Branch MacMaster has launched a new site ( The Class Actions in Canada Blog now lives on this site and will continue to be updated from there. Please update your links and rss subscriptions as necessary. Thanks, and look forward to your comments on the new site....

Friday, November 24, 2006

November 2006

Only 32 shopping days to Xmas!
Since I know you are looking out for my gift, I'd like (1) an 80GB Video Ipod, (2) another hard-working associate (applications being accepted!), and (3) national adoption of the ULCC National Class recommendations. Or socks, whatever.....
New Brunswick introduced Bill 50 in April and it received Royal Assent June 22nd. It will come into force on proclamation. The text of the Bill can be read at It is an Alberta-type statute (as you might expect from NB's former Conservative Government), with opt in and costs. It will be interesting to see what the new Liberal government does with the bill.

Richard v. British Columbia, [2006] B.C.J. No. 2632: Class counsel Poyner Baxter applied to divide the class into two subclasses and appoint a new representative plaintiff for one subclass. Poyner Baxter argued that the current representative (1) did not have a viable cause of action in light of a recent BCCA decision ruling on the time frame for valid suits against the Crown, and (2) had a conflict of interest in that the he had rejected a settlement offer that did not include any proposed benefits for those outside the relevant time frame. The court refused to divide the case into subclasses but appointed a second representative plaintiff from the group who stood to receive benefits under the settlement proposal and whose claims were not barred by the BCCA decision. The writer is co-counsel for the government in this action.

R.N. Parton v. Bayer Inc., 2006 BCSC 1621: Poyner Baxter sought to approve a fee award from two partial settlements in this price fixing class action. Similar fees had already been approved in Ontario and Quebec. The court refused this request, stating that fees could only be approved at the conclusion of the litigation as a whole given the terms of the retainer agreement. The agreement stated the fee "will be payable only in the event of success in the class proceeding". It also stated the fee would be calculated based on the "... total value of the benefit received in a judgment or settlement" and that the amount payable for fees was "... payable as a lump sum following the resolution of this action by judgment or settlement". All class counsel take note in relation to your retainer agreements - contemplate interim settlements!
Of greater concern for class counsel is that the court went beyond an interpretation of the agreement and stated:
"I am also mindful of the duties imposed upon the Court by s. 38 of the Act when the Court is asked to approve an agreement respecting fees and disbursements and to approve the legal fees and disbursements plus applicable taxes claimed by class counsel. Before it is possible to assess the results achieved including whether members of the Class have received significant benefits, the complexity of the litigation, the extent to which the litigation was disputed, the risks associated with the multi-party litigation, the time and expenses incurred by class counsel in pursuing the litigation, the extent and character of the services rendered by class counsel and the overall appropriateness of the fees and disbursements claimed by class counsel, it is necessary to review the total results received. I am satisfied that it would be inappropriate to review each settlement in isolation and that overall success (or lack of success) must be assessed when any agreement respecting fees and disbursements is reviewed pursuant to s. 38 of the Act."
With respect, this cannot be correct. There is nothing preventing an assessment of counsel's effort and the risks involved in achieving a partial settlement.

Thorburn v. British Columbia (Ministry of Public Safety) 2006 BCSC 1613: The court considered the following point of law in this proposed class action alleging illegal strip searches: "Whether the judgment in R. v. Golden, [2001] 3 S.C.R. 679 ("Golden"), applies to a "shared facility" under s. 13.1(1) of the Correction Act, R.S.B.C. 1996, c. 74". It appears that plaintiff's counsel agreed to this motion proceeding first. The proposed class was generally successful on the legal point.

3969410 Canada Inc. (c.o.b. Park Avenue Hair Salon) v. Atofina Chemicals Inc., [2006] O.J. No. 4311: In this price fixing case, Siskinds obtained an ex parte order directing that no further actions could be commenced without leave of the court. At the time of this order, there were no competing actions. Harvey Strosberg's firm then commenced a separate action, which Siskinds eventually agreed to prosecute together with their own as co-counsel. Strosberg sought to set aside the earlier order on the grounds that it set a bad precedent, in that carriage issues should only be resolved in the context of a full carriage motion when there are other proceedings pending (the author agrees). However, the court held that the issue was moot since Strosberg's client had already been added as a co-plaintiff to the Siskinds action.

Healey v. Lakeridge [2006] O.J. No. 4277: The court made a few interesting findings along the way in (nearly) certifying this case:
1. The court confirmed that "class members and the representative plaintiff need not share a common cause of action against the defendants. The representative plaintiff can validly assert a cause of action against a defendant on behalf of other class members which he or she does not assert personally, provided that the causes of action all share a common issue of law or fact".
2. There should be a separate representative plaintiff for "each subclass whose causes of action differ significantly...I believe this would generally be the case even though all of the claims of class members are for the same tort, if there are significant differences in the material facts on which the members of the subclass would seek to rely."
3. The court held that there was sufficient similarity between the Infected and Uninfected persons to support certification of these subclasses using the same representative.
4. The novelty of the claim that the defendants owed a duty of care to persons who simply visited the hospital and possibly came into contact with TB, was not sufficient to support a conclusion that there was no cause of action under s.5(1)(a).
5. The court rejected the duty to warn common issue on the basis that the issue was superseded by the provisions of a particular statutes prescribing the necessary reporting standards, which required only that hospitals and physicians report to health boards.
6. The court held that cross-infected persons should not be included in the class definition because there was no evidence that any such people existed.
The court wanted further submissions on the process for addressing individual issues, and gave the parties time to address this concern.

