Does Defendant Now Have Presumptive Right to Bring Pre-Certification Motion?

  • June 27, 2022
  • Jeremy Martin, Cassels Brock LLP

A trilogy of new cases – or rather, two new cases and one comment in obiter – have popped the cork on an interpretive dispute the class actions bar has been waiting for since Bill 161, amending the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”) was passed.  These cases interpret Section 4.1 of the amended CPA, and address whether or not a defendant has a presumptive right to bring a motion to dismiss or narrow the case prior to certification.  They also, perhaps unintentionally, interface with another recent decision interpreting those amendments that has left some observers asking if the interpretation of Section 4.1 even matters.

What is Section 4.1?

The new Section 4.1 of the CPA is an unusual and seemingly consequential adjustment to the normal order of proceedings prior to certification in an Ontario class action.  It has the appearance of being an iron fist in a boxing glove; it is entirely unclear just how forceful a weapon it is intended to be.

The section requires a court to hear any motion “that may dispose of the proceeding in whole or in part, or narrow the issues to be determined or the evidence to be adduced in the proceeding” prior to the certification hearing, which was previously generally conceived of as the first procedural step outside of carriage in a class proceeding – as it is in most other common law jurisdictions.  Section 4.1 contains very broad language.  Virtually any preliminary motion that resolves a legal issue will “narrow the issues to be determined” or “dispose of the proceeding in part”.  As a result, on a plain construction, the section appears to have the effect of giving defendants carte blanche to dictate the tempo of a class proceeding from the outset.

To defendants, Section 4.1 was a welcome relief from the typical understanding that a certification hearing was inevitable, even if silver-bullet exculpatory evidence was ready at hand.  Even in such cases, defendants – and especially third or fourth parties – could expect to be silenced and forced to spend years preparing for a half-million-dollar certification hearing in order to be permitted to advance a conclusive argument on threshold issues such as jurisdiction, identity, or methodology of proving causation.[1]

To plaintiffs, Section 4.1 was a step back from the progress the class actions bar had made in the previous two decades in developing a trend of certification orders being negotiated on consent.  It was a rejection of the original intention of the Act that certification should be a purely procedural matter dealt with summarily within a few months of issuing a statement of claim,[2] and moreover, it seemed to be an authorization to defence counsel to engage in potentially unlimited delay tactics.

There was, however, a catch that potentially circumscribed either extreme view of the amendment: Section 4.1 motions were required to be heard first, unless the court decided that the motion be heard together with certification.  The amendments and Hansard provided no guidance as to how often that power is to be exercised, or on what basis the court should arrive at the decision to deviate from the otherwise mandatory language of the section.

What was clear from the text was that the court no longer had the discretion to schedule such motions after certification.  A bipartisan working group at the OBA recommended to the Office of the Attorney General that the court’s residual discretion to allow such motions to be heard after certification remain in place, with a minor amendment to the section to read that these motions would be heard first by default “unless the court orders otherwise”.[3] That proposal was rejected, with the effect that defence motions that fit the loose description in Section 4.1 will always be heard before, or simultaneously with, certification motions.