CITATION: Mancinelli v. Royal Bank of Canada, 2017 ONSC 6737
COURT FILE NO.: CV-15-536174
DATE: 20171109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES
Plaintiffs
– and –
ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)
Defendants
Daniel Bach and Anthony O’Brien for the Plaintiffs
Lara Jackson and Chris Horkins for the Bank of Montreal, BMO Financial Corp., BMO Harris Bank N.A., BMO Capital Markets Limited
Eliot Kolers for the Defendants UBS AG, UBS Securities LLC and UBS Bank (Canada)
Brendan van Niejenhuis and Benjamin Kates for the Defendants Toronto Dominion Bank, TD Bank, N.A., TD Group Holdings, LLC, TD Bank USA, N.A. and TD Securities Limited
Caitlin Sainsbury and Alannah Forthingham for the Defendant Deutsche Bank AG
Zohaib Maladwala for Defendants BNP Paribas Group, BNP Paribas North America Inc., BNP Paribas (Canada), and BNP Paribas
James Gotowiec for the Defendants Bank of America Corporation, Bank of America, N.A., Bank of America National Association
Andrea Laing for the Defendants The Goldman Sachs Group, Inc. Goldman, Sachs & Co. and Goldman Sachs Canada Inc.
Emrys Davis for the Defendants JPMorgan Chase & Co., J.P. Morgan Bank Canada, J.P. Morgan Canada, J.P Morgan Chase Bank National Association
Proceeding under the Class Proceedings Act, 1992
HEARD: November 1, 2017
PERELL, J.
REASONS FOR DECISION
1. Introduction
[1] In this proceeding under the Class Proceedings Act, 1992,[^1] the Plaintiffs sue 16 groups of financial institutions (48 banks in all) about events that are alleged to have occurred between January 1, 2003 and December 31, 2013.
[2] The Plaintiffs now seek to add two more groups of Defendants comprising nine more financial institutions; namely: (1) Bank of Montreal, BMO Financial Corp., BMO Harris Bank N.A., and BMO Capital Markets Limited (“BMO”); and (2) Toronto Dominion Bank, TD Bank, N.A., TD Group Holdings, LLC, TD Bank USA, N.A., and TD Securities Limited (“TD”).
[3] BMO and TD argue, however, that they should not be added because the claims against them are statute-barred under the Limitations Act, 2002.[^2]
[4] Cross-examining Robert Gain, the Plaintiffs’ deponent for the joinder motion, BMO and TD asked for disclosure of the evidentiary proffer from a settling defendant in May 2016 that Mr. Gain, in his affidavit, had deposed was the source of discovering the claims against BMO and TD. Mr. Gain refused to answer on the grounds that the questions were irrelevant and the evidence privileged. BMO and TD bring a motion to compel Mr. Gain to answer the refused questions.
[5] The motion was argued on November 1, 2017 and I ordered certain questions to be answered for written reasons to follow. What follows are those reasons for the decision.
2. Factual Background
[6] The Plaintiffs, Joseph S. Mancinelli, Carmen Principato, Douglas Serroul, Luigi Carrozzi, Manuel Bastos, and Jack Oliveira, in their capacity as The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada, and Christopher Staines, sue 16 groups of financial institutions.
[7] The Plaintiffs sue: (1) Royal Bank of Canada, RBC Capital Markets LLC; (2) Bank of America Corporation, Bank of America, N.A., Bank of America Canada, Bank of America National Association; (3) The Bank of Tokyo Mitsubishi UFJ Ltd., Bank of Tokyo-Mitsubishi UFJ (Canada); (4) Barclays Bank PLC, Barclays Capital Inc., Barclays Capital Canada Inc.; (5) BNP Paribas, BNP Paribas (Canada), BNP Paribas Group, BNP Paribas North America Inc.; (6) Citibank, N.A., Citibank Canada, Citigroup Global Markets Canada Inc., Citigroup, Inc.; (7) Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, Credit Suisse AG, Credit Suisse Securities (Canada), Inc.; (8) Deutsche Bank AG; (9) The Goldman Sachs Group, Inc., Goldman, Sachs & Co., Goldman Sachs Canada Inc.; (10) HSBC Holdings PLC, HSBC Bank PLC, HSBC North America Holdings Inc., HSBC Bank USA, N.A., HSBC Bank Canada; (11) J.P.Morgan Canada, JPMorgan Chase Bank National Association, JPMorgan Chase & Co., J.P.Morgan Bank Canada; (12) Morgan Stanley, Morgan Stanley Canada Limited; (13) Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., Royal Bank of Scotland PLC; (14) Société Générale S.A., Société Générale (Canada), Société Générale; (15) Standard Chartered PLC; and (16) UBS AG, UBS Securities LLC and UBS Bank (Canada).
