COURT OF APPEAL FOR ONTARIO

CITATION: Trillium Motor World Ltd. v. Cassels Brock &
    Blackwell LLP,

2017 ONCA 544

DATE: 20170704

DOCKET: C60828

Cronk, van Rensburg and Pardu JJ.A.

BETWEEN

Trillium Motor World Ltd.

Plaintiff (Respondent/

Appellant by way of cross-appeal)

and

General Motors of Canada Limited and

Cassels Brock & Blackwell LLP

Defendant (Appellant/

Respondent by way of cross-appeal)

Peter H. Griffin, Rebecca Jones and Danielle Glatt, for
    the appellant/respondent by way of cross-appeal Cassels Brock & Blackwell
    LLP

Bryan Finlay, Q.C., Marie-Andrée Vermette, Michael
    Statham, David Sterns, Allan D.J. Dick and Andy Seretis, for the respondent/appellant
    by way of cross-appeal Trillium Motor World Ltd.

Heard: January 16, 17, 18 and 19, 2017

On appeal from the judgment of Justice Thomas J. McEwen
    of the Superior Court of Justice, dated July 8, 2015 and March 22, 2016, with
    reasons reported at 2015 ONSC 3824, 30 C.B.R. (6th) 1 and 2016 ONSC 666.

TABLE OF CONTENTS

OVERVIEW
...
4

STANDARD OF REVIEW
...
10

FACTS
..
12

(1)

GMCL
    Dealer Network
.
13

(2)

Looming
    Threat of Bankruptcy
.
13

(3)

March
    2009 Events  Cassels Enters the Picture
.
14

(a)

Saturn
    Retainer

16

(b)

Canada
    Retainer

16

(4)

April
    2009 Events
.
17

(a)

GMCL
    Dealer Retainer and the Proviso

17

(b)

Pontiac
    Announcement and Revised GMCL Restructuring Plan
.
18

(c)

Dealers
    Get Organized
.
19

(5)

May
    2009 Events
.
20

(a)

May
    4 Memorandum
..
21

(b)

Cassels
    Dealer File
.
23

(c)

May
    7 Dealer Conference Call

24

(d)

Delivery
    of WDAs
.
25

(e)

Subsequent
    Events
.
28

(f)

GMCL
    Averts Bankruptcy
.
30

TRIAL DECISION
..
32

ISSUES
..
35

ANALYSIS
..
36

Issue 1: Did the Trial Judge Err in
    Finding an Operative Retainer Between Trillium and Cassels?
.
36

(1)

Introduction
.
36

(2)

Trial
    Judges Findings
.
37

(3)

Cassels
    Position
.
39

(4)

Discussion
.
40

(a)

Defining
    Scope of Dealer Retainer

40

(b)

Trial
    Judges Interpretation of May 4 Memorandum
..
43

(c)

Conclusion
    on Scope of Dealer Retainer

67

Issue 2: Did the Trial Judge Err in
    Finding that Cassels Breached its Obligations due to the Canada Conflict?
.
67

(1)

Introduction
.
67

(2)

Trial
    Judges Findings
.
68

(3)

Cassels
    Position
.
70

(4)

Discussion
.
72

(a)

Bright
    Line Conflict

72

(b)

Substantial
    Risk Conflict

80

(c)

Alleged
    Misapprehension of Adverse Interests
.
84

(d)

Expert
    Evidence Complaints
.
85

(e)

Causation
    Argument

88

(f)

Concluding
    Comments
.
88

Issue 3: Did the Trial Judge Err in
    his Treatment of the Saturn Dealers?
.
89

(1)

Trial
    Judges Findings
.
89

(2)

Cassels
    Position
.
89

(3)

Discussion
.
90

(a)

Nature
    and Scope of the Saturn Retainer

90

(b)

Standard
    of Care
.
93

Issue 4: Did the Trial Judge Err in
    his Causation and Loss of Chance Analyses?
.
97

(1)

Introduction
.
97

(2)

Trial
    Judges Findings
.
102

(3)

Cassels
    Position
.
103

(4)

Discussion
.
104

(a)

Threshold
    Issues
.
104

(b)

Standard
    of Care
.
113

(c)

Factual
    Findings and Inferences
.
118

(d)

Causation
    and the Saturn Dealers
.
134

(e)

Loss
    of chance analysis
.
137

Issue 5: Did the Trial Judge Err in
    his Assessment of Aggregate Damages?
.
139

(1)

Trial
    Judges Original Decision
.
139

(2)

Original
    Decision Revisited
.
141

(3)

Cassels
    Damages Appeal

143

(a)

Entitlement
    to Consider Aggregate Damages
.
143

(b)

Calculation
    Errors
.
146

(4)

Trilliums
    Cross-appeal

148

DISPOSITION
..
153

Cronk J.A.:

OVERVIEW

[1]

In May 2009, Canada, like the United States and many other countries,
    was in the grips of the biggest global financial crisis since the Great
    Depression.  Corporate Canada as well as countless individual Canadians were
    experiencing significant financial stress.

[2]

General Motors Corporation in the United States (GM) and its Canadian
    subsidiary, General Motors of Canada Limited (GMCL), were among those
    affected.  Both companies were on the brink of bankruptcy.  Their only hope was
    financial bailouts from the American and Canadian governments.  But the
    governments made the bailouts conditional on acceptable restructuring plans.
    In GMCLs case, this meant cutting ties with hundreds of its dealerships across
    Canada.  As matters evolved, GMCL had about two months to devise an acceptable
    restructuring plan and make the necessary cuts.

[3]

GMCL initially proposed to contract its national dealer network of 705
    dealers by about one-third (cutting 205 to 255 dealers) over five years,
    through attrition and consolidation of dealerships in the normal course.
    Later, it revised and accelerated its dealer reduction plan, calling for 280 to
    310 dealers to be cut by the end of 2010.  This was a dramatic proposal for a
    42 percent reduction within 20 months.

[4]

Not surprisingly, all sides sought the advice of legal counsel.  Three
    of the key players reached out to the same Toronto-based law firm, Cassels
    Brock & Blackwell LLP (Cassels).

[5]

First, in early March 2009, GMCLs 51 Saturn automobile dealers (the    Saturn Dealers) retained Cassels to represent them after they learned that GM
    would be discontinuing the Saturn brand.

[6]

Second, in late March 2009, Industry Canada (Canada) retained Cassels
    to represent it in respect of a potential commercial financing transaction to
    support GMCL and Chrysler Canada, which was also experiencing financial
    difficulties.

[7]

Third, by May 4, 2009, a group representing GMCL dealers across Canada
    had retained Cassels to represent the dealers in a potential GMCL restructuring
    or insolvency.  At the time, the dealers knew that many of them would be forced
    out of business even if GMCL managed to stay afloat.

[8]

Cassels heard the conflict alarm bells, and devised a solution: it
    decided that if Canadas interests and those of the dealers diverged, it would
    cease to act for the dealers.  Cassels disclosed the Saturn dealer retainer,
    and later the GMCL dealer retainer, to Canada, and assured it that the firm
    would drop the GMCL dealers mandate if a conflict arose.

[9]

However, Cassels did not disclose the Canada retainer to the Saturn or
    other GMCL dealers.  It did not tell them that if an adversity of interests
    arose between the dealers and Canada, the dealers would have to find new
    lawyers.  Cassels view was that any conflict was prospective, not active, and
    manageable, not intractable.

[10]

Events unspooled rapidly over a short period in May 2009.  On May 20,
    GMCL informed 240 dealers, including all 51 Saturn Dealers, that it would be
    terminating their franchises.  They were offered money in exchange for full and
    final releases of any legal claims against GMCL.  The dealers were given until
    May 26 to sign Wind-Down Agreements (WDAs), terminating their relationships
    and agreements with GMCL.  If GMCL could not get a critical mass of dealers to
    sign the agreements, it would have to file for bankruptcy protection under the
Companies
    Creditors Arrangement Act
, R.S.C. 1985, c. C-36 (the
CCAA
) on
    June 1.

[11]

In the end, 202 GMCL dealers, including 42 Saturn Dealers, signed the
    WDAs.  It was enough to satisfy the governments.  Having also secured
    agreements with the Canadian Auto Workers Union and a group of bondholders,
    GMCL was able to restructure successfully, without having to file under the
CCAA
.
    GM was not as fortunate.  It sought bankruptcy protection in the United States
    on June 1, 2009.

[12]

Some months later, Trillium Motor World Ltd. (Trillium), a GMCL dealer
    in Toronto, commenced class proceedings on behalf of all dealers who had signed
    the WDAs.  Trillium became the representative plaintiff.  The defendants were
    GMCL and Cassels.  After opt-outs from the class, 181 dealers became class
    members.  The class actions were certified and tried together over 41 days in
    2014.

[13]

Against GMCL, Trillium claimed that GMCL had breached both common law
    and statutory duties to class members in the manner in which it executed the
    WDAs.  GMCL counterclaimed, relying on the releases in the WDAs.

[14]

The trial judge dismissed both the claim and the counterclaim.
    Trilliums appeal and GMCLs cross-appeal are the subject of separate reasons
    by this court, released concurrently with this decision:
Trillium Motor
    World Ltd. v. General Motors of Canada Limited
, 2017 ONCA 545.

[15]

Against Cassels, Trillium claimed that the firm had breached its
    contractual and fiduciary duties to the dealers, including its duty of loyalty,
    by failing to disclose the existence of the Canada retainer, among other
    things.  Trillium asserted that the dealers interests were adverse to Canadas
    from the very start: the dealers wanted to get the most money possible from
    GMCL for their dealerships, and were willing to act as a spoiler in the run-up
    to a
CCAA
filing to get the best deal they could.  In contrast, as the
    bailout party, Canada wanted GMCL to avoid a
CCAA
filing and to pay as
    little as possible to the dealers under the WDAs.

[16]

Trillium claimed that, with proper legal representation and advice, the
    dealers would have negotiated successfully with GMCL, acting collectively, for
    more compensation for the loss of their dealerships.  However, Cassels
    breaches of its obligations deprived the dealers of their only chance to
    negotiate, as a group, for a better deal from GMCL.  Through Trillium, they sued
    Cassels for damages for this lost chance.

[17]

Cassels denied that it had an existing retainer with the GMCL dealers in
    the first place; it argued that it had a contingent retainer that would only
    crystallize in the event of a
CCAA
filing  an event that never occurred.
    It also maintained that there was no actual conflict between the dealers and
    Canada; the conflict was only a potential one that could be prudently managed
    if and when it materialized.

[18]

The trial judge allowed Trilliums claim.  In careful and comprehensive
    reasons, he found there was a retainer between Cassels and the dealers, the Canada
    retainer gave rise to a bright line conflict or a substantial risk of conflict with
    the dealers retainer and, at a minimum, Cassels had breached its duties to the
    dealers by failing to disclose the Canada retainer and its decision that it
    would not act for the dealers if their interests came into conflict with Canadas.
    The trial judge found that, had the dealers been properly represented and
    advised, they would have negotiated successfully with GMCL.  He assessed their
    damages at $45 million.  In a later supplementary ruling, he ordered that the
    process for calculating the damages awarded, and for identifying the number and
    identity of the dealers entitled to share in them, would be determined on
    further motion to the Superior Court, if necessary, following the final
    disposition of any appeal from the trial judgment.

[19]

On appeal to this court, Cassels launches a full-scale attack on most of
    the trial judges key findings of fact.  It also raises legal issues relating
    to liability, the availability of an aggregate damages award, and the trial
    judges damages assessment. For its part, Trillium cross-appeals the quantum of
    damages awarded in favour of the class at trial, arguing it should have
    received more and that the trial judges supplementary ruling on damages should
    not be considered.

STANDARD OF
    REVIEW

[20]

Trilliums solicitors negligence claim against Cassels is grounded in
    contract and tort.  As I will elaborate, the trial judge concluded that Cassels
    was retained by the GMCL dealers, that it breached its fiduciary and
    contractual duties to the dealers and that, as a result, it is liable to them
    for damages.  On this appeal, Cassels argues that the trial judge erred, in
    fact and in law, in both his liability and damages holdings.

[21]

Cassels primarily attacks many of the trial judges factual findings and
    findings of mixed fact and law.  In many instances, its argument is based on
    alleged errors in the trial judges processing of the evidence.  For example,
    Cassels argues that the trial judge failed to consider relevant evidence,
    reached factual conclusions in the absence of supporting evidence, or
    misapprehended the evidence.  In some instances, Cassels alleges legal errors
    that it characterizes as extricable errors of law, which actually concern
    findings that are factual in nature.

[22]

The Supreme Court has repeatedly emphasized that there is one, and only
    one, standard of review applicable to factual conclusions made by a trial judge
     that of palpable and overriding error:
Housen v. Nikolaisen
, 2002
    SCC 33, [2002] 2 S.C.R. 235, at para. 25.  This standard demands strong
    appellate deference to a trial judges findings of fact: see
Waxman v.
    Waxman
(2004), 186 O.A.C. 201 (C.A.), at para. 291, leave to appeal
    refused, [2004] S.C.C.A. No. 291;
IFP Technologies (Canada) Inc. v. EnCana
    Midstream and Marketing
, 2017 ABCA 157, at paras. 71-72. It applies, as
    the
Waxman
court noted, at para. 300, to all factual findings whether
    based on credibility assessments, the weighing of competing evidence, expert
    evidence, or the drawing of inference from primary facts.  An appellate court
    is not permitted to retry any aspect of a case.

[23]

The decision of the Supreme Court of Canada in
Sattva Capital Corp.
    v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633 governs the
    approach to review of the trial judges interpretation of the retainer contract
    between the parties.
Sattva
concerns the standard of review for
    questions of contractual interpretation.  It holds, at para. 50, that
    [c]ontractual interpretation involves issues of mixed fact and law as it is an
    exercise in which the principles of contractual interpretation are applied to
    the words of the written contract, considered in light of the factual matrix.
    Accordingly, questions of contractual interpretation are generally reviewable
    on the deferential standard of palpable and overriding error:
Sattva
,
    at paras. 50-52.  See also,
Ledcor Construction Ltd. v. Northbridge
    Indemnity Insurance Co.
, 2016 SCC 37, [2016] 2 S.C.R. 23;
Deslaurier
    Custom Cabinets Inc. v. 1728106 Ontario Inc.
, 2017 ONCA 293; and
MacDonald
    v. Chicago Title Insurance Company of Canada
, 2015 ONCA 842, 127 O.R. (3d)
    663, leave to appeal refused, [2016] S.C.C.A. No. 39.

[24]

Sattva
also holds that, rarely, it may be possible to identify
    an extricable question of law from within what is initially characterized as a
    question of mixed fact and law.  In those exceptional cases, the interpretation
    of a disputed contract will be reviewable on the correctness standard:
Sattva
,
    at paras. 53-55.

[25]

However,
Sattva
warns that reviewing courts should be slow to
    identify extricable questions of law in contractual interpretation disputes,
    given that the goal of contractual interpretation, to ascertain the objective
    intentions of the parties, is inherently fact specific:
Sattva
, at
    paras. 54-55.

[26]

My analysis of the issues on appeal proceeds with these settled standard
    of review principles squarely at the forefront.

FACTS

[27]

The parties, for differing purposes, place particular emphasis on the
    factual background to the matters at issue.  And, as I have said, many of Cassels
    grounds of appeal challenge findings of fact or mixed fact and law.  It is
    therefore necessary to review the pertinent background facts in some detail.
    Where other facts are relevant, they will be addressed in the context of the
    issues to which they relate.

[28]

As the following summary illustrates, this litigation arose out of
    fast-moving and rapidly-deteriorating conditions affecting GMCL and its dealer
    network in the spring of 2009.  The role that Cassels played  or did not play
     as the crisis unfolded was central to Trilliums claims at trial.

(1)

GMCL Dealer Network

[29]

In late 2008, GMCL had an extensive national dealer network in Canada consisting
    of 705 franchised dealers, including 51 Saturn Dealers.

[30]

GMCL communicated with its dealers in various ways, including through: i)
    the GMCL Dealer Communications Team, a consultative board comprised of GMCL
    representatives and dealers from across Canada; ii) the General Motors Dealers
    Association, which provided a voice for GMCL dealers; iii) the Canadian
    Automobile Dealers Association (CADA), a not-for-profit organization
    representing more than 3,000 dealers from various automobile manufacturers in
    Canada; and iv) video-linked, televised broadcasts known as Highly Interactive
    Distance Learning Broadcasts (HIDLs).

[31]

CADA was a long-time Cassels client.  Its Director of Industry
    Relations and General Counsel, Tim Ryan, and Cassels partner Peter Harris had
    a lengthy professional relationship.

(2)

Looming Threat of Bankruptcy

[32]

By the close of 2008, both GM and GMCL were insolvent or on the eve of
    insolvency.  GMCL took a number of steps to deal with this potential calamity.

[33]

First, and critically, it proposed the reduction of its dealer network,
    described above, in a revised bailout proposal submitted to the Ontario and
    federal governments (the Canadian Governments) on February 20, 2009.  This
    plan contemplated a reduction of about one-third of GMCLs dealers, by 2014.

[34]

Second, it informed the Saturn Dealers that it would discontinue the
    Saturn brand at the end of the 2011 model year, but it was hopeful that the
    brand could be sold to a third party.  Faced with this adverse news, the Saturn
    Dealers formed an action group.

[35]

Third, GMCL hired Ernst & Young Inc., as financial advisors, to
    begin preparations for a filing under the
CCAA.
It is undisputed that
    a
CCAA
filing would have had serious financial consequences not only
    for GMCL but, also, for many others associated with or dependent on it.  The
    dealers position was particularly vulnerable.  On a
CCAA
filing, they
    would rank as unsecured creditors with little, if any, prospect for recovery in
    the bankruptcy or restructuring.  All of GM, GMCL and the involved governments
    wished to avoid a GMCL
CCAA
filing.

(3)

March 2009 Events  Cassels Enters the Picture

[36]

By March 2009, GMCL faced a tsunami of problems.  In addition to the
    difficulties posed by an overextended dealer network, it needed to address
    claims by the Canadian Auto Workers (the CAW), various bondholders, and its
    own retirees, if it was to avoid bankruptcy.  GMCL therefore embarked on negotiations
    with the CAW in an effort to obtain concessions from the union.  It also
    attempted to restructure legacy costs with its retirees and to resolve issues
    with its suppliers, who faced liquidity problems of their own.  While these
    efforts were ongoing, a group of hedge funds in the United States (the
    Bondholders) sued GM, GMCL and some of their executives in Nova Scotia,
    alleging a series of wrongful inter-corporate transfers said to be valued at
    more than $570 million.

[37]

These stakeholders  the CAW, the Bondholders and the dealers  were the
    three-legged stool GMCL had to deal with to avoid a
CCAA
filing.

[38]

GMCLs outlook continued to go from bad to worse when, at the end of
    March 2009, the United States and Canadian Governments rejected GMs and GMCLs
    restructuring plans and called for tougher measures (United States
    government) and further fundamental changes (Canadian Governments) in order
    to secure bailout funds.  They granted the beleaguered companies a 60-day
    extension, until June 1, 2009, to submit revised restructuring plans that met
    these goals.  If this extended deadline was missed, or if unsatisfactory
    revised plans were delivered, bailout funds would not be forthcoming and GM and
    GMCL could be liquidated.

[39]

By this time, it was clear that neither GM nor GMCL would survive
    without government financial assistance.  In a March 30 HIDL, Marc Comeau,
    GMCLs Vice-President of Sales, Service and Marketing, informed dealers that the
    governments had rejected GMs and GMCLs restructuring plans and suggested, in
    what the trial judge found soon became GMCLs mantra, that deeper and faster changes
    were required.

(a)

Saturn Retainer

[40]

In March 2009, Ryan of CADA assisted the Saturn Dealers in retaining
    Cassels to provide legal advice about GMCLs potential termination of their dealerships
    (the Saturn Retainer) and a steering committee of Saturn Dealers was
    established to provide instructions to counsel.  Each Saturn dealer who wished
    to engage counsel signed a separate retainer agreement with Cassels.

[41]

The Saturn Retainer was Cassels first specific client engagement in
    matters related to GMCLs and GMs financial difficulties.  In April, a new
    CADA subfile was opened at the firm, concerning advice to be provided to CADA
    about GMCLs and Chrysler Canadas financial difficulties.

(b)

Canada Retainer

[42]

At the end of March 2009, Cassels accepted a second key retainer.  It agreed
    to represent Canada concerning a potential commercial financing transaction to
    support GMCL and Chrysler Canada (the Canada Retainer), effective March 30,
    2009.

(4)

April 2009 Events

[43]

In early April 2009, the Canadian Governments cast GMCL a short lifeline,
    providing it with bridge financing to allow it to remain in business while
    working on a new restructuring proposal.  By mid-April, Comeau had informed the
    dealers of the acceleration of GMCLs dealer network restructuring and the June
    1 deadline imposed by the governments for the submission of revised restructuring
    plans by GM and GMCL.

(a)

GMCL Dealer Retainer and the Proviso

[44]

On or about April 15, 2009, Ryan contacted Cassels again  this time
    about representation by Cassels of the GMCL dealers in respect of a potential
CCAA
filing by GMCL.  Independent of Ryans call, a group of dealers formed a dealer
    steering committee (the DSC), to represent all GMCL dealers in Canada should
    GM file for bankruptcy protection.

[45]

These developments prompted an important internal meeting at Cassels.
    On April 21, 2009, several Cassels lawyers, including Harris and two of the
    lawyers involved with the Canada Retainer, met with the firms managing partner,
    Mark Young, to discuss whether the firm could accept the retainer for GMCL dealers
    proposed by Ryan.  The group concluded that accepting the proposed dealer engagement
    would not create a conflict with the firms existing Canada Retainer.
    Nonetheless, they decided that a precautionary ethical wall should be erected
    within the firm and that each client should be informed about the firms
    retainer by the other.

[46]

Later the same day, Harris emailed and spoke with Ryan.  What Harris told
    Ryan is significant.  The trial judge found, at para. 390, that Harris disclosed
    the Canada Retainer to Ryan and also informed him that Cassels could not take
    on the government, if such a circumstance arose, in any
CCAA
proceeding.

[47]

At trial, Harris and Ryan both testified that this proviso on Cassels
    ability to act for the dealers was acceptable to Ryan and CADA.  However, at no
    point did Harris or anyone else at Cassels disclose the Canada Retainer or this
    proviso to the GMCL dealers, whether through the DSC or otherwise.  Neither did
    Ryan.

(b)

Pontiac Announcement and Revised GMCL Restructuring Plan

[48]

Six days later, on April 27, 2009, GM officially announced an
    anticipated, additional piece of bad news: it would be discontinuing its
    Pontiac brand of cars.  This was a seismic development: Pontiac sales
    represented approximately 26 percent of GMCLs sales in Canada.

[49]

On the same day, GMCL announced its own revised restructuring plan.  In
    its press release regarding the revised plan, GMCL revealed that it intended to
    expedite cuts to its dealer network.  It was now proposing to reduce the number
    of dealers from 705 to between 395 to 425 dealers by the end of 2010  a
    reduction of approximately 42 percent within 20 months.

[50]

The trial judge found that, following this announcement, it would have
    been obvious to all involved that a large percentage of the dealers would find
    themselves on the chopping block in the near future (at para. 65).

(c)

Dealers Get Organized

[51]

Events continued to unfold rapidly.  On April 28, CADA sent an email to
    GMCL dealers confirming that it was busy putting in place a contingency plan
    in order to assist its [GM] dealer members in the event that [GMCL] seek[s]
    creditor protection under Canadas [
CCAA
].

[52]

The next day, at Ryans request, Harris provided CADA with a memorandum
    entitled Provision of Legal Services to the GM Dealers Group (the Legal
    Services Memorandum), in which he described Cassels history, service
    guarantee, automotive clients, and relevant expertise and practice experience.
    The Legal Services Memorandum identified the Cassels lawyers proposed for
    involvement with the dealers and disclosed both Cassels 30-year relationship
    with CADA and the existing Saturn Retainer.

[53]

On April 30, the first conference call among CADA, the DSC, and others
    took place.  Harris and David Ward of Cassels were on the call.  The participants
    discussed, among other things, the mandate of the DSC and the creation of a
    trust fund to be set up by CADA (described below).  The minutes of the April 30
    call describe a scheduled May 7, 2009 national GMCL dealer conference call, in
    these terms:

[I]t would be a listen only call for participants  to inform
    [GMCL] dealers about the formation of a national General Motors dealer group to
    ensure that [GMCL] dealer interests are represented should [GMCL] file for
    bankruptcy protection in Canada in the near future.

