James C. Orr

This is a costs endorsement following a successful motion by the defendants to strike out the plaintiffs' statement of claim, with leave to amend.

The defendants sought costs on a substantial indemnity scale, arguing the claims were baseless and important to their reputations.

The court denied substantial indemnity costs, finding no reprehensible conduct by the plaintiffs.

Instead, the court awarded costs on a partial indemnity scale to both groups of defendants, fixing specific amounts for fees and disbursements, emphasizing that costs are not a mechanical exercise and must be fair and reasonable for the unsuccessful party.

The plaintiffs, Evertz Technologies Limited and Evertz Microsystems Limited, brought an action alleging theft of confidential information by former employees and competing businesses.

The defendants moved to strike the statement of claim in its entirety, arguing that the plaintiffs failed to provide sufficient particulars regarding the alleged confidential information, its misuse, and its incorporation into the defendants' products.

The court found that the statement of claim, even with supplemental particulars, did not meet the minimum level of material fact disclosure required for claims of misappropriation and misuse of confidential information.

Consequently, the statement of claim was struck out, but the plaintiffs were granted leave to serve an amended statement of claim within 30 days.

The defendants in a class action sought a pause in proceedings, including the adjournment of a certification motion, pending a Supreme Court of Canada judgment in *Toshiba Corporation v Godfrey*.

The SCC decision was expected to clarify key issues relevant to class certification in price-fixing cases, specifically regarding "umbrella purchasers" and the economic methodology for proving common impact for indirect purchasers.

The court granted the motion, finding that a temporary pause would prevent the need for redoing expert reports and ensure the certification motion was based on the most current state of the law, thereby promoting the expeditious and efficient conduct of the litigation.

In CCAA proceedings involving a debtor company whose assets had already been sold and where no plan of arrangement was contemplated, the representative plaintiff in a proposed securities class action moved to lift the stay of proceedings and to amend the claims procedure order after failing to file a proof of claim by the claims bar date.

The directors argued that the claims procedure barred the class action against them and extinguished related claims, including access to insurance proceeds.

The court held that both the stay and the claims bar order are discretionary tools intended to facilitate restructuring or liquidation objectives under the CCAA.

Because the restructuring process had effectively concluded and no plan was forthcoming, using the claims bar order to extinguish the class action would serve no functional purpose under the CCAA.

The court exercised its discretion to lift the stay and modify the claims procedure order to permit the plaintiff to proceed with the class action.

In a proposed class action against an insurer, the court addressed procedural directions for the hearing of a certification motion and a defendant’s summary judgment motion.

The plaintiffs sought a further and better affidavit of documents before the summary judgment motion, arguing procedural unfairness.

The court held that there was no automatic entitlement to an affidavit of documents at this stage and emphasized proportionality principles and the court’s discretion under s. 12 of the Class Proceedings Act, 1992.

The court directed that no affidavits of documents were required and restricted the defendant’s summary judgment motion to limitation period defences against the proposed representative plaintiffs.

The certification motion and the focused summary judgment motion were ordered to be heard together with a revised timetable.

A law firm sought to replace existing carriage counsel in a proposed pharmaceutical class action on the basis of unreasonable delay in bringing a certification motion.

The court held that under s. 12 of the Class Proceedings Act, 1992 it has supervisory jurisdiction to entertain a carriage transfer motion.

The court established a four-part test requiring proof that the delay is clearly unreasonable, that it causes actual prejudice to class members, that the explanation for the delay is inadequate, and that compelling certification within a fixed timeline would be unworkable or not in the class’s best interests.

Applying this test, the moving party failed to demonstrate unreasonable delay or prejudice, and the explanation for the delay was credible.

The motion to replace carriage counsel was therefore dismissed.

Invesco sought leave to appeal orders sanctioning a Plan of Compromise and Reorganization under the CCAA and approving a settlement that released Ernst & Young LLP from claims arising from its auditing of Sino-Forest Corporation.

The Court of Appeal denied leave, finding that the proposed appeals failed to meet the stringent test for leave in CCAA proceedings.

The appeal of the Sanction Order was moot, and the issues regarding the third-party release in the Settlement Order were governed by the court's prior decision in ATB Financial.

The plaintiffs appealed a decision denying certification of a proposed class proceeding against the manufacturers of the drug Seroquel, as well as the associated costs award.

The Divisional Court upheld the motion judge's finding that the pleadings failed to disclose a cause of action under s. 5(1)(a) of the Class Proceedings Act and that the plaintiffs failed to meet the evidentiary threshold for the remaining certification criteria.

The court also found no error in principle in the costs award, noting the motion judge properly exercised her discretion.

The appeal was dismissed with costs fixed at $30,000.

The applicant, Sino-Forest Corporation, sought an order sanctioning a plan of compromise and reorganization under the CCAA.

The plan was supported by the vast majority of creditors, including noteholders, auditors, and underwriters, but opposed by certain funds.

The court found that the statutory requirements were met, the creditors were properly classified, and the plan, including its third-party releases, was fair and reasonable.

The motion was granted and the plan was sanctioned.

Institutional investors sought an adjournment of a motion to sanction a restructuring plan under the Companies’ Creditors Arrangement Act, arguing that provisions in the proposed plan concerning settlements and releases for third party defendants could improperly affect their ability to pursue claims in related securities class actions.

The court reviewed the plan and concluded that approval of any specific settlement, including a proposed auditor settlement, was not before the court on the sanction motion and would require further court orders and satisfaction of multiple conditions precedent.

