Court File and Parties

COURT FILE NO: CV-18-595380-CP DATE: 20200227 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY STENZLER Plaintiff (Moving Party)

• and –

TD ASSET MANAGEMENT INC. Defendant (Responding Party)

Proceeding under the Class Proceedings Act, 1992

BEFORE: Justice Edward P. Belobaba

COUNSEL: Paul Bates, Michael Robb and Anthony O’Brien for the Plaintiff R. Paul Steep, Shane D’Souza and Leah Ostler for the Defendant

HEARD: January 10, 2020

Motion for Certification

[1] The plaintiff moves to certify a proposed class action on behalf of persons who purchased units of a TD Mutual Fund from a discount broker. The plaintiff alleges that the defendant wasted Mutual Fund assets by improperly paying “trailing commissions” [1] to discount brokers, causing investor losses in the tens of millions of dollars.

[2] The defendant TD Asset Management Inc. (“TDAM”) submits that the plaintiff has no cause of action for the alleged losses and asks that the motion for certification be dismissed.

Background

[3] The plaintiff is a retired dentist. Like many Canadians saving for their retirement or their children's college education, he invests in mutual funds. For many years, he held "units" in various TD Mutual Funds that were created and managed by the defendant TDAM, a wholly-owned subsidiary of the Toronto Dominion Bank.

[4] TDAM distributed the TD Mutual Funds through full-service investment firms and through less expensive discount brokers that appealed mainly to the “do-it-yourself” investors. It is not disputed that TDAM paid trailing commissions to both the full-service and the discount firms that sold the mutual funds to their clients. The trailing commissions were paid ostensibly to cover the “service and advice” that these firms were providing to their clients.

[5] The payment of a trailing commission to the full-service firms made sense because they were legally permitted to provide investment advice to their clients and have done so. The payment of trailing commissions to the discount brokers made less sense because they were prohibited by provincial securities law from providing investment advice. Indeed, over the last ten years, the payment of trailing commissions to discount brokers has been a topic of concern in the mutual fund industry. After several years of industry-wide discussion, the Canadian Securities Administrators concluded in a July 2018 report that there was “no justifiable rationale” for paying discount brokers an ongoing trailing commission for the sale of a mutual fund. Regulatory changes are expected sometime this year. Meanwhile, the practice continues.

[6] The plaintiff purchased the units in his TD Mutual Funds from TD Direct Investing, a discount broker. Towards the end of 2017, he discovered that TDAM was paying trailing commissions to discount brokers for “service and advice” even though no advice of any kind was being provided by them. He understood that TDAM’s payment of these trailing commissions depleted the assets of the TD Mutual Funds which in turn reduced the value of his units and thus the overall return on his investment.

[7] The plaintiff then commenced this proposed class action. The basis of the proposed class action is that TDAM in breach of trust and in violation of its fiduciary duty improperly paid trailing commissions to discount brokers causing losses to the Funds and its unitholders.

Analysis

[8] Counsel on both sides well understand that certification is a relatively low hurdle. It has nothing to do with the merits of the action. That comes later, on a summary judgment motion or a trial of the certified common issues. As the Supreme Court noted in Hollick v Metropolitan Toronto (Municipality), 2001 SCC 68 at paras. 14–15. “the certification stage is decidedly not meant to be a test of the merits of the action.” [2]

[9] Unfortunately, counsel for the defendant wasted much time and paper arguing the merits of the plaintiff’s claim. The defendant may well prevail on the merits if this action is certified as a class proceeding but at this stage the plaintiff only has to satisfy the five requirements set out in s. 5(1) of the Class Proceedings Act, 1992 (“CPA”): [3]

a. the pleadings disclose a cause of action; b. there is an identifiable class; c. the claims 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 who (i) would fairly and adequately represent the class; (ii) has a plan which sets out a workable method for the advancement of the proceeding; and (iii) does not, on the common issues, have a conflict of interest.

