de Muelenaere v Great Gulf Homes Limited, 2015 ONSC 7442 (CanLII)
On November 30th the Superior Court released its
decision in de Muelenaere v Great Gulf Homes Limited. Mr.
de Muelenaere is the representative plaintiff in a proposed class
proceeding relating to the installation of allegedly defective
shower valves in a newly built condominium containing 437
This pre-certification stage motion asked the Court to
determine how communications between defendants and putative class
members, including settlement offers, should be regulated at this
relatively early juncture in a class proceeding.
The defendant developer had received 24 letters from unit
holders seeking to resolve their claims directly with the
developer, and without necessarily involving class counsel. In
response to those expressions of interest the developer offered to
retrofit the units with a specially designed valve along with
a small payment for inconvenience. In exchange, the developer
required the unit holder to execute a Release from future actions,
including the proposed class proceeding. The Release contained
details about the proposed class action, including contact
information for putative class counsel.
The representative plaintiff brought a motion seeking an order
that would (a) set aside settlements that had been reached between
the developer and the putative class members (b) amend certain
provisions in the Release and, (c) direct the developer to
implement a procedure whereby putative class counsel receive notice
of any offers to settle. The motion raised squarely the scope of a
solicitor-client relationship at the pre-certification stage and
that the rights of putative class members in relation
to settlements reached outside of the structure of a class
Mr. Justice Perell dismissed the motion. In doing so, he found
that provided defence counsel takes care to ensure that
putative class members are not misled in any way that may
affect their rights as members of the proposed class nor undermine
the integrity of the class proceeding more generally, defense
counsel are free to communicate with putative class members for the
purposes of collecting information or settling claims. Mr. Justice
Perell underscored that defence counsel's conduct in this
regard would be guided by their professional obligations pursuant
to the Rules of Professional Conduct.
While Mr. Justice Perell acknowledged that the
Court has the power to intervene in communications that are
abusive or misleading in the pre-certification stage, it should
only do so sparingly.
In the case at bar, the Court found that, with some minor
modifications, the defendants' Release provided those wishing
to settle their claims individually with enough information
regarding the class proceeding. The Release further recommended
independent legal advice and enclosed the contact information for
the putative class counsel. The Court held that there was no basis
upon which to interfere with the individual settlements or to force
the defendant to disclose the individual unit holders'
identities. The Court left open the possibility that the
extent to which the Releases are binding could be raised at a
common issues trial, though it did not elaborate on the point.
Pre-certification communication between defendants and putative
class members has long been an issue in which defendants have
sought guidance. This decision offers a helpful and thoughtful
contribution to the law guiding these communications and to the
responses available to defendants in the shadow of a putative class
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J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
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