Wallace v Canadian Pacific Railway 2011 SKCA 108

From the judgment written by  Ottenbreit J.A.

I. Introduction

[1] On December 17, 2008, McKercher LLP (“McKercher”) commenced a class action on behalf of Gordon Wallace (“Wallace”), as representative plaintiff, against Canadian National Railway (“CN”), the Canadian Pacific Railway and several other defendants (“the Wallace claim”) alleging the railways had overcharged western farmers for grain transportation during the previous 25 years and claiming damages, including aggravated and punitive damages. This matter comes before us because, at the time it commenced the Wallace claim, McKercher was acting for CN on a number of other unrelated matters. Not unsurprisingly, when CN found out about the Wallace claim, it was chagrined, and it successfully applied to disqualify McKercher from acting on it. The primary questions on this appeal are three: first, whether McKercher, as CN alleges, gained material confidential information about CN while acting for it prior to and at the time the Wallace claim was commenced which could result in prejudice to CN if McKercher were to continue to act for Wallace; second, whether McKercher by acting for Wallace breached its duty of loyalty to CN; and third, if the first two questions are answered in the affirmative, whether the resultant remedy should be disqualification of McKercher, as the chamber judge ordered.

For the full decision, click HERE.

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