Continuing a small but growing trend, another products case has been denied certification in Ontario. In Poulin v Ford (November 14, 2006) (Ont.S.C.), the court declined to certify regarding allegedly defective door latches. Some of the more notable findings:
1. The court found there were no common issues because there was insufficient evidence that all door latches for all vehicles were the same (Quaere whether this doesn't just call for a smaller class, not no class at all?)
2. The court found that Transport Canada complaint was a preferable procedure. The court distinguished the BC case Reid v. Ford on the basis that there was some evidence in that case that Transport Canada had declined to respond to earlier complaints.

Harry v. Merck, 2006 BCSC 1549: In this case, the Merchant Law Firm argued that certification of its action must proceed before carriage, which was opposed by the Poyner Baxter/Klein Lyons consortium. The Court rejected this submission. The court agreed that the CPA does not grant jurisdiction to hear a carriage motion in advance of certification in light of the fact that a class proceeding is defined as a certified class proceeding. However, the court did have jurisdiction to hear such carriage motions in advance of certification under s.10 of the Law and Equity Act and the inherent jurisdiction of the court. The court also rejected the alleged "Quebec Rule" that the first applicant must be allowed to proceed first, with other actions being stayed.

Press reports indicate that a Quebec court authorized a class action suit against Merck & Co over its Vioxx painkiller without including the ``vast majority'' of users who took the medicine and didn't claim injuries. Siskinds acts for the certified class.

Five decisions were rendered by Judge Gascon on November 1, 2006 in a series of banking class actions. The cases involve various banking charges. The cases were certified against any banks who had privity of contract with the plaintiffs. The case against the others were dismissed on the basis of Agropur and a lack of evidence/pleadings against those other banks. The certified cases will be case managed together with the earlier certified Marcotte v. Bank of Montreal class action: see Option Consommateurs v. Bank of Montreal et al (unreported, Que.S.C.)

Robertson v. Thompson, 2006 SCC 43: The issue in this certified case was whether the defendant newspaper could reproduce articles in a searchable database. The principal legal issue in the case was whether the databases were republication of the articles or of the newspaper. The court held that newspaper publishers have the right to reproduce their newspapers or a substantial part thereof, but the essence of the newspaper must be preserved in that reproduction. Originality of the newspapers was not reproduced in online databases; those databases were a collective work of another nature. However, CD-ROMs remained faithful to essence of the original work. The court held that non-exclusive licenses permitting republication do not need to be in writing.
Finally, the court held that staff writers should not have been included as members of the class, as they had no cause of action.

Bouchard v. Agropur, (October 18, 2006) (Que.C.A.): The Plaintiff sought to certify a case alleging widespread misrepresentation of the fat content of milk by various producers in Quebec. He only dealt with one. The Quebec Court of Appeal upheld the rejection of certification on various grounds, but most importantly for broader class action practice, on the basis that the case could not be certified against producers with whom the named plaintiff had not dealt (para.109).
The Court of Appeal also clarified:
1. that the judge does have certain discretion in considering whether to certify, but in relation to the requirements, rather then at the point where the judge concludes that all the requirements have been met (para.41)
2. the high standard imposed on any appeal (para.42);
3. that punitive damages alone should not sustain certification (para.57)
The court also found that the plaintiff was not an adequate representative because he was a producer of raw milk, with an interest in increasing the cost of his competitor's products (para.83). He had never sought to make contact with the consumers, but had only interacted with other raw milk producers. (para.94)

Jeffery v. London Life Insurance Co., [2006] O.J. No. 4000: Various pre-certification timing and material delivery addressed. Nothing of general application.

