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Canadian Class Actions Monitor

Beaten to the Punch: Ontario Court of Appeal considers carriage motion in Mancinelli v Barrick Gold

Posted in Class Actions

In Ontario, as in other provinces, only one class action may be certified in the same jurisdiction representing the same class in relation to the same claim.[1] Where rival actions exist, the proposed representative plaintiffs must bring a “carriage motion” to determine the action that will proceed on behalf of all class members and the actions that will be stayed or consolidated.

A recent Ontario Court of Appeal decision, Mancinelli v Barrick Gold, 2016 ONCA 571, considers which group of law firms should have carriage over a multi-billion dollar securities class action that, if certified, would become one of the largest in Canadian history.[2] In so doing, the Court discussed a non-exhaustive list of criteria courts should consider in a carriage motion, and included a new consideration: proposed fee arrangements between class counsel and the plaintiff. Continue Reading

Cutting Ties: Supreme Court of Canada lays foundation for judges to roam when managing national class actions

Posted in Class Actions
Michael RosenbergCaroline Zayid

The Supreme Court of Canada recently released its decision in Endean v. British Columbia and the companion case of Parsons v. Ontario: 2016 SCC 42.[1]  The Court’s decision articulates a framework for the superior courts to conduct an extraterritorial hearing in the interest of managing a national class action.  Yet the Court left many thorny issues untouched.  Because this was a case in which personal and subject matter jurisdiction were conceded, there was no need to tackle the difficult questions raised by decisions like Meeking v. Cash Store Inc., 2013 MBCA 81.[2]  We will have to wait for clarity on the circumstances in which deference is owed to the result of a class proceeding in another jurisdiction. Nor was this a case in which the court’s coercive powers were required, as the motion at issue was to proceed on a paper record. Rather, Endean and Parsons are important because they offer a toolkit with which to manage the scale, complexity, and geographic realities of pan-Canadian proceedings.


Concurrent class proceedings were certified in Ontario, B.C., and Quebec in respect of claims by people who contracted Hepatitis C from the Canadian blood supply between January 1, 1986 and July 1, 1990. The B.C. and Quebec proceedings included residents of those provinces, while the Ontario proceeding included all other claimants.  A national settlement was reached on June 15, 1999.  In order to effect this settlement, the governments of the three territories and all of the provinces except British Columbia and Quebec attorned to the jurisdiction of the Ontario courts, and they were included as defendants in the Ontario action. Continue Reading

Think Fee Agreements are Privileged? Think Again: Alberta Court Affirms Privilege Over Fee Agreements More Easily Overcome in Class Proceedings

Posted in Class Actions
Beverly MaSara Albert

In LC v Alberta (“LC”), the Alberta Court of Queen’s Bench considered a defendant’s application for the production of contingency fee agreements.[1]  In his reasons, Graesser J. reinforced that privilege over retainer agreements in a class proceeding is more easily overcome than in other types of proceedings.


Relevant Facts

Following certification of the class proceeding in LC, counsel for the representative plaintiff, Mr. Lee (“Lee”), brought an application for advance costs in the amount of $1.7 million.[2]  In response to the advance costs application, the defendant, Her Majesty the Queen (“HMQ”), sought and applied for the production of all contingency fee agreements.[3] Continue Reading

Third time’s the most inefficient: Another call for national class actions reform in McKay v. Air Canada, 2016 BCSC 1671

Posted in Class Actions
Patrick Williams

McKay is one of three potential class actions brought in B.C., Ontario, and Quebec respectively, arising from cargo fees charged by certain airlines. Counsel for the proposed class representative in each action worked co-operatively and focused on the Ontario action, which was certified in Airia Brands v. Air Canada, 2015 ONSC 5352. The Ontario Superior Court subsequently approved a distribution protocol respecting settlement funds. Counsel for the proposed class representative in McKay then sought the B.C. Supreme Court’s approval of a similar distribution order.