[8] The Plaintiffs allege that between January 1, 2003 and December 31, 2013, the Defendants conspired with each other to fix prices in the futures exchange market (the “FX Market”). It is alleged that through the use of multiple chat rooms with names such as “The Cartel,” “The Bandits’ Club,” and “The Mafia,” the Defendants communicated directly with each other to coordinate their: (a) fixing of spot prices; (b) control and manipulation of FX benchmark rates; and (c) exchange of key confidential customer information to trigger client stop loss orders and limit orders. The Plaintiffs allege that the Defendants’ conspiracy impacted all manner of FX instruments, including those trading both over-the-counter and on exchanges.
[9] The Plaintiffs, through Mr. Staines, commenced their action by way of Statement of Claim, which was issued on September 11, 2015. The Statement of Claim pleads several causes of action against the Defendants including a statutory right of action for contraventions of Part VI of the Competition Act;[^3] namely: civil conspiracy, and unjust enrichment. The Plaintiffs claim damages of $1 billion plus punitive damages.
[10] There have been four rounds of settlements with some of the Defendants. Twelve of the 16 groups of defendants have settled. The court has approved settlements with: (1) UBS AG, UBS Securities LLC and UBS Bank (Canada) (“UBS”); (2) BNP Paribas Group, BNP Paribas North America Inc., BNP Paribas (Canada), and BNP Paribas (“BNP”); and (3) Bank of America Corporation, Bank of America, N.A., Bank of America Canada and Bank of America National Association (“Bank of America”); (4) the Goldman Sachs Group, Inc., Goldman, Sachs & Co., and Goldman Sachs Canada Inc. (“Goldman Sachs”); (5) JPMorgan Chase & Co., J.P.Morgan Bank Canada, J.P.Morgan Canada, and JPMorgan Chase Bank National Association (“JPMorgan”); (6) Citigroup, Inc., Citibank, N.A., Citibank Canada, and Citigroup Global Markets Canada Inc. (“Citibank”); (7) Barclays Bank PLC, Barclays Capital Inc., and Barclays Capital Canada Inc. (“Barclays”); (8) HSBC Holdings PLC, HSBC Bank PLC, HSBC North America Holdings Inc., HSBC Bank USA, N.A., and HSBC Bank Canada (“HSBC”); (9) Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., and Royal Bank of Scotland PLC (“RBS”); (10) Standard Chartered plc; (11) The Bank of Tokyo Mitsubishi UFJ Ltd., and Bank of Tokyo-Mitsubishi UFJ (Canada)(“BTMU”); and (12) Société Générale S.A., Société Générale (Canada), and Société Générale (“SocGen”).
[11] All the Settlement Agreements provided, among other things, that: (1) the settlement amounts shall be held in an interest-bearing account; (2) the costs of disseminating the Notices of Certification and Settlement Approval Hearings are to be paid from the settlement amounts; (3) the opt-out deadline has been set as part of the earlier settlements and no further opt-out rights will be provided; and (4) the Settling Defendants agree to provide reasonable co-operation to the Class Members in order to assist in the continued prosecution of this action against the Non-Settling Defendants.
[12] All of the settlements contained the following provision making the proffers of evidence confidential or privileged:
Notwithstanding any other provision of this Settlement Agreement, and for greater certainty, it is agreed that all statements made and information provided by counsel for the Settling Defendants are privileged, will be kept strictly confidential, may not be directly or indirectly disclosed to any other person, and will not be used by Class Counsel for any purpose other than for their own internal use in connection with prosecution of the Proceedings.
