July 2005

"No more sleeps" until we leave on our holiday to our cottage in New Brunswick, so it's a good time to blast off the next update. I am a bit apprehensive however, as my brother-in-law just found a decomposed squirrel that chose to die under the shower stall over the winter. The joys of cottage life!
LEAVE GRANTED IN SAME SEX CASE
The Supreme Court of Canada has agreed to hear the merits appeal of the same sex benefits class action: Attorney General of Canada et al v. George Hislop et al (Ont. C.A., November 26, 2004) (30755).
ONTARIO NATIONAL CLASS NOT ENFORCED IN QUEBEC
In Lépine c Société canadienne des Postes (July 20, 2005), the Quebec Superior Court declined to dismiss a Quebec class proceeding that overlapped with an Ontario national class settlement. However, the court did appear to accept the principles espoused in the Currie v. McDonalds case (although not as expressly as one might like). The court did conclude however that the Ontario settlement notice published in Quebec was confusing, and did not adequately detail the relationship between the Quebec action and the Ontario action. In the bigger picture though, one can read some readiness by the Quebec Court to respect a national class if proper notice is given to Quebecers.
CLASS ACTION SETTLEMENTS
Madam Justice Brown has approved the Behr wood stain settlement in B.C. A parallel approval hearing is set in Ontario for September. The writer is counsel for the class, along with Joe Prodor. For details on the settlement see http://www.blogger.com/www.behrsettlement.ca .
The Maytag repairman will presumably be a bit busier as a result of a class action settlement involving front end loader washers in Quebec: See Asselin v. Maytag Corp, 2005 QJ 9193. Siskinds is counsel for the class.
The Air Transat case settled: Nunes v. Air Transat A.T. Inc., 2005 A.C.W.S.J. LEXIS 4267. Camp Fiorante Matthews is counsel for the class.
The mass termination Murray v. Halde litigation has settled: 2005 OJ 2657. Koskie Minsky is acting for the class.
The EPDM price fixing case has settled in Quebec: Fluet v. Bayer inc., 2005 QJ 9341
The immigration regulation class action has been settled: Rasolzadeh v. Canada, 2005 FCJ 1165.
The Easyhome class action received court approval on June 15, 2005. For more information see http://www.easyhomeclassaction.com/

MEDICAL EQUIPMENT STERILIZATION CASE CERTIFIED
In Rideout v. Health Labrador Corp, 2005 NJ 228 the court certified a case raising the defendant's failure to properly sterilize medical instruments. The battery cause of action was struck however.

FLOODING CASE CERTIFIED
In McLaren v. Stratford, 2005 OJ 2288, Mr. Justice Jenkins agreed to certify a case alleging flooding damage of homes in Stratford. Would sewage by any other name smell as sweet?
Of note is Mr. Justice Jenkins' statement that: "It seems clear that the Supreme Court of Canada in Hollick and the Ontario Court of Appeal in Cloud expanded the range of cases in which a finding can be made that common issues exist even though liability and damages must be left to be resolved in individual trials. As a result the degree to which individual issues will need to be resolved for each class member, is less important due to the finding in Cloud that the requirement for individual trials will not be fatal to the request for certification."
Furthermore, on preferability, Mr. Justice Jenkins distinguished Hollick stating: "In Hollick Chief Justice McLaughlin rejected certification because the common issues were negligible in relation to the individual issues. That case can be distinguished from this case on the basis that the common issues in this case are a more significant part of each class member's claim and they will not be overwhelmed by the individual issues. This is a claim in negligence by a limited number of homeowners in a defined area of the City of Stratford. The action arises out of a flooding event alleged to have been caused by the defendant's negligence in interconnecting and overcharging municipal sewers in three sanitary sewer districts and failing to remedy defects and deficiencies in both the storm and sanitary sewer systems. The determination of the allegations of negligence will significantly advance the claims of the homeowners who suffered damage from flooding. Although there was a fund available to compensate flood victims, it was limited to $5,000 per claim for property damage. It did not approximate the amount of damage alleged to have been suffered by many of the class members."

