February 2005

Greetings. Before we begin, I thought I would highlight an interesting statistical result from our last three updates.
For each update we conduct a search on the common law databases for the term "class action", and then the Quebec databases for the term "recours collectifs". For the last three rounds, there have been more class action judgments from Quebec alone than all other common law provinces combined. A working theory may be that the combination of the relaxed certification requirements in Quebec with the heavier costs awards in Ontario is creating a real jurisdictional swing in favour of "La Belle Province". We will see if the trend continues.

THE MOTHER OF ALL CLASS ACTION SEMINARS
We are continuing our preparations for the class action seminar in Vancouver on February 25. We look forward to seeing you there. Special features continue to be added, as now our luncheon address will feature both Allan Seckel (the Deputy AG for BC) and Paul Vickery (senior counsel for the Federal Department of Justice) providing their respective governments' take on class actions. Should be a great day.
I attach a brochure and the website address to sign up.
http://www.cle.bc.ca/CLE/Courses/Individual+Courses/2005/Summaries/1065105

RECONSIDERATION OF CERTIFICATION REJECTED
In Hague v. Liberty Mutual (November 22, 2004) (Ont.S.C.J.), the Court issued supplementary reasons after its decision to certify this after-market parts class action. The court found that (1) a common issue on global damages was appropriate in this case where there was a direct link between the alleged wrong and the class, unlike the case in the price fixing case Chadha v. Bayer, and (2) certification should not be reopened as a result of the disciplinary proceedings taken against one of Plaintiff's experts. The court reemphasized that expert evidence should not be weighed at the certification hearing in any event.
The court also issued reasons on costs on January 5, granting an amount of $315,000 to the successful plaintiffs.

LOG SALVAGORS CLASS ACTION DISMISSED
In Ogden v. Gulf Log Salvage Association and the Province of BC, 2005 BCJ 61 the court rejected certification. The class wanted to establish that the defendants were not paying a fair price for their logs. However, the court concluded that the appropriate price for the logs could only be determine on a sort by sort approach. The court also declined to give Relic from "The Beachcombers" any intervention rights ;)
The writer served as a consultant to the Province on this matter.

PROVINCE'S EFFORT TO ESCAPE CLASS ACTION DISMISSED
In Gagnon v. Orlando School, 2004 QJ 13809, the court rejected a request by the Province of Quebec to strike the certified class action against it on jurisdictional grounds. The case involved a school in Florida, but the class alleged that the government should not have granted student loans in respect of an institution that did not provide a proper education. The court found that the contracts with the school were subject to review by a Quebec court and that Quebec as a convenient forum.

PRE-RETAINER EMAIL GIVEN PRIVILEGE PROTECTION
In Miller v. Kia, 2004 QJ 13810, the court granted privilege protection to an email which class counsel sent to the eventual representative plaintiff asking whether he would be interested in participating in a class action. The plaintiff had posted an ad for sale of his Kia on the internet when he received the inquiry from the law firm. The court held that the privilege protection was sufficiently broad to cover the communication at this stage.

FLOOD CLASS ACTION CERTIFIED IN BLANCHETTE V. LONGUEUIL, 2004 JQ 13821
On November 8-9 ,1996, rain fell in the defendant's town flooding the Plaintiff's basement. The Plaintiff blamed the town alleging:
a)
the negligent construction of an inadequate artificial lake for the retention of water by the Town of Saint-Hubert;
b)
improper operation of the artificial lake used by the Town;
c)
inadequate storm-water sewers within the municipality;
The court certified the action.

BAYCOL CLASS ACTION CERTIFIED
In the first certification decision out of Manitoba, the court certified a national opt out class action in a products liability case: Walls v. Bayer, 2005 MJ 4. The usual product liability analysis was performed. The court did express some frustration about the lack of guidelines for the management of overlapping classes (given that there was already a Newfoundland class certified) stating: "Regrettably, there is no legislation that would take control of a class proceeding for all of Canada. I am told by counsel that there is often informal accommodation achieved between counsel for the various parties. In my view, that is something that ought certainly to be done here. A stay of this action for a period of time to permit such attempts to be concluded is something that may be considered by the parties or may be sought by the defendant."

