Lerners' Monthly Lists
September 2016
Top 5 Civil Appeals from the Court of Appeal
1. Babington-Browne v. Canada (Attorney General), 2016 ONCA 549 (Laskin, Tulloch and Hourigan JJ.A.), July 8, 2016
2. Anderson v. McWatt, 2016 ONCA 553 (MacPherson, Cronk and Benotto JJ.A.), July 8, 2016
3. Mancinelli v. Barrick Gold Corporation, 2016 ONCA 571 (Strathy C.J.O., Pepall and Brown JJ.A.), July 18, 2016
4. Whitfield v. Whitfield, 2016 ONCA 581 (Weiler, van Rensburg and Roberts JJ.A.), July 20, 2016
5. Fantl v. Transamerica Life Canada, 2016 ONCA 633 (Strathy C.J.O., Blair and Lauwers JJ.A.), August 22, 2016
1.  Babington-Browne v. Canada (Attorney General), 2016 ONCA 549 (Laskin, Tulloch and Hourigan JJ.A.), July 8, 2016

Captain Ben Babington-Browne, a British soldier, was deployed to Afghanistan for a coalition mission directed by Canada’s Department of National Defence and coordinated by NATO. In July 2009, Babington-Browne was killed when the Canadian Forces helicopter in which he was a passenger crashed into a security wall upon take-off.
The appellants, Babington-Browne’s mother and brother, brought an action under section 61 of the Family Law Act, R.S.O. 1990, c. F. 3, against the federal Crown, represented by the Attorney General of Canada, and against the pilot, aircraft captain, and flight engineer who operated the helicopter on the day of the crash (named as John Doe defendants). They claimed that Babington-Browne died due to the defendants’ negligence.
The appellants brought their action not in the Federal Court but in the Ontario Superior Court of Justice. The issue on this appeal was whether the latter court had jurisdiction over the claim.
The Attorney General moved to strike the claim on the ground that the action was started beyond the six month limitation period in s. 269 of the National Defence Act, R.S.C. 1985, c. N-5, or alternatively on the basis that the Ontario Superior Court has no jurisdiction over a claim against the federal Crown. The motion judge ruled that the limitation period did not bar the action because the claim was not discoverable until the Canadian Forces Board of Inquiry reported its findings in April 2011. He struck the claim against the federal Crown, however, on the basis that the Ontario Superior Court lacked jurisdiction. Under s. 21(1) of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 (CLPA), the Ontario Superior Court would have jurisdiction only if the claim against the federal Crown arose in Ontario. The motion judge held that the claim arose not in Ontario, but in Afghanistan.
The appellants did not challenge the motion judge’s ruling on the limitation issue, but submitted that he erred in his interpretation and application of the CLPA. They argued that he ought to have applied the test for jurisdiction established by the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, and further, that if the Van Breda test applied, then the Ontario Superior Court had jurisdiction over the claim against the federal Crown.
The Court of Appeal rejected these submissions, agreeing with the Attorney General of Canada that Van Breda does not apply to the interpretation of s. 21(1) of the CLPA and that the appellants’ claim arose in Afghanistan. The Court concluded that only the Federal Court has jurisdiction over the claim against the federal Crown.
Section 21(1) of the CLPA states:
In all cases where a claim is made against the Crown, except where the Federal Court has exclusive jurisdiction with respect to it, the superior court of the province in which the claim arises has concurrent jurisdiction with respect to the subject-matter of the claim.
Writing for the Court of Appeal, Laskin J.A. noted that prior to the addition of this provision in 1992, jurisdiction over claims against the federal Crown resided exclusively with the Federal Court, creating a challenge for plaintiffs wishing to sue both the Crown and individuals for claims arising out of the same or related facts. Section 21(1) was designed to eliminate or limit multiple proceedings arising out of the same facts and to facilitate access to justice. Justice Laskin emphasized, however, that a provincial superior court’s jurisdiction over claims against the federal Crown is not open-ended: a provincial court will have concurrent jurisdiction only if the claim arose in that province.