CHICKEN AND EGG UPDATE
In Consumers Assn of Canada v. Coca Cola Bottling Co, 2005 BCSC 1042, the court allowed a Rule 18A motion to proceed in advance of certification (for those outside BC, this is a summary judgment motion in which evidence can be adduced.) The court addressed the plaintiff's concerns as set out below. Note however, that the plaintiff neglected to raise the most compelling policy argument in favour of having certification first i.e. that from an economic perspective, counsel should not be expected to undertake the cost of a substantial summary trial battle without the assurance that they are indeed representing a class. Reversing the economics substantially undermines the fundamental economic incentive structure underpinning class legislation. For a further discussion of this issue see our paper at http://www.branmac.com/go/download/Chicken_or_the_Egg_2005.pdf
The court held:
" First, the plaintiffs argue that Rule 18A imposes upon the plaintiffs the significantly higher burden of proof, that being proof on a balance of probabilities, than does the, "disclose a cause of action," test under s. 4(1) of the Act. By proceeding with the 18A application first, the plaintiffs would be denied the benefit of the lower test under the Act, yet the defendants would be able to avoid the onerous burden of proving the statement of claim does not disclose any actionable claim. Moreover, the plaintiffs do not currently have all the information that they need to meet the standard of proof at an 18A application. They need the benefit of disclosure from discovery and other pre-trial procedures. Also, at a conventional trial, reluctant witnesses can be subpoenaed. The plaintiffs say they are unable to obtain an affidavit voluntarily from a critical witness who will have to be subpoenaed. The first part of this argument is unpersuasive. On the second part, I observe that under Rule 52(8) (b) and (c) the court may order the examination of a party or witness and give directions required for the discovery, inspection or production of a document or copy thereof. An application for an order under Rule 51(8) could be made before or at the Rule 18A hearing. Its potential success does not depend upon when the Rule 18A is heard.
Second, the plaintiffs argue that at the pre-certification stage, the defendant's would not be bound by a judgment in favour of the plaintiffs; while the plaintiffs would be bound by any judgment granted in favour of the defendants. In other words, the defendants would be immune from judgment because there has been no certification. In my view, this is not a significant concern in this case. The authority cited by the plaintiffs addresses the situation in conventional litigation where one party attempts to use the Rule 18 summary trial procedure as a "trial run" at the litigation whereby it can attempt to get judgment in its favour without risking judgment in the other party's favour. This is not what the defendants are trying to do here. Rather, the defendants are seeking to invoke the Rule 18A procedure to resolve some, or all, of the issues raised by the plaintiff before proceeding with the certification hearing and its attendant costs and publicity.
Third; the plaintiffs say it is generally inappropriate to use Rule 18A procedure in class proceedings prior to certification and it is particularly unsuitable in this case because the affidavits that the plaintiffs would file on a summary trial would conflict with those filed by the defendants, and they will not be in a position to fully cross-examine the defendants on their affidavits. This argument is also unpersuasive. I have already referred to Rule 52(8) as providing the court with discretion to order the examination of a party or witness and to give directions required for the discovery of a document....
Fourth, the plaintiffs argue that numerous areas of ambiguity may arise if the 18A application proceeds in advance of the certification hearing. For example, summary judgment might be entered in favour of some but not all defendants, or with respect to only one of the claims, and this is undesirable. This argument is not supported and belongs at the 18A hearing itself. It is also of note that counsel for Encorp argued on behalf of all defendants to have Rule 18A heard prior to certification hearing.
Fifth, the legislative intent in the Act was that an application for certification be the first step in class proceedings. In support of this proposition, the plaintiffs cite Moyes v. Fortune Financial Corp., [2001] O.J. No. 4455 (S.C.J.), an Ontario decision where the court held that the motion for summary judgment should be adjourned pending certification, in part on the basis that the brief 90 day period for bringing a certification application was indicative of legislative intent that certification precede motions for summary judgments. I note that there is the same 90 day time limit for bringing a certification application in British Columbia (s. 2 of the Act), so the court's findings in Moyes regarding legislative intent are applicable here. However, I find that the other basis for the court's decision is clearly distinguishable. Specifically, in Moyes, it was only one of the defendants, the personal defendant, who was seeking summary judgment. In those circumstances, prior to certification, the court was concerned that, if the defendant was successful, an issue might arise at to whether all members of the class were bound by that determination or whether other members of the class could later seek to add the personal defendant as a defendant based on information unique to their circumstances and unavailable at the summary judgment hearing. In this case, all the defendants have advanced the same position and the claims against all the defendants are based on the same set of facts, so those dangers do not arise. In addition, the court in Moyes found there was no prejudice to the personal defendant if his summary judgment motion was not heard until after the certification hearing. This was so because the personal defendant would be involved in the certification hearing in terms of giving evidence and because there would be no savings, either in time or legal costs, since the personal defendant was represented by the same counsel as the corporate defendants. In this case, on the other hand, there will be considerable cost to the defendants by proceeding with the certification hearing first, in terms of time expended, legal fees expended, and potential negative publicity generated.