Authorson v. Canada, 2006 OJ 3878: Class counsel claimed a lump sum of $ 75 million as "full indemnity costs," on the basis that they were retained under a contingency fee agreement. The court rejected this approach stating: "I have difficulty is seeing the relationship of the claim of $ 75 million to a calculation under any of those three methods, but think the important point is that the obligation of the class members to class counsel is not to be determined now, but only if and when a final recovery is made, with such determination then to be subject to approval of the court, which presumably will be based on the circumstances then existing. In addition to the contingencies of what may happen in the appellate process, and what may happen on a hearing for approval of a cost claim, there has been, since the commencement of this litigation, the contingent risk that Parliament, for reasons that it might have to explain to the electorate, but not to the courts, might decide to "expropriate" the cause of action herein. Because of all of the foregoing areas of uncertainty, I simply cannot, at this point, assess a fixed dollar amount, as costs, that would indemnify the liability of the class members to class counsel. Further, as an unprecedented step, proposed without prior notice, I reject the proposal to shift the contingent fee claim of class counsel to the defendant Crown."
The court did award full indemnity costs on the basis of actual time spent. The first factor in favour of such an award was the existence of certain offers to settle: "I, therefore, conclude that the offers themselves entitle class counsel to substantial indemnity costs relating to the quantum part of the litigation, but over and above that, are a factor to consider in relation to the claim of class counsel to full indemnity for all of their efforts now under consideration." Further, "where the winners are physically and mentally crippled veterans, to the point of being incompetent to manage their own affairs, and the loser is the Government of Canada, which has been found to have breached it's fiduciary obligation to them, the balance should be moved as far to the benefit of the veterans as the law would otherwise allow." Costs in the amount of $2.171 million were awarded on this basis."
Given the difficulty of the case, the court also awarded a $1,000,000 risk premium.

Lawrence v. Atlas Cold Storage Holdings Inc., 2006 OJ 3748: The Court agreed to allow a new plaintiff (who purported to have a primary market prospectus claim) to be added to the case. This notwithstanding that he did admit that his shares were purchased on the Toronto Stock Exchange.
The court also refused to strike the misrepresentation claim (which plead a form of "group reliance" or "fraud on the market-lite" but cautioned that "This need to determine reliance, as a matter of fact, with respect to each member of the class, as opposed to being able to rely on a class-wide presumption of reliance on publicly distributed information as a matter of law, will of course significantly impact on certain issues in certification"
The court continued on in relation to the other pleadings issued raised on the motion: "If, as a result of the plaintiffs failing to meet the condition set out above for the addition of the Charles Trust as another plaintiff [being the securing of consent of all trustees], the Charles Trust is not added another plaintiff, the claims in negligence and negligent misrepresentation against E&Y and Nesbitt shall be struck. As discussed in Part IV, the plaintiffs did not plead they acquired units offered under a prospectus or other material facts showing that they stood in a special relationship with E&Y entitling them to rely on E&Y's audit opinions for the purpose of making investments or with Nesbitt entitling the plaintiffs to rely on Nesbitt's certification of the prospectus. In light of the acknowledgment of counsel for the plaintiffs, referred to in Part III below, that the plaintiffs are "secondary market purchasers", and the distinction specifically drawn by counsel for the plaintiffs in the Amended Claim between the Charles Trust, which is described as purchasing units offered under one of the five prospectuses, and the plaintiffs, who are not so described, these claims are struck without leave to amend. If the Charles Trust is not added as another plaintiff as a result of the failure of the plaintiffs to meet the conditions set out above, I will rule as to: (a) whether either of the plaintiffs can advance a Securities Claim against the defendants against whom Securities Claims are asserted and, if not, whether that cause of action can be pleaded by the plaintiffs on behalf of class members; and (b) the effect of the alleged admissions by the plaintiffs, discussed below un-der Part V below. For the reasons set out below, it is not necessary for me to do so if the Charles Trust is added as a plaintiff."
Finally, the claims against Mr. Michael H. Wilson for negligent and fraudulent misrepresentation and pursuant to the Competition Act were struck on the basis that Wilson did not sign the 2001 or 2002 financial statements, or any prospectus containing them.

Toms Grain & Cattle Co. v. Arcola Livestock Sales Ltd., 2006 SKQB 373: The court rejected the application for decertification given that no new facts or law were alleged.

Ward v. Canada, 2006 MBQB 212: Canada sought to stay this proposed national class action filed in Manitoba, but arising out of event at the Gagetown military base in New Brunswick. The representative plaintiff was from Manitoba. Canada argued that the case should be heard in New Brunswick. The court stated that the usual test for jurisdiction simpliciter would be met because both Canada and the plaintiff were representative in Manitoba. Canada argued that the usual rule should be modified in the context of a class action in order to preserve order. In particular, they argued that the court should require that the acts giving rise to the action should take place within the chosen jurisdiction. The court rejected this suggestion, stating that it was implicitly rejected by Morguard and Moran. The court also found that such a rule would not add much order to the problem of multiple classes, since it would not apply in cases where a product was distributed nationally. Finally, there was little driving such an approach in the case before it, since there was little evidence of witnesses or documents that would be required to be transported from new Brunswick. The court held that the difficulties with national class actions should be resolved by "cooperation between the provinces and the development of uniform class action legislation" (Ed. Note: Hear, hear! For our favoured solution see:
The court said that any further analysis must take place within the forum conveniens test. The court found that there was no basis for a challenge on this basis. Canada had not established that it would be very burdensome or that it would suffer juridical disadvantage if the case proceeded in Manitoba. The court conceded that the law of New Brunswick would apply, but that this would not cause any real difficulty. Further the issues in the case would be more factual than legal. The court also relied on the court's general acceptance of a plaintiff's right to choose of forum to which the plaintiff is reasonably connected. The court held that this interest was heightened as a result of some particular juridical advantages to with (1) the existence of a Class Proceedings Act (2) the national opt out rule, and (3) the no costs rule. The court also noted that two intended third parties, Monsanto and Dow Chemical, had a presence in Manitoba.