The application was heard by Chief Justice Hinkson, who began his reasons for judgment with a review of Canada’s national class actions regime—or lack thereof. Chief Justice Hinkson found that the existence of three parallel actions in B.C., Ontario, and Quebec merely duplicated each other, occupied the time of three courts, and created additional expenses for parties forced to litigate in different provinces. Continue Reading

News from Quebec on Joint Experts: Superior Court says no to an application for the appointment of a single expert regarding the assessment of damages subject to collective recovery in a Class Action

Posted in Class Actions

In Masella v. Toronto-Dominion Bank Financial Group, 2016 QCCS 4450 (“Masella”), the Quebec Superior Court (Justice David Collier) ruled on an application by the class’ representative plaintiff to appoint a joint expert to assess the total amount of compensatory and punitive damages allegedly owed by the defendant following an increase of the variable annual interest rate (VAIR) on the members’ home equity lines of credit (HELOCs). The Court agreed with the defendant and dismissed the application, allowing each party to retain its own expert(s) regarding the calculation of the alleged damages.


The class action was authorized (certified) on January 15, 2016 by the Quebec Court of Appeal (reversing the Superior Court). One of the common questions identified by the Quebec Court of Appeal was whether the alleged damages should be subject to collective recovery, as opposed to individual recovery. The originating application was then filed by the representative plaintiff on April 13, 2016.

On July 29, 2016, an application to appoint a joint expert was filed by the representative plaintiff as a preliminary motion, to be heard during a case management conference where the parties would also argue before the judge regarding the setting of the case protocol (litigation timetable). The application thus came at an early stage of the proceedings: after the originating application had been filed, but before a case protocol had been set by the parties and accepted by the Court.

The application for the appointment of a joint expert was based upon paragraph 158(2) of the new Code of Civil Procedure (“CCP”) in force in Québec since January 1, 2016, which provides that the Court may appoint a joint expert where the parties fail to agree on joint expert evidence.

Counsel for the representative plaintiff argued that the appointment of a joint expert would be in the interest of judicial economy, and that it would help the Court determine whether collective recovery was possible. The conclusions sought by the representative plaintiff were consistent with a judicial culture that is increasingly favourable to the appointment of joint experts in Quebec following the enactment of the new CCP.

Three-Part Test for Appointment of Joint Experts

Interpreting para. 158(2) of the CCP, the Court determined that it can appoint a joint expert “if it considers that joint evidence satisfies the reasonable requirements of the case (the principle of proportionality), and such evidence is conducive to the efficient resolution of the dispute – without, however, jeopardizing the rights of the parties to make their case.”

The Court thus applied a three-pronged test for the appointment of joint experts on the basis of para. 158(2) of the CCP:

  • proportionality,
  • efficiency, and
  • respect for the parties’ rights.

Proportionality is assessed on the basis of what the Court labeled as the reasonable requirements of the case.

Applying the three-pronged test, the Court concluded that the appointment of a joint expert was not warranted under the circumstances. Since it was not clear at this stage that collective recovery was possible or appropriate, and thus that any expertise would be needed at all on the issue, the Court concluded it would not be reasonable nor useful to order the defendant to participate in a joint expertise. Such an appointment would not be consistent with the principle of proportionality, nor conducive to the efficient resolution of the dispute.


The Masella ruling is significant for the three-pronged test it proposes, which introduces reasonableness as the standard by which proportionality is assessed.

The ruling is also noteworthy for the circumstances in which the three-pronged test is applied, i.e. at an early stage of a class action, when the recovery mode has yet to be determined.

Class Actions against the Government – Key Lessons from the Ontario Superior Court’s decision of Johnson v Ontario, 2016 ONSC 5314

Posted in Class Actions
Brandon Mattalo

On August 23, 2016, Justice Grace released his decision, Johnson v. Ontario,[1] certifying a class of inmates in their action against the Ontario Government. The plaintiff class claims against the Ontario Government for systemic negligence, assault, battery, breaches of fiduciary duty and breaches of sections 7 and 12 of the Canadian Charter of Rights and Freedoms. Johnson is one of a long line of institutional abuse cases certified in Canada and has implications for class actions against governments alleging systemic wrongdoings.

The action arises out of facts reminisce of HBO’s latest series “The Night Of”, a crime drama that explores the institutional issues within the United States’ prison system. Instead of Rikers Island in New York, Johnson deals with the Elgin-Middlesex Detention Centre (“EMDC”) in London, Ontario. The representative plaintiff, Mr. Johnson, alleges that he was subject to threats, assaults, inadequate medical attention and overcrowding while housed at EMDC.

