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Canadian Class Actions Monitor

The Role of Representative Plaintiffs from Other Jurisdictions: An Update

Posted in Class Actions
Theodore StathakosAndrew Foster

We previously reported in June 2016, on a Saskatchewan Court of Queen’s Bench decision holding that, in certain circumstances, a representative plaintiff in a multi-jurisdictional class action in a province other than Saskatchewan can (a) adduce evidence and make argument in a certification application in a Saskatchewan class proceeding and (b) apply for a stay of that Saskatchewan proceeding (Ammazzini v Anglo American PLC, 2016 SKQB 53). This decision was based on section 5.1 of The Class Actions Act, which provides generally that a representative plaintiff in a multi-jurisdictional class action commenced in a province elsewhere in Canada involving the same or similar subject-matter “may make submissions at the certification hearing” in the Saskatchewan class proceeding. The Court of Queen’s Bench granted a stay of the Saskatchewan class proceeding upon the application of a representative plaintiff in a similar Ontario class proceeding action (the “Ontario Plaintiff”). This decision was appealed to the Saskatchewan Court of Appeal.

The Saskatchewan Court of Appeal has now decided that the Court of Queen’s Bench was correct to permit the Ontario Plaintiff to adduce evidence and present arguments in the certification application, but that section 5.1 could not be construed so broadly as to permit him to apply for a stay of the Saskatchewan class proceeding (Ammazzini v Anglo American PLC, 2016 SKCA 164).

The Court of Appeal held that the Ontario Plaintiff’s right to make “submissions” pursuant to section 5.1 was not limited to the right to make oral representations, but included the right to make written argument and adduce evidence. The Court of Appeal held that section 5.1 was intended to confer a right to present information or argument to the certification judge so that he or she can be fully informed of all relevant information,[1] but in particular, of information required to determine whether it would be preferable for the claims or common issues raised in the Saskatchewan class proceeding to be resolved in a different proceeding in another jurisdiction.[2]  In order to make this determination, the certification judge should be informed of (1) the nature and status of class proceedings in other jurisdictions and (2) the views or perspectives of the representative plaintiffs in other class proceedings regarding the resolution of claims outside of Saskatchewan.

On this basis, the Court of Appeal concluded that the right to “make submissions” did not extend so far as to confer the right to apply for a stay of the Saskatchewan class proceeding. For one thing, the plain meaning of making “submissions” did not include the right to initiate a proceeding that may result in specific relief.[3]  In addition, in other provisions by which the statute conferred the right to make an application, the word “apply” was specifically selected.[4]  Its absence from section 5.1 suggested that the Legislature did not intend for that section to confer a right to make an application.  Finally, it did not serve the purpose of section 5.1 (to ensure that the certification judge could make an informed decision regarding certification) to also allow representative plaintiffs from other jurisdictions to initiate applications that could change the course of a class proceeding in Saskatchewan.

Although overturning part of the certification judge’s interpretation of section 5.1, the Court went on to rule that the judge was right to order a stay of the Saskatchewan class proceeding pursuant to section 6(2).  That section provides that, where a multi-jurisdictional class action commenced elsewhere involves the same or similar subject-matter to the Saskatchewan class proceeding, the judge must consider whether it would be preferable to deal with the claims in the other action.  Thus, the certification judge was required to perform the very same analysis that the judge did perform in deciding the Ontario Plaintiff’s stay application.  Indeed, the certification judge expressly held that, even were it not for the stay application, he would have granted the same stay order.[5]  The Court of Appeal agreed with this conclusion and the stay order was therefore upheld.

The Court of Appeal’s decision in this case has further clarified the role that a representative plaintiff from a jurisdiction other than Saskatchewan may play in a Saskatchewan class proceeding. Such a plaintiff may make oral and written argument and adduce evidence but may not initiate applications such as stay applications.

[1]           Ibid, at paras 30, 45.

[2]           Ibid, at para 45.

[3]           Ibid, at para 50.

[4]           Ibid.

[5]           Ibid, at para 53.

