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Canada

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CANADA – Concurrent class proceedings can raise procedural and substantive issues, chief among which is how to avoid conflicting judicial determinations from separate courts adjudicating on the same issue. When seeking approval from multiple courts of a global class action settlement, one approach may be to have the various courts preside over the same hearing.

A recent decision of the Supreme Court of Canada in Endean v. British Columbia, 2016 SCC 42 (“Endean“) held that judges of superior courts from different provinces may sit together to hear a motion arising out of concurrent class proceedings in their respective jurisdictions.

In Canada, superior courts are those with general rather than statutorily-granted jurisdiction. There is a separate superior court in each Canadian province.

The Endean decision arose from three concurrent class proceedings which had been commenced in the superior courts of Ontario, British Columbia and Quebec on behalf of individuals infected with Hepatitis C through the Canadian blood supply. It was common ground that each superior court had personal and subject-matter jurisdiction over the parties and issues in their respective proceedings.

All three actions were ultimately certified. The Ontario class included residents in every province except British Columbia and Quebec, meaning all affected Canadians were class members to one of the proceedings.

The Ontario Court of Appeal in Excalibur Special Opportunities LP v. Schwartz Levitsky Feldman LLP 2016 ONCA 916, has overturned two lower decisions, certifying a securities fraud class action against a Canadian auditor in which 98% of the class members were not Canadian. The judgment offers helpful guidance to parties seeking to bring or defend global class actions in Ontario.

The class action is based on allegations of negligence and negligent misrepresentation over an audit report prepared by Schwartz Levitsky Feldman LLP (“SLF”). Excalibur is a Toronto-based fund and was one of 57 “accredited investors” that invested a total of $7.5 million in Southern China Livestock International Inc. (“Southern China”), a Nevada company that owned and operated hog farms in China. One other investor was a Canadian resident, 50 were American and the remaining investors resided in the Cayman Islands, Samoa, Malaysia and the United Kingdom. In 2010, SLF prepared a one-page audit report of Southern China’s financial statements that was appended to a private placement memorandum. The essence of the claim is that in light of the true state of Southern China’s all-cash business, SLF could not have provided a clean audit report in accordance with generally accepted accounting principles, as it had professed to.

Both of Canada’s primary insolvency statutes, the Bankruptcy and Insolvency Act (“BIA”) and the Companies’ Creditors Arrangement Act (“CCAA”) provide for an automatic stay of all legal proceedings when an insolvent debtor files for or seeks insolvency protection. The purpose of the stay is to provide breathing space to a debtor attempting to restructure its business so as to avoid “death by a thousand cuts” and also to ensure similarly situated creditors are treated equally. While it is an integral part of Canada’s insolvency regime, the stay of proceedings is not inviolable and there have been a number of noteworthy cases where Canadian courts have considered whether to lift the statutory stay and permit proposed class actions to proceed where the plaintiff has alleged fraud.

Twenty six countries now authorize private civil damage actions for antitrust/competition law allegations. In several of these countries, claims may proceed as class or collective claims. Litigation strategy requires accounting for all claims, and coordinating them with regulatory investigations by government antitrust authorities. Consistency in approach, while dealing with the requirements of local laws, can be key to resolving antitrust matters for global companies. Our Global Guide to Competition Litigation (2016) helps to orient you…

The Ontario Court of Appeal recently reconsidered its decision (the “Original Stay Appeal”) to stay a securities class action claim in Canada, on the basis that Ontario was not the most appropriate forum, where the securities at issue were purchased on foreign stock exchanges. Leave to appeal the Original Stay Appeal was dismissed by the Supreme Court of Canada. In its most recent decision the Court of Appeal considered an argument that the Original Stay Appeal…

CANADA – In an earlier post we discussed the implications of the Ontario Superior Court decision of Coffin v. Atlantic Power Corp. (“Coffin”) on secondary market securities class actions. We observed that the decision reiterated a higher threshold for secondary market misrepresentation class actions under the Ontario Securities Act (“OSA”), stating that the test for leave under the OSA was intended to be a “robust deterrent screening mechanism” to help “weed out hopeless claims”. Coffin was…

CANADA – Privacy and data breach class actions are on the rise in many jurisdictions that allow class action litigation, and Canada is no exception. Ontario’s highest appellate court recently ruled on a case involving 280 patients’ records that were improperly accessed and disclosed at an Ontario hospital. The Court affirmed a lower court decision that the representative plaintiff could seek certification of a class action based on the tort of intrusion upon seclusion. This tort…

CANADA – A recent Ontario court decision has underlined the high threshold to be met for parties seeking leave to pursue secondary market securities class actions. In Coffin v. Atlantic Power Corp. (“Coffin”), Justice Belobaba of the Ontario Superior Court of Justice denied certification of a proposed secondary market securities class action, holding that the claim lacked a reasonable possibility of success and reinforcing the high bar in place to dispense with unmeritorious claims. An action…

CANADA – In a recent post we described the Ontario Court of Appeal’s finding, in Kaynes v. BP, PLC, that Ontario was not the most convenient forum for a class action commenced by an Ontario resident who had purchased the defendant’s securities on the NYSE. The claim alleged market misrepresentation under section 138.3(1) of the Securities Act, R.S.O. 1990, c. S.5. The proposed class included those who purchased securities on the TSX, NYSE and LSE…

CANADA — In an era where secondary market misrepresentation class actions frequently cross the Canada-US border, concerns with the multiplicity of proceedings and the risk of inconsistent decisions are persistent and palpable. In a recent decision, the Ontario Court of Appeal took a step toward alleviating some of these concerns by holding that Ontario was not the most convenient forum to address the claims of proposed class members who purchased the defendant’s shares on foreign…