[10] Except for the cause of action requirement, the plaintiff only needs to provide “some basis in fact” to satisfy these requirements. Hence, the relatively low hurdle.

(1) Causes of action

[11] The defendant, to its credit, directs almost all of its attention to the pleaded causes of action. The plaintiff pleads seven causes of action: breach of trust, breach of fiduciary duty, knowing assistance, knowing receipt, the disallowance of improper expenses under s 23(1) of the Trustee Act, [4] prospectus misrepresentation and unjust enrichment.

[12] There is no dispute about the applicable law. The test under s. 5(1)(a) of the CPA is the same as the test on a motion to strike for no reasonable cause of action: assuming the facts pleaded to be true, is it plain and obvious that the claim has no chance of success? [5]

[13] The breach of trust and fiduciary duty claims. The first two causes of action relate to breaches of trust and fiduciary duty by TDAM as trustee and manager. They turn in large part on the language found in the Declaration of Trust (“DOT”), a standard-form document that established the Mutual Funds in question and was provided to the investors.

[14] The DOT makes clear that the TD Mutual Funds are trusts, that TDAM is the trustee and holds the Funds in trust for the benefit of the unitholders. The DOT provides that TDAM has appointed itself as manager and that TDAM as trustee will pay a management fee to itself for providing the management services. As both trustee and manager, TDAM is obliged to adhere to a prescribed standard and duty of care that includes the obligation to exercise its powers and discharge its duties “in the best interests of the Fund” and exercise the degree of care, diligence and skill that a “reasonably prudent person” would exercise in the circumstances. The DOT also provides that TDAM as trustee shall be responsible for any losses that arise out of any breaches of the prescribed standard and duty of care whether by the trustee or the manager.

[15] The defendant’s core argument is that the plaintiff as unitholder has no standing to bring this action. The defendant says there is nothing in the DOT that provides unitholders with a right of action for any of the losses allegedly sustained. The DOT states that TDAM is obliged to act in the best interests of “the Fund” - not its unitholders. Indeed, section 1.9 of the DOT specifically provides that “unitholders … have no rights other than those rights expressly provided for herein” and here, says the defendant, no right to sue the Fund (the trust) has been expressly provided.

[16] I do not agree, at least not at this stage of the proceeding. As already noted, the defendant may well prevail on the merits when the matter is fully before the court. On this motion for certification, my only concern is whether it is plain and obvious that the pleaded causes of action have no chance of success and are doomed to fail. [6]

[17] In my view, it is not at all plain and obvious on the facts as pleaded that the plaintiff as unitholder and beneficiary has no right to sue the defendant trustee in respect of the alleged breaches of the prescribed standard and duty of care. To the contrary, the following suggests that the plaintiff may well have the right to do so:

➢ The observation of the Supreme Court of Canada in Valard Construction Ltd v Bird Construction Co, 2018 SCC 8: [7]

[T]he beneficiary of a trust has a right to hold the trustee to account for its administration of the trust property and to enforce the terms of the trust. Absent such a right, both the trustee’s obligation to act in accordance with its fiduciary duty and the terms of the trust itself would be substantially unenforceable. In effect, the trustee would hold beneficial as well as legal ownership of the trust property — which would, of course, be contrary to the division of legal and beneficial ownership upon which the trust relationship is premised. [8] [Emphasis added.]

➢ The opinion of leading commentators on the law of trusts and investment trusts:

[T]he essence of a trust is a beneficiary’s right of recourse against the trustee for proper administration, and if the beneficiary is altogether denied that recourse it is highly questionable whether the settlor has created a trust at all. [9]

To say that trustees owe a duty to the trust rather than its unitholders is to assume that somehow the trust has objectives and goals distinct from its unitholders. The trust has no separate legal existence and is merely a legal relationship among its beneficiaries (unitholders) and its trustees … It would be peculiar, as a functional matter, to outline what amounts to fiduciary obligations in the DOT, but then not allow the parties who benefit from these duties (the unitholders) from suing to enforce them. [10]

