Peter F.C. Howard

The plaintiffs, Andrew and Selena Stronach, brought motions to strike out portions of the defendants' Fresh as Amended Statements of Defence under Rule 25.11 of the Rules of Civil Procedure.

The plaintiffs argued that the impugned pleadings improperly referenced documents and communications that were subject to settlement privilege arising from a confidential judicial mediation.

The defendants argued that the plaintiffs had waived privilege or that an exception applied based on the justice of the case.

The court found that the mediation was subject to settlement privilege, the plaintiffs had not waived the privilege, and no exception applied.

The court granted the motions to strike the pleadings relating to the mediation.

The court also struck out portions of one defendant's pleading as scandalous, but dismissed a motion to require another defendant to reinstate a withdrawn admission.

The plaintiff brought a motion to certify a class action against Toyota for settlement purposes regarding defective Takata airbag inflators.

The court reviewed the five-part test under section 5 of the Class Proceedings Act, 1992, noting that the criteria may be less rigorously applied in a settlement context.

Finding that all criteria were satisfied, the court granted the motion, certified the action for settlement purposes, and approved the notice plan and appointment of administrators.

The plaintiff sought leave to bring a statutory misrepresentation class action under Part XXIII.1 of the Securities Act against MDC Partners Inc. and its former executives.

The plaintiff alleged that the defendants made material misrepresentations by failing to disclose an SEC subpoena, an internal investigation into executive expenses, and other accounting issues.

The court dismissed the motion for leave, finding that none of the alleged omissions or misstatements were material facts that would have significantly altered the total mix of information available to a reasonable investor, particularly given that the company's auditors never withdrew their clean audit opinions or required a restatement of financial statements.

The plaintiff brought a proposed class action for secondary market misrepresentation against the defendants under the Ontario Securities Act and common law.

The defendants brought motions to restrict the class to Canadians who purchased shares on the TSX, arguing that the Ontario court was forum non conveniens for Canadians who purchased on NASDAQ, and that American law should apply to those claims.

The court dismissed the motions, finding that the defendants failed to show that the U.S. was a clearly more appropriate forum, and that the statutory cause of action under the Ontario Securities Act applies extra-territorially to Canadian purchasers on foreign exchanges.

The defendants, an auditing firm, brought a motion for summary judgment to dismiss a $5 billion negligence claim arising from their audits of feeder funds that invested in the Bernard Madoff Ponzi scheme.

The plaintiffs alleged that the auditors failed to discover the fraud, causing the funds to remain invested and suffer massive losses.

The court granted summary judgment, finding that the plaintiffs failed to prove any damages.

Applying the plaintiffs' own damages formula, the court concluded that the funds actually benefited from the delayed discovery of the fraud due to net withdrawals and the exclusion of fictitious profits and unasserted liabilities.

In a certified class proceeding regarding a franchise dispute, the plaintiff sought to bring a motion for partial summary judgment on the issue of whether the defendant was a franchisor under the Arthur Wishart Act.

The defendant opposed, arguing that all issues should proceed to the scheduled common issues trial.

The court held that permitting a partial summary judgment motion would not be proportionate, expeditious, or cost-effective, as it risked creating multiple final judgments and appeal routes.

The court exercised its power under section 12 of the Class Proceedings Act to prohibit the plaintiff from proceeding with the motion, directing that all issues be determined at the common issues trial.

The liquidator of LWP Capital Inc. brought a motion for declaratory relief regarding a dispute over a working capital adjustment following the sale of its special crops division to the respondent.

The applicant argued the respondent was estopped from disputing the preliminary closing working capital and that the dispute resolution mechanism in the Asset Purchase Agreement was not properly engaged.

The court dismissed the motion, finding no estoppel and holding that the dispute over the net realizable value of the inventory properly triggered the expert determination process under the agreement.

The plaintiff sought certification of a class proceeding on behalf of operators of Sears Hometown Stores who entered into standard Dealer Agreements with the defendants.

The claim alleged that the contractual arrangements constituted franchise relationships under the Arthur Wishart Act (Franchise Disclosure), 2000, triggering statutory disclosure obligations and a duty of fair dealing, and alternatively alleged breach of contract, breach of the duty of good faith, and unjust enrichment arising from the defendants’ compensation structures, advertising practices, and direct sales into dealers’ market areas.

The court applied the certification criteria under s. 5(1) of the Class Proceedings Act, 1992 and found that the pleadings disclosed viable causes of action, the proposed class was identifiable, and the claims raised common issues concerning the defendants’ standardized contractual practices and compensation structure.

The court further held that a class proceeding was the preferable procedure and that the proposed representative plaintiff was adequate despite not currently operating a store and lacking resources to satisfy potential costs awards.

The action was certified as a class proceeding with revised common issues.

Following judgment awarding damages for auditor negligence, the court determined the appropriate prejudgment interest rate and start date under the Courts of Justice Act.

The court rejected the plaintiff’s proposed interpretation of the Ministry interest rate tables and held that the statutory quarterly rate corresponding to the commencement of the action applied.

The court also declined to average interest rates over the period absent compelling justification, emphasizing that deviations from the statutory scheme require substantial evidence.

Applying ss. 128 and 130 of the Act, the court structured the accrual of prejudgment interest to reflect when losses were actually incurred rather than the breach date alone.

Interest was calculated in stages culminating in a total prejudgment interest award exceeding $33 million.

Livent Inc., through its Special Receiver, sued its former auditors, Deloitte & Touche, for negligence and breach of contract in failing to detect massive corporate fraud perpetrated by Livent's directing minds, Garth Drabinsky and Myron Gottlieb.

The court found that Deloitte failed to conduct its 1996 and 1997 audits in accordance with generally accepted auditing standards (GAAS), particularly regarding preproduction costs and complex revenue transactions.

The court rejected Deloitte's defences based on the corporate identification doctrine and ex turpi causa, holding that the fraud of the directing minds could not be attributed to the company to shield the negligent auditors.

Damages were assessed at $84,750,000, representing the increase in Livent's liquidation deficit caused by the delayed discovery of the fraud, discounted by 25% for business contingencies.