IG Investment Management Ltd., 2010 ONSC 5132: Market timing class action settlement approved even though earlier motion for certification had been rejected. The court stated "Where certification is sought for the purposes of settlement, all the criteriafor certification must still be met. However, compliance with the certification criteria is not as strictly required because of the different circumstances associated with settlements...In the context of the proposed settlement, I am satisfied that the preferable procedure criterion of s. 5 (1)(d) of the Act has now been satisfied. The existence of settlement changes the nature of the preferable procedure analysis" (at para.10)

Stieber v. Joseph Élie ltée, 2009 QCCS 2498: Case alleging short changing on oil deliveries settled. Court noted that cheques to active customers would be sent directly without the need to make a claim. Contingency fee of 20% approved, 12.5% of which was coming straight from defendant.

Zopf v. Burger, 2010 ONSC 30000: Settlement of investment class action that was essentially a follow on to the earlier certification in Zopf v. Soberman Tessis Inc., [2009] O.J. No. 1104 (Ont. S.C.J.). A new action was filed against different parties with assets. A fee of 16.7% (a 2.5X multiplier) equivalent to $1.75M was approved.

Ontario Hospital Assn. v. Summers, 2010 ONSC 4497: Defendant's class proceeding certified and settled allowing for distribution of proceeds of Mutual Life demutualization.

Kotai v. "Queen of the North" (The), 2010 BCSC 1180: Ferry sinking class action settled for payment of $354,600 to the class members. Class counsel sought disbursements from this fund of $153g, and fees of $60g.

McLaren v. LG Electronics Canada Inc., 2010 ONSC 4710 and 2010 ONSC 5090: Case settled on the basis of the provision of an extended warranty on all impugned refrigerators. Class members were not required to release property damage claims. Legal fees of $250,000 all inclusive were approved.

Toronto District School Board v. Field, 2010 ONSC 3865. Pension surplus case certified. Multiplier of 2 approved.

Chrysler retiree benefits class action settled: http://bit.ly/dxwZmx <http://bit.ly/dxwZmx>

Bibaud c. Banque Nationale du Canada 2010 QCCS 2857: Service fee class action settled

Boulerice c. Bell Canada 2010 QCCS 2922: Late fee class action settled.

Garceau c. Télébec, s.e.c. 2010 QCCS 2824: Internet service interruption class action settled.

Dallaire c. Eli Lilly Canada inc. 2010 QCCS 2760: Zyprexa class action settled

COMMUNICATION WITH CLASS MEMBERS

White v. IKO Industries Ltd., 2010 ONSC 3920: Defendant was communicating with class members in an effort to settle claims in the face of a pending class action. The Defendant agreed that it should provide notice of the class action, but there was a dispute about timing and content.

On timing the court stated: "The most objective and practical time to provide communication about class proceedings is when an individual has submitted the warranty claim, along with the required documentation and is at the stage of deciding whether to accept or reject settlement of the claim. That said, I think there is merit to class counsel's concern that in the face of a dangling cheque, many homeowners may not stop to consider the significance of the class action. In my view that concern can be addressed by a proviso in the notice that IKO cannot complete any exchange of the settlement amount and the release until at least seven (7) days have passed after the claimant has received the notice. This allows the recipient reasonable time to obtain legal advice and/or inquire about the class action before the settlement can be finalized."

The court also addressed certain content issues stating: "A fair compromise is to state that claimants who accept the offer "may" give up their right to participate in the class action....A reasonable compromise will advise the claimant s/he may obtain legal advice or obtain information from class counsel, provided the notice includes a toll free line for service in English or French."

RES JUDICATA

In Ouimet c. Québec (Caisse de dépôt & placement) 2010 QCCA 1222, the Quebec Court of Appeal confirmed that the fact that the proposed class were all part of another class action against other parties did not prevent a class action against a different defendant, particularly where the class was smaller than the class certified in the first case.

INJUNCTIVE RELIEF PRE-CERTIFICATION

Fradenburgh v. Ontario Lottery & Gaming Corp., 2010 ONSC 5387: Ontario lottery class action denied injunction to force new draws pre-trial: http://bit.ly/cdO8R6 <http://bit.ly/cdO8R6> . The court stated: "There are a number of legal reasons, described below, why the plaintiff's motion will be dismissed, but over-riding these there is a very simple reason - it is just not a fair and workable solution. The obvious and sad truth is that once people check their lottery tickets they throw away their losing tickets. The evidence suggests that somewhere around 95% of ticket holders will have thrown away their tickets by now, some three months after the draw. Two of the three number combinations on the tickets are "quick-picks" (i.e., random computer-generated numbers), so it is highly unlikely that people will remember all of their numbers. Under the plaintiff's proposal, only 5% of ticket holders will still have their tickets and 95% either will not know their ticket numbers, or cannot prove their numbers, or both. Anyone can see that a "draw" conducted on this basis would be unfair." The court continued: "The plaintiff seeks immediate class-wide relief in an action that has not yet been certified as a class action. Although it is conceivable that a court could grant an injunction or mandatory order in a proposed class action prior to certification, pursuant to s. 12 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 ("C.P.A."), it would be extraordinary and unprecedented relief."