➢ The limitation of liability provision in section 10.2 of the DOT contemplates that an action may be brought by a unitholder against, inter alia, the trustee or manager for breach of trust or other duties, and limits liability in this regard;

➢ The analogy to the rights and duties set out in s. 116 of the Securities Act [11] which deals specifically with investment fund managers and refers to the “best interests of the investment fund.” This language has been held to include an obligation to “to look to and take account of the best interests of the unitholders of that fund as a whole.” [12]

[18] In short, I am persuaded that it is at least arguable that the plaintiff/unitholder can sue the defendant for the alleged breaches of the prescribed standard and duty of care. Given the points listed above, I cannot conclude that this core claim about the plaintiff’s standing to sue has no chance of success. Further, I agree with Professors Anand and Iacobucci that the law of unit trusts and the rights of the unitholders is still developing, “is not yet settled” and “should be decided at trial [and not] on a motion to strike.” [13]

[19] Having made this core finding about the plaintiff’s standing to sue, I can quickly address the trappings of the claims alleging breach of trust and fiduciary duty, all of which are properly pleaded. The claim against TDAM as trustee and fiduciary, in my view, is solidly within the four corners of the DOT and conventional trust law. The claim against TDAM as manager and fiduciary may arguably be less solid but I agree with the plaintiff that it is not plain and obvious that it has no chance of success.

[20] Knowing assistance and knowing receipt. The knowing assistance and knowing receipt claims, however, are plainly and obviously untenable on the facts herein and must be struck. It is true that TDAM as trustee delegated management duties to itself so that TDAM was both trustee and manager - but it is still the same entity. The allegation that TDAM as manager knowingly assisted TDAM as trustee - that is, that it knowingly assisted itself - to breach the prescribed standard and duty of care by making improper payments of trailing commissions to discount brokers is analytically unworkable and is doomed to fail.

[21] The same can be said about the knowing receipt claim. Here the allegation is that TDAM as manager received management fees from the Fund and then improperly paid out a portion of these fees as impugned trailing commissions to discount brokers.

[22] The defendant makes several compelling submissions as to why the knowing receipt claim has no chance of success. I agree with these submissions but it is sufficient for me to note what was said by the Supreme Court in Gold v. Rosenberg, 1997 SCC 333, [1997] 3 S.C.R. 767. [14] The Supreme Court made clear that the cause of action in knowing receipt arises “because the defendant has improperly received property which belongs to the plaintiff.” [15] The plaintiff's claim in essence is, “You unjustly have my property. Give it back." [16]

[23] This is not the case here and no such facts are pleaded. There is no suggestion that TDAM as manager improperly received management fees that belonged to the plaintiff/unitholder. The plaintiff’s complaint is not “You have my property; give it back” but rather, “Your payment of the trailing commissions to the discount brokers was in breach of trust and fiduciary duty and caused losses in value. Pay me these losses.”

[24] The viable claim is obviously breach of trust and fiduciary duty. The knowing assistance and knowing receipt claims are square pegs that are being forced unsuccessfully into a round hole. Both are plainly and obviously doomed to fail.

[25] Section 23.1 of the Trustee Act. [17] Section 23.1(2) provides that this court can disallow any expenses paid by a trustee from a trust account “if it is of the opinion that the expense was not properly incurred in carrying out the trust.”

[26] This appears to be a viable claim. The submissions made by the defendant as to why this statutory provision cannot apply to the action herein are not persuasive. Provincial legislation, such as the Trustee Act, is not ousted by the DOT: see, for example, sections 9.1 and 2.8 of the DOT which properly provide that provincial trust laws will continue to apply. TDAM also argues that s. 23.1(2) of the Trustee Act only applies to applications to pass accounts. I agree with the plaintiff that no such express limitation is found in s. 23.1. Nor does it necessarily follow that any judicially disallowed expense must invariably revert to the trust. Here again, I agree with the plaintiff. There is nothing in s. 23.1 of the Trustee Act that limits the court’s discretion to craft a remedy in law or equity that compensates the appropriate beneficiaries if an expense is disallowed. In any event, I note that the plaintiff pleads in the alternative that if the impugned trailing commissions cannot be paid to the class member/beneficiaries that they be repaid to the TD Mutual Funds.

