July 19, 2013
Friday, July 19, 2013
Branch MacMaster

SEQUENCING

Brittin v Canada (Human Resources and Skills Development), 2013 SKQB 214: The Merchant Law Group (“MLG”) commenced a number of proposed class actions in Saskatchewan, BC, Alberta, Manitoba and Ontario relating to the loss of a portable computer hard drive containing the personal information of over 500,000 Canadian Student Loan participants. A similar action had commenced by a separate group of plaintiffs in the Federal Court of Canada. The plaintiff in MLG’s Saskatchewan action brought a motion to set the date and time of the certification application. Counsel for the defendant and the Federal court plaintiffs advised the court of their intention to bring motions to stay the MLG actions on jurisdictional and forum non conveniens grounds.

The Court set a schedule for the hearing of the two stay motions prior to certification over MLG’s objection as well as a schedule for the ensuing certification hearing of the MLG actions, while reserving MLG’s right to argue sequencing again at the stay hearing.

The writer is counsel for the Federal Court plaintiffs.

Douez v. Facebook, Inc., 2012 BCSC 2097:  Motion by the defendant for an order that its jurisdictional application be heard prior to the plaintiff’s application for certification dismissed. The court rejected the defendant’s proposition that a determination of whether or not the court should decline jurisdiction may dispose of the entire proceeding and avoid inefficiency and cost. The court concluded that the cost of multiple motions and appeals would exceed the cost of preparing for a single procedural hearing (a combined certification application where jurisdiction arguments could be advanced). The court also noted that both the plaintiff and defendants had complex arguments with respect to the key jurisdictional issue (forum non conveniens). The court held that it would be more convenient to have the two motions heard together.

Chris Rhone and Greg McMullen of our office were counsel for the plaintiff.

Kowch v. Gibraltar Mortgage Ltd., 2013 ABQB 317: The defendants brought an application for summary judgment on the basis that the plaintiffs’ proposed class action was started after the expiry of the applicable limitation period. The first question before the court was whether a master had jurisdiction to hear a summary judgment application in a matter intended to be certified as a class action. The court held that until certified, a proceeding commenced as a class action did little else other than suspend the limitation period for the cause of action asserted in the proceeding. Until certified, there was nothing special about the action and all of the other procedural rules prevailed. There was therefore no reason a master could not hear a summary dismissal application prior to certification.

Further the court held that while as a general rule a certification application should be the first order of business in a proposed class action, the large scale of class action lawsuits provided an impetus to entertain dispositive or final motions first. In other words, the court found it had discretion to hear and determine a summary dismissal application in advance of a certification application.

The court went on to conclude that the proposed class action was commenced after the expiry of the limitation period, and accordingly dismissed the action.

Miller v. Purdue Pharma, Inc, 2013 SKQB 193: The defendants applied to strike or stay proposed class action on jurisdictional and forum non conveniens grounds. In terms of sequencing, the court noted that while generally speaking, the first motion to be heard in a class action proceeding should be the certification motion, it may be appropriate to make preliminary rulings in advance of hearing the certification motion where it would further the objectives of judicial efficiency. The court held that the non-discretionary question of territorial competence could resolve the claim against one or more defendants altogether. As such, it was appropriate to deal with this issue in advance of the certification application.

After reviewing the evidence, the court concluded that there was a good arguable case that the Canadian and US defendants were affiliated corporations controlled directly or indirectly by the same entity or group of entities and engaged in a common business enterprise. The court therefore concluded that it had territorial competence over the action.

With respect to the forum non conveniens question, the court held that it would be more appropriate to defer this aspect of the question until the certification hearing.

JURISDICTIONAL ISSUES

Parsons v. The Canadian Red Cross Society, 2013 ONSC 3053: This motion for directions raised the question of whether a judge of the Superior Court of Ontario may sit in another province to hear a motion concerning a pan-Canadian settlement agreement of related class actions certified in Ontario, BC and Quebec. The motion was raised in the context of the national Hepatitis C settlement. The answer to the question raised would practically affect the ability of three supervisory judges to sit together in one location to adjudicate common matters over which they had personal and subject-matter jurisdiction.

