Larry P. Lowenstein

Following the dismissal of an environmental class action on appeal, the successful defendant sought costs for the period from certification to the trial decision, payable from the Class Proceedings Fund administered by the Law Foundation of Ontario.

The court held that the defendant was prima facie entitled to costs on a partial indemnity basis under the general rule that costs follow the event.

However, under s.31(1) of the Class Proceedings Act, the court considered that the proceeding raised novel legal issues concerning environmental mass torts and class proceedings and involved significant public interest, including access to justice and environmental concerns.

Balancing these factors with the defendant’s entitlement to compensation for substantial litigation expenses, the court reduced the costs award.

The defendant was awarded 50% of the otherwise assessed costs, payable from the Fund.

In a class proceeding costs dispute following the dismissal of environmental contamination claims, the defendant brought a motion to strike portions of affidavits filed by a third-party fund administrator opposing payment of costs from the Class Proceedings Fund.

The challenged affidavits contained opinion evidence from non‑expert witnesses asserting that the litigation raised issues of public interest.

The court applied the principles governing admissibility of lay opinion evidence from R. v. Graat, distinguishing between admissible opinion grounded in factual observations and inadmissible speculation or legal opinion.

While the court permitted most of the opinion evidence as permissible lay opinion supporting observations about the public interest and access to justice, it struck limited portions that lacked factual foundation or amounted to speculation.

The plaintiffs sought court approval of a settlement agreement resolving complex litigation and related bankruptcy proceedings arising from the collapse of Lehman Brothers.

The dispute concerned ownership and recovery of investment fund assets held by the prime broker at the time of its insolvency, including securities subject to re-hypothecation and claims advanced in multiple jurisdictions.

The court considered the fairness and reasonableness of the settlement, including its impact on investors and the risks and delays associated with continued litigation and cross-border enforcement.

Relying on principles reflected in the Bankruptcy and Insolvency Act and the court’s jurisdiction under the Courts of Justice Act, the court concluded that the compromise was fair and reasonable.

The court approved the settlement and issued vesting orders in relation to assets conveyed under the agreement.

In an environmental class action concerning historic nickel emissions from a refinery, the appellant challenged findings of nuisance, strict liability, and aggregate damages for alleged property value stigma following public concern about soil nickel levels.

The Court of Appeal held that a mere chemical alteration of soil, without detrimental effect on the land or its use, does not constitute actual, substantial, physical damage for private nuisance.

The court also held that Ontario law does not recognize strict liability based solely on allegedly extra-hazardous activity, and that the refinery operation was not a non-natural use within the Rylands v. Fletcher framework.

The claimants further failed to prove any compensable diminution in property values on a proper analysis of the valuation evidence.

The appeal was allowed and the action dismissed.

The appellant franchisee operated a gas station under a one-year franchise agreement with the respondent franchisor.

The franchisee sought to rescind the agreement and claim a refund under the Arthur Wishart Act because the franchisor had not provided a disclosure document.

The franchisor successfully moved for summary judgment on the basis that it was exempt under s. 5(7)(g)(ii) of the Act, which applies to agreements valid for no longer than one year that do not involve a non-refundable franchise fee.

The Court of Appeal upheld the motion judge's finding that the agreement's one-year term and requirement to pay royalties, rather than a franchise fee, satisfied the exemption criteria.

Staff of the Ontario Securities Commission brought a hearing under section 127 of the Securities Act regarding Magna International Inc.'s proposed plan of arrangement to collapse its multiple voting share structure.

Staff alleged the management information circular lacked sufficient information and the transaction was contrary to the public interest.

The Commission found the proposed transaction was not abusive, but concluded the circular failed to provide shareholders with sufficient disclosure to make an informed decision, particularly given the lack of a board recommendation and the transaction's nature as a related party transaction.

The Commission ordered that the circular be amended to include specific material information, including financial analysis and alternatives considered by the special committee, before the shareholder vote could proceed.

Class counsel appealed an order fixing their fees at $6.3 million plus GST, which was approximately half the amount agreed upon in their contingency fee agreements.

The motion judge had reduced the base fee by 25% and applied a multiplier of 2.6, finding the requested $12 million fee excessive in relation to the $40 million settlement recovery.

The Court of Appeal dismissed the appeal, holding that the motion judge applied the proper test, considered all relevant factors, and made no palpable and overriding error in determining a fair and reasonable fee.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and Research In Motion Limited (RIM) and several of its directors and officers regarding the improper backdating and repricing of stock options over a ten-year period.

The misconduct resulted in an undisclosed benefit of approximately $66 million and misleading public disclosure.

The Commission approved the settlement agreement, finding it to be in the public interest.

The settlement included substantial financial contributions to RIM, administrative penalties totaling $8 million, costs of $1.05 million, reprimands, and various prohibitions and educational requirements for the individual respondents.

The Ontario Securities Commission held a hearing to consider whether to approve a Settlement Agreement between Staff and Biovail Corporation.

Biovail admitted to inaccurate and false public disclosure that materially impacted its financial statements, including failing to disclose arrangements with a research vehicle, improperly recognizing revenue from a 'bill and hold' transaction, failing to correct a material error in exchange rates, and disseminating incorrect statements regarding a truck accident.

Biovail also provided misleading information to Staff.

The Commission approved the Settlement Agreement, finding it in the public interest, and ordered Biovail to be reprimanded, pay a $5,000,000 administrative penalty, pay $1,500,000 in costs, and retain a consultant to review its compliance training.

