Law Times

lAw Times • April 11, 2011 Matter could serve as precedent in similar cases FOCUS All eyes on Silver BY DARYL-LYNN CARLSON For Law Times class of plaintiff s but perhaps none has been as compelling and attention-grabbing as the matter of Silver v. IMAX Corp. What's unique about this T particular case and is catching the attention of counsel is that it serves as the fi rst securities- related class action following amendments to the Ontario Securities Act in 2005. Dimitri Lascaris of Siskinds LLP in London, Ont., along with Jay Strosberg of Sutts Stros- berg LLP in Windsor, Ont., are representing the plaintiff s. Th ey say the case is an important one for all lawyers to follow for a number of reasons. "Th is is the fi rst case where a Canadian court has certifi ed a global class in a securities case and it certainly is the fi rst time a court has certifi ed a case here when there is a pending case in a foreign jurisdiction," says Lascaris. Th ere's a class action pend- ing in the United States regard- ing Imax shares that were trad- ed in that country, although the Canadian case will include non-Canadian shareholders who purchased their shares on a U.S. exchange notwithstand- ing the lawsuit there. Th at will make it an impor- tant case to watch for lawyers representing both the defence side and plaintiff s. Imax, of course, is a Canadi- an-based company with its head- quarters in Mississauga, Ont. "Th e signifi cance is that here in Canada, under the right circum- stances, [our courts] could be the appropriate venue for persons from outside of the country to have their claims against Canadi- an issuers resolved and that this is a development that I think should be applauded from a plaintiff point of view," Lascaris says. "Th e more you slice up a class into diff erent groups or sub- groups, the less likely you are go- ing to achieve rendering the class action economical to pursue and the less likely you will be to achieve judicial economy." In Lascaris' view, litigating similar claims in multiple juris- dictions isn't an optimum use of resources on anyone's part. "Global classes are important, here have been a number of class actions in Ontar- io that include a global and the court needs to address which jurisdiction has the closest connection to the case," he says. "It's best in order to avoid multi- ple overlapping class actions and have one jurisdiction decide." Imax applied for leave to ap- peal the certifi cation issued by the Ontario Superior Court, but its request was denied. Lascaris says the company's motive is simple. "Th e primary reason that de- fendants argue that a global class action should not be certifi ed is because they understand that if they make the plaintiff s fi ght on as many diff erent fronts as pos- sible, it will be more expensive and probably many cases won't go forward," he says. Strosberg, meanwhile, says the case is signifi cant because the Ontario court certifi ed the case despite the counterpart matter pending in New York. "It shows that if there are competing class actions, the Ontario court will certify, but we had to convince the judge that there was a real and substantive connection be- tween all of the plaintiff s in the global class," he says. "Th e idea of the Ontario court assuming jurisdiction over resi- dents who don't live here is not new. You can come to Ontario, and as long as you have a con- nection, the chances are that the judge will certify a global class." He says U.S. judges are less inclined to hear class actions that have a global scope of plaintiff s while the Ontario courts have become a very receptive venue for actions that include plain- tiff s beyond Canada's borders. "Ontario is opening the doors to more global classes, and there are a lot of things that came together in terms of Imax that make it signifi cant in terms of global class actions," he says. Th e 2005 Securities Act revi- sions enabled plaintiff s to bring 'You can come to Ontario, and as long as you have a con- nection, the chances are that the judge will certify a global class,' says Jay Strosberg. actions for civil liability against directors and offi cers of public companies for misrepresentations in public disclosure documents. Formerly, for such an action to succeed at common law, it was necessary to show detrimental reliance upon a misrepresenta- tion in order to fi le any lawsuit, never mind a class action. Last month, another case, Dobbie v. Artic Glacier Income Fund, was certifi ed in Ontario as the second class action to be launched and approved for certi- fi cation under the 2005 amend- ments to the Securities Act. Th e judge presiding in that case referenced the Imax class action and held that the plain- tiff s had brought their lawsuit in "good faith" under s. 138. It further expands the report- ing obligations of issuers in the primary and secondary markets with respect to their potential li- ability under the amended act. Meanwhile, Silver will be heading for trial soon unless a settlement is reached. Th ere's not yet a date for the matter, but it's expected to be heard during the next several months. PAGE 25 FOR BETTER OR FOR WORSE: A PRACTICAL GUIDE TO CANADIAN EMPLOYMENT LAW, THIRD EDITION FULLY REVISED AND UPDATED! FROM START TO FINISH, A COMPREHENSIVE AND PRACTICAL GUIDE TO THE COMPLETE EMPLOYMENT RELATIONSHIP This text is an easy-to-read reference on employment law issues across Canada. 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