In Davey v. CNR, 2006 ABQB 704, the court approved a discontinuance of a proposed class action. The court noted that given the defn of a class proceeding in Alberta's statute as a certified class action, it would appear that the plaintiff could discontinue prior to certification as of right. However, Mr. Justice Slatter held that "In my view, it is prudent for the parties to have any discontinuance reviewed by the court". The court stated that "The court should authorize a discontinuance of a proposed class action unless some prejudice can be shown". Given that the limitation period had been suspended by the proposed class action, there was no such prejudice in that respect. In relation to class members being under the mistaken assumption that they were still part of a class action, Plaintiff's counsel had indicated that it would be issuing a notification to the broader public"
There remains a class action on behalf of boat owners claiming damages from the same spill.

Vasquez v. United Steel Workers of America, Local No. 1-3567, 2006 BCSC 1399: This case flowed from a Labour Relations decision concluding that there was no collective agreement in place with the defendant. As such, there was a question of the legality of the union dues that had been collected. The court agreed to certify. The court found that the fact that there were some class members who would also have a negligent misrepresentation claim did not undermine certification. The court also found that there was insufficient evidence that the plaintiff's strings were being pulled by a competing union.

Anderson v. St. Jude, 2006 OJ 3659: Defendant St. Jude was ordered to produce (1) basic information about its corporate structure (2) a Code of conduct (relevant to issues of punitive damages and standard of care) (3) the compensation plan (relevant to issue of premature or inappropriate marketing), (4) documents in control of related corporations (knowledge about coating imputed to St. Jude. Research data used to track performance of coating), (4) monthly sales reports (relevant to allegation of overly-aggressive marketing), (5) subject to confidentiality provisions, regulatory documents regarding coating, (5) insurance policy and termination agreement between St. Jude and owner (relevant to whether St. Jude or owner knew of defects).
From the plaintiff's side, medical records, including records of non class members, examined by experts were relevant. The court held that monitoring information was to be provided only in respect of representative plaintiff, as such information was unduly onerous to produce for each plaintiff.
Reid v BCEMB (unreported, June 7, 2006) (B.C.S.C.): The court ordered that a counterclaim cannot be heard at the common issue trial unless the plan of proceeding specifically contemplates this.

Vivendi Universal Canada Inc. v. Jellinek, [2006] O.J. No. 3687: A creative plaintiff company used the class action structure in order to obtain a binding surplus settlement against all class members. The court granted certification, which was on consent against certain Representative Defendants.

Smith v. Canada (Attorney General), 2006 BCCA 407: The Plaintiff's claim had been struck on pleadings grounds prior to certification. The Court of Appeal awarded costs of $10,000 to the successful government defendant. The Court held: "As was pointed out by Mr. Justice K. Smith, while a member of the Supreme Court, in Killough v. Canadian Red Cross Society, [1998] B.C.J. No. 3019, prior to certification the ordinary rules as to costs should apply...Secondly, as for the submission that an award of costs might discourage class proceedings, we are of the view that the affirmation by this Court of a judgment that the litigation is doomed to fail should attract costs to discourage hopeless actions, and that, on balance, the salutary effects of that outweigh any deleterious effects. Thirdly, as to the novel and complex nature of the action as a basis for denying costs, we do not think that the presentation of a hodgepodge of issues with no visible merit is a proper ground for denying costs. Fourthly, it is said that this was in the nature of public interest litigation. We are in agreement with the Attorney General's submission that it cannot be so characterized, given that what was sought to be obtained for a distinct group of taxpayers was a recovery of substantial sums of money, and, accordingly, the litigation was for the financial interests of the appellants. Fifthly, the appellants invite the Court to consider the financial resources of the government relative to the appellants, in deciding costs. We do not think that this is a valid factor in this case because of the financial motivation behind the litigation, the number of appellants, and the roughly 2,000 other taxpayers who "signed up" for this case."

Grace Canada Inc. (Re) [2006] O.J. No. 3643: The position of proposed Manitoba class counsel was considered in this Ontario CCAA proceeding. It was a motion by Manitoba counsel for recognition of Manitoba order in the Ontario proceeding. The Manitoba order had found that the law firm had no conflict of interest and was entitled to act in the Manitoba action against Grace. There was possibility that court action would proceed as part of restructuring claim in Ontario. The court held that notwithstanding that Manitoba order was non-monetary and interlocutory, it was appropriate for Ontario court to recognize it. The Manitoba order was clear and certain and its recognition presented little risk of prejudice to Grace. It was improper for the Ontario court to arrive at a new conclusion in respect of whether law firm could represent Thundersky.