In Van Breda, the Supreme Court considered when a provincial court can assume jurisdiction over a claim. The Supreme Court affirmed the principle that plaintiffs must demonstrate a “real and substantial connection” between the subject matter of their claim and the province in which they seek to litigate it, outlining four “presumptive connecting factors” which, unless rebutted, entitle a provincial court to assume jurisdiction.
Lebel J. also noted in the seminal case, however, that the real and substantial connection test is subject to the provisions of specific statutes.
Justice Laskin emphasized that s. 21(1) of the CLPA is a specific statutory provision that sets out a different test from that in Van Breda. Therefore, the language of that provision – and not Van Breda – should be used to decide a provincial superior court’s jurisdiction under the CLPA.
That Van Breda does not apply to the resolution of a provincial superior court’s jurisdiction under s. 21(1) of the CLPA is evident when considering that case’s presumptive connecting factors. The first presumptive connecting factor – whether the defendant is domiciled or resident in the province – would give the Ontario Superior Court jurisdiction over every claim against the federal Crown, as the “head office” of the federal Crown is located in Ottawa. Because the federal Crown has a presence in every province in Canada, however, the second connecting factor – whether the defendant carries on business in the province – would give every province jurisdiction over every claim against the federal Crown, no matter where the claim arose. Applying the real and substantial connection test to the federal Crown would clearly lead to impractical results that are inconsistent with the language and intent of s. 21(1) of the CLPA.
As the Court of Appeal held in David S. LaFlamme Construction Inc. v. Canada (Attorney General), 2014 ONCA 775, when determining whether a provincial superior court has jurisdiction over a claim against the federal Crown, the court must decide where “the substance of the claim arose”. In Justice Laskin’s view, there was no doubt that the substance of the appellants’ claim against the federal Crown arose in Afghanistan, not in Ontario. For a cause of action in tort, there must be an accident, a negligent act, and an injury. In this case, the accident occurred in Afghanistan. While some negligent acts by the federal Crown could have taken place in Ontario, the bulk of the many alleged negligent acts which led to the helicopter crash occurred in Afghanistan. Captain Babington-Browne tragically died in Afghanistan. Because the substance of the appellants’ claim against the federal Crown did not arise in Ontario, under s. 21(1) of the CLPA, the Ontario Superior Court had no jurisdiction over that claim.
The appeal was dismissed.
2. Anderson v. McWatt, 2016 ONCA 553 (MacPherson, Cronk and Benotto JJ.A.), July 8, 2016
Helen Anderson filed for divorce from Roger McWatt in 2000. Fifteen years of bitter legal battles culminated in a trial where Anderson was awarded relief including a constructive trust against a property on the basis of unjust enrichment. In this decision, the Court of Appeal considered the appropriateness of this award.

The parties moved in together in 1980 and married nine years later. Together they had two children and built a successful interior design business. “McWatt Anderson” was jointly owned: the appellant, McWatt, had a fifty-five percent interest in the business; the respondent, Anderson, forty-five percent.
McWatt Anderson operated out of a property on Toronto’s Atlantic Avenue. Although the property was purchased solely by the appellant prior to the marriage, the parties discussed with their accountant a plan to transfer ownership of the property to a corporate entity to be owned by them both in accordance with their proportionate ownership of the business. Unbeknownst to the respondent, however, this transfer never took place. It was not until 2012 that she learned that title to the Atlantic property remained in McWatt’s name alone.
Both parties contributed to the maintenance of the Atlantic property from the time it was purchased until June 2000 when, following their separation, the respondent ceased working at McWatt Anderson. From then onward, the appellant operated his own business, McWatt & Associates, out of the property.
