In a somewhat anticlimactic follow-up to Nordheimer J.'s decision granting leave to appeal, the Divisional Court recently deferred to Belobaba J.'s carriage decision and dismissed the appeal in Mancinelli v Barrick Gold Corporation, 2015 ONSC 2717.
The class action is based on misrepresentations alleged to have been made by Barrick Gold in relation to a Chilean mining project. In a December 2014 carriage motion, Belobaba J. granted carriage of the securities class action to the group of law firms led by Rochon Genova, rather than to the group of firms led by Koskie Minsky. Nordheimer J. granted leave to appeal later that month.
At the Superior Court, Belobaba J. preferred the extensive preparation and broader claims put forward by the Rochon Genova Group, rather than the more streamlined approach taken by the Koskie Minsky Group. While Nordheimer J. appeared to strongly disagree with Belobaba J.'s minimalist approach of going no further than determining whether a claim is “frivolous”, the Divisional Court gave significant deference to Belobaba J.'s analysis and found no basis on which to set aside the carriage order. The Divisional Court viewed the Koskie Minsky Group's appeal as merely an attempt to get another kick at the can – trying to convince the Court to reweigh the factors already considered by Belobaba J. – which is not the Court's role on an appeal. Reviewing each of the carriage factors and the motion judge's accompanying analysis, the Divisional Court found no reason to intervene, instead deferring to Belobaba J.'s discretion and expertise in class proceedings.
In endorsing Belobaba J.'s decision so comprehensively, the Divisional Court has made clear that it will give significant deference to motion judges on discretionary decisions made under the Class Proceedings Act, and particularly on carriage decisions where the motion judge has expertise in class proceedings.
While Nordheimer J.'s leave decision gave hope to practitioners that guidance about the law applicable to carriage motions would be forthcoming, the Divisional Court did not provide any significant guidance. Instead, the Court supported a case-based analysis, which maintains the unclear state of the law and could, in fact, encourage more disputes in the future.
As a particular aspect of this uncertainty, this decision has left open the question of whether motion judges should prefer narrower or broader claims on carriage motions. Prior to Belobaba J.'s decision, the case law on carriage disputes exhibited a trend of judges granting carriage to the more narrow, streamlined claim, as such claims tend to be easier to certify, more expedient and less complicated overall. However, in this case, Belobaba J. thought it was in the best interests of the class to grant carriage to the representative plaintiff whose action had the most expansive reach and the higher number of genuinely viable claims. Belobaba J.'s analysis essentially begins with a threshold check on the viability of the claims asserted – which is not a high threshold – followed by a discretionary test as to which competing claim would best serve the interests of the class. Given the Divisional Court's approval of Belobaba J.'s approach in this decision, it may be prudent for counsel bringing claims in the context of securities class actions to assert as many viable claims as possible, rather than cherry picking only those that seem most likely to succeed in an effort to present a more streamlined claim.
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