Year in Review: Ontario Class Actions 2010-2011

Year in Review: Ontario Class Actions 2010/2011Presented by: Michael D. Schafler

Certification Test (Class Proceedings Act, 1992)s. 5(1) The court shall certify a class proceeding on a motion… if, (a) the pleadings or the notice of application discloses a cause of action; (b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant; (c) the claims or defences of the class members raise common issues; (d) a class proceeding would be the preferable procedure for the resolution of the common issues; and (e) there is a representative plaintiff or defendant who, (i) would fairly and adequately represent the interests of the class, (ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and (iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members. 2

Class Certification Motions 24 25 20 20 15 10 4 5 0 Total Contested Certification Motions Granted Motions Denied** Motions*All data relates to the period August 1, 2010 – July 31, 2011**Does not include appeals 3

Class Certification Motions• As of September 2010, of 161 contested certification motions in Ontario, only 98 were certified (Ward Branch, Class Actions in Canada)• Number of class actions being certified has increased dramatically – Only 4 of 24 contested motions in past year denied certification 4

Class Certifications Denied Re*Collections Inc. v. Toronto‐Dominion Bank, 2010 ONSC 6560• Allegation of improper “holds” on customers’ cheques• No cause of action; no common issuesWilliams v. Corporation of the City of Toronto, 2011 ONSC 2832• Allegation against the City of Toronto for overcharging of rent • No cause of action, the City as owed no duty of careTurner v. York University, 2010 ONSC 4388• Alleged breach of contract, breach of the Consumer Protection Act with respect to tuition and other fees paid to York University for 2008 fall semester due to cancelled classes resulting from faculty strike• No cause of action; over‐inclusive class; class proceeding not the preferable procedureKafka v. Allstate Insurance Company of Canada, 2011 ONSC 2305• Alleged constructive dismissal resulting from new centralized business model • No common issues 5

6 ns al io ot is s M m er is th y D al 11 O ar ov m vi t pr um da l Ap S ffi ia ee Tr 7 A lF ke ty tri ili se S ab oun Li 1 e C gl t & val in S en ro 1 tle m pp et tA S en al 9 m tle pe nce et Ap e S ef 3 to D e d av en im Le m la 2 A C s e d ar av en cul *All data relates to the period August 1, 2010 – July 31, 2011 Le m rti 1 e A Pa av for er Le rd 2 d O an lity e m t ia D en 1 t fid en on m C tle 1 s et al us n, S e ef io Fe R at el 2 tif ic ns er n ou io C C at 9 ic ss tif la er l- C er 24 C rd va O ro t. s pp e r sueTypes of Motions A C 1 d Is en on m m A 2 om C dd A 1 25 20 15 10 5 0

7 d x or Ta ties ndl 3 ri a cu or L Se rty 7 e op ing Pr x ls Fi ica 2 e t ic eu Pr ac ry ns 2 m ju tio ar In r Ac Ph al e 1 on m rs nsu ce Pe o en ent 2 C ig er gl ym O th Ne plo al 4 ic Em ed d M an aud 1 ur r bo t F rty La en pe 7 m o st l Pr ns ve In ctua ctio 1 lle nt A s te *All data relates to the period August 1, 2010 – July 31, 2011 e on In nm ctiClass Actions Trends 1 er A ts ov ee uc 8 G is ch ta l od s an Pr tion en al Fr nm ic nt a 4 o ed ese ucts vir M r En e ep od tiv isr Pr 2 ec M e ef er iv ct ce 4 D m efe n su D lige on er C eg 3 m N su n on ctio cts C 4 ru ra st nt on Co C 1 e iv us Ab 2 8 7 6 5 4 3 2 1 0

EmploymentFresco v. Canadian Imperial Bank of Commerce, 2010 ONSC 4724• Alleged failure to pay overtime pay• Certification denied (Div. Ct.); no common issues• Appeal being heard by Court of Appeal on September 14, 2011Fulawka v. Bank of Nova Scotia, 2011 ONSC 530• Alleged failure to pay overtime pay• Certification granted (Div. Ct.); refusal to pay overtime resulted from policy, not individual decisions• Appeal to Court of Appeal perfected but not yet scheduledMcCracken v. Canadian National Railway Company, 2010 ONSC 4520• Alleged unlawfully classification of employees a managers, depriving them of overtime and vacation pay • Certification granted• Appeal being heard by Court of Appeal on September 14, 2011Kafka v. Allstate Insurance Company of Canada, 2011 ONSC 2305• Alleged constructive dismissal resulting from new centralized business model • Certification denied; no common issues 8

SecuritiesFischer v. IG Investment Management Inc., 2011 ONSC 292• OSC found that IG failed to act in the public interest in relation to market timing activities• Plaintiffs claim the balance of losses not recovered through OSC proceeding• Class certification granted (Div. Ct.); OSC proceeding irrelevant to preferable procedure requirementSilver v. IMAX Corporation et al., 2011 ONSC 1035• Allegation that decline in share price caused by IMAX misrepresentations• Granted leave under s. 138 of the OSA (Div. Ct.) • Certification granted (Div. Ct.)Dobbie v. Arctic Glacier Income Fund et al., 2011 ONSC 25• Allegation of misrepresentations to both primary and secondary markets• Motion to strike – partially granted (common law claims against the Income Fund struck because it lacked the required legal personality) • Motion for leave under to s. 138.8 of the OSA – partially granted• Certification granted 9

