Litigation Brief

Hakemi & Company Law Corporation Adds Further Depth to its Litigation Practice

We are pleased to announce that Jessica Forman has joined Hakemi & Company Law Corporation as an articled student.  She is admitted to practice in California, where she has represented clients in a variety of litigation matters, and at all stages of litigation, from pre-dispute negotiations, through trials, and appeals.

She has provided civil litigation advice to clients in a variety of industries, including representing a large construction company, an international airline and a non-profit housing rights organization. Her criminal litigation experience includes advising clients in criminal matters relating to securities issues as well as insurance disputes, legal malpractice issues, fraud and negligence.  She has appeared before United States Federal courts as well as California state courts.

Prior to her legal practice, she worked for several years in Washington D.C. as a legislative assistant to a member of Congress.  She is a graduate of the University of Southern California Gould School of Law in Los Angeles and earned her undergraduate degree from Emory University in Atlanta, Georgia.

For more information about Jessica and her experience see: Jessica Forman

Canadian Supreme Court Grants Leave in Pro-Sys/Microsoft and Sun-Rype Indirect Purchaser Competition/Antitrust Class Actions

Earlier today the Supreme Court of Canada, per Justices LeBel, Fish and Cromwell, granted leave to appeal in the Pro-Sys Consultants Ltd. v. Microsoft Corporation and Sun-Rype Products Ltd. v. Archer Daniels Midland Company cases.

These cases relate to conflicting indirect purchaser class action certification decisions in British Columbia (two companion decisions of the British Columbia Court of Appeal) and Quebec (a recent decision of the Quebec Court of Appeal).

(See: Quebec Court of Appeal rejects B.C. Court of Appeal passing-on defence decisions in Pro-Sys and Sun-Rype and British Columbia Court of Appeal allows Microsoft appeal in Pro-Sys v. Microsoft - creates de facto passing-on defence).

The central issue to be decided by the Supreme Court will be the ability of “indirect purchasers”, that is purchasers further down the supply chain than "direct purchasers" of products, to proceed with claims against defendants in price-fixing class actions.

Presently, based on conflicting appellate decisions in British Columbia and Quebec, there is uncertainty as to indirect purchasers’ ability to proceed with such claims as well as the status of the related “passing-on defence” in Canada (which originated in the United States in the context of indirect purchaser class action litigation).

For the British Columbia Court of Appeal’s judgments in the Pro-Sys and Sun-Rype cases see:

Pro-Sys Consultants Ltd. v. Microsoft Corporation (B.C.C.A.)

Sun-Rype Products Ltd. v. Archer Daniels MIdland Company, et al. (B.C.C.A.)

For the procedural history of these cases before the Supreme Court see:

Pro-Sys Consultants Ltd., et al. v. Microsoft Corporation, et al. (docket 34282)

 

Supreme Court of Canada Denies Leave in U.S. Steel Investment Canada Case

On November 24, 2011, the Supreme Court of Canada denied leave in United States Steel Corporation et al. v. Attorney General of Canada (FC) (Civil) (By Leave) (34389).  See: Supreme Court of Canada Judgements.  See also: National Post - Supreme Court Won't Hear U.S. Steel Appeal.

To appeal a decision of a court of appeal in a civil case to the Supreme Court, the party wishing to appeal must first obtain leave (i.e., permission) to do so.  Under the Supreme Court Act, an application for leave to appeal may be granted if the Supreme Court finds that the case: (i) raises an issue of public importance and (ii) should be decided by the Supreme Court.  Any case must raise an issue that goes beyond the immediate interests of the parties.

The Supreme Court does not issue reasons for its decisions to allow or dismiss applications for leave to appeal.  Judgments on applications for leave to appeal are also generally final (under the Supreme Court of Canada Rules, an application for leave to appeal will not be reconsidered unless there are exceedingly rare circumstances in the case that warrant consideration).

This U.S. Steel case relates to the federal government’s lawsuit against U.S. Steel in relation to the performance of undertakings U.S. Steel provided in its 2007 acquisition of Hamilton-based Stelco Inc.  The Federal Court had previously allowed the government’s lawsuit to proceed.

Where an investor fails to comply with the Investment Canada Act (e.g., fails to file an application for review or notification, fails to comply with undertakings or completes a reviewable investment without the requisite approval) a number of penalties may be imposed.  These include divestiture of assets, the revocation (or suspension) of voting rights and financial penalties of up to Cdn. $10,000 per day that an investor is in contravention of the Investment Canada Act (being sought by the government in this case).

For the Supreme Court of Canada’s leave decision see:

Supreme Court of Canada Judgements

For more about the Investment Canada Act see:

Investment Canada

 

Court denies leave to bring a claim for statutory civil liability for secondary market disclosure

The BC Supreme Court has dismissed a claim made under new legislation making it easier for investors to sue if they purchase shares in the stock market and then suffer a loss because of a publicly-traded company’s misrepresentations or failure to disclose important information.

In Round v. MacDonald, Dettwiler and Associates Ltd., 2011 BCSC 1416, the Court for the first time considered Part 16.1 of the Securities Act, which in securities law parlance provides for civil liability for secondary market disclosure: the “secondary market” is the market for a company’s shares after they have been issued by the company and are trading publicly, while “disclosure” refers to the obligations on publicly-traded companies to report facts that could have an impact on their share-price.  The new provisions make it easier for an investor to sue, because they no longer need to show that they actually relied on, among other things, a company's misrepresentation or failure to disclose.