DEDUCTIBLES LITIGATION UPDATE: COSTS
In McNaughton v. Co-operators, 2005 OJ 179, the court considered the issue of costs in relation to the battery of motions decided on certification and other matters. The court held that the "novel/test case" discretion in the CPA did not apply, since the first MacNaughton judgement had already settled the legal principles and the issues were otherwise of interest only to the particular class. The court concluded: "In my opinion, therefore, the normal rule that costs follow the event should apply on all the motions although, in fixing the costs, I will entertain further submissions from counsel on the extent, if any, the underlying goals of the CPA, should impact the quantum of costs awarded."
As to the appropriate scale, the court found: "I can see no reason why I should not award substantial indemnity costs on the motions for judgment in the actions where the claims of the proposed representative plaintiffs fell outside the one year limitation period and those plaintiffs persisted with unsubstantiated allegations of fraud, dishonesty and deceit in an effort to establish fraudulent concealment in order to extend the limitation period to include their claims. In the end, it is my opinion that the costs on all of the motions in these actions should be payable to the successful party on a partial indemnity scale except for the r. 20 motions where the defendants demonstrated there was no genuine issue for trial relating to the limitation period. In the end, it is my opinion that the costs on all of the motions in these actions should be payable to the successful party on a partial indemnity scale except for the r. 20 motions where the defendants demonstrated there was no genuine issue for trial relating to the limitation period."

WHEAT BOARD CLASS ACTION BACK ON THE RAILS
In Sander Holdings Ltd. v. Canada, 2005 FCJ 31, the proposed class appealed a decision of a motions judge who granted the respondent's motion for summary judgment on the ground that the appellants' statement of claim failed to disclose a reasonable cause of action. The proposed class were all producers who have shipped grain through the Canadian Wheat Board. They challenged the means by which transportation costs were calculated. The appeal court concluded that there was a proper issue for trial, and sent the case back for further consideration.

PENDING CLASS ACTION DID NOT PREVENT ISSUANCE OF INJUNCTION IN INDIVIDUAL LITIGATION
In Bettencourt v. Ontario, 2005 OJ 70 the court considered a motion for an interlocutory injunction involving two children with autism. They sought to compel the Ontario Government to continue funding them for Intensive Behavioural Intervention ("IBI").
On the balance of convenience test, the defendants noted that on November 15, 2004, a class action against Ontario was filed in Hartley v. Ontario, on behalf of approximately 1,200 children with autism who have been placed on a waiting list for the IEIP program but who have not received any services or funding, including children who have been discharged from the program without having received any services or funding. The court held that this was not a basis to refuse granting the injunction.

CHICKEN AND EGG UPDATE
In Ezer v. Yorkton Securities Inc., 2005 BCJ 30 the plaintiff in this proposed class action appealed from the order staying his actions. The chambers judge had found that the "exclusive jurisdiction clause" in an Account Agreement entered into between Mr. Ezer and Yorkton was enforceable and Ontario was the proper forum for the proceedings. The Plaintiff claimed, relying on MacKinnon v. National Money Mart Co., [2004] B.C.J. No. 1961, that the chambers judge should have heard the application for certification of the class proceeding before deciding the stay applications.
The court disagreed stating: "The issue in MacKinnon was whether an arbitration clause in the contract was "inoperative" in the face of a class proceeding. This Court found that there was a conflict between s. 15 of the Commercial Arbitration Act, R.S.B.C. 1996, c. 55, and s. 4 of the Class Proceedings Act. The conflict could only be resolved by determining whether the class proceeding met the requirements for certification, including determining that a class proceeding "would be the fair and preferable procedure for the fair and efficient resolution of the common issues". This could only be determined after considering the application for certification. There is no such statutory conflict in this case. The question is whether the jurisdiction in which the action may be brought is determined by the contract between the parties. If the exclusive jurisdiction clause is enforceable, Mr. Ezer cannot bring any action against Yorkton in B.C., including a class proceeding, and there is no action to be certified. The issues of whether a class proceeding is the fair and preferable procedure or there are common issues do not arise. The chambers judge clearly recognized this when he pointed out that other members of the purported class who are not subject to an exclusive jurisdiction clause may commence class action proceedings against Yorkton in B.C."
Other grounds for appeal were also dismissed.
In other poultry related news, in McKinnon v. Moneymart, 2004 BCSC 1532, a 2003 oral judgment only recently ordered, the court concluded that a Ragoonanan and arbitration motion should proceed as part of the certification application. The court stated: " Although there have been cases in British Columbia in which applications have been heard before certification, those were applications which would resolve significant issues, whether or not the action was certified: Edmonds v. Acton Supersave Gas and Dahl v. Royal Bank. However, here the applications may not resolve issues, regardless of certification" However, the certification hearing itself was bifurcated between the s.4(1)(a)/Ragoonanan motion and the balance of the requirements.
The writer is counsel for certain defendants in this action.

