West. Cdn. Shopping v. Dutton (2001), 272 N.R. 135 (SCC)
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Temp. Cite: [2001] N.R. TBEd. JL.018
Bennett Jones Verchere, Garnet Schulhauser, Arthur Andersen & Co., Ernst & Young, Alan Lundell, The Royal Trust Company, William R. MacNeill, R. Byron Henderson, C. Michael Ryer, Gary L. Billingsley, Peter K. Gummer, James G. Engdahl and Jon R. MacNeill (appellants/respondents on cross-appeal) v. Western Canadian Shopping Centres Inc. and Muh-Min Lin and Hoi-Wah Wu, representatives of all holders of Class “A”, Class “E” and Class “F” debentures issued by Western Canadian Shopping Centres Inc. (respondents/appellants on cross-appeal)
(27138; 2001 SCC 46)
Indexed As: Western Canadian Shopping Centres Inc. et al. v. Dutton et al.
Supreme Court of Canada
McLachlin, C.J.C., L’Heureux-Dubé, Gonthier, Iacobucci, Binnie, Arbour and LeBel, JJ.
July 13, 2001.
Summary:
The individual plaintiffs were investors who made investments under an immigration/investment regime created by the federal government. They claimed representative status on behalf of themselves and 239 other investors who made similar investments and whose funds were disbursed. Each investor paid funds to Royal Trust pursuant to offering memoranda issued by the corporate plaintiff. The plaintiffs sued the defendants (individuals, partnerships and corporations) who participated in the disbursement of those funds in breach of a duty owed by each of them to the investors. The defendants applied under Alberta Court Rule 42 to strike the representative part of the statement of claim. Alternatively, they sought the same order under rule 129.
The Alberta Court of Queen’s Bench, in a decision reported at 191 A.R. 265, dismissed the application. The defendants appealed.
The Alberta Court of Appeal, in a decision reported at 228 A.R. 188; 188 W.A.C. 188, upheld the decision but allowed the defendants the right to discovery of each of the plaintiffs. The defendants appealed. The plaintiffs cross-appealed the allowance of individualized discovery.
The Supreme Court of Canada dismissed the appeal and allowed the cross-appeal.
Practice – Topic 208
Persons who can sue and be sued – Individuals and corporations – Status or standing – Class or representative actions – For damages – The individual plaintiffs, investors under a federal government immigration/investment regime, claimed representative status on behalf of themselves and 229 similar investors – Each investor paid funds to Royal Trust pursuant to offering memoranda issued by the corporate plaintiff – The plaintiffs sued the defendants (individuals, partnerships and corporations) who participated in the disbursement of those funds in breach of a duty owed by each of them to the investors – The defendants applied under rule 42 to strike the representative part of the statement of claim – The Supreme Court of Canada held that the plaintiffs met the requirements for a representative action – The class was clearly defined; common issues of fact and law united all members of the class; resolving one class member’s breach of fiduciary claim would effectively resolve the claims of every class member; and the representative plaintiffs were appropriate – See paragraphs 52 to 57.
Practice – Topic 209
Persons who can sue and be sued – Individuals and corporations – Status or standing – Class or representative actions – General principles – The Supreme Court of Canada stated that “class actions should be allowed to proceed under Alberta’s Rule 42 where the following conditions are met: (1) the class is capable of clear definition; (2) there are issues of fact or law common to all class members; (3) success for one class member means success for all; and (4) the proposed representative adequately represents the interests of the class. If these conditions are met, the court must also be satisfied, in the exercise of its discretion, that there are no countervailing considerations that outweigh the benefits of allowing the class action to proceed” – See paragraph 48.
Practice – Topic 209.8
Persons who can sue and be sued – Individual and corporations – Status or standing – Class actions – Notice to members of class – The Supreme Court of Canada discussed when a class action should be allowed – The court stated that “prudence suggests that all potential class members be informed of the existence of the suit, of the common issues that the suit seeks to resolve, and of the right of each class member to opt out, and that this be done before any decision is made that purports to prejudice or otherwise affect the interests of class members” – See paragraph 49.
Practice – Topic 4231
Discovery – Examination – Persons who may be examined – Members of class – Class action – The individual plaintiffs, investors under a federal government immigration/investment regime, claimed representative status on behalf of themselves and 229 similar investors – Each investor paid funds to Royal Trust pursuant to offering memoranda issued by the corporate plaintiff – The plaintiffs sued the defendants (individuals, partnerships and corporations) who participated in the disbursement of those funds in breach of a duty owed by each of them to the investors – The defendants applied under rule 42 to strike the representative part of the statement of claim – The motions judge dismissed the application – The appeal court upheld the decision, but granted the defendants the right to discovery of the 231 individual defendants – The Supreme Court of Canada allowed the class action to proceed, but disallowed the discovery of each class member – The defendants should be allowed to examine the representative plaintiffs as of right, but examination of other class members should be available only upon the defendants showing reasonable necessity – See paragraphs 58 to 60.