The Québec Court of Appeal confirms the dismissal at the authorization stage of a shareholder class action against the directors and officers of a public company

Posted in Class Actions
Jean-Philippe Mathieu

In Groupe d’action d’investisseurs dans Biosyntech c. Tsang, 2016 QCCA 1923, the Québec Court of Appeal (Justices Schrager, Dutil and Parent) recently confirmed the decision of the Québec Superior Court to dismiss at the authorization stage a shareholder class action against the directors and officers of a public company.


The Petitioner sought leave to institute a class action on behalf of the shareholders of BioSyntech, a medical device public company that filed for bankruptcy in 2010, against its eight directors and officers. BioSyntech was a biotech start-up and its success rested on its ability to access capital to develop and market a promising medical device, BST CarGel. In the aftermath of the financial crisis of 2008, BioSyntech was not able to access sufficient capital to conclude its pivotal trial and reach the European and Canadian markets with its product, which ultimately led to its bankruptcy in 2010. The Petitioner alleged that BioSyntech’s bankruptcy was avoidable and resulted from a pattern of faults of the directors and officers, who failed to properly address the company’s financial condition. The Petitioner argued that, as a result of the faults of the directors and officers, the shareholders were deprived of the possibility to share in the potential profits of BioSyntech and were therefore entitled to compensatory damages.

Before the Québec Superior Court (“QCSC”), the Respondents argued, inter alia, that the shareholders of BioSyntech did not have the necessary standing to institute a class action against its directors and officers since the alleged faults, should they ever be proven, would have been committed against the company and only indirectly against its shareholders and the alleged damages (i.e. the loss in value of BioSyntech’s shares) would have been suffered by the company and only indirectly by its shareholders. The QCSC accepted the damages argument and dismissed the Motion to Institute a Class Action on that basis.

On appeal, the Petitioner argued that the QCSC interpreted the Supreme Court’s leading cases of Peoples v. Wise and BCE Inc. v. 1976 Debentureholders too restrictively. The Petitioner argued that the Supreme Court opened the door to a direct action by shareholders against the directors and officers based on the violation of their duty of care under section 122 b) of the Canada Business Corporations Act.

The Decision of the Québec Court of Appeal

The Québec Court of Appeal (“QCCA”) first noted that “the facts of the matters before the Supreme Court did not strictly require consideration of whether shareholders are included in “stakeholders” to whom the directors owed their duty of care under Section 122 b) C.B.C.A.” and that “the debate is ongoing as to whether a direct right of action is open to shareholders against directors” (para. 21). Yet, for the purposes of the appeal, the QCCA, much like the QCSC, was prepared to adopt the Appellant’s view that shareholders had such a direct right of action against the directors and officers of a company post-Peoples and BCE Inc.

The QCCA agreed with the Respondents that irrespective of the question of the duty of care owed by the directors and officers to the shareholders, the proposed class action in the case at hand had no chance of success because the damages alleged by the Petitioner were indirect. The QCCA referred to other decisions rendered by the Courts of Appeal in British Columbia (Roback v. Gardner) and Newfoundland (Npv Management Limited v. Anthony). The QCCA also referred to the common law rule in Foss v. Harbottle, whereby shareholders cannot sue a wrongdoer where a company already has a right of action against the same wrongdoer for the same damages:

“[23] Indirect damage is not that caused by the act of the wrongdoer, but rather is caused by the damage which the wrongdoer caused. In this case, the damages claimed for the loss of share value were not caused directly by the directors alleged breach of their duty of care by not obtaining, for example, adequate financing for BioSyntech. That alleged fault might (arguably) have caused (in whole or in part) the insolvency and inability of BioSyntech to pursue its business. It is the insolvency which caused the shares to lose their value so that such damage would be caused indirectly to the shareholders by the directors.

