Court Of Appeal Summaries (July 18-July 22)

Below are the summaries of this week's civil decisions released by the Court of Appeal for Ontario. Topics covered include contracts (interpretation and application of exclusion clause), summary judgment in the limitation period context, and contempt. The most noteworthy decision of the week was in Mancinelli v. Barrick Gold Corporation, in which the court confirmed the test and factors to be considered in choosing between plaintiff law firms competing for carriage of a class action. Also interesting was the decision in Whitfield v Whitfield, in which a judgment awarding damages for historic sexual assault was overturned because the trial judge broke the credibility tie between the complainant and the defendant by impermissibly relying on expert opinion evidence.

Civil Decisions

Mancinelli v. Barrick Gold Corporation, 2016 ONCA 571

[Strathy C.J.O., Pepall and Brown JJ.A]

Counsel: P. Pape, S. Chaudhury and J. Naim, for the appellants W.A.D. Millar and P. Jervis, for the respondents K.E. Thomson and S.G. Frankel, for the defendants

Keywords: Class Action, Carriage Dispute, Securities, Misrepresentations

Facts:

Barrick is a Canadian gold company that obtained approvals from the Chilean government to develop an open-pit mine, subject to conditions regarding the project's environmental impact. Barick first publicly disclosed that its activities complied with Chilean regulatory requirements and that it had comprehensive environmental protection measures in place. Then, on April 10, 2013, Barrick disclosed that a Chilean court had issued an interlocutory order suspending construction of the mine. The following month, Chilean regulators closed the project due to environmental violations. The resulting plunge in Barrick's share price spawned shareholder class actions in the U.S. and Canada alleging violations of the Securities Act by misrepresenting the progress of the mine in public disclosures.

Two law firms in Canada, Rochon Genova LLP and Koskie Minsky LLP, have commenced a class action against Barrick. They each seek a carriage order and stay of the other's action. The motion judge applied the test set out in Vitapharm Canada Ltd. v. F. Hoffman-Laroche Ltd. for carriage of the class action and granted the carriage order in favour of Rochon. The Divisional Court found that the motion judge made no error in law or principle and no palpable and overriding error of fact. Koskie appeals this decision but focusses its submissions on the motion judge's alleged errors in principle.

Issues:

(1) Did the motion judge err in principle in preferring Rochon's broader claim as opposed to the more streamlined theory pleaded by Koskie?

(2) Did the motion judge err by examining the quality of Rochon's preparation as opposed to considering the stage of preparation?

(3) Did the motion judge err in assuming Rochon would be able to find favourable third party funding arrangements?

(4) Did the motion judge err in failing to recognize Koskie's greater expertise in securities class actions?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The court rejects any firm rule that "less is more" or that "more is better". In considering the factor of "nature and scope of cause of action advanced" of Vitapharm, the ultimate question is whether the proposed strategy is reasonable and defensible. Rochon's claim added a further basis of liability and the motion judge was entitled to conclude that this was in the best interest of the class.

(2) No. In general, the focus under "state of preparation" factor of the test is the extent of preparation as opposed to quality. Nevertheless, quality of preparation can be a relevant factor. It is not unreasonable to ask which firm has done the best job in preparing for the litigation and whether its preparation has yielded benefits for the class. Rochon's pleading demonstrated a more informed and sophisticated understanding of the underlying factual issues than the more formalistic Koskie pleading. In producing evidence for support of this factor, counsel is allowed to use their own judgment to choose to produce its work product (ex. expert evidence it has adduced). The court will not assume that in doing so, the law firm has placed its own interests ahead of the class. Counsel is also permitted to draw attention to occurrences of events after the carriage motion date is scheduled. The court would reject a rule that sees carriage motions decided based on a "freeze frame" on the date the motion is filed.

(3) No. In light of the motion judge's experience and familiarity with the claim, he was entitled to find that Rochon would be able to secure funding arrangements.

(4) No. Any one of the "elite class action firms" who were members of the consortia would have more than enough expertise and experience on their own to do an excellent job as carriage counsel.

The Court of Appeal approved of the test for determining a carriage motion as set out in the seminal carriage decision of Cumming J. of the Superior Court of Justice in Vitapharm. The main criteria for determination of a carriage motion are: (a) the policy objectives of the Class Proceedings Act, namely, access to justice, judicial economy for the parties and the administration of justice, and behaviour modification; (b) the best interests of all putative class members; and, at the same time, (c) fairness to defendants.

The following factors are for consideration on a carriage motion: (i) the nature and scope of the causes of action advanced; (ii) the theories advanced by counsel as being supportive of the claims advanced; (iii) the state of each class action, including preparation; (iv) the number, size and extent of involvement of the proposed representative plaintiffs; (v) the relative priority of commencing the class actions; and (vi) the resources and experience of counsel.

The Court of Appeal listed further factors to be considered on a carriage motion as set out in subsequent case law: In Sharma v. Timminco Inc., an additional factor was identified: (vii) the presence of any conflicts of interest.

In Smith v. Sino-Forest Corporation, Perell J. described the foregoing factors as non-exhaustive. He added six others that he considered relevant to the circumstances of the competing actions before him: (viii) funding; (ix) definition of class membership; (x) definition of class period; (xi) joinder of defendants; (xii) the plaintiff and defendant correlation; and (xiii) prospects of certification. The factors are non-exhaustive and there may be others that arise on the particular facts of each case.

Finally, the Court of Appeal suggested an additional factor to be considered on a carriage motion: the proposed fee arrangement between class counsel and the representative plaintiff. This factor vitally affects the interests of the class. Significant differences between fee arrangements may be considered on a carriage motion.

Gledhill v MikeGold Construction Ltd., 2016 ONCA 570

[Juriansz J.A.]

Counsel:

Mark Gledhill, in person

Judith Parker, for the responding party Her Majesty the Queen in Right of Ontario

Damian Hornich and Natalie Kolos, for the responding party Toronto Police Services Board

Timothy Duggan and Douglas H. Levitt, for the responding parties Better Living Homes Inc., Corsetti Paralegal PC, Cathy Corsetti, Leo Corsettti, MikeGold Construction Ltd., K&G Group, Sam Goldband, Jeffery Goldband, Jeffery Rana and Dwayne Whitford

Keywords: Endorsement, Civil Procedure, Appeals, Extension of Time, Vexatious Litigants

Facts:

There are three separate orders of the Superior Court declaring Gledhill to be a vexatious litigant. He wanted to appeal those orders. Gledhill sought an extension of time to perfect these appeals. The extension was granted. However, Gledhill did not perfect the appeals within the extended time frame and the appeals were dismissed for delay. Gledhill brings a motion to leave to bring motions to reinstate his appeal.

Issues:

Should the appeals be reinstated? Holding: Motion Dismissed

Reasoning:

Although Gledhill spent a great deal of time and effort preparing voluminous materials and always maintained an intention to proceed with the appeals, there was no explanation as to why he failed to perfect the appeals. Further, the appeals are entirely void of merit. There is no doubt that they are destined to be dismissed. The overall interests of justice are, therefore, better served by denying this...