Law Times

Page 12 April 7, 2014 • lAw Times www.lawtimesnews.com Mall collapse among current issues in class actions LEAVE REFUSED IN ARORA V. WHIRLPOOL e Supreme Court of Canada's refusal in March to grant leave to appeal in Arora v. Whirlpool Canada LP is a measure of the reluctance Canadian courts have had in recognizing class actions as a legitimate vehicle for regulat- ing consumer transactions. e Ontario Court of Appeal had dismissed the proposed class action, holding that "policy considerations negate recogniz- ing a cause of action in negli- gence for diminution in value for a defective, non-dangerous consumer product." e refusal also leaves Arora as the leading Ontario decision on manufacturers' liability with respect to several signifi cant causes of action including breach of express and implied warranty, Competition Act breaches, negli- gence, and waiver of tort. e proposed class action claimed a partial rebate from manufacturers of certain older washing machines. e plaintiff s didn't assert that the machines were dangerous but alleged they were less than they had bar- gained for. e Court of Appeal ruled no cause of action arose. According to Nickolas Tzoulas and Daniel Stern, writing in a recent bulletin from Blake Cassels & Graydon LLP, the following were among the decision's key fi ndings: • Express warranties covering defective materials or work- manship didn't extend to de- sign defects. • Implied warranties under the Sale of Goods Act required privity of contract, meaning consumers had no recourse against manufacturers unless they purchased the goods di- rectly from them. • Failure to disclose an alleged defect wasn't a representation under s. 52 of the Competition Act unless an express rep- resentation had impliedly turned an omission into a misrepresentation or there existed a duty to disclose based on some other legal obligation. • Consumers couldn't recover in negligence for pure eco- nomic loss based on diminu- tion in value of a shoddy but non-dangerous product. • Waiver of tort claims had to allege a wrongdoing that gave rise to a tenable cause of action. ACCESS TO JUSTICE PARAMOUNT e Divisional Court's February decision in Cavanaugh v. Gren- ville Christian College affi rms the paramountcy of access to justice as a consideration in certifying class actions. Cavanaugh arises from com- plaints of physical and psycho- logical abuse by students of an Anglican boarding school in Brockville, Ont. As the court saw it, the case exemplifi ed a "power- ful economic barrier" to access to justice. "One need only look to the costs order made following the certifi cation motion to under- stand that 'most individuals can- not aff ord to pursue litigation on this scale,'" the court stated, noting that proceeding by way of class action would streamline the legal process, advance the goal of judicial economy, and avoid the risk of inconsistent outcomes. e Divisional Court relied on criteria set out in a recent Su- preme Court of Canada decision in AIC Ltd. v. Fischer. at case sets out a framework for a "pref- erability analysis," which is an i n- quiry a motions judge must make to determine whether it would be better to continue the case as a single class action or as a series of separate individual lawsuits. e framework requires the judge to consider the three goals of class proceedings: judicial economy, behaviour modifi cation, and ac- cess to justice. In Cavanaugh, Superior Court Justice Paul Perell denied certifi cation of the class action at fi rst instance. In his view, the case met all of the requirements for certifi cation but he couldn't conclude that proceeding by class action would be the prefer- able procedure. Perell worried the unique circumstances of each individual plaintiff would overwhelm the common issues at a single trial. e plaintiff s, represented by Kirk Baert of Toronto's Koskie Minsky LLP and Russell Raikes of McKenzie Lake Lawyers LLP, appealed. e Divisional Court allowed the appeal, ruling Perell had erred in deciding the case without considering the correct criteria in his preferable proce- dure analysis (though it's impor- tant to note Perell ruled on Cava- naugh before the Supreme Court released its Fischer decision). ELLIOT LAKE MALL ACTION CERTIFIED Ontario Superior Court Justice Edward Belobaba has certifi ed a class action lawsuit arising from the collapse of the Algo Centre Mall in Elliot Lake, Ont., in June 2012. e lawsuit seeks damages for about 300 victims of the collapse and names the mall's current and former owners, sev- eral engineers and construction professionals, the City of Elliot Lake, and the province of On- tario as defendants. Belobaba said the case was a "textbook" example of facts ide- ally suited to a class action. "In my view, this is precisely the kind of case for which the class action was designed," Be- lobaba concluded. "Compensation is obviously owing to those who were killed, injured or suff ered fi nancial losses. " e damage amounts that may be recovered will most likely require individual assess- ments but a common issues class action trial that asks, in essence, 'what happened and who's to blame ' would defi nitely advance the overall litigation." Elaine Quinte, one of the representative plaintiff s who launched the lawsuit and whose restaurant, Hungry Jack's, was destroyed, said in a press release that Elliot Lake was "devastated" by the collapse. "My husband and I are just two of the people who lost their life's work in the collapse," she said. "We are very pleased with the judge's decision and hope, for ev- eryone's sake, that we can bring this case to a fair resolution as soon as possible." 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