Canadian Appeals Monitor

Information and Commentary on Upcoming and Recent Appeal Court Decisions

Certification of an “Uncommon” Class Action based on a “Central Commonality”

Posted in Case Comments, Class Actions
Sara Babich

The Ontario Court of Appeal recently reiterated several key principles in the context of class action certification motions. In Good v Toronto Police Services Board, 2016 ONCA 250 [Good], the Court of Appeal upheld the Divisional Court decision to certify the claim of Ms. Sherry Good as representative plaintiff (the “Representative Plaintiff”) in the proposed G20 class action against the Toronto Police Services Board (the “TPS”). The decision in Good reminds us of two very important considerations in class action proceedings:

  1. the outcome of the certification application is highly dependent on how the proposed class action is framed, particularly where the proposed common issues are not initially clear; and
  2. the legislative goals of access to justice, behaviour modification, and judicial economy will be considered and placed at the forefront of the certification process.

Background

During the G20 summit in June 2010, demonstrations occurred at various locations in Toronto.  The police arrested or detained approximately 1,000 individuals.  The Representative Plaintiff was among the group of persons who were arrested.  She commenced a class proceeding against the TPS, asserting multiple claims.  Her motion for certification under the Class Proceedings Act (the “Act”) was originally dismissed.  The proposed class proceeding was subsequently narrowed by the Representative Plaintiff on appeal to the Ontario Divisional Court.  The Divisional Court certified the narrowed claim as two separate class proceedings, and set aside the order of the motions judge.  The TPS appealed the certification decision.

Framing the Issues: Central Commonality Among Class Members

This case highlights that the way proposed classes and common issues are framed and presented is often determinative of whether the action is certified as a class proceeding.

In Good, the class members appeared to each have distinctive and individual stories about the circumstances of their detainment and, in some cases, their imprisonment. However, the certification was granted on appeal by the Divisional Court, and upheld by the Ontario Court of Appeal, because there was a “Central Commonality” among all the individuals. The “Central Commonality” was that each detainment or arrest may have been carried out pursuant to one overarching command order allegedly directed by the TPS.

While the approach endorsed by the Ontario Court of Appeal might appear to broaden the circumstances where class members who appear to have little in common are certified as a proper class, the application of this approach may, and perhaps should, be limited to the unique circumstances in which this case arose.

The Motions Judge’s Decision to Refuse Certification

The Motions Judge declined to certify the action as a class proceeding for a variety of reasons; importantly, she found that the Representative Plaintiff was seeking to certify as one class eight distinct groups of claims with no common link. While it is typically permissible to include subclasses in proposed class actions, the plaintiff must still establish a common link between the class members. Further, the Motions Judge found that the proposed subclasses were defined using unclear words, and the class and subclass definitions were overly broad.

The Successful Appeals

The Representative Plaintiff appealed to the Divisional Court, but had by then narrowed the proposed class proceeding, including by removing several Defendants, shrinking the proposed class, and abandoning a number of the claims originally asserted. The Divisional Court certified the class proceeding, relying on the significantly narrowed proposed proceeding as the basis for doing so with respect to the requirements under section 5(1) of the Act, including the cause of action, the identifiable class, and the preferable procedure.

The Court of Appeal largely agreed with the Divisional Court. Although the Court of Appeal noted that the Motions Judge’s certification decision is generally accorded significant deference, the Divisional Court’s essentially de novo review of the certification application was justified here on the basis that the reviewing court should be given some latitude in light of the significantly revised proposed class proceeding.

Identifiable Class

The Divisional Court and the Court of Appeal distinguished the prior cases of Caputo v Imperial Tobacco Ltd. and Merck Frosst Canada Ltd. v Wuttunee on the basis that the “Central Commonality” was missing in both. In Good, the Divisional Court found that there is a single defendant and a single course of conduct alleged, and that each of the proposed subclasses had the commonality of the alleged command order:

[35]      [T]here is a single defendant and a single course of conduct alleged.  Each of the proposed subclasses (save for the Detention Centre subclass) have the commonality of an alleged command order being made ordering the detention of the class members without regard for the individual characteristics or conduct of each class member.  Indeed, it is alleged that one command officer, Superintendent Fenton, issued the command order in at least three of the five location based subclasses.