The court held that any potential impact on investors’ claims could be addressed in future proceedings where the specific settlements and releases would be considered.

As the objections were premature and the debtor faced time and funding constraints, the request for an adjournment was denied.

A lawyer sought payment for drafting work performed for a litigation firm during discussions about potential employment.

The plaintiff claimed a verbal retainer and invoiced more than $31,000 plus a premium for anticipated class action success.

The court held that although some remuneration was contemplated, the parties implicitly understood the work was connected to class proceedings conducted on a contingency basis.

Accordingly, payment would arise only if and when class counsel recovered fees in the underlying actions.

The plaintiff was granted a declaration that his reasonable hourly fees would be payable as a disbursement if the firm later recovered fees, but otherwise the claim was premature.

The plaintiff sought leave to commence a secondary market misrepresentation action under the Securities Act and to certify a class proceeding against the defendants for misrepresentation, conspiracy, and oppression.

The plaintiff alleged that the defendants fabricated a financial crisis by including a 'going concern' note in the company's financial statements to artificially depress the share price, allowing insiders to acquire shares cheaply.

The court dismissed the motion for leave, finding no reasonable possibility of success at trial, as the financial disclosures were factual, required by GAAP, and made after reasonable investigation.

The court also refused to certify the conspiracy claim due to a lack of factual basis and struck the oppression claim, ruling that the Ontario Superior Court lacked subject-matter jurisdiction over an oppression remedy under the British Columbia Business Corporations Act.

Following dismissal of a proposed pharmaceutical class action certification motion, the successful defendants sought $1.2 million in costs.

The plaintiffs argued that no costs should be awarded due to public interest considerations relating to individuals with mental illness or, alternatively, that costs should be limited to $75,000.

The court held that although individuals with mental illness may constitute a historically disadvantaged group, the evidentiary record did not engage the public interest considerations under s. 31 of the Class Proceedings Act, 1992.

Applying the principles governing certification motion costs and considering the complexity of the proceeding, the plaintiffs’ litigation conduct, and comparable awards, the court fixed fees at $475,000 and allowed most disbursements subject to a reduction in travel expenses.

The plaintiffs brought a motion to certify a class action against the defendants, the manufacturers of the antipsychotic drug Seroquel.

The plaintiffs alleged that Seroquel caused various health risks, including weight gain and diabetes, and that the defendants were negligent in their design, testing, marketing, and failure to warn, particularly regarding off-label uses.

The court dismissed the certification motion, finding that the plaintiffs failed to satisfy any of the criteria under section 5(1) of the Class Proceedings Act.

The statement of claim was found to be fundamentally deficient, failing to disclose a valid cause of action.

Furthermore, the court found no identifiable class, a lack of common issues capable of being assessed in common, that a class action was not the preferable procedure, and that the proposed representative plaintiffs were unsuitable.

In CCAA restructuring proceedings, the plaintiff in a securities class action sought to lift the stay of proceedings to continue the class action against the debtor company and related defendants.

The moving party argued the action should proceed in order to access insurance proceeds that would not be available to other creditors.

The court considered the purposes of the CCAA stay, including preserving the status quo and facilitating a restructuring or sales process for the benefit of stakeholders.

Balancing prejudice, convenience, and the interests of the restructuring process, the court held that permitting the litigation to proceed would divert management resources from the ongoing court‑supervised sales process.

The stay was maintained except to permit the plaintiff to pursue a leave application to the Supreme Court of Canada on a limitation period issue.

Three competing groups of plaintiffs and their respective counsel brought carriage motions seeking to represent a class of investors who suffered losses following a massive decline in the value of Sino-Forest Corporation's securities.

The court evaluated the competing actions based on factors including the definition of class membership, class period, theory of the case, causes of action, joinder of defendants, and prospects of certification.

The court stayed the Smith and Northwest actions and granted carriage to the Labourers action, finding its approach to the class definition, causes of action, and joinder of defendants to be the most cohesive and in the best interests of the class.

The plaintiffs brought a motion for leave to appeal a certification decision that refused to certify class members' entitlement to punitive damages as a common issue and bifurcated common issues relating to the quantification and apportionment of waiver of tort damages.

The Divisional Court found that there were conflicting decisions on both issues and good reason to doubt the correctness of the motion judge's order.

Leave to appeal was granted on both issues and the hearing of the appeal was expedited.

The plaintiffs brought a motion for leave to appeal an order bifurcating common issues relating to the quantification and apportionment of any accounting or disgorgement for a claim based on waiver of tort from the other common issues in a class action concerning allegedly defective cardiac defibrillators.

The court granted leave to appeal, finding conflicting decisions on the issue of bifurcation and good reason to doubt the correctness of the order, noting the matter is of sufficient importance to warrant appellate review.

The defendants sought leave to appeal a partial indemnity costs award of $650,000 granted to the plaintiffs following a lengthy and aggressively fought class action certification motion regarding allegedly defective pacemakers.

The Divisional Court dismissed the motion for leave to appeal, finding no conflicting decisions and no reason to doubt the correctness of the costs order, noting that the defendants' aggressive approach significantly drove up the plaintiffs' costs.

The defendants sought leave to appeal an interlocutory order of the case management judge, who directed that the plaintiffs' motion for class certification be heard prior to the defendants' motion for summary judgment.

The Divisional Court dismissed the motion for leave to appeal, finding no conflicting decisions and no reason to doubt the correctness of the case management judge's discretionary decision regarding the timing of procedural motions.