Lexpert US Guides

Litigation 2013

The Lexpert Guides to the Leading US/Canada Cross-Border Corporate and Litigation Lawyers in Canada profiles leading business lawyers and features articles for attorneys and in-house counsel in the US about business law issues in Canada.

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LITIGATION BOUNDARIES THE INTERPROVINCIAL CLASS ACTION Parsons v. The Canadian Red Cross Society is one of three parallel class-action cases against the Canadian Red Cross Society brought in British Columbia, Ontario and Québec concerning persons alleged to have contracted Hepatitis C infections from the Canadian Red Cross Society blood supply. In 1999, all actions were settled by a comprehensive settlement agreement that was approved in each court. In 2012, class counsel filed motions before the superior courts of each of the three provinces seeking an extension of the deadline for filing first claims for benefits from the settlement funds. These motions were opposed by the defendants. Class counsel proposed having the three supervisory judges sit together in one location. According to counsel, this would be the most efficient and effective procedure for adjudicating the motions, as the three judges would be better positioned to reach concurrent orders without material differences. Edmonton, Alberta, was suggested as the location for the hearing as the three judges were already scheduled to be there for a meeting of the Canadian Judicial Counsel. The Attorneys General of Ontario, British Columbia and Québec, however, objected to the joint hearing. Class counsel in each of the three provinces thus brought concurrent motions for directions in order to determine whether a superior court judge could sit in another province to hear a contested motion. The AGs' arguments centered on the historical limitations of English courts to sit outside England. In the Ontario case, the AG Ontario argued that neither the common law nor statute afforded the Superior Court of Justice of Ontario jurisdiction to hear a contested motion while sitting outside Ontario. The AG Ontario submitted that an Ontario judge should not sit outside the province in the absence of a comprehensive legislative scheme enabling such a power and proposed that a joint hearing be held by way of videoconference instead. In May 2013, Ontario's Chief Justice Warren Winkler (sitting as a judge of the Superior Court of Justice for these purposes) held that, in the right circumstances, Superior Court judges can sit outside of their jurisdiction. The British Columbia and Québec courts agreed with the conclusions and reasons of Chief Justice Winkler (see Endean v. Canadian Red Cross, 2013 BCSC 1074 and Honhon v. Canada (Procureur général), 2013 QCCS 2782). In his decision, Chief Justice Winkler held that the AGs' historically based arguments conflicted with the Supreme Court of Canada's decision in Morguard Investments Ltd. v. de Savoie, (1990 CanLII 29 (SCC)), which rejected the comparison between the interprovincial relationships of today and the relationships between foreign countries in the 19th century. Chief Justice Winkler found no constitutional principle or rule of law preventing Superior Court judges from sitting outside their jurisdiction. In fact, he held that authority supported a conclusion that provincial superior courts have discretion to sit outside their home province, relying on the Supreme Court in MacMillan Bloedel Ltd. v. Simpson, 1995 CanLII 57 (SCC), for the principle that the inherent jurisdiction of the superior courts includes the power to fully control their own process. As such, Chief Justice Winkler held that there is no need for comprehensive legislation empowering a judge of a superior court to implement procedures that are intended to address the functions of inherent jurisdiction. In fact, the courts are "obliged to fill the void by exercising their inherent powers to settle the rules of practice and procedure as to disputes." A superior court's inherent jurisdiction to control its own process thus permits a judge to preside over a hearing conducted outside of its home province, provided the court has personal and subject matter jurisdiction and if in the particular case the interests of justice would be served. Chief Justice Winkler noted that such a scenario will occur infrequently, but more often in relation to settlements of class actions involving national classes. "Complex litigation," he noted, requires "innovative solutions to problems that are often not addressed by the rules of court or by statute." With respect to class counsel's request for a joint hearing, Chief Justice Winkler held that the following two (of four) functions of inherent jurisdiction referred to in MacMillan Bloedel were engaged: ensuring convenience and fairness in legal proceedings and the prevention of unnecessary steps that may render judicial proceedings inefficacious (one of those excellent words in the Oxford English Dictionary that is not recognized in The Official SCRABBLE® Players Dictionary). The efficiency rationale for the joint hearing was reinforced by the general supervisory powers conferred by the Class Proceedings Act, 1992. Section 12 of the Class Proceedings Act empowers the court to "make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination." Chief Justice Winkler held that a single hearing would save expense and valuable resources and help avoid the additional costs that would occur if inconsistent judgments were rendered, as had happened earlier in the proceedings. Interestingly (given the increasing use of simultaneous video-conference hearings for joint class action settlement-related motions), he noted that the AGs' alternative proposal for a concurrent hearing by video-conference from three separate locations was not an adequate substitute for a joint hearing. Specifically, that approach did not offer the equivalent procedural advantages of holding a hearing before all the supervisory judges in one location. However, a video link could be used to allow any interested class members to observe the joint hearing from their home province. The decision in Parsons was ultimately driven by the courts' stated understanding that access to justice is a national and international issue, and that the events that gave rise to the present actions transcended provincial borders and were national in scope. Though noted to be applicable infrequently in practice, the issue arises in Canada because of the absence of a US-style multidistrict litigation panel. In any event, it is a novel and interesting interpretation of the jurisdiction of the judges of superior courts and their ability to control their own processes, and potentially opens the door to further procedural decisions of this nature. THE CROSS-BORDER CLASS ACTION WITH A GLOBAL CLASS, FOR A WHILE Another class action that stretched the Ontario court's geographic jurisdictional boundaries is Silver v. IMAX in which, in December 2009, Justice Katherine van Rensburg certified a global class that included all persons who acquired IMAX shares on the US NASDAQ exchange or the Toronto Stock Exchange (TSX), and held such shares during the relevant class period. IMAX was not the first Canadian class action to certify a global class. Classes including international members have been certified by Ontario courts without any detailed consideration of the jurisdictional issues in Robertson v. Thomson Corp. 1999 CanLII 14768 (ONSC); Cheung v. Kings Land Development Inc., 2001 CanLII 28002 (ONSC), leave to appeal refused [2002] OJ No. 336 (Div. Ct.); Brimner v. Via Rail Canada Inc. (2002), 1 C.P.C (5th) 185. While there are no reported appellate decisions in Ontario reviewing a decision to certify a global class, the issue of when a domestic court can assert jurisdiction over the claims of non-residents was addressed by the Court of Appeal in the context of the recognition and enforcewww.lexpert.ca | LEXPERT • December 2013 | 45

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