McCarthy Tétrault LLP

How to Bulletproof and Attack Class Action Pleadings

Elaine J. Adair

HOW TO BULLETPROOF AND ATTACK CLASS ACTION PLEADINGS

I. INTRODUCTION

Every litigation lawyer knows very well the rule that pleadings generally are to be as brief as the nature of the case will permit – in other words, “a concise statement” – and must contain a statement in summary form of the material facts on which the party relies, but not the evidence by which the facts are to be proved.1 Every litigation lawyer also knows, generally, the function of pleadings. It is succinctly described in Homalco Indian Band v. British Columbia (1998), 25 C.P.C. (4th) 107 (B.C.S.C.), one of the leading B.C. cases on pleadings (at p. 109; italics added):

¶ 5 The ultimate function of pleadings is to clearly define the issues of fact and law to be determined by the court. The issues must be defined for each cause of action relied upon by the plaintiff. That process is begun by the plaintiff stating, for each cause, the material facts, that is, those facts necessary for the purpose of formulating a complete cause of action . . . The defendant, upon seeing the case to be met, must then respond to the plaintiff's allegations in such a way that the court will understand from the pleadings what issues of fact and law it will be called upon to decide.

A justice in the B.C. Court of Appeal, Madam Justice Southin, lamented:2

When a case goes to trial . . . on a hopelessly inadequate statement of claim, there is nothing on which the trial judge can concentrate his or her mind. The course of litigation would be much improved if trial judges in stating their findings of fact would address the pleadings and say which pleas are established and which are not. But how can a trial judge address the pleadings when the pleadings do not address anything?

In National Trust Co. v. Furbacher, [1994] O.J. No. 2385 (Gen. Div. Comm. List), Mr. Justice Farley struck out proposed pleadings that he considered merely tactical and designed to put unfair pressure on the opponents or to embarrass them, as an

1 B.C. Rules of Court (“B.C. Rules”), Rule 19(1); Ontario Rules of Civil Procedure (“Ontario Rules”) R. 25.06 (1). 2 In Cotton v. Wellsby (1991), 59 B.C.L.R. (2d) 366 (C.A), at para. 26.

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abuse of process. He also observed that it is improper to make an excessive or grossly exaggerated claim for damages.3

Recently, Mr. Justice Nordheimer reviewed applicable principles under the Ontario Rules governing motions to strike, in Air Canada v. WestJet Airlines Ltd. (2004), 72 O.R. (3d) 669 (S.C.J.), at para. 6:

Those principles include:

(a) motions under rule 25.11 should only be granted in the "clearest of cases" -- see Wernikowski v. Kirkland, Murphy & Ain (1999), 50 O.R. (3d) 124, 181 D.L.R. (4th) 625 (C.A.);

(b) any fact which can effect the determination of the rights of the parties can be pleaded but the court will not allow facts to be alleged that are immaterial or irrelevant to the issues in the action -- see Duryea v. Kaufman (1910), 21 O.L.R. 161, [1910] O.J. No. 118 (C.J.);

(c) portions of a pleading that are irrelevant, argumentative or inserted for colour, or that constitute bare allegations should be struck out as scandalous -- see George v. Harris, [2000] O.J. No. 1762 (S.C.J.);

(d) facts may be pleaded but not the evidence by which those facts are to be proved -- rule 25.06(1) of the Rules of Civil Procedure;

(e) similar facts may be pleaded as long as the added complexity arising from their pleading does not outweigh their potential probative value -- see Garwood Financial Ltd. v. Wallace (1997), 35 O.R. (3d) 280, 14 C.P.C. (4th) 277 (Gen. Div.).

Among other things, Mr. Justice Nordheimer struck out claims in the counterclaim, including a claim alleging intentional interference with economic interests, that had not been properly pleaded.

In class action litigation, many of the usual rules governing pleadings – perhaps especially the rule that a pleading be a “concise statement of the material facts” – seem to have given way to a different style. Statements of claim are creatively drafted,

3 National Trust v. Furbacher, para. 7. Mr. Justice Farley discusses the general function of pleadings at paras. 9-12.

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and can include such things as a table of contents,4 a definition section,5 a detailed description of disease,6 a history of the defendant’s (alleged) bad conduct7 and the unfortunate consequences that have resulted,8 and other material that might be more at home in a closing argument than a pleading. From the plaintiffs’ perspective, a statement of claim must inevitably be drafted with an eye on the goal of achieving certification. But plaintiffs’ counsel must also make sure that the pleading states a reasonable claim or claims, and avoids being embarrassing or abusive. A highly effective polemic or rhetorical piece may simply not survive a motion to strike. A defendant must be on the look-out not only for what is simply bad pleading, but also for aspects of the case that will or may make it unsuitable for certification.

Very recently, Mr. Justice Cullity reinforced the importance of the pleadings in class actions, in Cassano v. Toronto-Dominion Bank (2005), 9 C.P.C. (6th) 291 (Ont.S.C.J.), [2005] O.J. No. 845 (“Cassano v. TD Bank”). He said (at para. 23; italics added):

In considering whether the requirement in section 5(1)(a) [of the Ontario Class Proceedings Act] is satisfied, the court must, of necessity, identify the cause, or causes, of action that form the basis of the case for certification. . . . In each case it is only when the relevant causes of action have been identified that the other requirements in section 5(1) have meaning and can be addressed. The statement of claim may disclose a number of causes of action of which only some are common to class members, raise common issues or are appropriate for a determination in a class proceeding. In order, for example, to determine whether the "claims" raise common issues for the purposes of section 5(1)(c), the relevant cause, or causes, of action must first have been identified. This will also be necessary for the purpose of section 8(1)(c) of the CPA which requires a certification order to describe the nature of the claims to be asserted on behalf of the class.

4 Statement of Claim in Mondor v. Fisherman; Amended Statement of Claim in Harrington v. Dow Corning Corporation. Pleadings frequently are posted on the websites of plaintiffs’ counsel. 5 Statement of claim in Mondor v. Fisherman (the definitions are set out in a Schedule); Amended Statement of Claim in Serhan v. Johnson & Johnson 6 Amended Claim in Serhan v. Johnson & Johnson (diabetes); Vezina v. Loblaw Companies Limited (Hepatitis A) 7 Amended Statement of Claim in Harrington v. Dow Corning Corp. The “Dow” history is pleaded over 16 pages and about 80 paragraphs. 8 In Harrington v. Dow Corning Corp., 22 problems are itemized in the statement of claim for the named plaintiff alone.

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This paper will first discuss basic aspects of good pleadings. A statement of claim that pleads, concisely, the material facts setting out a complete cause of action will be bulletproof, and it would be pointless for a defendant to attack it. On the other hand, a statement of claim that is missing basic elements of substantive claims, or which is a rambling, mixed-up mass of facts, evidence, arguments and law,9 will be quite attackable. This discussion will be followed by a further consideration of examples of statements of claim that have worked (both in the sense of surviving attack, and providing a basis for the case ultimately being certified), and some that have not. Next will follow a practical dissection of a statement of claim, including identification of pleadings that can (and did in practice) jeopardize certification. Finally, I will review some strategic considerations in filing a statement of defence, and, when the decision has been made to file a defence, some points to consider in terms of its content.

Drafting a good pleading takes time and effort (often a great deal of effort), and the contents of the pleadings directly affect many – indeed most – aspects of any litigation. Class action litigation is no different. In addition to giving an opponent a weak area to exploit, badly or carelessly drafted pleadings will make life difficult for counsel and for the court. For plaintiff’s counsel seeking certification of an action as a class proceeding, the allegations in the statement of claim are the foundation for any possible common issues, without which no case will be certified. Counsel on both sides must have a firm grasp of the facts that are legally relevant and material to the cause(s) of action alleged. Plaintiffs’ counsel must also consider carefully whether the cause or causes of action to be advanced are ones that can generate common issues that are significant in the context of the case as a whole, and will permit a clearly defined class. Given the statutory requirements for certification, any statement of claim in a proposed class action will be rigorously scrutinized by defendant’s counsel in order to identify any weakness that could jeopardize certification, or could make the case untriable even if certified.

II. PLEADINGS BASICS

A. The Rules of Civil Practice

Pleading drafters must know what the local rules of civil procedure say about pleadings.

For example, in B.C., the Rules of Court forbid the pleading of an amount of general damages.10 That is not the rule in Ontario. Conclusions of law may be

9 Cadillac Contracting and Developments Ltd. v. Tanenbaum, [1954] O.W.N. 221, at pp. 224-5 10 B.C. Rules, Rule 19(29)

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pleaded, but only if the material facts supporting them are pleaded.11 The effect of a document or the purport of a conversation, if material, shall be pleaded as briefly as possible, but the precise words of the document or conversation need not (in B.C. shall not) be pleaded unless those words are themselves material.12 Where misrepresentation or fraud is alleged, full particulars must be given.13

Simply following the rules reduces the risk that your pleadings will be attacked.

B. Material Facts stating a Cause of Action

As noted above, a pleading must set out the “material facts.” The substantive law provides essential guidance in identifying what facts are “material.” In Cotton v. Wellsby, referred to above, plaintiff’s counsel was apparently attempting to advance a contract claim. However, instead of pleading the basic elements of an enforceable agreement, counsel had merely described (in Southin J.A.’s words) a nudum pactum.14

The word “material” has been interpreted to mean “essential for the purpose of formulating a complete cause of action.” As Scott L. J. stated in Bruce v. Odham Press Ltd., [1936] 1 K.B. 697 (C.A.), at p. 712:

The word “material” means necessary for the purpose of formulating a complete cause of action; and if any one “material” fact is omitted, the statement of claim is bad; it is “demurrable” in the old phraseology, and in the new is liable to be “struck out.”

The learned Justice continued, concerning particulars (pp. 712 - 713):

The function of “particulars” . . . is quite different. They are not to be used in order to fill material gaps in a demurrable statement of claim--gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff’s cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function

11 Ontario Rules Rule 25.06(2); B.C. Rules Rule 19(9.1) 12 Ontario Rules Rule 25.06(7); B.C. Rules Rule 19(2) 13 B.C. Rules Rule 19(11); Ontario Rules Rule 25.06(8) 14 Cotton v. Wellsby, para. 24.

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is to fill in the picture of the plaintiff s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial. Consequently in strictness particulars cannot cure a bad statement of claim.

The classic definition of a cause of action is stated by Lord Diplock in Letang v. Cooper, [1965] 1 Q.B. 232 (C.A.), at pp. 242-243: “A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person.”

The topic was also recently addressed by Mr. Justice Cullity in Cassano v. TD Bank, where he said (at para. 24; italics added):

In Dumoulin v. Ontario (2005), 71 O.R. (3d) 556 (S.C.J.), at page 563, I referred to various meanings that have been attributed to the concept of a cause of action for different purposes. While it is quite common to refer to a cause of action as one for breach of contract or in tort - or for a particular tort - a more precise definition is in terms of the material facts that must be pleaded to enable the plaintiff to succeed. In my opinion, the requirement in section 5(1)(a) will be satisfied only if material facts have been pleaded that, if proven, could - in accordance with the plain and obvious test - entitle the plaintiff to relief requested in the statement of claim. The material facts that constitute the cause of action must I believe include any that are specific to the particular relief claimed. . . . A pleading may, however, contain only material facts that, if proven, would entitle the plaintiff to one remedy but not another. In such a case, claims for the latter may be struck on the ground that no reasonable cause of action that would support it was disclosed [citation omitted].

A necessary pleading of a material fact or facts is not to be left to mere inference or mere implication, to be deduced from the form in which the pleading is framed. A defendant is entitled to know definitely the case it is being called upon to meet.15

15 Wyman v. Vancouver Real Estate Board (1957), 8 D.L.R. (2d) 724 (B.C.C.A.)

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It seems that virtually all statements of claim in proposed class actions include a claim for punitive (or exemplary) damages.16 No plaintiff’s counsel should be filing a pleading including such a claim without reading Mr. Justice Binnie’s judgment in Whiten v. Pilot Insurance Co. (2002), 209 D.L.R. (4th) 257 (S.C.C.), where he says (para. 87):

[T]he facts said to justify punitive damages should be pleaded with some particularity. The time-honoured adjectives describing conduct as "harsh, vindictive, reprehensible and malicious" . . . or their pejorative equivalent, however apt to capture the essence of the remedy, are conclusory rather than explanatory.

In addition to providing specific guidance on pleading claims for punitive damages, Mr. Justice Binnie also implicitly reinforces the basic principle that pleading conclusory allegations, without pleading the material facts to support the conclusions, is improper.

