Executive Summary: Key Legal and Evidentiary Issues

• Certification turns on whether amended CEPA and conspiracy pleadings disclose viable causes of action and meet the “some basis in fact” test for new common issues.
• A central evidentiary theme is the use of defeat devices and “clean diesel” marketing, supported by indictments, guilty pleas, consent agreements, and public admissions across the Volkswagen corporate group.
• The scope of CEPA liability, including whether Canadian sales, leases and VCCI’s financing activities amount to “importation, sale or lease” by each defendant, is a key statutory interpretation issue.
• The adequacy of conspiracy particulars against each related corporate entity, especially the Canadian defendants, raises questions about corporate separateness and proof by circumstantial evidence.
• VCCI’s attempt to decertify focuses on the withdrawal of its earlier admission of making the representations and whether any non-hearsay evidence ties it to marketing using “TDI Clean Diesel.”
• Competing positions on the sufficiency and admissibility of online marketing evidence (websites, LinkedIn profiles, trademark records) shape the “some basis in fact” analysis for certification and continued inclusion of VCCI.

Facts and procedural background

The MacKinnon litigation arises from the Volkswagen “clean diesel” emissions scandal and targets various Volkswagen and Audi entities in Canada and abroad. The core allegation is that certain 2009–2016 Volkswagen and Audi TDI diesel vehicles marketed as environmentally friendly “Clean Diesel” cars actually violated emissions standards and were equipped with unlawful software defeat devices designed to cheat regulatory tests. The vehicles allegedly emitted pollutants at levels significantly higher than represented in ordinary driving conditions, despite being promoted as compliant with North American emissions standards. The plaintiff, Stuart MacKinnon, commenced a proposed class action on behalf of former owners and lessees of 2.0L and 3.0L TDI vehicles who had sold or returned their vehicles before the emissions violations became public in September 2015. These individuals had been excluded from earlier Canadian consumer class action settlements on the assumption that, having disposed of their vehicles prior to disclosure, they suffered no compensable loss. The present proceeding seeks to fill that remedial gap by advancing claims solely for this excluded group.
Earlier, in 2021, an initial attempt to certify a related class action on behalf of these “former owners” was rejected, chiefly because the plaintiffs had not provided a workable methodology for proving class-wide economic loss. In 2024, however, Justice Akbarali of the Ontario Superior Court revisited the certification question in MacKinnon v. Volkswagen Group Canada Inc., 2024 ONSC 4988. She allowed the class proceeding to move forward in part, certifying several causes of action and common issues against Volkswagen Group Canada Inc. (VW Canada), Volkswagen AG (VW AG), Volkswagen Group of America Inc. (VW USA), Audi Canada Inc., Audi AG, and VW Credit Canada Inc. (VCCI). The certified claims centred on negligent misrepresentation, breaches of the Competition Act, and statutory consumer protection claims related to the defendants’ “clean diesel” marketing and the sale of vehicles equipped with defeat devices in Canada. The 2024 decision also confirmed that the plaintiff had adequately pleaded CEPA-based claims against the German corporate defendants (VW AG and Audi AG) for allegedly importing emissions-non-compliant vehicles into Canada in contravention of CEPA. However, the court declined at that stage to certify a conspiracy cause of action, finding the pleadings insufficiently particularized as to each defendant. Justice Akbarali granted leave to amend the statement of claim to better particularize the conspiracy allegations and also indicated that, if the plaintiff wished to extend the CEPA claims to the Canadian defendants (VW Canada, Audi Canada, and VCCI) for their roles in selling or leasing the vehicles domestically, he would need to amend the CEPA pleadings and return for a further certification motion.
The defendants’ corporate roles are significant to the issues in dispute. VW AG and Audi AG are German manufacturers; VW USA is involved in North American operations; VW Canada and Audi Canada distribute, market, sell and lease the vehicles in Canada; and VCCI is a Canadian federally incorporated subsidiary offering retail financing and customer lease financing for Volkswagen and Audi vehicles. The plaintiff’s theory is that these entities collectively participated in a coordinated strategy to conceal non-compliance and to market the vehicles as “clean” or environmentally friendly, in order to boost sales and leases across North America. In addition to regulatory proceedings and criminal prosecutions abroad, VW Canada and Audi Canada had already entered into a Consent Agreement with the Canadian Competition Bureau in which they admitted making misrepresentations about the environmental attributes of the vehicles and violating the Competition Act.