Sixth, and finally, the Supreme Court of Canada has consistently held that class action litigation should not be dealt with in slices whenever possible. In my view, this argument is inapplicable at this stage of the litigation. I am not dividing up the issues or determining that only certain issues will be permitted to be advanced at the Rule 18A application. Rather, I accept the defendants' submission that the whole action could potentially be resolved at the summary trial, or at least some of the numerous causes of action. Thus, this is not a situation where single issues are likely to be litigated individually on multiple occasions while the rest of the class proceeding is effectively held hostage as was the case in Garland v. The Consumers' Gas Company Ltd., [2001] O.J. No. 4651 (C.A.); rev'd [2004] 1 S.C.R. 629. Moreover, it is to be noted that the motivation behind the Supreme Court of Canada's discouragement of litigating by instalments in Garland, at para. 90, was to reduce costs. In this case, proceeding with the certification hearing first is likely to increase costs rather than reduce them."
COSTS ORDER OVERTURNED IN FEDERAL COURT CASE
In Le Corre v. Canada, 2005 CAF 1100, the Federal Court of Appeal concluded that an order requiring the unsuccessful plaintiff to pay costs in relation to certification was an oversight as the general rule against costs in class actions was not brought to the court's attention. The costs order was overturned.
CENTRE OF THE UNIVERSE TAKES CONTROL
In Sollen v. Boehringer Ingelheim, 2005 OJ 2248, Mr. Justice Nordheimer moved this Ottawa class action to Toronto, so that it could be case managed with all the other Ontario Celebrex class actions.
In Joseph v. Lefaivre Investments, 2005 OJ 2325 leave to appeal dismissed 2005 OJ 2911, a motion was brought to move the proposed pay day loan class action to Ottawa from Toronto. The court refused to do so given the presence of related class actions already in Toronto.
FINANCING CHARGE CLASS ACTION CERTIFIED
The court has certified a furniture store financing charge disclosure case in St.-Pierre v. Meubles Leon limitee, 2005 QJ 8495. Yves Lauzon acts for the class.
ATTEMPT TO DODGE QUEBEC'S "NO DEFENDANT APPEALS" UNSUCCESSFUL
In Marches mondiaux CIBC v. Nutri-Mer, 2005 QJ 7735, the Quebec Court of Appeal declined to grant leave to appeal to the unsuccessful defendant on a certification motion.
STAY PENDING APPEAL REJECTED
In Pharmascience v. Option Consommateurs, 2005 QJ 8455, the Quebec Court of Appeal refused to grant a stay while the defendants appealed the decision refusing to strike down Quebec's fast track certification rules.
PAINT DELAMINATION CASE REFUSED CERTIFICATION
Del Guidice v. Honda Canada inc., 2005 QJ 7870 the court declined to certify a case involving 1997, 1998 et 1999 Civics sold in Quebec with "Dark Amethyst Pearl" paint. (Is that actually blue? I'm having horrible flashbacks to conversations with our designer during our home renovations). Of note, the court declined to address the limitation argument raised by the defendant at the certification stage. However, as a signal to plaintiffs in Quebec that certification still requires some effort on their part, the court held that the plaintiff failed to satisfy the court of the impracticality of joinder, or his competence. The plaintiff had not established that there were a substantial number of cars with that paint colour (highlighting the foolishness of the Quebec "no affidavit" rule. In BC, the defendant would have had a positive evidentiary obligation to provide that information). The court also found that the plaintiff had failed to say anything about his competence, and as such there was no basis to conclude that this requirement was met.
POST-CERTIFICATION ADJUSTMENTS MADE IN SHERBERN
In Sherbern v. Vancouver Intl Airport, 2005 BCSC 896, the court made several adjustments to the certified class proceeding including: (1) amendments to the pleadings to make it conform with the common issues, (2) adding a common issue, (3) adding a subclass, (4) tightening some of the other common issues, and (5) settling the case management plan. The court refused the application to examine the new subclass representative, stating it was premature to determine whether such an examination was necessary since it appeared that the only reason for the subclass was as a result of an additional question of law.
MACNAUGHTON OVERTURNED
Who says judges are rigid? A five justice panel of the Ontario Court of Appeal overturned their decision in the proposed MacNaughton class action, and declared that insurers were allowed to charge deductibles when taking salvage of automobiles. Hundreds of Bay Street lawyers weep as their Jardynce v. Jardynce-like affair with deductibles litigation draws closer to an end.
See: http://www.ontariocourts.on.ca/decisions/2005/june/C40447.htm
NON LAWYERS BOOTED FROM BC CLASS ACTIONS
In Gitxsan First Nation v. BC, 2005 BCJ 1531, the court held that the plaintiffs could not proceed with the proposed representative proceeding without having a lawyer representing them. The court held:
"There may be some lay persons who would be competent to adequately and capably represent the interests of a small group of plaintiffs, in court. But I doubt whether any lay person could adequately or competently conduct proceedings on behalf of a group of 50 or 60 plaintiffs. Even if such a lay person existed, there are other reasons why no lay person, regardless of ability, should be permitted to represent a large group of plaintiffs. Some of the reasons advanced by counsel on the hearing of the stay applications were these:
(a) A practicing lawyer would be subject to all the rules of the Law Society, which include rules governing a lawyer's conduct when acting for more than one party in a proceeding, where conflict of interest issues may arise.
(b) A practicing lawyer would have an enforceable obligation to ensure that all of the plaintiffs continued to have "the same interests" and to ensure that they are all notified promptly of all developments in the litigation.
(c) A practicing lawyer would be insured against claims that might be made against him or her, for damages for negligence in the conduct of the proceeding.
In this case, I would add the additional reason that the proceedings involve complex issues of fact and law, and will require considerable legal ability to identify the true issues, gather the necessary evidence and marshal the evidence to the issues, if the litigation continues.
Of necessity, and in the interest of justice, I have granted leave to various lay persons to represent the plaintiffs on interlocutory applications. In my opinion, absent extreme emergency, no further leave should be granted to any lay person or persons to represent the plaintiffs as a group, in any aspect of these proceedings.
I order that all further proceedings in action 13305 and action 13184 be stayed until such time as a lawyer authorized to practice law in British Columbia is appointed by the plaintiffs to represent them."
The BC Supreme Court reached the same conclusion in a proposed class proceeding: Gravlin v. BC, 2005 BCSC 839.