[24] Such distinction, at least in the corporate context, is hardly exclusive to Quebec civil law. The principle is known in Common Law jurisdictions as the rule in Foss v. Harbottle. It is certainly recognized in Quebec and was explained by Laforest, J. speaking for a unanimous bench of the Supreme Court in Hercules Managements Ltd. v. Ernst & Young : […]


[26] Peoples and BCE did not change the rule in Foss v. Harbottle – they did not (and it was not necessary to) address the rule. Again, and at best, the only assistance to Appellants in Peoples and BCE is the recognition of the possibility that the Section 122 b) C.B.C.A. duty of care is owed by directors directly to shareholders. However, there is really nothing in either of the Supreme Court cases to suggest that a breach of the duty of care entitles shareholders to recover compensation from directors for indirect injury.”

Our Comments

Importantly, the QCCA confirmed that it is still possible for a class action in Québec to be dismissed at the authorization stage, despite recent Supreme Court and QCCA rulings. The QCCA refers to its recent decision in Charles v. Boiron Canada inc., where Justice Bich questions the utility of the authorization process in Québec, but still decides to maintain the dismissal of the Motion for Authorization.

According to the QCCA, the QCSC’s analysis in the case at hand had not gone beyond the filtering mechanism applicable at the authorization stage and the authorization judge was correct in denying authorization based “purely on a meticulous analysis of the legal argument under-pinning the factual allegations” (para. 33). Accordingly, it was legitimate for the QCSC to dismiss the proposed class action at the authorization stage.

Saskatchewan Court of Appeal Upholds Certification, Finds Attempted Appeal an Abuse of Process

Posted in Class Actions
Sara Albert


The Saskatchewan Court of Appeal recently confirmed that parties don’t get another “bite at the cherry” in Saskatchewan Medical Association v Anstead, 2016 SKCA 143. The Saskatchewan Medical Association’s (the “SMA”) application for leave to appeal on one decision was dismissed; however, the SMA then attempted to appeal a different but related decision using the same grounds of appeal. The Court of Appeal struck the second appeal as an abuse of process. Continue Reading

Ghost in the Machine – Pure Economic Loss in the Time of Recalls

Posted in Class Actions
Ljiljana Stanic

Plaintiffs are, in certain circumstances, able to recover pure economic loss caused by the negligent supply of dangerous products from the manufacturers of those products. [1] As long as the defect poses a “real and substantial danger” to persons or property, the plaintiff may recover for lost profits and for the costs of avoiding the danger posed by the defective products.

Generally, however, these product liability cases arise on the supply of the defective products. Is pure economic loss recoverable in the product liability context when a dangerous good is recalled and no longer supplied precisely because it has been identified as dangerous? In other words, is the absence or spectre of the dangerous good enough to ground liability for the manufacturer? In recent decision of the Ontario Superior Court on a motion to certify a class proceeding, fittingly released on Halloween, Justice Leitch opens the door to this possibility.[2] Continue Reading

Three Quebec Court of Appeal justices reiterate that a low threshold is to be applied at the authorization stage; one calls for the legislature to rethink the entire authorization process

Posted in Class Actions
Jean-Philippe Mathieu

In Charles v. Boiron Canada inc., 2016 QCCA 1716, the Quebec Court of Appeal (Justices Bich, Savard and Levesque) again overturned a refusal by the Quebec Superior Court to authorize a class action in a consumer law matter. In brief concurring reasons, Justice Bich wonders whether the authorization process still has any real utility and calls for help from the legislature, in light of recent Supreme Court of Canada precedents.


The case involves a homeopathic product called “Oscillococcinum” (and a version for children called “Oscillo”) marketed as reducing cold symptoms. Although the product is made with 85% sucrose and 15% lactose, studies filed by the respondent manufacturer with Health Canada (which approved the sale of the product) support the positive effects of the product as marketed by the manufacturer. Based on these studies, the Superior Court authorization judge found that the Petitioner could not demonstrate a “prima facie” case of misrepresentation, even if the Petitioner had filed an expert opinion contradicting the studies filed with Health Canada. The Quebec Superior Court (“QCSC”) also concluded that the Petitioner had not demonstrated that she was in a position to represent the class members adequately, noting that basically all the Petitioner had done was to read an article on the internet, consult a lawyer and let the latter manage the case from there on, without communicating with the Respondent to complain or ask questions. Accordingly, the QCSC dismissed the putative class action. Continue Reading