[54]

Thus, by the end of April, Cassels had three existing retainers
    regarding GMCL and GM matters  its continuing CADA retainer, the Saturn
    Retainer, and the Canada Retainer  and one proposed retainer by the GMCL
    dealers.  The scope of the latter is a central issue on this appeal.

(5)

May 2009 Events

[55]

By early May 2009, GMCL was preparing a plan for the formal wind-down of
    some of its dealerships, including a process for identifying target dealers who
    would receive WDAs.  The trial judge found that the WDA proposal was intended
    to terminate the dealers business relationships and agreements with GMCL and
    eliminate GMCLs estimated exposure to dealer claims resulting from the
    restructuring, valued by GMCL at between $300 - $500 million, while providing the
    dealers with what GMCL considered to be fair treatment in the circumstances.

[56]

Of the many events that transpired in May, the following are especially relevant
    to the issues before this court.

(a)

May 4 Memorandum

[57]

On May 4, 2009, the DSC sent a memorandum, on CADA letterhead, to all
    GMCL dealers announcing the formation of the DSC and describing its purpose (the
    May 4 Memorandum).  The parties interpret the May 4 Memorandum differently
    and each relies on it, together with other evidence, to support its characterization
    of the formation and scope of Cassels retainer by the dealers.

[58]

The May 4 Memorandum indicates that the DSC was created to work with
    CADA for the purpose of organiz[ing] [GMCL] dealers into a national [GM]
    dealer group to ensure that [GMCL] dealer interests are represented should
    [GMCL] file for bankruptcy protection in Canada in the near future.  A
    covering email from Ryan to all GMCL dealers that accompanied the May 4
    Memorandum contains virtually identical language.  Importantly, the May 4
    Memorandum also states:

The role of the [DSC]  is to provide policy direction and
    instructions to legal counsel
who will represent the
    [GMCL] dealers in any bankruptcy filing.  We have retained the Toronto law firm
    of Cassels Brock and Blackwell to handle our interests
.  [Emphasis
    added.]

[59]

In the May 4 Memorandum, the DSC sought to have each dealer sign a
    participation form and make a contribution to a trust fund on behalf of the
    GMCL dealer group, to be held by CADA, to pay for professional services associated
    in representing you.  The memorandum confirms CADA had already contributed
    $150,000 to provide administrative and logistical support and to assist with
    the initial legal and other professional services that may be necessary in
    preparation for a bankruptcy filing by [GMCL].

[60]

The May 4 Memorandum also outlines various reasons why dealers should participate
    in the proposed national dealer group, including the following:

2.
Reasons to Participate:

·

General Motors Dealers Have Many Issues in Common
:
    All [GMCL] dealers share many of the same concerns that will arise out of a
    [GMCL] restructuring.
These include issues such as
    potential termination of the existing dealership agreements, changes to your
    relationship with [GMCL], responsibility for and payment of warranty claims,
    holdbacks and incentive payments, and floor plan financing
.  It is more
    effective and efficient to have these common issues addressed by one counsel
    representing the voice of all [GMCL] dealers.

·

Economies of Scale:

Legal
    representation in a complex restructuring or insolvency proceeding is expensive
.
    The costs of retaining qualified counsel are considerably lower when you share
    a single, unified retainer rather than retaining counsel on your own or in a
    small, regional group.

·

Power in Numbers:
By joining together as one
    large group,
you show [GMCL] and other stakeholders that
    the [GMCL] dealers are united in their position, which forces those other
    parties to involve your counsel at the bargaining table and respect your
    interests
.

·

Avoid Getting Left Out:
Cassels Brock and
    Blackwell can only represent the interests of the [GMCL] dealers who retain
    them.  If you are not a part of the client group, they do not represent you and
    you will not have a voice. [Bold in original; underlining added.]

[61]

Eventually, by May 20, approximately 400 GMCL dealers would return participation
    forms and trust funds of approximately $1 million would be raised in response
    to the May 4 Memorandum.   The trial judge held that Cassels was liable to
    those dealers who returned a participation form and/or sent funds to CADA in
    response to the DSC request (the Participation Form Dealers) and,
    additionally, the Saturn Dealers.

(b)

Cassels Dealer File

[62]

On May 4, 2009, Cassels opened a new file regarding the firms
    engagement by the dealers.  This precipitated two significant events.  First, after
    learning of the file opening, Bruce Leonard, a Cassels partner involved with
    the Canada Retainer, emailed two of his colleagues on the Canada Retainer team,
    sounding an alert about potential conflicts between the Canada Retainer and the
    new mandate from the GMCL dealers.  I will return to the subject matter of
    these important emails later in these reasons.

[63]

The second significant event involved Cassels circulation throughout
    the firm, on May 7, of an ethical wall memorandum regarding the GMCL dealer
    file (the Ethical Wall Memorandum).  It states in part that the firm had
    accepted a retainer from the GM Dealers Action Groupthrough [CADA] regarding
    potential claims against [GMCL] with respect to the potential bankruptcy of GM
    and the potential restructuring of the GM dealer network.  I will have more to
    say later about the significance of this memorandum.

(c)

May 7 Dealer Conference Call

[64]

The national GMCL dealer conference call announced in the May 4
    Memorandum was held on May 7.  Harris and David Ward of Cassels participated in
    the call.  During the call, the Cassels lawyers discussed, among other things:
    i) whether GM could unilaterally cancel contracts under the
CCAA
; ii)
    whether and how GM could sell off assets; and iii) the likelihood of a GM
    protective bankruptcy filing in the United States and a
CCAA
filing by
    GMCL.  They also urged the dealers on the call to organize themselves for the
    latter potential development.

[65]

At trial, Cassels argued the comments by the Cassels lawyers on the call
    were simply informational, that is, the Cassels lawyers provided general
    bankruptcy and insolvency-related information only, and did not furnish legal
    advice to the dealers.  The trial judge disagreed.  He found that legal advice
    was provided on the call for the benefit of the dealers.    However, and in any
    event, he also found that it was unnecessary to parse the distinction between
    legal advice and legal information.  The important point was that the May 7
    call was an indicium of a solicitor-client relationship between Cassels and the
    dealers.

(d)

Delivery of WDAs

[66]

On May 14, an important meeting with representatives of the American and
    Canadian Governments took place in Washington, D.C., as a result of which it
    became clear that bailout funds for GMCL from the Canadian Governments would be
    forthcoming only if it effectively addressed its three-legged stool, that is,
    if it successfully resolved the claims of its dealers, the Bondholders and the
    CAW.  Further, while all governments wished to avoid a GMCL
CCAA
filing, this, in their view, had to be accomplished at a reasonable cost.

[67]

Also on May 14, GM informed approximately 1,100 of its own dealers in
    the United States that their agreements with GM would not be renewed.

[68]

The next day, GM approved GMCLs proposal to deliver WDAs to 290 GMCL
    dealers.  It also approved a $218 million budget requested by GMCL for this
    purpose.

[69]

Comeau conducted another HIDL on May 15.  During the broadcast, he told
    the dealers about the possibility of a court-supervised
CCAA
restructuring of GMCL if the company could not reach agreements with all its
    key stakeholders, or if the Canadian Governments did not approve its revised
    restructuring plan.  He also said that GMCL would be identifying dealers with whom
    its relationship would end and that it hoped to roll out its restructuring plan
    by the end of May or the beginning of June.

[70]

The trial judge found, at para. 84, that the dealers listening to this
    broadcast should and likely did understand that a 42 percent reduction [in
    GMCLs dealer network] could not be achieved through normal attrition and
    consolidation.  In other words, while the dealers were not aware that WDAs
    specifically were on the horizon, they knew that they were in an intensely
    precarious, and rapidly changing, position.

[71]

Comeau also called Richard Gauthier, the President of CADA, informing him
    that WDAs would be offered to a group of dealers, and requesting that the DSC
    play a role with respect to the intended offers.  After speaking with the DSC,
    CADA informed Comeau that neither it nor the DSC would become involved with the
    WDAs.  The trial judge accepted, at para. 85, that the DSC viewed the WDAs as
    falling outside its mandate to address issues flowing from a possible GM
    bankruptcy or GMCL
CCAA
filing and that it took the position it had
    no role to play with respect to any proposal being developed for the dealers
    whose dealerships would be discontinued.

[72]

Cassels places considerable reliance on the DSCs decision to not become
    involved with the WDAs and on its corresponding instructions to Cassels to the
    same effect.  Notably, Cassels lawyer Glenn Zakaib was on the CADA call with
    the DSC.  In a subsequent email forwarded to Zakaib, Ryan explained that the
    DSC advised GMCL that the DSC had no role to play in GMCLs proposed offers to
    dealers outside a
CCAA
filing.  In a responding email, Zakaib said he
    agreed with this decision and that dealings with terminated dealers will
    require a new retainer and a new committee.

[73]

On May 19, GMCL completed preparation of the WDAs and Comeau informed the
    dealers in an HIDL that some of them would receive WDAs on the following day.
    On May 20, representatives of CADA, Cassels and the DSC met.  The DSC
    confirmed, again, that it would not play a role regarding the WDAs.

[74]

GMCL delivered WDAs and Notices of Non-Renewal to 240 dealers, including
    the Saturn Dealers, on May 20, 2009.  The Notices indicated that GMCL would not
    renew the dealers respective agreements with GMCL when they expired on October
    30, 2010.

[75]

The terms of the WDAs were not uniform.  The Saturn Dealers, for
    example, received WDAs providing them with the option of either accepting the payment
    offered in the applicable WDA and terminating their relationship with GMCL, or
    electing to defer receipt of the payment in the hope that the Saturn brand
    would be purchased by a third party and continue to operate.  In addition,
    different forms of WDAs were prepared for single and dual operators of GMCL
    dealerships and for Saab/Saturn automobile dealers.

[76]

The offers in the WDAs were conditional on the acceptance by all 240 dealers
    (the Acceptance Threshold Condition).  GMCL, however, reserved its right to
    waive this condition.  The dealers were given six days, until May 26, within
    which to decide whether to accept the offers and sign the WDAs.

(e)

Subsequent Events

[77]

Three important events occurred after delivery of the WDAs.  First, on
    May 22, 2009, CADA sent a memorandum to the GMCL dealers, stating:

Given the very short time lines that Dealers have to
    consider this important agreement it is critical that you review these
    documents with your legal and business advisors immediately and ensure that you
    respond before the deadline of May 26, 2009, should you determine to sign the
    [WDA].
[Bold in original.]

[78]

Second, GMCL delivered the WDAs on a take it or leave it basis.  On
    May 22, it told the dealers that the WDAs were non-negotiable.

[79]

Third, CADA held another call-in dealer conference call on May 24, 2009.
    Gauthier and Ryan of CADA were both on the call, as were Harris and Zakaib of
    Cassels.  The day before the conference call, Zakaib had also participated in a
    call with CADA representatives to prepare for the May 24 conference call.

[80]

The full details of what was said by the Cassels lawyers on the May 24 conference
    call are disputed.  However, the following appears to be uncontested: i) GMCLs
    offers and the WDAs were discussed on the call; ii) Gauthier reiterated that
    the trust funds then held by CADA could be used only for the purpose of
    representing the dealers in court in a
CCAA
proceeding; iii) the
    dealers were told that the WDAs were a take it or leave it proposition; iv)
    they were also told that the Cassels lawyers would not make any recommendations
    regarding the offers and the WDAs; and v) the dealers were again urged, as they
    had been in CADAs May 22 memorandum, to obtain independent legal advice.

[81]

The record does not establish the number of dealers from across the
    country who called in for the May 24 conference call (the Call Dealers).  However,
    based on the trial judges reasons, it appears that, at trial, the parties
    thought approximately 110 dealers were involved.  It is unclear how many of the
    Call Dealers are also Participation Form Dealers.  This distinction is
    important because, ultimately, the trial judge held Cassels had only been
    retained by  and, thus, only owed duties to  the Participation Form Dealers.

[82]

On May 28, 2009, after the WDA sign-back deadline, CADA announced its
    proposal, should GMCL proceed with a
CCAA
filing, that Cassels would act
    for the non-continuing dealers (i.e. those who had received WDAs), while a
    different law firm would act for the continuing dealers.

[83]

By May 29, 2009, almost 85 percent of the dealers (202 of 240) who had
    received WDAs had accepted GMCLs offers and signed the WDAs, thereby releasing
    GMCL from all claims.  On May 30, GMCL waived the Acceptance Threshold
    Condition.  In the end, GMCL paid $126 million to the 202 dealers who accepted
    its offers and the WDAs.

[84]

Cassels did not undertake any negotiations regarding the WDAs, or
    alternatives to them, with GMCL on behalf of the dealers.  Further, with the
    exception of the Saturn Dealers (as I next explain), Cassels did not engage in
    any discussions with GMCL or, indeed, with any dealers, about the possibility
    of attempting to negotiate improved offers from GMCL under the WDAs or
    otherwise, or the possibility of seeking an extension of time for the dealers consideration
    of the WDAs.

[85]

In contrast, Cassels lawyers participated on May 22 in a conference call
    with the Saturn Dealers to discuss their WDAs and options.  Subsequently, CADA approached
    GMCL to seek changes to the options outlined in the Saturn WDAs, described
    above.  This effort failed when GMCL refused to vary the terms of the Saturn
    WDAs.  Eventually, all 51 Saturn Dealers elected to terminate their
    relationships with GMCL and 42 Saturn Dealers chose to participate in the class
    proceeding.

(f)

GMCL Averts Bankruptcy

[86]

Concurrent with these events, GMCL reached and subsequently ratified
    settlements with its retirees and the CAW.  Further, on June 1, after what can
    only be described as around-the-clock, intense negotiations and with a GMCL
CCAA
filing prepared and ready to be delivered, GMCL also concluded a settlement
    with its Bondholders, obtained the Canadian Governments approval to the
    settlement, and narrowly avoided a bankruptcy filing.  GM was not as
    successful.  On June 1, it was forced to file for bankruptcy protection under
    Chapter 11 of the
United States Bankruptcy Code
.

[87]

By the end of June 2009, GMCL had confirmed that it would not be filing
    for bankruptcy and CADA had refunded the monies it held in trust to the
    contributing GMCL dealers.  For its part, Trillium had sold its inventory and
    ceased operating as a GMCL dealer.  Its sales and service agreement with GMCL
    was terminated effective July 2, 2009.

[88]

GMCL made all required payments under the WDAs by December 2009.  Two
    months later, in mid-February 2010, Trillium commenced class proceedings
    against GM and Cassels on behalf of all dealers who had signed WDAs.

[89]

In March 2011, Strathy J. of the Superior Court of Justice (as he then
    was), certified Trilliums action under the
Class Proceedings Act, 1992
,
    S.O. 1992, c. 6 (the
CPA
):
Trillium Motor World Ltd. v. General
    Motors of Canada Ltd.
, 2011 ONSC 1300, 7 C.P.C. (7th) 388 (the
    Certification Decision).  The class is defined under the Certification
    Decision as all corporations in Canada that signed a [WDA] with the defendant
    [GMCL] in or after May 2009 (the Class).  After opt-outs, 181 dealers became
    class members.  Of these, 42 class members are Saturn Dealers.

[90]

The Certification Decision certifies four issues concerning Cassels
    (lettered to reflect that they followed the common issues certified with
    respect to GMCL):

(j)    Did [Cassels]
    owe contractual duties to some or all of the Class Members and, if so, did
    Cassels breach those duties?

(k)   Did
    Cassels owe fiduciary duties as lawyers to some or all of the Class Members
    and, if so, did Cassels breach those duties?

(l)    Did
    Cassels owe duties of care to some or all of the Class Members and, if so, did
    Cassels breach those duties?

(m)     What
    is the amount of pre-judgment and post-judgment interest applicable to any
    damages awarded?

[91]

On March 26, 2012, the Divisional Court dismissed Cassels appeal from
    the Certification Decision:
Trillium Motor World Ltd. v. General Motors of
    Canada Ltd.
, 2012 ONSC 1443, 37 C.P.C. (7th) 30, leave to appeal to OCA refused,
    (M41228, August 24, 2012).

TRIAL DECISION

[92]

The common issues trial was lengthy and intensely fought.    The parties
    called 25 witnesses, including eight experts.  Hundreds of documents were
    admitted into evidence and the parties filed approximately 1,500 pages of
    written closing submissions.

[93]

The trial judges reasons are also lengthy, and comprehensive (143
    single-spaced pages, plus appendices).  After a detailed review of the
    evidentiary record, the trial judge made the following key findings regarding Trilliums
    liability claims against Cassels:

·

By May 4, 2009, the dealers, including the class members, had
    retained Cassels to protect their interests in any complex restructuring of
    the dealer network and to represent them in any GMCL
CCAA
proceedings
    (the Dealer Retainer) (para. 6);

·

The scope of the Dealer Retainer was not confined to
    representation in a GMCL
CCAA
proceeding, as Cassels maintained.
    Rather, it extended to pre-filing advice on issues relating to the
    restructuring of the dealer network, including advice about the WDAs (para. 480);

·

Cassels breached its contractual and fiduciary duties to the class
    members by accepting the Dealer Retainer in the face of a known conflict
    arising from its existing Canada Retainer and by continuing to act on both
    retainers notwithstanding this conflict (para. 6); and

·

Cassels was negligent and breached its contractual duties to the
    class members by:

i)

agreeing
    to act for the GMCL dealers notwithstanding its pre-existing Canada Retainer;

ii)

failing
    to advise the DSC that, after the WDAs were delivered, it was in a position of
    conflict by acting for two groups of dealers who it knew or ought to have known
    had divergent and adverse interests, that is, the dealers who had received and
    accepted the WDAs and those who had not; and

iii)

maintaining a wait and see approach long past its appropriateness,
    instead of preparing for a
CCAA
filing or restructuring (paras. 7 and
    533).

[94]

With respect to damages, the trial judge held:

·

As a result of the breaches described above, the class members
    lost the chance to negotiate with GMCL for wind-down payments in excess of the
    compensation offered to them under the WDAs, the latter of which represented a
    fraction of the value of their dealerships (para. 8);

·

There was a 55 percent chance that, if negotiations had taken
    place, GMCL would have paid $218 million to the dealers instead of the $126
    million it actually paid (para. 610); and

·

Applying this lost chance (55 percent) to the $92 million
    difference between the amount of post-negotiation compensation that the trial
    judge found would have been paid by GMCL and the compensation it actually paid
    ($218 million - $126 million), the class members suffered damages for lost
    opportunity in the amount of $50 million.  After accounting for those dealers
    who opted out of the Class, these damages should be reduced to the sum of $45
    million (para. 611).

[95]

In January 2016, after the release of the trial decision, the parties
    attended before the trial judge to settle the terms of the judgment.  At that
    attendance, it emerged that the trial judge may have misunderstood the
    composition of the Class.  He had assumed that all 181 class members were also
    Participation Form Dealers, and thus Cassels clients; in fact, some of the
    class members may have been Call Dealers who listened in on the May 24
    conference call but did not sign a participation form or send in money to the DSC.

[96]

In the result, by supplementary reasons dated March 22, 2016, the trial
    judge directed that the formal judgment provide that the damages awarded ($45
    million) may be reduced on further motion to the Superior Court, if necessary,
    following the final disposition of any appeal from the trial judgment, to
    settle the process for determining the number and identity of the dealers
    entitled to share in that award and the calculation of those damages.

ISSUES

[97]

Cassels challenges virtually every substantive aspect of the trial
    judges liability and damages holdings.  Because of the number of issues raised
    and, in some cases, the overlap between issues, these reasons are lengthy and
    sometimes repetitive.  In general terms, Cassels submits that the trial judge
    erred:

(1)

in
    his findings concerning the scope of the Dealer Retainer;

(2)

by
    finding that Cassels breached its duties to the class members;

(3)

in
    his treatment of the Saturn Dealers claims;

(4)

by
    inferring causation;

(5)

by
    awarding aggregate damages; and

(6)

in
    his quantification of damages.

[98]

As I will explain, Cassels primary focus is on challenging the trial
    judges findings about the scope of the Dealer Retainer.  It submits that if
    the trial judge erred in finding that the Dealer Retainer was active throughout
    May 2009  and not contingent on a prospective
CCAA
filing, as Cassels
    maintains  this error is dispositive of the entire appeal.

[99]

Trillium cross-appeals from the quantum of the trial judges damages
    award.  It contends that, properly quantified, the value of the dealers lost
    chance is $77.3 million, rather than $45 million as found by the trial judge.

ANALYSIS

Issue 1: Did the Trial Judge Err in Finding an
    Operative Retainer Between Trillium and Cassels?

(1)

Introduction

[100]

Cassels factum
    puts both the fact and scope of the Dealer Retainer in issue.  However, at the
    appeal hearing, Cassels narrowed its position, acknowledging that, by May 4,
    2009, a retainer did exist between Cassels and the GMCL dealers.  But, Cassels maintains
    that the scope of the retainer was confined to representing the dealers in a
CCAA
filing that never materialized and did not extend to representation and advice
    on pre-
CCAA
filing matters, including the WDAs.  Cassels says there
    was no operative retainer, no possible breach, and no liability to any of the
    dealers.  This, it says, is sufficient to allow the appeal in its favour.

[101]

Cassels
    acceptance on appeal of the existence of the Dealer Retainer was prudent.  As
    the trial judge indicated, at paras. 411 and 416, the determination whether a
    solicitor-client relationship exists is a question of fact and requires a
    fact-driven and multifaceted inquiry.  The trial judge found that the
    documentary record and the conference calls held in late April and May 2009,
    which I recounted above, established several traditional indicia of a
    solicitor-client relationship between Cassels and the GMCL dealers.  As Cassels
    effectively concedes, there is no basis on which to conclude that this
    threshold finding is tainted by palpable and overriding error.

[102]

Accordingly, the
    critical question is whether the trial judge erred in his interpretation of the
    scope of the Dealer Retainer.  For the reasons that follow, I conclude that he
    did not.

(2)

Trial Judges Findings

[103]

The trial judge
    made the following specific findings regarding the scope of the Dealer Retainer:

·

The scope of the retainer was ambiguous.  Cassels had failed to
    discharge its obligation to clearly delineate the scope of the retainer and to
    document its terms of engagement by the dealers (para. 472);

·

In accordance with the governing legal principles, the ambiguity
    in the retainer must be resolved against Cassels (para. 473);

·

The DSCs view of its mandate, and its associated instructions to
    Cassels to not get involved with the WDAs, was only one of many factors to be
    considered in determining the scope of the Dealer Retainer.

By May
    15, 2009, the DSC was in a position of conflict  it was speaking for two
    dealer groups with divergent interests (those who had received WDAs and those
    who had not).  Consequently,

the
DSCs
instructions to Cassels were not
    dispositive of the scope of the Dealer Retainer (paras. 473-74);

·

Even with the ambiguity in the Dealer Retainer, the documentary
    evidence, in particular: i) the Legal Services Memorandum; ii) the Ethical Wall
    Memorandum, and iii) especially, the May 4 Memorandum, as well as Harris and
    Zakaibs testimony, all supported Trilliums claim that the Dealer Retainer was
    not limited to steps in commenced
CCAA
proceedings (para. 475);

·

Only an unreasonable micro-dissection of the language of the May
    4 [Memorandum] could support Cassels contention that the Dealer Retainer
    extended only to representation in commenced
CCAA
proceedings (para.
    475); and

·

Contrary to Cassels submission, the evidence of GMCL dealers
    Hurdman and Turpin, while not always consistent and worthy of only limited
    weight, did not support Cassels narrow interpretation of the Dealer Retainer
    (paras. 476-79).

[104]

The trial judge
    summarized his conclusions about the scope of the Dealer Retainer, at paras.
    471 and 480 of his reasons, in this fashion:

I find that the scope of the retainer was not strictly limited
    to representation in a possible
CCAA
proceeding.  The retainer
    included pre-filing advice on issues relating to the restructuring of the
    dealer network.  Of course, Cassels was not obligated to provide advice on
    every aspect of the GMCL dealers affairs.  However, the most important matter in
    question  namely, the WDAs  ultimately fell squarely within the purview of
    complex restructuring of the GMCL dealer network.  Further, while Cassels
    contested whether the retainer included such restructuring activities, it never
    suggested that the WDAs were not a pre-filing restructuring event.  In my
    opinion, Cassels retainer included advice about the WDAs.

.

I find that there was a retainer between Cassels and the GMCL
    dealers and that its scope was not limited to representation

related exclusively to a
CCAA
proceeding.  Given the nature of the common issues certified against Cassels,
    it is unnecessary to specify the precise scope of the retainer.  Nevertheless,
    it is clear that to the extent that the retainer included complex
    restructuring of the dealer network, Cassels was obligated to provide legal
    services to the dealers  be it advice or representation  with respect to the
    Notices of Non-Renewal and the WDAs.