The motion arose out of the settlement agreement reached between the parties in the Red Cross Hepatitis C national class action. The settlement agreement assigned a supervisory role over implementing and enforcing its provisions to the superior courts of Ontario, Quebec and BC. In the course of implementing the settlement procedure, class counsel filed motions before the supervisory judges for approval of a protocol extending the deadline for filing first claims for benefit from the settlement funds. Class counsel, in consultation with the court monitor, proposed that the most efficient and effective procedure for adjudicating these motions would be to have the three supervisory judges sit together in one location so that they could hear the same submissions and be better positioned to reach concurrent orders without material differences, as required by the settlement agreement. The Attorney General of Ontario objected to class counsel’s request on the basis of jurisdiction, but did not file a formal motion raising jurisdictional questions. As a result, class counsel brought this motion for directions.

After reviewing the historical, constitutional and statutory context associated with the jurisdictional question, the court concluded that a judge of the Superior Court of Ontario may preside over a hearing that is conducted outside of Ontario where the Ontario court has personal and subject-matter jurisdiction over the parties and the issues in the proceeding. Specifically, the court held as follows:

[53]   In the interests of promoting access to justice and judicial economy, the three supervisory courts were prepared to sit together to hear and determine a motion for directions regarding the extension of the time to file claims under the settlement agreement. This was an instance of judicial cooperation intended to permit the supervisory judges to efficiently and effectively hear submissions so that each court could render a decision on a matter within its own competence. In my view, AG Ontario’s highly restrictive reading of the inherent jurisdiction of the Superior Court of Justice to control its own process is inimical to this judicial initiative. Furthermore, in my opinion, AG Ontario’s proposed alternatives to a joint hearing, whether in the form of three duplicative hearings or a video-linked joint hearing, do not adequately address the goals of ensuring access to justice and judicial economy.

[54]   Access to justice is a national and, indeed, an international, issue. The Hepatitis C and Indian Residential Schools class actions are internationally recognized examples of Canadian class proceedings that provided access to justice to thousands of people who suffered common wrongs. The procedural vehicle of the class action has permitted these victims to obtain redress for the harms they have suffered. The tragic events that gave rise to the actions transcended provincial borders and were national in scope. The settlements were pan-Canadian in nature because of the need to avoid inefficiencies and costly duplication which would have ensued had the settlements been limited by provincial jurisdictions.

[55]   Within Canada’s constitutional framework, the provincial and territorial superior courts are charged with the responsibility for certifying class actions, approving settlement agreements, and, ultimately, administering those settlements. The provincial superior courts have had to adapt their procedures to ensure that settlements of pan-Canadian class actions achieve their intended purpose in the most efficient and effective way possible.

[56]   Contrary to AG Ontario’s position, I conclude that there is no constitutional, statutory or common law provision precluding the Superior Court of Justice from conducting a hearing outside Ontario. Where the Superior Court of Justice has subject matter and personal jurisdiction over a proceeding, the court may conduct a hearing outside the province as a function of its inherent jurisdiction to fully control its own process.

[57]   In deciding whether to exercise this discretion, the court should consider if sitting outside Ontario is in the interests of justice. In the class proceedings context where national or inter-provincial classes are involved, the interests of justice include the goals of achieving judicial economy and access to justice.

[58]   Having regard to these considerations, I am satisfied that it is in the interests of justice for this court to conduct a hearing in a location outside Ontario alongside the other two supervisory judges from British Columbia and Québec.”

Endean v. Canadian Red Cross, 2013 BCSC 1074: The BC court made a similar finding to the Ontario court with respect to the question of whether a superior court judge of British Columbia could sit with his or her counterparts in another province to hear applications under the settlement agreement. Relying on Winkler J.’s decision in Ontario, the BC court held that it was appropriate to hear the underlying application in a location outside BC alongside the other two supervisory judges from Ontario and Quebec.

Honhon c. Canada (Procureur général), 2013 QCCS 2782: Like its Ontario and BC counterparts, the Quebec court held that it was appropriate in the particular context of this case to hold joint hearings between the Ontario, BC and Quebec Courts, with judges from all three courts sitting in the same place.  

Gottfriedson v. Canada, 2013 FC 546: The plaintiffs in this case commenced a proposed class action against Her Majesty in Right of Canada for treatment they received at Kamloops and Sechelt Residential Schools. The Crown advised the case management judge that it wished to claim indemnity (under the BC Negligence Act) from certain religious orders involved in the day-to-day operation of the schools, but that the Federal Court lacked jurisdiction over the indemnity claim.