ARBITRATION

Lachapelle Pontiac Buick GMC ltee c. General Motors du Canada ltee 2010 QCCS 1126: Quebec court refused to give effect to an arbitration clause as it found that arbitral tribunals did not have the power to grant the requested injunctive relief.

Rhodes v. Compagnie Amway Canada, 2010 FC 724: The Federal Court refused to stay an action despite the existence of a class action waiver clause on the basis that any controversy concerning the unenforceability or inapplicability of the limited class action waiver was to be decided by the courts. Further, the court stated that it could depart from the rule of systematic referral to arbitration if there was challenge to the arbitrator's jurisdiction based solely on a question of law.

MOTIONS TO STRIKE

Logan v. Demartech, 2010 BCSC 481: The Third Party Health Canada brought an application to strike and dismiss the Amended Third Party Notice filed by the defendants. The reasons for judgment indicate that "there has not yet been a certification application", so it appears that no issue was taken by the Plaintiff as to whether or not the application was properly brought before certification. The Plaintiff claimed for damages arising from the use of an injectable product which was alleged had serious side effects. Although the Plaintiff did not advance any direct claims against Health Canada, the Plaintiff alleged she would not have agreed to being injected with the product had the product not been available in Canada as a licensed medical device. In their Third Party Notice, the defendants argued that, by licensing the product, Health Canada represented it met the safety requirements set out in the food and Drugs Act ("FDA") and the Medical Devices Regulations (the "Regulations"). The Third Party argued it did not owe a duty of care to the plaintiff in exercising regulatory and licensing powers pursuant to the FDA and the regulations thereunder. The Court agreed, and noted that, in the absence of liability to the plaintiff, a declaration to the extent to which Health Canada contributed to the plaintiff's loss would be of no practical utility because the remaining defendants would be jointly and severally liable for the whole of the plaintiff's loss (at para. 24). The application was dismissed with liberty to apply with respect to costs.

Harris v. GlaxoSmithKline Inc., 2010 ONSC 2326: Application to strike claim relating to alleged illegal delay of entry of generic drugs to market granted.

Mackie v. Toronto (City), 2010 ONSC 3801: Application to strike claim based on failure to repair rental units. Main claim fell as it was within jurisdiction of an administrative tribunal. Court found that new s.46.1 of the Human Rights Act did not allow the discrimination claim to proceed, as the new right to bring a civil claim could only be corollary to another claim. It did not create jurisdiction in the superior courts for a pure discrimination claim.

Pellan c. Québec (Sous-ministre du Revenu) 2010 QCCS 3404: Tax class action struck on basis that Superior Court did not have jurisdiction.

Association pour la défense des droits des défunts & familles cimetière Notre-Dame-des-Neiges c. Notre-Dame-de-Montréal (Fabrique de) 2010 QCCS 2221: Court allowed applications to strike certain allegations in certification motion materials where they were be prejudicial.

APPEALS

Fresco v. CIBC, 2010 ONSC 4734 The Divisional Court upheld the decision refusing certification of this overtime class action. The court held that the legality of the Bank's overtime policy did not yield a useful common issue, since the true issue was simply whether there was in fact overtime that was unpaid. The court found that there was insufficient evidence to support a systemic practice of not paying overtime. The court distinguished Fulawka (another certified overtime case) on the basis that the class was narrower and the court in that case did find the minimum evidentiary standard of a systemic practice was met. There was also evidence in Fulawka that the plaintiff has not been paid for overtime because of the overarching written policy requiring pre-approval. In Fresco, the plaintiff was not even aware of the policy. Further, the CIBC policy allowed post-overtime approval. A common issue as to record-keeping practices failed as (1) there was no evidence of a systemic failing, and (2) the issue would not materially advance the overtime claim. The proposed contractual issue also failed, as it appeared that there was little dispute about the terms; rather the issue is whether the terms were respected. There was no common issue on aggregate damages, as it was clear that damages would have to be considered on a case by case basis. The court also upheld the $525,000 costs order.

