Paul Bates

Following a decision granting leave to proceed with secondary market misrepresentation claims and certifying a class action, the parties disputed the settlement of the order, the certification of the primary market subclass's financial outlook claim, and costs.

The court held that the primary market subclass's claim remained certified, as importing a merits-based leave test into the certification criteria was improper.

The court settled the order in accordance with the plaintiff's draft, declined to clarify findings of fact, and awarded the plaintiff $950,000 in costs based on overall success.

The plaintiffs brought a motion to certify a class action against seven discount brokers, alleging that their receipt of mutual fund trailing commissions prior to the 2022 prohibition was illegal.

The court found that the plaintiffs failed to satisfy the 'some evidence' requirement to show that the practice contravened applicable Canadian securities law.

The evidence filed by the plaintiffs themselves demonstrated that the practice, while controversial, was not illegal before the regulatory amendments took effect.

The motion for certification was dismissed.

The plaintiffs brought a motion to certify a class action against the manufacturers of the antidepressant Celexa, alleging it is a teratogen that causes congenital malformations.

The plaintiffs proposed common issues regarding general causation (whether Celexa is or may be teratogenic) and duty to warn.

The court dismissed the certification motion, finding that the proposed common issues failed to satisfy the commonality requirement under s. 5(1)(c) of the Class Proceedings Act, as they would not advance the litigation without individual trials for each specific congenital malformation.

The court also found that a class proceeding was not the preferable procedure due to the overwhelming number of complex individual issues.

The defendant in a proposed class action brought a motion to strike the plaintiff's expert evidence filed in support of certification.

The proposed class action alleged the defendant trust company breached its duties regarding syndicated mortgages held in registered savings accounts.

The court granted the motion to strike the expert's evidence in its entirety, finding the expert was not qualified, lacked independence, acted as a partisan advocate, and improperly provided legal argument and opinions on ultimate issues beyond his expertise.

The plaintiff brought a motion to certify a class action against a trust company that acted as the trustee for registered savings accounts through which class members invested in syndicated mortgages.

The syndicated mortgages, promoted by a third-party developer, failed, resulting in significant losses.

The plaintiff alleged the trust company breached trust, fiduciary, contractual, and common law duties by failing to ensure the mortgages were fully secured and qualified investments under the Income Tax Act.

The court dismissed the certification motion, finding it plain and obvious that the pleadings disclosed no reasonable cause of action, as the trust company did not undertake the alleged gatekeeper duties.

The court also found the proposed omnibus class action failed the common issues, preferable procedure, and representative plaintiff criteria.

The plaintiff brought motions for approval of a class action settlement, plan of distribution, and class counsel fees in a securities class action alleging goodwill misrepresentation.

The court approved the settlement of US$3.65 million, finding it fair and reasonable given the significant risks of the litigation, including the primary market claims being potentially statute-barred and the defendants' dwindling insurance proceeds.

The court also approved the plan of distribution, the appointment of the settlement administrator and referee, and class counsel's 33% contingency fee of $1,353,246.25.

The plaintiff brought a motion to discontinue a proposed class action against Olympia Trust Company regarding a syndicated mortgage loan investment.

The plaintiff had subsequently commenced an Omnibus Action against the same defendant on behalf of investors in 54 projects, which included the claims from the immediate action.

The court granted the motion to discontinue the action without costs and without requiring notice to putative class members, finding that the immediate action was redundant and the class members' interests were protected by the Omnibus Action.

The plaintiff brought a motion for leave to proceed with a secondary market securities class action under the Securities Act and a motion for certification under the Class Proceedings Act.

The claim alleged that the defendant cannabis company and its directors made thousands of misrepresentations regarding revenue recognition, which were later corrected in restated financial statements.

The court dismissed the motion for leave, finding no reasonable possibility that the plaintiff could prove the alleged misrepresentations had a material impact on the share price.

Consequently, the court also dismissed the certification motion, as the pleadings failed to disclose a viable cause of action for the remaining common law and oppression claims.

A case conference was held to determine the sequencing and scheduling of proceedings leading up to the leave and certification motions.

The parties agreed on consent to have both motions heard at the same time and established a timetable for the exchange of materials, cross-examinations, and factums, with hearing dates set for June 7-9, 2021.

Following the dismissal of the plaintiffs' proposed class action on summary judgment, the successful defendants sought costs on a partial indemnity basis totalling approximately $2.3 million.

The plaintiffs and the Class Proceedings Fund argued that the costs should be reduced to $600,000 in the aggregate, asserting that the case was not complex, was in the public interest, raised novel points of law, and that a large costs award would have a chilling effect on class actions.

The court rejected these arguments, finding that the litigation was primarily commercial, involved complex issues, and that the normal costs rules should apply.

The court awarded the defendants their requested costs, subject to a reduction of one expert witness's fee.

The plaintiffs brought a motion to certify a class action for settlement purposes and to approve a national settlement regarding alleged exhaust leaks in certain Ford Explorer vehicles.