Given the propensity for claims of punitive damages in proposed class actions, and the popularity of claims under s. 36 of the Competition Act, R.S.C. 1985, c. 34 (as amended), counsel should note that in Wong v. Sony of Canada Ltd. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.J.), Cumming J. held that punitive damages are not available under the Competition Act. In the absence of a pleading of a separate (non-statutory) cause of action, Cumming J. struck out the claim for punitive damages as failing to disclose any reasonable claim.

Plaintiffs (and their counsel) are entitled to formulate their case in their own way, subject however to the basic rules of pleadings. On this particular point, two late-19th century cases are still worthy of review.

In Davy v. Garrett (1878), 7 Ch. D. (473) C.A.,17 the Court of Appeal allowed the defendants’ appeal from an order refusing to strike a statement of claim that (for the time) was very long, and (among other things) quoted from a number of documents. James L.J. said (at p. 483):

Now nothing is more embarraasing to a Defendant than a number of statements which may be irrelevant, and with which he therefore does not know what to do. Almost every statement

16 “Exemplary” and “punitive” are synonyms. They are not two different types of damages. As a result, the plea should be for “punitive or exemplary” damages not “punitive and exemplary” damages. See Imperial Oil Ltd. v. Lubrizol Corp. (1996), 67 C.P.R. (3d) 1 (F.C.A.), p. 18. 17 cited with approval in Patterson & Hidson v. Livingstone and others, [1931] 1 D.L.R. 386 (S.C.C.), where the court struck out the whole claim, and more recently in Homalco.

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in this claim appears calculated to embarrass the Defendant in ascertaining what is the case which he has to meet.

The learned justice addressed the point that a pleading is to contain material facts, not evidence, and explained the reason for that rule (p. 485):

[T]he Rules of Court expressly forbid the statement of evidence in pleading. The party is to state facts constituting the wrong of which he complains, and he is not to state evidence, whether consisting of admissions or not. The Defendant must make up his mind what he will traverse, and it is premature to enter upon the question of evidence before it is known of which facts evidence will be required. . . ..

James L.J. concluded (at p. 486):

But a Defendant may claim ex debito justitiae to have the Plaintiffs’ case presented in an intelligible form, so that he may not be embarrassed in meeting it.

In Knowles v. Roberts (1888), 38 Ch. D. 263 (C.A.), Bowen L.J. said (at pp. 270-271):

[T]he rule that the Court is not to dictate to parties how they should frame their case, is one that ought always to be preserved sacred. But that rule is, if course, subject to this modification and limitation, that the parties must not offend against the rules of pleading which have been laid down by the law; and if a party introduces a pleading which is unnecessary, and it tends to prejudice, embarrass, and delay the trial of the action, it then becomes a pleading that is beyond his right.

There are a number of examples in the class actions context where claims or parts of claims that have been badly or improperly pleaded have been struck out.

Chopik v. Mitubishi Paper Mills Ltd. (2002), 26 C.P.C. (5th) 104, [2002] O.J. No. 2780 (S.C.J.) involved alleged breaches of the Competition Act. The plaintiff claimed damages under s. 36, and sought certification of the action as a class proceeding.18 The defendants brought a motion to strike certain parts of the “Amended, amended Statement of Claim,” on the grounds that they were embarrassing. Plaintiff’s

18 See also Price v. Panasonic Canada Inc., [2000] O.J. No. 3123 (S.C.J.), another proposed price-fixing class action, where improper pleadings were also struck out.

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counsel conceded that certain paragraphs should be struck out, but continued to maintain that other paragraphs should not. These paragraphs alleged:

Exemplary damages must be of sufficient amount to deter the defendants from committing further acts contrary to the Act. With respect to their financial means, MPM's [Mitsubishi Paper Mills Ltd.] revenues and net income for their fiscal year ending March, 1996 were U.S. $2.062 billion and U.S. $50.4 million. In the 12 months ending March, 1998, MC [Mitsubishi Corporation] reported its net income and shareholder's equity as JY 10.071 billion and JY 312.385 billion respectively. Using an exchange rate of JY 87 to C $1 MC's [Mitsubishi Corporation] net income and shareholders equity equate to C $115.758 million and C $3.59 billion.

. . . . . . . . . .

The Plaintiffs plead that the defendants’ violations of the Act were part of an unlawful systemic MGC [Mitsubishi Group of Companies] - wide attempt to control commerce. The "harmonious way" referred to in the letter written by MPM [Mitsubishi Paper Mills Ltd.] and MC [Mitsubishi Corporation] in fact referred to secret, price fixing and price programs that are contrary to law and harmful to the purchasers of the defendants products involving class members. The defendants are members of the Mitsubishi group of companies, an organization that has repeatedly and willfully breached anti-trust laws worldwide. Members of the MGC have been investigated, prosecuted and litigated by authorities around the world for practices similar to the allegations contained herein. Previous prosecutions, fines and penalties have not deterred the Mitsubishi Companies from continuing anti-competitive activities contrary to law.

Plaintiffs’ counsel argued that the first paragraph was relevant to the claim for punitive damages, and the second relevant to an alleged “worldwide conspiracy” involving the defendants. Shaughnessy J. struck out both paragraphs, and said:

¶ 16 Even if I were to accept the Plaintiffs' position that the pleadings related to exemplary damages and the scope of a conspiracy of price-fixing, these paragraphs would nevertheless offend Rule 25.06(1) in that it is a pleading of evidence. I would also find that the pleading in both paragraphs is frivolous and they have the potential to delay the fair trial of the action.

¶ 17 I would also observe that the statements . . . would also constitute an abuse of process. In the case of National Trust Co. v. Furbacher, [1994] O.J. No. 2385, Farley J. noted that there are many ways in which pleadings may be an abuse of process.

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Citing Chadwick J. in Carnegie v. Rasmussen Starr Rudely (1994), 19 O.R. (3d), 272 at p. 277-8:

Vexatious actions include those brought for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights ...

. . . . . . . . . .

¶ 20 I further find that [these paragraphs] are not a concise statement of relevant facts, but instead are "a rambling, diffused, mixed-up mass of facts, evidence, arguments and law", (Cadillac Contracting and Developments Ltd. v. Tanenbaum, [1954] O.W.N. 221 at p. 224-5).

The defendants’ pre-certification motion to strike in Hughes v. Sunbeam Corp. (Canada) (2001), 11 B.L.R. (3d) 236 (Ont. S.C.J.), varied (2002), 61 O.R. (3d) 433 (C.A.) raised a number of issues for determination by the court, including whether a plaintiff could maintain a proposed class action against defendants against whom he had no personal claim.19 The proposed class action involved allegedly defective smoke detectors. Among other things, the plaintiff alleged that the smoke detectors were negligently designed and constructed, with inadequate research and development, and inadequate testing. The plaintiff also alleged that there was a suppression of evidence of latent defects, breach of a duty to warn, breach of contract and fraudulent or negligent misrepresentations in advertising, packaging, labelling, product documentation and instructions.

Mr. Justice Cumming described the statement of claim in these terms (para. 20):

The 29 page Claim lacks clarity, is rambling and contains allegations as to various causes of action that are lumped together and overlapping. It is a shotgun approach to setting forth a discernible claim. In my view, the disparate claims lack the particulars sufficient for the defendants to properly plead in reply.

The entire claim was struck out, with leave to amend.

Mr. Justice Cumming took some pains (more, apparently, than the drafter of the claim) to describe how properly to plead a misrepresentation claim:

19 This issue is discussed under the heading “Suing Multiple Defendants”, below.

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¶ 22 When misrepresentation is pleaded, the statement of claim shall contain full particulars [citations omitted].

¶ 23 A pleading of negligent misrepresentation must set forth with careful particularity the material facts in support of establishing the requisite elements for the tort: the representation; when, where, how, by whom and to whom it was made; the existence of a duty of care based upon a "special relationship" between the representor and representee; the falsity of the representation; that the representor acted negligently in making the representation; reasonable reliance by the representee on the representation; and the resulting loss or damage. Queen v. Cognos Inc. (1993), 99 D.L.R. (4th) 626 at 643 (S.C.C.).

¶ 24 The material facts necessary to establish the discrete elements for fraudulent misrepresentation must be pleaded. [Citation omitted.]

¶ 25 To allege fraud is to allege a most serious civil tort. Hence, the allegation must be strictly pleaded. Fraud is a false representation of fact. The representation must have been made with knowledge of its falsehood, or recklessly without belief in its truth. The representation must have been made by the representor with the intention that it should be acted upon by the representee and the representee must in fact have acted upon it. [Citations omitted.]

¶ 26 When fraudulent misrepresentation is alleged against a corporate defendant, the intention to deceive must be proven. The fraudulent intent must have been held on the part of a person who is the directing mind, or by a person who was acting in the course of his or her employment such that vicarious liability applies. [Citation omitted.]

. . . . . . . . . .

¶ 30 There is no particularity as to what was allegedly said in the labelling, packaging or advertising at the time of purchase by the plaintiff. There are no references in the Claim as to the literature, instructions or sales material employed by any of the Sunbeam defendants.

¶ 31 A reader of the pleading is left ultimately with the unanswered question: what precisely are the "misrepresentation(s)" alluded to throughout the Claim? As well, the pleading does not indicate which defendants made any alleged representations, the timing of any such representations and what particular products were related to any such representations.

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On the plaintiff’s appeal, the Court of Appeal concluded that the claim in negligence for pure economic loss should not have been struck out,20 but otherwise affirmed Mr. Justice Cumming’s order. In particular, the appellate court rejected the plaintiff’s argument that Cumming J. should have permitted the pleading to stand and should not have required the plaintiff to amend. Laskin J.A. (for the court) said, at para. 9:

I see no merit in this contention. The motions judge characterized the statement of claim as rambling and lacking in clarity. His characterization was correct. So, too, was his conclusion that even the causes of action that Hughes could maintain had not been pleaded properly.

C. Has a reasonable claim been stated?

Before a pleading will be struck out for failing to disclose a reasonable claim (or defence), the failure must be “plain and obvious.”21 The facts alleged in the pleading are accepted as true for the purposes of the motion, unless they are patently incapable of proof. The pleading is to be read generously.22 Nevertheless, if the pleaded facts, if proved, do not set out the basis in law for liability, no cause of action has been pleaded, and the claim should be struck out, although leave to amend may be granted.

The “plain and obvious” test set out in Hunt v. Carey does not mean the complicated questions of law are necessarily unsuited for resolution on an application to strike. A court is not bound to refuse relief simply because the relevant area of the law is uncertain.23 The issue is whether there is a question that is fit to be tried, regardless of the complexity or novelty of the question.

In view of the “plain and obvious” test, and the requirement to give the pleadings the benefit of a “generous” reading, could a defendant possibly succeed on a motion to strike where one judge has accepted a reasonable claim has been pleaded? Cooper v. Hobart (2001), 206 D.L.R. (4th) 193 (S.C.C.), affirming (2000), 184 D.L.R. (4th) 287 (B.C.C.A.) reversing (1999), 68 B.C.L.R. (3d) 274 (S.C.) and 68 B.C.L.R. (3d)

20 See Court of Appeal’s judgment, paras. 24-35. 21 Hunt v. Carey Can. Inc. (1990), 49 B.C.L.R. (2d) 273 (S.C.C.), at pp. 288 - 289 22 See Kimpton v. Canada (Attorney General) (2002), 9 B.C.L.R. (4th) 139 (S.C.), at para. 7; Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 164 D.L.R. (4th) 257 (Ont.C.A.), at para. 9. 23 Kripps v. Touche Ross & Co. (1992), 69 B.C.L.R. (2d) 62 (C.A.), 94 D.L.R. (4th) 284, at B.C.L.R. pp. 67-68. The Court of Appeal upheld the order striking the plaintiffs’ claims premised on a presumption of reliance.

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293 (S.C.) provides the answer, which is yes.24 This case reinforces the point that Hunt v. Carey does not stand for the proposition that complicated questions of law are necessarily unsuited to resolution on a motion to strike.

Cooper v. Hobart was a proposed class action brought on behalf of investors in Eron Mortgage Corporation, a registered mortgage broker. It was estimated that approximately $222 million was outstanding to investors at the point where Mr. Hobart, the Registrar of Mortgage Brokers in B.C., suspended Eron’s licence and issued a freeze order. Eron went out of business shortly thereafter, and the investors lost tens of millions of dollars. The cause of action alleged in the Statement of Claim against Mr. Hobart was in negligence – that he breached the duty of care that he allegedly owed to the plaintiff and other Eron investors. This required, among other things, that a duty of care in tort law be owed by Mr. Hobart to the investors. Therefore, the question was whether the Registrar of Mortgage Brokers, a statutory regulator, owes a private law duty of care to members of the investing public for alleged negligence in failing to properly oversee the conduct of an investment company licensed by the regulator.