In May 2014, the respondent obtained leave to amend her pleadings to make an unjust enrichment claim and to seek a constructive trust against the Atlantic property. This claim was a central issue at the sixteen-day trial the following year. In a comprehensive decision, the trial judge awarded the respondent a forty-five percent interest in the property on the basis of unjust enrichment, retroactive spousal support for the years 2000 to 2015, and prejudgment interest on the equalization payment.

McWatt challenged each of these orders on appeal.

The appellant raised three issues with respect to the trial judge’s finding of unjust enrichment. First, he alleged that the claim was statute barred under the Real Property Limitations Act, R.S.O. 1990, c. L. 15; second, he disputed the apportionment of forty-five percent to the respondent; and third, he argued that in the event that he was unsuccessful on the limitation period argument, the respondent should receive a monetary award as opposed to a property interest.

The Court dismissed McWatt’s submission that the trial judge erred in awarding the respondent a constructive trust against the Atlantic property.

With respect to the limitation period issue, the trial judge held that the doctrine of fraudulent concealment applied and that, in accordance with R. v. Guerin, [1984] 2 S.C.R. 335, the limitation period did not start to run until the respondent discovered the fraud (or until, with reasonable diligence, she ought to have discovered it). That did not occur until 2012, when the respondent learned that the Atlantic property was owned solely by the appellant. The Court of Appeal agreed. While counsel for the respondent suggested in 2001 that she “may” have a claim to the property, the appellant continued to swear financial statements and affidavits for more than a decade indicating that the property was owned by the corporation. The respondent was entitled to rely on this disclosure. The Court further noted that the trial judge’s findings made it clear that the respondent did everything she reasonably could to determine the true ownership of the Atlantic property. Accordingly, the limitation period was stayed until 2012 when the fraud was discovered, and the respondent’s claim was brought in time.

The appellant did not challenge the trial judge’s finding of unjust enrichment, but submitted that she erred in concluding that the respondent was entitled to a forty-five percent interest in the property. The Court disagreed, noting that the trial judge’s findings – that the respondent believed the Atlantic property would be jointly owned, that the parties jointly contributed to the maintenance of the building, and that the appellant had told the respondent that the property was owned by a corporation in which she held shares – were open to her on the record, and supported the finding of a constructive trust.

The Court also dismissed the appellant’s submission that the trial judge ought to have made a monetary award instead of awarding an interest in the property, noting that the trial judge correctly considered and rejected the appropriateness of a monetary award in light of the difficulty of recovery, the contributions made by the respondent, the market forces that increased the value of the property, and the profits that the appellant had taken for himself.
This is in contrast to the Court of Appeal’s analysis in Martin v. Sansome, 2014 ONCA 14. In that decision, while it found that the elements of unjust enrichment had been made out, the Court held that the trial judge made an error of law in failing to consider whether monetary damages would suffice to address the unjust enrichment. Citing the Supreme Court’s decision in Kerr v. Baranow, 2011 SCC 10, the Court emphasized that where unjust enrichment is established, “the first remedy to consider is always a monetary award” and that a court may order a proprietary remedy “only if the plaintiff satisfies it that a monetary award would be insufficient in the circumstances and that there is a sufficiently substantial and direct link between his or her contributions and the acquisition, preservation, maintenance or improvement of the dispute property”. Guided by this principle, the Court concluded in Sansome that it was not a case where a monetary award would be insufficient.
In this case, the Court seemed to feel that the trial judge properly considered the appropriateness of a monetary award in addressing the unjust enrichment, and was entitled, in light of her findings about the property and the parties’ respective contributions to maintain and improve it, to conclude that monetary damages would not adequately address the unjust enrichment and that only a property interest would suffice.
