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Battle continues over proposed Motherisk class-action suit

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Were Motherisk’s hair tests reliable? Did the lab meet forensic standards?

These questions, answered nearly three years ago in a government-commissioned review that exposed a litany of failings at the Hospital for Sick Children’s former drug-testing tab, were revived Wednesday in Toronto Divisional Court, where the ongoing battle over a proposed national class-action lawsuit highlighted a hard truth for thousands of alleged Motherisk victims: When it comes to the fight for compensation in any given case, the damning conclusions reached by retired judge Susan Lang remain up for debate.

The hearing was an appeal by the proposed lead plaintiff — a Toronto mother who claims her access to her son was limited for several years due to Motherisk’s flawed testing — of Superior Court Justice Paul Perell’s decision not to certify the case because of the “intensely individualistic nature of the claims.”

“The significant damages are caused not by the common unreliability of the tests, but by an individual’s test being wrong with sometimes tragic consequences,” Perell concluded late last year. “Class members should not suffer the disappointment of a class action that will not take them far enough on the path to substantive justice.”

However, the plaintiff’s lawyer, Kirk Baert, argued in court on Wednesday that because “nothing has been conceded in terms of liability” by the defendants, who include Motherisk’s founding director, Dr. Gideon Koren, former lab manager Joey Gareri and Sick Kids, there are substantial — and outstanding — shared issues related to the conduct of the lab.

When pressed by the three-judge panel about whether Sick Kids admits Motherisk’s hair tests did not meet internationally recognized forensic standards, hospital lawyer Kate Crawford said, “We don’t make a full denial. We need to look at the circumstances of each test . . . Any court is going to have to look at every case. There is no across the board answer.”

Crawford said that a class-action is not the “preferable” way to decide these claims — which is one of the tests for certification — because establishing negligence hinges on proving that the results were false and that those tests led to a negative outcome in each case.

Justice Fred Myers challenged her on that point, asking her if “every person should have to sue the government of Ontario” to determine whether the tests were unreliable “when Justice Lang has already told everyone who reads a newspaper that is the case.”

“How is that preferable?” he said.

Beginning in the 1990s, Sick Kids made millions from Motherisk’s hair tests, which were admitted in a handful of criminal cases and thousands of child welfare cases — primarily by children’s aid societies, as evidence of parental substance abuse — until late 2014, when a Star investigation exposed questions about the reliability of Motherisk’s results.

In December 2015, Justice Lang concluded that Motherisk’s results from 2005 to 2015 were “inadequate and unreliable” and that the lab “fell woefully short of internationally recognized forensic standards.”

Lang’s review led to a second probe of nearly 1,300 individual Ontario child protection cases. Motherisk Commissioner Judith Beaman concluded in February that 56 families were “broken apart” by Motherisk’s faulty testing.

“The testing was imposed on people who were among the poorest and most vulnerable members of our society, with scant regard for due process of their rights to privacy and bodily integrity,” Beaman wrote in her report.

Reuniting these families has proved difficult, because, once finalized, adoptions are virtually impossible to overturn.

In court on Wednesday, Koren’s lawyer, Darryl Cruz, said the “big problem” with the proposed class action is that it has “a poor foundation.”

“The plaintiff’s entire case is premised on the Lang report. The Lang report was good work but it was directed at something. Her task was not to determine responsibility of any person. She was looking at something very different,” Cruz said. “She was not determining whether anyone met the cause of action of any negligence claim.”

The three-judge panel reserved its decision.

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Rachel Mendleson is a Toronto-based investigative reporter. Follow her on Twitter: @rachelmendleson

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‘Business as usual’ for Dorel Industries after terminating go-private deal

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MONTREAL — Dorel Industries Inc. says it will continue to pursue its business strategy going forward after terminating an agreement to go private after discussions with shareholders.

« Moving ahead. Business as usual, » a spokesman for the company said in an email on Monday.

A group led by Cerberus Capital Management had previously agreed to buy outstanding shares of Dorel for $16 apiece, except for shares owned by the family that controls the company’s multiple-voting shares.

But Dorel chief executive Martin Schwartz said the Montreal-based maker of car seats, strollers, bicycles and home furniture pulled the plug on a deal on the eve of Tuesday’s special meeting after reviewing votes from shareholders.

“Independent shareholders have clearly expressed their confidence in Dorel’s future and the greater potential for Dorel as a public entity, » he said in a news release.