This question was answered in the affirmative by the judge at first instance, applying the “plain and obvious” test, and he went on to certify the action as a class proceeding. In one of the rare decisions from the B.C. Court of Appeal allowing a defendant’s appeal from a certification order, the Court reversed, on the grounds that the pleadings did not disclose a cause of action. This ruling was upheld by the Supreme Court of Canada, who provided a careful and detailed analysis on the issues of foreseeability and proximity.

The Ontario Court of Appeal applied the analysis from Cooper v. Hobart in Haskett v. Equifax Canada Inc. (2003), 63 O.R. (3d) 577 (C.A.). The court allowed the plaintiff’s appeal of an order striking out his proposed class actions against credit reporting agencies as disclosing no reasonable claim. The analysis was also applied by G. A. Smith J. in Hoffman v. Monsanto Canada Inc., 2005 SKQB 225 (Q.B.), [2005] S.J. No. 304 on the plaintiff’s certification application, in reaching the conclusion that much of the statement of claim did not disclose reasonable claims.25

Borins J.A., in Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 164 D.L.R. (4th) 257 (Ont.C.A.), reinforces the point that the “plain and obvious” test is not meant to be an excuse for allowing defective pleading (at pp. 263-265; italics added):

24 Edwards v. Law Society of Upper Canada (2001), 206 D.L.R. (4th) 211 (S.C.C.) is a companion case, decided at the same time. 25 The plaintiff’s attempted negligence, nuisance and trespass claims were among those the court concluded failed to disclose a cause of action. See, e.g., paras. 31-35, 43-46, 59, 67, 69-72 and 81 respecting the negligence claims.

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¶ 8 . . . [A] defendant may move to strike out a plaintiff's statement of claim on the ground that it does not disclose a reasonable cause of action. The essence of the defendant's motion is that the "wrong", described in the statement of claim, is not recognized as a violation of the plaintiff's legal rights, with the result that the court would be unable to grant a remedy, even if the plaintiff proved all the facts alleged. Thus, to permit the plaintiff to litigate the claim through discovery and trial would be a waste of both the parties' and the court's time.

¶ 9 Because the purpose of [the] motion is to test whether the plaintiff's allegations (assuming they can be proved) state a claim for which a court may grant relief, the only question posed by the motion is whether the statement of claim states a legally sufficient claim, i.e., whether it is substantively adequate. Consequently, the motions judge, as mandated by [the rule], does not consider any evidence in deciding the motion. The motions judge addresses a purely legal question: whether, assuming the plaintiff can prove the allegations pleaded in the statement of claim, he or she will have established a cause of action entitling him or her to some form of relief from the defendant. Because dismissal of an action for failure to state a reasonable cause of action is a drastic measure, the court is required to give a generous reading to the statement of claim, construe it in the light most favourable to the plaintiff, and be satisfied that it is plain and obvious that the plaintiff cannot succeed. See Hunt v. Carey Canada Inc. [citation omitted].

¶ 10 In some cases, a statement of claim will be vulnerable to dismissal . . . because the plaintiff has sought relief for acts that are not proscribed under the law. The typical textbook example is a statement of claim that alleges that the defendant made a face at the plaintiff, or that the defendant drove a car of an offensive colour. In other cases, however, the statement of claim may be defective because it has failed to allege the necessary elements of a claim that, if properly pleaded, would constitute a reasonable cause of action.

. . . . . . . . . .

¶ 12 Although I have analyzed [the rule] from the perspective of a defendant's motion to strike out a statement of claim on the ground that it is substantively inadequate, a similar analysis applies to a plaintiff's motion to strike out a statement of defence on the ground that it does not state a reasonable defence.

These cases reinforce that a pleader must have a firm grasp of the essential legal elements that must be stated for a reasonable and complete claim. Texts such as Bullen & Leake & Jacobs Precedents of Pleadings, Odgers’ Principles of Pleadings and

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Practice, and Lord Atkin’s Encyclopedia of Court Forms and Precedents (older, but still useful) can be invaluable in reminding a pleader of the basics. They also provide a helpful guide to defendant’s counsel in analysing and dissecting a statement of claim. Leading cases, such as Queen v. Cognos (misrepresentation claims), Whiten v. Pilot (punitive damages; conclusions must be supported by material facts), Hunt v. Carey (conspiracy claims), Winnipeg Condominium (economic loss), Cooper v. Hobart (negligence claims) and Fraser-Reid v. Droumtsekas (1980), 103 D.L.R. (3d) 385 (S.C.C.) (warranty claims), among many others, also provide important guidance on the material facts that must be pleaded to state reasonable claims.

III. Challenging Pleadings (and surviving attack) – What is working and what is not

The pleadings create the basic frame in which the court assesses whether or not a case (or some part of it) is appropriate for litigation as a certified class proceeding. In view of the criteria for certification, inevitably the statement of claim will be subjected to very close scrutiny by defendant’s counsel, on the question whether a reasonable claim has been pleaded, on the question whether allegations should be struck as embarrassing or abusive, and finally on the question whether the allegations give rise to either or both of common and individual issues. If a cause of action is one where individual issues are significant, and will likely overwhelm and predominate over any common issues, the chances of certification are diminished.26 Because the certification application is a key battle (often the key battle) in a proposed class action, it can be very important for a defendant to ensure – in advance of the certification application – that all elements of a claim are pleaded properly, since one or more of them may give rise to individual issues that could defeat certification. This is part of the work defendant’s counsel must undertake in analysing the pleadings. Defendant’s counsel must also analyse the proposed common issues in the light of the pleadings. For example, do the allegations in the statement of claim in fact give rise to the issues the court is being asked to certify, or do the proposed common issues assume facts that are not (yet) alleged?

There are many examples of the approach to drafting a statement of claim that “more is better.” If a complaint is being made about an allegedly defective product that caused injury or damage, why be satisfied with simply pleading a claim in negligence, when fraud, misrepresentation, conspiracy and other complaints can be added too? And why be satisfied with a remedy in compensatory damages, when you could try 26 In Hollick v. Toronto (City) (2001), 205 D.L.R. (4th) 19 (S.C.C.) (“Hollick”), e.g., the cause of action was in nuisance. The claim gave rise to common issues, however they were negligible in relation to the individual issues. A conspiracy claim requires proof of damage as an element of liability, and without some evidence that this can be done on a class-wide basis, certification will be refused: Chadha v. Bayer Inc. (2003), 63 O.R. (3d) 22 (C.A.), affirming (2001), 54 O.R. (3d) 520 (Div. Ct.)

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for disgorgement of alleged profits, or claim “reimbursement” from the defendant, or ask to have an “aggregate damages” issue certified as a common issue? This approach can back-fire on plaintiff’s counsel however, and, if not used thoughtfully, it can provide multiple avenues for attack by defendant’s counsel.

Statement-based or misrepresentation claims have proved to be particularly challenging to plead successfully, and to get certified. When tort claims alleging breach of a statute (without more) are pleaded, they are fairly routinely struck out. Using pleadings that have worked well in a class action in the U.S. can also simply be a trap for the unwary. A claim alleging an implied contractual term that a “fee” would be “reasonable” could state a reasonable claim but chances of having such a claim certified are poor. Claims alleging multiple statements made at various times over the proposed class period would likely also state reasonable claims, but present problems on certification.

These are just a few of the pitfalls for plaintiffs’ counsel, and areas for attack for defendants’ counsel.

A. Tort and Misrepresentation Claims

So-called “mass torts” are tailor-made for class actions, and vice versa. As MacPherson J.A. commented “disasters spawn litigation.”27 Pleading such claims should, in theory, be straightforward, but in practice this is not always the case.

Product liability actions often include claims and proposed common issues concerning an alleged duty to warn. Counsel (particularly in British Columbia) should note that there is good authority to support a defendant’s argument that complaints concerning an alleged duty and failure to warn, by their nature, are inappropriate for class treatment, since they face individualized questions linking causation of the alleged harm to absence of the warning: see Rumley v. British Columbia (1999), 72 B.C.L.R. (3d) 1 (C.A.), at para. 45 and Harrington v. Dow Corning Corp. (1996), 22 B.C.L.R. (3d) 97 (S.C.), at para. 8.

The litigation over Bre-X Minerals generated many interesting legal issues, including issues involving pleadings. The causes of action asserted28 fell into broad categories of negligence, negligent misrepresentation, fraudulent misrepresentation, conspiracy, breach of fiduciary duty and breach of the Competition 27 Carom v. Bre-X Minerals Ltd. (2001), 51 O.R. (3d) 238 (C.A), at p. 238 28 Rather than attempting to proceed with a single action in which everyone involved was named as a defendant (in effect, suing the Bre-X “industry”), plaintiffs’ counsel, wisely, filed eight separate actions, which were being jointly case-managed by Winkler J.

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Act, although not all causes of action were alleged against every defendant. Each statement of claim was between 60 and 100 pages long. A number of defendants brought motions (pre-certification) to strike claims.

In Carom v. Bre-X Minerals Ltd. (1998), 20 C.P.C. (4th) 163 (Ont. G.D.), Mr. Justice Winkler refused to strike the misrepresentation claims, despite an insufficiency of a plea of reliance. He did however strike the breach of fiduciary duty claims advanced against the brokers and individual analysts. Winkler J. concluded (para. 33) that the pleading “without exception, contained bald general allegations that the various representative plaintiffs relied upon” the advice of those defendants “at all material times.” None of the plaintiffs had pleaded any specific facts demonstrating reliance that could elevate the brokers above the status of information provider or order-taker. There were no material facts pleaded which, if true, could support a finding of vulnerability on the part of the plaintiffs or discretion in decision-making on the part of the brokers. In short, merely pleading conclusory allegations was insufficient to sustain the claims. Winkler J. continued (at para. 34; italics added):

It is not possible, in a class proceeding, to plead material facts in respect of each class member, since generally the identities of the class members and the particulars of their claims are not known. At a minimum, however, the elements of the cause of action and the material facts which underlie them must be pleaded in respect of the representative plaintiff. The claims for breach of fiduciary duty, as pleaded, do not meet even the low threshold applicable on these motions . . ..

A claim asserting breach of the Ontario Professional Engineers Act against another group of defendants was also struck out. On this point, Mr. Justice Winkler said (para. 59):

Breach of a statute does not, in and of itself, give rise to a civil cause of action, though evidence of the breach may be used as evidence of negligence in a civil action; see The Queen v. Saskatchewan Wheat Pool (1983), 143 D.L.R. (3d) 9 (S.C.C.). Counsel for the plaintiff conceded that he wishes to rely on breach of the Act only as evidence of negligence. Rule 25.06(1) provides that evidence by which material facts are to be proved need not be pleaded. Accordingly, I ruled at the hearing of the motion that this portion of the statement of claim is struck.

About six months later, Mr. Justice Winkler ruled on the plaintiffs’ motion to amend the statement of claim: see Carom v. Bre-X Minerals Ltd. (1998), 41 O.R. (3d) 780 (S.C.J.). The plaintiffs sought leave to amend to add claims based on the U.S. “fraud on the market theory.” Applying the “plain and obvious” test stated in Hunt v. Carey,

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Mr. Justice Winkler dismissed the plaintiffs’ motions. He noted in passing that the proposed amended statements of claim were “replete with assertions of actual reliance.”

Proper pleading of misrepresentation claims in proposed class actions against professionals came before the court again on the defendants’ motion to strike in Mondor v. Fisherman, [2001] O.J. No. 4620 (S.C.J.), (2001) 18 B.L.R. (3d) 260 (Ont. S.C.J.). By this time, the certification applications in Carom v. Bre-X had been dismissed in a majority of the actions.29 Plaintiff’s counsel in Mondor – who had been plaintiff’s counsel in Carom v. Bre-X – had clearly learned from experience however, and was putting the lessons to good use. Instead of multiple alleged representations, made over time, the case in Mondor v. Fisherman was advanced on the basis of a single “Representation.”30 The claim against an accounting firm was also pleaded specifically having regard to the substantive law set out in Hercules Managements Ltd. v. Ernst & Young (1997), 46 D.L.R. (4th) 577 (S.C.C.). In the result, the motion by the defendant-accountants to strike the claim as failing to disclose a reasonable cause of action was dismissed.

In Boulanger v. Johnson & Johnson Corp., [2003] O.J. No. 2218 (C.A.), affirming in part [2002] O.J. No. 1075, 14 C.C.L.T. (3d) 233 (Ont. S.C.J.), a proposed products liability class action, the Ontario Court of Appeal considered whether misrepresentation claims, and claims for reimbursement by a class of users of the drug Prepulsid should be struck as failing to disclose reasonable claims.

