Published by the Litigation Group
Litigation Co-Counsel
McCarthy Tétrault 2011


Letter from the Editor

Welcome to Volume 4, Issue 2 of McCarthy Tétrault Co-Counsel: Litigation.

Bringing together legal developments with value-added context gives our lawyers the opportunity, in this publication, to share important analysis with you.

In this issue, you will get more than a bird’s-eye "tweet" or a foggy "blog" on significant cases that have impact both nationally and internationally.



MTS Allstream Inc. v. TELUS Communications Company: Further Confirmation of the Exclusive Jurisdiction of the CRTC
The recent Alberta Court of Appeal decision in MTS Allstream Inc. v. TELUS Communications Company affirmed the exclusive jurisdiction of the Canadian Radio-television and Telecommunications Commission (CRTC) to regulate telecommunications services in Canada, including setting the rates and tariffs for such services. Efforts to litigate disputes over such matters in Canadian courts have routinely been referred back to the CRTC in recognition of the CRTC’s broad policy mandate and specialized expertise.

Class Action

Is McCracken v. Canadian National Railway Co. a Sign of Things to Come in Overtime Class Actions?
Although Canada’s experience with "overtime" class actions is relatively recent, there have been some significant developments. One such development has occurred in the "misclassification" class action McCracken v. Canadian National Railway Co. A question that has been lingering in the context of overtime class actions is: Can the provisions of the Canada Labour Code be seen as implied terms of employment contracts, and if so, can they be the foundation of a direct claim in breach of contract? McCracken has now answered this question in the affirmative.

Can Collective Prejudice be Inferred? Biondi v. Syndicats des cols bleus regroupés de Montréal — Lowering the burden of proof for class-wide "prejudice"
If the elements of fault, damage and causal connection are established, can a court infer from the evidence that all members of a class action have suffered similar harm (or prejudice?) Yes, according to the recent decision in Biondi v. Syndicat des cols bleus regroupés de Montréal (SCFP-301) et Ville de Montréal (500-06-000265-047, September 3, 2010, Grenier J).


European Court of Justice rules that no privilege attaches to communications with in-house counsel in European Commission’s competition investigations
On September 14, 2010, the European Court of Justice, Europe’s highest court, ruled that communications between a company and its in-house lawyers are not covered by legal professional privilege (i.e., solicitor-client privilege in Canada) when the company comes under investigation by the European Union competition authorities.


BCSC Says "NO" to Board’s "Just-Say-No" Response to Hostile Takeover Bid
The British Columbia Securities Commission (BCSC) has issued its final majority reasons in the case of Icahn Partners and Lions Gate Entertainment. The BCSC had issued a ruling that cease traded the Lions Gate shareholders' rights plan (SRP) at the conclusion of a hearing in April, 2010. In summary reasons that followed, a majority of the hearing panel expressed reservations that the decisions of the Alberta Securities Commission in Pulse Data Inc. and the Ontario Securities Commission in NEO Materials Technologies may have departed from the Canadian Securities Regulators’ view of the public interest as it relates to SRPs in prior decisions of Canadian Securities Commissions and in National Policy 62-202 on defensive tactics and takeover bids.

Financial Services

Only actual knowledge will suffice: the Ontario Court of Appeal clarifies and limits the liability of banks to non-customers
Banks are convenient deep pockets to sue when someone suffers a loss but cannot recover from the perpetrator who has caused the loss. But the recent decision of the Ontario Court of Appeal in Dynasty Furniture Manufacturing Ltd. v. The Toronto-Dominion Bank, 2010 ONCA 514 puts serious roadblocks in the way of non-customers seeking to pick the deep pockets of a bank.


A Real and Substantial "Tune-Up": The Ontario Court of Appeal Reformulates the Test for Asserting Jurisdiction Against Out-of-Province Defendants
On February 2, 2010, a five-member panel of the Ontario Court of Appeal released its long-awaited reasons in Van Breda v. Village Resorts Limited (2010), 98 O.R. (3d) 721 (CA) (sub nom. Charron Estate v. Bel Air Travel Group Ltd.), leave to appeal to SCC granted, [2010] SCCA. Nos. 114 and 174. The decision in Van Breda significantly reformulates the test for "jurisdiction simpliciter," i.e., the court’s ability to assert jurisdiction against an out-of-province defendant who has not submitted or attorned to an action against it in Ontario.

New Alberta Rules of Court: A Client’s Perspective
On November 1, 2010, the new Alberta Rules of Court are scheduled to come into force, repealing the current Rules of Court. The New Rules represent a dramatic change to the procedural landscape of litigation in Alberta, and everything from timelines to case management has undergone significant and material change.


US Supreme Court Limits Extraterritorial Reach of US Securities Law: Morrison v. National Australia Bank
Out of the US Supreme Court comes a positive development for Canadian issuers of securities who have business operations in the United States: the US Supreme Court held, on June 24, 2010, that the principal statutory provisions used by security-holders to bring class actions in the US — s.10(b) of the Securities and Exchange Act of 1934 and SEC Rule 10b-5 (which is promulgated under s. 10(b)) — have no application to trades in securities that are not traded on a US exchange and that do not take place in the US.

Farley's Reflections

Good Faith in Execution (aka Performance) of Agreements
So what’s in a word? One is curiously reminded that one should use words carefully by an excerpt from Shakespeare’s Hamlet, Act V Scene I:
First Clown: What is he that builds stronger than the mason, the shipwright, or the carpenter?
Second Clown: The gallows-maker, for that frame outlives a thousand tenants.
First Clown: I like thy wit well, in good faith: the gallows does well; but does it well? It does well to keep those that do in.

The phrase "execution of an agreement" can have two meanings: (i) confirming the existence of a contract, usually by having it signed, although it is possible to execute an oral agreement and (ii) the performance of obligations agreed to in the contract.