(3)

Cassels Position

[105]

As I have said, Cassels
    mounts an all-out attack on these central findings.  Its overarching submission
    is that CADA, the DSC, the dealers and Cassels itself contemplated a conditional
    group retainer in which Cassels would act for all the GMCL dealers only in the
    event of a GMCL
CCAA
filing.  Cassels counsel put it this way in oral
    argument: There was a present retainer to do things in the future  nothing
    was to be done under it unless there was a [
CCAA
] filing.  Cassels also
    renews its claim, advanced at trial, that all the relevant evidence
    overwhelmingly demonstrates this conditional retainer.

[106]

Cassels further argues
    that the trial judge erred:

(1)

by
    failing to define the scope of the Dealer Retainer;

(2)

in
    several respects, in his interpretation of the May 4 Memorandum;

(3)

by
    applying the law of limited retainers and reversing the burden of proof; and

(4)

in
    his treatment of the witnesses evidence about the scope of the Dealer
    Retainer.

[107]

For the reasons
    that follow, I disagree.  In my opinion, Cassels has not identified a palpable
    and overriding error or an extricable error of law concerning the trial judges
    findings on this central issue.

(4)

Discussion

(a)

Defining Scope of Dealer Retainer

[108]

I begin with the
    standard of review.  This court has confirmed that the nature and scope of a
    solicitors retainer is a factual question on which the findings of the trial
    judge are entitled to great deference:
Fasken Campbell Godfrey v. Seven-Up
    Canada Inc.
(2000), 47 O.R. (3d) 15, at para. 40, leave to appeal refused,
    [2000] S.C.C.A. No. 143, quoting
Woodglen & Co. v. Owens
(1999), 126
    O.A.C. 103 (C.A.), at para. 12.   Accordingly, Cassels faces a steep hurdle in
    attempting to displace the trial judges findings about the scope of the Dealer
    Retainer.

[109]

Turning to the
    merits, Cassels argument that the trial judge erred in law by failing to
    define the actual scope of the Dealer Retainer arises from the trial judges
    statement, at para. 480, quoted above: Given the nature of the common issues
    certified against Cassels, it is unnecessary to specify the precise scope of
    the retainer.  With respect, this argument focuses on one isolated sentence in
    one paragraph of the trial judges lengthy reasons and, in so doing, distorts
    his reasoning and his findings regarding the Dealer Retainer.

[110]

The trial
    judges impugned comment must be read in the light of his entire reasons regarding
    the Dealer Retainer.  He began his analysis of the Dealer Retainer and its
    scope by stating, at para. 377:

Common Issues (j) [breach of contract] and (k) [breach of
    fiduciary duty] require the court to determine whether Cassels was retained by
    the GMCL dealers; and if such a retainer existed, whether it was limited to
    providing dealers with legal advice on the
CCAA
proceedings or whether
    the retainer also included advice about how the dealers, including the Class
    Members, should respond to a non-
CCAA
restructuring.

[111]

The trial judge
    then devoted 23 paragraphs of his reasons to the retainer issue, including 19
    paragraphs expressly on the topic, What was the scope of the retainer?
    Having done so, he found there was a retainer between Cassels and the GMCL
    dealers and that its scope was not limited to representation related
    exclusively to a
CCAA
proceeding (at para. 480).  It is in this
    context, and in view of the certified common issues regarding Cassels, that the
    trial judge concluded: [I]t is unnecessary to specify the precise scope of the
    retainer.

[112]

I see no basis
    on which to fault the trial judge for this conclusion in the circumstances of
    this case.  Common issues (j) (breach of contract) and (k) (breach of fiduciary
    duty) obliged the trial judge to determine if Cassels owed contractual or
    fiduciary duties to some or all of the class members and, if so, whether it had
    breached those duties.  This determination rested, in the first instance, on
    whether a retainer between Cassels and the dealers existed and, if so, on the
    nature of the retainer.  It did not require that the precise contours of any
    retainer found to exist be defined with exactitude.  Rather, it required an
    examination of the essential subject matter of the contract between the parties
    in order to then assess whether the contract had been breached.

[113]

And that is the
    inquiry the trial judge undertook.  When his reasons are read in context, they
    confirm that he came to grips with, and adequately articulated, the essential subject
    matter of the contract between the parties.  He concluded that,
at a minimum
, the Dealer Retainer extended to advice or
    representation concerning pre-
CCAA
filing matters, including the WDAs.
    Indeed, he said as much, at para. 475:

[E]ven with [the ambiguity in the May 4 Memorandum that he
    found existed], it is clear that,
at the least
,
    the scope of the retainer included pre-filing restructuring of the nature of
    the WDAs.  [Emphasis added.]

[114]

He then elaborated,
    at para. 480:

Nevertheless, it is clear that to the extent that the retainer
    included complex restructuring of the dealer network, Cassels was obligated
    to provide legal services to the dealers  be it advice or representation
    with respect to the Notices of Non-Renewal and the WDAs.

[115]

While Cassels
    challenges these findings on other grounds, I do not think it fairly can be
    said that the trial judge failed to identify the essential nature of the Dealer
    Retainer, or that his findings concerning it were insufficient to answer the certified
    common issues.  His definition of what the contract included, at a minimum,
    resolved the dispute between the parties concerning the ambit of the contract.
    No further exposition of the scope of the Dealer Retainer was necessary in the
    circumstances to answer common issues (j) and (k).

(b)

Trial Judges Interpretation of May 4 Memorandum

[116]

Cassels next argues
    that the trial judge erred, in fact and in law, in his interpretation of the
    May 4 Memorandum.  Specifically, it submits that, in rejecting the alleged
    contingent nature of the Dealer Retainer, the trial judge erred by:

(1)

failing
    to carefully scrutinize the language of the May 4 Memorandum;

(2)

finding
    that the scope of the Dealer Retainer was ambiguous;

(3)

focusing
    on what the May 4 Memorandum excluded, rather than on what it included;

(4)

failing
    to take account of the circumstances surrounding the formation of the contract
    between the parties;

(5)

applying
    the law of limited retainers and reversing the burden of proof;

(6)

failing
    to consider evidence of relevant post-May 4, 2009 events; and

(7)

misapprehending

the evidence of relevant witnesses about
    the Dealer Retainer.

I will consider these arguments in turn.

(i)

Failing to scrutinize language of May 4 Memorandum

[117]

I do not accept
    Cassels contention that the trial judge failed to carefully scrutinize the May
    4 Memorandum.  In my view, this argument is belied by the trial judges
    reasons.

[118]

To begin, it is
    important to underscore that Cassels challenge to the trial judges
    interpretation of the May 4 Memorandum proceeds on the premise that this
    memorandum, and it alone, establishes the retainer between Cassels and the GMCL
    dealers and that it conclusively demonstrates that the Dealer Retainer was
    contingent on a GMCL
CCAA
filing.  I do not accept this premise.

[119]

This is not a
    case where the retainer agreement was reduced to a single written document.  In
    contrast to Cassels arrangements with the Saturn Dealers, where the dealers
    signed individual retainer agreements, there are no stand-alone, group or
    individual retainer agreements between Cassels and the GMCL dealers.  Rather,
    on the trial judges findings, the Dealer Retainer is evidenced by a series of
    documents and communications among CADA, Cassels and the DSC at the relevant
    times, including, but not limited to, the May 4 Memorandum.

[120]

As a result, the
    trial judges findings regarding the scope of the Dealer Retainer do not rest
    solely on the May 4 Memorandum.  In his reasons, the trial judge identifies and
    addresses the documentary and other evidence bearing on the nature of Cassels
    retainer by the dealers, including evidence that, according to Cassels,
    supports its narrow interpretation of the engagement.  This evidence included,
    in addition to the May 4 Memorandum itself: the Legal Services Memorandum; the
    Ethical Wall Memorandum; the notes of Peter Andrews, a GMCL dealer, of the May
    7, 2009 call-in dealer conference call; parts of the trial testimony of Cassels
    lawyers Harris and Zakaib and GMCL dealers Hurdman and Turpin; and CADAs May
    22, 2009 memorandum to the dealers.

[121]

Having
    considered the totality of this evidence, the trial judge rejected Cassels
    submission that it had a contingent retainer with the dealers, one that would
    become operative only in the event of a GMCL
CCAA
filing.

[122]

The reasons, in
    particular, at paras. 426-27, also reveal that  the trial judge appreciated the
    parties conflicting interpretations of the retainer described in the May 4
    Memorandum and that he was alert to those parts of the memorandum cited by each
    party in support of its urged construction of the document.  I recognize that,
    at these paragraphs of his reasons, the trial judge was addressing whether a
    retainer by the dealers in fact existed.  Nonetheless, his discussion of this
    issue demonstrates that he did focus on the entirety of the May 4 Memorandum
    and considered it in the light of the parties conflicting positions at trial
    on the existence and subject matter of the Dealer Retainer.  That this is so is
    further confirmed by the trial judges holding, at para. 475, also quoted above:
    Only an unreasonable micro-dissection of the language of the May 4 [Memorandum]
    could support [Cassels] contention that the scope of the retainer excluded
    anything beyond representation in commenced
CCAA
proceedings.

(ii)

Finding of ambiguity

[123]

Cassels next
    challenges the trial judges finding that the scope of the Dealer Retainer was
    ambiguous.  I see no reversible error in this finding.

[124]

In support of
    its contention that the trial judge erred by finding that the scope of the
    Dealer Retainer was ambiguous, Cassels emphasizes passages from the first two
    paragraphs of the May 4 Memorandum.  For convenience, I repeat them:

[A] national General Motors Steering Committee  has been
    created to work with [CADA] to organize [GMCL] dealers  to ensure that [GMCL]
    dealer interests are represented
should [GMCL] file for
    bankruptcy protection in Canada in the near future
.

The role of the Steering Committee  is to provide policy
    direction and instructions to
legal counsel who will
    represent the [GMCL] dealers in any bankruptcy filing
.  We have retained
    [Cassels] to handle our interests. [Emphasis added.]

[125]

As Cassels
    stresses, these passages suggest that the retainer referenced in the May 4 Memorandum
    applied only if GMCL filed for bankruptcy protection in Canada.

[126]

However, other parts
    of the May 4 Memorandum suggest an active and ongoing retainer of Cassels: i)
    the concluding language of the second paragraph of the May 4 Memorandum, quoted
    above, confirms that Cassels had been retained to handle [the GMCL dealers]
    interests; ii) the memorandum informs dealers of the April 30, 2009 DSC
    conference call with CADA and legal counsel to discuss our going forward
    strategy; iii) the memorandum announces the scheduling of a national dealer
    conference call on May 7, 2009, when dealers would be provided with the crucial
    information required on a going forward basis; and iv) in soliciting dealer
    participation in the proposed national General Motors dealer group, the
    memorandum instructs, in capital letters: (
IF
    YOU WISH TO PARTICIPATE AND BE REPRESENTED PLEASE COMPLETE THE FORM ON PG 5
)
    (emphasis in original).

[127]

These parts of
    the May 4 Memorandum are expressed in the present tense.  They include no
    marker of a contingent retainer.  Specifically, they do not suggest that Cassels
    representation of participating dealers would only become effective, if at all,
    upon the happening of some future event.

[128]

Thus, while the
    May 4 Memorandum contains language supporting Cassels contention that the
    Dealer Retainer was contingent and was to apply only if GMCL filed for
    bankruptcy protection under the
CCAA
, it also employs language
    supporting the conclusion that the Dealer Retainer was not conditional and had
    been activated.

[129]

Accordingly, to the
    extent that the trial judges finding of ambiguity is tethered to the May 4
    Memorandum, a plain reading of that document supports his finding.  The May 4 Memorandum
    uses inconsistent language to describe the nature of the retainer.  There is
    language in the memorandum that both supports and cuts against a narrow interpretation
    of the Dealer Retainer.  The trial judge, therefore, was not obliged to accept
    Cassels construction of the memorandum.    I also note that the record
    indicates that the memorandum was reviewed and approved by Cassels prior to its
    delivery.

(iii)

Considering May 4 Memorandum as a whole

[130]

I reach a
    similar conclusion concerning Cassels related submission that the trial judge
    erred in his interpretive approach to the May 4 Memorandum by allegedly
    focusing only on what the memorandum excluded, rather than on what it
    included.  Once again, the reasons do not support this claim.

[131]

As I have said,
    at trial, Cassels denied any retainer with the GMCL dealers.  In the alternative,
    it argued that any retainer that did exist related exclusively to services to
    be rendered on a GMCL
CCAA
filing.  In other words, the retainer
    excluded pre-
CCAA
matters.  Against the backdrop of the case Cassels
    ran at trial, the trial judges use of the language of exclusion (for
    example, at para. 475, quoted above), simply means that he addressed, head-on,
    Cassels position regarding the scope of the Dealer Retainer.

[132]

In any event, contrary
    to Cassels submission, the trial judge also addressed what the Dealer Retainer
    included.  He held that: i) it
included

    pre-filing advice on issues
relating to the restructuring
    of the dealer network
 (para. 471); ii) it
included
    pre-filing restructuring
of the nature of the WDAs (para. 475); iii)
it included advising on
the WDAs, which ultimately fell
    squarely within the purview of
complex restructuring of
    the GMCL dealer network
 (para. 471); and iv)
to
    the extent that the retainer included complex restructuring
of the
    dealer network, Cassels was obligated to provide legal services to the dealers
     with respect to the Notices of Non-Renewal and the WDAs (para. 480)
    (emphasis added).  The latter comment echoes the language of the May 4
    Memorandum that dealers could achieve Economies of Scale by participating in
    the proposed national dealer group because Legal representation in a
complex restructuring or insolvency proceeding
is
    expensive (emphasis added).

[133]

Cassels takes
    aim, especially, at the trial judges reliance on the language of complex
    restructuring in the May 4 Memorandum to support his finding that the Dealer
    Retainer included the provision of advice or representation on pre-
CCAA
filing matters, including the WDAs.  Cassels submits, for example, that the
    phrase complex restructuring is not found in the operative language of the
    May 4 Memorandum and that the trial judge erred by interpreting this wording as
    meaning a complex restructuring of the dealer network, a conclusion that
    Cassels says is unwarranted and unexplained.

[134]

I disagree.
    Cassels argument pits those sections of the May 4 Memorandum that explain the
    purpose and function of the DSC against those parts of the memorandum that
    describe the suggested reasons for the dealers to participate in the proposed
    GMCL national dealer group.  This artificially divides the May 4 Memorandum
    into discrete parts and ignores its overall meaning and subject matter.

[135]

The trial judge,
    as he was obliged to do, considered the May 4 Memorandum in its entirety.  His
    finding of ambiguity in the scope of the Dealer Retainer implicitly recognizes
    the inconsistencies in the language of the May 4 Memorandum.  So, too, does his
    qualifying language at para. 480: [T]
o the extent that
    the retainer included complex restructuring
of the dealer network, it
    obliged Cassels to provide legal services regarding pre-
CCAA
matters
    like the Notices of Non-Renewal and the WDAs (emphasis added).

[136]

The May 4
    Memorandum does not stop with the suggestion, contained in the first two
    paragraphs of the memorandum, that the dealers interests were to be
    represented if GMCL filed for bankruptcy protection.  It goes on to expressly
    reference legal representation for the dealers in a complex restructuring
or
insolvency proceeding (emphasis added).  This language
    necessarily implies that legal representation was to be provided for restructuring
    matters arising outside of an insolvency or bankruptcy proceeding.  That is
    exactly what GMCLs dealer network reduction plan  and, ultimately, the WDAs
    contemplated.

[137]

I note also
    that, in his trial testimony, Peter Harris acknowledged that the scope of the
    Dealer Retainer included preparatory work for a potential GMCL
CCAA
filing.  He also allowed that the May 4 Memorandum contemplates that Cassels
    would represent the GMCL dealers both in an insolvency and in a complex
    restructuring.  These acknowledgements are consistent with the conclusion that
    the Dealer Retainer was active by May 4, 2009 and that its scope went beyond
    representation of the dealers only in a formal
CCAA
proceeding.

[138]

I am unable, in
    these circumstances, to fault the trial judge for his scrutiny of the May 4
    Memorandum, or for his finding that the scope of the Dealer Retainer was
    ambiguous.

(iv)

Evidence of surrounding circumstances

[139]

Sattva
holds, at para. 47, that in matters of contractual interpretation, the
    overriding concern is to determine the intent of the parties and the scope of
    their understanding (citations omitted).  Further, in order to do so, a
    decision-maker must read the contract as a whole, giving the words used their
    ordinary and grammatical meaning, consistent with the surrounding circumstances
    known to the parties at the time of formation of the contract.

[140]

However,
Sattva
also cautions, at para. 57:

While the surrounding circumstances will be considered in
    interpreting the terms of a contract, they must never be allowed to overwhelm
    the words of that agreement  The interpretation of a written contractual
    provision must always be grounded in the text and read in light of the entire
    contract . While the surrounding circumstances are relied upon in the
    interpretive process, courts cannot use them to deviate from the text such that
    the court effectively creates a new agreement.  [Citations omitted.]

[141]

Sattva
provides guidance, at para. 58, on the evidence that can qualify as evidence of
    surrounding circumstances:

The nature of the evidence that can be relied upon under the
    rubric of surrounding circumstances will necessarily vary from case to case.
    It does, however, have its limits.  It should consist only of objective
    evidence of the background facts at the time of the execution of the contract
    that is, knowledge that was or reasonably ought to have been within the
    knowledge of both parties at or before the date of contracting.  [Citations
    omitted.]

See also
IFP Technologies (Canada)
, at para.
    83.

[142]

Cassels
    maintains that the trial judge erred in law by failing to interpret the May 4
    Memorandum in a manner consistent with the surrounding circumstances known to
    the parties at the time of formation of the Dealer Retainer, contrary to
Sattva
.
    It asserts, as it did at trial, that the evidence of contemporaneous documents
    leading up to the memorandum, as well as those post-dating it, overwhelmingly
    demonstrate that all involved parties were contemplating a group retainer on
    behalf of all GMCL dealers only in relation to a
CCAA
proceeding.
    Cassels faults the trial judge for allegedly considering only some of the
    relevant pre-May 4, 2009 documents and, even then, for relying on documents
    that it says do not support a finding that the Dealer Retainer included advice
    or representation on pre-
CCAA
matters, including the WDAs.

[143]

At the heart of
    these submissions is the proposition that the Dealer Retainer did not, and
    could not, extend to advice or representation on the Notices of Non-Renewal and
    the WDAs, which were delivered after the date of the May 4 Memorandum, because
    none of Cassels, CADA, the DSC or the GMCL dealers anticipated the delivery of
    these documents by GMCL at the time of the memorandum.  The Notices and the
    WDAs, therefore, were not part of the surrounding circumstances known to the
    parties at that date and, consequently, the parties could not have intended
    that the Dealer Retainer would extend to the provision of legal services
    regarding them.

[144]

I would reject
    these submissions, for several reasons.

[145]

As the trial
    judge noted, Cassels did not dispute at trial that the Notices of Non-Renewal
    and the WDAs were pre-
CCAA
filing restructuring events.  Nor does
    Cassels take that position before this court.  It follows that, if the Dealer
    Retainer extended to advice or representation on pre-
CCAA
restructuring matters, as the trial judge found, it included advice or
    representation regarding the Notices and the WDAs.  I have already concluded
    that the trial judge did not err in finding that the Dealer Retainer extended
    to complex restructuring matters, separate and apart from formal bankruptcy
    or insolvency proceedings.

[146]

The fact that
    only GMCL was aware of the possibility that Notices of Non-Renewal and WDAs would
    be delivered prior to the May 4 Memorandum does not preclude this conclusion.
    The evidence at trial established that, by the beginning of May 2009, GMCL was
    actively working on its dealer network reduction plan, including a plan for the
    formal wind-down of some of its dealerships.  It publicly announced its revised
    restructuring plan and its intention to expedite extensive cuts to its dealer
    network on April 27, 2009.

[147]

While the
    dealers may not have known that WDAs would be chosen as the mechanism for
    achieving these cuts, they were certainly aware that GMCL would not be
    continuing all its dealerships, that many dealerships would cease to operate,
    and that GMCL would be taking steps to shrink its dealer network.  Indeed, as
    the trial judge found, following GMCLs April 27 announcement, [I]t would have
    been obvious to all involved that a large percentage of the dealers would find
    themselves on the chopping block within 20 months at most (at para. 65).
    Further, the important implications of GMCLs April 27 announcement were
    considered and discussed during the April 30, 2009 conference call among DSC
    members, CADA and Cassels lawyers.

[148]

Thus, it was
    clearly within the parties contemplation at the time of the May 4 Memorandum
    that GMCL would be taking steps to restructure, and drastically reduce, its
    dealer network. This potentially included the termination of dealership
    agreements outside of a formal bankruptcy proceeding.  This is confirmed by the
    May 4 Memorandum itself, which expressly identifies the potential termination
    of the existing dealership agreements and changes to your relationship with
    [GMCL] as concerns common to all GMCL dealers that [would] arise out of a
    [GMCL] restructuring.

[149]

I therefore
    agree with Trilliums submission that the relevant surrounding circumstances at
    the time of the May 4 Memorandum, considered by the trial judge, included the
    parties awareness of the risk that GMCL would pursue an out-of-court
    restructuring plan that would adversely affect the dealers rights and
    interests.  The WDAs were simply the device chosen to implement this plan.

[150]

In my opinion,
    there is no tenable case to be made here that, in interpreting the scope of the
    Dealer Retainer, the trial judge failed to consider the circumstances
    surrounding its formation.  Near the outset of his reasons, the trial judge
    reviewed, in detail, events pre-dating the May 4 Memorandum.  Later in his
    reasons, when specifically addressing Trilliums claims against Cassels, he
    returned to a discussion of pre-May 4, 2009 events involving Cassels, CADA, the
    DSC and the dealers.  In so doing, he also considered evidence of many post-May
    4, 2009 events pertaining to the Dealer Retainer.

[151]

Cassels
    complains that the trial judge erred by failing to mention some documents that
    it says formed part of the surrounding circumstances.  Again, I disagree.

[152]

The trial judge
    was not obliged to recite all the evidence bearing on the Dealer Retainer.  The
    reasons confirm that he had a strong command of the trial record and undertook
    a careful analysis of the evidence concerning the Dealer Retainer, leading to
    detailed findings of fact.  His failure to refer to any particular piece of
    evidence does not lead to the conclusion that he ignored it.  Rather, it can be
    understood as an indication that, in the context of all the evidence, it had no
    significance to the trial judge in his analysis of the Dealer Retainer.  As
    this court has repeatedly emphasized, the sorting of the evidentiary wheat from
    the chaff is the essence of the trial judges job:
Waxman
, at paras.
    344-45.

[153]

The crucial
    point is that the trial judge addressed, and bluntly rejected, Cassels claim
    that the pre-May 4, 2009 documentary record overwhelmingly supports its
    interpretation of the scope of the Dealer Retainer.  He held, at para. 475:
    Cassels assertion that there is extensive, repeated written support for its
    position simply cannot be made out on the evidence.  I repeat that the trial
    judges appreciation of the evidence attracts considerable deference from this
    court: It is not the role of appellate courts to second guess the weight to be
    assigned to various items of evidence:
Nelson (City) v. Mowatt
, 2017
    SCC 8, at para. 38.

[154]

Moreover, as
Sattva
teaches, present day contractual interpretation is by its nature  a
    fact-specific inquiry that yields fact-specific results:
Iroquois Falls
    Power Corporation v. Ontario Electricity Financial Corporation
, 2016 ONCA
    271, 398 D.L.R. (4th) 652, at para. 96, leave to appeal refused, [2016]
    S.C.C.A. No. 279.

[155]

Recall again,
    that the trial judge relied on other evidence, apart from the May 4 Memorandum,
    to anchor his findings concerning the ambit of the Dealer Retainer.  I will
    address some of this evidence.

[156]

First, the Legal
    Services Memorandum.  Cassels downplays the significance of this document,
    maintaining that it was merely a firm marketing brochure that was not seen by
    the dealers, that it is evidence only of a potential future retainer in a
CCAA
proceeding, and that it does not support a finding that the Dealer Retainer
    included advice or representation on the WDAs.

[157]

The trial judge
    disagreed.  He found that the Legal Services Memorandum was created and
    intended for the benefit of the DSC.  Having considered the relevant testimony
    regarding the origins and purpose of the memorandum, the trial judge inferred
    that the DSC received and reviewed it.  In my view, this inference was
    available on the evidentiary record.