Securities Class Action StatisticsTrends in Canadian Securities Class Actions: 2010 Update (NERA Economic Consulting)• 8 new Canadian securities class action: total claims >$870 million – 7 claims under secondary market liability provisions of provincial securities acts – 2 against companies in the minerals sector; 2 against manufacturing and retail trade companies; 1 in the financial sector; and 3 in the health technology and electronic sectors – 6 claims commenced in Ontario; 2 claims commenced in Quebec• As of December 31, 2010, 28 active securities class actions, $15.9 billion in outstanding claims (includes claims for punitive damages)• 1996‐2010 – Canadian‐domiciled companies named as defendants in 71 filings in the U.S.; 17 also had parallel class actions in Canada 10

Franchisee Class ActionsTrillium Motor World Inc. v. General Motors of Canada Limited, 2011 ONSC 1300• Allegations that GM breached its duties to disclose and of fair dealing under the Arthur Wishart Act (Franchise Disclosure) 2000• GM only contested the alleged disclosure obligation• Certification grantedQuizno’s Canada Restaurant Corporation v. 2038724 Ontario Ltd., 2010 ONCA 466• Allegations of breach of contract and anti‐competitive behaviour relating to franchisor’s vertical supply and pricing arrangements• Certification granted (Court of Appeal); franchise disputes are “exactly the kind of case for a class proceeding”578115 Ontario Inc. v. Sears Canada Inc., 2010 ONSC 4571• Alleged inadequate disclosure of supplier rebates, contrary to Arthur Wishart Act and common law duties; alleged breach of the Criminal Code• Certification granted; (claim under the Criminal Code was struck) 11

Franchisee Class Actions (cont’d)1250264 Ontario Inc. v. Pet Valu Canada Inc., 2011 ONSC 287• Allegation that franchisor failed to disclose volume rebates, as required under the Arthur Wishart Act• Certification grantedFairview Donut Inc. v. TDL Group Corp.• Proposed class proceeding on behalf of franchisees that own and operate Tim Hortons franchises in Canada. The plaintiff franchisees claim for breach of contract, unjust enrichment, breach of the Arthur Wishart Act and misrepresentation.• Certification motion has not yet been heard. 12

Government Taylor v. Canada (Attorney General), 2011 ONCA 181• Claim against the Attorney General of Canada for alleged negligence of Health Canada with respect to the regulation of temporomandibular joint implants• Special case to be heard by the Court of Appeal: what is required in a statement of claim for regulatory negligence to satisfy the relationship of proximity?Ontario v. Phaneuf, 2010 ONCA 901• Allegations against the Crown by persons ordered psychiatrically assessed and subsequently detained in jail pending availability of beds in hospital where assessment was to be conducted • Certification denied (Court of Appeal); no cause of action 13

Procedure UpdatePennyfeather v. Timminco Limited, 2011 ONSC 425• Defendants brought motion for particulars• Motion for particulars granted BUT… following delivery of particulars, the Defendants must deliver a Statement of Defence• “It is time to revisit the convention that defendants do not deliver a Statement of Defence before the certification motion”: – It was the legislature’s intention that the Statement of Defence should be delivered before the certification motion – Controversies about the first of the five criteria for certification might be resolved or at least narrowed before the certification motion – An interlocutory motion about the sufficiency of the pleading might be preferable given the “interdependency of the certification criteria” 14

Globe and Mail “LawPage”‐ August 17, 2011A new playbook on how to fight class actions“Mr. Kim, acting for Timminco shareholders, said the ruling means firms like his won’t have to bear the enormous cost of carrying cases to certification… [Justice Perell is] ‘making the defendants put up or shut up, which evens out the playing field and gets the game going as soon as possible. He’s saying, ‘Enough with the procedural niceties, let’s get to the substance,’’…Alan D’Silva of Stikeman Elliott, acting for Timminco, disagrees and played down the decision calling it a ‘a complete non‐ issue, a minor procedural event.’ He said the ruling is very specific and will not spill over to other kinds of class actions.” 15

Procedure UpdateTuron v. Abbott Laboratories Ltd., 2011 ONSC 4343 (Justice Strathy)• Motion by plaintiffs for temporary stay so counsel could proceed with certification motion in a similar class action commenced in BC• Court denied the stay: – Primary purpose of continuing the action, and perhaps the only purpose, was to preserve any limitation period that may be available to Ontario residents – Counsel cannot stake out claims to national class actions in multiple jurisdictions, keep some of the actions inactive or “parked” and leave the defendants, the potential class members and the court up in the air about their intentions • Not fair to the defendant to leave the action in limbo • Obligation to move the proceeding forward “with reasonable dispatch” 16

Procedure UpdateTaylor v. Canada (Attorney General), 2011 ONCA 181• Parties sought leave to have a special case determined pursuant to rules 22.01 and 22.03 of the Rules of Civil Procedure• Issue: “what is required in a statement of claim for regulatory negligence to satisfy the relationship of proximity between the plaintiff and the defendant”• Parties submit that there is conflict between Sauer v. Canada (Attorney General), on the one hand, and Drady v. Canada (Minister of Health) and Attis v. Canada (Minister of Health), on the other hand, and that these cases cannot co‐exist• Leave granted: – Current state of jurisprudence suggests that the case should be heard – Inevitable that this issue will have to be decided by the OCA – Already enormous delay and expense in this case – the case had already become a “procedural marathon” – 30 other cases “waiting in the wings” for this issue to be resolved – Parties consented 17

Thank you.

The preceding presentation contains information regardingClass Actions in Ontario. If you are faced with one of these issues, please retain professional assistance as each situation is unique.

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Year in Review: Ontario Class Actions 2010-2011

by FMC Law on Oct 24, 2011

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Year in Review: Ontario Class Actions 2010-2011 — Presentation Transcript