Roberts v. Canadian Pacific Railway Co., 2006 BCSC 1649: The action concerned coal dust that the plaintiff said escaped from the rail cars operated by the defendants, causing damage, annoyance, discomfort and loss of enjoyment to the property located in proximity to the rail tracks. The court refused to certify making the following key points:
Class Definition: "This evidence does not provide an evidentiary basis to support the current scope of the Proposed Class. Indeed, if anything, the evidence suggests that the 500 metre zone on either side of the tracks is overly broad. There is no evidence of the scope of the harm. The plaintiff's evidence involves complaints from residences in Kamloops, Hope and Chilliwack all originating from properties located quite close to the tracks. There is no evidence of patterns of coal dispersion within and throughout the Class Area. There is likewise no evidence of the impact of contamination throughout the Class Area...The fundamental problem is that this is a class whose membership is not readily identifiable, and no rational connection has been shown between the class and the asserted common issues. The plaintiff has not demonstrated that the Proposed Class is sufficiently narrow"
Common Issues: " If so, does coal dust settle on the property located within 500 metres of the railway tracks carrying the CN and CP trains? In my view, this question cannot be determined on a common basis. The uncontroverted expert evidence is that the dispersion of coal dust is subject to significant variation. There is no evidence that the 500 metre boundary is anything other than arbitrary. It is clear that a finding that coal dust settled on any particular property within the Class Area cannot be extrapolated throughout the Class Area. What are the effects of coal dust settling on a person's property? In my view, this cannot be a common question since the answer will depend upon numerous factors including the amount of dust and the characteristics of the property. The answer in the case of any individual cannot be extrapolated throughout the Class Area. Do such effects constitute unreasonable interference with persons and the enjoyment of property amounting to a nuisance?... I agree with the submission of the defence that the severity of the interference with a person's use or enjoyment of property must be considered from an individualized context looking at the nature, duration and effect of the interference, and from the context of a reasonable person in the circumstances of the particular neighbourhood."
Preferability: " It appears to me from the evidence that many, if not most of the individual claims, are relatively straightforward nuisance claims that would lend themselves to individual adjudication. It seems to me that adjudicating such claims by way of a class proceeding will likely result in needless complexity and unnecessary delay. "

Smith v. National Money Mart Co., 2006 OJ 3649: Moneymart's franchisees were added as defendants to this proposed class proceeding. The court held that the franchisees were necessary to the effective adjudication of whether Smith had cause of action for declaratory and injunctive relief, and so submissions of all parties having an interest in the outcome could be considered before decision was rendered.

Tembec Industries Inc. v. Parisian, 2006 MBQB 248: The plaintiff was a company that operated a paper mill in Pine Falls, Manitoba. The defendants were members of a council established by the defendant in the town when a decision was made to shut down the mill. The plaintiff owned a majority of the land and houses in the community. It alleges that commencing in 1950, it had a services arrangement covered by an agreement and it supplied the equivalent of municipal services. The residents paid a service fee. The company had concerns about how the council was operating. The council members raised various complaints about the company's conduct in a counterclaim. The court rejected certification of the counterclaim class action on the basis that the case did not disclose any individual class member causes of action. The court was also concerned that the council members could be defendants in any action by ratepayers generally.

Queackar-Komoyue Nation v. British Columbia, 2006 BCSC 1517: This was a petition for various relief under Judicial Review Procedure Act to challenge an environmental assessment certificate . Petitioners claimed respondent required to consult with Queackar Komoyue First Nation who was descendant of signatory to 1851 Treaty. The matter was brought as a representative proceeding under the old rule. The court held that the class was not objectively definable. Self-appointed aboriginal persons could not be allowed standing as individuals to assert collective treaty rights on behalf of aboriginal community. Descendants of treaty signatories did not constitute class capable of clear definition. The interrelationship of all successor groups to those whom original signatories represented would make it virtually impossible to ascertain whether particular descendant was one who now supported petitioners' objectives or favoured positions advanced by Band of which he or she was a member. The court also held that even if representative class were objectively definable, success for class members who asserted right to special consultation would not be success for others who voted in favour of project. On the rep plaintiff point, the court stated that the Komoyue Heritage Society lacked capacity to act as representative plaintiff and that the Petitioner Hunt, as member and former chief of Kwakiutl Indian Band lacked status to act as representative plaintiff due to inherent conflict of interest.