[158]

I am also not
    persuaded that the trial judge erred by finding that the Legal Services
    Memorandum supports the conclusion that the Dealer Retainer extended to advice
    or representation on pre-
CCAA
filing matters.  The memorandum contains
    statements suggesting the potential representation of the dealers by Cassels on
    a wide array of issues relating to GMCLs difficulties.  It advances Cassels
    long-standing relationship with CADA and its existing retainer with the Saturn
    Dealers, coupled with its years of experience in representing clients in the automotive
    industry, as direct experience positioning the firm to be keenly aware of
    the issues the [GMCL] Dealers group could face in the coming months.  No
    qualification of these issues is expressed in the memorandum.

[159]

To the point, the
    memorandum says nothing about any limitation on or condition attaching to the
    services available to the dealers from Cassels.  And, while the CADA and Saturn
    Retainers are disclosed, indeed, promoted, in the Legal Services Memorandum, no
    mention is made of the Canada Retainer or any potential conflict arising from
    it.

[160]

I appreciate the
    marketing purposes of the Legal Services Memorandum and that it is not a
    contract.  A certain amount of expansiveness in a promotional document of this
    kind is commonplace.  That said, the memorandum does contain representations
    concerning Cassels expertise and the broad range of professional services
    available to the dealers through the firm.  And those representations are
    unqualified.  In this context, as I read his reasons, the trial judge simply held
    that the Legal Services Memorandum supports the conclusion that the services
    offered to the dealers through the DSC were not restricted to representation in
    commenced
CCAA
proceedings.  Given the unconstrained language of the memorandum,
    I agree.

[161]

I reach a
    similar conclusion concerning the trial judges impugned reliance on the May 7,
    2009 Ethical Wall Memorandum.

[162]

I accept, as
    Cassels emphasizes, that this was an internal firm document that was not
    provided to CADA, the DSC or the dealers.  Nonetheless, it is some
    contemporaneous evidence, expressed in Cassels own words, of Cassels
    understanding of and intention regarding the scope of its representation of the
    GMCL dealers.

[163]

Recall that the
    Ethical Wall Memorandum references the representation of the dealers by Cassels
    regarding potential claims against [GMCL] with respect to the potential
    bankruptcy of GM
and
the potential restructuring
    of the GM dealer network (emphasis added).  Thus, like the May 4 Memorandum,
    the Ethical Wall Memorandum differentiates restructuring matters from
    bankruptcy or insolvency proceedings.  It also specifically refers to GMCLs
    restructuring of its dealer network.  It contains no suggestion that the firms
    new retainer for GMCL dealers was operative only if GMCL filed for bankruptcy
    protection under the
CCAA
.  To the contrary, it bolsters the trial
    judges finding that the Dealer Retainer was more expansively cast, extending
    to restructuring issues outside a formal bankruptcy proceeding.

(v)

Law of limited retainers and reversal of burden of proof

[164]

Having found
    that the scope of the Dealer Retainer was ambiguous, the trial judge held, at
    para. 472: Even if Cassels honestly believed that the retainer excluded major
    pre-filing events such as the WDA[s], it woefully failed to delineate the scope
    of the retainer and document its terms of engagement.  In the trial judges
    view, absent compelling considerations to the contrary, the ambiguity in the
    Dealer Retainer fell to be resolved against Cassels.  In this context, he stated,
    at para. 472: Lawyers and law firms who use limited scope retainers must
    clearly define the scope of the legal services to be provided and candidly
    explain these limitations to their clients.

[165]

Cassels argues that
    the trial judges findings on this issue reflect a misapplication of the law of
    limited retainers and, consequently, an improper reversal of the burden of
    proof.  It submits that a limited retainer is a term of art, having a
    technical and specific meaning.  Relying on two decisions of the Superior Court
    of Justice (
ABN Amro Bank Canada v. Gowling, Strathy & Henderson
(1995),
    20 O.R. (3d) 779 (S.C.), at p. 794, and
Broesky v. Lü
st
, 2011
    ONSC 167, 330 D.L.R. (4th) 259, (S.C.), affd 2012 ONCA 701, 356 D.L.R. (4th)
    55), at para. 56.  Cassels says that a limited retainer is one where the
    scope of the retainer requires of the lawyer a standard of conduct less than
    that required of a reasonably competent and diligent solicitor.

[166]

In Stephen
    Grant, Linda Rothstein and Sean Campbell,
Lawyers Professional Liability
,
    3rd ed. (Markham: LexisNexis Canada Inc., 2013), at p. 4, the authors indicate
    that the term limited retainer refers to a retainer that does not require
    the lawyer to perform all of the legal services that might otherwise be
    necessary to accomplish the clients goals.  In other words, a limited
    retainer is a retainer that is limited, by an agreement between the lawyer and
    the client, with respect to the scope of legal or professional services to be
    provided under the retainer agreement.

[167]

I do not read
    the trial judges reasons as indicating that he was considering whether the Dealer
    Retainer was a limited retainer in any technical sense.  As Cassels submitted
    at the appeal hearing, what was at issue at trial was whether the Dealer
    Retainer captured pre-
CCAA
filing events.  Cassels argued at trial that
    the scope of the Dealer Retainer was limited to a
CCAA
filing.
    Thus, the trial judges use of the term limited in relation to the Dealer
    Retainer was a response to Cassels own submission that the scope of the
    retainer was confined or restricted to representation of the dealers only in a
    commenced GMCL
CCAA
proceeding.

[168]

As I apprehend
    it, the real thrust of Cassels complaint is not the trial judges use of limited
    retainer language but, rather, his findings that Cassels was obliged, and
    failed, to clearly define the scope of the legal services to be provided to the
    dealers, and that the ensuing ambiguity in the Dealer Retainer had to be
    resolved against Cassels.

[169]

I would reject
    this complaint.  Nothing turns on this issue in the particular circumstances of
    this case.  The trial judges finding that the scope of the Dealer Retainer
    extended to pre-filing restructuring matters, including the WDAs, did not depend
    on resolving any ambiguity in the retainer as against Cassels.  The trial judge
    held, at para. 475:
[E]ven with this ambiguity
,
    it is clear that, at the least, the scope of the retainer included pre-filing
    restructuring of the nature of the WDAs (emphasis added).  I have already
    discussed the cogent reasons provided by the trial judge in support of this
    conclusion.

(vi)

Evidence of subsequent events

[170]

Cassels also submits
    that the trial judge erred in his interpretation of the May 4 Memorandum by
    failing to consider evidence of relevant post-May 4, 2009 events.

[171]

There are three
    responses to this submission.  First, the trial judge did not ignore the
    evidence of post-May 4 events.  As I have said, he essentially commenced his
    reasons with a detailed review of the events relating to GMCLs insolvency and
    its restructuring plans, including events bearing on the dispute between
    Cassels and the GMCL dealers.  This included a description of events subsequent
    to the May 4 Memorandum.  There is nothing in the trial judges later analysis
    of Trilliums claims against Cassels to suggest that, in analyzing these
    claims, he forgot or discounted his earlier exposition of post-May 4, 2009 events.
    To the contrary, at this part of his reasons, the trial judge again addressed
    post-May 4, 2009 events.  For example, he expressly considered and made
    detailed findings about Cassels argument that it had received and was required
    to follow the DSCs directions on May 15 and 20, 2009 not to become involved
    with the WDAs.

[172]

Second, this
    court has held, on the authority of
Sattva
, that evidence of
    subsequent conduct must be distinguished from the factual matrix surrounding
    the formation of a contract.  Evidence of subsequent conduct is admissible only
    if the contract remains ambiguous after considering its language or text and its
    factual matrix:
Shewchuk v. Blackmont Capital Inc.
2016 ONCA 912, 404
    D.L.R. (4th) 512, at paras. 41-46. Further, if admissible, evidence of
    subsequent conduct is relevant only to inferentially establish the parties
    intentions at the time of formation of their contract:
Shewchuk
, at
    paras. 50 and 56.

[173]

Here, the trial
    judge found that the Dealer Retainer was ambiguous.  However, he also held, in
    effect, that it was unnecessary to fully resolve that ambiguity because, at a
    minimum, the retainer extended to the provision of advice or representation on
    pre-
CCAA
filing issues.  It was therefore unnecessary for the trial
    judge to undertake an extensive review of events subsequent to May 4, 2009 to
    inferentially establish the parties intentions at the time of formation of the
    contract.  The available pre-May 4, 2009 documentary evidence and the oral
    testimony at trial concerning the parties intentions regarding the scope of
    the retainer were sufficient to establish the core, contested subject matter of
    the contract.

[174]

Third, Cassels
    continues to maintain that both the pre- and post-May 4, 2009 documentary
    records overwhelmingly demonstrate that the Dealer Retainer related only to the
    representation of the dealers in any
CCAA
proceeding.  Cassels, for
    example, relies on CADAs May 20 and May 22, 2009 memoranda to the dealers to
    argue that they knew or ought to have known that they could not look to Cassels
    for advice on the Notices of Non-Renewal and the WDAs.

[175]

The trial judge,
    however, was alert to these memoranda and to Cassels reliance on them.  He
    specifically identified the May 22, 2009 memorandum, at para. 467, as one of
    the documents cited by Cassels in support of its assertion that there was
    extensive, repeated written support for its position that the Dealer Retainer
    was simply a retainer to act in the event of a
CCAA
proceeding.  As I
    have already indicated, the trial judge concluded that this assertion was not made
    out on the evidence.  This was his call to make.

(vii)

Treatment of witnesses evidence

[176]

This brings me
    to Cassels arguments that the trial judge erred by relying on out-of-context
    trial testimony of Harris and Zakaib to support his findings regarding the
    scope of the Dealer Retainer, and that he misapprehended the evidence of GMCL
    dealers Hurdman and Turpin on this issue.

[177]

There is no
    doubt that, at various points in their testimony, Harris and Zakaib said that
    the Dealer Retainer involved representation of the dealers in a GMCL
CCAA
filing or bankruptcy.  However, their evidence on cross-examination undercut
    Cassels claim of a narrow retainer restricted to a
CCAA
-filing or
    bankruptcy.  The trial judge put it this way, at para. 475:

[D]uring examination, Harris and Zakaib were open to the
    possibility that their retainer with the GMCL dealers involved more than just
    representation in a
CCAA
proceeding.  Harris agreed that complex
    restructuring and insolvency [as referenced in the May 4 Memorandum]
    referred to distinct concepts.  And with regard to the potential claims
    mentioned in the Ethical Wall memorandum, Zakaib testified that other claims,
    in addition to the potential bankruptcy, could arise and that the retainer
    would have generally covered these.

This is a fair depiction of the relevant parts of
    these witnesses testimony.  Again, the assessment of the evidence was a matter
    squarely within the trial judges domain.

[178]

I also do not
    accept that the trial judge erred in his treatment of Hurdmans and Turpins
    evidence.  The trial judge acknowledged, at para. 455, that their testimony at
    times supported the position of Cassels but concluded, overall, that they had
    both said they expected preparation work to have been done if necessary for a
    potential
CCAA
filing.  He also found, at para. 476:

At best, for Cassels, the evidence of Hurdman and Turpin during
    cross-examination was equivocal with regard to their understanding of the exact
    scope of the retainer.  Only taken out of context does it suggest that they
    reviewed the retainer as strictly limited to a
CCAA
proceeding.

[179]

For reasons he
    explained, the trial judge placed little weight on Hurdmans and Turpins
    evidence concerning the ambit of the Dealer Retainer.  The reasons confirm that
    this evidence played no material part in the trial judges reasoning.

(c)

Conclusion on Scope of Dealer Retainer

[180]

For the
    foregoing reasons, I see no basis for appellate interference with the trial
    judges ruling on the scope of the Dealer Retainer.  Deference is required.  I
    would dismiss this ground of appeal.

Issue 2: Did the Trial Judge Err in Finding that
    Cassels Breached its Obligations due to the Canada Conflict?

(1)

Introduction

[181]

The trial judge
    concluded that Cassels breached its fiduciary and contractual obligations to
    the class members in three principal ways: i) by agreeing to act for the GMCL
    dealers despite its pre-existing Canada Retainer and failing to disclose the
    Canada Retainer and its implications to the dealers (the Canada Conflict);
    ii) by failing to advise the DSC that it was in a conflict once the WDAs were
    delivered to some, but not all, dealers and nonetheless accepting the DSCs directions
    not to become involved with the WDAs (the DSC Conflict); and iii) by
    deferring its preparation for a GMCL
CCAA
filing or restructuring and
    adopting a wait-and-see approach longer than was appropriate.

[182]

In my view, the
    trial judges findings regarding the Canada Conflict are sufficient to fix
    Cassels with liability to the class members.  I will therefore focus on
    Cassels grounds of appeal regarding those findings.  While Cassels spent
    considerable time, both at trial and on appeal, focused on the DSC Conflict, I
    regard that aspect of the case as secondary to, and separate from, the Canada
    Conflict.  In this court, Cassels emphasized that it was properly following
    instructions when, on May 15 and again on May 20, 2009, the DSC indicated that
    Cassels should not get involved with the WDAs.  In my view, that is no defence
    to Cassels earlier, pre-May 15 breaches of its contractual and fiduciary duties
    to the dealers by virtue of the Canada Conflict.

[183]

I will address
    separately Cassels challenge to the trial judges findings concerning the
    Saturn Dealers.

(2)

Trial Judges Findings

[184]

The trial judge
    held, at para. 490, that Trillium and Cassels were in a fiduciary relationship
    and that Cassels had a specific obligation to represent the interests of the
    GMCL dealers in the [GMCL] restructuring and the
CCAA
proceedings.   Further,
    Cassels owed Trillium contractual obligations arising out of the Dealer Retainer,
    including a duty of loyalty, a duty to avoid conflicts, a duty to provide
    candid advice and disclosure, and a duty to act in the clients best interest.

[185]

The trial judge
    concluded that Cassels breached its fiduciary and contractual obligations to
    the dealers in several respects.  In respect of the Canada Conflict, he found:

·

At the relevant times, Canadas immediate interests were adverse
    to those of the GMCL dealers, the latter of which were to obtain the best
    possible non-
CCAA
restructuring deal, if GMCL offered such a deal
    (para. 497);

·

Cassels conduct fell afoul of the bright line conflict rule
    articulated by the Supreme Court of Canada in
R. v. Neil
, 2002 SCC 70,
    [2002] 3 S.C.R. 631 (paras. 494-97);

·

Regardless of the bright line conflict rule, Cassels was
    conflicted at the time it accepted the Dealer Retainer under the principles
    discussed in
Canadian National Railway Co. v.
McKercher LLP
,
    2013 SCC 39, [2013] 2 S.C.R. 649,

because there was a substantial
    risk that its representation of Canada would materially and adversely affect
    its concurrent representation of the GMCL dealers (paras. 494, 498-500 and
    508);

·

Cassels breached its duty of loyalty to the class members and its
    duty to avoid conflicts, by accepting the Dealer Retainer despite knowing, or
    having ought to have known, that there was a substantial risk it would be
    unable to act for the GMCL dealers because of its pre-existing Canada Retainer
    (para. 513);

·

Cassels also breached its duty to provide candid advice and
    disclosure to the class members by failing to inform the GMCL dealers, either
    directly or through the DSC, of the Canada Retainer (paras. 513-14);

·

Due to its loyalty to Canada, Cassels failed to act in the GMCL
    dealers best interests and, further, failed to represent the dealers as
    zealously as [it] could have (paras. 513 and 518); and

·

Cassels failed to have an effective system in place for
    discussing and resolving potential firm conflicts and was liable for its
    failure to heed audible conflict alarm bells

(para. 381).

[186]

The trial judge
    also considered whether Cassels owed a duty of care to the Call Dealers  those
    dealers who listened in on the May 24, 2009 dealer conference call arranged by
    CADA but who, unlike the Participation Form Dealers, did not contribute to the
    DSC litigation fund and/or send in a participation form.  After conducting the
    requisite proximity analysis in accordance with
Cooper v. Hobart
, 2001
    SCC 79, [2001] 3 S.C.R. 537, and
Anns v. Merton London Borough Council
,
    [1978] A.C. 728 (H.L.), the trial judge found that the Call Dealers did not
    retain Cassels and were not clients of the firm.  Accordingly, Cassels owed the
    Call Dealers no duty of care and was not liable to them.  As I will discuss
    when addressing the trial judges damages analysis, the fact that some Call
    Dealers may nonetheless be members of the Class figures prominently in Cassels
    appeal from the trial judges damages award.

(3)

Cassels Position

[187]

On appeal,
    having now accepted that it was retained by the GMCL dealers, Cassels does not dispute
    that it owed fiduciary and contractual duties to them.  However, it continues
    to assert, generally, that: the trial judge erred in his interpretation of the
    scope of the Dealer Retainer; that the firms approach to any potential
    conflict arising from the Canada Retainer met the applicable standard of care; that,
    in any event, nothing flowed from the alleged conflict as the lawyers working
    on the Dealer Retainer were not affected by the Canada Retainer; that it
    satisfied all its obligations to the dealers in the circumstances; and, for
    many of the same reasons it advanced at trial, the trial judge erred in holding
    to the contrary.

[188]

Against this
    backdrop, Cassels makes four specific submissions regarding the Canada
    Conflict.

[189]

First, it
    submits that, as the trial judge erred in his interpretation of the scope of
    the Dealer Retainer, his finding of a bright line conflict arising from the Canada
    Retainer necessarily falls away.  Cassels maintains that any conflict in its
    representation of both Canada and the GMCL dealers could only have arisen if
    GMCL filed for protection under the
CCAA
.  As this never occurred, no
    bright line conflict ever arose.

[190]

Second, Cassels
    argues that the trial judge additionally erred by finding that the Canada
    Retainer created a conflict under the substantial risk principle discussed in
McKercher
.

[191]

Third, it
    submits that the trial judge confused the obvious adversity between GMCL and
    the GMCL dealers with a misalignment of interests between the dealers and
    Canada.

[192]

Finally, Cassels
    advances a causation-based argument.  It contends that the Canada Conflict is,
    in effect, of no moment because it led to no consequences and caused no damage
    whatsoever.

(4)

Discussion

(a)

Bright Line Conflict

[193]

Cassels attack
    on the trial judges finding that the Canada Retainer gave rise to a bright
    line conflict with the Dealer Retainer fails on several grounds.  Most
    obviously, I have already concluded that the trial judge did not err in his
    interpretation of the scope of the Dealer Retainer.  On the disposition of that
    issue that I propose, it cannot be said that, by reason of the narrow and
    contingent ambit of the Dealer Retainer, there was no conflict with the Canada
    Retainer.

[194]

However, there
    is more.  The trial judge appreciated the nature of the bright line conflict
    rule articulated in
Neil
, and applied it to the facts as he found
    them.  He quoted
Neil
directly, at para. 495 of his reasons:

In
Neil
, the Supreme Court established the bright line
    test where a lawyer is not permitted to act for adverse clients unless both
    parties provide their informed consent.  Justice Binnie, writing for the court,
    articulated the rule as follows at para. 29:

The bright line is provided by the general rule that a
    lawyer may not represent one client whose interests are directly adverse to the
    immediate interests of another current client
even if the two mandates
    are unrelated
 unless both clients consent after receiving full
    disclosure (and preferably independent legal advice), and the lawyer reasonably
    believes that he or she is able to represent each client without adversely
    affecting the other. [Emphasis in original.]

There is no suggestion here that the trial judge
    misapprehended the nature of this rule.  Rather, Cassels argues that it is
    inapplicable in this case.  I disagree.

[195]

The trial judge
    held that the Canada Conflict arose because Trillium had proved, on a balance
    of probabilities, that the dealers interests were directly adverse to Canadas
    immediate interests during the relevant period.  Cassels counters that, while a
    conflict could have arisen between Canadas interests and those of the dealers,
    it was a potential conflict only and there was no direct or immediate
    adversity between the interests of the two clients.  To the contrary, Cassels says,
    the two clients shared considerable common interests and their interests were
    not necessarily irreconcilable.

[196]

The trial judge
    considered, and rejected, this argument.  As he pointed out, Harris made
    important admissions during his evidence at trial.  These admissions went a
    long way to establishing direct adversity between the dealers interests and
    Canadas immediate interests.  Harris testified:

·

He understood that in April 2009, the Canadian Governments were
    setting the pace on GMCLs viability plans;

·

If GMCL could avoid liquidation, Canada would be one of the
    bailout parties;

·

If GMCL filed under the
CCAA
, Canada and GMCL would have
    an identity of interests;

·

If he were acting for the dealers and was trying to upset the
CCAA
proceedings in order to obtain leverage for the dealers, these steps would
    necessarily engage Canadas interests;

·

Canada would have an interest in avoiding upset to or delay in a
    GMCL
CCAA
proceeding;

·

It was anticipated that Canada would be the debtor-in-possession
    financier; and

·

Cassels representation of the dealers would involve Canada, on
    the one side, and the GMCL dealer group, on the other side.

[197]

Moreover, at
    least one senior lawyer at Cassels recognized the conflict concerns arising
    from the acceptance of the Dealer Retainer in the face of the pre-existing Canada
    Retainer.  Shortly after learning that the firm opened a file for the GMCL dealers,
    Cassels lawyer Bruce Leonard sounded alarms in an exchange of emails with
    members of the firms Canada legal team.  On May 5, 2009, one day after the
    opening of the dealer file, he wrote to his colleagues:

I can see some points of conflict that may develop between IC [Canada]
    and the GM dealers.  As in who owns the inventory on hand, collection of A/R
    from dealers, appeals from disclaimers of contracts, dealers who operate from
    leased (company) premises and the like.  There may be ways to handle this
    (passing these issues off to Citi as the primary secured creditor) but there is
    a distinct possibility that we would end up in Court on opposite sides.  We
    could use conflict counsel as a device but at some point IC would be alarmed to
    see the firm acting in a way that depreciates a successful sale of GMCL and the
    continuance of a GM business in Canada.  As far as I know, the GM side of this
    has not been disclosed to IC.

We said in our Saturn disclosure that the Saturn dealers would
    amount to a negligible part of any restructuring.  I believe the GM dealers
    would be a much larger issue.  I am open to suggestions but I think that if we
    are going to proceed with the dealer representation, our contact with IC
    requires at least disclosure if not consent.

[198]

One of Leonards
    colleagues on the Canada file replied: Bruce  the disclosure letter
    generically referred to retainers through CADA not to Saturn or GM specifically
    thereby constituting disclosure of both (as each came through and are
    coordinated by the CADA).

[199]

Crucially,
    Leonard wrote back on May 5:

Sure but this may not reach the level of informed consent to
    the representation of the GM dealers.
We did say we
    would back off the dealers if their position threatened the IC position but has
    this been accepted by Peter Harris?  We probably need some parameters on what
    we can do for the GM dealers and if you have had those discussions with Peter
    and they are satisfactory to IC, all is well.  I would recommend some
    additional clarity before we commit to do anything aggressive for the dealers
    that might alarm IC.
Thoughts everyone?  [Emphasis added.]

[200]

Importantly, these
    emails were not copied to Harris or Cassels managing partner, Mark Young.  Further,
    and unfortunately, Leonards warnings were not discussed with or ever brought to
    Harris attention.

[201]

Nor, on the
    trial judges findings, did the internal meeting of Cassels lawyers on April
    21, 2009 lead to a proper consideration of the conflict implications arising
    from the Canada Retainer.  The trial judge found that, instead, the
    participants in that meeting focused only on Canada and CADAs interests.  He held,
    at para. 398, that the paucity of communication among Cassels partners
    regarding potential conflicts at this time, resulted in a lack of understanding
    of the whole picture and a failure by the firm to ever properly address the
    Canada Conflict.

[202]

Finally, as the
    trial judge observed, at para. 508, there was evidence of Cassels conflicts
    and problems with loyalty playing out in real time. On May 14, 2009, Cassels,
    acting for Canada, asked GMCL to provide Canada with a car dealer analysis of
    potential claims on shut down obligations to dealers. It also asked GMCL to
    provide critical vendor analysis and [a] list of Canadian vendors designated
    as non-critical.

[203]

Cassels argues
    that Leonards emails and his evidence at trial concerning them recognize only
    the possibility of a future conflict and further suggest the potential for
    managing that conflict.  Taking this argument at its highest, it still does not
    undercut the trial judges findings concerning the Canada Conflict.  The emails
    clearly recognize the need for disclosure of the potential conflict to one
    client  Canada.
[1]
They do not recognize the companion need for reciprocal disclosure to the other
    client, the GMCL dealers, of either the fact of the Canada Retainer or the
    constraint on Cassels ability to act for the dealers that Harris had
    communicated to Ryan.