[27] This is, to be sure, a novel application of the s. 23.1 remedy but on the facts herein it has at least a chance of succeeding. In any event, novel issues of statutory interpretation should not be decided at the certification stage. [18]

[28] Prospectus misrepresentation. The prospectus misrepresentation claim is also a viable cause of action. Mutual funds are sold to the investing public in Canada by way of a primary market distribution pursuant to a “Simplified Prospectus.” Since 2011, the Simplified Prospectus has incorporated a Fund Facts informational document.

[29] The defendant’s Fund Facts documents have consistently stated that trailing commissions are paid for the “services and advice” provided by dealers to their clients. See, for example, the representation set out in the Fund Facts document relating to the plaintiff’s purchase of the Investor Series of the TD Dividend Growth Fund:

TDAM pays your investment firm a trailing commission for as long as you own the fund … for the services and advice your investment firm provides to you … The trailing commission is paid out of the management fees paid to TDAM. The rate is up to 1% of the value of your investment each year. This equals $10 each year for every $1,000 invested.

[30] The plaintiff pleads that this is a material misrepresentation that provides the basis for a claim under s. 130 of the OSA. It is a misrepresentation, says the plaintiff, because it falsely represents that trailing commissions are only paid to dealers that provide services and advice to investors when in fact trailing commissions are also paid to discount brokers even though they do not provide services or advice to their clients. The trailing commissions are paid for no purpose that benefits investors. The representation is “material,” adds the plaintiff, because the unauthorized and wasteful depletion of the mutual fund and resulting reductions in the investor’s rate of return is at least arguably “a fact that would reasonably be expected to have a significant effect on the market price or value of the securities”. [19] I accept these submissions.

[31] The defendant’s submissions that the prospectus claim is statute-barred by the applicable limitation period are best left for the next stage of this proceeding. The limitations argument does not succeed at this stage of the proceeding for at least three reasons. First, if TDAM wants to rely on a limitations defence, it must plead that defence in its statement of defence [20] and it has not done so. Second, a limitations defence is not a bar to certification. As the Court of Appeal concluded in Pearson v Inco Ltd, 2006 ONCA 913, [2005] O.J. No. 4918 (C.A.), [21] individual limitation defences do not “negate a finding that the case is suitable for certification”. [22] Third, on the facts herein, there will be discoverability issues that should not be determined on a motion for certification. Again, the Court of Appeal: “discoverability is often an individual issue that will require individual adjudication after the common issues are determined”. [23] Hence the prevailing wisdom that “the limitations issue should not be resolved on a pleadings motion or on a motion for certification.” [24]

[32] In short, the prospectus misrepresentation claim is properly pleaded and is not plainly and obviously doomed to fail.

[33] Unjust enrichment. As was the case with the knowing assistance and knowing receipt claims, the unjust enrichment claim is untenable on the facts herein, has no chance of success and must be struck. The elements of unjust enrichment are well-established. There must be: (i) an enrichment of the defendant; (ii) a corresponding deprivation of the plaintiff; and (iii) no juristic reason for the enrichment. [25]

[34] In my view, it is plain and obvious that the first two elements of unjust enrichment cannot be made out on the facts as pleaded. There is a fatal disconnect between the plaintiff’s alleged loss and the defendant’s alleged unjust enrichment. As the Supreme Court noted in Moore v. Sweet, 2018 SCC 52, [26] the plaintiff must demonstrate that the loss he incurred “corresponds to the defendant’s gain…this correspondence is what grounds the plaintiff’s entitlement to restitution as against an unjustly enriched defendant.” [27] The defendant must have been enriched “at the plaintiff’s expense.” [28] The defendant’s gain and the plaintiff’s loss are “essentially two sides of the same coin.” [29]

[35] The plaintiff pleads that the defendant paid the impugned trailing commissions to discount brokers. There was no “gain” by the defendant. There is no pleading that the defendant kept any portion of the trailing commissions for its own benefit and enrichment. Or that the defendant was enriched “at the plaintiff’s expense.” [30] The unjust enrichment claim has no chance of success and must be struck.