Section 50.1 of the Federal Courts Act requires the court to stay a principal action where the Crown desires to institute a counter-claim or third party proceeding in respect of which the Federal Court lacks jurisdiction over the Crown’s indemnity claim. The Crown therefore moved for an order to stay the proposed class action.

The Court noted that a finding of Federal Court jurisdiction required the satisfaction of a 3 part test:

  1. There must be a statutory grant of jurisdiction by the Federal Parliament;
  2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction; and
  3. The law on which the case is based must be a “law of Canada”.

The Court found it had jurisdiction over the Crown’s indemnity claim against the religious orders. The statutory grant of this jurisdiction was found in s.17(1) of the Federal Courts Act which gives the Court “concurrent original jurisdiction in all cases in which relief is claimed against the Crown.” The Court also noted that two sources of federal law, namely the Indian Act and the sui generis relationship between the Crown and Aboriginal peoples, were also essential to the disposition of the case. Finally, the Court acknowledged that, quite apart from the Canadian Charter of Rights and Freedoms (through which the existing aboriginal and treaty rights of the Aboriginal peoples were recognized and affirmed), matters involving the honor of the federal Crown in relation to Aboriginal peoples formed part of Federal law.

The Court acknowledged that there were no specific statutes conferring jurisdiction on the Federal Court to deal with questions of negligence. That being said, the Court relied on the existence of federal common law dealing with contributory negligence, and the fact that the case was essentially about the administration of the Indian Act (educating day pupils) as sufficient grounds to satisfy the second and third elements of the test.

Having found it had jurisdiction, the Court went on to deny the Crown’s motion to stay the principal action, granted the plaintiffs leave to serve and file an Amended Statement of Claim, and ordered that the Crown may thereafter file the third party proceedings.

MOTIONS TO STAY, STRIKE, OR FOR SUMMARY JUDGMENT

WP v Alberta (No. 1), 2013 ABQB 295 and 2013 ABQB 296: Plaintiffs applied for certification of the action, which pertained to allegations of physical, sexual and emotional abuse of students at the Alberta School for the Deaf. The Province made a cross application for summary judgment on the basis that the plaintiffs’ claims were statute-barred by the Alberta Limitations Act. The Court found that, based on the plaintiffs’ own evidence, their claims arose between 1959 and 1991. The statement of claim was filed in 2008, approximately 17 years after the most recent alleged wrongful acts occurred. Accordingly, the claims were barred by the 10 year ultimate limitation period. The plaintiffs had not established that the operation of the limitation period was suspended by age, fraudulent concealment or disability (in the sense of a disability that affected the plaintiffs’ ability to make reasonable judgments regarding their claims). Therefore, the application for summary judgment was granted.

In separate reasons for judgment, the court indicated that it could not certify the case given the result on the limitations motion.  

The writer was co-counsel for the Province of Alberta.

Dixon v. Stork Craft Manufacturing Inc., 2013 BCSC 1117: The Merchant Law Group (“MLG”) commenced numerous actions across Canada alleging negligence by the defendants in the design, manufacture, distribution and sale of baby cribs. An action on behalf of Dixon, the plaintiff in the BC action, was commenced on November 4, 2011. MLG had already started a similar action on behalf another plaintiff, Dodd, on November 24, 2009.

Following the issuance of the various actions, MLG amended the Dodd action by removing Dodd as representative plaintiff and substituting Dixon as the representative plaintiff for the BC resident class and McFadzean as the representative plaintiff for the out-of-province class. The defendants successfully brought an application to strike the amended statement of claim substituting Dixon and McFadzean in place of Dodd. The plaintiff had filed an application for leave to appeal that order (which was still outstanding at the time of this judgment).

At the time of filing the Dixon action, MLG also filed a notice of application for certification of the Dixon action. In the notice of application for certification, the plaintiffs in the Dixon action sought an order joining their action with the Dodd action for the purposes of certification and trial of the common issues. In response, the defendants brought an application to stay the Dixon action or in the alternative strike Dixon’s claim on the basis that it is vexatious or an abuse of the court’s process.