Justice Grace certified the issues of systemic negligence and breaches of ss. 7 and 12 of the Charter, since these issues met all of the requirements of section 5(1) of the Class Proceedings Act (“CPA”).[2]

The decision has two important lessons for class actions brought against government institutions.

Implementations of government policy decisions are justiciable

Generally, policy decisions by a government entity are not justiciable and cannot give rise to a tort liability.[3] However, this limit does not apply when the government has acted irrationally or in bad faith.

In Johnson, the Province argued that the Plaintiffs did not disclose a reasonable cause of action in negligence, since they were ultimately attacking a policy decision regarding the funding of prisons in Ontario. The Court disagreed, and instead found that the pleadings challenged the operational implementation of policies in Ontario, and not the policies themselves.[4]

There is a fine line between a bona fide policy decision, and the implementation of that policy decision. Justice Grace in Johnson referred to a decision of Justice Cory where the distinction was illustrated:

For example, at a high level there may be a policy decision concerning the inspection of lighthouses.  If the policy decision is made that there is such a pressing need to maintain air safety by the construction of additional airport facilities with the result that no funds can be made available for lighthouse inspection, then this would constitute a bona fide exercise of discretion that would be unassailable.  Should then a lighthouse beacon be extinguished as a result of the lack of inspection and a shipwreck ensue no liability can be placed upon the government agency…

On the other hand, if a decision is made to inspect lighthouse facilities the system of inspections must be reasonable and they must be made properly…Thus, once the policy decision to inspect has been made, the Court may review the scheme of inspection to ensure it is reasonable and has been reasonably carried out in light of all the circumstances, including the availability of funds, to determine whether the government agency has met the requisite standard of care.[5]

When bringing an action against the government, careful Plaintiff’s counsel can plead around this issue by ensuring that their claim relates to systemic issues involving the implementation of policy decisions.

Systemic wrongdoings can be common to the class even if individual circumstances of the class vary widely

The core issue the certification stage is whether the class can truly be said to have issues in common. The plaintiffs usually highlight the cohesiveness of the group, while the defendants show how many subdivisions and differences there are between the class members. Section 1(1) of the CPA makes clear that “common but not necessarily identical” issues of fact or law will be sufficient for there to be a certifiable common issue.

In Johnson, the Province argued that the inmates did not have issues in common since all of their experiences would have been different, especially since they were separated into different units within the EMDC, the range of complaints was wide and the time period of the defined class was over three years.

The Court held that while there are some cases where that argument succeeded that there was a “lengthy list of cases at their disposal which have concluded that issues of systemic wrongdoing are common even though the individual circumstances of the class members may have varied widely”.[6] Although the Court agreed that the “permutations and combinations of systemic negligence cases seem almost infinite”, the liability questions in this case were broad ones which raised issues that were common to the class.

This result is consistent with the long line of institutional abuse cases that have been certified in Canada.[7] Johnson follows this authority in confirming that allegations of systemic negligence, even if that negligence may have impacted class members differently, are often suitable for certification.

What does this all mean?

Johnson confirms two important issues in respect of class actions brought against government institutions:

  1. implementations of government policy issues may be justiciable so long as they are pleaded properly; and
  2. systemic wrongdoings can be considered common issues even if individual circumstances of the class vary widely.

[1] Johnson v Ontario, 2016 ONSC 5314 (CanLii) [Johnson].

[2] Class Proceedings Act, 1992, S.O. 1992, c. 6.

[3] R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at para. 72 (CanLII).

[4] Johnson, supra note 1 at paras. 33-35.

[5] Just v. British Columbia, 1989 CanLII 16 (SCC) at 1242-1243.

[6] Johnson, supra note 1 at para. 103.

[7] See e.x. Rumley v. British Columbia, 2001 SCC 69 (CanLII); See also Cloud v. Canada (Attorney General), 2004 CanLII 45444 (ON CA).