The Court briefly considered and dismissed the appellant’s assertion that the trial judge erred in awarding the respondent retroactive spousal support. The Court noted that the trial judge found that the respondent assumed primary responsibility for the household and the children both during the marriage and after separation, contributed equally to the success of the joint business, suffered undue economic hardship due to the breakdown of the marriage despite “valiant efforts at self-sufficiency”, suffered economic disadvantage to the advantage of the appellant, and suffered emotional abuse at the hands of the appellant which had an ongoing impact on her health and professional abilities. She also found that the appellant had suppressed his true available income for support purposes and consistently ignored the interim spousal support order, forcing the respondent to deplete her savings to support herself during the proceedings. In light of these findings, the support awarded was held to be justified.
The Court also found no reason to interfere with the trial judge’s decision to award the respondent prejudgment interest on the equalization payment. She concluded that the appellant owed the respondent an equalization payment of $62,731.69, due and payable on September 1, 1997, and found no reason to depart from the general rule that the payor spouse is required to pay prejudgment interest on the equalization payment owing to the payee spouse, at the judge’s discretion. The Court noted that the appellant was not unable to pay the equalization amount; rather, he delayed the precise calculation of the amount through concealment of relevant information. The trial judge properly exercised her discretion.
The appeal was dismissed.
3. Mancinelli v. Barrick Gold Corporation, 2016 ONCA 571 (Strathy C.J.O., Pepall and Brown JJ.A.), July 18, 2016
Two consortia of law firms were engaged in a “carriage dispute” over the right to represent class members in a multi-billion dollar securities action against Barrick Gold Corporation over alleged misrepresentations in public filings.
Barrick Gold Corporation 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. Barrick publicly disclosed that its activities complied with Chilean regulatory requirements and that it had comprehensive environmental protection measures in place. However, in April 2013, it revealed 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 led to shareholder class actions in the United States and Canada alleging violations of the Securities Act, R.S.O. 1990, c. S. 5, by misrepresenting the progress of the mine in public disclosures.
Three actions remain active in Ontario. Two, referred to as the “Lee” and “DALI” actions, were commenced by a group led by Rochon Genova LLP. The third, known as the “Labourers” action, was commenced by Koskie Minsky LLP and others.
The proposed actions are grounded in the common law and Part XXIII.1 of the Securities Act, and allege negligent misrepresentation by Barrick relating to the development and operation of the mining project. While Koskie Minsky’s action focuses only on alleged misrepresentations regarding environmental compliance, Rochon Genova’s DALI action is broader, alleging misrepresentations with respect to environmental compliance, the capital expenditure budget and Barrick’s financial statements, in addition to claims of conspiracy and fraudulent concealment.
The actions seek damages in the billions of dollars. If certified, the proceeding will be one of the largest securities class actions in Canada.
Rochon Genova filed a motion to certify the DALI action in September 2014, which prompted a motion by Koskie Minsky shortly thereafter for a carriage order and a stay of Rochon Genova’s action. Rochon Genova immediately responded with a similar motion.
Applying the multi-factor test set out in Vitapharm Canada Ltd. v. F. Hoffman-Laroche Ltd., [2000] O.J. No. 4594 (S.C.J.) for carriage of a class action, the motion judge awarded carriage to the group led by Rochon Genova and stayed the action brought by plaintiffs represented by Koskie Minksy. He preferred Rochon Genova’s broader claims and more extensive preparation to Koskie Minsky’s more streamlined approach. The Divisional Court upheld this decision, finding that the motion judge made no error in law or principle and no palpable and overriding error of fact. Koskie Minsky appealed.
In Vitapharm, Cumming J. identified the main criteria for determination of a carriage motion: (a) the policy objectives of the Class Proceedings Act, 1992, S.O. 1992, c. 6, 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 (c) fairness to defendants. He further outlined six factors which must be considered: (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. In Sharma v. Timminco Inc. (2009), 99 O.R. (3d) 260, a seventh factor was identified: (vii) the presence of any conflicts of interest. In Smith v. Sino-Forest Corporation, 2012 ONSC 24, Perell J. described the foregoing factors as non-exhaustive and added six other considerations, namely (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.