The Court of Appeal supported this finding, stating:

[59]      The plaintiff alleges that Superintendent Fenton was the command officer who issued the order in at least three of the five location-based subclasses, and that either he or one other officer made the order in the other two instances. Having regard to the applicable tests for lawful arrests and detentions that the Divisional Court adverted to, there was some basis in fact for finding that the individual officer or officers who are alleged to have given orders for mass detentions and arrests did so without regard to whether all of the individuals detained, or detained and then arrested, were implicated in the criminal activity with which the police were concerned.

The Divisional Court and the Court of Appeal focussed on the command order as the “Central Commonality” rather than on the distinct circumstances of each individual detainment or arrest. The alleged causes of action, as framed in the revised proposed class proceeding, appear to have arisen from one distinct order which would have applied equally to each class member.

The Court of Appeal further stated that where the proposed classes share a “Central Commonality”, joining the classes in the same class proceeding would facilitate the recognized goals of class proceedings; however, joining the classes in this way remains at the discretion of the Motions Judge.

Given the unique circumstances in Good, particularly alleged command order that formed the basis for the allegations in the proposed class proceeding, the application of this case in other contexts may be limited. An argument could certainly be made that the discretion of the Motions Judge ought to be exercised to refuse to certify a class proceeding where the “Central Commonality” is not as pronounced as it was in this case.

Legislative Goals

It should be noted that the Divisional Court and the Court of Appeal referred to the recognized goals of class proceedings, including throughout the analysis of s. 5(1) of the Act, and in the Court of Appeal’s consideration of the Representative Plaintiff’s cross-application for costs.

The Court of Appeal endorsed the view of the Divisional Court that it is essential for the courts to avoid an overly restrictive approach to interpreting the legislation. Instead, the benefits intended by the drafters should be given effect. It is clear that the legislative goals of access to justice, behaviour modification, and judicial economy will influence certification decisions and ought to clearly frame the presentation of arguments for or against certification.

Case Information

Good v Toronto (Police Services Board), 2016 ONCA 250

Docket: C60095

Date of Decision: April 6, 2016

Standard of review of administrative action: coherence post-Dunsmuir?

Posted in Administrative, Case Comments
Louis Fouquet

It was widely hoped that the Supreme Court of Canada decision in Dunsmuir v. New Brunswick, 2008 SCC 9 (“Dunsmuir”) would simplify the judicial review of administrative action by limiting the scope of review to two standards: reasonableness and correctness. The divided Supreme Court of Canada opinion in Commission scolaire de Laval v. Syndicat de l’enseignement de la région de Laval, 2016 SCC 8 shows that there is still a long way to go before coherence and uniformity is brought to this area of law. Continue Reading

The SCC Monitor (19/04/2016)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in The SCC Monitor
Laurie BaptisteRyann AtkinsShanique Lake

Leaves to Appeal Granted

Since our last post, the Supreme Court of Canada (SCC) has granted leave in a couple significant cases that will be of interest to our readers:

Douez v. Facebook:  Like or Dislike?

The SCC recently granted leave to appeal from the judgment of the B.C. Court of Appeal in Douez v. Facebook (“Douez”), which likely garnered “dislikes” from online businesses and service providers who rely on choice of law and forum selection clauses in their Terms of Use agreements. Continue Reading

Missing the Mark – Federal Court of Appeal set aside dismissal in passing off and copyright case

Posted in Case Comments, Intellectual Property
Ryann AtkinsKaitlin Soye

In Sadhu Singh Hamdard Trust v. Navsun Holdings Ltd. (2016 FCA 69), the Court of Appeal set aside the Federal Court’s (2014 FC 1139) decision dismissing Hamdard Trust’s claim of copyright infringement and passing off against Navsun Holdings and remitted the matter to the Federal Court for redetermination, with some guidance. Continue Reading

Abuse of Process: Carbon Copy Class Actions Stayed by Courts Coast to Coast

Posted in Case Comments, Civil Litigation, Class Actions, Multijurisdictional
Kelli McAllister

A recent article, Abuse of Process: Carbon Copy Class Actions Stayed by Courts Coast to Coast, published on McCarthy Tétrault LLP’s Class Actions Monitor blog may be of interest to readers of the Canadian Appeals Monitor blog. Kelli McAllister recently published on update to her previous discussion about the ongoing systems access fee class action.