Cases Noticed:
353850 Alberta Ltd. v. Horne & Pitfield Foods Ltd., [1989] A.J. No. 652 (Q.B. Master), refd to. [para. 12].
Shaw v. Real Estate Board of Greater Vancouver (1972), 29 D.L.R.(3d) 774 (B.C.S.C.), refd to. [para. 13].
Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321; 4 C.C.L.T.(2d) 1; 43 C.P.C.(2d) 105; 49 B.C.L.R.(2d) 273; 74 D.L.R.(4th) 321; [1990] 6 W.W.R. 385, refd to. [para. 14].
Hunt v. Carey Canada Inc. – see Hunt v. T & N plc et al.
Korte v. Deloitte, Haskins & Sells et al. (1993), 135 A.R. 389; 33 W.A.C. 389; 8 Alta. L.R.(3d) 337 (C.A.), refd to. [para. 15].
Oregon Jack Creek Indian Band Chief v. Canadian National Railway Co., [1989] 2 S.C.R. 1069; 102 N.R. 76, refd to. [para. 16].
International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14; 35 E.T.R. 1; 44 B.L.R. 1, refd to. [para. 17].
Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1; [1994] 9 W.W.R. 609; 22 C.C.L.T.(2d) 1; 117 D.L.R.(4th) 161, refd to. [para. 17].
Chancey v. May (1722), Prec. Ch. 592; 2 E.R. 265, refd to. [para. 20].
London (City) v. Richmond (1701), 2 Vern. 421; 23 E.R. 870, refd to. [para. 21].
Wallworth v. Holt (1841), 4 My. & Cr. 619; 41 E.R. 238, refd to. [para. 23].
Duke of Bedford v. Ellis, [1901] A.C. 1 (H.L.), refd to. [para. 24].
Taff Vale Railway Co. v. Amalgamated Society of Railway Servants, [1901] A.C. 426 (H.L.), refd to. [para. 24].
Markt & Co. v. Knight Steamship Co., [1910] 2 K.B. 1021 (C.A.), refd to. [para. 24].
Bell v. Wood, [1927] 1 W.W.R. 580 (B.C.S.C.), refd to. [para. 34].
Langley v. North West Water Authority, [1991] 3 All E.R. 610 (C.A.), leave to appeal denied [1991] 1 W.L.R. 71n (H.L.), refd to. [para. 34].
Newfoundland Association of Public Employees v. Newfoundland (1995), 132 Nfld. & P.E.I.R. 205; 410 A.P.R. 205 (Nfld. T.D.), refd to. [para. 34].
Ranjoy Sales and Leasing Ltd. v. Deloitte, Haskins and Sells, [1984] 4 W.W.R. 706; 27 Man.R.(2d) 311 (Q.B.), refd to. [para. 36].
International Capital Corp. v. Schafer (1995), 130 Sask.R. 23 (Q.B.), refd to. [para. 36].
Guarantee Co. of North America v. Caisse populaire de Shippagan Ltée (1988), 86 N.B.R.(2d) 342; 219 A.P.R. 342 (Q.B.), refd to. [para. 36].
Lee et al. v. OCCO Developments Ltd. (1994), 148 N.B.R.(2d) 321; 378 A.P.R. 321 (Q.B.), refd to. [para. 36].
Van Audenhove v. Nova Scotia (Attorney General) (1994), 134 N.S.R.(2d) 294; 383 A.P.R. 294 (S.C.), refd to. [para. 36].
Horne v. Canada (Attorney General) (1995), 129 Nfld. & P.E.I.R. 109; 402 A.P.R. 109 (P.E.I.S.C.), refd to. [para. 36].
Bywater v. Toronto Transit Commission (1998), 27 C.P.C.(4th) 172 (Ont. Gen. Div.), refd to. [para. 38].
Drummond-Jackson v. British Medical Association, [1970] 1 All E.R. 1094 (C.A.), refd to. [para. 45].
Naken et al. v. General Motors of Canada Ltd., [1983] 1 S.C.R. 72; 46 N.R. 139, refd to. [para. 46].
Statutes Noticed:
Alberta Rules of Court, rule 42 [paras. 10, 31]; rule 129, rule 187, rule 201 [para. 10].