Garland v. Enbridge Gas Distribution Inc., 2006 OJ 4273: Believe it or not, the parties in the long-running Garland criminal interest rate/late fee saga agreed to a settlement. As one might expect with this star-crossed piece of litigation, the settlement was not approved. The settlement terms were included an agreement for a payment of $ 19.175 million as damages and interest by the defendant, together with partial indemnity costs of $ 2 million, and a release of all claims against it. This amount was to be divided as follows:
(a) the defendant would pay $ 1,917,500 to the Class Proceeding Fund;
(b) the defendant would pay $ 8,257,500 to class counsel in trust to be applied to legal fees, disbursements and GST and the class representative's compensation;
(c) the $ 2 million of partial indemnity costs would be released from trust and applied to the fees and disbursements of class counsel;
(d) the defendant would pay $ 9 million to the United Way of Greater Toronto ("United Way") (paragraph 7d); and
(e) the $ 9 million would be applied cy pres by the United Way to benefit the defendant's customers who qualify under the United Way's Winter Warmth Fund program.
The court's concern was class counsel's position that the agreement could not be approved unless the fees were approved. The court stated:
"I am, however, concerned by counsel's insistence that the binding effect of the settlement is conditional upon the approval of the fees referred to in the implementation order and subsequently inserted into the retainer agreement...In effect, the court has been presented with an ultimatum: approve the fees or the class gets nothing under the settlement. Independently of the in terrorem aspect of such an approach, and its tendency to interfere with a judicial exercise of the discretion under section 32, I continue to be surprised that, in insisting on such a condition, counsel would not recognize the inherent conflict between their own interests and those of the class their client seeks to represent. This is a matter that is quite extraneous to any settlement, or compromise, of the issues between the parties...No other interests are engaged and the conflict of interest is, in my opinion, both apparent and unacceptable. In my judgment, it is an insurmountable obstacle to the court's approval of the settlement in its present form....I am not suggesting that the practice of having a motion for settlement approval followed by a separate motion to approve fees must always be followed. It is, in my opinion, more consistent with the structure of the CPA, but I see no compelling reason why the motions cannot be combined as long as the benefits to the class are not conditioned on the approval of counsel fees."
The court distinguished Dabbs stating: "The conflict in this case arises precisely because the fees are to be paid from the total settlement fund and will diminish the amount available for the benefit of the class." However, the court went on to say: "I might add that my opinion would be the same if the settlement simply provided for the defendant to pay a fixed, or capped, settlement amount of a specific sum, for a counsel fee of some other fixed amount and for the settlement as a whole to be conditional on the court's approval of the fee. As the provision for the counsel fee would discharge a liability that would otherwise be borne by the plaintiff and the class, the total settlement amount in such a case should, I believe, be the total of the two amounts and, as in this case, it would be reduced by the payment of the fee. Consistently with this analysis, any amount of the fee in excess of that approved by the court should augment the amount paid to, or applied for the benefit of, the class"
The court indicated that it was otherwise comfortable with the settlement. On the cy-pres point: "I am also satisfied that this is pre-eminently a case in which a cy pres distribution would be the appropriate method of providing benefits to the class. The class is too large and the settlement amount too small to make a distribution of even an equal amount to each class member a reasonable, and an economically viable, alternative". The court did want more detail on the intended implementation of the cy -pres program, and was concerned that the program could be shut down in the future.
The court did give the parties 30 days to address his concerns.
Reid v. Ford, 2006 BCSC 1454 and 134482 v. Ford (unreported October 13, 2006) (Ont.S.C.): The automobile part class action settlement was approved in B.C. and Ontario. The writer is co-counsel for the class in B.C.
Kranjcec v. Ontario [2006] O.J. No. 3671: Settlement was approved in this government benefits class action. The court noted that certain estates had mistakenly not been provided with notice of the settlement approval. The court held that this was not fatal stating: "Notice of a fairness hearing is not obligatory under the CPA and, although it is invariably ordered, it is a safe assumption that the notice that was given reached far more class members than is usually the case with a class of this size. Insofar as the purpose of notice is, for the most part, to permit the court to hear concerns that the members might have about the settlement, and the fees of class counsel, there is no reason to believe that the representatives of the estates that had been excluded from the mailing would wish to raise objections, or make submissions, that would not be shared with the approximately 47,000 members who received notice. The settlement of $20 million was approved with a 15% fee.
CBS Pictures Canada Inc. v. Dillon, [2006] O.J. No. 3669: Settlement of this pension plan class action was approved. The class was given the right to 50% of the surplus. Fees of $247,000 were approved. In terms of post settlement time, the court required that both parties fees be reasonable in order to be charged as against the fund.
Montreal Trust Co. of Canada v. Armstrong [2006] O.J. No. 3951: Settlement of this pension surplus case approved.
Hurst v. Berkshire Securities Inc., [2006] O.J. No. 3647: Settlement and certification was approved in this investment class action. . The essence of the claim was that the Berkshire defendants failed in their duties to their clients by entering into referral agreements with a company named Portus and by breaching their alleged "Know-Your-Client" and suitability obligations to clients who were referred to Portus and invested in Portus' investment products. Class members received $600,000 and $300,000 went to class counsel. If the deficiency in the bankruptcy was at the low end of the range provided by the trustee, the proposed settlement, when combined with a payment required by the OSC, will result in class members fully recouping their investments. If the deficiency is at the high end, the investors will recoup 91%. In relation to the reasonableness of the fee, the dollar value of the time spent by Class Counsel to August 30, 2006, plus disbursements and travel is in excess of $ 600,000, before any multiplier is applied. Counsel has spent additional time since August 30, 2006, and will spend further time in relation to this action.
Vezina v. Loblaws, 2006 OJ 2509: Settlement of this Hepatitis A case, and fees of $700,000 were approved.
Palmer v. Sony BMG Music Entertainment (September 21, 2006) (Ont.S.C.J.): This case involving Sony's allegedly invasive "rootkit" software on its CDs was settled in Ontario. Mr. Justice Winkler approved the settlement in an unreported endorsement. The class includes Canadian residents, except for those in BC and Quebec.
Jones v. Royal Botanical Gardens (September 28, 2006) (Ont.S.C.J) : This salmonella contamination action has been settled.
Elliott v. Boliden Ltd. [2006] O.J. No. 4116: This was the Ontario arm of the earlier provisional BC Pearson v. Boliden settlement. Certification and settlement were approved. The Pearson settlement covered BC, while the Elliott action covered the rest of the country save for those jurisdictions (Alberta and NB) where there was no proper cause of action. The court held that one representative plaintiff could represent class members who raised claims under extraprovincial securities statutes, as there was no conflict of interest. (para.19).
The court raised some concern with the fact that the Ontario action lay dormant until settlement time: "There may be a separate question whether the manoeuvring orchestrated by counsel in order to bind non-residents of British Columbia who do not opt in should be considered an impermissible attempt to evade the policy reflected in the Class Proceedings Act of British Columbia. Alternatively, perhaps, it might be regarded as an acceptable and, even laudable, attempt to achieve the widest possible access to justice within Canada for the defendants as well as the plaintiffs. The question is, I believe, more properly one for the court in British Columbia to decide."
The settlement approved was for $1 million to be applied on a cy-pres basis, divided between the Small Investors' Protection Association, the Rotman School of Management of the University of Toronto, the Sauder School of Business at the University of British Columbia and the Consumers' Association of Canada. This "capitulation" was said to be justified on the conclusion that the case had no merit. The court approved the cy-pres distribution stating: " I have reviewed the proposals submitted by the four cy pres recipients of the net settlement amount. I am satisfied that, as well as being reputable organisations, their programmes are sufficiently related to the interests and needs of investors -- and particularly small investors -- to be materially, though indirectly, beneficial to the class."

