Carom v. Bre-X Minerals Ltd.

Carom v. Bre-X Minerals Ltd.

The appeal is allowed: negligent misrepresentation was improperly excluded from the certified class action because there is substantial overlap in legal and factual issues with fraudulent misrepresentation (notably false representations and defendants' state of mind/recklessness/negligence); the statutory definition of common issues is permissive and certification should be used to resolve as many overlapping issues as possible to advance litigation and promote judicial economy; consequently negligent misrepresentation must be included in the certified common issues and the class proceeding is the preferable procedure for it in context.

Citation
C33905
Parties
Plaintiff (appellant): Donald Carom; Plaintiff (appellant): 3218520 Canada Inc.; Plaintiff (appellant): 662492 Ontario Limited; Plaintiff (appellant): Osamu Shimizu; Plaintiff (appellant): Eugene Schonberger; Defendant (respondent): Bre‑X Minerals Ltd.; Defendant (respondent): Bresea Resources Ltd.; Defendant (respondent): John B. Felderhof; Defendant (respondent): Jeannette Walsh (Estate Trustee of the Estate of David G. Walsh); Defendant (respondent): Jeannette Walsh (personally); Defendant (respondent): T. Stephen McAnulty; Defendant (respondent): John B. Thorpe; Defendant (respondent): Rolando C. Francisco; Defendant (respondent): Hugh C. Lyons; Defendant (respondent): Paul M. Kavanagh; Defendant (respondent): Nesbitt Burns Inc.; Defendant (respondent): Egizio Bianchini; Defendant (respondent): First Marathon Securities Limited; Defendant (respondent): Kerry Smith
Court
Court of Appeal for Ontario
Jurisdiction
Canada
Judgment Date
31 October 2000
Procedural Posture
Civil – Class Action Certification Appeal / Appeal From Divisional Court Decision on Certification Under the Class Proceedings Act, 1992
Outcome
Appeal allowed; Divisional Court and motions judge erred in excluding negligent misrepresentation from the certified common issues; certification order amended to include negligent misrepresentation; appellants awarded costs of the appeal and of the Divisional Court; original costs order of the motions judge stands.
Legal Topics
Certification, Common Issues, Preferable Procedure, Fraudulent Misrepresentation, Negligent Misrepresentation, Conspiracy, Competition Act S.36
Source Language
English
Class Actions Tort Law Competition Law Civil Procedure Securities/commercial Law Certification Common Issues Preferable Procedure +4 more

Case Brief

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Parties

Donald Carom

Plaintiff (appellant)

3218520 Canada Inc.

Plaintiff (appellant)

662492 Ontario Limited

Plaintiff (appellant)

Osamu Shimizu

Plaintiff (appellant)

Eugene Schonberger

Plaintiff (appellant)

Bre‑X Minerals Ltd.

Defendant (respondent)

Bresea Resources Ltd.

Defendant (respondent)

John B. Felderhof

Defendant (respondent)

Jeannette Walsh (Estate Trustee of the Estate of David G. Walsh)

Defendant (respondent)

Jeannette Walsh (personally)

Defendant (respondent)

T. Stephen McAnulty

Defendant (respondent)

John B. Thorpe

Defendant (respondent)

Rolando C. Francisco

Defendant (respondent)

Hugh C. Lyons

Defendant (respondent)

Paul M. Kavanagh

Defendant (respondent)

Nesbitt Burns Inc.

Defendant (respondent)

Egizio Bianchini

Defendant (respondent)

First Marathon Securities Limited

Defendant (respondent)

Kerry Smith

Defendant (respondent)

Procedural Posture

Civil – Class Action Certification Appeal / Appeal From Divisional Court Decision on Certification Under the Class Proceedings Act, 1992

Legal Issues

  1. 1 Whether the negligent misrepresentation claim falls within the certified common issues
  2. 2 Whether a class proceeding is the preferable procedure for the negligent misrepresentation claim
  3. 3 Whether fraudulent and negligent misrepresentation should be treated differently at certification

Ratio Decidendi

The appeal is allowed: negligent misrepresentation was improperly excluded from the certified class action because there is substantial overlap in legal and factual issues with fraudulent misrepresentation (notably false representations and defendants' state of mind/recklessness/negligence); the statutory definition of common issues is permissive and certification should be used to resolve as many overlapping issues as possible to advance litigation and promote judicial economy; consequently negligent misrepresentation must be included in the certified common issues and the class proceeding is the preferable procedure for it in context.

Court Disposition

Appeal allowed; Divisional Court and motions judge erred in excluding negligent misrepresentation from the certified common issues; certification order amended to include negligent misrepresentation; appellants awarded costs of the appeal and of the Divisional Court; original costs order of the motions judge stands.

Orders

  • Paragraph 9 of the Superior Court of Justice Order amended by deleting reference excluding negligent misrepresentation (negligent misrepresentation claim included in certified class action)
  • Appellants awarded costs of the appeal and the Divisional Court