Walter v Western Hockey League: Admissibility of Survey Evidence and Pre-Certification Disclosure Requirements

Posted in Class Actions
Theodore StathakosAnna-Marie Manley

A proposed class action in Alberta raises the issue of whether Western Hockey League (“WHL”) players are employees and should be paid a salary in accordance with employment standards legislation.[1]  Two decisions decided in that proposed class action consider interesting issues regarding the admissibility of certain interview evidence (the “Admissibility Decision”)[2] and the plaintiff’s entitlement to financial disclosure prior to certification (the “Financial Disclosure Decision”).[3]


The proposed representative plaintiff, Lukas Walter, is a former WHL player for the Tri-City Americans. The WHL and its umbrella organization, the Canadian Hockey League (“CHL”) are both named as defendants in the proposed class action, as are the owners of the individual WHL and CHL teams.  Currently, the WHL and CHL consider that their players are student-athletes.  As such, many players receive a stipend rather than a salary.[4] The plaintiff argues that they are legally employees, and that the WHL and CHL teams are in breach of employment standards legislation by not paying their players a salary.

The plaintiff has applied to certify the action in the Alberta Court of Queen’s Bench under the Class Proceedings Act, SA 2003, c C-16.5. Two preliminary decisions were recently released by Justice Hall: the first decision, released on October 20, 2016, relates to the admissibility of affidavit evidence that allegedly included inadmissible opinion, hearsay, or was inadmissible for other reasons.[5]  The second decision, released on October 28, 2016, relates to disclosure of financial materials.[6]

The Admissibility Decision

The admissibility of an affidavit and a declaration were challenged on various grounds, including that they contained inadmissible opinion evidence, hearsay, and did not disclose the source of information relied upon where the affidavit was based on information and belief. In both cases, the evidence included interviews with persons who were, at the time of the interviews, current or former CHL players.

The first affidavit included the affiant’s Master of Arts thesis entitled “A Struggle Against the Odds: Understanding the Lived Experiences of Canadian Hockey League (CHL) Players”.  In the course of preparing her thesis, the first affiant interviewed eleven unidentified CHL players.  However, the Court found that this evidence was inadmissible as being argumentative opinion given by a non-expert.  Further, the Court found that the questions posed to the players in the Master’s thesis demonstrated bias and were inconsistent and unfocused, therefore they could not be deemed to be “survey” questions.

The declaration made by the second witness received more favourable treatment by the Court. The declarant had a Ph.D. in industrial/organizational psychology and had extensive experience studying aspects of wage and hour compliance. His evidence was adduced for the purpose of comparing the similarity of variability between different putative class members. The survey questions were logically structured to allow the expert to opine on the degree of similarity of players’ experiences in the CHL. The issue of anonymity was not determinative; although the identities of the players were unknown to the expert, the Court found that the players’ fear of recrimination was genuine and reasonably based.  As such, even though the interviews were conducted on an anonymous basis, the declaration was held to be admissible.

The Financial Disclosure Decision

Although none of the defendants had pleaded in their Statements of Defence that they could not afford to pay the players as employees, much of their affidavit evidence emphasized this point. The plaintiff brought an application for disclosure of all relevant financial statements before cross-examining on the affidavits because it was anticipated that the request would not be granted in any event. The defendants argued that the application was premature, as the plaintiffs were seeking document discovery prior to Certification. The Court disagreed with the defendants, noting that it “short circuits the necessity for a sham examination on affidavits before the application is brought, and conserves court time and litigation expense.”[7]

The Court found that the defendants, through their filed affidavits, had raised the issue of the league’s financial viability and the effect that paying wages to its players may have on such viability. The Court ordered production of financial statements and tax returns for all WHL teams, all WHL revenue-sharing agreements and other WHL revenue-generating agreements and the source documents for any statistical conclusions made in affidavits. Although the defendants argued that they should not have to produce financial documentation for those WHL teams that had not provided affidavits, the Court found that this would “allow the Defendants to cherry pick which teams provide financial statements and which do not.”[8]

The Ontario Hockey League (“OHL”) was not listed as a defendant; however, affidavits from OHL teams had been filed. The Court ordered production for the OHL teams as well, unless the defendants chose to withdraw those affidavits.[9] Given the parallel proceedings in Ontario, the defendants may strategically choose to withdraw those affidavits.