The court approved the discontinuance of claims regarding other Ford models, added a new representative plaintiff, and certified the class for settlement.

Finding the settlement fair, reasonable, and in the best interests of the class, the court approved the settlement, the notice plan, and honoraria for the representative plaintiffs.

The plaintiffs, franchisees of the defendant, brought a motion for partial summary judgment seeking declarations that the defendant franchisor breached the Arthur Wishart Act by failing to provide a disclosure document upon renewal of their franchise agreement, and breached its duty of fair dealing.

The franchisor argued it was exempt from providing a disclosure document under s. 5(7)(f) of the Act because there was no material change.

The court dismissed the motion, finding that whether the terms of the renewal agreement constituted a material change, especially in the context of the franchisor's shift toward a corporate service model, presented a genuine issue requiring a trial.

Following a summary judgment motion in a class proceeding where the plaintiff succeeded on four of five common issues, the plaintiff sought an elevated partial indemnity costs award of $1,287,296.

The defendant argued for partial indemnity costs capped at $500,000 due to divided success.

The court rejected the elevated scale, applied the recommended Grid rates for hourly fees, and reduced the fees by one-quarter to reflect the divided success.

Costs were fixed at $775,000 all-inclusive, payable within 30 days.

The representative plaintiff in a class action sought costs following a successful second motion under s. 5(1)(a) of the Class Proceedings Act and a subsequent consent certification.

The court awarded the plaintiff partial indemnity costs of $31,089 for the contested motion.

For the balance of the certification motion, the court ordered a hybrid costs award because the defendants did not communicate their consent in a timely fashion, fixing costs at $65,235, with one-third payable forthwith and two-thirds payable in the cause.

The applicant sought leave to commence a class action under s. 138.8 of the Securities Act, alleging the respondent mining company failed to disclose a material change regarding the introduction of cement grout pack supports which allegedly caused a decline in production.

The court reviewed the evidence, including expert reports and fact witness affidavits, and found that the overwhelming weight of the evidence demonstrated that cement grout packs were not introduced during the relevant quarter.

Applying the Supreme Court of Canada's threshold test from Theratechnologies, the court concluded the proposed action had no reasonable prospect of success at trial and dismissed the motion for leave.

The representative plaintiff in a securities class action sought court approval of an $11 million settlement agreement, a plan of distribution, and class counsel fees.

The action alleged that the defendants misrepresented the development costs of a mining project.

The court found the settlement to be fair, reasonable, and in the best interests of the class, noting the significant litigation risks, including proving liability and overcoming statutory liability caps under the Securities Act.

The court also approved the plan of distribution, the appointment of the claims administrator, and class counsel's fee request of $2.75 million (25% of the settlement) plus disbursements, finding them fair and reasonable given the results achieved and risks assumed.

The plaintiffs in a proposed class action regarding beer pricing and market allocation in Ontario sought leave under s. 29 of the Class Proceedings Act to discontinue the action against the LCBO and treat it as an unnamed co-conspirator.

The court dismissed the motion as premature, finding that the discontinuance should occur, if at all, only after the close of pleadings, as the remaining defendants had not yet filed statements of defence and might assert cross-claims or third-party claims against the LCBO.

The court also found the evidentiary record inadequate to justify discontinuance.

The defendant BCE Inc. brought a consent motion to discontinue a proposed class action concerning alleged secondary market misrepresentations.

The court found that the plaintiff's statutory and common law claims were statute-barred because no motion for leave had been brought within the applicable limitation periods.

As no purpose would be served by continuing the action and no prejudice would result, the court granted leave to discontinue the action without costs and without notice to the putative class members.

The plaintiff sought leave under s. 138.8 of the Securities Act to pursue a secondary market misrepresentation class action arising from a mining company’s public restatement of prior financial statements related to “bill and hold” revenue recognition.

The court held that the explicit restatement acknowledging prior errors and internal control weaknesses created a reasonable possibility that the claim against the issuer could succeed at trial.

However, the individual officers and directors demonstrated a reasonable investigation defence through detailed evidence of their reliance on professional auditors and careful review of revenue recognition practices.

As a result, the statutory leave requirement was satisfied only as against the issuer company.

Leave was refused against the individual defendants.

The plaintiff, a unit-holder in a real estate investment trust (REIT), brought a proposed class action alleging that the REIT's former CEO and trustees breached their fiduciary duties and duties of trust by entering into an undisclosed related-party transaction.

On a bifurcated certification motion to determine if the pleadings disclosed a reasonable cause of action under s. 5(1)(a) of the Class Proceedings Act, the court struck the breach of fiduciary duty claims, finding that the defendants owed duties to the REIT but not to the unit-holders.

However, the court allowed the breach of trust claims against the trustees and the knowing assistance claim against the former CEO to proceed, while striking the knowing assistance claims against the vendor and the vendor's solicitors.