[13] On May 20, 2016, the Plaintiffs and UBS signed a settlement agreement. The settlement was subject to court approval.
[14] On May 24, 2016, pursuant to its settlement agreement, but before it had been approved by the court, UBS made the first proffer of evidence.
[15] On July 20, 2016, the Plaintiffs served a notice of motion to amend the Statement of Claim to add BMO and TD as defendants. The motion was supported by an affidavit from Mr. Gain in which he deposed that the involvement of BMO and TD was not discovered by Class Counsel and could not reasonably have been discovered until May 2016.
[16] On August 5, 2016, BMO’s counsel requested particulars of the information leading to the discovery of the involvement of BMO in the alleged conspiracy. The Plaintiffs’ lawyer responded that further information would be forthcoming. The joinder motion was to be adjourned in the meantime.
[17] On November 9, 2016, the first round of settlements, involving UBS, BNP, Bank of America, Goldman Sachs, JPMorgan and Citigroup, received court approval.
[18] On June 22, 2017, Plaintiffs’ counsel advised that the Plaintiffs intended to bring on the joinder motion and the motion was subsequently scheduled for November 27 and 28, 2017.
[19] On July 31, 2017, the Plaintiffs served a new motion record to add BMO and TD.
[20] The motion record contained another affidavit from Mr. Gain, who deposed that the involvement of BMO and TD was not discovered by Class Counsel, and could not reasonably have been discovered at the time the action was commenced in September 2015 or at any time before the first proffer.
[21] Mr. Gain also deposed that before the commencement of the action to the date of the UBS proffer on May 24, 2016, Class Counsel conducted its own investigations and no public documents referred to BMO or TD being involved in the alleged conspiracy.
[22] On September 13, 2017, TD’s counsel requested copies of the first proffer referred to in paragraph 10 of Mr. Gain’s affidavit as well as any other proffers and any associated documents relied on in support of the Plaintiffs’ position on discoverability.
[23] On September 14, 2017, Plaintiffs’ counsel responded and advised that the information requested would not be provided because the information was privileged and confidential pursuant to the settlement agreements and court orders incorporating those agreements.
[24] On October 20, 2017, Mr. Gain was cross-examined for the pending joinder motion. He refused to answer any questions about any of the proffers including when the Plaintiffs learned about the claims against BMO and TD.
3. Discussion and Analysis
[25] Questions 85-88, 107, 108, 110-115, 120-125, and 146 were withdrawn.
[26] Questions 43, 58, 72, 80, 81, 82, 98, 99, and 101 were properly refused on the grounds of irrelevancy, immateriality, overreaching, being beyond the scope of the examination, or as disproportionate.
[27] Questions 55, 57, 59, 60, 61, 68, 70, 73, 74, 78, 79, and 102 should be answered. The questions are relevant to the joinder motion now before the court and although the evidence proffered may be covered by some form of privilege, any privilege has been waived and therefore the questions should be answered.
[28] Recalling that the events in issue in the proposed class action occurred between January 1, 2003 and December 31, 2013 and that the Statement of Claim was issued on September 11, 2015, and it is proposed to add BMO and TD in 2016-17, the critical issue on the joinder motion is whether the claims against BMO and TD are statute-barred under the Limitations Act, 2002, pursuant to sections 4 and 5, which state:
Basic limitation period
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
Discovery
- (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Presumption
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
[29] In the circumstances of the immediate case, the Plaintiffs have a claim that occurred between 2003 and 2013 and pursuant to s. 5(2) of the Limitations Act, 2002, the Plaintiffs are presumed to know, unless the contrary is proved, that TD and BMO, the persons against whom the claim is made, were the wrongdoers whose acts or omissions caused or contributed to the injury, loss, or damage that occurred.