This unusual class action was launched in nine provinces in 2004 by the same counsel on behalf of the same plaintiffs. This class action has now been found to be an abuse of process by the Nova Scotia Court of Appeal in BCE Inc. v Gillis, 2015 NSCA 32, the Alberta Court of Appeal in Turner v Bell Mobility Inc, 2016 ABCA 21 and the Manitoba Court of Appeal in Hafichuk-Walkin et al v BCE Inc et al, 2016 MBCA 32. The Nova Scotia decision has been appealed to the Supreme Court of Canada and the decision on the leave application is pending. The Supreme Court of Canada is faced with a unique situation: not only is same issue being considered by courts across Canada, but, in fact, the exact same case. It remains to be seen whether bringing carbon copy class actions across Canada as part of a litigation strategy and without the intention to pursue the action (except in one province), will likewise be condemned by the Supreme Court of Canada. We will update you on that leave decision in our regular SCC Monitor blog posts.

Careful Putting Your Best Foot Forward: Alberta Court of Appeal Eases Access to Summary Dismissal

Posted in Case Comments, Civil Litigation, Contracts
Timothy Froese

The Alberta Court of Appeal strengthened the post-Hryniak judicial trend in favour of the summary disposition of litigation without trial by upholding the decision of a chambers judge to grant summary dismissal without strict adherence to the applicable Rules of Court.  In Pyrrha Design Inc v Plum and Posey Inc, 2016 ABCA 12, the plaintiff applied for summary judgment but failed to make its case. It saw not just its application, but its entire claim, dismissed, even though the defendant had not brought a cross-application for summary dismissal. Continue Reading

Dunkin’ Donuts: The Supreme Court of Canada puts an end to the saga

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Adam ShipAnne-Marie NaudHelen Fotinos

A recent article published on McCarthy Tétrault LLP’s Consumer and Retail Advisor blog may be of interest to readers of the Canadian Appeals Monitor blog. Adam Ship, Anne-Marie Naud and Helen Fotinos recently published an update to their previous discussion about the Québec Court of Appeal’s decision in Dunkin’ Brands Canada Ltd. c. Bertico inc., 2015 QCCA 624, in particular its finding of implied obligations in franchise agreements. The Supreme Court of Canada (SCC) just announced their dismissal of Dunkin’ Brands Canada Ltd.’s application for leave to appeal from the judgment of the Quebec Court of Appeal. Notably, in a very rare move, Côté J. dissented on the decision to deny the application for leave.

Cook or Get Out of the Kitchen: Legitimate Interest Required to Enforce a Restrictive Covenant

Posted in Case Comments, Civil Litigation, Franchise and Distribution
Shanique Lake

MEDIchair LP v DME Medeqip Inc., 2016 ONCA 168 is a case with important implications for all franchisors and franchisees. In the decision released on February 29, 2016, the Ontario Court of Appeal struck down a non-competition covenant because the franchisor had no intention of operating a competing business within the geographical area covered by the covenant.  Overturning the lower court decision, the Court of Appeal held that a legitimate proprietary interest is necessary to enforce a restrictive covenant. Continue Reading

“Crossing the Rubicon” Against Corporations: Authorities Cannot Investigate Corporations Under the Guise of an Audit

Posted in Case Comments, Charter of Rights, Competition, Constitutional, Criminal, Securities, Tax
Julie-Martine LorangerGabriel QuerryPatrick Ostiguy

Authorities must relinquish their broad compulsory auditing powers when engaging in an adversarial determination of penal liability or, as stated by the Supreme Court in R. v. Jarvis, [2002] 3 SCR 757 [1] when they “cross the Rubicon”. This flows from the protection against self-incrimination enshrined under section 7 of the Canadian Charter of Rights and Freedom, a protection which, traditionally, only benefits individuals. However, according to a recent Court of Québec decision in Agence du revenu du Québec c. BT Céramiques inc., 2015 QCCQ 14534 [2] the protection of the Rubicon is not exclusive to individuals: it also shields corporations. This decision’s pending appeal is one to keep an eye out for, as it might revisit the scope of corporations’ rights during regulatory audits and penal investigations. Continue Reading

The SCC Monitor (04/03/16)

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Posted in The SCC Monitor
Patrick WilliamsMeghan S. Bridges

Since our last post, most of the judgments and successful applications for leave decided by the Supreme Court have arisen from criminal cases. The most notable exception was the judgment in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60, concerning secondary market class actions, which we have already covered in detail.

