Court File and Parties

COURT FILE NO.: 3957/11-CP DATE: 20180911 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Peter Rooney and Archie Leach, Plaintiffs/Responding Parties AND: ArcelorMittal S.A., Lakshmi N. Mittal, Aditya Mittal, 1843208 Ontario Inc., Philippus F. Du Toit, Nunavut Iron Ore Acquisition Inc. Iron Ore Holdings, LP, NGP Midstream & Resources, L.P., NGP M&R Offshore Holdings, L.P., Jowdat Waheed, Bruce Walter, John T. Raymond, John Calvert, Baffinland Iron Mines Corporation, Richard D. McCloskey, John Lydall and Daniella Dimitrov, Defendants/Moving Parties

BEFORE: Aston J.

COUNSEL: Michael G. Robb, Nicholas C. Baker and Garett Hunter, for the Plaintiffs Steve J. Tenai, for the defendants ArcelorMittal S.A., Aditya Mittal, 1843208 Ontario Inc., Philippus F. du Toit, and Baffinland Iron Mines Corporation Alex Rose, for the defendants, Richard D. McCloskey, John Lydall and Daniella Dimitrov

HEARD: September 5, 2018, in writing

Endorsement

[1] This is a motion for leave to appeal the May 18, 2018 order of Rady J. certifying a class action proceeding. The Statement of Claim asserts a statutory cause of action under the Ontario Securities Act (OSA) [1], relief from oppression under the Ontario Business Corporations Act (BCA) and a claim for unjust enrichment. Baffinland Iron Mines and three individual defendants (collectively BIM) seek to set aside the class action certification of the “oppression-based common issues” but they do not challenge the certification of the OSA or unjust enrichment claims.

[2] Rule 12.06(2) provides that leave to appeal shall be granted only on the grounds provided in subrule 62.02(4).

[3] Is there a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal? At para. 75 of the certification decision, Rady J. states: “One final point before leaving the topic. The [Shaw v. BCE] [2] decision is dated and appears out of step with subsequent decisions such as BCE, Ford and Essar.” At first blush, this seems to identify “conflicting decisions” for the purposes of r. 62.02(4).

[4] BIM asserts that [Shaw v. BCE] [2], and [Milburn v. Growthworks Canadian Funds Limited] [3] stand for the proposition that class proceedings based on oppression claims cannot proceed because of the need for an individual assessments of the expectations of individual shareholders.

[5] Neither case stands as authority for that broad proposition.

[6] In [Shaw v. BCE] [2], Farley J. found that the plaintiff had not articulated any maintainable cause of action based on oppression in the Statement of Claim. [4] Consequently, the Statement of Claim was struck [5] and the class certification motion failed on that ground alone [6]. It is only by way of obiter [7] that Farley J. alluded to the “problem” of individualized expectations and made the observation that “misrepresentations will not normally raise common issues” [8].

[7] The plaintiff in Millburn was not asking the court to certify a class proceeding. Rather, he sought status as a representative plaintiff for disclosure and discovery purposes and for some, but not all, shareholders. One of the eight reasons for rejecting Dr. Milburn as a representative plaintiff (for the purpose of disclosure and discovery) was that “the assessment of reasonable expectations to support an oppression remedy requires an individual assessment of each shareholder’s circumstances and may differ within the proposed group”. The statement is made without discussion, analysis or reference to any authority. It seems that was a simply a finding of fact in that case, not a statement of a universal legal principle.

[8] I do not regard either the obiter in Shaw or the apparently factual conclusion in Millburn as a “conflicting decision” for the purposes of Rule 62.02(4).

[9] Does there appear to be good reason to doubt the correctness of the order in question?

[10] The decision of the motions judge applies the Supreme Court of Canada decision in [Re BCE Inc.] [9], and decisions by the Court of Appeal for Ontario in [Ford v. Omers] [10], and [Ernst & Young v. Essar Global Fund Limited] [11] on the issue of reasonable expectations of shareholders in the context of a proposed oppression claim. Though these cases are not class actions, it is the oppression claim context that makes them germane to this case. The motions judge followed appellate precedent and correctly concluded that oppression claims do not necessarily require explicit evidence of the expectations of each individual shareholder. At this stage of the proceeding it is sufficient for the plaintiffs to specifically identify and assert one or more common shareholder expectations that are objectively reasonable. They have done so in particular fashion in this case. The oppression claim as pleaded goes beyond mere allegations of misrepresentation. See paras. 101A(a), 101A(b), 101B and 101C of the Statement of Claim.

[11] There is no reason to doubt the correctness of the order. Even if there was, the proposed appeal does not involve matters of such importance that leave to appeal ought to be granted.

[12] The moving parties assert that the order in this case represents a “profound turning point” in the law. I disagree. Many oppression cases have been certified over the years. This is a complicated proceeding but the class certification order in this case does not set any new precedent. It does not transcend the interests of the parties.

[13] The motion for leave to appeal is dismissed with costs. If counsel are unable to agree on the quantum of costs, brief written submissions may be made in the next 20 days.

“Justice D. R. Aston” Justice D. R. Aston Date: September 11, 2018

[1] for circular misrepresentation and insider trading. [2] [2003] O.J. No. 2695 (S.C.J.) [3] 2013, NSSC 69 [4] Para. 17 [5] Para. 18 [6] Para. 19 [7] Para. 23 [8] Para. 22 [9] , [2006] O.J. No. 27 (C.A.) [10] , [2006] O.J. No. 27 (C.A.) [11] 2017 ONSC 1366 ; aff’d 2017 ONCA 1014