Statutory framework and relevant contractual terms

Two statutes sit at the centre of the litigation: CEPA and the Competition Act, alongside a suite of provincial consumer protection statutes. Under s. 153(1) CEPA, a company may not “sell” a vehicle in Canada unless it conforms to prescribed emissions standards, and “sell” is defined in s. 3 to include offering for sale or lease, having in possession for sale or lease, or delivering for sale or lease. Section 40 CEPA provides a civil cause of action for any person who has suffered loss or damage as a result of conduct that contravenes the Act or its regulations, allowing recovery of proven loss and associated costs. The plaintiff alleges that by importing, selling and leasing non-compliant vehicles equipped with defeat devices in Canada, the various Volkswagen entities breached CEPA and are liable in damages under s. 40.
The Competition Act component of the claim centres on Part VI (criminal misleading advertising and deceptive marketing practices). The plaintiff alleges that the defendants’ representations that the vehicles were “clean diesel,” environmentally friendly, and compliant with emissions standards were false or misleading in a material respect, causing class members to overpay or to purchase vehicles that ought not to have been offered in Canada at all. VW Canada and Audi Canada’s earlier Consent Agreement with the Competition Bureau, in which they admitted misrepresenting the vehicles and contravening the Act, forms an important evidentiary foundation for the plaintiff’s case.
The claim also invokes multiple provincial consumer protection regimes. In relation to VCCI specifically, the certified common issues ask whether it made or engaged in false, misleading, deceptive or unconscionable representations or unfair practices within the meaning of statutes such as Ontario’s Consumer Protection Act, 2002, the Business Practices Act in Manitoba, and analogous legislation in several other provinces, and whether affected class members are entitled to damages under those statutes.
One contractual clause receives attention in the later decision of Leiper J. VCCI pointed to a term in its standard lease agreement stating that it is not responsible for statements or actions of any dealer selling or servicing the vehicles and argued that this insulated it from liability for marketing representations. The court rejected this as a basis to strike the claim at the pleadings stage. Justice Leiper emphasized that the plaintiff was not suing VCCI vicariously for dealer statements but alleging that VCCI itself participated in the “TDI Clean Diesel” promotional campaign, including through its own website and branded online content, and that it benefited from and supported the misrepresentations as part of a broader enterprise to sell and lease the vehicles.

The 2025 motions: CEPA, conspiracy and decertification

The 2025 reasons of Justice Leiper (2025 ONSC 6942) address three principal issues: whether CEPA claims should be certified against the Canadian defendants, whether the conspiracy claim should be certified, and whether existing certified claims against VCCI should be decertified in light of its withdrawal of an earlier admission.
On CEPA, the plaintiff sought to amend his pleadings to clarify and expand the statutory claims. First, he proposed to amend paragraph 1(e) to make clear that the declaration of CEPA breach is sought not against all defendants generically, but specifically against VW AG, Audi AG and the Canadian defendants (VW Canada, Audi Canada and VCCI), and that the alleged breach includes not only importing but also selling and leasing the vehicles in Canada. Second, he sought to consolidate and expand the CEPA factual allegations in dedicated paragraphs, expressly pleading that the Canadian defendants distributed, sold and leased the non-compliant vehicles domestically, in violation of s. 153(1). The plaintiff argued that these amendments did not introduce new facts but recast existing allegations as alternative legal bases for relief under s. 40 CEPA.
The Canadian defendants opposed, contending that the CEPA claim was bound to fail because they had relied in good faith on U.S. EPA certificates, under a regulatory regime that deemed vehicles with such certificates to conform to Canadian standards. They argued that the pleadings did not adequately allege knowledge of the defeat devices or negligence in failing to detect them, and that the plaintiff had not pleaded causation or fault in a way that could sustain liability under s. 40. Justice Leiper rejected these arguments at the certification stage. She held that it was sufficient for the plaintiff to allege that he and class members purchased non-compliant vehicles that either should not have been offered at all or were worth less than they paid, and that proof of knowledge, intent or negligence — whether direct or circumstantial — was a matter for trial, not a basis to find the cause of action “plainly doomed to fail” on the pleadings. She expressly adopted Justice Akbarali’s earlier reasoning that CEPA’s text, context and purpose do not make it “plain and obvious” that a statutory cause of action for economic loss is unavailable, and that such claims provide an additional enforcement mechanism in furtherance of CEPA’s environmental objectives.
VCCI advanced a separate, more technical objection, arguing that its role was limited to offering financial products in connection with vehicle purchases and leases, and that this could not amount to “selling” within CEPA’s expanded definition. Because the claim described MacKinnon as having leased his vehicle from a dealer and then having the lease assigned to VCCI, VCCI contended that it neither offered nor delivered the vehicles for sale or lease and thus could not be captured by s. 153(1). Justice Leiper disagreed. She held that the breadth of “offering for lease,” “having in possession for lease” or “delivering for lease” must be interpreted purposively in light of CEPA’s consumer and environmental objectives, and that a financial corporation acting as lessor to consumers may well fall within those phrases. She concluded that it was not plain and obvious that the CEPA claim against VCCI would fail and certified the CEPA-based cause of action against VCCI alongside the other Canadian defendants.

