In Silver v. IMAX, 2012 ONSC 1047, Justice K van Rensburg considered an unusual set of circumstances. In December 2009, a global class action was certified with respect to purchasers of IMAX securities on the TSX and NASDAQ from February 17, 2006 to August 9, 2006. A similar class action was pending in the US. A second class action in the US included only those who had purchased on NASDAQ and had a longer class period. Nonetheless, there were some overlapping class members between the US and Canadian proceedings.
Initially, Canadian class counsel and defendants agreed on a form and manner of notice for the Canadian proceeding. The lead plaintiff in the US proceeding, The Merger Fund (“TMF”), sought leave to participate in the Canadian proceeding to oppose the content and timing of the notice. When the motion was argued, settlement discussions had commenced in the US proceeding. Shortly thereafter, the US defendants and class counsel agreed to a proposed settlement.
In determining whether to grant TMF standing, Justice K van Rensburg considered Section 14 of the Class Proceedings Act, 1992. As noted by Justice K van Rensburg, this section confers a broad discretion on the Court to permit participation of class members at any time. The objective is to protect the interests of class members. This recognizes the fact that a class member may wish to participate to oppose the manner in which the representative plaintiff is conducting the proceeding or to assert positions that differ from the majority of the class and that such may be the only way to bring the court relevant information or evidence.
Justice van Rensburg found that TMF was a class member of the Canadian class action. Despite its stated intention to opt-out, whether it would opt-out was dependant on there being a certified class action in the US. Had the Canadian defendants not initially accepted the form, content and timing of the notice of certification of the Canadian proceedings, there may have been no need for TMF to move to participate in the Canadian proceeding.
In the circumstances of this case, TMF was a class member and fell within the ambit of section 14 of the CPA. It was permitted to participate and brought an important perspective to the court.
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