The court agreed with the defendants, holding as follows:

“[69]        The stated intention of the plaintiffs in the Dixon Action and the plaintiff in the Dodd Action is to have both actions consolidated. In my opinion, consolidation of these two actions would impermissibly and improperly permit the plaintiffs to circumvent the rules governing the adding of parties to an action and the amendment of pleadings. The same concern applies to the appeal process that the plaintiff in the Dodd Action has initiated. If the two actions are permitted to be consolidated, then the plaintiff in the Dodd Action will have obtained what he initially sought and therefore there would be no need for him to pursue his appeal. Finally, I find the joining of the Dixon Action to the Dodd Action would improperly toll a limitation period and this on its own creates a measurable prejudice for the defendants.

[72]        In my view, the position taken by the defendants on this application is the correct one. The Dixon Action attempts to re-litigate an issue that has already been adjudicated upon; it evades the appeal process that the plaintiff in the Dodd Action has initiated; it circumvents the rules of court that govern the adding of parties to an action and the amendment of pleadings; and it results in the improper tolling of a limitation period. For all of these reasons, I find the Dixon Action is vexatious and an abuse of the court’s process.”

O’Mara v. Air Canada, 2013 ONSC 2931: Defendant airline brought motion to strike out the plaintiff’s claims for punitive, aggravated and exemplary damages, as well as the claims for psychological or emotional injuries. The court found that the Warsaw Convention and the Montreal Convention, which applied to all accidents during international carriage by air, precluded recovery for purely psychological or emotional damages. The Conventions also precluded the recovery of punitive damages. These claims were therefore struck. Although a claim for aggravated damages was not specifically prohibited by the Conventions, in the case at bar, the claim for aggravated damages was really a claim for punitive damages and was therefore struck. Finally, the case law established that passengers that were subject to the Conventions did not have recourse to domestic law in advancing a claim for damages arising in connection with international carriage by air. Therefore, common law negligence could not be relied on to advance claims for punitive damages.

Robinson v. National Money Mart Company, 2013 BCSC 967: Motion by some of the defendants to stay a portion of the proposed class action in favour of referring the matter to arbitration. The court dismissed the application for a stay. In doing so, the court noted that the legal proceeding advanced two types of claims by parties to the arbitration agreement: (a) claims against the parties to the arbitration agreement that were not in respect of a matter agreed to be submitted to arbitration, and (b) claims against non-parties to the arbitration agreement, some of the subject matter of which could be subject to arbitration if brought against parties to the arbitration agreement. The BC Arbitration Act provided for a mandatory stay of legal proceedings in favor of arbitration if certain conditions were met. In this case, the requirements of the Act were not met as the legal proceeding did not advance a claim against a party to an arbitration agreement that was in respect of a matter agreed to be submitted to arbitration. Therefore, the application for a stay was denied.

CERTIFICATION

Martin c. Société Telus Communications, 2013 QCCS 2648:Motion for authorization to institute class action granted in a Telus fees/rates class action.

Boudreault c. Société Telus Communications, 2013 QCCS 2360: Motion for authorization of action as class proceeding denied in Telus late fee class action.

Brown c. Lloyd's Underwriters, 2013 QCCS 2389: Motion for authorization of action as class proceeding granted in the iForum fraud class action.

Royer-Brennan c. Apple Computer Inc., 2013 QCCS 2219: Amended motion for authorization of action as class proceeding granted in proposed Apple “hearing loss” class proceeding.

COMMON ISSUES TRIAL

Anderson v. Bell Mobility Inc., 2013 NWTSC 25: at the common issues trial of the Northwest Territories/Yukon/Nunavut 911 emergency fee class action, the Northwest Territories Supreme Court held that while the service agreements between the class members and Bell do not expressly require Bell to provide 911 live operator service to the class members, Bell cannot charge 911 emergency service fees in the absence of the service. Further, the court concluded that Bell had breached the service agreements and was unjustly enriched. No liability was found on the basis of waiver of tort, and no punitive damages were awarded.