Certification of the conspiracy claim

The plaintiff had earlier been refused certification of his conspiracy claim because he failed to set out specific particulars against each defendant. On leave to amend, he significantly expanded these pleadings, adding 34 pages of allegations and a five-page appendix detailing the roles of each corporate entity. The amended claim incorporates by reference a wide array of external documents: U.S. grand jury indictments, plea agreements, agreed statements of fact, criminal complaints, consent decrees, and regulators’ findings, as well as admissions in the defendants’ own pleadings. These documents collectively describe how Volkswagen personnel and entities allegedly designed, installed and concealed defeat devices, orchestrated a misleading marketing campaign, and coordinated efforts to avoid disclosure to regulators and consumers.
Justice Leiper summarized the legal test for unlawful means conspiracy: there must be an agreement between two or more persons, to engage in unlawful conduct (which can include torts or statutory offences) with knowledge that injury to the plaintiff is likely, and resulting damage. The pleading must, at a minimum, particularize the relationship among the alleged conspirators, the agreement, the object of the conspiracy, overt acts by each conspirator, and the resulting injury. The Canadian defendants argued that, even after amendment, the case still pleaded a conspiracy only among the foreign entities (VW AG, Audi AG, VW USA) and certain individuals, and that VW Canada, Audi Canada and VCCI were little more than downstream distributors or financiers blindly following head-office instructions. They relied on case law stressing that related corporations must be treated as distinct, and that plaintiffs cannot state a conspiracy claim by painting an entire corporate “group” with the same brush.
The court rejected this narrow reading. It found that the amended claim did not consist merely of bald allegations and that the plaintiff had adequately pleaded knowledge and participation by each of the Canadian entities, including admissions that VW Canada and Audi Canada misrepresented the vehicles and violated the Competition Act in their own right. The combination of criminal findings, regulatory admissions, and detailed allegations about coordinated North American marketing and distribution strategies provided enough for a trier of fact to infer that the conspiracy extended across the Volkswagen corporate structure, including the Canadian arms. Justice Leiper emphasized that at certification the plaintiff need only show that the claim is not “doomed to fail” and that there is some minimal evidence supporting the existence of a common issue, not prove the conspiracy on the merits. On that basis, she certified the conspiracy cause of action and the associated common issue asking whether any or all defendants are liable in conspiracy for the engineering, design, development, installation, testing, manufacture, marketing, distribution, sale or lease of the diesel engines and vehicles containing defeat devices.