TRUCKER CLASS ACTION REFUSED CERTIFICATION
In Smith v. Canada, 2005 BCJ 1547 the court declined certification. The proposed class was brought on behalf of all non-government workers who travel for a living, pay income tax, and are entitled to a meal allowance deduction. The claim alleged that government workers received better meal allowance benefits, and that this was discriminatory. The claim was struck as disclosing no cause of action.

BC RULE REQUIRING DEFENCES RECONSIDERED
In Maclean v. Telus Corp, 2005 BCJ 1633 the BC Court of Appeal sent a decision requiring the defendant to file a defence back to trial for reconsideration. The court stated in relation to an earlier decision requiring defences (which the author was quite proud of, and hates to see unjustly criticized):
"In my view, the chambers judge in Scott adopted an unduly strict and narrow approach to the interpretation of the Act and Rules of Court in concluding that a statement of defence is invariably required to be filed prior to a certification hearing, thereby effectively precluding a chambers judge from exercising any discretion in that regard. That approach has not found favour in the authorities relied upon by Telus, although authorities from other jurisdictions must be approached with some caution to the extent they are based on legislation and procedural rules which differ from those in British Columbia. More importantly, the Scott approach is inconsistent with the flexible approach to procedural issues in class action proceedings encouraged by the relatively recent Supreme Court of Canada decisions in Hollick and Dutton. Since the respondents acknowledge on appeal that a chambers judge has a discretion to permit the delayed filing of a statement of defence, I need not say more on this point."