(2) Class definition

[36] The plaintiff proposes the following class definition:

All persons, wherever they may reside or be domiciled, who held or hold, at any time prior to the conclusion of the trial of the common issues in this proceeding, units of a TD Mutual Fund through a Discount Broker, except for the Excluded Persons. [31]

[37] There appears to be some basis in fact for this proposed definition. The defendant, however, levels three criticisms: a limitations argument, overbreadth and indeterminacy.

[38] The limitations argument does not succeed at this stage of the proceeding for the reasons already stated above at paragraph 31. The defendant is right that the proposed class cannot be overly broad or over-inclusive. [32] Here, however, the class is limited to unitholders of TD Mutual Funds who purchased their units from discount brokers and whose investment returns were adversely affected by the defendant’s payment of the impugned trailing commissions. In my view, the class definition is not overly broad. Nor is it indeterminate. The defendant maintains records of all unitholders who held its funds. The unitholders can be identified and ascertained.

[39] I am satisfied that there is some basis in fact for the proposed class definition.

(3) Proposed common issues

[40] The plaintiff proposes 19 common issues. I have attached a copy of the proposed common issues (“PCIs”) in the Appendix. The PCIs that depend on the causes of action that have been struck – namely PCI 7 (knowing assistance), PCI 8 (knowing receipt) and PCIs 12, 13 and 14 (unjust enrichment) – cannot be certified.

[41] The PCIs that remain must satisfy the two-part “some basis in fact” requirement: the plaintiff must provide (i) some evidence that the PCI actually exists and (ii) some evidence that it can be decided on a class-wide basis. [33] Here the two-step requirement is easily satisfied. There is no dispute that the defendant paid trailing commissions to discount brokers impacting the plaintiff’s return on investment. And, because the action is based on standard-form documents (such as the DOT and the Simplified Prospectus) that were made available on a class-wide basis, there is no issue of commonality.

[42] I don’t understand why the plaintiff is pressing to certify PCIs 2 and 5 that ask about TDAM’s liability as manager when the DOT makes plain that TDAM is responsible for all losses arising out any breach of the prescribed standard and duty of care including those caused by its manager. I question whether PCIs 2 and 5 do anything to advance the litigation. However, I will not press the point and I will certify these PCIs.

[43] Assuming liability can be established, PCIs 15 to 19 then ask about the appropriate remedies and some related matters. These are questions that have been routinely certified in many other proposed class actions and I do so here as well. PCI 17, that asks about aggregate damages, is certified because the damages in question can reasonably be determined without proof by individual class members. [34] As already noted, class member losses can be established through the defendant’s own records.

[44] PCIs 1 to 6, 9 to 11 and 15 to 19 are certified.

(4) Preferability

[45] The preferability requirement is not seriously contested by the defendant.

[46] This action is ideally suited to proceed as a class action. The determination of the common issues would advance the litigation and class member damages can be determined on an aggregate basis. The alternative, individual lawsuits, would be unduly expensive and would probably not be pursued which would undermine the important goals of access to justice and behaviour modification.

(5) A suitable representative plaintiff

[47] The defendant’s only objection under this requirement is that the plaintiff’s own claim is statute-barred and thus he cannot serve as a representative plaintiff. However, the plaintiff’s evidence is that there is no limitations issue - he first became aware that trailing commissions were being paid to discount brokers toward the end of 2017 and the statement of claim was issued in March 2019, within the two-year period.