VCCI’s motion to decertify

VCCI’s decertification motion represented the most aggressive defence step in the 2025 proceedings. It sought to unwind the 2024 certification order as it applied to VCCI, particularly the misrepresentation, Competition Act and consumer protection claims. The motion was triggered by VCCI’s withdrawal, by consent order in February 2025, of an earlier admission in its statement of defence that it, along with the other defendants, had made the impugned environmental representations. In the 2024 certification reasons, Justice Akbarali had noted that, while VCCI’s corporate role as a financing subsidiary distinguished it from the other entities, the unqualified admission that all defendants made the representations resolved any pleading-stage doubt. Certification of claims against VCCI had thus rested heavily on this admission.
After the admission was withdrawn, the plaintiff filed a further amended claim and the defendants, including VCCI, delivered an amended defence. VCCI then moved under s. 10(1) of the Class Proceedings Act, arguing that the conditions for certification were no longer met. It contended that, absent the admission, the claim disclosed no reasonable cause of action against it and lacked any evidentiary basis for the certified common issues relating to its conduct.
On the pleadings question, Justice Leiper found that the amended statement of claim contained more than bare or implausible allegations. The plaintiff alleged that VCCI participated in a group-wide marketing effort that prominently used “TDI Clean Diesel” branding, including on a website associated with its business name VW Finance. The claim pointed to specific online content linking VCCI’s site (vwfinance) with references to clean diesel vehicles, and alleged that VCCI’s role as the captive finance and leasing arm was integral to the overall strategy of selling and leasing environmentally deficient vehicles at inflated prices, along with associated financing charges. The court held that these allegations, read generously and in context, were sufficient to state viable causes of action in negligent misrepresentation, Competition Act breach, consumer protection offences, and conspiracy, without relying on the withdrawn admission.
On the “some basis in fact” requirement for common issues, VCCI attacked the plaintiff’s evidentiary record as hearsay and insubstantial. The plaintiff had filed an affidavit from a law clerk attaching: a screenshot of Volkswagen Financial Services Canada’s LinkedIn profile; archived screenshots of vw.ca pages obtained through the Wayback Machine; and screenshots from the LinkedIn profiles of two VCCI employees describing their marketing roles. VCCI argued that none of this proved that VCCI itself had marketed vehicles as “clean diesel” or that it had used the contested phrase in its own promotions. Justice Leiper, however, stressed the modest threshold for certification evidence. She treated these materials as capable of establishing that VCCI had a marketing function and that its online presence may have contained “TDI Clean Diesel” references. She also relied on trademark records showing that VW Canada had applied as early as 2008 to register “Clean Diesel” as a trademark for use, among other things, in association with “car and truck leasing,” a business line that naturally intersected with VCCI’s activities. This allowed an inference that the mark could have been used by VCCI in its promotional materials. The ubiquity of the “clean diesel” branding across the Volkswagen organization, coupled with VCCI’s inability or unwillingness to put forward its own evidence clarifying the history and content of the vwfinance website, further supported the conclusion that there was some basis in fact to leave the common issues against VCCI intact.

Outcome of the combined decisions

Taken together, the 2024 and 2025 decisions substantially advance MacKinnon’s class action on behalf of former owners and lessees of Volkswagen and Audi TDI “clean diesel” vehicles. In 2024, Justice Akbarali certified a class proceeding focusing on misrepresentation-based theories of liability under the common law, the Competition Act and provincial consumer protection statutes, and recognized a viable CEPA cause of action against the German manufacturers for importing non-compliant vehicles into Canada. The 2025 ruling by Justice Leiper expands and consolidates the case. It allows amended CEPA claims to proceed not only against VW AG and Audi AG, but also against VW Canada, Audi Canada and VCCI, on the theory that domestic sales, leases and financing of non-compliant vehicles in breach of s. 153(1) give rise to statutory damages under s. 40. It also certifies the unlawful means conspiracy cause of action against all defendants, rejecting arguments that the Canadian entities were mere passive conduits. Finally, the court refuses to decertify the existing claims against VCCI, holding that the withdrawal of its earlier admission does not fatally undermine the pleadings or the evidentiary basis for the certified common issues. Procedurally, the plaintiff and the class are the successful parties in both certification stages: their proposed class action has been preserved and broadened, while the defendants have failed in their efforts to narrow its scope or remove VCCI from the proceeding. At this point, however, neither decision makes any finding of final liability or quantifies damages; no monetary award for damages or costs has yet been ordered in favour of the plaintiffs, and the total amount ultimately payable, if any, cannot presently be determined.