Teck Cominco Limited applied to the Ontario Securities Commission for an order to cease trade any securities issued under Inco Limited's shareholder rights plan.

The parties consented to an order lifting the rights plan against the Teck bid effective August 16, 2006.

The Commission determined it was in the public interest to lift the rights plan not only against the Teck bid, but against all potential bidders, to ensure an unrestricted auction and allow shareholders to evaluate all offers.

Xstrata applied to the Ontario Securities Commission for an order to cease trade Falconbridge's shareholder rights plan, which was preventing Xstrata from advancing its unsolicited take-over bid.

Falconbridge cross-applied for an order prohibiting Xstrata from making market purchases of up to 5% of Falconbridge shares under the exemption in section 94(3) of the Securities Act.

The Commission applied the Royal Host factors and determined that it was in the public interest to allow the rights plan to continue for a brief period to allow the auction process to continue, given the competing bid from Inco.

The Commission also suspended Xstrata's ability to make market purchases under section 94(3), finding that such purchases, combined with Xstrata's ability to waive its minimum tender condition, could prematurely end the auction and deprive shareholders of the opportunity to tender to the bid of their choice.

Both the rights plan and the suspension of the 5% exemption were ordered to remain in place until July 28, 2006, or until Xstrata took up sufficient shares to meet its majority of the minority condition.

Following the plaintiff's successful appeal to certify an environmental claim as a class proceeding, the court determined the appropriate costs awards for the certification motion, the Divisional Court appeal, and the Court of Appeal.

The court held that the plaintiff was entitled to costs for all stages, imputing success at the certification motion stage despite the plaintiff having substantially narrowed the claim on appeal.

Recognizing the public interest nature of the environmental class action under s. 31(1) of the Class Proceedings Act, the court awarded the plaintiff $90,000 for the motion, $65,000 for the Divisional Court appeal, and $50,000 for the Court of Appeal.

The appellant sought to certify a class proceeding against the respondent for environmental contamination caused by a nickel refinery in Port Colborne.

The motion judge and Divisional Court dismissed the certification motion.

On appeal, the Court of Appeal allowed the appeal and certified the action.

The Court found that the appellant's narrowed claim for property devaluation met all certification requirements under the Class Proceedings Act, 1992, including identifiable class, common issues, preferable procedure, and representative plaintiff.

The appellant sought to certify a class proceeding against Inco Limited for environmental contamination in Port Colborne, alleging that nickel oxide emissions caused a decline in property values following a 2000 Ministry of the Environment announcement.

The motion judge and Divisional Court refused certification, finding the class arbitrary and individual issues overwhelming.

The Court of Appeal allowed the appeal and certified the action, holding that the narrowed claim focusing solely on property devaluation met all certification requirements under the Class Proceedings Act, including identifiable class, common issues, preferable procedure, and suitable representative plaintiff.

The Environmental Commissioner of Ontario brought a motion for leave to intervene as an added party or, alternatively, as a friend of the court in an appeal concerning certification and costs in an environmental class action.

The Court of Appeal dismissed the motion to intervene as an added party, noting that interveners are rarely permitted to expand the evidentiary record.

However, the court granted the Commissioner leave to intervene as a friend of the court solely on the issue of costs, finding that the Commissioner could bring a broader public interest perspective to that issue.

The intervention was subject to conditions, including filing a consolidated factum with other interveners.

The appellants appealed a decision interpreting their franchise agreement with First Choice Haircutters.

The Court of Appeal upheld the motion judge's finding that the franchisor only agreed not to grant another franchise in the territory, and the contract did not provide wider protection against competition following the franchisor's acquisition by a company operating competing franchises.

The Court also agreed that the Arthur Wishart Act did not apply to the 'franchisor associate' in this case, and dismissed the appeal.

The appellant appealed the dismissal of his motion to certify a class proceeding against Inco Limited and others for environmental contamination in Port Colborne, as well as the subsequent costs order.

On appeal, the appellant narrowed the claims to real property devaluation, abandoning health impairment claims.

The Divisional Court upheld the motion judge's findings that the proposed class definition was arbitrary, individual issues would overwhelm common issues, and a class proceeding was not the preferable procedure.

The court also upheld the costs award of $184,332.14 against the appellant, finding no error in the motion judge's application of costs principles under the Class Proceedings Act and the Courts of Justice Act.

The plaintiff attended a mandatory training program to become a licensed sales representative for the defendant.

After completing the program, she signed a contract containing an arbitration clause.

She later brought a proposed class action claiming the defendant failed to pay minimum wage during the training period under the Employment Standards Act.

The defendant moved to stay the action under s. 7(1) of the Arbitration Act, 1991.

The Court of Appeal upheld the motion judge's dismissal of the stay, finding that the arbitration clause applied only to disputes arising from the relationship created by the contract, not the pre-contractual training relationship.

On a motion to quash an appeal, the moving party argued that a refusal to stay a class proceeding under the Arbitration Act, 1991 was unappealable under s. 7(6) and, in any event, interlocutory.

The court held that where the motions judge determined the arbitration agreement did not govern the dispute, the matter fell outside s. 7 and the statutory appeal bar did not apply.

The court further held that an order refusing a stay pending arbitration was final because it conclusively determined the forum and deprived the responding party of the substantive right to resolve the dispute by negotiation and arbitration.

The motion to quash was dismissed with costs.