[48] There is some basis in fact for a finding that the proposed representative plaintiff would fairly and adequately represent the interests of the class, has produced a workable litigation plan and has no conflicts of interest on the proposed common issues.

[49] All five certification requirements as set out in s. 5(1) of the CPA are satisfied.

Disposition

[50] The motion for certification is granted. The action is certified as a class proceeding.

[51] PCIs 1 to 6, 9 to 11 and 15 to 19 are certified as the common issues. PCIs 7 and 8, and 12 to 14 are not certified.

[52] Counsel shall prepare an order in the form contemplated by s. 8 of the CPA.

[53] If the parties cannot agree on costs, they may forward brief costs submissions to my attention – within 14 days from the plaintiff and within 14 days thereafter from the defendant.

[54] I am obliged to counsel on both sides for their assistance.

Justice Edward P. Belobaba Date: February 27, 2020

Appendix

Proposed Common Issues

[ Note: PCIs 1 to 6, 9 to 11 and 15 to 19 are certified. PCIs 7, 8, 12, 13 and 14 are not certified. ]

Breach of Trust

1. Did the Defendant, as the trustee of the TD Mutual Funds, breach the Standard and Duty of Care set out in the Trust Instruments? If so, when and how?
2. Did the Defendant, as the manager of the TD Mutual Funds, breach the Standard and Duty of Care set out in the Trust Instruments? If so, when and how?
3. Is the Defendant liable to account to the Class Members?

Breach of Fiduciary Duty

4. Did the Defendant, as the trustee of the TD Mutual Funds, owe a fiduciary duty? If so, to whom was the duty owed?
5. Did the Defendant, as the manager of the TD Mutual Funds, owe a fiduciary duty? If so, to whom was the duty owed?
6. If the answer to the first question in (4) and/or (5) is yes, did the Defendant breach its fiduciary duty? If so, when and how?

Knowing Assistance (not certified)

7. Did the Defendant, as the manager of the TD Mutual Funds, knowingly assist a breach of trust and/or breach of fiduciary duty by the Defendant, as the trustee of the TD Mutual Funds? If so, when and how?

Knowing Receipt (not certified)

8. Did the Defendant, as the manager of the TD Mutual Funds, knowingly receive trust property that was paid by the Defendant, as the trustee of the TD Mutual Funds, in breach of trust and/or breach of fiduciary duty? If so, when and how?

Section 23.1 of the Trustee Act

9. Should the payment of the Unearned Management Fees [35] by the Defendant be disallowed as an expense pursuant to section 23.1 of the Trustee Act?

Prospectus Misrepresentation

10. Did the Fund Facts Documents, and the Simplified Prospectuses which incorporate the Fund Facts Documents, contain a misrepresentation within the meaning of the OSA (and, as applicable, the Other Canadian Securities Legislation)?
11. If the answer to (10) is yes, is the Defendant liable to the Class Members pursuant to s. 130 of the OSA (and, as applicable, the equivalent provisions of the Other Canadian Securities Legislation)?

Unjust Enrichment (not certified)

12. Has the Defendant been enriched by the receipt of the Unearned Management Fees?
13. If the answer to (12) is yes, have the Class Members suffered a corresponding deprivation?
14. If the answer to (13) is yes, is there a juristic reason for the enrichment of the Defendant?

Remedies

15. If the Defendant is found liable on any claims asserted by the Class Members, as set out above, what remedies, including damages and/or equitable remedies, are the Class Members entitled to receive?
16. How should recoveries under each type of remedy be measured?
17. Can the amount of any monetary relief be determined on an aggregate basis? If so, what is the amount and what is the appropriate method or procedure for distributing that amount to the Class Members?

Interest

18. Should the Defendant be ordered to pay an equitable rate of interest and/or pre-judgment and post-judgment interest pursuant to the CJA? If so, what is the appropriate measure or amount of such interest?

Administration and Distribution

19. Should the Defendant pay the costs of administering and distributing the recovery? If so, what amount should the Defendant pay?