This post will cover the very brief judgment in Canadian Pacific Railway Co. v. Canada (Attorney General), 2016 SCC 1 and the successful application for leave to appeal from Urban Communications Inc. v. BCNET Networking Society, 2015 BCCA 297. Continue Reading

May it Please the Court: Does “May” in an Arbitration Clause Convey Choice About Proceeding to Arbitration?

Posted in Case Comments, Contracts
Meghan S. Bridges

The difference between the mandatory “shall” and the permissive “may” in a contract is, perhaps typically, straightforward. One mandates action; the other allows, but does not require, it. This analysis can be more complex in the context of an arbitration agreement: can a party to the agreement force a stay of litigation based on a clause that states the parties may submit the dispute to arbitration? The Privy Council in Anzen Limited v. Hermes One Limited faced essentially this question, and, in part based on Ontario Court of Appeal jurisprudence, held that the answer is yes. Continue Reading

Complete Relief Provides Defendants With No Relief From Class Actions

Posted in Case Comments, Class Actions
Eric Pellegrino

Defendants cannot defeat a class action by relying on an unaccepted settlement offer made to the proposed representative plaintiff for the full amount of his or her individual claim.  That is the conclusion reached by the Supreme Court of the United States in Campbell-Ewald Co. v. Gomez, No. 14–857.  The majority found that an unaccepted settlement offer creates no lasting right or obligation and, therefore, does not automatically render moot the claims of the representative plaintiff or by extension, those of the putative class members.  That said, the decision does reveal a potential path forward for class action defendants in both the United States and Canada. Continue Reading

Hot Off the Press – Defending Class Actions in Canada: A Guide for Defendants

Posted in Class Actions

Defending_Class_Action_Book_2016In the newly published fourth edition of Defending Class Actions in Canada: A Guide for Defendants, McCarthy Tétrault litigators offer valuable insights for business leaders and professionals exposed to class actions as well as their counsel.

This easy-to-read book outlines the procedural machinery of Canadian class actions and the law that governs them, provides strategic analysis on managing the risks they entail, and explains the most important recent developments and trends on a national and international scale.

Edited by Jill Yates and written by Alexandra Cocks, Sarah Corman, Jessica Dorsey, Christopher Hubbard, Miranda Lam, Jean-Francois Lehoux, Elder C. Marques, Kelli McAllister, Michael J.P. O’Brien, Julie Parla, Renee Reichelt, Michael Rosenberg, and Bryan West, the fourth edition of Defending Class Actions in Canada can be purchased here.

This article was original posted on the Canadian Class Actions blog on February 17, 2016.

The Long Arm of the B.C. Securities Commission

Posted in Case Comments, Securities
Patrick Williams

In McCabe v. British Columbia (Securities Commission), 2016 BCCA 7, the B.C. Court of Appeal upheld the ability of the B.C. Securities Commission (the “Commission”) to penalize a resident of British Columbia for publishing misrepresentations about an American company in the United States. This case confirms the Court’s expansive approach to the Commission’s extraterritorial jurisdiction.

Background Continue Reading

Ontario Court of Appeal Inspiring Consumer Misrepresentation Class Actions

Posted in Case Comments, Class Actions, Consumer Protection
Laurie Baptiste

The Ontario Court of Appeal is once again making headlines with the case of Ramdath v George Brown College, which has turned out to be a doubly significant case at the intersection of class actions and consumer protection legislation. Continue Reading

The Ontario Court of Appeal Declines to Extend the Doctrine of Unconscionability into the Performance of Contracts

Posted in Case Comments, Civil Litigation, Contracts
Geoff R. HallTrevor Courtis

In the 14 months since the Supreme Court of Canada rendered its landmark decision in Bhasin v. Hrynew, 2014 SCC 71 [1] the general organizing principle of good faith in contract law has been applied in a very restrained manner by courts across Canada. The recent decision of the Ontario Court of Appeal in Bank of Montreal v. Javed, 2016 ONCA 49 is a further example of this trend. Continue Reading