SETTLEMENTS

Sorenson v. easyhome Ltd., 2013 ONSC 4017: The plaintiff brought motion for approval of the settlement and approval of counsel fees. The motion was on consent save for one element – the identity of the cy pres beneficiary. The defendants challenged the plaintiff’s choice of Canadian Foundation for Advancement of Investor Rights (“FAIR”) as the beneficiary. The basis for the objection was that the defendants had learned that class counsel and FAIR had linkages that were not known to the defendants prior to the settlement. The linkages were that FAIR had been a pro bono client of class counsel’s firm, and that it and the law firm had been allies in making certain responses to the Ontario Securities Commission. The plaintiff submitted that none of these linkages rose to the level that would invalidate FAIR as a cy pres beneficiary.

The court noted that since the class members were seeking to enforce shareholders’ rights that existed under Canadian securities law, the class members could obtain an indirect benefit by donating a portion of the settlement proceeds to an association that was dedicated to advancing investors’ rights. However, in the case at bar, if FAIR Canada was the cy pres recipient, then class counsel would also obtain an indirect benefit because they could take credit for the class members’ contribution to FAIR Canada, another client of the firm. Further, there could be an optic or appearance of a business development synergy in class counsel’s supporting FAIR Canada’s mission and this synergy would be another indirect benefit to class counsel. The court went on to conclude as follows at paragraph 33:

“In my opinion, however well meaning, it is inappropriate for Class Counsel to indirectly benefit from a cy près distribution and it is inappropriate for Class Counsel to have any direct connection with a recipient of a cy près distribution. I think that it is undesirable for courts to have to determine whether the connection rises to any particular level. Given that there are many other worthy recipients of cy près distributions, in my opinion, in the circumstances of the case at bar, it is not in the best interests of class members to have a cy près distribution to FAIR Canada, and I do not approve this aspect of the proposed settlement.”

The settlement was otherwise approved with another cy pres recipient to be approved by separate motion. Class counsel fees of $661,000 were also approved.

Sonego c. Danone inc., 2013 QCCS 2616: Motion to authorize proposed Activia class action granted for settlement purposes. Settlement agreement approved. Counsel fees of $420,000 approved.

Banks c. Sony Canada ltée, 2013 QCCS 2754: Following the approval of the settlement agreement by the Ontario court, the Quebec Superior Court of Justice granted the plaintiff’s motion to discontinue the Quebec action.

Zaniewicz v. Zungui Haixi Corp., 2013 ONSC 2959: Consent motion for partial certification of action for settlement purposes only granted. Plan of notice approved.

APPEALS

T.L. v. Alberta (Child, Youth and Family Enhancement Act, Director), 2013 ABCA 211: During the course of settlement discussions, it became apparent that counsel for the various representative plaintiffs had differing views as to the authority of the representative plaintiffs to settle the class proceedings. On motion for directions, the case management judge appointed the lawyers for two of the representative plaintiffs as class counsel and ordered that the third lawyer, Robert Lee and his professional corporation, be removed as class counsel until further order of the court. Lee appealed the decision of the case management judge.

The Court of Appeal concluded that what the case management judge really did was to take a pragmatic step intended to facilitate initial discussions between lawyers appointed as class counsel and counsel for the defendants: “The order sought to help structure a means for settlement discussions to commence in earnest. It is common ground … that, in order for an effective settlement to occur, at least one Representative Plaintiff would have to agree to it. At the stage before the case manager judge, there was a logjam as to any settlement discussions going forward at all.”

The Court of Appeal noted that the case management judge had not removed any representative plaintiff under s.13(2) of the Alberta Class Proceedings Act. Nor did the case management judge permanently remove Lee from the action, make a finding under Fantl v. Transamerica Life Canada or impose conditions on Lee’s relationship with the representative plaintiffs. The case management judge simply recognized that it was not in the best interests of the class to leave the situation as it was. With a mediation session imminent at that time, the case management judge used his discretion under the Class Proceedings Act to grant an interim order that was tailored to deal with the immediate situation. In light of the deference owed to case management judges and in light of the fact that the case management judge had been involved with this lawsuit for at least five years and had a command for the case, the Court of Appeal refused to interfere with the order. Appeal was dismissed.

The writer was co-counsel for Alberta in this action.

