Saskatchewan Court Denies Certification and Strikes Claim where Representative Plaintiff and Lawyer Sought to Profit from Class Members they Sought to Represent

  • 18 octobre 2021
  • Michael Tersigni, Keel Cottrelle LLP

In Piett v Global Learning Group Inc., 2021 SKQB 232 (the “Piett Action”), Justice McCreary of the Saskatchewan Court of Queens Bench (the “Court”) refused to certify a proposed class action and struck the claim in its entirety because it was an abuse of process. In addition, the Court found that neither of the proposed representative plaintiffs were suitable, and that an overlapping certified class action in Ontario was the preferable procedure for addressing the claims of class members.

Background

The Piett Action was commenced in 2016 as a proposed multi-jurisdictional class action pursuant to The Class Actions Act, SS 2001, c C-12.01 (the “CAA”). The proposed representative plaintiff, Lorne Piett, brought an application to certify the action as a class action, as well as an application to substitute the proposed representative plaintiff. The Defendants opposed these applications.

The Piett Action related to a charitable donation tax shelter program that operated from 2004 to 2014 (the “Gift Program”), which was promoted by the defendant, Global Learning Group Inc. (“GLGI”). Canada Revenue Agency (“CRA”) subsequently disallowed the tax credits claimed by the donors of the Gift Program.

The Piett Action alleged that the Defendants participated in the sale or marketing of the Gift Program while knowing that the Gift Program was a sham. The proposed class was comprised of individual taxpayers that participated in the Gift Program and had their tax credit claims denied by CRA.

The Piett Action was commenced and directed by a steering committee consisting of Mr. Piett, Plaintiffs’ counsel, Tony Merchant, and Ryan Mitchell, a former executive with GLGI. The steering committee agreed that Mr. Piett would serve as the representative plaintiff and would be compensated for doing so. However, prior to the certification hearing, Mr. Piett proposed to substitute Randy Shoeman as the proposed representative plaintiff. Mr. Piett and Mr. Shoeman were both donors to the Gift Program as well as commissioned sales agents of it. Both were also the subject of claims for contribution and indemnity by the Defendants as a result of their roles as sales agents.

Subsequent to the commencement of the Piett Action, a substantially similar class action was issued in Ontario (the “Ontario Action”), which had since been certified as a class action.