What’s in a Name?: BCCA Holds that a Bid Made in the Name of a Related Company is Non-Compliant

Posted in Case Comments, Civil Litigation
Patrick Williams

The recent case of M.G. Logging & Sons Ltd. v. British Columbia (Forests, Lands & Natural Resource Operations), 2015 BCCA 526 emphasizes the strict standards required for compliance in the tendering context, highlights the benefits and drawbacks of a discretion clause, and holds that owners do not have an obligation to resolve ambiguities in non-compliant bids. Continue Reading

Ontario Court of Appeal Dismisses Pet Valu Class Action, Clarifies the Scope of the Duty of Good Faith and Fair Dealing and Calls for Greater Judicial Restraint

Posted in Case Comments, Civil Litigation, Class Actions, Franchise and Distribution
Helen FotinosAdam ShipAlexandra Aliferis

The recent decision of the Ontario Court of Appeal in 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2016 ONCA 24 clarifies and narrows the scope of the duty of good faith and fair dealing imposed on franchisors under section 3 of the Arthur Wishart Act (Franchise Disclosure) (“AWA”) and expressly cautions against zealous judicial intervention in the framing and amendment of common issues in class action proceedings. Continue Reading

Looking Back – The 10 Most Important Appeals of 2015

Posted in Features
Laurie BaptisteRyan MacIsaacKate Macdonald

 

 

 

 

“Those who cannot remember the past are condemned to repeat it”
– George Santayana

Top 10_2


Over the holidays, many reflect over the past year in search of lessons learned for the coming year. In line with this tradition the Appeals Monitor is, once again, pleased to present our annual review of the most significant appeal decisions of the past year which we should be mindful of and which can be expected to impact Canadian employees and businesses for years to come. Continue Reading

Getting Around the Corporate Veil through Agency

Posted in Case Comments, Contracts
Sara Babich

In the recent decision of 1196303 Ontario Inc v Glen Grove Suites Inc, 2015 ONCA 580, the Ontario Court of Appeal considered to what extent parties not privy to an agreement should be held liable for the obligations it creates.

In that case, 1196303 Ontario Inc. (“119”) entered into a settlement agreement with 1297475 Ontario Inc. (“129”), a shell corporation which was owned by Mrs. Sylvia Hyde. Mrs. Hyde was also the sole owner of Glen Grove Suites Inc. (“Glen Grove”), which owned valuable rental property. Mr. Edwin Hyde, who exercised de facto control over both Glen Grove and 129,  agreed that Glen Grove was to provide guarantees and security obligations as part of the settlement. However, Glen Grove was not a signatory to the settlement agreement. 129 subsequently failed to fulfill its obligations under the settlement and 119 sought to collect from Glen Grove.

Continue Reading

Setting Limits: The Supreme Court Confirms a Robust Gatekeeper Approach to Secondary Market Liability Actions

Posted in Case Comments, Class Actions, Securities
Miranda LamPaul Davis

In a much anticipated decision, the Supreme Court released its rulings in three Ontario securities class actions on December 4, 2015: Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60 (“Green”). This trilogy of secondary market class actions has been discussed extensively in previous postings on this blog (see this blog’s discussion of the Ontario Court of Appeal decisions, in the Top Ten Appeals to Watch in 2015 and in the SCC Monitor after the appeals were argued at the Supreme Court). Continue Reading

Cavendish v Talal and ParkingEye v Beavis: The UK Supreme Court provides a refresher on penalty clauses

Posted in Case Comments, Contracts
Sam Rogers

The common law penalty rule is poorly understood but can have disastrous consequences for contracting  parties who do not consider it when setting out remedies for contractual breach. The UK Supreme Court recently brought some much needed clarity to the rule and articulated a revised test in a pair of decisions: Cavendish v Talal and ParkingEye v Beavis. The two decisions consider the rule in very different contexts: Cavendish in the valuation of assets in a share sale and ParkingEye in the imposition of a charges for violating parking lot time limits. Continue Reading