[1] Trailing commissions are fees that “trail” the sale of an investment product over its lifetime. They are generally paid on an annual basis to the dealers that sold the product to their client, ostensibly to compensate the dealer for the investment advice being provided to the client. Critics say that trailing commissions are more about kick-backs than compensation. [2] Hollick v Metropolitan Toronto (Municipality), 2001 SCC 68 at paras. 14–15. [3] Class Proceedings Act, 1992, S.O. 1992, c. 6. [4] R.S.O. 1990, c. T.23. [5] Pro-Sys Consultants Ltd v Microsoft Corp, 2013 SCC 57 at paras 99 and 105. [6] Ibid. [7] Valard Construction Ltd v Bird Construction Co, 2018 SCC 8. [8] Ibid., at para. 18. [9] Waters et al, Waters’ Law of Trusts in Canada, 4th ed. (2012), at s. 18.III. [10] Anand and Iacobucci, “The Boundaries of Corporate Law and Trust Law: An Analysis of Locking v McCowan” (2016) 62 McGill L.J. 577 at 589 and 595. [11] Securities Act, R.S.O. 1990, c. S.5 (“OSA”). [12] Re Crown Hill Capital Corp, 2013 CarswellOnt 12163, at para 109, aff’d Pushka v. Ontario (Securities Commission), 2016 ONSC 3041. On appeal, the Divisional Court described as “well-grounded in the jurisprudence” the OSC Panel’s conclusion that an investment fund manager’s duties under s. 116 of the OSA require the manager to, among other things, “act with utmost good faith and in the best interests of the investment fund and put the interests of the fund and its unitholders ahead of its own”: Pushka v. Ontario (Securities Commission), 2016 ONSC 3041, at para. 120. See also 1426505 Ontario Inc v. Jovian Capital Corporation, 2019 ONSC 3799, at para 65. The duty of care under s. 116(b) of the OSA has also been held to extend to the unitholders of the funds: Re Pro-Financial Asset Management Inc. 2017 ONSEC 9, at paras. 129-130. [13] Anand and Iacobucci, supra, note 10, at 595. [14] Gold v. Rosenberg, 1997 SCC 333, [1997] 3 S.C.R. 767. [15] Ibid., at para. 49. [16] Ibid. [17] Supra, note 4. [18] Addison Chevrolet Buick GMC Ltd v General Motors of Canada Ltd, 2016 ONCA 324, at para. 52. [19] OSA, supra, note 11, s. 1(1) (definition of “material fact”). [20] Clark v. Ontario (Attorney General) 2019 ONCA 311, at para. 61. Also see Fresco v. CIBC, 2012 ONCA 444 at para. 108: “The issue of limitations is not an ingredient of the class members’ claims, but instead may be relied on by [the defendant] in its defence.” [21] Pearson v Inco Ltd, 2006 ONCA 913, [2005] O.J. No. 4918 (C.A.). [22] Ibid., at para 63. [23] Smith v Inco Ltd, 2011 ONCA 628, at para 165. [24] Winkler, Perell, Kalajdzic and Warner, The Law of Class Actions in Canada, (2014), at 294. [25] Pro-Sys Consultants, supra, note 5, at para 86. [26] Moore v. Sweet, 2018 SCC 52. [27] Ibid., at paras. 41 and 43. [28] Ibid., at para. 43. [29] Ibid., at para. 41. [30] Ibid. at para. 43. [31] Such as, for example, the defendant’s officers and directors. [32] Pearson, supra, note 21, at para. 57. [33] Until the one-step versus two-step issue is clarified by the Court of Appeal and ideally the Supreme Court, I will continue to use the two-step approach “out of an abundance of caution”: see my explanation for taking this approach in Kaplan v. Casino Rama, 2019 ONSC 2025, at paras. 48 to 54. [34] CPA, supra, note 3, s. 24(1)(c). [35] Unearned Management Fees are defined in the Statement of Claims to mean “trailing commissions.”