Case information

Law of professions – Barristers and solicitors – Duty of loyalty – Conflict of interest – Breach of contract – Breach of fiduciary duty – Negligence – Class actions – In class action proceedings, can causation be determined at a common issues trial grounded in loss of chance without certification as a common issue? – Can the determination of causation in a loss of chance case based on professional negligence or breach of fiduciary duty lead to strict liability for professionals found to have divided loyalties with no determination of what an unconflicted non-negligent professional would do? – Does class proceedings legislation allow a plaintiff to use a procedural statute to effect substantive proof of the essential elements of each class member’s claim? – Does class proceedings legislation permit courts to draw inferences from the evidence of the representative plaintiff that would not be available in a regular civil action?

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

During the 2009 financial crisis which impacted the automotive industry, General Motors Canada Limited (“GMCL”) sought to restructure in order to benefit from a government bailout. The law firm Cassels Brock Blackwell LLP represented Industry Canada in respect of a bailout to support GMCL. Cassels also represented a group of GMCL dealers but did not disclose to the dealers its pre-existing retainer with Canada. GMCL’s restructuring plan involved a reduction in its dealer network. As part of this plan, GMCL delivered to the dealers a Wind-Down Agreement (WDA), intended to terminate their franchises and eliminate its exposure to dealer claims in exchange for a payout. A majority of the dealers signed the WDAs and received $126 million combined.

That same year, Trillium Motor World Ltd., a GMCL dealer, commenced class proceedings against Cassels on behalf of all dealers who had signed the WDAs. Trillium claimed that Cassels had breached its contractual and fiduciary duties to the dealers, including its duty of loyalty. It alleged that, but for these breaches, the dealers would have negotiated, collectively, a better deal and sought damages for this lost chance. Cassels argued that its retainer with the dealers was contingent on GMCL becoming insolvent, which did not occur, and denied the alleged breaches.