[204]

Recall also that
    the firms Ethical Wall Memorandum, upon which Cassels in part relies to argue
    that it properly managed the potential for conflict, expressly contemplates
    disclosure to both clients of the retainer of the firm by the other.  Yet, Cassels,
    although admittedly free to do so, neither informed the dealers nor the DSC of
    the Canada Retainer or of any qualification on its ability to represent the
    dealers.

[205]

The Leonard
    emails support the trial judges finding, at para. 515: [A]t a minimum  Cassels
    owed a duty to the dealers to advise them at the outset of the Canada
    [R]etainer and all of the potential problems that could thereafter arise, and
    not, as Cassels suggests, wait until June 1 to see what happened.  Cassels
    failure to make this disclosure, the trial judge found, was a breach of its
    duty to provide candid advice and disclosure to the class members.  I agree.  I
    note that, at the appeal hearing, Cassels did not attempt to defend its
    non-disclosure to the dealers and the DSC.

[206]

The Leonard emails
    also indicate that Cassels intended, and had committed, to back off the
    dealers if their position threatened [Canadas] position.  Further, they suggest
    that nothing should be done on behalf of the dealers that might imperil the
    Canada Retainer or alarm Canada, the firms pre-existing client.

[207]

These statements
    lay bare another important aspect of the bright line conflict.  Their clear
    import is that Cassels accepted the Dealer Retainer with the intention of
    abandoning the dealers in favour of a preferred client, Canada, should the need
    arise.  While, arguably, this would have been a defensible posture if both
    clients were fully informed of this prospect and agreed to it, that is not this
    case.  As the trial judge observed, at para. 397: [A]lthough there was
    sensitivity for unconflicted loyalty to Industry Canada [by various Cassels
    lawyers], there appears to have been no similar sentiment for the GMCL dealers
    interests.

[208]

The evidence
    fully supports this observation.  It also supports the trial judges finding
    that Cassels breached its duty of loyalty and its duty to avoid conflicts owed
    to the GMCL dealers.  Indeed, it was its loyalty to Canada that propelled Cassels
    to impose a condition on its ability to represent the dealers  a condition
    never disclosed to them and that preferred Canada over the dealers.

[209]

Moreover, as the
    trial judge also held, at para. 497: [I]t would have been directly against the
    interests of [Canada] for the GMCL dealers to take a tough stance on the WDAs
    because this could have jeopardized the restructuring that the Canadian
    Governments wanted to succeed.

[210]

I agree.  Leonards
    emails, described above, anticipate as much.  As long as there was the prospect
    of a
CCAA
proceeding that could lead to a dispute between the dealers
    and Canada, Cassels was not positioned to vigorously advance the dealers
    interests.  Leonard essentially said so in his email exchange with the Cassels
    Canada legal team.

[211]

Leonards
    concerns were well-placed.  It was not in Canadas interests (or, for that
    matter, those of Cassels itself), to take action for the dealers that would provoke
    a dispute with Canada.  But it was not necessarily in the dealers interests to
    avoid such a dispute.  In this fundamental respect, Canadas immediate
    interests were indeed adverse to the direct interests of the GMCL dealers, from
    the outset.

[212]

Harris evidence
    and the chain of emails described above, in combination, provide ample support
    for the trial judges holding of a bright line conflict with the Canada
    Retainer when Cassels accepted the Dealer Retainer.

(b)

Substantial Risk Conflict

[213]

I reach a
    similar conclusion regarding the trial judges impugned finding of a conflict
    arising from the Canada Retainer due to the substantial risk that that retainer
    would materially and adversely affect Cassels representation of the dealers.

[214]

The trial judge
    recognized the controlling principles for determining whether a conflict of
    interest can be said to have arisen outside the scope of the bright line
    conflict rule.
McKercher
, to which the trial judge expressly
    referred, instructs, at para. 38, that the determination whether a conflict
    falling outside the scope of the bright line conflict rule exists depends on
    whether the concurrent representation of the clients in question creates a
    substantial risk that the lawyers representation of the client would be
    materially and adversely affected.

[215]

The trial judge concluded
    there was a substantial risk of a material and adverse effect on Cassels
    representation of the GMCL dealers by reason of its existing Canada Retainer,
regardless whether
Canadas immediate interests and the
    interests of the GMCL dealers were adverse and
even if
Cassels characterization of a narrow and contingent retainer by the dealers
    had prevailed.  As I see it, this finding is unassailable.

[216]

Recall that
    Cassels response at trial to Trilliums claim that it was conflicted from accepting
    the Dealer Retainer because of the pre-existing Canada Retainer was to argue
    that, as at May 4, 2009, there was only the potential for a future conflict in
    the event of a GMCL
CCAA
filing, which the firm properly managed.
    However, unbeknownst to the dealers or the DSC, Cassels had told CADA that it
    could not take on the government, if such a circumstance arose, in any
CCAA
proceeding.

[217]

In these
    circumstances, in my opinion, the trial judges finding of a substantial
    risk-based conflict due to the Canada Retainer is firmly anchored in the
    evidence.  With respect, Cassels position on this issue is inherently
    contradictory.  Trillium puts it well in its factum:

The implication of Cassels position is that:
(i)
it had a contingent retainer that would not crystallize unless and until the
    event of a
CCAA
filing, and that the firm would take no steps until
    that event occurred; but
(ii)
when and if that event occurred,
    Cassels would then have to refuse the retainer it had accepted on a contingent
    basis because the dealer group and Industry Canada would have been adverse in
    interest and Cassels had already decided it could not act adverse to Industry
    Canada (i.e. the undisclosed proviso).

This makes no sense.  It shows an inescapable conflict of
    interest, as fully recognized by the trial judge.  Cassels was required to be
    candid at the outset and fully disclose that the retainer (as Cassels saw it)
    was contingent on the event of a
CCAA
filing, but would then have to
    be immediately declined if the contingent event occurred.  No rational, fully
    informed dealer group would ever have retained Cassels on this basis.  In any
    event, Cassels made no such disclosure.

I agree with these submissions.

[218]

There are
    additional difficulties with Cassels attack on the trial judges substantial
    risk finding.  By recognizing the potential for a conflict arising from the
    Canada Retainer, as it did, Cassels necessarily acknowledged that it understood
    there was a risk, from the outset, that its representation of Canada could
    negatively impact on its representation of the GMCL dealers.  On Cassels own
    evidence, this risk was real, not merely theoretical.  The critical issue was
    whether the risk was also substantial, as the trial judge found it was.

[219]

It is helpful to
    situate Cassels argument on this issue in the factual landscape as it existed
    by May 4, 2009.  That factual landscape strongly supports the trial judges
    substantial risk finding.  By the beginning of May 2009: a GMCL
CCAA
filing appeared very likely, if not inevitable (para. 501); GMCL had
    announced its plan for drastic cuts to its dealer network and, on April 27, had
    also disclosed publicly that it intended to expedite those cuts (a 42 percent
    reduction within 20 months); on the same day, GM had announced its own
    accelerated plan for the discontinuance of the Pontiac brand, a highly negative
    development for GMCL given that this brand constituted more than a quarter of
    its book of business; the Saturn brand was to be discontinued by the end of
    2011 unless a third party purchaser could be found; GMCL could not survive
    without a government bailout; and a June 1 deadline had been imposed for the
    submission of an acceptable, revised GMCL restructuring plan, which GMCL
    recognized had to include deeper and [more] drastic restructuring changes.  It
    is apparent that GMCL was in perilous financial circumstances, rendering all its
    dealers especially vulnerable.

[220]

Further, in anticipation
    of a GMCL
CCAA
filing, the GMCL dealers had twice been warned by May 4
    that it was crucial that they organize and be represented by legal counsel to
    ensure their interests were protected.  The May 4 Memorandum repeated this
    message and emphasized the power in numbers to be achieved by collective
    action to ensure the dealers had a seat at the bargaining table.  The point was
    underscored in a May 13, 2009 email from CADA urging the dealers to sign the
    participation forms to guarantee their seat at the table.

[221]

In this factual
    context, the trial judge concluded, at para. 499, that the proviso attached
    by Cassels to its acceptance of the Dealer Retainer left little doubt of an
    existing, substantial risk that Cassels representation of the GMCL dealers
    would have been materially affected by the Canada Retainer.  I agree.

[222]

Finally, as the
    trial judge noted, Cassels was aware from its representation of the Saturn
    Dealers that the planned reduction to GMCLs dealer network might violate the
    terms of the dealers agreements with GMCL; that, if GMCL dealerships were cut,
    it would have to take a position contrary to Canadas desire for restructuring;
    that Canadas interests would be aligned with GMCL in the event of a
CCAA
filing; and that (on Harris and Leonards evidence), on a
CCAA
filing, Canadas and the GMCL dealers interests would be adverse.

[223]

Given all this
    evidence, in my opinion, Cassels has failed to demonstrate any reversible error
    in the trial judges impugned substantial risk finding.  This finding, by
    itself, is sufficient to establish Cassels breaches of its obligations to the
    dealers.

(c)

Alleged Misapprehension of Adverse Interests

[224]

Cassels further submits
    that the trial judge misapprehended the divergent interests at stake by
    confusing the clear adverse interests between GMCL and the GMCL dealers with
    the differing interests of Canada and the dealers.

[225]

I am not
    persuaded by this submission.  The evidence at trial established, and the trial
    judge accepted, that Canadas interests would be aligned with those of GMCL on
    a
CCAA
filing.  Obviously, this was not the case for the dealers.  As
    the trial judge found, it was in their interests to either stay in business or
    obtain as much financial compensation for the loss of their dealerships as
    possible.

[226]

The trial judge
    had a clear grip on the evidence at trial and was alert to the varying
    interests at play, in particular, those of Canada and the GMCL dealers.  Based
    on his reasons, there can be no serious claim that he conflated or confused the
    divergent interests of GMCL and the dealers, on the one hand, and those of
    Canada and the dealers, on the other hand.  That the trial judge did not fall
    into this error is manifest, for example, in his observation at para. 497, quoted
    above, that: [I]t would have been directly against the interests of Industry
    Canada for the GMCL dealers to take a tough stance on the WDAs because this
    could have jeopardized the restructuring that the Canadian Governments wanted
    to succeed.  In my view, the reasons confirm that the trial judge understood
    and engaged directly with the competition between Canadas interests and those
    of the GMCL dealers.

(d)

Expert Evidence Complaints

[227]

Cassels attacks
    the trial judges substantial risk finding on two additional bases, both
    related to the expert evidence at trial.  It submits, first, that the trial
    judge erred in his analysis of the Canada Conflict by failing to take account
    of the opinion evidence of Cassels experts that the firms approach to the
    potential conflict arising from the Canada Retainer met the applicable
    standard of care.  Cassels also says that Trillium failed to lead any expert
    evidence on this issue.  In my opinion, neither assertion does justice to the
    record or to the trial judges analysis of the Canada Conflict.

[228]

Cassels called
    opinion evidence at trial from two senior Toronto lawyers accepted as experts in
CCAA
and insolvency and restructuring matters  Kenneth Rosenberg and
    Jonathan Levin.  Trillium, for its part, led opinion evidence from Gerald
    Kandestin, a senior Québec lawyer who was qualified at trial as an expert in
    Canadian insolvency law and practice.

[229]

Rosenbergs and
    Levins evidence on the Canada Retainer was brief.  Suffice it to say, they
    offered the opinions that Cassels met the standard of care in its approach to a
    possible conflict arising from the Canada Retainer. For example, Levin
    testified that there was clearly the potential for conflict, but that
    potential conflicts are not unusual in large insolvencies, and can be managed
    as they arise. Similarly, Rosenberg testified that Cassels had attempted to
    manage the Canada Conflict, and that he considered it to be a future issue to
    be dealt with.

[230]

In other words,
    Rosenbergs and Levins evidence on this issue was premised on Cassels
    contention that the Canada Retainer created merely the potential for a future
    conflict with the Dealer Retainer.  The trial judge disagreed.  Based on both
    the
Neil
bright line conflict rule and the
McKercher
substantial risk principle, he concluded that an actual and obvious conflict with
    the Canada Retainer existed from the beginning, when Cassels accepted the
    Dealer Retainer.  As a result, on the trial judges findings, the foundational
    premise for Cassels experts opinions on the issue of the Canada Retainer was
    vitiated
on the evidence
.

[231]

It is also
    incorrect to say, as Cassels does, that the trial judge ignored their evidence
    or failed to factor it into his analysis of the Canada Conflict.  The reasons
    do not bear this out.  To the contrary, the reasons confirm that the trial judge
    expressly considered the evidence of both experts regarding the Canada Retainer
    and simply declined to accept it, for reasons he explained.  He was entitled to
    do so.

[232]

Nor, on the
    record, is it accurate to suggest that Trillium failed to lead any expert evidence
    on standard of care issues relating to the Canada Retainer.  In his report,
    which was filed as an exhibit at trial, Kandestin addressed the Canada
    Retainer.  He offered the opinion that the Dealer Retainer and, in his view,
    the Saturn Retainer, were irreconcilable with the Canada Retainer and that
    Cassels had accepted retainers from the GMCL dealers and the Saturn Dealers
    that it could not fulfill.  He posited, for example, the following pertinent
    question:

How could Cassels, even though different members of its firm
    and even with the consent of the  Saturn Dealers and GM Dealers (which it
    never obtained), represent different parties with conflicting interests before
    the
CCAA
court?  It could not.

[233]

I recognize that
    the trial judge does not refer to Kandestins evidence in his analysis of the
    Canada Retainer.  In contrast, when later discussing the DSC Conflict, he
    refers to Kandestins evidence about how Cassels ought to have managed that
    conflict, and rejects it.

[234]

However, nowhere
    in his reasons does the trial judge suggest that Kandestins evidence was
    otherwise unacceptable or unreliable.  Indeed, he confirmed in his costs
    reasons that Kandestins opinion evidence, while not accepted on the DSC
    Conflict issue, was helpful overall.  And, in his damages analysis, the trial
    judge expressly accepted parts of Kandestins evidence.  The fact remains that
    there was some expert evidence at trial supporting the trial judges finding of
    a conflict arising from the Canada Retainer.

(e)

Causation Argument

[235]

Cassels last
    ground on this issue is a causation-based argument.  I deal with it in connection
    with issue (4), relating to Causation and Loss of Chance.

(f)

Concluding Comments

[236]

I make these
    final comments regarding the Canada Conflict.  I accept that, in complicated
    insolvencies or
CCAA
matters, law firms, particularly large law firms
    with established expertise in such matters, may have multiple clients affected
    by the insolvency or bankruptcy events.  In many instances, the means may be
    found to appropriately manage the risk of conflicts developing among the
    various clients interests.

[237]

However, two
    important factors set this case apart from the manageable risk category of
    cases.  First, the dealers were not told of Cassels engagement by another
    client, one whose objectives competed with those of the dealers.  Second, the
    dealers were also not told that Cassels willingness and ability to represent
    their interests was qualified.  But the pre-existing client was told.  This,
    therefore, is not a case of conflicts risk management.  There is no suggestion here
    of informed client consent to multiple mandates.  Rather, this is a case, as
    found by the trial judge, of divided client loyalties that led the involved law
    firm to impermissibly favour one client over another.

Issue 3: Did the Trial Judge Err in his Treatment
    of the Saturn Dealers?

(1)

Trial Judges Findings

[238]

The trial judge
    held, at para. 488: What can be said about Cassels retainer with the GMCL
    dealers applies equally to its retainer with the Saturn [D]ealers.  He found
    that Cassels owed the Saturn Dealers the same
per se
 fiduciary and
    contractual duties as it owed to the GMCL dealers, including the duty of
    loyalty, the duty of candid disclosure, and the duty to avoid conflicts.  In
    respect of the Canada Conflict specifically, he held that, as with the other
    GMCL dealers, Cassels conduct toward the Saturn Dealers amounted to a breach
    of those duties.

(2)

Cassels Position

[239]

Cassels argues
    these findings are merely conclusory and the trial judge failed to conduct the
    necessary analysis of the Saturn Dealers specific circumstances to support
    them.  It submits the trial judge erred by: i) failing to determine the nature
    and scope of the Saturn Retainer, including whether it extended to advice on
    the Saturn WDAs; ii) failing to determine the standard of care applicable to
    the Saturn Dealers and any breaches of that standard; and iii) failing to make
    necessary causation findings regarding the Saturn Dealers.

[240]

I turn now to
    Cassels first two submissions.  I will address the third submission under
    issue (4), relating to Causation and Loss of Chance.

(3)

Discussion

(a)

Nature and Scope of the Saturn Retainer

[241]

Contrary to
    Cassels contention, the trial judges reasons confirm that he did address,
    albeit in brief compass, the essential subject matter and scope of the Saturn
    Retainer.

[242]

As I earlier
    indicated, Cassels was retained by the Saturn Dealers in March 2009, shortly
    after GMCLs announcement that it would be discontinuing the Saturn brand by
    the end of 2011, unless a purchaser for the brand could be found.  Early in his
    reasons, in identifying this precipitating cause for the Saturn Retainer, the
    trial judge said, at para. 49: Cassels was retained by the Saturn Group in
    March 2009
to provide legal advice with respect to, among
    other issues, GMCLs legal ability to terminate the Saturn Dealerships

    (emphasis added).

[243]

The trial judge
    twice returned to the issue of the nature and scope of the Saturn Retainer in
    his reasons, stating, at para. 363, that the Saturn Dealers retained Cassels
with respect to the closing or sale of the Saturn dealerships

    and, at para. 383: Cassels was retained by the Saturn [D]ealers
to provide advice regarding their rights and options with
    respect to the discontinuance of the Saturn brand
 (emphasis added).

[244]

Thus, on the
    trial judges explicit findings, the Saturn Retainer involved advice regarding
    GMCLs intended termination of the Saturn dealerships, including the issue of
    GMCLs legal entitlement to terminate its agreements with the Saturn Dealers.  As
    the Saturn WDAs were merely the instrument by which GMCL sought to effect this
    purpose, it is implicit in the trial judges findings that the Saturn Retainer
    included advice to the Saturn Dealers regarding the Saturn WDAs.

[245]

This conclusion
    is bolstered by the terms of the individual, written retainer agreements
    entered into by the Saturn Dealers.  Cassels asserts in its factum that
    Trillium led no evidence from a Saturn dealer regarding the Saturn Retainer.
    This is incorrect.  Turpin was both a Saturn dealer and the principal of a
    Pontiac Buick dealership in Ottawa.  In cross-examination of Turpin, Cassels
    counsel introduced into evidence and questioned Turpin about the specific
    retainer agreement that his company had entered into with Cassels.  Turpin
    confirmed that the agreement set out the nature of the retainer with Cassels.

[246]

The agreement is
    a template document that was prepared for execution by any Saturn dealer who
    wished to participate in the Saturn group by retaining Cassels.  The language
    of the agreement is widely cast.  It stipulates that the applicable dealer retained
    Cassels to provide advice and to act on their behalf with respect to all
    matters to do with the Saturn Dealer Association and GMCL, including any other
    matter requested by the [Saturn] Steering Committee.  Without any qualifying
    wording, which does not appear in the template retainer agreement, this broad language
    clearly extends to matters relating to the termination of the Saturn
    dealerships, like the Saturn WDAs.

[247]

Cassels argues,
    and I accept, that the Saturn Retainer obliged it to perform legal work for the
    Saturn Dealers as a group, and did not require it to advise on the individual
    circumstances of Saturn Dealers.  This was also true of the Dealer Retainer.  But
    this does not mean that advice to the Saturn Dealers,
as
    a group
, regarding the WDAs was excluded from the ambit of the Saturn
    Retainer.  Indeed, Cassels recognized its role to provide legal services to the
    Saturn Dealers,
as a group
, regarding the
    termination of their dealerships when, on April 16, 2009, it provided a draft
    letter for individual Saturn Dealers to deliver to GMCL, if they so chose, to
    effect withdrawal from their dealership agreements with GMCL.

[248]

Nor is it
    accurate to suggest the trial judge failed to recognize the differences between
    the Saturn Dealers circumstances and those of the GMCL dealers.  The trial
    judge identified those differences at various points in his reasons, including:
    GMCLs announcement of its plan to discontinue the Saturn brand, as distinct
    from any other brand; the associated timing of the Saturn Dealers retainer of
    Cassels; the fact that, by reason of the separate Saturn Retainer, the May 4
    Memorandum did not apply to the Saturn Dealers; and the provision in the Saturn
    WDAs of the option to defer acceptance of any GMCL payment pending the outcome
    of efforts to sell the Saturn brand to a third party, which was not contained
    in the other WDAs.

[249]

In these circumstances,
    while it might have been preferable if the trial judge had conducted a stand-alone
    analysis of the nature and scope of the Saturn Retainer, I am unable to
    conclude that his appreciation of it and his articulation of its reach are
    deficient or tainted by any reversible error.  As with his findings on the
    nature and scope of the Dealer Retainer, the trial judges findings on the
    nature and scope of the Saturn Retainer are findings of fact, to which this
    court must defer:
Seven-Up Canada Inc.
, at para. 40.

(b)

Standard of Care

[250]

It also does
    disservice to the trial judges reasons to claim, as Cassels does, that the
    trial judges findings regarding the Saturn Dealers are merely conclusory and
    that he failed to determine the standard of care applicable to Cassels
    representation of the Saturn Dealers.

[251]

In respect of
    the Canada Conflict, Trillium argued before the trial judge that the Saturn
    Dealers were similarly positioned to the GMCL dealers.  The trial judge
    accepted this argument.  As I have said, at para. 488 of his reasons, he held
    that what could be said about the Dealer Retainer applied equally to the Saturn
    Retainer.  For that reason, he referred generally to the GMCL dealer group
    throughout his analysis of Cassels conduct concerning the Canada Retainer.  I
    take this to mean that the trial judge concluded that the standard of care
    applicable to the GMCL dealers under the Dealer Retainer also applied to the
    Saturn Dealers under the Saturn Retainer.

[252]

I see no error
    in this conclusion as it relates to the Canada Conflict.  As the trial judge
    found, Cassels was clearly in a fiduciary relationship with the Saturn Dealers
    and owed fiduciary and contractual duties to them by reason of the separate
    written retainer agreements entered into by them with Cassels.  As a matter of
    law, these duties included the duty of loyalty, the duty of candid disclosure, and
    the duty to avoid conflicts.  In these respects, Cassels obligations to the
    Saturn Dealers were no different from those applicable to the other GMCL
    dealers.  The fact that Canada played no role in the discontinuance of the
    Saturn brand is irrelevant to this conclusion.

[253]

Further, and
    importantly, the record supports the trial judges finding that the Saturn Dealers
    and the affected GMCL dealers were similarly vulnerable in their exposure to a
    GMCL restructuring or
CCAA
filing.  This followed inexorably from
    GMCLs announcement to CADA on May 15, 2009 that the delivery of WDAs was
    anticipated for dealerships GMCL wished to terminate, including Saturn
    dealerships.  The Saturn Dealers received their WDAs on May 20, along with the
    other dealers.

[254]

The record also
    indicates that all involved parties, including Cassels, accepted that, after
    the delivery of the WDAs and notwithstanding the option contained only in the
    Saturn WDAs, the interests of all proposed non-continuing GMCL dealers had
    converged.

[255]

Recall that CADA
    held a conference call with the Saturn Dealers on May 22, 2009 in which
    Cassels lawyers participated, to discuss the Saturn WDAs and options.  On May
    15, in preparation for that call, Ryan emailed members of the Saturn steering
    committee, indicating in part:

We would also explain that given the situation of other GM
    dealer brands like Pontiac it appears that the
Saturn
    issues which were initially in the forefront of GM issues appear now to be
    converging with general GM issues and that this is likely to only become more
    pronounced if GM files for bankruptcy protection
.  [Emphasis added.]

[256]

Subsequently,
    Ryan suggested to Harris and Zakaib that the other GMCL dealers join the May 22
    conference call because, as he put it in a May 19 email to the Cassels lawyers,
    the Saturn dealers will be part of this group anyway.   In the event, under
    the heading Next Steps, the agenda for the May 22 call contemplated the [e]nd
    of Saturn Dealer Action Group and to be under the [DSC].

[257]

The Saturn
    Dealers were also similarly situated to the other GMCL dealers in other
    significant respects in relation to the Canada Conflict.  The trial judge
    found, at para. 515, that at a minimum  Cassels owed a duty to the dealers to
    advise them at the outset of the Canada [R]etainer and all of the potential
    problems that could thereafter arise.  And, he also found, at para. 507:
    [M]any of the dealers, GMCL and Saturn alike, stood to lose their livelihoods
    precisely because the Canadian Governments were demanding massive restructuring
    before they would offer financial support to the imperilled enterprise.

