The appellants, including a provincially constituted lottery authority, sought to strike a class action claim brought by respondents who alleged that video lottery terminals were inherently dangerous and deceptive, and sought a gain‑based award quantified by the authority's profits.
The majority held that none of the three pleaded causes of action — waiver of tort as an independent cause of action, breach of contract, and unjust enrichment — disclosed a reasonable cause of action.
The majority definitively rejected "waiver of tort" as an independent cause of action for disgorgement in Canadian law, holding that disgorgement is a remedy for established wrongful conduct and not a freestanding cause of action.
The majority further found that the breach of contract claim could not support disgorgement or punitive damages on the pleadings as framed, and that a valid contract between the parties constituted a juristic reason defeating the unjust enrichment claim.
In partial dissent, four justices would have allowed the breach of contract claim to proceed to certification on the common issues of breach of contract, punitive damages, and the appropriateness of disgorgement as a remedy.