Ontario judges nominated for appointment to Supreme Court of Canada

The Globe & Mail has reported that Madam Justice Andromache Karakatsanis and Mr. Justice Michael Moldaver, both currently of the Ontario Court of Appeal, have been nominated for appointment to the Supreme Court of Canada.

To read the full article, click here.

Court of Appeal rules on time limits to sue insurer

The Court of Appeal has held that an insurance company can contract for a longer limitation period than provided for by statute, and that each denial of benefits causes a fresh limitations period to commence.

In Sander v. Sun Life Assurance Company of Canada, 2011 BCCA 3, the Court overturned a decision made at a summary trial regarding the applicable limitation period and sending the matter to the trial list for a determination of the merits of the appellant’s claim.

The appellant, Dr. Sander, practiced as a dentist until he developed cataracts in both eyes which interfered with his ability to carry on his practice.  In July of 1998, he sought and received benefits pursuant to a group insurance policy issued by Sun Life. 

In September and October of 2000, Sun Life wrote and advised Dr. Sander that it expected him to undergo corrective surgery and that it would not continue to pay benefits indefinitely. Benefits were paid until June of 2001. 

Court of Appeal decides against BC plaintiff unable to show that its claim against non-resident defendant has a "real and substantial connection" to BC

The Court of Appeal today emphasized that a BC court, when faced with a claim brought against a non-resident, should “concern itself with whether on the whole, the [BC] plaintiff has shown a real and substantial connection between [BC] and the facts on which the proceedings are based.”  Giving reasons in North America Steamships Ltd. v. HBC Hamburg Bulk Carriers GmbH & Co. KG., 2010 BCCA 501, the Court of Appeal reversed a lower-court’s decision, which had held that a claim could proceed in BC and that BC had territorial competence under the Court Jurisdiction and Proceedings Transfer Act, SBC 2003, c. 28 (the “CJPT Act”), the statute that governs the determination of jurisdictional issues in the province.

SCC: Unperfected PPSA security interest trumps subsequent Bank Act security

In two judgments that will be of significant interest to lenders, the Supreme Court of Canada has held that an unperfected security interest taken pursuant to a provincial personal property security statute may take priority over a security interest taken subsequently under federal banking legislation.  Although the companion decisions, Royal Bank of Canada v. Radius Credit Union Ltd., 2010 SCC 48 and Bank of Montreal v. Innovation Credit Union, 2010 SCC 47 (“Innovation”), both specifically deal with the interaction between the Bank Act, S.C. 1991, c. 46 and the Saskatchewan Personal Property Security Act, 1993, S.S. 1993, c. P-6.2 (the “PPSA”), the Court’s reasons will apply to similar PPSAs in other provinces. 

In the Innovation decision, a farmer had granted the credit union a security interest over much of his property back in 1991.  For reasons not disclosed by the judgment, the credit union did not register its interest in the provincial PPSA database until June of 2004.  In 1998, the farmer gave the Bank of Montreal (“BMO”) a security interest in much of the same property, without disclosing the credit union’s interest in the property.  The Court held that the operation of the Bank Act lead it to conclude that the credit union, notwithstanding that it had not perfected its security interest by registering it for some 13 years, had priority over BMO, as the farmer could not grant a greater interest in the property than he had to give.

BC's Supreme Court denies injunction enjoining former employees from competing for business

The Supreme Court of British Columbia has denied Inprotect Systems Inc. ("Inprotect"), a traffic control product distributor, a one-year injunction restraining its former director and general manager from competing with it for one year (or until trial).

Madam Justice Fenlon found that Inprotect had a strong prima facie case that Kenneth Davies was a fiduciary of Inprotect and in breach of his duties owed to Inprotect upon leaving its employ.  However, in assessing the balance of convenience between the parties, the Court found that Inprotect's damages could be quantified, if ultimately successful at trial, and that an injunction would essentially put Mr. Davies and his new company, Roadway Traffic Products Ltd., out of business, as it would not be able to meet its obligations without the anticipated revenue.

Court of Appeal decides against Appellant that failed to fulfill its purported obligations within a "reasonable period of time"

Indotan Inc. (“Indotan”), appealed a lower court's summary decision dismissing its action against Invincible Resources Corp. (“Invincible”) for payment of 1.8 million shares of Invincible. In 2005, Invincible invested in the exploration of certain mineral properties in Indonesia held by Indotan (the “Property”). The parties executed a poorly drafted letter agreement after Invincible had invested in the Property. The letter agreement was subject to the execution of a final agreement between the parties. Pursuant to that letter agreement, Invincible was required to issue 1.8 million shares. The letter agreement did not specify to whom the shares were to be issued, or when, or under what circumstances. The lower court held that there was no definitive agreement between the parties in existence and dismissed Indotan’s claim for payment of 1.8 million shares of Invincible.

In Indotan Inc. v. Invincible Resources Corp., 2010 BCCA 318, the Court of Appeal dismissed the appeal on the basis that, even if the letter agreement was binding on the parties, Indotan failed to fulfill its obligation under that purported agreement to deliver a title opinion to Invincible within a "reasonable period of time" and was therefore not entitled to the payment of shares.

To read full decision of the Court of Appeal, click here.