In 2038724 Ontario Ltd. v Quizno's Canada Restaurant Corp, 2010 ONCA 466, the Ontario Court of Appeal affirmed a conditional certification of an action on behalf of all Canadian Quizno's franchisees claiming the defendants charged them exorbitant prices for food and other supplies for use in their restaurants. The motions judge had determined the Statement of Claim disclosed causes of action for breach of the Competition Act, R.S.C. 1985, c. C-34, breach of contract, and civil conspiracy, and that the plaintiffs fulfilled the requirements of s. 5(1)(b) of the Class Proceedings Act [footnote S.O. 1992, c. 6] by showing the existence of an identifiable class. Nonetheless, the motion judge refused certification finding that the plaintiffs failed to show that their damages, if any, could be proven in the aggregate on a class wide basis and that this effectively removed any utility in proceeding with determination of other common issues on a class basis. In affirming the Divisional Court's order, the Court of Appeal held that "[38] . . . the majority correctly concluded that the focus of the motion judge's reasons was on the issue of damages, which he found overwhelmed the remaining proposed common issues. While he referred to the other issues in passing, there was effectively no independent analysis of those issues by the motion judge, which constitutes the kind of error that attracts the intervention of an appellate court." The Court of Appeal observed that s. 61(1) of the Competition Act prohibits price maintenance. The Court explained that "[43] . . . for the franchisees to succeed in their Competition Act claim, s. 61(1) must operate in combination with s. 36(1) of the Act, which requires proof of loss or damage. That said, it does not detract from the conclusion that a breach of s. 61 is itself an appropriate common issue, which advances the litigation." Citing Cassano v. The Toronto Dominion Bank [footnote: (2007), 87 O.R. (3d) 401 (C.A.)] the Court found that the issue of whether damages can be aggregated "[56] . . . is an issue to be decided by the common issues trial judge [pursuant to ss. 23 and 24 of the Class Proceedings Act]." The Court added that "[59] . . . s. 25 of the Class Proceedings Act provides a procedural code for the determination of individual issues as an adjunct to a class proceeding. It is clear that the intent of the act is to accommodate both common issues and individual issues that may arise in a class proceeding."

Option Consommateurs v. British Airways, p.l.c., 2010 QCCA 1134: Leave to appeal decision declining to strike price fixing case on jurisdictional grounds prior to certification rejected.

Barbour v. University of British Columbia, S.C.C., McLachlin C.J., Abella & Cromwell JJ., Doc. 33642, June 24, 2010: Plaintiffs' application for leave to appeal to Supreme Court of Canada dismissed, with costs.

Vermette c. General Motors of Canada Ltd.,2010 QCCA 1021: Appeal of refusal to strike parts of certified claim dismissed.

Buffalo v. Samson Cree Nation, 2010 FCA 165: Court upheld denial of certification

Menon v. Regional Health Authority 7, 2010 CarswellNB 328 (C.A.): Court denied leave to appeal an interlocutory evidentiary motion, holding that the applicant must wait until to see whether the matter is certified before appealing to prevent delay of the certification motion by a series of interlocutory appeals

ADMINISTRATION

Fontaine v. Canada, 2010 BCSC 1208: Court found that in assessing the reasonableness of the fees payable by IAP claimants under the Indian Residential Schools settlement, adjudicators could consider the hours incurred by the lawyers on individual claims prior to the earlier 2005 cut off used for payment of class counsel fees, as well as the fact that the lawyers had already been paid for that time.

AMENDMENTS

Langevin c. Bouchard 2010 QCCS 3417: Court approves certain amendments, but did not allow the individual plaintiff to be replaced by a public interest group because certain of the remedies sought were only available to natural persons.

Barrette c. Ciment St-Laurent inc. 2010 QCCA 831: Court refused request to expand class post-merits judgment.

Picard c. Air Canada, 2010 QCCS 2940: Addition of additional representative plaintiffs allowed.

Addition of new defendants allowed: Ouelett c. Hitachi Ltd. 2010 QCCS 261 and Jacques c. Imperial Oil Ltd. 2010 QCCS 2612. In Jacques, the court held that it only needed to examine the issue of cause of action in relation to the new defendants, since the other requirements were already established in the initial certification.

MISC

SSQ, société d'assurance-vie inc. c. Caron 2010 QCCS 3379: Confidentiality request over material filed by Defendant in opposition to certification rejected.

Rodriguez c. Microsoft Corp. 2010 QCCS 2906: Case dismissed because of failure to have a lawyer representing the class.

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Ward Branch, PartnerBranch MacMaster LLP1410 - 777 Hornby StreetVancouver, B.C. V6Z 1S4P: 604.654.2966 | F: 604.684.3429www.branchmacmaster.com