The statement of claim alleged liability against the defendants (other than Health Canada) based on negligence, failure to warn, breach of fiduciary duty, breach of warranty and collateral contract. These claims were not challenged. However, the defendants brought a motion to strike out claims based on representations allegedly made to a third party (not to any class members), and the claims for reimbursement. Those claims were struck out by Nordheimer J. The plaintiffs appealed.

With respect to the misrepresentation claims, the plaintiffs pleaded that in order to sell Prepulsid in Canada, the defendants had to seek regulatory approval from Health Canada. The plaintiff alleged that the defendants’ filings to obtain this approval were fraudulently or negligently prepared, failed to comply with the provisions of the Food and Drugs Act, and that the defendants failed to disclose to Health Canada problems about which the defendants knew or ought to have known. Mr. Justice Goudge (for the court) said (italics added): 29 see Carom v. Bre-X Minerals Ltd. (1999), 44 O.R. (3d) 173 (S.C.J.), (1999), 46 O.R. (3d) 315 (Div.Ct.), (2000), 51 O.R. (3d) 236 (C.A.) 30 The same technique was used in Serhan v. Johnson & Johnson (2004), 72 O.R. (3d) 296 (S.C.J.), with less success. Cullity J.’s judgment granting certification is under appeal: see Serhan v. Johnson & Johnson, [2004] O.J. No. 4580 (S.C.J.).

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¶ 10 The motions judge found that in so far as these pleadings simply allege a nominate tort of breach of statute, they cannot be sustained. I agree. . . .

¶ 11 The motions judge also concluded that these pleadings could not be sustained on the basis of negligent misrepresentation. Again I agree. It is clear that in Canada, actual reliance is a necessary element of an action in negligent misrepresentation and its absence will mean that the action cannot succeed. See Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165 at para. 18. Here there is absolutely no assertion of reliance by the appellant (or by anyone on her behalf) on the representations of the respondents to Health Canada. Indeed there is no pleading of reliance on the fact of regulatory approval. This complete absence of reliance is fatal to a negligent misrepresentation claim. Thus these paragraphs of the statement of claim cannot be said to disclose a reasonable cause of action based on misrepresentation.

¶ 12 However, in my view, the paragraphs are sustainable on the basis of the appellant's negligence claim against the respondents. That claim is broadly pleaded. The appellant alleges that the respondents negligently designed, formulated, tested, manufactured, labelled, distributed, advertised, marketed and promoted Prepulsid and thus caused harm to the appellant.

¶ 13 There is no doubt that the respondents owed a duty of care to the appellant as a consumer of their drug product. . . .

¶ 14 The appellant's allegation is that the standard of care required of the respondents includes taking reasonable care in the filings they made to obtain regulatory approval and that without that approval, Prepulsid would not have been available to harm the appellant. These filings are pleaded as an aspect of the respondents' conduct which caused the appellant harm and which fell below the standard required of a reasonable drug manufacturer. They are one of the ways in which the appellant says the respondents were negligent. Framed this way, I cannot say that it is plain and obvious that such a claim will fail.

The allegations concerning the representations made by the defendants to Health Canada (a third party) were (arguably) a pleading of evidence, not material facts. However, Mr. Justice Goudge placed them in a context where they functioned essentially as particulars of the defendants’ breach of the standard of care. As such, the pleading was proper.

With respect to the claim for reimbursement, the court rejected the plaintiff’s submission that reimbursement was properly pleaded as a remedy for pleaded

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negligence. The court also rejected the plaintiff’s submission that reimbursement could be claimed as a remedy for breach of contract. Reminding the plaintiff (and her counsel) of basic propositions in contract law, Goudge J.A. said (para. 19; italics added):

The claims of breach of contract as against the respondents (including implied warranty) were not attacked in this motion, but assuming that they can be successfully maintained by the appellant against the manufacturer of the drug (who is not the seller), reimbursement (as distinct from damages equivalent to the purchase price) would not follow as a remedy. Reimbursement would come only with rescission of the contract and that is not available here, since the drugs cannot be returned. The parties cannot be restored to their pre-contractual positions. [Citation omitted.]

The court also rejected the plaintiff’s argument that the pleading could be sustained on the basis of unjust enrichment. Again reminding the plaintiff (and her counsel) of basic legal propositions, Goudge J.A. said (para. 20):

The difficulty is that the purchase price for which the appellant seeks reimbursement was paid to the retailer not to the respondents. Any benefit to the respondents from this payment was indirect and only incidentally conferred on the respondents. Unjust enrichment does not extend to permit such a recovery.

In a companion decision, the Divisional Court addressed the defendants’ appeal of Nordheimer J.’s order refusing to strike claims based on non-Ontario statutes: see Boulanger v. Johnson & Johnson (2003), 64 O.R. (3d) 208 (S.C.J. Div. Ct.). It was plain and obvious that the plaintiff had no personal cause of action based on these statutes. Nevertheless, the Divisional Court dismissed the defendants’ appeal. In the course of its reasons, the court provides helpful guidance on pleading statutes of other provinces.

In Shaw v. BCE Inc. [2003] O.J. No. 2695 (S.C.J.),31 Mr. Justice Farley struck out a statement of claim purporting to plead causes of action for negligent misrepresentation and oppression, and dismissed the plaintiff’s application for certification. In describing the deficiencies in the statement of claim, Mr. Justice Farley said:

31 Mr. Shaw tried again before Farley J., but continued to be unsuccessful. See Shaw v. BCE Inc. (2003), 42 B.L.R. (3d) 107 (Ont. S.C.J.), aff’d (2004), 49 B.L.R. (3d) 1 (Ont. C.A.).

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¶ 5 [Class Proceedings Act] proceedings are not exempt from the usual rules for pleading. The Statement of Claim must plead all of the materials facts on which Shaw relies, including the material facts capable of supporting each of the constituent elements of the causes of action alleged [citations omitted]. . . . If a pleading is so general as to be lacking the material facts, the appropriate remedy is to strike the proceeding rather than proceed by way of demanded particulars. [Citations omitted]

A common problem confronting plaintiffs’ counsel is how properly to pleading a cause of action for misrepresentation, when the statements are about the future.32 In Ontario Public Services Employees Union v. Ontario, [2005] O.J. No. 1841 (S.C.J.), Cullity J. discusses the acceptable way to make allegations about statements regarding future conduct: see paras. 34-35.

It should come as no surprise, therefore, that tort-based claims need to be thoughtfully and carefully pleaded, both to avoid being struck out, and to provide a foundation for common issues that can be certified. More ambitious or “novel” claims still need some connection to the substantive law, something which the reimbursement claim in Boulanger v. Johnson & Johnson, for example, lacked.

B. “Systemic Negligence”

Class action practitioners know that in Rumley v. British Columbia (2001), 205 D.L.R. (4th) 39 (S.C.C.), affirming (1999), 72 B.C.L.R. (3d) 1 (C.A.), the main issue certified by the B.C. Court of Appeal (and upheld by the Supreme Court of Canada) was based on liability for “systemic negligence.” In reversing the original refusal to certify the case, MacKenzie J.A. said (para. 19): “In essence, the claims will be based on systemic negligence, the failure to have in place management and operations procedures that would reasonably have prevented the abuse.” This made the case “more amenable” to class proceedings.

The idea that claims based on “systemic negligence” should generally be “more amenable” to class proceedings has had mixed results in practice.

In Rumley itself, after two years of case-management, the defendant brought a motion to have the action decertified as untriable: see Rumley v. British Columbia (2003), 12 B.C.L.R. (4th) 121 (S.C.). Although the application was dismissed, the case management judge considered it necessary, in order to move the litigation forward, to frame 11 new issues. Moreover, the court warned plaintiffs’ counsel that she

32 This was a problem in Shaw. See para. 8 of Mr. Justice Farley’s judgment.

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had reached “a precarious balance between a potentially workable class proceeding and unmanageable confusion.”33

The court rejected certification based on alleged “systemic negligence” in Fehringer v. Sun Media Corp. (2002), 27 C.P.C. (5th) 155 (Ont. S.C.J.). More recently however the court has granted certification in W.W. v. Canada (Attorney General) (2004), 24 B.C.L.R. (4th) 347 (S.C.), and in Cloud v. Canada (Attorney General) (2004), 247 D.L.R. (4th) 667 (Ont. C.A.), reversing (2003), 65 O.R. (3d) 492 (Div. Ct.). Like Rumley, both of these cases involved allegations of physical and other abuse.

C. Contract-based Claims

Contract-based claims should (in theory) be straightforward to plead, and generate common issues that will be significant in the context of the case as a whole and will result in certification. Again, in practice, the results have been mixed. Claims based on implied terms (including implied warranties), or oral terms, have been particularly problematic for plaintiffs and their counsel. This is because, with limited exceptions, individual inquiries will be required to draw conclusions about the actual contract terms. Even if common issues are present, individual issues are likely to overwhelm and predominate.34 Such cases can also present problems in arriving at an appropriate class definition.

Scott v. TD Waterhouse Investor Services (Canada) (2001), 94 B.C.L.R. (3d) 320 (S.C.) (“Scott Certification”) and Wilson v. Re/Max Metro-City Realty Ltd. (2003), 63 O.R. (3d) 131 (S.C.J.) are examples of relatively straightforward claims, based on the proposition that all class members were parties to a standard form contract with the defendant, which it is alleged was breached. Both actions were certified.35

Compare the result in these cases with the result in Macleod v. Viacom Entertainment Canada Inc. (2003), 28 C.P.C. (5th) 160 (Ont. S.C.J.). The action involved Blockbuster Video stores, and the plaintiff sought to represent Canadian residents who had entered into membership agreements with the defendants for video rentals. The plaintiff sought declarations that certain late fees and unreturned video fees charged by the defendants constituted breaches of contract and unlawful penalties. The plaintiff also sought restitution and damages for the class in the amount of $20 million, and punitive damages.

33 para. 91. 34 This point was noted by MacKenzie J. (as he then was) in Harrington v. Dow Corning Corp. (1996), 22 B.C.L.R. (3d) 97 (S.C.), at para. 50, who refused to certify such claims. 35 In Wilson v. Re/Max, Charbonneau J. refused to certify an proposed common issue relating to punitive damages: see paras. 20 and 24.

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Mr. Justice Cullity dismissed the plaintiff’s certification application. Among other things, Mr. Justice Cullity concluded that the statement of claim failed in key aspects to disclose reasonable claims.

Cullity J. summarized the allegations in the statement of claim as follows (para. 3; italics added):

1. The defendants, through their employees, entered into membership agreements with the plaintiff and other members of the proposed class to enable them to rent videos.

2. It was an implied term of the "standard contract" between the members and the defendants that any late charges or other fees would be reasonable.

3. Videos that are rented are due back by midnight on particular dates.

4. When videos were returned late, the plaintiff and other members of the class were charged additional fees ("late fees") and, when a video was not returned at all, the rental was converted into a sale and the purchase price (an "unreturned video fee") set by the defendants was charged to the member's account.

5. The late fees greatly exceeded the daily cost of a video rental and the unreturned video fees greatly exceeded the actual replacement cost, or retail price, of the video.

6. The fees were not disclosed to the members in advance, they were imposed without the consent of the members and they were neither a genuine pre-estimate, nor a reflection, of the actual loss suffered by the defendants. They were unreasonable and extravagant and constituted unlawful penalties. The defendants' conduct in charging fees was contrary to principles of justice, equity and a good conscience.

7. As a consequence of this behaviour, the defendants were unjustly enriched without juridical reason.

8. The plaintiffs are entitled to recover punitive damage from the defendants because of their failure to disclose the amount, or method of calculating, late fees and unreturned video fees and the confusing, ambiguous, misleading and deceptive representations they made with respect to such fees.

Counsel for the defendants argued that (among other things) the pleading was so deficient in its statement of material facts so as to amount only to a pleading of legal conclusions.

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Mr. Justice Cullity focussed his analysis on the claims that the fees were “unlawful penalties.” He observed (para. 6) that the court’s power to grant relief against penalties is premised on the existence of a term of a contract between the parties that provides for a specific payment, or payments, to be made by one of them in the event of a breach, and said further that the law of penalties is essentially concerned with relieving contracting parties from the agreed consequences of a breach of the contract. After reviewing a number of authorities on the legal nature of a penalty, Mr. Justice Cullity said:

¶ 12 Here, the statement of claim contains no allegation that there was any provision in the standard contract between the members and the defendants for the payment of the fees that were charged, nor that a failure to return a video by the due date would constitute a breach of the contract. It is pleaded that the fees were not disclosed in the standard contract, were never communicated to members and were charged without their consent. The whole thrust of the statement of claim is that there was no agreement to pay the fees that were charged. This is all quite inconsistent with reliance on the law relating to penalties. . . . As the pleading stands, the allegation that the fees were penalties adds nothing to the assertion that there was no agreement to pay them. If the facts, as pleaded, are proven, the members would have had no contractual obligation to make the payments and no question of relieving against them as penalties could arise. . . . Inconsistent allegations in a statement of claim are permitted but only when "the pleading makes it clear that they are being pleaded in the alternative”. . . :. This is not the case here as it is expressly stated that the fees that are alleged to be penalties were "set and charged by the defendants without the consent or input of the customer".

