In Banman v. Ontario, 2023 ONSC 6187 (“Banman”), the Ontario Superior Court of Justice interpreted for the first time the new provisions under the preferable procedure branch of the certification test in the amended Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”). The Court confirmed that the addition of section 5(1.1) to the CPA, which set out the predominance and superiority requirements, imposed a stricter test for preferability, but pondered how much stricter the new test was.
In the recent decision of Grozelle v. Corby Spirit and Wine Limited, 2023 ONSC 7212 (“Corby”) the Court has affirmed the impact of the CPA amendments as imposing a stricter, more rigorous certification test. The decision is also the first time the amended preferable procedure criterion has not been met.
Background
The proposed class action arose out of emissions emitted from whisky aging warehouses in Lakeshore, Ontario which were purported to have caused the growth of “whisky fungus” and damage to the properties of the proposed class. The proposed representative plaintiffs asserted causes of action in negligence and negligent misrepresentation on behalf of a class of people who had lived or were living within a certain geographic zone within the municipality of Lakeshore since the 1980s.
The defendant Corby Spirit and Wine Limited argued it managed the whisky aging warehouses at issue between September 2006 and June 2020, not from 1980 to present as alleged by the plaintiffs. The defendant also argued there was no evidence that the emissions from the warehouses caused the black mold-like substances that the plaintiffs claimed had been accumulating on their properties, and instead cited other potential causes.
Certification Denied
The Court in Corby declined to certify the action as a class proceeding on the basis that it had not been properly pleaded, there was no basis in fact to conclude the alleged common issues existed, and the individual issues predominated.
Stricter Test for Preferability Confirmed
The Court reviewed the recent amendments to the CPA, which added the requirement that a class proceeding is only preferable if it is: (i) superior to all reasonably available means of determining the entitlement of the class members to relief; and (ii) the questions of fact or law common to class members predominate over any questions affecting individual class members.
The Court agreed with the analysis in Banman that the amendments to the CPA impose a stricter test for preferability, and that the preferable procedure analysis is now more rigorous. The Court also affirmed the finding in Banman that the purpose of determining whether the common issues predominate is to ensure that the common issues taken together advance the objectives of class proceedings, and that “a class action will not be preferable if, at the end of the day, claimants remain faced with the same economic and practical hurdles that they faced at the outset of the proposed class action” (Corby at para. 81, citing Banman at para. 321).
Class Proceeding Not Preferable
The Court in Corby determined that a class proceeding would not be the preferable procedure in this case, as the individual issues predominated, and there were other reasonable alternatives available to resolve any dispute such that a class action was not superior. In particular, the Court identified individual claims as the “obvious alternative”, in light of the challenges identified with individual issues trials in the circumstances.
In respect of predominance, the Court found that potential common issues would be overwhelmed by the individual issues that would remain, including issues of causation and damages in the context of negligence, and issues of reasonable reliance, detrimental reliance/causation, and damages, among others, in the context of negligent misrepresentation. The Court also noted that discoverability was an individual issue that many, if not all, class members faced.
The Court found that, in addition to the number of individual issues that would arise, the nature of proof required to deal with the individual issues would be equal or more significant than the common issues and would require individual class members to each adduce expert evidence specific to their circumstances and particular properties, as well as fact evidence, supporting their individual claims. This was because the evidence in the record indicated there was a variance in ethanol emissions in the relevant geographic area near the warehouses, and the whisky mold growth could be contributed to by other proximity factors. As a result, the common questions did not predominate over the individual issues, as each class member would be left with individual issues litigation that would carry the same practical and economic hurdles they would face in an individual action.
Key Takeaways
The decision in Corby affirms the Court’s statements in Banman that the addition of the predominance and superiority requirements to the preferable procedure step of the certification test impose a stricter test for preferability, and accordingly, for certification. In analyzing predominance, a review of the number and the nature of the individual issues is necessary to determine if class members would be faced with the same practical and economic hurdles at the end of the day, as well as the type of evidence that class members would be required to adduce.
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