Class Action Filed in Relation to BC’s Foreign Buyer Tax

Posted in Class Actions
Alexandra Cocks

A proposed class action has been filed a mere six weeks after the BC government introduced amendments to the Property Transfer Tax Act to impose an additional 15% tax on the purchase of residential properties by foreign entities in the Greater Vancouver Regional District (the “Foreign Buyer Property Tax”).  This legislation, and the issue of foreign buyers in Vancouver, has received significant news coverage in the local and national media. This case is a prime example of a company/entity being at a high risk of being a class action target where it has received significant publicity/news coverage. Continue Reading

Silvercorp Metals: Ontario Court of Appeal confirms robust test for leave in securities class actions and affirms costs award

Posted in Appeals, Certification, Class Actions, Securities
Dana PeeblesMiranda LamPaul Davis

Silvercorp Metals: Ontario Court of Appeal confirms robust test for leave in securities class actions and affirms costs award[1]

The Ontario Court of Appeal recently released an important decision in a securities class action that (1) summarized the law with respect to the “robust” statutory screening mechanism which plaintiff investors must meet, (2) affirmed a significant costs award against the unsuccessful investor. On August 24, 2016, the Ontario Court of Appeal released its decision in Mask v. Silvercorp Metals Inc. (“Silvercorp”),[2] an appeal from a refusal to grant leave to proceed to a secondary market class action. In the wake of the Supreme Court’s recent[3] decisions[4] in secondary market cases, the unanimous decision dismissing the appeal confirms that the robust screening mechanism of a leave to proceed motion permits weighing of competing factual and expert evidence. It also confirms that a motion judge’s analysis of that evidence will be subject to appellate deference, and that unsuccessful plaintiffs on leave to proceed motions may, like unsuccessful defendants, face significant costs awards.

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When Will a Court Lift a Statutory Stay to Permit A Class Action to Proceed?

Posted in Class Actions
Kelli McAllister

Both the Bankruptcy and Insolvency Act (“BIA”)[1] and the Companies’ Creditors Arrangement Act[2] stay actions and remedies as against debtors. However, creditors may apply to lift the stay to pursue a proposed class action. The recent decision of the Alberta Court of Queen’s Bench in Da Silva v River Run Vistas Corporation (“Da Silva”)[3] considered the framework for when a court may lift such a statutory stay so that a proposed class action may proceed.


In Da Silva, the plaintiff for a proposed class action brought an application to lift a BIA stay in respect of two bankrupt defendants who were the directors, officers, shareholders, and operating minds of corporations promoting and developing a real estate development project (the “Project”) in Alberta. The plaintiffs invested $14 million, secured by a first mortgage, in the Project based on representations made in 2007 and 2009. In 2009-2010, after an initial default, investors were told that their investments were still secured, based on an appraisal of the lands of between $11 million and $13 million. The plaintiffs alleged that the representations were made fraudulently based on false appraisals. By 2011, there was no progress on the development of the Project and by 2015, the lands were valued at $623,230. The investors lost substantially all of their investment in the Project.[4]

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Access to Justice in “Manageability” of Individual Issues: Appeal Dismissed in Fantl v Transamerica Life Canada

Posted in Case Comments, Certification, Class Actions
Breanna Needham

In the recent decision of Fantl v Transamerica Life Canada (“Fantl”)[1], the Ontario Court of Appeal unanimously dismissed the appeal of the Divisional Court’s decision and confirmed the certification of class claims in negligent misrepresentation, noting that it was time for class actions to “deliver on their promise of access to justice”[2] when it comes to individual issues.


The matter involved a class action lawsuit against Transamerica Life Canada advancing a claim for negligent misrepresentation on behalf of investors in the defendant’s fund. The alleged misrepresentations arose from “best efforts” statements contained in information folders provided to class members pursuant to the Ontario Insurance Act. The claim concerned 53 different insurance contracts – five of which contained an express statement as to “best efforts” and 48 of which did not.

Certification Decision

The certification judge, while certifying the action for breach of contract based on the five contracts with express “best efforts” statements, declined to certify the negligent misrepresentation claim based on the information in the folders which accompanied the remaining contracts lacking express statements. He found that two, or at best three, of the five elements of negligent misrepresentation could be common issues. As a result, the issues of reliance and damages would have to be dealt with in extensive individual trials, clearly indicating that a class action proceeding was not the preferable procedure for the claims in negligent misrepresentation.

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