¶ 13 In order to plead a cause of action based on penalties, it would have been necessary to plead, in the alternative to the allegations of an implied term and non-disclosure, that the fees were set in a contract between the parties, that the contract imposed an obligation to return videos by their due dates and that the fees would be payable in the event of a breach of this obligation. None of these facts was pleaded and the facts that were pleaded were inconsistent with them. On the basis of the pleading, and the authorities I should follow, it is, I believe, "plain and obvious" that the claims based on penalties could not succeed.

¶ 14 I do not consider this finding to be unduly technical. The defendants are entitled to know the case that is being advanced against them. If the position of the plaintiff is that a failure to return videos by their due dates was a breach of the standard contract - and that, under the terms of the contract,

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payment of the fees was conditioned on such a breach - these allegations were required be pleaded. If they had been pleaded, they would have raised a question of construction - a discrete question of law - that might have been tried as a preliminary issue . . .. The plaintiff cannot, in my opinion, avoid these questions by denying that there was any agreement to pay the fees and, at the same time, seek relief on the ground that they were penalties. The defendants were, in my opinion, entitled on this motion to take the position that, as the claims based on the alleged character of the fees as penalties could not succeed on the basis of the facts pleaded, the statement of claim disclosed no cause of action with respect to such claims. I so find.

Here, the substantive law relating to penalties was simply inconsistent with the facts pleaded. Perhaps the use of the term “penalties” was merely intended to make a rhetorical point, and cast the defendants in a bad light. However, the term had a particular legal meaning, which provided the focus for the defendants’ and Mr. Justice Cullity’s legal analysis. The end result was that no reasonable claim had been pleaded. Whether the same analysis would have applied had the word “fee” or “charge” been used, rather than “penalty,” is speculative. However, the case illustrates once again the importance of having a firm grasp of the basics, both in drafting a statement of claim, and in dissecting it.

The problems with the pleadings also affected Mr. Justice Cullity’s analysis and conclusions on the question whether there were any common issues. Certainly in hindsight, advancing a claim based on an implied contract term that fees would be “reasonable” appears doomed. Accepting the submissions of counsel for the defendants that one class member’s success would not necessarily mean success for any other class member, Cullity J. said (para. 24):

The statement of claim does not identify any express term that was allegedly breached. Nor is it alleged that the defendants were not entitled to charge any late, or replacement, fees. The claim of breach of contract depends on the existence of the alleged implied contractual term that late fees, and replacement fees, would be reasonable. The question whether such a term should be implied must depend upon the manner, and degree, of disclosure to each member of the fees the defendants intended to charge and it may, indeed, be affected by "Who said what to whom, and when" as well as by the member's past experience of renting videos from the defendants or, perhaps, from other retail outlets. I do not accept the proposition that the issue could be determined solely from evidence of general practices adopted by the defendants without regard to the knowledge and understanding of individual members.

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The breach of contract claims in Hickey-Button v. Loyalist College of Applied Arts & Technology (2003), 31 C.P.C. (5th) 171 (Ont. S.C.J.) were based on alleged oral terms. Not only did such claims require detailed individual inquiries, they also created difficulties in describing an identifiable class. Certification was refused.

The Plaintiff in Collette v. Great Pacific Management Co. [2003] B.C.J. No. 529 (S.C.), reversed (2004), 26 B.C.L.R. (4th) 252 (C.A.) experienced similar problems in a obtaining certification of a case based on a contract for services with implied duties. In refusing certification (for the second time), Macaulay J. said (para. 10):

Although it is possible to identify potential common issues in the pleadings as set out, it becomes apparent on analysis that those issues do not necessarily apply to all members of the putative class. Instead, further individualized inquiries into the specific contractual arrangements between the defendants and their clients would be needed to determine whether the alleged implied contractual terms exist. Absent such an inquiry, any determination of the proposed common issues would take place in a vacuum. While the need to demonstrate individual reliance, so problematic on the first application, is avoided by the presentation of the claim in contract, the need to prove the necessary contractual terms capable of giving rise to the duties as now alleged presents similar practical hurdles to certification.

However, Mr. Collette found success in the B.C. Court of Appeal. There, a common issue framed in terms of whether the defendants owed a duty – whether in tort or contract or both – to evaluate a proposed investment by a standard of due diligence was certified.

Direnfeld v. National Trust (2002), 17 C.P.C. (5th) 102 (Ont. C.A.), affirming the judgment of Mr. Justice Cumming pronounced March 6, 2001,36 provides an example where the motion to strike brought an end to the proceedings.

The plaintiffs alleged that the defendant, through extensive advertisements, “represented to the public at large” that eligible consumers who took out a mortgage with the defendant would receive “home warranty protection.” The claim further alleged that the advertised program, by the simple fact of being advertised to the public, imported terms into the specific mortgage contracts of the putative class members,

36 This judgment, in the form of an endorsement, is apparently unreported. The author can provide a copy. The citation given in the report of the Court of Appeal’s judgment is to a judgment on a motion for costs.

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whereby the “home warranty protection” became part of those contracts. Mr. Justice Cumming observed (para. 8) that the plaintiff was obliged to plead the material facts relied upon to establish, on the face of the pleading, that there was an enforceable contract between the parties which included a contractual promise by the defendant to provide the home warranty protection program to the plaintiff (and putative class members). In short, because the fundamental claim was a claim in contract (essentially alleging a collateral contract), all of the elements describing a valid (collateral) contract – including offer and acceptance – were material and had to be pleaded (and ultimately proved). However, the statement of claim did not allege that any of the representative plaintiffs knew and relied on the advertisements in entering into their mortgage contracts, or that any representative plaintiff was even aware of the alleged representations “to the public at large.”

Plaintiffs’ counsel declined the opportunity to amend the pleading to incorporate some reference to a representative plaintiff knowing of and relying on the advertising. The entire claim was struck out. Cumming J.’s order was upheld on appeal, the Court of Appeal noting that the necessary knowledge and reliance were not pleaded.

One basic problem with this type of claim is the inevitability of having to focus on the circumstances of individual claimants,37 which are as likely to be unique and different as common. Plaintiffs’ counsel in Direnfeld v. National Trust was faced with an uncomfortable dilemma. On the one hand, a proper warranty claim could have been pleaded,38 and any real chance of certification sacrificed. On the other hand, counsel could simply attempt to survive a motion to strike. In the end, counsel chose the latter course, and the action was dismissed.

Caputo v. Imperial Tobacco Ltd. (2004), 236 D.L.R. (4th) 348 (Ont. S.C.J.) (“Caputo”) included a claim for breach of implied warranty, and Mr. Justice Winkler rejected defendant’s submissions (made at the hearing of the certification application) that there was no viable cause of action for such a claim.39 Winkler J. observed (para. 22) that the claims turned on the doctrine of privity of contract, and that “while it may have been the case that the law regarding privity of contract was settled for a number of years, it is also the case that a number of exceptions have been developed.” He concluded that it was not plain and obvious the plaintiffs could not succeed in

37 See the comments Chief Justice McLachlin in Western Canadian Shopping Centres Inc. v. Dutton (2001), 201 D.L.R. (4th) 385 (S.C.C.) (“Dutton”), at para. 47. 38 Doing so would essentially create a claim much like Naken v. General Motors of Canada Ltd. (1983), 144 D.L.R. (3d) 385 (S.C.C.) 39 Breach of warranty claims have been included in other products liability class actions. See, e.g., the statement of claim in Wilson v. Servier Canada Inc. and Olsen v. Behr Process Corporation, discussed below. There is no question that proper claim can be pleaded, but doing so creates problems for the plaintiff on certification.

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establishing an exception to the doctrine of privity might apply in the circumstances of the case.40 In the result, however, the certification application was dismissed.

Properly pleaded breach of warranty claims clearly are amenable to certification where the focus can remain on the conduct of the defendant, and there is no real issue concerning the status of the claimants. Claims relying on, for example, breach of implied warranties under the Sale of Goods Act can be well-suited for class litigation where the defendant is the seller and the class members are purchasers. A class of all purchasers gets the benefit of warranties implied by statute, and the focus can be on whether or not the conduct of the defendant-seller amounted to a breach of the warranty.41

D. Suing “an industry” or multiple defendants in a single action

There are a number of examples of an action brought by a single plaintiff against multiple defendants. Again, results for plaintiffs have been mixed. Even when an appropriate class and common issues can be identified, suing multiple defendants inevitably raises issues concerning manageability, and therefore preferability, of litigating the claims in the context of a class action.

There is also now a clear divide between B.C. and Ontario on the question whether a plaintiff must allege a personal cause of action against each defendant. In B.C., a claim against multiple defendants will not be struck out even though the plaintiff has no personal cause of action against one or more of them. Such a claim would be struck out in Ontario as against those defendants. Litigants (and their counsel) in other provinces will have to wait and see whether the B.C. or the Ontario approach is favoured.

Two of the first cases filed in B.C. when the Class Proceedings Act came into force were Harrington v. Dow Corning Corp. (2000), 82 B.C.L.R. (3d) 1 (C.A.), affirming (1996), 22 B.C.L.R. (3d) 97 (S.C.) (“Harrington v. Dow”) and Campbell v. Flexwatt Corp. (1997), 44 B.C.L.R. 343 (C.A.), affirming (1996), 25 B.C.L.R. (3d) 329 (S.C.). On the facts in both, the named plaintiffs had causes of action against only some of the defendants, and there was no dispute that they had no personal cause of action against others. Nevertheless, the defendants against whom the plaintiffs had no personal cause of action did not challenge the legal sufficiency of the pleadings. Instead, at the hearing of the certification application, they made arguments to the effect that, because

40 Mr. Justice Winkler also rejected the defendants’ submissions that the conspiracy claim should be struck: see paras. 24-27. 41 Examples are Fakhri v. Wild Oats Markets Canada Inc. (2004), 41 C.P.C. (4th) 369 (B.C.S.C.) and Vezina v. Loblaw Companies Ltd., [2005] O.J. No. 1974 (S.C.J.). In both cases, the defendant was the seller, and the Sale of Goods Act applied.

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the plaintiffs lacked any personal cause of action against some defendants, the plaintiffs were not adequate representatives for the class. Both cases were certified, and certification was upheld on appeal.

Despite success in having the action certified – and essentially being given permission to sue multiple defendants involved in the manufacture of breast implants – it proved to be difficult for the plaintiff and her counsel to actually “move the litigation forward” in Harrington v. Dow, however. Some of the problems are highlighted in the reasons dealing with an application to approve a trial plan: see Harrington v. Dow Corning Corp. (2002), 3 B.C.L.R. (4th) 51 (S.C.). Arguably, rather than facilitating access to justice, the ambitious and broad scope of the proceedings in fact created a practical barrier to bringing issues forward to trial. In addition, the plaintiff (and her counsel) faced not just one determined defendant, who was more than capable of mounting a vigorous defence, but a whole group.

The specific question whether a claim could stand against a defendant where the plaintiff had no personal cause of action came before the Ontario court in Ragoonanan Estate v. Imperial Tobacco Canada Ltd. (2000), 51 O.R. (3d) 603 (S.C.J.). Prior to the application for certification, two of the defendants applied to have the statement of claim struck out, and were successful. Mr. Justice Cumming distinguished Harrington v. Dow and Campbell v. Flexwatt and concluded that an action may not be brought against a stranger with whom the plaintiff does not have any relationship that can be the subject of a cause of action.

That this was the proper result was affirmed by the Ontario Court of Appeal in its decision in Hughes v. Sunbeam Corp. (Canada) (2002), 61 O.R. (3d) 433 (C.A.), where Laskin J.A. said (for the court) at para. 18:

In Ontario a statement of claim must disclose a cause of action against each defendant. Thus in a proposed class action, there must be a representative plaintiff with a claim against each defendant.

However, in MacKinnon v. National Money Mart Company (2005), 33 B.C.L.R. (4th) 21 (C.A.), released in September, 2004, a five-judge panel of the B.C. Court of Appeal came to the opposite conclusion.

