Deloitte & Touche Inc. ("Deloitte"), the
long-acting trustee for the Estate of Bre-X Minerals Ltd., has
brought motions in the Alberta and Ontario courts seeking leave to
discontinue the class action litigation that it has been
prosecuting against, amongst others, former Bre-X principal John
Felderhof and his ex-wife Ingrid Felderhof, as well as the Estate
of founder and CEO David Walsh.
As a brief background, in October 1997, an action was commenced
in Alberta by investors who lost money on the collapse of Bre-X. In
November 1997, the Alberta Bankruptcy Court authorized Deloitte to
prosecute the class action on behalf of these investors; shortly
thereafter, Deloitte was granted carriage in Ontario in January
1998 (collectively, the "Deloitte Action"). The Deloitte
Action asserted that John Felderhof failed to promptly disclose
material changes relating to Bre-X's gold mining properties,
and that he conspired with others to deceive investors by issuing
false statements, announcements and press releases.
Deloitte's motions for discontinuance are being brought for
two reasons: Deloitte no longer has the financial resources to
prosecute the Deloitte Action, and it believes that there is no
reasonable prospect of significant recovery from the Felderhofs or
the Walsh Estate. Deloitte's motions are opposed by David
Carom, one of the plaintiffs in a second class action against the
Felderhofs and the Walsh Estate which, until recently, was in a
litigation partnership with the Deloitte Action.
In anticipation of Deloitte's Ontario discontinuance motion
hearing (currently scheduled for March 4, 2013), Mr. Carom recently
brought a cross-motion seeking an order that Ingrid Felderhof and
Jeannette Walsh (David Walsh's widow) attend to be examined as
witnesses under Rule 39.03 of the Rules of Civil
Procedure, and that Ingrid Felderhof allow class counsel to
obtain an appraisal of a property in the Cayman Islands. Deloitte
opposed the cross-motion based on its concern that its
discontinuance motion could be affected in the event that either of
the proposed witnesses failed to comply with any order made by the
At the cross-motion hearing (2012 ONSC 7278), Perell J. held that since
neither of the proposed witnesses had actually been served with a
summons, the appropriate decision was to adjourn the cross-motion
to allow Mr. Carom to serve summonses. Perell J. noted, however,
that had summonses been served, he saw no basis for striking them
out. With respect to the request for an appraisal, Perell J.
dismissed the motion without prejudice due to the lack of advice
concerning his jurisdiction to make such an order, noting that
Ingrid Felderhof was not a party to the Ontario litigation.
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In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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