Top Appeals Of 2012: The Appeals Monitor Looks Back

As the year draws to a close, we thought it appropriate to look back at the most significant civil appeals of 2012, and to look forward to the appeals in 2013 that are sure to impact Canadian businesses and professions. In this year-end post – the first of a special two-part series – Canadian Appeals Monitor will review four areas in which appellate courts were particularly active in 2012: (1) class actions; (2) copyright; (3) private international law; and (4) torts. Some of these cases have been written about previously on this blog, whereas others are new. We hope you find these "stocking stuffers" as interesting as we do! In our second post, we will review some areas of the law that are likely to be big stories in 2013. Watch out for it next week.

Class Actions

The year 2012 witnessed several important developments in the field of class actions.

First, appellate courts released multiple decisions involving securities class actions. In one of the most high-profile cases of 2012, the Court in Sharma v. Timminco, 2012 ONCA 107 held that the 3-year limitation period for secondary market misrepresentation claims in s. 138.14 of Ontario's Securities Act cannot be suspended upon the commencement of a class action pursuant to s. 28 of the Ontario Class Proceedings Act, 1992 unless the plaintiff first obtains leave under s. 138.8 of the Securities Act. The effect of the judgment was to confirm that the s. 138.14 limitation period begins to run and can expire even prior to the time when the plaintiff obtains a leave ruling, setting off a host of debates in lower courts about whether the limitation period is subject to the "special circumstances" doctrine and whether leave can be granted nunc pro tunc. We discussed Sharma in a previous post.

The courts also grappled with the territorial scope of secondary market misrepresentation claims. In Abdula v. Canadian Solar Inc., 2012 ONCA 211, the Court held that the statutory right of action in Part XXIII.1 of the Ontario Securities Act can be asserted against issuers whose securities are listed solely on a non-Canadian exchange. As we noted in a previous post, the Court's decision is at odds with the approach taken by the U.S. Supreme Court in Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (2010), and may be constitutionally suspect. It will be interesting to see whether courts in other provinces follow the Ontario Court of Appeal's lead.

The B.C. Court of Appeal weighed in on secondary market misrepresentation actions in Round v. MacDonald, Dettwiler and Associates Ltd., 2012 BCCA 456, where it found that the B.C. Securities Act provisions which created the right of action were not retroactive, and so could not be applied to disclosures that pre-dated their enactment. The Court also held that the cause of action was inapplicable to a plaintiff who acquired her securities directly from the issuer's treasury through her participation in an employee share purchase plan, and not through a secondary market transaction. Finally, in what may prove to be a particularly important development for secondary market class actions procedure in B.C., the Court awarded costs against the plaintiff despite the "no costs" regime in the B.C. Class Proceedings Act, since she brought her unsuccessful motion for leave to commence the claim prior to seeking certification. We provided a more extensive discussion of Round in aprevious post.

Another important securities decision was Fischer v. IG Investment Management Ltd., 2012 ONCA 47, a case we also discussed in a previous post. The Court in Fischer affirmed certification of an investor class action against the defendant mutual fund managers, which alleged the latter permitted "market timing" to occur in the funds they managed, resulting in losses to the class members. Notably, the Court rejected the argument that settlement agreements between the defendants and the Ontario Securities Commission, which required the defendants to repay monies into the funds, displaced a class action as the preferable procedure for resolving the claims. This aspect of Fischer is now before the Supreme Court of Canada, which granted the defendants leave to appeal in June of 2012.

Second, the Ontario Court of Appeal released an important trilogy of decisions in the field of employee "overtime" pay class actions: Fulawka v. Bank of Nova Scotia, 2012 ONCA 443; Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444; and McCracken v. Canadian National Railway Company, 2012 ONCA 445. The Fulawka case is particularly notable for clarifying the legal principles that apply to the "common issues" requirement on certification, and in restricting the circumstances in which aggregate damages are available to the class. In addition, the McCracken case – where certification was overturned – contains an extensive review of the plaintiff and defence evidence by the Court. These cases confirm that the plaintiff's obligation to show "some basis in fact" for the existence and commonality of the alleged common issues is a real one, and suggest that the pendulum is swinging in favour of a more rigorous review of the plaintiff's record at the certification motion.

Third, other types of class actions against financial institutions also loomed large in 2012. In two decisions -Fédération des Caisses Desjardins du Québec v. Marcotte, 2012 QCCA 1395 and Amex Bank of Canada v. Adams, 2012 QCCA 1394 – the Quebec Court of Appeal granted judgment in authorized class actions alleging that the defendant financial institutions breached Quebec consumer protection legislation by invoicing credit card consumers with foreign currency conversion charges. Interestingly, the Court rejected arguments by the defendants that the provincial legislation was constitutionally inapplicable since the conduct in question concerned matters within exclusive federal jurisdiction, such as bills and exchanges, and the federal banking power. The defendants have sought leave to appeal from both judgments to the Supreme Court of Canada.

McCann v. Canada Mortgage and Housing...