PROVINCE ALLOWED OUT OF BREAST CANCER TREATMENT CLASS ACTION
Leave to appeal was dismissed by the SCC in the case of a Cilinger v. Quebec, in which the Que CA upheld the refusal to certify the proposed class proceeding against the provincial government regarding their funding of breast cancer treatment. The action continues however against the hospitals: Anahit Cilinger v. Attorney General of Quebec (Que. C.A., November 4, 2004) (30703) "with costs"

ARBITRATION CLAUSE NOT ENFORCED
In Smith v. Moneymart, 2005 A.C.W.S.J. LEXIS 4169 the court refused to enforce an arbitration clause to shut down a proposed pay day loan class proceeding. The court also refused to dismiss the case against a US defendant alleged to have a relationship with the Canadian operating company.

MACKINNON CLEAVED IN 4
In MacKinnon v. Moneymart (June 16, 2005), the court under s.9 (the post-certification powers section) agreed to allow the plaintiff to continue to pursue certification through four individual proceedings against the pay day lenders with whom the named plaintiff actually had contractual dealings. The court held that this reformulation was sufficiently different that the plaintiff was not seeking to have "multiple kicks at the can".
Leave to appeal has been granted in relation to this decision.

PENSION CASE REJECTED
In Public Service Alliance of Canada Pension Plan Members v. Public Service Alliance of Canada,[2005] O.J. No. 2693, the court refused to certify a pension surplus case holding that:
"1. The plaintiffs have not defined a class.
2. The plaintiffs seek to represent various groups of individuals who have conflicting interests.
3. A class proceeding is not the preferable procedure to deal with the governance claim as this could be adequately dealt with by way of a standard proceeding by way of action or notice of application.
4. The litigation plan proposed by the plaintiffs is unworkable."
It sounds as thought a quick call to a specialist class action firm might have made the difference, as the focus of the court's reasons was on the inadequacy of the materials. The court stated: "The plaintiffs' motion is to say the least confusing. Many of their submissions are made in the alternative [*8] or as mere possible avenues of how they propose to deal with the class action depending on various contingencies. It is presented as a work in progress. It must be said at the outset that the onus is on the plaintiffs to establish the criteria set by section 5. It is not for the court to sort out the plaintiffs' material and try to somehow salvage a class proceeding out of them."
WRONGFUL DISMISSAL CASE REFUSED CERTIFICATION
In Aston v. Casino Windsor Ltd., 2005 OJ 2879, the court certified a class action on behalf of 19 supervisors dismissed without cause. The fact that it was a small geographically-focused class weighed against certification, as the court contrasted it with the larger Webb v. Kmart class. The court also concluded that there were no common issues in dispute stating:
"In my opinion there is no dispute as to the common issues affecting these 19 individuals. They were all employed as supervisors by the Defendant and they were all let go at the same time as a result of an economic downturn. The Defendant has gone on record as part of the class action motion that none of the individuals were let go for just cause. All the issues including the validity of the individual contract must be decided on an individual basis and whether the employer fairly considered the individual employment records and years of service in selecting those who were terminated. There may be other individual issues to be determined such as mitigation. It is the Plaintiff's position that even though individual assessment will be required, it is appropriate that this matter be certified as a class action for all of the factors contained in s. 5 of the Act. It is the Defendant's position that the 19 individual assessments mean that the class procedure is not appropriate on the facts of this case."
The finding on the common issues is somewhat unique, in that there have been a number of cases that state that an admission by a defendant is not truly useful unless it is made within the confines of a certified class action.
The court went on to conclude that case management would be a more efficient vehicle to manage the claims, a more solid procedural basis to decline certification in the author's view. The court set up a detailed program for the joint management of the individual claims.

