In Fantl v. Transamerica Life
Canada, the Ontario Court of Appeal upheld the
certification of common law negligent misrepresentation claims in
an investor class action where "there was a single uniform
representation, contained in a statutorily-mandated disclosure
document, which was given to each class member and which each
The proposed class members were investors in Transamerica's
Can-Am Fund, an investment vehicle offered under insurance
contracts sold by Transamerica between October 1992 and March 2001.
Potential investors in the Fund were provided with both an
investment contract and a statutorily mandated disclosure document
called an "Information Folder". Beginning in 1994, the
Information Folder indicated that the goal of the Fund was to
replicate, on a "best efforts" basis, the performance of
the S&P 500 Total Return Index. The misrepresentation claim
arose from this statement.
Certain of the insurance contracts also contained an express
"best efforts" clause regarding the S&P 500 Total
Return Index. A breach of contract claim was also certified but not
At certification, the motion judge found that a class proceeding
was not the preferable procedure for resolving the class
members' negligent misrepresentation claim because the
individual issues of reliance, causation and damages would
"overwhelm or subsume" the common issues. This decision
was reversed by the Divisional Court and by the Court of
The Court of Appeal's decision focused on the preferability
analysis and the application of the Supreme Court of Canada's
decision in Fischer v. IG Investment Management
Ltd., which had not been available to the
certification judge. Applying Fisher, the Court considered
three factors: (a) the barriers to access to justice; (b) the
potential of a class action to address those barriers; and (c) the
alternatives to a class action, including the extent to which the
alternatives address the relevant barriers and how the two
The Court found that in the circumstances of the case, Mr.
Fantl's claim could not reasonably be viewed as economically
viable to litigate on an individual or joinder basis such that cost
was a significant barrier to access to justice.
The Court also noted that, unlike other cases in which negligent
misrepresentation claims have not been certified, the nature of the
representation at issue (a single common written representation
which every class member acknowledged receiving) obviated concerns
that the individual issues would overwhelm the common issues and
result in an inefficient or unmanageable action. The Court was of
the view that there would be "substantial" overlap with
breach of contract claims, the resolution of which would also
materially advance the negligent misrepresentation claim.
The Court of Appeal concluded with a note on assumptions about
the manageability of individual issues trials:
"Although class actions have
been with us in Ontario for almost 25 years, there have, at most
recent report, been less than 20 common issues trials: ... Few of
these have resulted in individual issues trials. If class actions
are to deliver on their promise of access to justice it is perhaps
time to test some of the assumptions made about the
"manageability" of the individual issues stage of a class
action. This appears to be an ideal case in which to do
The economic viability of pursuing
individual claims is an increasing important factor in a
court's consideration of whether a class action is the
preferable procedure in cases involving both common issues and
In determining whether a class
proceeding is the preferable procedure for the resolution of common
law negligent misrepresentation claims, the nature of the
representation is critical. Where there is a single uniform
representation, which each class member has acknowledged receiving,
there is a greater likelihood that the claim would be
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