Writing for the Court of Appeal, Strathy C.J.O. cautioned that this list remains non-exhaustive, observing that other factors may have significance in the unique circumstances of other cases. On that note, he suggested yet another factor to be considered on a carriage motion, namely the proposed fee arrangements between class counsel and the representative plaintiff, a factor which can significantly affect the interests of the class.
Koskie Minsky focused its submissions on the motion judge’s alleged errors in principle. It argued that the motion judge made four such errors. First, Koskie Minsky claimed that the motion judge erred in preferring Rochon Genova’s broader claim to its more streamlined theory. Strathy C.J.O rejected this submission, noting that in considering the factor of the “nature and scope of the cause of action advanced” in Vitapharm, the ultimate question is not whether “less is more” or “more is better”, but whether the proposed strategy is reasonable and defensible. Rochon Genova’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.
Next, Koskie Minsky argued that the motion judge erred by examining the quality of Rochon Genova’s preparation as opposed to considering the stage of preparation. Strathy C.J.O. rejected this submission as well, noting that while the focus is generally on the “state of preparation”, quality of preparation can be a relevant factor. It is not unreasonable to inquire which firm has done the best job in preparing for the litigation and whether its preparation has yielded benefits for the class. In this case, the motion judge found that Rochon Genova’s pleading demonstrated “a more informed and sophisticated understanding of the underlying factual issues” than the Koskie Minsky pleading.
Koskie Minsky further submitted that the motion judge failed to consider that it had made a favourable third party funding arrangement, and erred in assuming, without any factual basis, that Rochon Genova would be able to do the same. Chief Justice Strathy rejected this argument, concluding that in light of the motion judge’s experience and familiarity with the claim, he was entitled to find that Rochon Genova would be able to secure funding arrangements.
Finally, Koskie Minsky asserted that the motion judge erred in failing to recognize its greater expertise in securities class actions or to consider the history of disciplinary infractions and judicial criticism of one of the members of the Rochon consortium. Strathy C.J.O. noted that the motion judge had observed that 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. In addition, both consortia had added external securities specialists to their teams.
The appeal was dismissed.
4. Whitfield v. Whitfield, 2016 ONCA 581 (Weiler, van Rensburg and Roberts JJ.A.), July 20, 2016
Bryan Whitfield appealed from a 2014 judgment that found him civilly liable to his sister, the respondent Agnes Jane Whitfield, for sexual and physical assaults that allegedly occurred between forty and sixty years previously. He also appealed the dismissal of his counterclaim against his sister for defamation. The issues raised on the appeal included the permissible uses that can be made of an expert’s opinion concerning the credibility and reliability of a witness, and the application of the defence of qualified privilege.
Agnes Whitfield, now sixty-five years old, claimed that at age fifty she recovered repressed memories of horrific sexual and physical abuse at the hands of her brother which began when she was four or five years old and continued until she was twenty. Bryan Whitfield, who is now in his seventies, vehemently denied that he ever sexually or physically abused his sister. These denials were supported by the parties’ two older sisters and a woman who had worked for their family as a mother’s helper.
The main support for the respondent’s evidence came from her expert witness, Dr. Sarah Maddocks, a psychologist who was retained by the respondent’s prior lawyer to provide an opinion concerning, among other things, the respondent’s allegedly recovered traumatic memory, her mental status, and the impact of the alleged assaults on the respondent. She was qualified at trial “to give expert evidence generally in the area of psychology, and in particular in relation to sexual victimization”. Dr. Maddocks acknowledged the controversy surrounding memory recovery and admitted that recovered memories of early childhood abuse are rare and not always reliable. She agreed that it is impossible, without corroborating evidence, to distinguish a true recovered memory from a false one, stating that she could not know for certain whether the respondent’s memories, which remain fragmented, represented actual events. Nonetheless, she opined that the respondent’s recalled memories were not implanted and were consistent with the literature on types of recalled memory that have been found to refer to actual events, concluding that “there is a strong indication” that the respondent’s brother severely sexually and physically abused her on a regular basis over a long period of time, starting when she was very young.