APPEALS DISMISSED
Leave to appeal the Lieberman v. Business Development Bank of Canada decision mentioned in our last report was denied: 2005 BCCA 268
The appeal of the class action trial judgment in the wrongful dismissal case Gregg v. Freightliner, 2005 BCCA 349 was dismissed.

MANULIFE CLASS ACTION DISCONTINUED
The class action commenced against Manulife Securities International Ltd. and Manulife Financial Corporation in connection with Portus Alternative Asset Management has been discontinued on court approval. Class counsel asked for discontinuance of the class action after they concluded that the offer by Manulife Securities to acquire the interest of its clients who were referred to Portus by advisors licensed by Manulife Securities was "fair and reasonable". Class counsel has recommended that their clients accept the offer, which expires July 15, 2005.

KERR COSTS DECISION
Kerr v. Danier Leather Inc., Ontario Superior Court of Justice, [2005] O.J. No. 2696 considers the issue of costs in relation to earlier orders that had already been entered without provision for costs. The court concluded that the earlier orders could be amended to provide for costs on a party and party scale to the plaintiff.

NEW FILINGS
BC:
Archer v. Sun Rype: A high fructose corn syrup price fixing class action has been brought by Camp Fiorante Matthews.
Poyner Baxter LLP and Thorsteinssons LLP have filed a class action lawsuit against the Canada Revenue Agency related to taxable benefits which have been attributed to shareholders who have shareholder's loan credit balances with their companies,
Ontario:
A class action lawsuit has been commenced on behalf of passengers who were on Skyservice Flight 560 from Toronto to Punta Cana, Dominican Republic on May 22, 2005.
A national class action has been launched on behalf of patients who have received defective defibrillators manufactured by Guidant Corporation. Rochon Genova is acting for the proposed class.
A class action has been filed against the makers of Neurontin.
Family members of severely disabled residents at an Ontario care centre have filed a class action against the province. At issue is a decision by the Ministry of Community and Social Services to close the Rideau Regional Centre in Smiths Falls, near Ottawa, by 2009.
Quebec:
A class action has been commenced alleging that trichloroethylene (TCE), a common industrial solvent, has seeped into the underground water table from the Canadian Forces Base Valcartier. The group is suing the federal government and Groupe SNC Lavalin Inc., which owns the facilities on the base where TCE was used from 1953 until 1990.
A Montreal-area woman has launched a demand for a class action against Kellogg Canada, claiming it misleads consumers with "low sugar" advertising on its boxes of Frosted Flakes and Froot Loops cereals.
Saskatchewan:
A class-action lawsuit has been launched against the Saskatchewan government by game farm operators who claim their livelihood has been devastated by a mandatory surveillance program they call heavy-handed and unfair.
Newfoundland:
Members of the Ktaqamkuk Mi'kmaq Alliance, a band which is yet to be registered under the Indian Act, and members of the Sip'kop Band of St. Alban's, which is registered under the Indian Act, but are considered a landless band, have filed a class-action lawsuit to gain equal status to the Conne River Mi'kmaq and other First Nations people of Canada.
Federal Court:
A Penticton resident has filed a class-action lawsuit on behalf of the 14 million Canadians who have fluoride added to their water.
People who claim they were sprayed with Agent Orange and other chemicals at a Canadian Forces base in New Brunswick in the 1960s are launching a class-action lawsuit. Tony Merchant is acting for the proposed class

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