CIBC vs. Green could prove landmark
There are some interesting legal nuggets in the Supreme Court of Canada’s decision in CIBC vs. Green.
The main part of that case dealt with how to interpret the limitation periods in two Ontario statutes. The decision dealt with three separate securities classaction lawsuits. A divided court ultimately blocked a proposed investors’ action against Celestica, then issued a green light for investors to proceed against two others, one against CIBC and another against Imax.
The judges were unanimous in a couple of other points on how Canadian courts should approach class actions generally. These are important to note because classaction law is still relatively new and courts are still figuring out how to deal with the procedure.
The court unanimously confirmed that if a judge is asked to perform a “gatekeeper” role and rule on whether a case is a nuisance action, they can’t merely be pushovers. They have to determine whether the plaintiffs are basing their claim on credible evidence, and whether the plaintiffs have a reasonable chance of succeeding with the case at trial.
Another point touches on a long-standing debate in Canadian class-action law. The court unanimously held that plaintiffs in CIBC can try to sue the bank by pleading both statutory and common law grounds. This is worth some thought because it touches on a live debate that is just starting to work its way up the legal ladder in Ontario, and could eventually find its way to the Supreme Court in a few years.
There’s a school of legal thought saying that when a legislature creates specific, statutory grounds for lawsuits, the legislature creates a “complete code” that erases any commonlaw grounds to sue.
In a recent case called Shah vs. LG Chem Ltd., an Ontario judge found the Competition Act is a complete code. The judge therefore shut down an attempt by plaintiffs to plead both statutory and common law causes of action. (He did certify the statutory claim alone.)
Jean-Marc Leclerc of Sotos LLP, counsel for the plaintiffs in Shah, says all sides are appealing that ruling, which stands at odds with another court ruling from B.C. on the complete code question. “When you look at the legislative history (of the Competition Act), there’s no hint whatsoever that Parliament wanted to oust the common law,” Leclerc says.
You might ask, if a legislature goes to the trouble of passing a law that makes it easier for plaintiffs to sue, why do plaintiffs still bother pleading the common law torts?
Michael Osborne, a litigator with Affleck Greene McMurtry LLP who does a lot of competition cases, says doubling up on the claims is a means to change the settlement dynamics in favour of the plaintiff. Common law damages aren’t capped, so that gives plaintiffs a bigger stick. “That creates the possibility for a lot of easy money in a class action.”
The issue is all about balance. Canadian lawmakers create statutory grounds to sue when they catch wind that courts are tossing out a lot of plaintiffs’ claims on the grounds that the traditional common law doesn’t provide a legal underpinning for the class-action plaintiffs to seek relief.
To maintain some balance, lawmakers will include provisions in the law that weed out nuisance suits, impose limitation periods, and cap damages for cases that succeed at trial.
The complete code question makes a brief appearance in CIBC vs. Green. It appears in Justice Suzanne Côté’s decision, and all judges concurred with her conclusion. She found that investors are free to bring cases that plead common law causes of action in Ontario securities class-action suits, because the legislature made it clear that its new statutory torts wouldn’t wipe out the common law. The rights to sue created by the statute are “in addition to, and without derogation from, any other rights,” Justice Côté writes.
But what if the situation is reversed and a legislature doesn’t take the positive step of noting that its new statutory torts are either in addition to or in place of the common law? That’s the question going forward.
We got a peak at the “complete code” issue in CIBC vs. Green, and we’ll likely get a closer look at the question if Shah vs. LG Chem moves up the legal food chain.