[258]

Yet, as with the
    other GMCL dealers, Cassels never disclosed the Canada Retainer to the Saturn
    Dealers or the Saturn steering committee.  Nor did it tell them about any
    constraint on its ability to represent the dealers, including Saturn Dealers,
    in any matter adverse to Canadas interests.

[259]

In my view, therefore,
    the trial judge was on firm evidentiary ground when he held that, as with the
    other GMCL dealers, Cassels conduct regarding the Saturn Dealers in respect of
    the Canada Conflict amounted to a breach of the applicable standard of care.

Issue 4: Did the Trial Judge Err in his Causation
    and Loss of Chance Analyses?

(1)

Introduction

[260]

In its action,
    Trillium sought aggregate damages against Cassels under s. 24(1) of the
CPA
.
    It argued that, if Cassels had met the standard of care and provided proper
    advice to the dealers, including proposing negotiations with GMCL regarding the
    WDAs, the dealers, acting collectively, would have sought to negotiate with
    GMCL to improve their compensation under the WDAs.  Because Cassels failed to
    properly advise and represent the dealers, Trillium argued, the dealers lost
    their only chance to negotiate with GMCL for this purpose.

[261]

Trilliums loss
    of chance claim raises issues of concurrent liability in contract and tort.
    The question whether an action for damages for a lost chance sounds in tort is
    unsettled under the current Canadian jurisprudence.  However, the doctrine of
    lost chance in contract law has been expressly recognized both in Canada and
    England:
Chaplin v. Hicks
, [1911] 2 K.B. 786;
Webb & Knapp
    (Canada)  Limited v. City of Edmonton
, [1970] S.C.R. 588;
St. Thomas
    Subdividers Ltd. v. 639373 Ontario Ltd.
(1996), 91 O.A.C. 193 (C.A.).

[262]

The distinction
    between loss of chance claims in contract and claims for damages in tort is
    important because, in contract law, proof of damage is not part of the
    liability inquiry.   In contrast, in tort law, liability rests not only on
    proof of a breach of the applicable duty of care but, as well, on a showing by
    the plaintiff that the defendants conduct caused a loss.

[263]

In a solicitors
    negligence case like this one, where there is concurrent liability in contract
    and tort, the law is clear that a plaintiff may advance a claim for damages for
    loss of chance.  The leading case on the loss of chance to obtain a benefit
    or avoid a loss in the solicitors negligence context is the English Court of
    Appeals decision in
Allied Maples Group Ltd. v. Simmons & Simmons (a
    firm)
, [1995] 4 All E.R. 907.  In
Allied Maples
, the defendant
    solicitors negligently failed to warn their clients of the consequences of
    deleting a warranty in an agreement of purchase and sale.  The warranty stated
    that there were no existing or contingent liabilities on any leaseholds held by
    the vendors subsidiary.  In fact, there were such liabilities, and the
    plaintiff was bound by them.

[264]

The plaintiff
    sued its solicitors, arguing that if it had been properly advised, it would
    have successfully negotiated some level of protection from liability or,
    alternatively, walked away from the transaction.  In an argument that mirrors
    Cassels position on this appeal regarding the Canada Conflict, the solicitors countered
    that they were not liable because there was no causal link between the breach
    and the damages.

[265]

The Court of
    Appeal held that this argument confused the issues of causation and damages.
    The headnote of the case captures the courts key holdings:

Once the plaintiff proved on the balance of probability as a
    matter of causation that he would have taken action to obtain a benefit or
    avoid a risk, he did not have to go on to prove on the balance of probability
    that the third party would have acted so as to confer the benefit or avoid the
    risk to the plaintiff.  Instead, the plaintiff was entitled to succeed provided
    he showed that there was a substantial, and not merely a speculative, chance
    that the third party would have taken the action to confer the benefit or avoid
    the risk to the plaintiff.  The evaluation of a substantial chance was a
    question of quantification of damages,

the

range

lying

somewhere between
    something that just qualified as real or substantial on the one hand and near
    certainty on the other.

[266]

The majority
    dismissed the solicitors appeal because the plaintiff had established that it
    would have negotiated the warranty issue if it had been properly advised, and
    there was a substantial chance that it would have obtained partial or full
    protection from the leasehold liabilities: see
Lawyers Professional
    Liability
,
supra
, at p. 227.

[267]

In Ontario,
Folland
    v. Reardon
(2005), 74 O.R. (3d) 688 (C.A.), is the leading case on loss of
    chance in solicitors negligence.  In
Folland
, the plaintiff sued his
    former lawyer for the alleged negligent conduct of a sexual assault trial.  The
    plaintiff argued that, but for his lawyers negligence, he would have been
    acquitted.  This court held that the claim raised a genuine issue for trial.

[268]

Justice Doherty,
    writing for the court, went on in
obiter
to consider the plaintiffs additional
    argument that, as a result of his lawyers negligence, he had lost the chance
    to be acquitted.  This claim was novel, arising as it did in the criminal law
    context.  The court considered the relevant case law and held, at para. 73:

Whatever the scope of the lost chance analysis in fixing
    liability for tort claims based on personal injuries, lost chance is well
    recognized as a basis for assessing damages in contract.  In contract, proof of
    damage is not part of the liability inquiry.  If a defendant breaches his
    contract with the plaintiff and as a result a plaintiff loses the opportunity
    to gain a benefit or avoid harm, that lost opportunity may be compensable.  As
    I read the contract cases, a plaintiff can recover damages for a lost chance if
    four criteria are met.  First, the plaintiff must establish on the balance of
    probabilities that but for the defendants wrongful conduct, the plaintiff had
    a chance to obtain a benefit or avoid a loss.  Second, the plaintiff must show
    that the chance lost was sufficiently real and significant to rise above mere
    speculation.  Third, the plaintiff must demonstrate that the outcome, that is,
    whether the plaintiff would have avoided the loss or made the gain, depended on
    someone or something other than the plaintiff himself or herself.  Fourth, the
    plaintiff must show that the lost chance had some practical value.

[269]

The
Folland
court concluded that a lost chance claim was not available to the plaintiff on
    the facts of the case; among other reasons, it held, at para. 92, that public
    policy would not countenance a damage award in circumstances where, on the
    trial courts findings, the plaintiff probably committed the crime for which he
    was charged.

[270]

Recently, in
Berry
    v. Pulley
, 2015 ONCA 449, 335 O.A.C. 176, at para. 70, this court
    described a two-step framework for the determination of a loss of chance
    claim.  Associate Chief Justice Hoy explained, at para. 72, that the court must
    first determine if the four criteria set out in
Folland
are met.  If
    they are, then the court proceeds to the second step and will award damages
    equal to the probability of securing the lost benefit (or avoiding the loss)
    multiplied by the value of the lost benefit (or the loss sustained).

[271]

More recently
    still, in
Jarbeau v. McLean
, 2017 ONCA 115, this court restated the
    principles that govern a loss of chance claim in the context of an action for
    solicitors negligence. Justice Pardu, writing for the court, quoted from para.
    73 of
Folland
, set out above, and stated, at paras. 27-28:

Where a plaintiff in a tort action arising out of solicitors
    negligence can establish on the balance of probabilities that but for the
    [solicitors] negligence he or she would have avoided the loss, he or she
    should be fully compensated for that loss.

Where a plaintiff can only establish that but for the
    solicitors negligence he or she lost a chance to avoid a loss, a claim for
    breach of contract may permit recovery for the value of that chance.

[272]

In contrast to
Jarbeau
,
    Trillium advances a claim in this action for damages for loss of chance,
    flowing from solicitors negligence.

[273]

As I will
    elaborate, when these principles are applied to the facts of this case as found
    by the trial judge, I conclude that Cassels has mischaracterized the nature of
    the loss of chance claim put against it by Trillium.  Consequently, its
    challenges to the trial judges causation and loss of chance holdings are also
    flawed.

(2)

Trial Judges Findings

[274]

The trial judge
    accepted Trilliums loss of chance claim.  In his view, the analysis of that claim
    had two components  causation and quantum.  He therefore addressed causation
    under the rubric of his loss of chance analysis, holding that Trillium had established,
    on a balance of probabilities, that because of Cassels wrongful conduct, the
    GMCL dealers lost the opportunity to negotiate collectively with GMCL for
    increased WDA payments.  He made these specific findings:

·

But for Cassels divided loyalty, Cassels would likely have
    provided advice to the dealers about the WDAs and proposed the option of
    collective negotiation with GMCL (para. 555);

·

Cassels divided loyalty due to the Canada Conflict caused it to
    soft pedal its representation of the dealers interests and prevented it from
    fully committing to their cause (para. 556);

·

If the dealers had been properly advised and represented by
    Cassels, they would have banded together and instructed Cassels to negotiate
    with GMCL regarding the WDAs (paras. 556-61);

·

The dealers lost chance to negotiate with GMCL was real and
    significant (para. 562); and

·

It was likely that GMCL would have negotiated with the dealers.
    Further, there was a real chance that those negotiations would have proven to
    be productive (paras. 563-84).

(3)

Cassels Position

[275]

Cassels mounts
    broad attacks against the trial judges causation findings.  It contends, as a
    threshold matter, that the trial judge was precluded from making any findings
    on causation because it was not certified as a common issue.  In any event, Cassels
    says, the evidence necessary to determine causation was not before the court.

[276]

Cassels also argues
    that the trial judge erred by:

(1)   finding
    causation in the absence of any finding about what the standard of care
    required in the circumstances;

(2)   finding,
    in breach of the rule in
Browne v. Dunn
(1893), 6 R. 67 (H.L.), that
    Cassels soft pedalled its assistance to the GMCL dealers due to the Canada
    Retainer;

(3)   finding,
    in the absence of supporting evidence and based on a misapprehension of the
    composition of the Class, that GMCL would have agreed to negotiate with the
    GMCL dealers regarding the WDAs;

(4)   finding,
    based on an unavailable inference, that the class members would have instructed
    Cassels to negotiate collectively with GMCL;

(5)   failing
    to consider causation in relation to the Saturn Dealers; and

(6)   failing
    to undertake a proper loss of chance analysis, specifically, by failing to consider
    the cumulative elements of probability.

(4)

Discussion

(a)

Threshold Issues

[277]

I deal first
    with Cassels threshold submissions that the trial judge impermissibly
    undertook a causation inquiry and, relatedly, that he made causation findings
    in the absence of necessary supporting evidence.  The first of these
    submissions concerns the trial judges jurisdiction.  The second relates to his
    processing of the evidence.

[278]

As I have
    described above, the jurisprudence on loss of chance claims confirms that the concepts
    of loss of chance, causation and damages overlap.  The governing authorities
    establish that, at the first stage of a loss of chance analysis, liability, the
    plaintiff must prove on a balance of probabilities that, but for the
    defendants conduct, it had a chance to obtain a benefit or avoid a loss.  This
    is fundamentally a question of causation.  At the second stage, damages, the
    court is required to determine how much of the plaintiffs loss is attributable
    to the defendants conduct.  This, too, is a question of causation.

[279]

Thus, in a loss
    of chance case, causation is relevant both to the existence of liability and
    the extent of liability: see Ken Cooper-Stevenson,
Personal Injury Damages
    in Canada
, 2d ed. (Toronto: Carswell, 1996), at pp. 750-51.  This belies
    Cassels argument that the trial judge was not entitled to consider causation
    as it was not certified as a common issue.

[280]

Similarly, in a
    class proceeding, a trial judge can invoke the s. 24
CPA
aggregate
    damages remedy regardless whether aggregate damages are certified as a common
    issue:
Ramdath v. George Brown College of Applied Arts and Technology
,
    2015 ONCA 921, 341 O.A.C. 338, at para. 78, leave to appeal discontinued,
    [2016] S.C.C.A. No. 79;
Markson v. MBNA Canada Bank
, 2007 ONCA 334, 85
    O.R. (3d) 321, leave to appeal refused, [2007] S.C.C.A. No. 346.  In this
    context, as well, the case law recognizes that issues of causation and damages
    are inextricably linked.

[281]

In his
    Certification Decision, at paras. 24 and 26, the certification judge helpfully
    explained what was at issue in Trilliums action with respect, particularly, to
    the Canada Retainer:

Trillium alleges that Cassels had an undisclosed conflict of
    interest.  It pleads that Cassels had been retained by the government of Canada
    to provide legal advice on the GMCL bailout negotiations and that this retainer
    was not disclosed to the terminated dealers.  Canada had made financial
    assistance conditional on GMCL taking a more aggressive approach to its
    restructuring, including the reduction of its dealership network.  Trillium
    asserts that because it was in Canadas interest to have the GMCL dealers
    accept the [WDAs], Cassels was not in a position to provide independent and
    impartial advice to the terminated dealers.

Trillium pleads that Cassels failed to properly advise and
    represent class members  in particular, by failing to inform them of their
    rights under the [
Arthur Wishart Act (Franchise Disclosure), 2000
,
    S.O. 2000, c. 3] and by failing to properly represent them in developing a
    collective response to the [WDA].
Trillium alleges that
    by failing to disclose its alleged conflict, and by failing to refer class
    members to an independent lawyer who could inform them of their rights and
    properly represent their interests in a collective response to GMCLs ultimatum,
    Cassels deprived all class members of the opportunity to use their group
    negotiating power to full advantage.  Trilliums theory is that the dealers
    could have used their combined leverage to negotiate a better deal with GMCL by
    refusing to agree to the voluntary downsizing unless their compensation was
    increased.
Instead, says [Trillium], Cassels told them to obtain advice
    from their own lawyers, which  in view of GMCLs position that the [WDA] was
    non-negotiable  meant that there was no possibility of an effective response
    on an individual basis.  [Emphasis added.]

[282]

The
    certification judge went on to describe Trilliums breach of contract and
    breach of fiduciary duty claims in these terms, at paras. 84 and 87:

[Trillium] has pleaded the relevant terms of the contract,
    including implied terms that arise from a solicitor and client relationship.
[2]
There are allegations that set out the manner in which the contract was
    breached.  Damages are pleaded.
[Trillium] pleads that
    as a result of Cassels acts or omissions, the class members lost their chance
    to be represented as a collective and to negotiate a better settlement.
I cannot say that this is a patently ridiculous allegation or that the damages
    claimed are incapable of proof:
[r]ecovery for lost
    chances based on lawyers negligence either in advising clients, or in
    conducting litigation, is well established in the common law
.

.

The statement of claim contains allegations that Cassels owed a
    duty of loyalty and faithful and undivided representation to class members.
    These are fiduciary duties.  There are allegations that Cassels had a conflict
    of interest that it did not disclose to class members and that it acted
    contrary to the interests of class members by simultaneously acting for Canada
    as well as for the ongoing GM dealers who were not being terminated.  These are
    allegations of breaches of the fiduciary obligation of undivided loyalty that
    is at the heart of the lawyer-client relationship.  There is a properly pleaded
    cause of action for breach of fiduciary duty.  [Emphasis added; citations
    omitted.]

[283]

Later in his
    reasons, in his discussion of the common issues and preferable procedure
    criteria under the
CPA
, the certification judge reiterated that Trilliums
    claim was based on a loss of chance, a recognized claim at common law.

[284]

On appeal to
    the Divisional Court from the Certification Decision, Cassels argued that the
    but for test continues to apply in loss of chance cases and that the
    certification judge erred by holding to the contrary.  Justice Lauwers, as he
    then was, writing for the Divisional Court, described Cassels argument, at
    para. 8, in this fashion:

Justice Strathy erred in rejecting Cassels argument that the
    plaintiff must plead (and ultimately prove) that each proposed Class Member
    would not have signed the WDA but for Cassels alleged breaches.  Instead,
    Justice Strathy found at paragraph 158 of his [Certification] Decision that
    the individual motivations of class members are irrelevant.  This finding is
    contrary to the case law.

Justice Strathy erred in finding that the plaintiff need not
    plead or establish that it would have acted differently but for Cassels
    alleged negligence or breach of contract.  As the fiduciary duty claim arises
    from the contract claim, it fails for the same reason.

[285]

The Divisional
    Court rejected this argument, holding at para. 10: The causes of action on
    which the plaintiff relies against Cassels do require proof of causation, but
    not in the way that Cassels suggests.  The court then quoted at length from
    the Certification Decision emphasizing Trilliums loss of chance claim.

[286]

Justice Lauwers elaborated,
    at paras. 16-17:

[Trilliums] allegation is that an informed and competent
    lawyer in Cassels position, but without its inside knowledge and its conflict
    of interest, would have urged the dealers to take collective action that would
    have produced a better deal than the WDA.  This is not an implausible theory
    and it is not obviously impossible to prove to the standard required.

If that loss of chance were proven, then the causation element
    would be satisfied from the viewpoint of contract or tort; it seems axiomatic
    that if the trier of fact ultimately finds on the evidence that another
    conflict-free lawyer would have negotiated a better deal, then the [dealers] would
    plainly have accepted it instead of the WDA and the damages would be easily
    made out.  [Citations omitted.]

[287]

I take the
    certification judge and the Divisional Court to have both concluded that, given
    the way in which Trillium framed its action  as a loss of chance claim founded
    in solicitors negligence   its claim encompassed causation at both the
    liability and damages stages.  This necessarily meant that causation would be a
    live issue at trial.  As a result, it was unnecessary that causation be
    certified as a discrete common issue. I therefore disagree with Cassels
    submission that the trial judge was precluded from making any findings on
    causation.  A causation inquiry by the trial judge was both available and
    necessary to determine Trilliums claim, as pleaded.

[288]

I would also
    reject Cassels second threshold submission, that the evidence necessary to
    determine causation was not before the trial judge.  I am not persuaded there
    was any gap in the evidence at trial that foreclosed the trial judges
    causation inquiry or findings.

[289]

The alleged evidentiary
    gap relates to the independent legal advice received by the dealers from their
    personal lawyers regarding their jeopardy in the face of GMCLs restructuring
    and the WDAs.  As I have said, the certification judge considered Cassels
    assertions that evidence of the dealers independent legal advice was crucial
    to Trilliums claim.  He ruled, at paras. 139 and 158:

[Trilliums] case is that all dealers had a chance, through
    Cassels, to obtain a better deal and that due to Cassels breaches of duty they
    lost that chance.

.

Framing its claim in this fashion, as [Trillium] has every
    right to do, the individual motivations of class members are irrelevant.

This ruling was upheld by the Divisional Court, as
    described above.

[290]

Not to be
    deterred, before this court Cassels renews its argument that evidence relating
    to the independent legal advice received by the dealers, especially about the WDAs,
    was essential to any causation inquiry.  In support of this argument, it relies
    heavily on a 2012 ruling by Belobaba J. of the Superior Court of Justice, in
    his capacity as case management judge of this class action, on a motion by
    Cassels to compel production of documents concerning the dealers independent
    legal advice:
Trillium v. General Motors of Canada
, 2012 ONSC 5960.  In
    dismissing the motion, the case management judge said, at paras. 14 and 34-35:

Had this been an ordinary action rather than a class
    proceeding, I would have had no difficulty agreeing with GMCL and [Cassels]
    that the legal advice that each dealer received about the WDA was relevant to
    such key issues as causation and damages, and given that solicitor-client
    privilege was explicitly waived, that all relevant documentation should now be
    produced.  However, this is a class action.  The next phase of the litigation
    is the common issues trial.  Justice Strathy has carefully and deliberately
    certified thirteen issues.  It is not my place as the successor case management
    judge to alter the common issues that were just certified.  My choices are
    clear.  If the individual legal advice received by each dealer is relevant to
    the common issues, then the motions will be granted.  If not, then the motions
    must be dismissed, at least at this stage.

.

The legal advice received by Trillium and the other class
    members from their respective lawyers is not relevant to common issues (j), (k)
    and (l).  I agree with Trillium that [Cassels] will be the focus of the legal
    and factual inquiries that will have to be made at the common issues trial, not
    the class members and not their individual lawyers.  The certification judge
    made this clear:

The determination of whether Cassels owed a contractual
    duty, a fiduciary duty or a duty of care to the class can be made without
    considering the particular circumstances of individual class members.  The same
    is true of the question whether Cassels breached those duties.  There is no
    evidence that Cassels had dealings with individual class members that would
    make the answers to these questions dependent on individual communications or
    circumstances.

In sum, the content of the legal advice received by Trillium
    and the other class members from their respective lawyers is irrelevant to the
    common issues as certified by Justice Strathy.  There is no basis upon which
    [Cassels] can compel disclosure of that advice at this stage of the proceeding.

[291]

Cassels
    maintains these passages support its argument that a finding of causation on a
    class basis was not available to the trial judge.  I have difficulty
    understanding the logic of this argument.  The certification judge and the
    Divisional Court explained why Cassels position on causation failed to meet
    the case put against it by Trillium.  The case management judges decision on
    the production motion did not alter that explanation.  It endorsed it.

[292]

Cassels lost its
    argument that causation could not be determined on a class-wide basis before
    the certification judge.  It lost its appeal on this issue in the Divisional
    Court.  It also lost its application for leave to appeal from the Divisional
    Courts decision.  Now, on this appeal, it, in effect, renews its argument that
    Trilliums claim is one for the recovery of losses that each GMCL dealer suffered
    by accepting the applicable WDA, rather than the dealers collective loss of
    chance to negotiate with GMCL for a better deal.

[293]

And it is in
    this fashion that Cassels mischaracterizes the nature of the claim put against
    it by the dealers.  Trillium has alleged throughout that the GMCL dealers
    retained Cassels to act for them
as a group
and
    that Cassels breached its duties to them
as a group
by causing them to lose the chance,
as a group
, to
    collectively negotiate with GMCL for improved compensation under the WDAs.    Cassels,
    for its own purposes in respect of other issues on this appeal, stresses the
    group nature of the Dealer Retainer.  There was ample evidence before the trial
    judge to permit the evaluation of this group claim.

[294]

Nor was there
    any procedural unfairness to Cassels on this issue.  Trillium pleaded from the
    outset that Cassels caused the damage suffered by the dealers by reason of the
    loss of the chance to act and be represented as a collective.  Causation
    questions were significant issues and occupied considerable time at trial.  Well
    before trial, both Trillium and GMCL delivered extensive expert reports
    addressing causation and damages issues (including the probabilities regarding whether
    GMCL would have negotiated with its dealers and whether the dealers would have
    organized to negotiate collectively).  Further, Cassels cross-examined
    Trilliums witnesses on these issues.  It could not have come as any surprise
    to Cassels that the trial judge would undertake a causation analysis on a group
    basis in order to determine Trilliums loss of chance claim against Cassels.
    He was obliged to do so.

(b)

Standard of Care

[295]

Cassels also
    complains the trial judge erred by determining causation without first finding
    what the standard of care required in the circumstances.  This complaint focuses
    primarily on the trial judges findings regarding the DSC Conflict.  In my
    view, no viable complaint of this kind can be made in relation to the Canada
    Conflict.

[296]

I recognize
    that, in contrast to his findings on the DSC Conflict, the trial judge did not
    explicitly refer to the standard of care in relation to the Canada Conflict.
    However, it is obvious, if implicit, that he defined the standard of care by identifying
    the duties owed by Cassels to the dealers in respect of the Canada Conflict and
    its breaches of those duties.  Recall that, having defined Cassels fiduciary
    and contractual obligations to the dealers, he held that Cassels breached those
    obligations in relation to the Canada Conflict: i) by accepting the Dealer
    Retainer in the first place; ii) at a minimum, by failing to disclose the
    Canada Conflict to the dealers from the outset; and iii) having accepted the
    Dealer Retainer, by failing to fully commit to the dealers cause and by soft
    pedalling its representation of the dealers due to its divided loyalty arising
    from the Canada Retainer.  In this fashion, the trial judge defined the
    standard of care applicable to the Canada Conflict.

[297]

I have already
    discussed the first two breaches of the standard of care.  With respect to the
    third, the trial judge again made unambiguous findings regarding the standard
    of care and causation, identifying in the process what Cassels should have done
    in the circumstances.  He held, at para. 556:

I infer from the existence of the [Canada] [C]onflict and from
    Cassels inaction with regard to the dealers that Cassels divided loyalty
    caused it to soft pedal the representation of the dealers who received WDAs.
    The fact that Cassels would not confront the government in any
CCAA
proceedings or complex restructuring prevented Cassels from fully committing to
    the cause of the dealers.
I am satisfied that had
    Cassels been involved with the WDAs and proactive with regard to the dealers
    interests, it would have advised the Class Members about negotiating
    collectively with GMCL.  Alternatively, had Cassels advised the dealers of the
    Canada Conflict and the [DSC] conflict, and had new counsel been retained, I am
    confident that new counsel would have advised the dealers regarding the WDAs
.
    [Emphasis added.]