Precision Contractors Ltd v Government of Saskatchewan, 2013 SKCA 57: Appeal from the decision of the certification judge to conditionally adjourn the certification application pending the determination of one of the common issues in a separate proceeding outside the framework of the Saskatchewan Class Actions Act. The action pertained to the constitutionality of provincial legislation and regulations imposing provincial sales taxes on construction equipment brought into the province from Alberta for temporary use. The lower court found that the cause of action, identifiable class and common issues criteria were met, but went on to conclude that the common issue respecting the constitutional validity of the provincial legislation could best be dealt with through a judicial review. It therefore adjourned the remainder of the certification hearing until the constitutional question had been answered in a separate proceeding. The Court of Appeal allowed the appeal, noting:

“[48]   It is apparent from these reasons that I have concluded that the certification judge erred in his determination that judicial review is the preferable procedure to adjudicate the first common issue.  The bifurcation of the proceedings would likely increase costs and require more by the way of judicial resources than by having all three common issues determined and dealt with at the same time and in the same process.  A common proceeding would ensure that all class members are treated fairly and have adequate notice of all aspects of the litigation.  It would also treat PC fairly and not require it to launch a separate proceeding outside the framework of the Act that would expose it to costs.  Accordingly, the appeal is allowed.  A class proceeding is the preferable procedure in the particular circumstances of this action to determine the first common issue.  We respectfully decline the appellant’s request to certify the class action in this Court.”

The matter was remitted back to the certification judge so that the remaining certification criteria could be determined.

Barwin v. IKO Industries Ltd., 2013 ONSC 3054: Motion for leave to appeal from the order of the lower court certifying the products liability action as a class proceeding dismissed.  

Caponi v. The Canada Life Assurance Company, 2013 ONSC 2819: Motion for leave to appeal the lower court’s decision, which dismissed the defendants’ motion to order the representative plaintiff to answer questions he had refused during the course of his discovery. Motion was dismissed. There was no reason to doubt the correctness of the motion judge’s order, and the decision did not involve a matter of general importance warranting eave to appeal.

Montpetit c. Syndicat du transport de Montréal (employés des services d'entretien) CSN, 2013 QCCA 903: Appeal from the decision of the Quebec Superior Court dismissing the class action lawsuit denied.

MISCELLANEOUS

Anstead v Saskatchewan Medical Association, 2013 SKQB 185:  The plaintiff applied to have a judge designated to consider a certification application. Before a judge will be designated to consider such an application, it is necessary for a plaintiff to establish that all named defendants have been properly served and that proof of such service is filed with the court. In this case, the plaintiff asserted that the single defendant had been served by registered mail. The court found that Saskatchewan’s Queen’s Bench Rules and Business Corporations Act set out specific rules for personal service on a corporation, and service by registered mail was not a valid form of service.

However, since the application was filed, counsel for the defendant had written to the court requesting that a judge be designated so that the matter could be moved forward. This was therefore evidence that the defendant had received the statement of claim. The Queens’ Bench Rules gave the court wide discretion to validate improper service. A prime consideration as to whether such discretion was to be exercised was whether the party purportedly being served actually received notice. As the defendant’s letter to the court was evidence that it had notice of the claim, the court exercised its discretion to validate the irregular service. However, the court asked that in the future, counsel for the plaintiff (the Merchant Law Group) ensure that service was affected in accordance with the rules.

Having validated service, the court went on to designate a judge to consider the certification application.

Adams v. British Columbia, 2013 BCSC 557: The plaintiff, a former student of the Jericho Hill School for the Deaf and Blind, participated in a class action settlement compensation program for victims of sexual abuse at the school, and signed a release in connection with that program. He subsequently sued the province, seeking to avoid the release on the basis of non est factum. The plaintiff’s action was dismissed. The court noted that the plaintiff had the burden of proving the application of non est factum. The doctrine required the plaintiff to establish that the agreement he entered into was fundamentally different from what he believed, or intended it to be, and that the execution of the agreement was not the result of the plaintiff’s negligence in failing to take reasonable precautions.

The court was satisfied that the release was properly explained to the plaintiff and he understood the effect of the release. Even if the plaintiff did not understand the full effect of the release, he could not avoid its consequences based upon his own negligence in failing to make proper inquiry as to the consequences of the document which he willingly signed. He was bound by the release.

Asselin c. Fiducie Desjardins, 2013 QCCS 2398: Application of defendants for further particulars and production of certain documents allowed in part.

Article originally appeared on Branch MacMaster LLP: Barristers & Solicitors (http://www.branchmacmaster.com/).
See website for complete article licensing information.