Justice Low allowed General Motors of Canada Ltd. (GM) to appeal the certification decision of Justice Strathy to the Divisional Court on two of the four issues on which it sought to appeal. The first is whether the effect of GM’s alleged breach of the right of association under s. 4 of the Arthur Wishart Act can be decided as a common issue in this proceeding. The second is whether GM’s alleged breach of the duty to disclose all relevant information to the dealers when it presented the Wind-Down Agreement can be decided as a common issue in this proceeding.

Justice Low did not grant leave to appeal on the question of whether or not GM breached the duty of fair dealing under s. 3 of the Wishart Act or whether the enforceability of the waivers and releases in the Wind-Down Agreement can be determined as common issues. As well, GM did not seek leave to appeal from Justice Strathy’s determination that the question of the validity of the rescissions ought to be determined as common issues in the class action.

As regards Cassels Brock, Justice Low granted leave to appeal on the three common issues certified against Cassels Brock. She did not, however, grant leave to appeal from the denial of the stay of proceedings sought by Cassels Brock.

The appeal in the Divisional Court will likely take place in the fall.

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The lawsuit claims that General Motors of Canada Limited breached provincial franchise laws in eliminating the dealerships. Also named in the suit is Cassels Brock & Blackwell LLP, a major Canadian law firm retained to act for the Canadian GM dealers in anticipation of a GM restructuring. Sotos represents the former dealers in the ongoing dispute.

Visit the GM class action home page

The lawsuit, seeking $750 million in damages, claims that General Motors of Canada Limited (GM), a subsidiary of General Motors Company, breached provincial franchise laws in eliminating the dealerships. Also named in the suit is Cassels Brock & Blackwell LLP (Cassels), a major Canadian law firm retained to act for the Canadian GM dealers in anticipation of a GM restructuring.

Concluding that justice would best be served by allowing the dealers to proceed as a class action, Justice Strathy remarked:  “[i]t is not realistic to think that an individual franchisee, who has experienced the loss of their business, is financially or psychologically equipped to engage in protracted, complicated and very expensive litigation with one of the largest corporations in North America and a major Canadian law firm.” (Para. 161)

Regarding the claims against Cassels, the judge commented, “[t]his is not a typical solicitor’s negligence case” and that the case raises “important issues concerning lawyers’ duties to their clients, particularly in the context of group retainers.” (Para. 164)

David Sterns, one of the lawyers for the lead plaintiff, stated:

The elimination of the dealers was a man-made disaster for hundreds of family-owned businesses forced to pay the price for GM’s financial problems.  As a result of this decision, the dealers now have a chance to put the pieces back together and mount a recovery of their own.

Trillium Motor World Ltd., a former GM dealer in Toronto, has been designated to represent the terminated dealers in every province.

For more information contact David Sterns at dsterns@sotosllp.com or John Sotos at jsotos@sotosllp.com. The dealers are jointly represented by the Toronto law firms WeirFoulds LLP and Sotos LLP.

A copy of the decision is available at: http://www.sotosllp.com/wp-content/uploads/2011/03/reasons-for-decision-certification.pdf

Visit the GM class action home page

Stockie got the shock of his life back in May 2009 when word came that his dealership — along with more than 200 others across Canada — was being closed by GM by the end of that year as the automaker battled to streamline costs and avoid bankruptcy during the worst recession since the 1930s.

Read the article at therecord.com

Go to the GM class action home page

“The mega-firm model is fraught with the potential for client conflicts,” Mr. Sterns said.

He suggested that large law firms will have to factor in the risk of class actions in their conflicts and risk-management programs.

“Conflict of interest is a hot topic right now in terms of law firm organization. The larger the firms become, the more vigilant they need to be in preventing conflicts of interest,” he said.

Read the article online at: http://www.financialpost.com/Class+actions+target+firms+defendants/3804203/story.html

Click here to go to the GM class action home page

GM’s restructuring plan seemed like a sound idea. But that didn’t make the news any easier for 245 dealers shown the end of the road.

Read the full article at Bizmagazine.ca

What used to be a lively car dealership in Pickering is now deserted, with no cars in the lot, except perhaps one of Jerry Gazarek’s, the former owner who’s still in shock over what happened to his thriving business.

Read the full article at durhamregion.com: http://www.newsdurhamregion.com/article/152200

Listen to the segment online at CBC: http://www.cbc.ca/thecurrent/2010/04/april-13-2010.html

Click here to go to Sotos LLP’s GM class action web site

Read the full article at: http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/gm-suit-reignites-conflict-argument/article1525335/

Click here to go to Sotos LLP’s GM class action web site

Watch the video at BNN: http://watch.bnn.ca/the-close/march-2010/the-close-march-5-2010/#clip273134