Millard v. Dyck [2006] O.J. No. 4274: Summary judgment was granted against the defendant in this certified investment class action. The motion was not contested.

Press reports indicate that a Quebec Superior Court judge has refused to hear a class-action suit to recover millions of dollars collected by the Longueuil megacity from taxpayers in three South Shore communities that voted last year to merge. St. Lambert resident Michel Marcotte launched the suit on behalf of residents in Brossard, St. Bruno de Montarville and St. Lambert, who were charged taxes above the five-per-cent maximum set by the provincial government's merger law. If anyone has a copy of this judgment, let me know.

Jackson v. Canada (unreported, September 21) (Ont.C.A.): Ontario's highest court resurrected portions of a lawsuit filed by employees at Joyceville penitentiary, who claim their privacy rights were violated after a list containing their home addresses and phone numbers found its way into the hands of inmates. This is a proposed class proceeding.

Pérès c. Québec (Procureur général), [2006] J.Q. no 9864 (C.A.) The court ruled that a dismissal of the motion for certification was essentially the end of the proceeding in Quebec, and hence the costs should be determined on the same basis as if the case were dismissed outright under the Small Claims Court tariff. The defendant must have really wanted to make a point, as even with that win the grand total was $789.34.

Brochu c. Société des loteries du Québec (Loto-Québec) [2006] J.Q. no 12281: Headline self-explanatory.
In a related decision, the Court of Appeal overturned a lower court decision holding that 20 class member selected for examination did not have to produce their medical records: 2006 QJ 10296 (C.A.). The court said that it was artificial to treat class members as mere witnesses. The class member could still refuse to be examined under such rules, but he would have to renounce his claim for damages.

Riendeau c. Compagnie de la Baie d'Hudson, [2006] J.Q. no 12222 (C.A.): Class lost this interest rate case at trial. That was affirmed.

MacKinnon v. Omers (August 16, 2006) (Ont.S.C.): Certain summary judgment motions allowed.

