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LITIGATION BOUNDARIES ment in Ontario of a foreign judgment incorporating a settlement of a class action in Currie v. McDonald's Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321 (C.A.). IMAX, a Canadian public company whose shares are interlisted on the TSX and the NASDAQ exchanges, is a defendant in overlapping class proceedings in Ontario and the United States. In Ontario, the plaintiffs asserted causes of action against IMAX under both common law and the secondary market liability provisions of Ontario's Securities Act. The plaintiffs alleged misrepresentations and omissions in respect of the financial reporting and recognition of revenue for IMAX's theatre systems. At the certification motion, the defendants raised two arguments against a global class. The first was that a comprehensive proceeding had been commenced in the US that would be more appropriate for the pursuit of claims by US residents. Second, the defendants argued that a global class should not be certified because of the likelihood that different common law would apply to the claims of class members depending on where they acquired their shares and where they resided, which would make the proceedings unduly complex and inefficient. The plaintiffs asserted that the Ontario court had clear jurisdiction over the subject matter of the litigation. IMAX was a Cana- proceedings may be permitted to continue. Justice van Rensburg accepted that there was the potential for greater complexity in the litigation as a result of possible conflicts of law issues. However, such potential complexity did not constitute a bar to certification. Instead, she adopted a "wait and see" approach. If conflicts of law or other issues developed, the court could deal with them by making adjustments, including modifying the common issues or recognizing subclasses as needed. In other words, she was prepared to certify the global class in Ontario subject to an ability to reconsider or modify the certification to deal with actual rather than perceived difficulties. A global class was also certified in Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund (Trustees) v. SNC-Lavalin Group Inc., 2012 ONSC 5288, citing with approval the "wait and see" approach of Justice van Rensburg. This approach contrasts with the treatment this issue is receiving in the US. In 2010, the United States Supreme Court considered Morrison v. National Australia Bank, 561 U.S. (2010), in which it shut the door on US-based global securities class actions. The "wait and see" approach was tested earlier this year when the defendants moved to amend the global class to exclude those class members who held shares purchased on the NASDAQ exchange in order to permit the implementation of a settlement in the parallel US action. The US settlement had been approved by the US court subject to an order amending the class definition in the Ontario action. If amended, the resulting class in the Ontario action would be much smaller, comprised of approximately 15 percent of the global class originally certified. The Ontario plaintiffs opposed the amendment to the class definition. Justice van Rensburg held that the defendants established that the proposed amendment to the class was warranted. Among other things, she concluded that the Ontario action was no longer the "preferable procedure" for the determination of the claims of class members whose claims were covered by, and who had not opted out of, the US settlement. Justice van Rensburg found that there was no real question that the court's recognition of the US settlement and the amendment of the class would serve the objectives of behavior modification and judicial economy. Rather, the real issues were whether the amendment would further "access to justice" for the overlapping class members and for the members of the class who would remain if the NASDAQ purchasers were "carved out," and whether the order sought would respect the integrity of Ontario's class actions regime (see Silver v. IMAX, 2013 ONSC 1667 (CanLII), at paras. 140, 141). In analyzing the "access to justice" concerns, Justice van Rensburg considered the advantages and disadvantages to litigating the claims in Ontario as opposed to the US, and found that there was no compelling reason to conclude that the Ontario legal regime would be more favorable. She held that participation in the US settlement would meet the objective of providing access to justice for the overlapping class members. The court also considered access to justice for the remaining TSX class members, including the economic viability of the claims, and noted that the same offer, proportionally, was made available to Ontario class counsel for resolution of the TSX class members' claims. The court rejected the plaintiffs' contention that the relief sought would challenge the judicial integrity of the Ontario court or alter the typical approach to the resolution of cross-border class actions, noting that the existing framework for CLASS PROCEEDINGS are often commenced contemporaneously in different jurisdictions; even where a class proceeding has been certified elsewhere, parallel proceedings may be permitted to continue. dian corporation with its registered office in Mississauga, Ontario. The alleged misconduct related to the accuracy of IMAX's financial statements, which were prepared and audited in Ontario. The class proceedings objectives of judicial economy, access to justice and behavior modification would best be met by certifying a class defined to include all persons, including non-residents, who acquired IMAX securities on the TSX and NASDAQ and held such securities during the class period. Justice van Rensburg found that the proposed action had a "real and substantial" connection to Ontario, but the concept of a global class raised questions about the ability and appropriateness of an Ontario court exercising jurisdiction over non-resident class members. Justice van Rensburg stated that when deciding to certify a global class, even if a "real and substantial" connection to the proposed jurisdiction is found, the court must find that the assertion of jurisdiction is consistent with the principles of "order and fairness." She held that the fact there was a pending application for certification in another jurisdiction was not an obstacle to certification of a class that includes non-resident members. Class proceedings are often commenced contemporaneously in different jurisdictions; even where a class proceeding has been certified elsewhere, parallel 46 | LEXPERT • December 2013 | www.lexpert.ca

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