[298]

I return to one
    other aspect of Cassels standard of care argument, which I have already mentioned
    under issue (2), regarding Cassels Breaches of its Obligations due to the
    Canada Conflict.  Cassels argues that, by rejecting the evidence of its
    standard of care experts, the trial judge was left with no evidentiary
    foundation for his standard of care findings.  This, too, is a complaint about
    the trial judges processing of the evidence.  This complaint has no traction
    in respect of the Canada Conflict because it runs contrary to the established
    standard of care jurisprudence.

[299]

Cassels
    correctly points out that in
Krawchuk v. Scherbak
, 2011 ONCA 352, 106
    O.R. (3d) 598, at para. 130, leave to appeal refused, [2011] S.C.C.A. No. 319,
    this court held: [I]n general, it is inappropriate for a trial court to
    determine the standard of care in a professional negligence case in the absence
    of expert evidence.

[300]

However, the
Krawchuk
court also held, at paras. 133-35, that expert evidence is not necessary where:

(1)

it
    is possible to reliably determine the standard of care in relation to
    non-technical matters or those of which an ordinary person may be expected to
    have knowledge; or

(2)

the
    impugned actions of the defendant are so egregious that it is obvious that his
    or her conduct has fallen short of the standard of care, even without knowing
    precisely the parameters of that standard.

[301]

Assuming, for
    the sake of argument, that there was no expert evidence, accepted by the trial
    judge, on the relevant standard of care (notwithstanding Kandestins evidence
    on this issue, to which the trial judge made no reference), both
Krawchuk
exceptions to the need for expert evidence apply to the Canada Conflict.

[302]

First, the
    standard of care applicable to the Canada Conflict was not technical or
    complex.  It is axiomatic that a lawyer cannot act for clients with directly
    adverse interests without the clients informed consent, and certainly not
    without their knowledge.  This should be obvious to a lay person and is
    certainly obvious to a judge.  An expert witness is not better placed than a
    judge, who is presumed to know the law, to assess this fundamental dimension of
    a lawyers fiduciary obligations.

[303]

In particular,
    the case law establishes the following governing principles, none of which
    requires expert evidence to elucidate:

·

A lawyers fundamental duty is to act in the best interest of his
    or her client to the exclusion of all other adverse interests, except those
    disclosed to and willingly accepted by the client:
Strother v. 3464920
    Canada Inc.
, 2007 SCC 24, [2007] 2 S.C.R. 177, at para. 1;

·

A lawyer must not keep the client in the dark about matters he
    knows will be relevant to the retainer:
Strother
, at para. 55;

·

A lawyer must avoid competing interests precisely so that he can
    remain committed to the client, ensuring that divided loyalty does not cause
    the lawyer to soft-pedal his or her representation of one client out of concern
    for another:
Neil
, at para. 19; and
McKercher
, at para. 43; and

·

A law firm cannot terminate a client relationship purely in an
    attempt to circumvent its duty of loyalty to that client:
McKercher
,
    at para. 55.

[304]

Applying these
    principles to this case compels the conclusion, as the trial judge found, that
    the standard of care required Cassels, at a minimum, to disclose the Canada
    Retainer to the GMCL dealers and to discuss with them the implications of the
    proviso or constraint imposed by Cassels on its ability to act for the dealers.

[305]

Second, regardless
    whether the first
Krawchuk
exception to the need for expert evidence
    on the standard of care is engaged, the trial judges findings are tantamount
    to a holding that Cassels non-disclosure of the Canada Retainer and of the
    proviso on the Dealer Retainer was so egregious that Cassels conduct fell
    below the standard of care, however defined.  The trial judge held, at paras.
    516-17:

I cannot understand how [Cassels lawyers] thought it was
    acceptable for Cassels to take on [the Dealer Retainer] without advising the
    [DSC] or the Saturn [D]ealers that it was also acting for Industry Canada.

Having engaged Cassels on behalf of the dealers, it was not
    CADAs right to deal with the conflict of interest.  While CADA could
    certainly provide instructions regarding any conflicts or other issues that it
    saw with respect to
its own
retainer, it had no authority to waive
    conflicts or potential conflicts on behalf of the dealers.
This should have been obvious.  It is astonishing that the
    Cassels lawyers, acting on behalf of Canada, Saturn and the GMCL dealers,
    conducted firm meetings to analyze the likelihood and depth of a conflict  and
    somehow concluded that it was unnecessary to consult or advise the dealers,
    whom Cassels was apparently prepared to jettison in favour of Industry Canadas
    retainer.
[Underlining added; italics in original.]

[306]

On this record,
    these findings were open to the trial judge.

(c)

Factual Findings and Inferences

[307]

Cassels also challenges
    several key factual underpinnings of the trial judges conclusions on causation
    and loss of chance.  I will deal with these in turn.

(i)

Cassels
    inaction for the dealers

[308]

First, Cassels
    challenges the trial judges findings that, by reason of its divided loyalty
    due to the Canada Retainer, it soft-pedalled its representation of the
    dealers who received WDAs, failed to act proactively in their interests, and
    failed to commit fully to their cause.  Cassels says that these findings are
    unfair, unsupported by any evidence, and were made in violation of the rule in
Browne
    v. Dunn
.

[309]

The language of
    soft pedalling and commitment to the clients cause did not originate with
    the trial judge.  These words track the language of the Supreme Court of Canada
    in
Neil
, at para. 19, referenced above, that a lawyers duty of
    loyalty to a client engages many dimensions, including the duty of commitment
    to a clients cause or zealous representation.  This dimension of the duty
    of loyalty applies from the time counsel is retained and requires that a lawyer
    not downplay or mute his or her representation of a client out of concern for
    another client.  Both parties accept this duty and the fact that it was
    encompassed in the Law Society of Upper Canadas rules on the avoidance of
    conflicts of interest set out in the
Rules of Professional Conduct
as
    in force in May 2009.

[310]

As I see it, there
    are three problems with Cassels submissions on this issue.  First, when
    Cassels accepted the Dealer Retainer, it informed CADA, but not the DSC or the
    dealers, that it could not take on the government, if such a circumstance
    arose, in any
CCAA
proceeding.  The trial judge concluded that this
    proviso, arising from the Canada Retainer, prevented Cassels from fully
    committing to the dealers cause.  As a result, Cassels failed to represent
    the dealers as zealously as [it] could have and its representation of them was
    hampered by [its] overriding loyalty to another party in the same matter (at
    para. 518).

[311]

These factual
    findings are also rooted in the evidence.  The admitted, undisclosed proviso
    that conditioned Cassels acceptance of the Dealer Retainer reflected the
    intention to prefer Canadas interests to those of the dealers, should the need
    arise.  And, on the trial judges findings, when lawyers at the firm met to
    discuss whether Cassels could accept the Dealer Retainer, they were preoccupied
    with the impact of that potential mandate on Canadas and CADAs interests and
    did not consider the GMCL dealers interests.

[312]

I note further, as
    a matter of common sense and logic, that because Cassels knew it could not
    take on the Government, it follows that it would not knowingly have done
    anything that would trigger the conflict it hoped to avoid.  Advising the
    dealers to band together to negotiate improved WDAs with GMCL, thereby impeding
    GMCLs restructuring plan, could certainly have been such a trigger.

[313]

Second, and in
    any event, Cassels own Conflict of Interest Policies and Procedures in place
    at the time set out the Law Societys rules on the avoidance of conflicts of
    interest and further stipulated: [I]n considering potential conflicts of
    interest, the firm must be viewed as a unit,
i.e.
as if it was a
    single lawyer.  Accordingly, once Cassels accepted the Canada Retainer, it was
    precluded from accepting another retainer that would conflict with it.

[314]

Cassels relies
    on the fact that the relevant lawyers at the firm testified at trial that their
    actions in respect of the dealers were not affected by the Canada Retainer.
    However, in his testimony, Harris acknowledged that Canada would have an
    interest in avoiding upset to or delay in a
CCAA
proceeding and that
    Cassels representation of the dealers put it in the position where its client,
    Canada, would be on one side of the bargaining table, while its other client,
    the GMCL dealers, would be on the other.  This is undoubtedly correct.

[315]

Finally, Cassels
    submits that, because the involved Cassels lawyers were not cross-examined on
    whether they soft pedalled their representation of the dealers due to the
    Canada Retainer, it was not open to Trillium to argue at trial that they had
    done so and the trial judges finding to the contrary offends the rule in
Browne
    v. Dunn
.  I disagree.

[316]

The application
    of the rule in
Browne v. Dunn
, which seeks to foster trial fairness,
    is within the wide discretion of the trial judge and depends on the
    circumstances of the case:
R. v. Quansah
, 2015 ONCA 237, 125 O.R. (3d)
    81, at paras. 75-90, leave to appeal refused, [2016] S.C.C.A. No. 203.  The
    trial judge considered and declined to accept Cassels
Browne v. Dunn
argument, holding that it knew from the outset of this litigation that the
    Canada Conflict was one of the central issues raised by Trillium, that it had every
    opportunity to address this issue, and that it in fact did so.

[317]

I agree that the
    fact that Trillium would rely on Cassels inaction for the dealers as evidence
    that the dealers interests were adversely affected by the Canada Retainer
    could scarcely have caught Cassels by surprise.  Trillium pleaded the Canada
    Conflict and alleged that Cassels did not properly advise or represent the
    dealers as a result of it.  These allegations were central to Trilliums entire
    theory of the case.   In the circumstances, I agree with the trial judge that
    the rule in
Browne v. Dunn
was not implicated.  Cassels clearly knew
    the case it had to answer at trial regarding the Canada Conflict and availed
    itself of the opportunity to do so.

(ii)

Findings regarding negotiations with GMCL

[318]

Cassels next
    submits that the trial judge erred, in fact and in law, by holding that: i)
    properly advised, the affected dealers would have banded together and
    instructed Cassels or another law firm to pursue negotiations with GMCL
    regarding the WDAs, even though this risked precipitating a GMCL
CCAA
filing; and ii) if the dealers had done so, GMCL would have entertained
    negotiations with the dealers.

[319]

It is
    unnecessary to address every argument advanced by Cassels in support of these submissions.
    I would reject its challenge to these findings on several bases.

[320]

First, the
    finding that the dealers would have instructed Cassels to pursue negotiations
    with GMCL if they had been properly advised.  This finding is an inference
    drawn by the trial judge from the whole of the evidence.  This is a case where
    Cassels breaches of its obligations concerning the Canada Retainer were said
    to arise from its omission or non-feasance in failing to provide proper
    representation or advice to the dealers, rather than from some positive act or
    misfeasance.  The question of causation, therefore, depended on the answer to
    the hypothetical question of what the dealers would have done if Cassels had
    furnished the necessary representation or advice.  This was a matter of
    inference to be determined from all the circumstances, rather than a question
    of historical fact:
Allied Maples
, at pp. 914-15.

[321]

Thus, Trillium
    was required to prove, on a balance of probabilities, that the dealers would
    have taken action, as a collective, to obtain the benefit of improved
    compensation under the WDAs by attempting to negotiate with GMCL, as a group.
    The trial judge inferred that they would have done so.  This inference did not
    need to be the only inference available.  However, it did need to be among the
    field of available inferences, and not mere speculation.  In my view, the evidence
    supported this inference and it rises well above mere speculation.

[322]

Specifically,
    the trial judge relied on the evidence of Hurdman, the principal of Trillium,
    and that of Turpin and Brian Condie, a Pontiac/Buick dealer, that if Cassels
    had suggested negotiations with GMCL, they would have participated.  The trial
    judge accepted this evidence and inferred from it that other dealers facing the
    termination of their dealerships would also have done so.

[323]

Cassels asserts
    that the trial judge erred in law by drawing this inference.  First, it argues this
    inference runs contrary to the trial judges ruling, on an objection at trial by
    Cassels to the admissibility of the dealers testimony, that their evidence
    went only to the common issues.

[324]

Second, Cassels
    says that Trillium, as the representative plaintiff, was the only party at the
    common issues trial.  As a result, Cassels says, it was prevented from
    gathering or leading evidence from GMCL dealers who might have elected not to
    participate in such negotiations.  In other words, how each dealer would have
    responded to its WDA necessarily depended on their individual circumstances, a
    matter on which Cassels had been precluded from gathering and adducing evidence.

[325]

Finally, Cassels
    submits that the trial judge impermissibly inferred that, because Hurdman,
    Turpin and Condie testified that they would have negotiated, this evidence
    could be extrapolated and applied to the entire class.  It points to this
    courts direction in
Ramdath
, at para. 91: A court cannot extrapolate
    from the motivation of one person to a conclusion respecting others  [p]roof
    of reliance must be based on evidence of the experience of each individual
    class member.

[326]

Dealing with the
    last point first, I do not think that
Ramdath
assists Cassels on this
    issue.
Ramdath
was concerned with reliance in a misrepresentation
    case.  This is fundamentally different than the collective loss of chance claim
    advanced here.  As the certification judge held, by framing the case in this
    fashion, as Trillium had every right to do, the individual motivations of class
    members became irrelevant.

[327]

Further, as Trillium
    points out, the applicable authorities do not support Cassels contention that
    only the representative plaintiff can testify, to the exclusion of all other
    class members, at a common issues trial.  See, for example,
Bywater v.
    Toronto Transit Commission
, [2001] O.J. No. 2384 (S.C.);
Landsbridge
    Auto Corp. v. Midas Canada Inc.
, [2009] O.J. No. 1279 (S.C.).  There is
    also authority for the proposition that the normal rules of evidence that apply
    to a regular civil trial also apply to a common issues trial in a class
    proceeding:
Qué
bec (Public Curator) v. Syndicat national des
    employés de lhôpital St-Ferdinand
, [1996] 3 S.C.R. 211, at para. 39.  As
    the trial judge ruled, Trillium was entitled to call witnesses to prove its
    case.  The trial judge was entitled, therefore, to rely on the evidence adduced
    from the class member dealers, which he had ruled was admissible.

[328]

Perhaps more importantly,
    there were other compelling considerations upon which the trial judge could,
    and did, rely to ground his finding that, with proper advice and representation
    from Cassels, the non-continuing dealers would have joined together and sought
    to negotiate with GMCL for improved compensation packages.  There was evidence at
    trial that:

·

The monetary offers contained in the dealers WDAs represented a
    small fraction of the value of their dealerships;

·

GMCLs own internal analyses suggested that the compensation
    offered under the WDAs represented about one-third of the value of the
    dealerships that received WDAs;

·

As the DSC and Cassels itself had urged in communications with
    the dealers, there was strength in numbers.  As the trial judge found, the
    class members would have gained leverage from banding together as a cohesive
    unit;

·

The May 4 Memorandum, as well as the May 13, 2009 memorandum and
    the May 7, 2009 dealer conference call, all touted the benefits of collective
    action by the dealers in order to involve counsel for them at the bargaining
    table and to represent their interests as a whole.  By signing the
    participation forms and/or contributing to the trust fund to be held by CADA,
    the Participation Form Dealers took up the invitation for collective
    representation and advice;

·

The dealers were repeatedly invited, including by Cassels lawyers
    on the May 7, 2009 dealer conference call, to organize to have a seat at the
    table; and

·

It is common in restructurings or
CCAA
proceedings for
    stakeholders with common interests to unite as a group in order to gain
    leverage.

[329]

This evidence strongly
    pointed to the conclusion that the dealers had much to gain from pursuing
    collective negotiations with GMCL and that, notwithstanding the risks to them
    of non-recovery in a
CCAA
proceeding, they would have participated in
    such negotiations if this option had been raised by Cassels.  Further, it is
    apparent that all of CADA, Cassels and the DSC were of the view that the
    dealers could, and should, organize as a cohesive, collective negotiating unit
    and that there were many advantages to the dealers doing so and considerable
    risk to them if they did not.

[330]

Cassels also
    contends that the trial judge erred by failing to properly consider: i) what
    would have occurred if some dealers were opposed to negotiations due to the
    risk of a
CCAA
filing; ii) the very strong likelihood that the
    Saturn Dealers would have rejected any recommendation that might risk their
    WDAs and the deferred payment option contained in them; and iii) whether any
    realistic mechanism was available to bind the dealers in any negotiations or to
    permit Cassels to reliably obtain instructions from the dealers in any
    negotiations.

[331]

Contrary to
    Cassels contention, the trial judge did not ignore these considerations.  He
    simply rejected Cassels position on them.  His reasons confirm that he
    appreciated and took account of the differences among the GMCL dealers,
    including those differences identified by Cassels experts in their trial
    testimony.  He also recognized that the Saturn Dealers, as a stand-alone group,
    would have been in a less advantageous position than the other dealers in any
    negotiations with GMCL.  It was in part for this reason that he held, at para.
    612: [T]hey would have banded together, as it would have made good sense to
    increase [their] leverage by increasing their numbers.  I agree.

[332]

Nor did the
    trial judge ignore the practicalities of obtaining instructions from the dealer
    group or of devising a mechanism to bind the dealers in any negotiations.  He
    found that it was more likely than not that a mechanism could have been devised
    to bind the dealers within the negotiation framework.  He also held it was not
    a given that a binding mechanism was necessary in the first place; GMCL had the
    authority to waive the Acceptance Threshold Condition.  100 percent buy-in from
    the dealers who were offered WDAs was never required, nor was it actually
    obtained.

[333]

Moreover, there
was
evidence of a nascent binding mechanism being
    developed for the dealers: on May 28, 2009, CADA sent a memorandum to All GM
    Canada Dealers who have contributed to CADAs General Motors Dealer Group Fund.
    That memorandum explained that CADA had arranged for Cassels to represent the
    non-continuing dealers and for another law firm to represent the continuing
    dealers, so that the dealers would be in a position to hit the ground running
    on day one of any bankruptcy filing by GMCL.  The May 28 memorandum
    recognized that the non-continuing dealers and the continuing dealers had different
    interests.  There is no reason why separate counsel could not have been engaged
    earlier, to permit counsel for the non-continuing dealers to engage in
    negotiations with GMCL.

[334]

This brings me
    to Cassels submission that the trial judge erred by inferring that GMCL would
    have negotiated with the dealers if such negotiations had been proposed.

[335]

Cassels submits
    that this key finding was unsupported by the evidence and was speculative,
    that it was contrary to the evidence of Lawrence Buonomo of GM that GMCL would
    not have negotiated with the dealers, and that it was made in the absence of
    any evidence about how many Participation Form Dealers would have formed any
    negotiating group.

[336]

The issue
    whether GMCL would have negotiated with the dealers was an important and hotly
    contested issue at trial.  There was extensive evidence on this question, much
    of it conflicting, including expert evidence and testimony from two senior GMCL
    and GM executives (Comeau and Buonomo).  The trial judge addressed this
    evidence in some detail (five pages of his reasons), expressly focusing on the
    parties arguments that he considered to be significant.  Ultimately, at para.
    572, he accepted Trilliums contention that, if push came to shove, GMCL
    would have entertained negotiations with the dealers concerning the WDAs.  In
    my view, there was ample evidence at trial to support this inference.

[337]

The answer to
    the question whether, and the extent to which, negotiations on behalf of the
    dealers as a collective would have borne fruit depended on the hypothetical
    action of a third party  GMCL.   For the purpose of establishing causation,
    Trillium was required to demonstrate that the dealers had a real or substantial
    chance, as opposed to a speculative one, of negotiating with GMCL for improved compensation
    under the WDAs.  As
Allied Maples
instructs, at p. 919, The prospect
    of success depends on all the circumstances of the case and the third partys
    attitude must be a matter of inference.

[338]

As I have
    explained, GMCL argued at trial that its chances of avoiding bankruptcy or a
CCAA
filing rested on a three-legged stool, namely, successful negotiations with
    its union (the CAW), the Bondholders and the dealers.  Although it did
    negotiate with the CAW and the Bondholders (and with its retirees), it
    maintained that the one group with whom it would not negotiate was the dealers.

[339]

There is no
    doubt, on the record, that GMCL took the position the WDAs were non-negotiable
    and communicated this position to the dealers.  However, the trial judge did
    not accept that, as the prospect of a
CCAA
filing intensified and the
    clock to the June 1, 2009 deadline set by the Canadian Governments ran down,
    GMCL would have maintained this position.  The trial judges holding that it
    was likely that GMCL would have, in fact, entertained negotiations with the
    dealers if push came to shove, rested in part on the following explicit
    findings:

·

Given that GMCL needed settlements with all of the CAW, the Bondholders
    and the dealers to obtain bailout funds and avoid bankruptcy, it was unlikely it
    would have refused negotiations if a critical mass of dealers had rejected the
    WDAs and/or they had been properly organized.  The dealers were part of the
    three-legged stool that had to be dealt with to avoid a
CCAA
filing
    (paras. 570 and 580);

·

The Canadian Governments were the only source of bailout
    financing for GMCL and they, together with the American government, preferred
    restructuring outside the
CCAA
regime. Their expressed preference to
    avoid a
CCAA
finding was a weighty factor that would have encouraged
    GMCL to back off from its position that the WDAs were not negotiable (para.
    571);

·

Although GMCLs relevant witnesses testified that, in their view,
    GMCL would not have negotiated with the dealers, none of these witnesses
    including Comeau and Buonomo  had final decision-making authority on this
    issue.  Rather, they confirmed in their testimony that the final decision
    rested with GM in the United States (para. 573);

·

No GM representative with final decision-making authority on this
    issue testified at trial (para. 573);

·

While the Saturn Dealers had little leverage with GMCL as a
    stand-alone group, if they had joined forces with the GMCL dealers who had also
    received WDAs, the larger, united group would have enjoyed greater leverage in
    a negotiation with GMCL (para. 574);

·

GMCL had a GM-approved fund of $218 million to conclude the WDAs
    with 290 dealers.  In the end, it offered $143.5 million to 240 dealers.  This
    gave GMCL the financial flexibility to improve the compensation offered under
    the WDAs (para. 580);

·

The considerable and varied risks of a
CCAA
filing by
    GMCL to both GMCL and GM itself outweighed the benefits of such a filing and
    would have operated to make GMCL amenable to discussions with the dealers
    (para. 583); and

·

Both Rosenberg, for Cassels, and Kandestin, for Trillium,
    testified that while clients often take the position that an offer is
    non-negotiable, they also move off that position on a reasoned basis in order
    to effect a settlement of an issue (para. 572).

[340]

These factual
    findings, which were available on the evidence, provide compelling support for
    the inference that it was likely, at the end of the day, that GMCL would have
    negotiated with the dealers about the WDAs had the negotiation option been put
    on the table and had the dealers acted as an organized bloc in opposition to
    the offers under the WDAs.

[341]

Three factors
    are especially telling.  First, GMCL had negotiated successfully with two of
    the three groups forming its three-legged stool.  Against the backdrop of
    those negotiations, which continued in the case of the Bondholders past the 11th
    hour prior to a
CCAA
filing, GMCLs insistence that it would never
    have negotiated with the dealers rings hollow.  There is no reason why, as with
    the Bondholders, GMCL could not have entered into negotiations with the
    dealers, had they been represented by unconflicted counsel.  Second, it was the
    governments collective preference that GMCL avoid a
CCAA
filing.
    Third, as detailed by the trial judge, there were considerable costs and risks
    to a GMCL
CCAA
filing, including risks that could have interfered with
    its parent companys efforts to avoid or be released from bankruptcy in the
    United States.  Alone, and in combination, these factors all strongly militated
    in favour of the conclusion that GMCL would have revised its non-negotiation
    position if the evolving circumstances eventually cried out for it do so.

[342]

The trial
    testimony of both Kandestin, for Trillium, and Rosenberg, for Cassels, further bolsters
    this conclusion.  Kandestin testified:

The fact that a party in a circumstance says that something is
    non-negotiable does not mean that that is an iron-clad statement.  I think the
    experiences of every lawyer and, in particular, insolvency lawyers who deal
    with negotiations and non-negotiable take-it-or-leave-it positions of clients,
    be it our client or the other side, this is an initial posture and in many
    cases that is not the way it ends up.

[343]

Rosenberg
    agreed.  He said:

By May 19th it was clear, you had continuing dealers and
    potential non-continuing dealers,
and you had a jamming
    exercise by GM
.  They gave a very short timeline, which is not  which
    is customary in
CCAA
.  Very aggressive positions were taken,
    take-it-or-leave-it offers and so on.  I agree with Mr. Kandestin, you get
    them, and just because they say its non-negotiable doesnt mean you cant
    negotiate.  Try to negotiate.  [Emphasis added.]

[344]

It must also be
    emphasized that the trial judge was faced with extensive, conflicting evidence
    on this issue.  It was his task to sort through that contested minefield,
    determine which of the evidence, if any, he accepted as credible and reliable,
    and assess the probability that GMCL would have negotiated based on the
    evidence he did accept.  That is precisely what he did.