CLASS ACTION SETTLEMENT APPROVED AND FEES SET IN ENTRAN II HOSE CLASS ACTION
This action was certified by this court as a class proceeding for the purposes of effecting a settlement on November 17, 2003. On November 2, 2004, the plaintiffs brought motions for approval of the settlement and class counsel fees. The court approved the settlement, with reasons to follow, and reserved on the motion relating to fees pending delivery of further materials from class counsel. On November 24, 2004, class counsel filed the additional materials requested regarding the fees. Reasons for approval of the settlement and class counsel fees are now reported at Kelman v. Goodyear Tire and Rubber Co, 2005 OJ 175. The settlement was notable in that it covers both sides of the border in one omnibus settlement. The court had some concern that it was contemplated that the jurisdiction of the Ontario court would end after settlement. The court corrected this failing stating:
"The structure of the settlement suggests that the jurisdiction of this court extends only to approving the terms of the settlement, thus binding the Canadian class members, but thereafter leaving this court without any further supervisory role in the implementation or administration. I cannot accede to this proposition. There is no authority in the case law for the proposition that once an Ontario court has taken jurisdiction over a matter it may subsequently cede that jurisdiction to another court in a different forum. This should not be confused with a situation in which a stay is sought in one jurisdiction pending a resolution of a proceeding involving the same parties and same issues in another jurisdiction. In the present situation, for all intents and purposes, by way of the settlement and its approval, the parties have concluded the litigation in this jurisdiction. Therefore, any analogy to the law regarding stays of proceedings has no application. To similar effect, the Class Proceedings Act 1992, S.O. 1992, c.6, s. 26(7) states in pertinent part that "[t]he court shall supervise the execution of judgments and the distribution of awards under" the Act. Thus, where an Ontario court is involved in approving a settlement of a class proceeding, it must retain jurisdiction over the implementation of that settlement. Simply put, where the court has sanctioned a cross-border settlement of a class proceeding under the CPA, it cannot decline to exercise its continuing statutory jurisdiction over the parties and the settlement merely because the administration of the settlement is in the United States. Accordingly, the court has taken steps to assert its supervisory role over the implementation of the settlement. Further steps will be taken as necessary."
A fee of $1.8 million was approved, supported by the fact that it was only approximately 8% of the likely allocation of the settlement funds to Canadians based on the Canadian market share.

AUTHORSON SAGA CONTINUES
In Authorson v. Canada, 2004 OJ 5204, the court issued a 152 paragraph judgment on how the aggregate assessment of class damages should occur. If anyone actually gets around to reading this, let me know if there is anything interested buried in there.

JUDGMENT ISSUED IN PROPOSED CLASS ACTION
In Reid v. Canada, 2005 FC 158, the court granted summary judgment in favour of the plaintiff in a proposed class action regarding the calculation of death benefits for federal employees.

NUISANCE CLASS ACTION DENIED CERTIFICATION
In Citizens for Quality of Life v. Aeroport de Montreal, a decision of Justice André Roy, rendered on December 14, 2004, the court dismissed a proposed nuisance class action filed against Aéroports de Montréal.

RECUSAL CONSIDERATION REJECTED
The case management judge in the Woodlands class action, 2004 BCSC 1429 declined to recuse herself where the Defendants presented evidence that an affiant for the Plaintiff had previously sought legal advice from the judge prior to her elevation to the bench. The court confirmed that she had no recall of the affiant. The writer is counsel for the Defendant in this matter.

VITAMIN SETTLEMENT PROPOSED
Press reports indicate that group of 14 major international vitamin manufacturers have agreed to pay$132.2-million to end class-action lawsuits in connection with a price-fixing scheme for 10 bulk vitamins and food additives sold inCanada from 1990 to 1998. A court hearing for approval has been scheduled before an Ontario courtjudge on March 8 and 9. Similar hearings are set for April 6 in British Columbia and April 21 in Quebec.

NEW ACTIONS
ALBERTA: The court has agreed to treat a previously filed representative action as a proposed class action in Paron v. Alberta. The action raises alleged environmental problems at Wabamun Lake. The writer has been retained by the Province of Alberta.
BC:The latest criminal interest rate action has been brought against North Shore Credit Union, Community SavingsCredit Union, Chemainus Credit Union, Comox Valley Credit Union, Kootenay Savings Credit Union, Vernon and District Credit Union, Greater Vancouver Credit Union and Village Credit Union. The statement of claim alleges the credit unions charged up to $25 for overdrafts, in excess of the $5 overdraft fee permitted by the Criminal Code.Long-haul truckers have filed a class action suit over what they claim is an unfair tax deduction for meals. The Summerland legal firm of Johnston and Johnston filed the suit against the federal government in Supreme Court in Kelowna last week.

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