The trial turned on the credibility and reliability of the respective parties’ accounts. Finding the appellant and respondent equally credible as witnesses and their stories equally compelling, the trial judge deemed Dr. Maddocks’ evidence to be of “critical importance in resolving this litigation”. He concluded that he could use this evidence not simply in furtherance of the quantification of the respondent’s claim for damages, but also to support the respondent’s case on liability.
After a trial which spanned about a year, the trial judge found in favour of the respondent, awarding her $250,000 in “aggravated general damages”, $50,000 in punitive damages, and $54,200 in special damages for future therapeutic care, as well as costs.
The appellant submitted that the trial judge erred in law in his reliance on and use of Dr. Maddocks’ opinion evidence. The Court of Appeal agreed, finding that the trial judge relied on the expert evidence for the impermissible use of corroborating the truth of the respondent’s allegations of sexual and physical assault for the purpose of finding the appellant liable.
Writing for the Court, Roberts J.A. found that the trial judge’s reliance on the Court of Appeal’s decision in S.R.S. v. H.P.S. (1999), 122 O.A.C. 351, to corroborate the respondent’s allegations was misplaced. That decision does not stand for the general proposition that expert evidence can be admitted as corroboration of a claimant’s allegations of sexual abuse for the purpose of establishing liability. The Court simply held in that case that expert opinion evidence regarding the impact of sexual abuse was widely accepted.
Although the trial judge indicated in his reasons that he would not allow Dr. Maddocks’ evidence to disproportionately influence his analysis, in Justice Roberts’ view it was clear that this was precisely what occurred. The trial judge did not use Dr. Maddocks’ evidence to explain the memory process in human beings and delayed recall in victims of historical sexual abuse or for the purpose of assessing the respondent’s damages, all of which would have been permissible uses. Rather, he expressly relied on Dr. Maddocks’ evidence “to resolve the litigation by tipping his otherwise evenly balanced assessment of the credibility and reliability of the appellant and the respondent”. By relying on Dr. Maddocks’ evidence to corroborate the truth of the respondent’s fragmented recovered memories, the trial judge abdicated to the expert his role as the trier of fact.
Roberts J.A. observed that in light of the judge’s determination that “the scales between the case” for the appellant and respondent were “relatively evenly balanced,” it was clear that Dr. Maddocks’ evidence was essential to his finding that the respondent had made out her case. That evidence was simply not available to the trial judge to resolve the conflict between the parties’ respective accounts.
The appellant’s counterclaim against the respondent for defamation was founded on the publication of a series of letters and emails which the respondent sent to family members, lawyers and an old friend, which contained allegations of sexual and physical abuse against her brother which formed the basis for her claim. The trial judge determined that even if the respondent’s allegations were not accepted as true and her action had not been successful, the defence of qualified privilege would apply to all of her communications to third parties, barring the counterclaim.
In Justice Roberts’ view, the trial judge’s finding of qualified privilege was “irreparably tainted” by his erroneous finding that the respondent’s allegations were true, supported by Dr. Maddocks’ evidence. Moreover, even if the defence of qualified privilege could be said to apply to the communications to the respondent’s family and the two lawyers, it could not apply to the communications to the respondent’s former friend from high school, who, having had almost no contact with the respondent in several decades, had no duty or interest in receiving them. The respondent did not testify as to her reason for copying her old friend on the defamatory emails and provided no evidence that she asked her for assistance or advice, or that the friend ever responded. In these circumstances, there was no legitimate interest to be protected by the statements and, accordingly, they did not merit the protection afforded by the defence of qualified privilege.
The Court of Appeal concluded that the trial judgment, including the dismissal of the appellant’s counterclaim, must be set aside. Finding a new trial to be unnecessary, the Court dismissed the respondent’s action and allowed the appellant’s counterclaim.
