Articles 2019

A feature unique to class actions is that class members are not always happy with settlements. Occasionally, class members object to settlements but judges approve them anyway. Is there recourse for class members when this situation arises? Alberta Court of Appeal ruled in Macaronies Hair Club and Laser Center Inc. v Bank of Montreal that unhappy class members have no right to appeal a settlement order and have no other recourse.

Novel claims present a significant challenge for courts in the context of interlocutory proceedings such as motions to strike or amend pleadings, or to certify class proceedings. In Atlantic Lottery Corp. Inc. v. Babstock, the Supreme Court of Canada provided welcome guidance on how courts should approach motions to strike pleadings of novel causes of action. Notably, the Court held that a plaintiff’s claim will not survive a motion to strike simply because it is novel.

The OSC has finally decided the merits of a class action under the secondary market liability provisions of the Ontario Securities Act. Belobaba, J. began by noting that “leave to proceed will be granted if there is enough evidence to clear the ‘reasonable possibility’ hurdle,” but “when the matter is litigated in full and the plaintiff’s hurdle is the more demanding ‘balance of probabilities’, the defendants may prevail and the securities class action will be dismissed."

Historically, plaintiffs seeking damages for pure economic loss have faced multiple challenges from defendants, as well as skepticism from the Courts.  In two recent decisions, the Courts have emphasized that categories for claims for pure economic loss while not closed, are fact driven, and that a finding of proximity is key.  These cases could have important implications on the success of future class proceedings.

In a series of decisions released in the spring, summer and fall of 2020, the Ontario Superior Court of Justice granted summary judgment to the class in an overtime class action brought on behalf of approximately 35,000 front-line employees of CIBC. The decisions represent the first merits determination in an overtime class action case in Canada and could serve as a template for future cases.

In the wake of COVID-19, which has strained already limited judicial resources, the Alberta Court of Appeal has issued a decision addressing the need for judicial economy and the avoidance of duplicative and overlapping proceedings in multijurisdictional class actions.

An exclusivity order prevents the commencement of another action on the same facts without leave of the Court, effectively deciding carriage of the matter. In Harpreet v Cronos, the Court ruled that carriage would be dealt with when and if another proposed class action on the same subject matter was commenced. The Court viewed the request for an exclusivity order as “a form of end-run around a potential carriage motion."

Recent settlement approval decisions issued by several provincial courts provide useful commentary on the appropriate scope of a release in a class action settlement.

In Makris v. Endo International PLC, Justice Glustein approved a settlement of the class action but rejected the request for an honorarium payment to the representative plaintiff. He noted that honorarium payments were “exceptional” and “rarely done,” and available only when a representative plaintiff had “gone well above and beyond the call of duty,"

The significance of the Court of Appeal's decision in 3113736 Canada v Cozy Corner transcends issues of actual versus adequate notice, and leaves open the question of when, or whether a class member who does not wish to be bound by a class action can bring a motion to opt out of the class proceeding on the basis of lack of notice, and the test to be applied in those circumstances.