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The Litigator
AGM :: Affleck Greene McMurtry LLP

THE LITIGATOR

Affleck Greene McMurtry LLP
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Top Ontario court opens the door to recognition of foreign class action judgments binding Ontario plaintiffs

In a decision released last month, the Court of Appeal agreed with the finding of Cullity J. of the that foreign class actions that include Canadian plaintiffs as may be recognised and enforced in – as long as plaintiffs are given sufficient in the foreign .

In Currie, McDonald’s sought to dismiss an Ontario class action brought on behalf of all McDonald’s customers in regarding the promotional contests McDonald’s had run between 1995 and 2001. A class action on the same issues that purported to include Canadian class members had already been brought, certified and settled in . An court had issued an order approving the settlement of that class action. McDonald’s argued that the Canadian class actions should be dismissed because they sought to re-litigate issues that had already been decided by the court.

The Court of Appeal found that the Illinois court had a real and to the subject matter of that proceeding, given that the contest at issue had been run from Illinois . This is normally enough to allow the foreign court’s jurisdiction to be recognised and its judgment enforced.[2] However, the Court of Appeal went on to observe that class actions raise unique concerns regarding plaintiffs residing outside the jurisdiction in which they are brought – i.e. why would the customer of an Ontario McDonald’s restaurant ever expect that their rights would be dealt with in an Illinois court? Procedural protections to protect Ontario class members, the court found, are important in alleviating potential unfairness to Ontario plaintiffs and in determining whether the foreign judgment will be recognised. These protections include the provision of adequate notice to Ontario plaintiffs, the adequacy of the legal representation of the Ontario plaintiffs, and the right for the Ontario plaintiffs to opt out of the proceeding and pursue a remedy elsewhere. Provided such procedural protections are afforded by the foreign jurisdiction, the court found that it might be appropriate to bar Ontario residents from bringing local actions due to their failure to opt out of a foreign class action.

In Currie, however, the Court of Appeal agreed with the judge below that the notice given to Canadian plaintiffs regarding the Illinois action was inadequate.[3] It found that the failure to provide adequate notice had a bearing on both the jurisdiction of the Illinois court over Ontario plaintiffs and on the fairness of enforcing its judgment against Ontario residents. Recognition of the Illinois judgment was refused and the Ontario class action brought by Mr. Currie and others against McDonald’s was allowed to proceed.

Despite its decision not to recognise the Illinois judgment in this case, the Court of Appeal has nevertheless still opened the door for class actions to be conducted entirely abroad and then enforced in Canada – provided adequate provisions are made to notify class members in Canada , provide them with adequate legal representation, and allow them the chance to opt out. In the past, parallel class proceedings were usually brought against international corporations in several jurisdictions, including Canada . The Currie decision may, in some cases, remove the necessity of bringing a separate Canadian class action. Nevertheless, the only way defendants can be certain that foreign class actions will be enforced in Canada is to insist that parallel actions be commenced in Canada for purposes of obtaining court approval of any settlement that may result.

Published March 3, 2005

 

 

[1] A full copy of the Currie decision can be found on the Court of Appeal’s website at:
http://www.ontariocourts.on.ca/decisions/2005/
february/C41264.htm

[2]See Beals v. Saldanha, 2003 SCC 72

[3]The Illinois court had required notice in Canada to be published in three French-language newspapers, Maclean’s magazine, and two U.S. publications with circulation in Canada .

Kenneth A. Dekker
Affleck Greene McMurtry LLP

Kenneth A. Dekker

Kenneth Dekker, a partner of the firm, is a successful trial and appellate lawyer who is valued by his clients as a resourceful and practical litigation counsel.

Over more than two decades, Ken has litigated noteworthy cases in a range of fields that include class action defence, securities and broker-dealer litigation and regulatory defence, corporate and shareholder disputes (including oppression and winding up cases), defamation, civil fraud litigation, disputes over contracts, injunctions, professional liability litigation, employment litigation and cross-border litigation issues.

Ken has appeared before all levels of courts in Ontario, including the Ontario Court of Justice, the Superior Court of Justice, the Divisional Court and the Court of Appeal for Ontario, as well as before the Supreme Court of Canada. Ken also represents and advises clients in regulatory matters before the Investment Industry Organization of Canada (IIROC), the Mutual Fund Dealers Association of Canada (MFDA) and the Ontario Securities Commission (OSC).

Ken has been recognized for Corporate and Commercial Litigation by Best Lawyers of Canada and has been given the highest available rating of AV, or pre-eminent, by his peers on Martindale-Hubbell.

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