Law Times

Law Times • June 15, 2015 Page 5 www.lawtimesnews.com Competing class actions Firm seeking to appeal Divisional Court carriage ruling By Julius MelniTzer For Law Times ollowing a Divisional Court rul- ing on the issue, the Ontario Court of Appeal will soon have an opportunity to consider solving the carriage conundrum. "When it comes to determining who gets carriage of a class action, calling the guidance we have from the courts fuzzy is a generous way of looking at it," says Michael Peerless of McKenzie Lake Law- yers LLP in London, Ont. "I don't think there's a single lawyer who deals with this who knows what the test is and every time we get a decision, things become less clear." Many lawyers are levelling their criti- cism at the Divisional Court that, accord- ing to some observers, has fumbled the issue on the two occasions it has had to deal with it. However, one of these deci- sions, Mancinelli v. Barrick Gold Corp., is now the subject of an application for leave to appeal filed by Kirk Baert of Koskie Minsky LLP. On May 21, the Divisional Court up- held Superior Court Justice Edward Be- lobaba's December 2014 decision to award carriage of the securities class action to a consortium of law firms led by Rochon Genova LLP and including Rosen Nas- ter LLP and the Merchant Law Group LLP. Ultimately, the court endorsed Be- lobaba's finding that this group's state of preparation was further along than that of the Koskie Minsky group that includ- ed Sutts Strosberg LLP, Siskinds LLP, and Groia & Co. Justice Alison Harvison Young, writ- ing for a unanimous three-member pan- el, found that reviewing courts should defer to the motions judge absent an error of law. She also stated that the primary is- sue on a carriage motion was the deter- mination of which group was most likely to advance the interests of the class. Michael Robb of Siskinds, whose firm was on the losing side, says the decision didn't advance things a great deal. "The Divisional Court has now decid- ed two carriage cases and has not depart- ed in either case from the lower courts' criteria," he notes. But Joel Rochon of Rochon Genova, who was on the winning side, begs to dif- fer. In an earlier interview, he told Law Times that the court "certainly provided a level of clarity." Peerless, a lawyer not involved in Mancinelli, thinks otherwise. "The courts haven't given us a legal test, just a bunch of things to consider," he says. "If you compare the reasons [Justice Ian] Nordheimer gave in granting leave to appeal to the Divisional Court with the reasons of the Divisional Court on the actual appeal, it's hard to believe they're talking about the same case." To a degree, the situation has Peerless longing for the first-to-file test. "I never thought that first-to-file made a lot of sense," he says. "But with the lack of guidance we have, you're starting to look at situations like Barrick where a second filer comes in eight or nine months later and right before the case conference. It makes me think I ought to start up on a few cases that other people are already doing." Needless to say, Peerless hopes the ap- peal court will grant leave in Mancinelli. "I think it would be a good thing for the Court of Appeal to step in here and give us some real guidance, whatever the test they articulate may be," he says. "Even if they end up saying it's purely discretionary, at least we'll know and that's a lot better than not knowing, which makes the process slow and expen- sive for everyone." For his part, Robb says that to some extent granting carriage will always be a discretionary decision. "It would help if the discretion was guided by fairly broad principles that were in the best interests of the class, but I don't know whether the Court of Appeal can or will try to articulate what those broad principles are," he says. Certainly the Koskie Minsky group is relying on the chaos in urging the Court of Appeal to take on the issue. In his notice of application, Baert ar- gues that the appeal "is a matter of pub- lic importance" because the Divisional Court's decision "will have significant implications for all class proceedings in- volving competing claims, of which there are several extant in Ontario and else- where in Canada." Baert also suggested the decision would have a "chilling impact" on the class action process, particularly with regard to certification requirements and leave in securities class actions. LT NEWS Untitled-1 1 2015-02-05 2:53 PM F 'I think it would be a good thing for the Court of Appeal to step in here and give us some real guidance, whatever the test they articulate may be,' says Michael Peerless.

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