[30] Mr. Gain’s affidavit was proffered as evidence to contradict the presumption set out in s. 5(2) of the Limitations Act, 2002 that the claim against BMO and TD was discovered between 2003 and 2013, in which event an action after December 31, 2015 would be statute-barred. His evidence is to the effect that the claims against BMO and TD could not have been discovered earlier than when UBS made its evidentiary proffer. Mr. Gain’s evidence was relevant to the motion and BMO and TD are entitled to question him on his relevant evidence.
[31] Moreover, even if it was not relevant, Mr. Gain volunteered the evidence and made the UBS proffer an issue on the motion. The Plaintiffs made the proffer relevant to the explanation as to why they could not have discovered their case against TD and BMO earlier than they did.
[32] Where an affiant raises a matter, the opposite party is entitled to cross-examine on it, even if it appears irrelevant to the underlying action or motion.[^4] In these circumstances, BMO’s and TD’s Questions 55, 57, 59, 60, 61, 68, 70, 73, 74, 78, 79, and 102 were properly put to Mr. Gain and should have been answered.
[33] The Plaintiffs’ argument that the questions about how their lawyers came to discover a claim against BMO and TD are irrelevant is without merit. The premise of this argument, which would ignore the presumption found in s. 5(2) of the Limitations Act, 2002, is that the onus is on BMO and TD to ask questions to prove that with due diligence, it would have been possible for the Plaintiffs to discover the claim against them, presumably from some source other than the UBS proffer. It would certainly be proper for BMO and TD to ask questions of that nature, but that does not mean that other relevant and probative questions cannot be asked or that all other questions are irrelevant.
[34] Relying on settlement privilege, litigation privilege, or some sort of privilege arising from the settlement agreement of from the subsequent approval of that agreement, the Plaintiffs then argue that the questions need not be answered on the grounds of privilege.
[35] This argument, however, fails because if the answers are privileged, and I will assume without deciding that some sort of privilege attaches to the evidentiary proffer in the case at bar, then the privilege has been advertently waived.
[36] Even inadvertently, privilege may be waived where the evidence is relevant, and the principles of fairness and consistency require its disclosure.[^5] In S & K Processors Ltd. v. Campbell Avenue Herring Producers Ltd.,[^6] which was followed in Ontario in Browne (Litigation Guardian of) v. Lavery,[^7] Justice McLachlin, as she then was, stated:
Waiver of privilege is ordinarily established where it is shown that the possessor of the privilege (1) knows of the existence of the privilege, and (2) voluntarily evinces an intention to waive the privilege.
[37] Therefore, Questions 55, 57, 59, 60, 61, 68, 70, 73, 74, 78, 79, and 102 should be answered.
Perell, J.
Released: November 9, 2017
CITATION: Mancinelli v. Royal Bank of Canada, 2017 ONSC 6737
COURT FILE NO.: CV-15-536174
DATE: 20171109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES
Plaintiffs
– and –
ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)
Defendants
REASONS FOR DECISION
PERELL J.
Released: November 9, 2017
[^1]: S.O. 1992, c. 6.
[^2]: S.O. 2002, c. 24, Sched. B.
[^3]: R.S.C. 1985, c. C-34.
[^4]: Guestlogix Inc. v. Hayter, 2010 ONSC 5570 at para.16; Ferring Inc. v. Richmond Pharmaceuticals Inc., [1996] O.J. No. 621 (Div. Ct.) at paras. 14-15.
[^5]: Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of) (1997), 1997 CanLII 12113 (ON SC), 32 O.R. (3d) 575 (Gen. Div.); General Accident Assurance Co. v. Chrusz (1999), 1999 CanLII 7320 (ON CA), 45 O.R. (3d) 321 (C.A.); Creative Career Systems Inc. v. Ontario, 2012 ONSC 649; Enterprise Excellence Corp. v. Royal Bank (2000), 9 C.P.C. (5th) 362 (Ont. S.C.J.); Roynat Capital Inc. v. Repeatseat Ltd., 20l5 ONSC 1108.
[^6]: (1983), 1983 CanLII 407 (BC SC), 35 C.P.C. 146 (B.C.S.C.) at pp. 148-49.
[^7]: 2002 CanLII 49411 (ON SC), [2002] O.J. No. 564, 58 O.R. (3d) 49 (S.C.J.).