The first decision in Walter v Western Hockey League supports the proposition that survey evidence can be admissible in class proceedings, even if it contains hearsay and is derived from anonymous survey respondents, provided that the questions are crafted in an impartial manner and are relevant to the issue of commonality between putative class members.  The second decision demonstrates that a defence raised primarily through affidavits may leave the defendant vulnerable to relatively onerous requests for information and documents.

[1]      A parallel class action has been commenced in Ontario against the Ontario Hockey League (OHL). See Berg v Ontario Hockey League, 2016 ONSC 4466.

[2]      Walter v Western Hockey League, 2016 ABQB 588.

[3];     Walter v Western Hockey League, 2016 ABQB 608.

[4]      Ian Mulgrew, “The face of major junior hockey’s class-action wage lawsuit”, Vancouver Sun (21 October 2016) online: Vancouver Sun.

[5]      Walter v Western Hockey League, 2016 ABQB 588.

[6]      Walter v Western Hockey League, 2016 ABQB 608.

[7]      Walter v Western Hockey League, 2016 ABQB 608 at para 15.

[8]      Ibid at para 17.

[9]      Ibid at para 20

Victory for a Healthcare Company in the First Pharmaceutical Product Liability Class Action Trial in Canada

Posted in Certification, Class Actions
Andrée-Anne LabbéElisa Clavier

On October 19, 2016, the Superior Court of Québec released the first ever decision of a Canadian Court ruling on the merits of a pharmaceutical product liability common issues trial. In this decision [2016 QCCS 5083], the Plaintiffs were alleging that the healthcare company was responsible for psychiatric reactions experienced by the class members while taking an antibiotic.

The healthcare company retained McCarthy Tétrault LLP after certification of the class action by the Superior Court of Québec.

Justice Suzanne Hardy-Lemieux dismissed the action, concluding that the Plaintiffs had not met their burden of demonstrating that the antibiotic was the cause of the psychiatric reactions suffered by the class members. She stated that in the presence of strong evidence demonstrating the absence of causation, the Court could not base its decision on coincidental events that reveal, at best, low possibilities of causation. More specifically, Justice Hardy-Lemieux concluded that because of the blood-brain barrier protection, there was a minimal possibility that the drug could reach the brain and induce psychiatric reactions. Continue Reading

Araya v. Nevsun Resources Ltd., 2016 BCSC 1856: British Columbia Supreme Court refuses to allow a “common law class action” alleging human rights violations at Eritrean mine

Posted in Class Actions
Robyn GiffordMiranda Lam

In an important decision for Canadian resource companies operating abroad, the British Columbia Supreme Court has permitted claims alleging human rights abuses at a mine in East Africa to proceed to trial. In its decision, the Court considered whether British Columbia’s representative proceeding rule could be used in the context of a “common law class action”. Ultimately, the Court held that the plaintiffs did not satisfy the criteria for the rule because they failed to establish that the unrepresented parties had the same interest . The Court also held that the plaintiffs were improperly attempting to circumvent the residency requirement of the Class Proceedings Act.


The plaintiffs are three Eritrean nationals who are now refugees. In November 2014, they commenced a representative proceeding against Nevsun Resources Ltd., a British Columbia mining company, in connection with the Bisha Mine in Eritrea. They claim that they were forced to work at the mine by the Eritrean state and military, acting pursuant to construction agreements with Nevsun and its Eritrean subsidiary. The plaintiffs are seeking damages on behalf of all Eritreans forced to work at the mine from September 2008 to the present. Their claims are based on alleged breaches of customary international law. Continue Reading

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