Dorel’s board of directors, with Martin Schwartz, Alan Schwartz, Jeffrey Schwartz and Jeff Segel recused, unanimously approved the deal’s termination upon the recommendation of a special committee.

The transaction required approval by two-thirds of the votes cast, and more than 50 per cent of the votes cast by non-family shareholders.

Schwartz said enhancing shareholder value remains a top priority while it stays focused on growing its brands, which include Schwinn and Mongoose bikes, Safety 1st-brand car seats and DHP Furniture.

Dorel said the move to end the go-private deal was mutual, despite the funds’ increased purchase price offer earlier this year.

It said there is no break fee applicable in this case.

Montreal-based investment firm Letko, Brosseau & Associates Inc. and San Diego’s Brandes Investment Partners LP, which together control more than 19 per cent of Dorel’s outstanding class B subordinate shares voiced their opposition to the amended offer, which was increased from the initial Nov. 2 offer of $14.50 per share.

« We believe that several minority shareholders shared our opinion, » said Letko vice-president Stephane Lebrun, during a phone interview.

« We are confident of the long-term potential of the company and we have confidence in the managers in place.”

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Anglais

Pandemic funds helping Montreal businesses build for a better tomorrow

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Many entrepreneurs have had to tap into government loans during the pandemic, at first just to survive, but now some are using the money to better prepare their businesses for the post-COVID future.

One of those businesses is Del Friscos, a popular family restaurant in Dollard-des-Ormeaux that, like many Montreal-area restaurants, has had to adapt from a sit-down establishment to one that takes orders online for takeout or delivery.

“It was hard going from totally in-house seating,” said Del Friscos co-owner Terry Konstas. “We didn’t have an in-house delivery system, which we quickly added. There were so many of our employees that were laid off that wanted to work so we adapted to a delivery system and added platforms like Uber and DoorDash.”

Helping them through the transition were emergency grants and low-interest loans from the federal and provincial governments, some of which are directly administered by PME MTL, a non-profit business-development organization established to assist the island’s small and medium-sized businesses.

Konstas said he had never even heard of PME MTL until a customer told him about them and when he got in touch, he discovered there were many government programs available to help his business get through the downturn and build for the future. “They’ve been very helpful right from day one,” said Konstas.

“We used some of the funds to catch up on our suppliers and our rents, the part that wasn’t covered from the federal side, and we used some of it for our new virtual concepts,” he said, referring to a virtual kitchen model which the restaurant has since adopted.

The virtual kitchen lets them create completely different menu items from the casual American Italian dishes that Del Friscos is known for and market them under different restaurant brand names. Under the Prasinó Soup & Salad banner, they sell healthy Greek options and their Stallone’s Sub Shop brand offers hearty sandwiches, yet the food from both is created in the same Del Friscos kitchen.

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Downtown Montreal office, retail vacancies continue to rise

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Some of downtown Montreal’s key economic indicators are heading in the wrong direction.

Office and retail vacancies in the city’s central core continued to climb in the fourth quarter of 2020, according to a quarterly report released Thursday by the Urban Development Institute of Quebec and the Montréal Centre-Ville merchants association. The report, whose first edition was published in October, aims to paint a socio-economic picture of the downtown area.

The survey also found office space available for sublet had increased during the fourth quarter, which may foreshadow even more vacancies when leases expire. On the residential front, condo sales fell as new listings soared — a sign that the downtown area may be losing some of its appeal to homeowners.

“It’s impossible not to be preoccupied by the rapid increase in office vacancies,” Jean-Marc Fournier, the former Quebec politician who now heads the UDI, said Thursday in an interview.

Still, with COVID-19 vaccinations set to accelerate in the coming months, “the economic picture is bound to improve,” he said. “People will start returning downtown. It’s much too early to say the office market is going to disappear.”

Public health measures implemented since the start of the pandemic almost a year ago — such as caps on office capacity — have deprived downtown Montreal of more than 500,000 workers and students. A mere 4,163 university and CEGEP students attended in-person classes in the second quarter, the most recent period for which figures are available. Border closures and travel restrictions have also brought tourism to a standstill, hurting hotels and thousands of local businesses.

Seventy per cent of downtown workers carried out their professional activities at home more than three days a week during the fourth quarter, the report said, citing an online survey of 1,000 Montreal-area residents conducted last month.

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