Briefly, Mr. MacKinnon filed a action against over 20 defendants involved in offering payday loans in B.C. It was undisputed that Mr. MacKinnon had personally done business with a few defendants only, and had no personal cause of action against a majority of the defendants. Those defendants applied to have the action struck out, relying (among other things) on the decisions in Ragoonanan and Hughes v. Sunbeam. A

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five-judge panel of the B.C. Court of Appeal was assembled in view of the prospect that the court might have to overrule previous appellate decisions in Harrington v. Dow and Campbell v. Flexwatt. Counsel for the defendant-appellants argued forcefully that the Ontario approach was the correct one, while counsel for Mr. MacKinnon argued equally forcefully that the original approach taken in B.C. should be confirmed and that there was no good reason to force claimants to file multiple separate actions, rather than a single action against multiple defendants.

Saunders J.A. stated the question on the appeal as whether an action commenced under the B.C. Class Proceedings Act must allege a cause of action between a representative plaintiff and each defendant. The B.C. Court of Appeal said it did not. It firmly rejected the analysis that had been accepted and applied by the Ontario courts as applicable in B.C. in view of the provisions of the B.C. Class Proceedings Act.42 The Court concluded that while the B.C. Act requires a cause of action against each named defendant, that cause of action must be held by class members, and does not necessarily need to be held by the representative plaintiff.43

To date, this particular result represents something of a pyrrhic victory for Mr. MacKinnon, who proceeded to seek certification of the action as against all named defendants. The defendants opposed certification on a number of grounds, including that there were no common issues given the wide variety of agreements and business models among them, and that the case was simply too unwieldy to be prosecuted as a class action. On March 1, 2005, the certification application was dismissed: see MacKinnon v. National Money Mart Company, 2005 BCSC 271. Brown J. concluded that the action “as presently constituted” could not be certified, as the plaintiff had not satisfied her that there were common issues or that a class action was the preferable procedure.44 The judge noted evidence that there were over 20 different business models, more than 60 different forms of agreement, over 50 different fees charged (some payable to third parties) and, from time to time, negotiation of individual agreements with borrowers.45 The court also concluded that individual issues overwhelmed any common issues.46

42 The court noted s. 2.(4) in particular. This section states: “The court may certify a person who is not a member of the class as the representative plaintiff for the class proceeding only if it is necessary to do so to avoid a substantial injustice to the class.” 43 See para. 51. In the course of her reasons, Madam Justice Saunders coined a new term for a proposed (as yet uncertified) class proceeding. It is not just any old action, but “an action with ambition” (see para. 33). 44 2005 BCSC 271, at para. 6. 45 2005 BCSC 271, at para. 22. 46 2005 BCSC 271, at para. 39.

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However, Brown J. observed that “it may be that these claims could be pursued effectively in ‘less ambitious’ class proceedings.”47

Mr. MacKinnon and his counsel have not given up. In addition to appealing the order dismissing the certification application, the plaintiff sought and obtained an order relying on s. 9 of the B.C. Class Proceedings Act whereby he was allowed to reconstitute his action, and pursue new certification applications against individual defendants. The defendants have been granted leave to appeal this order.

As matters stand, therefore, it is possible in B.C. for a single plaintiff to sue multiple defendants – an “industry” – in a single action, although the plaintiff has no personal cause of action against many or most of them. Plaintiff’s counsel must, however, consider very carefully whether it is wise to do so. Having numerous defendants can create challenges in defining an appropriate class and common issues, and in the context of the action as a whole it may be more difficult to show that a class proceeding is preferable. Even if an action is certified, it may simply be untriable. The goals of access to justice and modifying defendants’ behaviour may be reached more easily – and more quickly – by tempering one’s ambition.

E. Particular causes of action and creative pleading can facilitate certification

Causes of action where the primary focus can be on conduct of the defendant, and where determinations made in respect of that conduct can advance the claims of the class members in a meaningful way, will facilitate certification. Such causes of action may not always be easy to identify however.

Scott v. TD Waterhouse Investor Services (Canada) (2001), 94 B.C.L.R. (3d) 320 (S.C.) (“Scott Certification”) and Cassano v. TD Bank have certain elements in common. Both cases involve financial services, both involved foreign exchange rates, and in both cases the plaintiffs complained that the defendant had been unjustly enriched at their expense. The first case was certified. The second case was not (and all parties, including plaintiff’s counsel, appeared to have difficulty with what exactly was being put forward for certification).

The first key to success in Scott Certification was basing the case on a standard form contract that applied to all class members. The second was the framing of the case in terms of an agency relationship. Based on the substantive law, a person in a fiduciary position (such as an agent) cannot profit from that position at the expense of the beneficiaries (the agent’s principal, and in this case the class members,) without obtaining

47 2005 BCSC 271, at para. 40

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the fully-informed consent of the beneficiaries to do so.48 Based on the substantive law, the main focus for the litigation was then, not what the class members knew, but what had been disclosed to them by the defendant concerning alleged profits taken by the defendant. Individual circumstances were largely irrelevant, and significant legal issues could be determined by examining only the conduct of the defendant.49

In Cassano v. TD Bank, the plaintiff complained that, on every transaction in foreign currency, the defendant had charged Visa cardholders “unauthorized fees” in addition to the reasonable exchange rates, and as a result had been unjustly enriched and held all “unauthorized fees” in trust for class members. Mr. Justice Cullity observed (para. 7) that the claims appeared to be premised on the existence of a constructive trust arising from the unjust enrichment of the bank, and that it was also pleaded that the bank owed a fiduciary duty to cardholders. However, the only cause of action being asserted by the plaintiff for purposes of certification was a claim for breach of contract. The plaintiff advanced a claim for an accounting as a remedy for the alleged breach.50 The claim for imposition of a constructive trust was apparently also advanced as a remedy for the alleged breach of contract.

Mr. Justice Cullity struggled with connecting the stated cause of action (breach of contract) to the proposed common issues he was being asked to certify.51 He considered it clear that the alleged failure to disclose service fees charged on foreign currency transactions was the essence of the claim that the fees were unauthorized.52 The court set out the competing theories advanced on the application. Plaintiff’s counsel argued that the fees would not have been charged if the contract had been performed and therefore the measure of damages for breach of contract was simply the amount of the fees.53 Defendant’s counsel argued that the alleged breach of contract was the charging of fees without disclosure, and that the proper measure of damages was the amount to place cardholders in the same position they would have been in had disclosure been made. However, what cardholders would have done could only be determined on the

48 Phipps. v. Boardman, [1964] 2 All E.R. 187 (Ch.), aff’d [1965] 1 All. E.R. 849 (C.A.), aff’d [1967] 2 A.C. 46 (H.L.) is a classic example of this kind of case. See the discussion at paras. 17-19 in Scott Certification. 49 The common issues certified in Scott Certification are set out at para. 170 of the court’s judgment. 50 Cassano v. TD Bank, paras. 7, 27 39. 51 The proposed common issues are set out at para. 44 of the reasons. Every proposed “issue” has multiple parts and sub-issues. 52 Cassano v. TD Bank, paras. 32, 45 53 Cassano v. TD Bank, para. 52.

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basis of individual inquiries, making the case unmanageable and inappropriate for certification.54

In the result, Mr. Justice Cullity dismissed the certification application, accepting the defendant’s arguments that the consequences of the alleged breach of contract could not be proved on a class-wide basis.

While these two cases shared a number of elements in common, the legal issues (including remedies) that the court was being asked to determine were placed in a much more certification-friendly context in Scott Certification as compared with Cassano v. TD Bank, with better results for the plaintiff and class members.

It is also instructive to compare the claims advanced in Caputo v. Imperial Tobacco Ltd. (2004), 236 D.L.R. (4th) 348 (Ont. S.C.J.) (“Caputo”), which was not certified, with the claims advanced in Knight v. Imperial Tobacco Canada Limited (2005), 250 D.L.R. (4th) 347 (B.C.S.C.), 2005 BCSC 172 (“Knight”), which was certified.

Caputo clearly was the more ambitious action. Claims were pleaded in terms that are fairly typical in product liability claims alleging personal injuries, including negligence, failure to warn, deceit, negligent misrepresentation, breach of implied warranty and conspiracy.55 Among other problems, plaintiffs’ counsel were never able to formulate an appropriate class definition, and Mr. Justice Winkler concluded that the action, as it was presently framed, could not be certified.

The statement of claim in Knight, on the other hand, was quite different. One of the first differences was a specific allegation that the plaintiff did not seek to recover damages for personal injuries. Rather, the claim was made under the B.C. Trade Practice Act, R.S.B.C. 1996, c. 457, and alleged that the defendant had engaged in deceptive acts and practices in connection with the sale and marketing of “light” and “mild” brand cigarettes. Under the statute, individual claims could be made for a variety of remedies, including damages and punitive damages, based on alleged deceptive acts or practices. Relevant provisions of the statute implied that causation needed to be established, linking a deceptive act to damage alleged to be suffered, but, for the purposes of deciding whether the pleadings disclosed a reasonable claim, the court accepted that causation could be proved other than by demonstrating individual reliance. In addition, the plaintiff did not seek individual damages for each class member, but sought an aggregate damage award that could be distributed (in part) to charitable institutions involved in researching and treating illnesses relating to smoking.

54 Cassano v. TD Bank, paras. 53-57. 55 A “strict product liability” claim was also included, but should not have survived a motion to strike. See the comments of Winkler J. at para. 19.

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In short, the claims in Knight were focussed and deliberately presented in a way that the criteria for certification could be met. The case lacked the scope and “ambition” of Caputo, but succeeded where Caputo failed.

F. “Aggregate Damages”

Despite the express provisions in class actions statutes concerning aggregate awards of monetary relief,56 plaintiffs’ counsel are receiving some encouragement from the court to include for certification common issues concerning “aggregate damages.” Recent examples are found in Cloud v. Canada (Attorney General) and Vezina v. Loblaw Companies Ltd.

In Vezina, plaintiff’s counsel apparently did not ask that an issue concerning “aggregate damages” be certified. Nevertheless, Mr. Justice Cullity certified it, observing (para. 24; italics added):

Whether an aggregate assessment of damages is to be made . . . would be in the discretion of the trial judge pursuant to section 24 of the CPA . . .. For that reason, the possibility of such an assessment in class proceedings is most often formulated as a common issue for the class, or a subclass of members. Whether or not this is strictly necessary, I believe it is good practice as it would inform the trial judge at the outset of a matter that may need to be determined at the trial.

G. When in the proceedings should pleadings be challenged?

If a defendant is going to attack the plaintiff’s pleadings, when should the attack be made? Should it be a separate motion, brought in advance of the certification application? Or should it be as part of the certification application?

If a defendant intends to mount a full-fledged attack with the goal of forcing the plaintiff to plead properly, or to have all or parts of a statement of claim struck out, the better course is to bring the motion separately, and in advance (preferably well in advance) of the certification application. This was the approach taken in Carom v. Bre-X, Ragoonanan, Hughes v. Sunbeam, and in Olsen v. Behr Process Corporation (discussed below), with significant success. If a defendant leaves complaints about the pleadings to the hearing of the certification application, the defendant will have to prepare its certification opposition based on the (allegedly) bad pleadings, and runs the risk that the evidentiary record on the certification application will be used to fill in gaps

56 See, e.g., B.C. Class Proceedings Act, s. 29, Ontario Class Proceedings Act, s. 24.

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in the pleadings. While on a defendant’s motion to strike, the defendant has the onus of satisfying the court that the motion should be granted, there can be tactical and strategic advantages to the defendant in being the party who first lays out for the court the aspects of the statement of claim that are problematic or deficient, and who has the right of reply.

A defendant who intends to file a statement of defence in advance of certification will also want to have a properly pleaded statement of claim. Although it is certainly possible to include allegations in a statement of defence that certain allegations in the statement of claim “fail to state any reasonable claim,” it is much easier to respond to a properly pleaded claim.

Of course, timing will not be completely within the defendant’s control. There is authority57 that it is quite suitable for a motion to strike pleadings to be brought and heard in advance of the certification application. However, there is also authority58 indicating a reluctance to split the “reasonable cause of action” question from the other issues the court must address on the certification application, and “litigating in slices” is discouraged.59

H. Particulars can be ordered after certification

Suppose, despite the best efforts of defendant’s counsel at the hearing of the certification application, the court has certified common issues that could fairly be described as broad and general.

In Hoy v. Medtronic Inc. (2002), 31 C.P.C. (5th) 86 (B.C.S.C.), Kirkpatrick J. (now Kirkpatrick J.A.) rejected the plaintiff’s arguments that there was no jurisdiction to order particulars of the common issues as defined by the certification order, and permitted the defendant to bring an application, post-certification, for further and better particulars of the common issues. Madam Justice Kirkpatrick said (para. 51), “it would be absolute folly to permit this action to proceed to trial without further refinement and elucidation of the issues that will require the court’s determination.”