Authors and Works Noticed:
Alberta, Law Reform Institute, Final Report No. 85, Class Actions (December 2000), pp. 75, 76 [para. 43].
Bankier, J.K., Class Actions for Monetary Relief in Canada: Formalism or Function (1984), 4 Windsor Y.B. Access Just. 229, pp. 230 [para. 27]; 231 [paras. 27, 28]; 232 [paras. 28, 29]; 236 [para. 20].
Bispham, G.T., The Principles of Equity (8th Ed. 1909), pp. 415 [para. 20]; 417 [para. 22].
Branch, W.K., Class Actions in Canada (1998), paras. 3.30 [para. 27]; 3.40 [para. 28]; 3.50 [para. 29]; 4.190 to 4.207 [para. 38]; 4.210 to 4.490 [para. 41]; 18.10 [para. 50].
Calvert, F., A Treatise Upon the Law Respecting Parties to Suits in Equity (1837), p. 3 [para. 19].
Canada, Uniform Law Conference of Canada, Proceedings of the 1995 Meeting, Appendix O [para. 30].
Chafee, Z., Some Problems of Equity (1950), p. 201 [para. 22].
Developments in the Law – The Paths of Civil Litigation (2000), 113 Harv. L. Rev. 1806, pp. 1809, 1810 [para. 29].
Eizenga, M.A., Peerless, M.J., and Wright, C.M., Class Actions Law and Practice (1999), paras. 1.6 [para. 17]; 1.7 [para. 28]; 1.8 [para. 29].
Friedenthal, Jack H., Kane, Mary Kay, and Miller, Arthur R., Civil Procedure (2nd Ed. 1993), pp. 726, 727 [para. 38]; 729 to 732 [para. 41].
Kazanjian, J.A., Class Actions in Canada (1973), 11 Osgoode Hall L.J. 397, pp. 400 [para. 19]; 401 [paras. 20, 21]; 411 [para. 23].
Manitoba, Law Reform Commission, Report No. 100, Class Proceedings (January 1999), generally [para. 30].
Ontario, Law Reform Commission, Report on Class Actions (1982), pp. 3, 4 [para. 46]; 11 [para. 29]; 118, 119 [para. 27]; 119 to 122 [para. 28]; 140 to 146 [para. 29].
Roberts, T.A., The Principles of Equity (3rd Ed. 1877), pp. 389 to 392 [para. 22].
Rogers, R., A Uniform Class Actions Statute, generally [para. 30].
Stevenson, W.A., and Côté, J.E., Civil Procedure Guide, 1996, p. 4 [para. 34].
Story, J., Equity Pleadings (10th Ed. 1892), s. 76(a) [para. 19].
Wright, C.A., Miller, A.R., and Cane, M.K., Federal Practice and Procedure (2nd Ed. 1986), para. 1751 [paras. 19, 22].
Yeazell, S.C., Group Litigation and Social Context: Toward a History of the Class Action (1977), 77 Colum. L. Rev. 866, pp. 867 [paras. 20, 21]; 872 [para. 20].
Counsel:
Barry Crump, Brian Beck and David C. Bishop, for the appellants/respondents on cross-appeal;
Hervé H. Durocher and Eugene J. Erler, for the respondents/appellants on cross-appeal.
Solicitors of Record:
Burnet, Duckworth & Palmer, Calgary, Alberta, for the appellant/respondent on cross-appeal, the Royal Trust Co.;
McLennan Ross, Edmonton, Alberta, for the appellants/respondents on cross-appeal, James G. Engdahl, William R. MacNeill, John R. MacNeill, Gary Billingsley and R. Byron Henderson;
Peacock Linder & Halt, Calgary, Alberta, for the appellant/respondent on cross-appeal, C. Michael Ryer;
Brownlee Fryett, Edmonton, Alberta, for the appellant/respondent on cross-appeal, Peter J. Gummer;
Parlee McLaws, Edmonton, Alberta, for the appellants/respondents on cross-appeal, Ernst & Young and Alan Lundell;
Gowling Lafleur Henderson, Calgary, Alberta, for the appellants/respondents on cross-appeal, Bennett Jones Verchere and Garnet Schulhauser;
Lucas Bowker & White, Edmonton, Alberta, for the appellant/respondent on cross-appeal, Arthur Anderson & Co.;
Durocher Simpson, Edmonton, Alberta, for the respondents/appellants on cross-appeal.
This appeal was heard and judgment was rendered on December 13, 2000, by McLachlin, C.J.C., L’Heureux-Dubé, Gonthier, Iacobucci, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada. McLachlin, C.J.C., delivered the following written reasons in both official languages on July 13, 2001.