5. Fantl v. Transamerica Life Canada, 2016 ONCA 633 (Strathy C.J.O., Blair and Lauwers JJ.A.), August 22, 2016
At issue in this appeal was whether a class action for negligent misrepresentation was the preferable procedure for resolution of the class members’ claims.
The proposed class was composed of investors in Transamerica Life Canada’s Can-Am Fund, an investment vehicle offered under insurance contracts sold by Transamerica between October 1992 and March 2001. The class action encompassed fifty-three different insurance contracts. Five of these contained an express statement that the fund would “on a best efforts basis replicate the performance of the S&P 500 Total Return Index”, while the other forty-eight contracts did not. Beginning in 1994, however, every investor in the Can-Am Fund received an information folder containing that statement. The information folder was provided pursuant to regulations under the Insurance Act, R.S.O. 1990, c. I. 8, requiring that investors receive a disclosure document containing the fund’s investment policy and objectives before investing in a segregated fund like the Can-Am Fund.
The respondent’s negligent misrepresentation claim arose from the “best efforts” statement in the information folder. He alleged that this representation was untrue.
The certification judge certified the class action for breach of contract based on the five insurance contracts that contained an express “best efforts” clause, but declined to certify the negligent misrepresentation claim with respect to the same statement contained in the information folders provided to investors in the remaining contracts. While he found that some of the elements of the tort of misrepresentation could be common issues, such as the existence of a duty of care, whether the representation was untrue, inaccurate or misleading, and whether the misrepresentation was made negligently, he held that a class action was not the preferable procedure for the negligent misrepresentation claims because the “critical, difficult, and contentious” individual issues of reliance and damages would “overwhelm or subsume” the common issues.
The Divisional Court overturned this ruling, noting that although a certification judge’s decision on preferable procedure is entitled to deference, the certification judge did not have the benefit of the approach to the preferability analysis set out by the Supreme Court of Canada in AIC Limited v. Fischer, 2013 SCC 69. Applying that analysis, the Divisional Court held that a class proceeding was “a fair, efficient and manageable method of advancing the claim and the only reasonable way to remove the economic barriers to access to justice”.
The Court of Appeal agreed, dismissing Transamerica’s appeal.
Writing for the Court, Chief Justice Strathy noted that in Fischer, the Supreme Court emphasized that the preferability analysis is a comparative one that considers whether the proposed class action will achieve the goals of the Class Proceedings Act, 1992, S.O. 1992, c. 6, as compared to other means of resolving the claim. Fischer requires consideration of three factors: the barriers to access to justice, the potential of a class action to address those barriers, and the alternatives to a class action including the extent to which the alternatives may address the relevant barriers and how the two proceedings compare.
Cromwell J. noted in Fischer that the most common barrier to access to justice is an economic one. In Strathy C.J.O.’s view, that was true of this case as well. The respondent’s claim could not reasonably be viewed as economically viable to litigate in the Superior Court. The cost of expert evidence alone to establish that the representation was untrue or misleading, and that the misrepresentation was made negligently, would be “out of all proportion” to the amount at issue and would be a significant barrier to access to justice. He observed that this economic barrier would not be addressed by joinder, which is not a practical means of bringing access to justice to a class of thousands. A class proceeding, however, has the potential to address this barrier by distributing the costs over thousands of class members.
Strathy C.J.O. further noted that if the common issues were resolved in favour of the class, a class proceeding could provide a framework for the resolution of the individual issues. Having tried the common issues, the trial judge would have a full appreciation of the individual issues and would be well equipped to devise a procedure for the resolution of those issues. Section 25 of the Class Proceedings Act gives the judge authority “to craft fair, inexpensive and efficient procedures” in order to do so. Justice Strathy also pointed out that while damages might be a more complex individual issue, s. 6.1 of the Class Proceedings Act expressly provides that the need for individual assessments of damages is not itself a bar to certification.

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