57 See, e.g., Stone v. Wellington (County) Board of Education (1999), 29 C.P.C. (4th) 320 (Ont. C.A.), Moyes v. Fortune Financial Corp. (2001), 13 C.P.C. (5th) 147 (Ont. S.C.J.), and see generally Consumers’ Association v. Coca-Cola Bottling Company, 2005 BCSC 1042. 58 See, e.g., MacKinnon v. National Money Mart Company, 2004 BCSC 1532, where the court directed that various motions to strike the claim be heard as part of the “first phase” of the certification application. 59 Garland v. Consumers Gas Co., [2004] 1 S.C.R. 629, 2004 SCC 25, at para. 90.

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On the facts of this case (as described in the judgment), the Canadian litigation followed on litigation against the same defendant in the U.S.60 With the defendant’s agreement, plaintiff’s counsel had access to a great wealth of documents and other material (including 800,000 pages of documents and deposition transcripts) generated there. Because all of this material was at their disposal, plaintiff’s counsel were in an impossible position trying to convince the B.C. court that it was too early to expect them to further particularize the allegations and common issues.

IV. DISSECTING AND ANALYZING PLEADINGS – A CASE STUDY

In November, 2000, an action was filed in the Supreme Court of British Columbia under the B.C. Class Proceedings Act, by Leonard Olsen and others against Behr Process Corporation and Behr Process Canada Ltd. The action involved 2 lines of exterior wood coating products: Super Liquid Raw-Hide (“SLR”) and Natural Seal Plus (“NSP”). The B.C. Action was filed following on class actions that had been filed in 2000 the U.S., as well as an action filed in 1998 in the Superior Court of Washington for Grays Harbor County (the “Smith” action). The Smith action had been certified and, through an unfortunate set of circumstances, a default judgment had been pronounced against the defendant in May, 2000.61 A ruling on damages issued a few months later approved a very generous compensation “matrix” for Smith class members.

The basic complaint advanced in all of the actions was that the subject products discoloured wood and “promoted” the growth of mildew, instead of protecting the wood. Allegations were also made that statements on various labels and brochures were misleading.

The original statement of claim filed in B.C. consisted of 36 paragraphs of allegations, and 12 subparagraphs of relief claimed. It was divided into sections: “The Parties,” “The Products,” “The Products’ failure and resulting damage to property,” “The Olsen Property,” “The Dennis Property,” “Negligence,” “Contraventions of the Trade Practice Act,” “Contraventions of the Competition Act,” “Civil Conspiracy,” “Breach of Warranty” (which advanced claims based on alleged “express or implied” warranties), “Class Definition,” “Causation and Damages,” and “Prayer for Relief.”

60 The defendant had successfully opposed certification in the U.S. cases. 61 The relevant details can be found in a judgment of the Washington Court of Appeal in Smith v. Behr Process Corporation, 2002 WL 3104548 (Wash. App.Div.). All litigation in the U.S. was finally settled in 2003. A settlement was approved by the B.C. Supreme Court in July, 2005 and an application for settlement approval (certifying a national class) is set for September 14, 2005 in Toronto.

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The headings provided guidance concerning what types of claims the plaintiffs apparently intended to advance. However, when an analysis was done of the facts that must be alleged to state proper conspiracy, Competition Act and warranty claims, there were obvious gaps in the pleading, and a number of conclusory allegations without material facts. The claim was argumentative, rather than a concise statement of material facts. In addition, activities were described, and complaints made, in complex and ambiguous ways. For example, it was alleged that the defendants “jointly marketed, promoted and warranted” products to consumers. Based on this style of drafting, it was unclear whether terms were in fact being used as synonyms, or whether the plaintiffs were intending to describe distinct activities, each of which could generate issues that would have to be resolved at some point in the litigation.

Among other things, the claim alleged that both defendants did everything relevant together or jointly (including manufacturing, production, promotion, marketing and so on). Other than describing the products used by the named plaintiffs as “NSP” or “SLR,” the claim provided no other details about the actual products used or in issue. However, there were in fact a total of 18 products in the two product lines (with different formulations), so the real scope of the complaints being advanced on behalf of the class (and the plaintiffs) was unclear.62 There were issues concerning the ability of the named plaintiffs to assert claims in respect of products, with materially different product formulations, that no plaintiff had either purchased or used.

One of the product lines had been sold for over 50 years, but there were no temporal boundaries set out in the claim for class membership. The products (like any exterior coating) had a limited useful life, and temporal boundaries for the class – and for the alleged “promotion” of mildew – were directly related to causation and contributory negligence issues. Representations and warranties alleged to have been made were not particularized in any meaningful way. Temporal boundaries for the class were also relevant here, since statements made about the products had changed over time.

The Prayer for Relief included a claim for rescission. However, the essence of the complaint was that the products had been used and caused damage to property. These facts were legally inconsistent with a claim for rescission.

One of the first steps taken was that each defendant made a separate demand for particulars. Particulars were sought of the facts based on which the Plaintiffs alleged each defendant “warranted” certain product performance, the words used in respect of each of NSP and SLR that the Plaintiffs alleged constituted a warranty, and the means by which it was alleged the warranty was given. Under the “Contraventions of the Trade Practice Act” heading, the Plaintiffs complained about matters “in addition to those

62 The Smith litigation had involved 4 products only.

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set out in the foregoing [22] paragraphs,” so each defendant requested particulars of what acts “in the foregoing paragraphs” were in issue. The Plaintiffs advanced claims based on both “express or implied warranties,” so each defendant demanded particulars of the statements alleged to have created express warranties, and those alleged to have created implied warranties. In a claim for punitive damages, the Plaintiffs alleged that:

The Defendants’ representations, acts, omissions, and other practices as described herein can be variously described as harsh, vindictive, represensible, malicious, high-handed, arbitrary or deserving of condemnation and punishment.

In response to this “more is better” style of drafting, each defendant demanded particulars of each representation alleged to be harsh, each representation alleged to be vindictive, each representation alleged to be reprehensible, and so on, and made the same demand with respect to the alleged “acts.”

In the covering letter to plaintiffs’ counsel delivering the demands, defendants’ counsel explained that one of the principal purposes in making the demand was to clarify the issues (by, for example, having the product numbers at issue identified, having the period of time at issue identified, and having identified whatever representations and warranties are being relied on), so that a responsive defence could be prepared.

The first case management conference was scheduled in early March, 2001. Shortly before that, the Plaintiffs delivered particulars, purportedly in response to the demands. However, the particulars improperly included the wholesale adoption of a set of reasons given in the Smith case, providing the defendants with further ammunition for a motion to strike.

At the first case management conference, Defendants’ counsel advised the court that the Defendants intended to file statements of defence in advance of certification, and laid out their complaints concerning the statement of claim for the court, saying in part:

Based on the current pleadings (including the particulars delivered so far), the Defendants’ position is that the Plaintiffs have failed to state a proper claim with respect to:

(a) breach of warranty claims . . .. The Plaintiffs and the alleged class members are end purchasers and the Defendants are alleged to be the manufacturers of the products (in fact, Behr is the manufacturer). The Defendants have have no contractual relationship with the plaintiffs or any alleged class members. No facts (e.g., that

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a statement alleged to be a warranty was made on a product label (or elsewhere or by other means) with the intention of inducing a person to purchase the product, and that someone relied on the statement and purchased the product on the basis of the statement) have been pleaded to support any warranty claim by either the Plaintiffs or any alleged class member against the Defendants.

. . . . . . . . . .

(c) the Competition Act claims. . . . No facts are pleaded that any of the Plaintiffs or alleged class members relied on any representation alleged to have been made in contravention of this Act.

. . . . . . . . . .

There appears to have been a deliberate effort to omit any reference in the Statement of Claim to “reliance” on any representation alleged to have been made by a Defendant . . ., no doubt out of concern that this would make is more difficult to obtain certification. However, an action which is brought as a intended class proceeding is still subject to the requirement that all causes of action be properly pleaded. The pleading of a bare legal conclusion . . . is not sufficient if the material facts on which the legal conclusion is based have not also been pleaded.

In the absence of appropriate amendments, which the Plaintiffs may now choose to make, the Defendants intend to make an application to have these portions of the statement of claim struck . . .. It is the Defendants’ position that the court should determine whether these claims should be struck, or, if they are to be amended, the specifics of any proper amendments, before it delivers its Statement of Defence. The Defendants also take the position that the certification hearing should only proceed on the basis of properly pleaded causes of action.

Shortly thereafter, Plaintiffs’ counsel advised that they intended to amend the Statement of Claim.

Almost a year later, in February, 2002, the amended Statement of Claim was filed. It had grown by about 20 paragraphs, but otherwise (particularly the breach of warranty claims) continued to display many of the problems in the original statement of claim and so remained quite attackable. It included references to events in the Smith litigation, improperly pleading evidence.

Particulars were now pleaded of the words that the Plaintiffs alleged constituted representations or warranties. But, looking ahead to the certification

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application, a silver lining for the Defendants was that use of a number of these statements was confined to specific periods, and certain statements were made only in respect of specific products (and not others). These facts created the potential for conflicts among the proposed “class.” Moreover, there was not a single allegation that a named plaintiff was aware that any of the alleged statements had even been made, much less that a plaintiff had acted on the basis of some statement. As a result, the existence of any class members with any type of warranty claims, or claims based on any alleged representations, was purely speculative. Clearly, based on the amended statement of claim, no plaintiff asserted any such cause of action.

Further particulars of the alleged product defects were pleaded, including that certain ingredients were incompatible with one another. Again, there was a silver lining for the Defendants, since these specific ingredients had in fact been changed over the proposed class period. By their amended pleading, the Plaintiffs made such differences in product formulation directly relevant, providing the Defendants with another way to attack the existence of common issues, and to argue that the nature of the claims created conflicts among putative class members.

In April, 2002, the Defendants brought a motion to strike portions of the amended Claim. For a variety of reasons, this motion was not heard until late October, 2002. In the meantime, Plaintiffs’ counsel had delivered the materials in support of the certification application. Reasons for judgment were pronounced on March 3, 2003: see Olsen v. Behr Process Corporation, [2003] B.C.J. No. 627 (S.C.), 2003 BCSC 429. The conspiracy claim was struck out. The Plaintiffs were given 30 days in which to amend the pleadings with respect to the warranty claims (to specifically plead all relevant elements, including reliance) and Competition Act claims, failing which those claims would be struck out. The Plaintiffs were also ordered to provide further and better particulars of the claim for punitive damages failing which that claim was to be struck out.

Rather than abandon certain claims, the Plaintiffs amended the statement of claim further, per the Court’s order, and finally specifically pleaded reliance on alleged representations and warranties. The Defendants then filed their statements of defence and affidavits in opposition to certification.

Reasons on the certification application were pronounced August 12, 2003: see Olsen v. Behr Process Corporation (2003), 17 B.C.L.R. (4th) 315 (S.C.), 2003 BCSC 1252. The proposed common issues are found at para. 4 of the reasons, and included negligence, Trade Practice Act, Competition Act, breach of warranty and punitive damages issues. Only the negligence issues were certified.

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V. STATEMENTS OF DEFENCE

A. Should a Defence be filed (even if it is not required)?

In Scott v. TD Waterhouse Investor Services (Canada) Inc. (2000), 83 B.C.L.R. (3d) 365 (S.C.), Madam Justice Martinson provided the following reasons for filing a statement of defence in advance of the certification application:

¶ 38 Identifying the common issues . . . is a central aspect of the certification process. . . .

¶ 40 Because the Act focuses on certifying the originating action as the class action, the process involved is to isolate certain issues from the pleadings . . . that are identified as suitable to be tried on a common basis. In order to isolate the common issues, all the issues must be identified. To do that, the pleadings in the originating action must be closed and the issues joined. It is the pleadings of both sides that lead to a joining of issues of fact and law for determination . . . .

¶ 41 . . . [C]ertification is simply a management vehicle. It does not change the underlying elements of the cause of action that a representative plaintiff must establish, as determined by the pleadings. Nor does it change the underlying elements of any defences that the defendants might raise, also determined by the pleadings. At some point, all issues raised by plaintiffs and defendants still have to be resolved.

. . . . . . . . . .

¶ 44 The conclusion that it is the pleadings, supplemented by the affidavits, that form the evidentiary basis for the certification hearing is supported by the following comment by the majority of the Court of Appeal in Harrington: (at para. 38)

[...] I am also mindful of the stricture of Judge Smith in Castano v American Tobacco Company [citation omitted]:

...Going beyond the pleadings is necessary, as a court must understand the claims, defenses, relevant facts and applicable substantive law in order to make a meaningful determination of the certification issues.