[345]

In doing so, the
    trial judge was not obliged to accept Buonomos evidence that GMCL would not
    have negotiated with the dealers, especially because Buonomo acknowledged that
    final decision-making authority on that issue rested with others, who did not
    testify, in the United States.  Buonomo had no direct role in the restructuring
    of GMCLs dealer network and was not involved in the Canadian side of the
    developing crisis.  Nor was the trial judge obliged to accept the evidence of
    GMCLs witnesses on the issue, although notably, he found support for his
    conclusion in Rosenbergs (and Kandestins) testimony.

[346]

In my view, it simply
    cannot be said, on this record, that the trial judges impugned holding lacked
    evidentiary support or was merely speculative.  To the contrary, it was firmly
    grounded in the evidence.

(d)

Causation and the Saturn Dealers

[347]

Cassels also
    submits that the trial judge erred by making the unsupported finding that the
    Saturn Dealers would have united with the other GMCL dealers to increase their
    leverage with GMCL, without having made a finding that Cassels ought to have
    advised them to do so.

[348]

This submission
    again engages the standard of care applicable to the Canada Conflict.  As I
    have stressed, the trial judge found that Cassels breached its obligations to
all

the dealers in respect of the Canada Conflict.  The
    standard of care owed to the Saturn Dealers regarding it was the same as that
    owed to the other GMCL dealers.

[349]

Cassels
    emphasizes that the Saturn Dealers did attempt to negotiate with GMCL, in
    respect of the option contained in the Saturn WDAs, only to be rebuffed by
    GMCL.  It argues that there was no evidence that they would have instructed
    Cassels to attempt further negotiations with GMCL or that they would have
    joined with the other dealers, and been welcomed by them, for a collective
    negotiation initiative, especially because such negotiations would have
    endangered the option contained in the Saturn WDAs.

[350]

The first
    difficulty with this submission is that, by reason of Cassels breaches of its
    obligations to all the dealers regarding the Canada Conflict, the Saturn
    Dealers were denied the opportunity to consider the advantages and
    disadvantages of attempting further negotiations with GMCL.  Further, as I have
    explained, both CADA and Cassels urged the dealers to come together and
    organize to gain a seat at the table to improve their negotiating position
    and protect their interests.  If anything, the common sense logic of this strength
    in numbers proposition resonates even more strongly in relation to the Saturn
    Dealers subgroup.

[351]

Nor did the fact
    that GMCL, when requested to do so, declined to alter the option contained in
    the Saturn WDAs foreclose the possibility that it would have been open to
    revisit the Saturn WDAs if confronted by a large group of GMCL dealers,
    including the Saturn Dealers, who were refusing to accept the WDAs as offered.

[352]

CADA, not
    Cassels, contacted GMCL to attempt to alter the option in the Saturn WDAs on
    behalf of the Saturn Dealers.  The evidence indicates that this contact
    consisted of only one telephone call by Ryan to GMCLs then-director of dealer
    network planning, who told him that GMCL was not prepared to modify the Saturn
    WDAs.  I agree with Trilliums submission that this contact can scarcely be
    described as a negotiation on behalf of the Saturn Dealers, let alone a
    negotiation conducted by sophisticated and knowledgeable legal counsel.

[353]

Finally, I would
    reject Cassels related submission that the trial judges reasons do not permit
    meaningful appellate review of the basis for his finding that Cassels is liable
    to the Saturn Dealers for its breaches of its obligations.

[354]

When the trial
    judges reasons are read in the context of the record as a whole, the live
    issues at trial and the submissions of counsel, they easily pass the
    sufficiency of reasons standard.  Read in this fashion, as they must be, the
    reasons regarding the Saturn Dealers perform their function of responding to
    the live issues involving those dealers, explaining why Cassels was found
    liable to them, and revealing how the trial judge decided as he did.  While the
    trial judge could have been more expansive concerning the Saturn Dealers,
    nothing more was legally required.  See
R. v. Sheppard
, 2002 SCC 26,
    [2002] 1 S.C.R. 869;
Hill v. Hamilton  Wentworth Regional Police Services
    Board
, 2007 SCC 41, [2007] 3 S.C.R. 129;
F.H. v. McDougall
, 2008
    SCC 53, [2008] 3 S.C.R. 41; and
R. v. R.E.M.
,

2008 SCC 51,
    [2008] 3 S.C.R. 3.  The trial judge was not required to respond to every
    argument raised by the parties, to recite all the evidence or to articulate all
    the relevant inferences or principles of law.  His reasons were more than
    adequate for their required purposes.

(e)

Loss of chance analysis

[355]

I turn now to
    the final branch of Cassels attack on the trial judges causation and loss of
    chance analyses.  In its factum, Cassels submits that the trial judge erred by
    holding, on an aggregate basis, that absent a breach by Cassels, the dealers
    had a 55 percent chance of obtaining a successful negotiation with GMCL for
    more compensation under the WDAs, without undertaking an analysis of the
    likelihood of the occurrence of each step in the chain of causation.

[356]

Cassels
    maintains that the trial judge was obliged to identify and assign each step in
    the causation chain a percentage chance of occurrence, and then multiply those
    percentage chances of each contingency occurring in order to determine an
    overall percentage probability of the dealers achieving a successful outcome in
    negotiations with GMCL.  This cumulative probabilities approach, Cassels says,
    would have yielded an overall percentage probability of successful negotiations
    well below 50 percent.

[357]

I would not
    accede to this novel proposition, which Cassels raises for the first time on this
    appeal.  Cassels was unable to point to any authority supporting its posited
    mathematical probabilities approach.  This court has not employed this approach
    in other loss of chance cases.  See, for example,
Wong v. 407527 Ontario Ltd.
(1999), 125 O.A.C. 101 (C.A.).

[358]

Notably, the
    analytical approach urged by Cassels has been specifically rejected by some courts
    in England.  In
Tom Hoskins plc v. EMW Law (a firm)
, [2010] EWHC 479
    (Ch.), Floyd J. stated, at paras. 133-34:

Although there are multiple contingencies  I think it would be
    wrong to apply percentage upon percentage  this is because the contingencies
    are not independent.

I think it right to ask what were the overall chances that [the
    plaintiffs] would, absent negligence, have negotiated and agreed [on the
    posited contract].

[359]

This is also not
    a case where the trial judge lost sight of the various contingencies at play,
    including relevant negative contingencies affecting the likelihood that the
    dealers would have achieved a successful outcome through negotiations with
    GMCL.  To the contrary, he considered the contingencies identified by the
    parties, including the salient fact that the dealers potentially stood to
    realize nothing in any
CCAA
filing.  On the authority of this courts
    decision in
Eastwalsh Homes Ltd. v. Anatal Developments Ltd.
(1993),
    12 O.R. (3d) 675, leave to appeal refused, [1993] S.C.C.A. No. 225, he also
    recognized, correctly, that a loss of chance will be smaller when more
    contingencies are involved.

[360]

Having
    considered the identified contingencies, the trial judge concluded, at para.
    608:

None of these contingencies, individually or together, negate
    the dealers chance of achieving a higher payout through negotiation.  Nor do
    they push that chance outside the realm of real and significant possibility.
    They are simply contingencies which lower the reasonable possibility of the
    chance lost by the dealers.

[361]

I see no
    reversible error in this conclusion.

Issue 5: Did the Trial Judge Err in his Assessment
    of Aggregate Damages?

(1)

Trial Judges Original Decision

[362]

Once the trial
    judge concluded that Trillium had established a loss of chance, he moved to the
    second step of the
Berry v. Pulley
analysis by valuing the chance that
    the class members lost because of Cassels conduct.  He then calculated damages
    in proportion to the likelihood that the chance would have materialized.

[363]

At trial, Trillium
    argued that the lost chance should be valued between $375 and $425 million.
    Cassels maintained that the lost chance was worthless because the downside risk
    of negotiating with GMCL far outweighed the chance that productive negotiations
    would have occurred.

[364]

The trial judge
    held that the lost chance did have value, though not nearly as much as Trillium
    claimed. He found that the most the dealers could have obtained through negotiations
    was $218 million, which was the total amount GM had approved for GMCL to offer
    the dealers: $182 million to the GMCL dealers; $30 million to the Saturn Dealers;
    $4 million to Hummer dealers; and $2 million to Saab dealers. The trial judge
    held, at para. 592, that any figure above $218 million was mere speculation.

[365]

The trial judge held
    that, within the limits of a real and significant chance the best possible
    result the dealers could have achieved would have been a collective increase in
    their WDA payments of $92 million  the difference between the $218 million
    GMCL was authorized to spend, and the $126 million it actually paid to the 202
    terminated dealers. The trial judge concluded that the total value of the
    dealers lost chance was $92 million.

[366]

The trial judge
    then went on to discount the value of this lost chance by what he found was
    only a 55 percent likelihood that the dealers would have been wholly successful
    in negotiations with GMCL. He explained, at para. 610:

In my view, it is far from certain that the affected dealers
    would have banded together and instructed Cassels to negotiate; that GMCL would
    have negotiated rather than file for
CCAA
protection; and that the Class
    Members would have achieved through negotiation the most that [GMCL] could
    offer without going to GM for permission to request more. In light of the
    contingencies, I find that the dealers had a 55 percent chance at obtaining a
    successful negotiation with GMCL.

[367]

Accordingly, the
    trial judge reduced the $92 million damages figure by 55 percent, yielding $50.06
    million, which he rounded down to $50 million.

[368]

The trial judge
    then took into account the fact that only 181 of the 202 affected dealers (or
    89.6 percent, which he rounded up to 90 percent) chose to participate in the class
    proceeding.  In the trial judges view, it would be unfair to allow the class
    members to reap the benefit of an aggregate damages award based on the 202
    dealers who accepted WDAs. He therefore reduced the damages award further,
    awarding the class members 90 percent of $50 million, for a total damages award
    of $45 million.

(2)

Original Decision Revisited

[369]

As I mentioned
    earlier, after release of the trial decision, the parties were unable to settle
    the terms of the formal judgment. Their disagreement revealed confusion about precisely
    which dealers were in the Class. The trial judge had apparently presumed that
    all 181 class members were Participation Form Dealers, that is, those who had
    responded to DSCs appeal for support, either by sending in the signed
    participation forms appended to the May 4 Memorandum and the follow up May 13 memorandum
    or by sending in contributions to the CADA trust fund, or both. The trial judge
    expressly rejected the suggestion that Cassels had a retainer with the Call Dealers
     those who listened in on the May 24, 2009 conference call but did not sign a
    participation form or remit money for the dealers legal fund.

[370]

The 181 figure
    was important to the trial judges original calculation of aggregate damages
    because, as I have just explained, he arrived at his final award of $45 million
    by comparing how many dealers signed WDAs (202) with how many he understood to
    be in the Class (181).

[371]

The parties
    returned before the trial judge to try to settle this and other issues.
    Trillium argued that the trial judges aggregate damages award should stand
    even without knowing precisely how many of the 181 class members were
    Participation Form Dealers. It submitted that the numbers were close enough
    it knew that at least 161 of the 181 were Cassels clients  to let the matter
    stand.

[372]

Cassels disagreed.
    It argued that it would be unfair to leave the original damages award intact,
    because the effect would be to award damages to dealers to whom Cassels had been
    found to have owed no duties.

[373]

The trial judge
    decided that the best approach was to allow for a possible adjustment of the quantum
    of the aggregate damages award following the release of this courts judgment
    on appeal. This is reflected in the final trial judgment:

6. THIS COURT ORDERS AND ADJUDGES
that Cassels pay
    damages in the amount of forty-five million dollars ($45,000,000), which amount
    may be reduced in accordance with the process set out in paragraph 7 below.

7. THIS COURT ORDERS AND ADJUDGES
that the process for
    determining the number and identity of the Participation Form Dealers, and for
    calculating the damages awarded in paragraph 6 above, shall be determined on
    further motion to this court, if necessary, following the final disposition of
    any appeal.

[374]

Cassels and
    Trillium both take issue with aspects of the trial judges damages analysis. I
    will begin with Cassels objections.

(3)

Cassels Damages Appeal

(a)

Entitlement to Consider Aggregate Damages

[375]

Cassels argues,
    as a threshold matter, that the trial judge was not entitled to consider
    aggregate damages in the first place because causation was neither certified
    nor established.  I have already explained why this submission misconceives the
    nature of Trilliums loss of chance claim, and must fail.

[376]

The Certification
    Decision expressly contemplates that the trial judge could award aggregate
    damages, if appropriate, at the end of the common issues trial.  The
    certification judge held, at para. 159:

There is at least a possibility that the damages of the class
    could be assessed in the aggregate, based on the plaintiffs theory that
    Cassels could have negotiated a better deal for the class. Given that GMCL took
    a formulaic approach to compensation of all terminated dealers, it is possible
    that this could be a template for the distribution of aggregate damages or that
    the court could develop an equitable plan of distribution.

[377]

In addition, the
    Plan of Proceeding approved under the Certification Decision contains specific
    provisions outlining the methodology for the valuation of aggregate damages as
    against Cassels or, in the alternative, for the assessment of damages in
    individual hearings, as determined by the common issues trial judge.

[378]

Similarly, the
    case management judge observed in his 2012 production ruling, at para. 3, that
    the issue of damages was left to be determined by the common issues judge,
    either by ordering individual hearings on damages or by making an aggregate
    assessment of damages pursuant to s. 24 of the [
CPA
].

[379]

Section 24(1) of
    the
CPA
provides that aggregate damages are available where:

(a)   monetary
    relief is claimed on behalf of some or all class members;

(b)   no
    questions of fact or law other than those relating to the assessment of
    monetary relief remain to be determined in order to establish the amount of the
    defendants monetary liability; and

(c)   the
    aggregate or part of the defendants liability to some or all class members can
    reasonably be determined without proof by individual class members.

[380]

In
Ramdath
,
    this court held, at para. 76, that s. 24(1)(c) must be assessed in light of
    three criteria:

1.     whether
    the non-individualized evidence presented by the plaintiff is sufficiently
    reliable;

2.     whether
    the use of the evidence will result in unfairness or injustice to the defendant,
    such as overstatement of its liability; and

3.     whether
    the denial of an aggregate approach will result in a wrong eluding an
    effective remedy and a denial of access to justice.

[381]

The trial judge
    was satisfied that these criteria were met in this case.  He explained, at
    para. 541:

The basis for Trilliums claim in aggregate damages is loss of
    chance.  This chance relates to the affected dealers as a group, and the
    likelihood that negotiations of the terms of the WDA would have taken place
    between the group as a whole and GMCL.
The
    non-individualized evidence is reliable, the use of the evidence does not
    result in any unfairness to Cassels, and to deny the Class Members the
    aggregate approach would amount to the denial of a remedy.  Acting collectively
    in negotiations with GMCL is a critical component of the Class Members claim
    against Cassels.  An individualized approach to damages would not only be
    unfair to the individuals who would have banded together, it would be misguided
    given the nature of their action.  Determining how much more money would have
    been available from GMCL for the Class Members had they had an opportunity to
    negotiate for it does not cause any injustice to the defendant Cassels by
    overstating its liability; rather, it simply quantifies that liability
.
    [Emphasis added.]

[382]

I see no error
    in this analysis.  Again, the collective nature of the class members loss of
    chance claim drives the aggregate damages analysis.  As the certification judge
    emphasized, Trillium did not argue that, but for Cassels misconduct, it would
    not have signed its WDA.  Rather, it argued that, because of Cassels
    misconduct, it lost the only chance it had to negotiate collectively to reach a
    better deal for all the affected dealers.

[383]

For these
    reasons, I am satisfied that it was open to the trial judge to award aggregate
    damages in this case.

(b)

Calculation Errors

[384]

Cassels next
    argues that the trial judge erred in calculating the total value of the class
    members loss of chance. Cassels says there are three figures relevant to
    calculating the value of the lost chance:

(1)

$218
    million  the total envelope of compensation GM
approved
for expenditure by GMCL on the WDAs, based on an estimated 290 terminated
    dealers;

(2)

$143.5
    million  the amount GMCL
offered
to the terminated dealers under the
    WDAs, based on a final count of 240 terminated dealers; and

(3)

$126
    million  the amount GMCL
paid
to the terminated dealers under the WDAs,
    based on the 202 terminated dealers who accepted the WDA offers.

[385]

As I have said,
    the trial judge calculated the lost chance as the difference between the amount
    approved and the amount paid: $218 million - $126 million = $92 million.

[386]

Cassels argues,
    and I agree, that the trial judge erred in using the $126 million figure, the
    amount paid, as the second number. Neither side in hypothetical negotiations
    could have known that 38 terminated dealers would reject the WDAs. The offers
    on the table totalled $143.5 million. Unbeknownst to the dealers, GMCL had $218
    million to spend. The trial judge should have calculated the value of the lost
    chance to negotiate successfully as the difference between the money approved
    for the WDAs and the money offered: $218 - $143.5 = $74.5 million.

[387]

This reduces the
    overall starting point for the quantification of the aggregate damages award to
    $74.5 million.

[388]

Finally, Cassels
    argues that the trial judges damages assessment was flawed because he
    erroneously assumed that all 181 class members were Participation Form Dealers
    to whom Cassels owed fiduciary and contractual duties.

[389]

I also accept
    this submission, though I emphasize that any confusion in the composition of
    the Class does not lie at the trial judges feet. In my view, it was incumbent
    on counsel to have identified and clarified this issue at trial.  The trial
    judge cannot be faulted for any misunderstanding about the composition of the Class
    arising from counsels failure to do so.

[390]

In any event,
    the trial judge offered a sensible, workable approach when he directed that a
    process for determining the number and identity of the Participation Form Dealers,
    and for calculating damages accordingly, shall be determined on a further
    motion before him following the release of this courts decision.  I would
    endorse this approach.

(4)

Trilliums Cross-appeal

[391]

This brings me
    to Trilliums cross-appeal.  Trillium submits the trial judge should have been
    more generous in calculating the class members damages.

[392]

Trillium argues,
    first, that the trial judge erred in holding that any figure above $218 million
    was mere speculation. It submits that by confining himself to a safe amount
    that had already been approved by GM, the trial judge did not fulfil his
    responsibility to assess the value of the real and substantial chance lost by
    the dealers, however difficult that assessment may be. In concluding that
    better evidence was required to assess the lost chance at more than $218
    million, the trial judge failed to heed this courts direction in
Wong
,
    at para. 27, that, in assessing the value of a lost chance, [t]he court  must
    do the best it can with the available evidence.

[393]

Here, Trillium
    argues, the available evidence was that there were significant costs and
    risks if GMCL were to file for
CCAA
protection, that the Canadian Governments
    preferred to avoid a filing, and that GMCL had negotiated successfully with
    other groups of stakeholders. All these factors, Trillium submits, would likely
    have forced GMCLs purported ceiling of $218 million upwards.

[394]

In the
    alternative, Trillium submits that the trial judge should have considered
    awarding damages based on alternative scenarios reflecting escalating success
    in the dealers negotiations with GMCL. It notes that this is a familiar
    approach in England, though Trillium did not cite a Canadian example of this
    practice.

[395]

I cannot accept
    these submissions. The trial judge made a careful assessment of the value of
    the dealers lost chance based on all the evidence available to him. That
    evidence was unequivocal  $218 million was the most that GMCL could offer
    without returning to its American parent, cap in hand, to ask for more. The
    trial judge considered the hypothetical scenarios Trillium offers on appeal but
    concluded that there was no evidence about how much more money, if any, GM was
    willing to spend to placate the dealers and avoid a GMCL
CCAA
filing.

[396]

In my view, the
    trial judges conclusion that anything above $218 million is speculative, is a
    paradigmatic finding of fact that ought not to be disturbed on appeal.

[397]

Trillium next
    argues that the trial judge erred in applying a 55 percent contingency to the
    value of the lost chance.

[398]

The trial judge,
    at paras. 607-08, identified five contingencies which lowered the reasonable
    possibility of the chance lost by the dealers. They were:

(1)

whether
    the dealers, given their differences, would have banded together to instruct
    Cassels to negotiate;

(2)

whether
    GMCL would have negotiated rather than file for
CCAA
protection;

(3)

whether
    good faith negotiations would simply have failed;

(4)

the
    dealers leverage had limits because they could have been terminated yet have
    received nothing in a
CCAA

filing; and

(5)

the
    dealers could have asked for significantly less than the approved $218 million
    available to GMCL.

[399]

Trillium submits
    that it was not open to the trial judge to apply a discount to the first of
    these contingencies. It says that, having found that Trillium established a
    lost chance to negotiate on a balance of probabilities, the trial judge was
    obliged to accept this contingency as a certainty. Trillium submits that the
    55 percent contingency the trial judge ascribed to the lost chance should
    accordingly be scaled upward by 15 percent, to 70 percent. This would increase
    the overall value of the lost chance.

[400]

I cannot agree.
    Even assuming that the trial judge should not have factored the first
    contingency into his quantum analysis, Trillium accepts that he was entitled to
    consider the remaining four. As I have already said, the trial judge did not
    ascribe a separate probability to each contingency, nor was he obliged to do
    so:
Tom Hoskins plc v. EMW Law (a firm)
. Standing alone, any one of the
    remaining four contingencies had the potential to sink the dealers chances of successful
    negotiations.  Viewed cumulatively, they were all the more daunting. I
    therefore see no reversible error in the trial judges decision to fix the
    probability of successful negotiations at 55 percent.

[401]

Finally,
    Trillium submits that the trial judge erred in delivering his supplementary ruling,
    some eight and a half months after the release of his original reasons for
    judgment. Trillium interprets the supplementary ruling as an impermissible
    change in the trial judges original decision on damages, one that has the
    effect of reducing the value of the damages properly owing to the class
    members.

[402]

I reject this
    submission, as well. I again emphasize that any confusion about the composition
    of the Class and the implications of that issue for the quantification of
    damages was not the trial judges fault.  It was only after the original
    reasons were released and the parties could not agree on the wording of the
    trial judgment that they came to identify the problem. With respect, this was
    an error of counsels own making. I see no error in the trial judges attempt
    to correct it, which the parties themselves asked him to do.

[403]

Further, the
    supplementary ruling arose in the context of a dispute over settling the terms
    of the judgment. The trial judge was not
functus
at that point. In my
    view, he properly exercised his jurisdiction to consider the issue, and
    sensibly left it open to revisit the calculation of damages following the
    release of this courts decision.  With the benefit of these reasons, that
    process can now be undertaken.

[404]

For these
    reasons, I would hold that the question of the final quantification of damages
    be returned to the trial judge for further consideration in accordance with the
    following:

(1)

the
    proper starting value for the loss of chance should be $74.5 million (and not,
    as the trial judge found, $92 million). Applying a 55 percent contingency, the
    damages award would be $40.975 million. This figure should be rounded to $41
    million;

(2)

account
    should be taken of the opt-outs from the Class, (10 percent), bringing the
    figure to $36.9 million; and

(3)

a
    determination should then be made, to the extent possible, of how many class
    members were Participation Form Dealers (
x

percent) to arrive
    at a new, final number.

[405]

Of course, it
    will be for the trial judge to determine the appropriate process for the
    hearing on these issues, including whether further evidence should be received.

DISPOSITION

[406]

For the reasons
    given, I would dismiss the appeal from the trial judges liability findings, allow
    the appeal from the trial judges quantification of damages in accordance with
    these reasons, and dismiss Trilliums cross appeal.

[407]

As success in
    these proceedings has been divided to some extent, I would direct that both
    parties are entitled to deliver submissions on the costs of this appeal and
    cross-appeal.  Trillium shall deliver its brief written costs submissions to
    the Registrar of this court within 30 days from the date of the release of
    these reasons.  Cassels shall deliver its brief responding costs submissions to
    the Registrar within 30 days thereafter.

Released: JUL -4 2017                               E.A.
    Cronk J.A.

EAC                                                                      I
    agree K. van Rensburg J.A.

I
    agree G. Pardu J.A.

[1]
F
or the purpose of trial, Canada declined to waive
    solicitor-client privilege to establish whether it was informed of the Dealer
    Retainer and, if so, precisely what was said.  The trial judge was invited to
    presume that Canada was informed of the conflict and of Cassels assurance that
    it would not act contrary to Canadas interests.  Leonard testified that this
    was what he meant in his May 5 email when he wrote: We did say [to Canada]
    that we would back off the dealers.

[2]

Based on Trilliums pleading, these express or implied terms
    included: that Cassels would provide fearless, loyal, competent and vigorous
    representation of the GM dealers; that Cassels had no conflict of interest and
    would provide completely faithful representation of the dealers relating to
    GMs restructuring; and that Cassels would subordinate its own interests,
    including its commercial interests, in its representation of the dealers.