Kerr v. Danier Leather (unreported, September 25, 2006) C41880 C41906 (Ont.C.A.): The Court of Appeal ruled on costs in this case, which was dismissed on the merits. The court stating that a costs award should issue against the rep plaintiff stating:
"While the context may be new, this is not enough to turn any of the issues into a novel point of law. Moreover, the case does not raise issues of general interest or importance to the public at large. Rather it is a commercial dispute between sophisticated commercial actors who are well resourced. The representative plaintiff’s claim is, in essence, that the substantial gain he made through his shareholdings of the corporate appellant (approximately $1.5 million), should have been even greater. This is not a case of personal injury or one that raises public law issues; nor is it a contest characterized by significant power imbalance. [Author's note: Is this the new test? Do you compare net worth to decide if costs should be awarded? This is even more encouragement to use straw or thinly capitalized plaintiffs. This goes against the US securities class action approach that tries to ensure that only the largest shareholders to act as rep plaintiffs. Again, BC et al's "no costs" approach is far more predictable and consistent with the policies underlying class litigation.] We therefore see no basis for departing from the usual approach to costs in this court. Thus, we would award costs of the appeal to the individual appellants and the corporate appellant payable by the respondent Durst on a partial indemnity basis. Given that this was a five-day appeal with complex issues, we find the amount of $100,000.00 plus G.S.T. to be reasonable in each case. In addition, the appellants Wortsman and Tatoff have claimed and should be awarded their disbursements in the amount of $4,349.03 together with G.S.T. We take the same approach to costs of the trial. The costs orders for the dismissal of the appellants’ motion for summary judgment and for the certification motion should remain unaltered because they constitute discrete and important chapters of this litigation in which the respondents succeeded. However there is no basis to deprive the appellants of their costs of the trial from after December 2, 2002 when the certification order was signed. These costs should be on a partial indemnity basis and should be assessed and, we would so order. "

Keewatin v Ontario, 2006 OJ 3418: Motion by plaintiff natives for leave to continue action as class action allowed on consent. A motion for order that defendant Minister pay the plaintiffs their costs in advance on partial indemnity scale allowed in part. The defendants largely agreed to representative order, but sought order that Grassy Narrows First Nation be jointly and severally liable for any costs ordered against plaintiffs. This was rejected on the basis that there was no allegation that named plaintiffs were men of straw.

Pellemans c. Norbourg (Syndic de), [2006] J.Q. no 10458: The court certified this investment class action. However, it was not certified against a few defendants, including KPMG. In relation to KPMG, the court stated that the class unity requirement did not exist since KPMG did not have an auditing role in relation to all of the subject funds. The case was certified against the government regulator however.

Englefield v. Wolf, [2006] O.J. No. 3330: Plaintiff offered further evidence to the court in support of specific damage award. The court agreed to vary its earlier judgment accordingly.
Option Consommateurs c. Service aux marchands détaillants, [2006] J.Q. no 11807: The Quebec Court of Appeal adjusted the award in favour of the class in this illegal late charge class action. The court reduced the damages stating that the class was not entitled to a refund of the entire financing charge, rather just the illegal component. The court also held that the entire class action could not be dismissed simply because the representative plaintiff had a limitation problem. The court did affirm the $100/class member punitive damage award, issued on the basis that the defendant was aware of the illegality.

Syndicat des travailleurs horaires de l'amiante CSN inc. c. [2006] J.Q. no 11473 (C.A.): The Court of Appeal affirmed a decision rejecting a motion to dismiss based on res judicata. The court held that a previous arbitral award did not meet the necessary requirements.

Paquin c. Compagnie de chemin de fer Canadien Pacifique, 2006 QCCA 1203: The Plaintiff tried to obtain the costs of issuing notice to the class as part of his costs award in relation to a successful affirmation of certification on appeal. The Court of Appeal rejected this attempt, stating that the decision on this point was governed by the original Supreme Court order, which stated simply that costs were to follow the event.

Allard c. Syndicat professionnel des infirmières et infirmiers du Québec, [2006] J.Q. no 11239: The Quebec Court of Appeal overturned the decision refusing certification of this case. The lower court decision was based on the "colour of right" requirement. The Court of Appeal held that the relevant contractual documents were potentially subject to multiple interpretations, and should be considered on the merits. The case involves the right to certain union funds.

George c. Québec (Procureur général), 2006 QCCA 1204: Court of Appeal upheld refusal of discrimination on this age discrimination class action, complaining that student employees were paid less than occasional employees. The court held that the proposed class definition was flawed as it was dependent on the extent of the student's experience and responsibilities.

Popovic v. Montreal (unreported, November 2, 2006) (Que.S.C.): Proposed class involved people arrested during protests at an international conference was dismissed on the merits.

Murray v. Alberta: Denial of access to publicly funded hip resurfacing surgery. The writer is co-counsel for the Defendant Alberta.
Imax Corp. has been sued in a securities misrepresentation case under Ontario's new "fraud on the market" statutory provisions. Sutts Strosberg is counsel for the proposed class.
Bishop Street area residents in Cambridge have sued Northstar Aerospace Canada Inc. in relation to an alleged chemical contamination problem.
A proposed class is challenging the federal government's archaic "Gold Digger Rule" for military spouses. The Boer War-era rules deny a widow a pension or medical benefits after her military husband dies if the two got married when he was over the age of 60. David Baker is handling the case.
Competing actions against United Furniture Warehouse have been filed by BC lawyers Neil Steinman and Bruce Lemer.
Wiggins v. BC: Claim asking for refund of school related fees filed by Poyner Baxter.


At 3:32 PM, Anonymous Anonymous said...

I heard about the Canada class action lawsuit against the banks when I was fortunate enough to be referred to Federal Debt Relief System. Once they explained to me how money creation works, I knew this was the way to go. In 18 months, they wiped my debts clean! I'm now debt free and my credit is clean. I couldn't be happier.


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