Madam Justice Martinson’s conclusion that a defendant should be required to filed a statement of defence in advance of certification, insofar as it was a statement of an invariable rule, was recently rejected by the B.C. Court of Appeal in Maclean v. Telus Corp., 2005 BCCA 338. Prowse J.A. (for the court) held that whether a statement of defence should be required prior to the certification application should be

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left to the discretion of the case management judge, and that an inflexible rule was inconsistent with the flexible approach to procedural issues in class actions encouraged by the Supreme Court of Canada in Dutton and Hollick. Nevertheless, Madam Justice Martinson’s views on the benefits of having the pleadings closed by the time the certification application comes on for hearing are worthy of careful consideration.

A statement of defence can give added focus and weight to a defendant’s affidavit evidence and arguments in opposition to certification. By filing a defence, a defendant takes an official position concerning the issues that the court will (eventually) have to address before the case will be fully adjudicated. A defendant can use its defence to begin laying out for the court all of the individual issues that at some point will have to be tried, and that the defendant will be arguing make the case unsuitable for prosecution as a class proceeding. There are at least two examples where the court appeared on the certification application to discount the defendant’s arguments on the importance of causation and contributory negligence issues in the context of the claim as a whole, where the defendant had not yet filed a statement of defence. 63

A defendant who intends to raise a limitations defence should file a defence specifically pleading the defence.64

B. What should the Defence say?

A statement of defence (like the statement of claim) must follow the basic rules of pleading. There is no point filing a statement of defence if it fails to disclose a reasonable defence to the claims. However, since typically in a proposed class proceeding one of the purposes of filing a statement of defence will be to begin laying out the case against certification, defendant’s counsel needs to give careful and deliberate thought both to the merits of the defence per se and to those features of the defence that counsel will want to argue should defeat the certification application.

Some examples will illustrate the point. If in a products liability case causation will be a significant battleground (as it was in Olsen v. Behr), defence counsel should consider pleading in the statement of defence particulars of the many other things (for which the defendant will not be responsible), including (perhaps) the plaintiff’s and class members’ own failure to take reasonable care, that could have caused the problem or damage about which the plaintiff complains. To take another straightforward example, variations in a product or product formulation over the proposed class period may be relevant (as noted above, in Olsen v. Behr, such variations were made relevant by the

63 Reid v. Ford Motor Company, 2003 BCSC 1632 (S.C.), [2003] B.C.J. No. 2489 (para. 52); and Andersen v. St. Jude Medical Inc. (2003), 67 O.R. (3d) 136 (S.C.J.) (para. 60). 64 See Wong v. Sony, above, para. 21.

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allegations in the statement of claim), and the statement of defence can be used to begin providing a foundation for later arguments that there are no common issues and irresolvable conflicts among the members of the proposed class.

If arguments are going to be made in opposition to certification concerning limitation issues, the statement of defence can and should set out the material allegations.

Defence counsel faced with blanket pleadings where multiple defendants are lumped together in an undifferentiated mass as “the Defendants” should consider filing separate defences even where counsel is representing more than one defendant, or all of the defendants in the group. It may well be the case that a particular defendant will have its own defences, separate from another defendant, and these should be laid out for the court as issues that will eventually have to be tried.

In short, if a decision has been made to file a defence, counsel should look on it as a important tool, not only to defend the case on the merits, but also to oppose certification of the action as a class proceeding.

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APPENDIX “A” - LIST OF CASES

Air Canada v. WestJet Airlines Ltd. (2004), 72 O.R. (3d) 669 (S.C.J.)

Andersen v. St. Jude Medical Inc. (2003), 67 O.R. (3d) 136 (S.C.J.)

Boulanger v. Johnson & Johnson (2003), 64 O.R. (3d) 208 (S.C.J. Div. Ct.)

Boulanger v. Johnson & Johnson Corp. [2003] O.J. No. 2218 (C.A.), affirming in part [2002] O.J. No. 1075, 14 C.C.L.T. (3d) 233 (Ont. S.C.J.)

Bruce v. Odham Press Ltd., [1936] 1 K.B. 697 (C.A.)

Cadillac Contracting and Developments Ltd. v. Tanenbaum, [1954] O.W.N. 221

Campbell v. Flexwatt Corp. (1997), 44 B.C.L.R. 343 (C.A.), affirming (1996), 25 B.C.L.R. (3d) 329 (S.C.)

Caputo v. Imperial Tobacco Ltd. (2004), 236 D.L.R. (4th) 348 (Ont. S.C.J.)

Carom v. Bre-X Minerals Ltd. (1998), 20 C.P.C. (4th) 163 (Ont. G.D.)

Carom v. Bre-X Minerals Ltd. (1998), 41 O.R. (3d) 780 (S.C.J.)

Carom v. Bre-X Minerals Ltd. (1999), 44 O.R. (3d) 173 (S.C.J.), (1999), 46 O.R. (3d) 315 (Div.Ct.), (2000), 51 O.R. (3d) 236 (C.A.)

Cassano v. Toronto-Dominion Bank (2005), 9 C.P.C. (6th) 291 (Ont.S.C.J.), [2005] O.J. No. 845

Chadha v. Bayer Inc. (2003), 63 O.R. (3d) 22 (C.A.), affirming (2001), 54 O.R. (3d) 520 (Div. Ct.)

Chopik v. Mitubishi Paper Mills Ltd. (2002), 26 C.P.C. (5th) 104, [2002] O.J. No. 2780 (S.C.J.)

Cloud v. Canada (Attorney General) (2004), 247 D.L.R. (4th) 667 (Ont. C.A.), reversing (2003), 65 O.R. (3d) 492 (Div. Ct.)

Collette v. Great Pacific Management Co. [2003] B.C.J. No. 529 (S.C.), reversed (2004), 26 B.C.L.R. (4th) 252 (C.A.)

Consumers’ Association v. Coca-Cola Bottling Company, 2005 BCSC 1042

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Cooper v. Hobart (2001), 206 D.L.R. (4th) 193 (S.C.C.), affirming (2000), 184 D.L.R. (4th) 287 (B.C.C.A.) reversing (1999), 68 B.C.L.R. (3d) 274 (S.C.) and 68 B.C.L.R. (3d) 293 (S.C.)

Cotton v. Wellsby (1991), 59 B.C.L.R. (2d) 366 (C.A.)

Davy v. Garrett (1878), 7 Ch. D. (473) C.A.

Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 164 D.L.R. (4th) 257 (Ont.C.A.)

Direnfeld v. National Trust (2002), 17 C.P.C. (5th) 102 (Ont. C.A.)

Edwards v. Law Society of Upper Canada (2001), 206 D.L.R. (4th) 211 (S.C.C.)

Fakhri v. Wild Oats Markets Canada, Inc. (2004), 41 C.P.C. (4th) 369 (B.C.S.C.)

Fehringer v. Sun Media Corp. (2002), 27 C.P.C. (5th) 155 (Ont. S.C.J.)

Fraser-Reid v. Droumtsekas (1980), 103 D.L.R. (3d) 385 (S.C.C.)

Garland v. Consumers Gas Co., [2004] 1 S.C.R. 629, 2004 SCC 25

Harrington v. Dow Corning Corp. (2000), 82 B.C.L.R. (3d) 1 (C.A.), affirming (1996), 22 B.C.L.R. (3d) 97 (S.C.)

Harrington v. Dow Corning Corp. (2002), 3 B.C.L.R. (4th) 51 (S.C.)

Haskett v. Equifax Canada Inc. (2003), 63 O.R. (3d) 577 (C.A.)

Hoffman v. Monsanto Canada Inc., 2005 SKQB 225 (Q.B.), [2005] S.J. No. 304

Hollick v. Toronto (City) (2001), 205 D.L.R. (4th) 19 (S.C.C.)

Homalco Indian Band v. British Columbia (1998), 25 C.P.C. (4th) 107 (B.C.S.C.)

Hoy v. Medtronic Inc. (2002), 31 C.P.C. (5th) 86 (B.C.S.C.)

Hughes v. Sunbeam Corp. (Canada) Limited (2001), 11 B.L.R. (3d) 236 (Ont. S.C.J.), varied (2002), 61 O.R. (3d) 433 (C.A.)

Hunt v. Carey Can. Inc. (1990), 49 B.C.L.R. (2d) 273 (S.C.C.)

Imperial Oil Ltd. v. Lubrizol Corp. (1996), 67 C.P.R. (3d) 1 (F.C.A.)

Kimpton v. Canada (Attorney General) (2002), 9 B.C.L.R. (4th) 139 (S.C.)

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Knight v. Imperial Tobacco Canada Limited (2005), 250 D.L.R. (4th) 347 (B.C.S.C.), 2005 BCSC 172

Knowles v. Roberts (1888), 38 Ch. D. 263 (C.A.)

Kripps v. Touche Ross & Co. (1992), 69 B.C.L.R. (2d) 62 (C.A.), 94 D.L.R. (4th) 284

Letang v. Cooper, [1965] 1 Q.B. 232 (C.A.)

MacKinnon v. National Money Mart Company (2005), 33 B.C.L.R. (4th) 21 (C.A.)

MacKinnon v. National Money Mart Company, 2004 BCSC 1532

MacKinnon v. National Money Mart Company, 2005 BCSC 271

Maclean v. Telus Corp., 2005 BCCA 338

Macleod v. Viacom Entertainment Canada Inc. (2003), 28 C.P.C. (5th) 160 (Ont. S.C.J.)

Mondor v. Fisherman, [2001] O.J. No. 4620 (S.C.J.), (2001) 18 B.L.R. (3d) 260 (Ont. S.C.J.)

Moyes v. Fortune Financial Corp. (2001), 13 C.P.C. (5th) 147 (Ont. S.C.J.)

Naken v. General Motors of Canada Ltd. (1983), 144 D.L.R. (3d) 385 (S.C.C.)

National Trust Co. v. Furbacher, [1994] O.J. No. 2385 (Gen. Div. Comm. List)

Olsen v. Behr Process Corporation (2003), 17 B.C.L.R. (4th) 315 (S.C.), 2003 BCSC 1252

Olsen v. Behr Process Corporation, [2003] B.C.J. No. 627 (S.C.), 2003 BCSC 429

Ontario Public Services Employees Union v. Ontario, [2005] O.J. No. 1841

Patterson & Hidson v. Livingstone and others, [1931] 1 D.L.R. 386 (S.C.C.)

Price v. Panasonic Canada Inc., [2000] O.J. No. 3123 (S.C.J.)

Queen v. Cognos Inc. (1993), 99 D.L.R. (4th) 626 (S.C.C.)

Ragoonanan Estate v. Imperial Tobacco Canada Ltd. (2000), 51 O.R. (3d) 603 (S.C.J.)

Reid v. Ford Motor Company, 2003 BCSC 1632 (S.C.), [2003] B.C.J. No. 2489

Rumley v. British Columbia (2001), 205 D.L.R. (4th) 39 (S.C.C.), affirming (1999), 72 B.C.L.R. (3d) 1 (C.A.)

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Rumley v. British Columbia (2003), 12 B.C.L.R. (4th) 121 (S.C.)

Scott v. TD Waterhouse Investor Services (Canada) (2001), 94 B.C.L.R. (3d) 320 (S.C.)

Scott v. TD Waterhouse Investor Services (Canada) Inc. (2000), 83 B.C.L.R. (3d) 365 (S.C.)

Serhan v. Johnson & Johnson (2004), 72 O.R. (3d) 296 (S.C.J.), leave to appeal granted [2004] O.J. No. 4580 (S.C.J.)

Shaw v. BCE Inc. (2003), 42 B.L.R. (3d) 107 (Ont. S.C.J.), aff’d (2004), 49 B.L.R. (3d) 1 (Ont. C.A.)

Shaw v. BCE Inc. [2003] O.J. No. 2695 (S.C.J.)

Stone v. Wellington (County) Board of Education (1999), 29 C.P.C. (4th) 320 (Ont. C.A.)

Vezina v. Loblaw Companies Ltd., [2005] O.J. No. 1974 (S.C.J.)

W.W. v. Canada (Attorney General) (2004), 24 B.C.L.R. (4th) 347 (S.C.)

Western Canadian Shopping Centres Inc. v. Dutton (2001), 201 D.L.R. (4th) 385 (S.C.C.)

Whiten v. Pilot Insurance Co. (2002), 209 D.L.R. (4th) 257 (S.C.C.)

Wilson v. Re/Max Metro-City Realty Ltd. (2003), 63 O.R. (3d) 131 (S.C.J.)

Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. (1995), 121 D.L.R. (4th) 193 (S.C.C.)

Wong v. Sony of Canada Ltd. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.J.)

Wyman v. Vancouver Real Estate Board (1957), 8 D.L.R. (2d) 724 (B.C.C.A.)