Ontario's Divisional Court has dismissed the Bank of Nova
Scotia's appeal from the order granting certification in an
overtime class action against the bank.
The Certification Motion
The plaintiff alleges that Scotiabank failed to pay overtime to
a class of employees in breach of the Canada Labour Code.
The plaintiff class claims $250 million in damages. As of September
2008, there were over 5,000 employees and former employees in the
In February 2010, Justice George Strathy certified the class
action. The plaintiff's claim alleged a number of causes of
action, including breach of contract, breach of the duty of good
faith, unjust enrichment and negligence. Scotiabank moved to strike
all of these claims but Justice Strathy declined to do so, finding
that it was not plain and obvious that the claims could not
succeed. Justice Strathy found that the class could benefit from a
common determination of at least three issues: whether the bank had
a system to ensure that employees were paid for overtime hours;
whether the bank breached its duties to its employees by requiring
employees to get pre-approval for overtime; and whether the
employees' employment contracts had an implied term that
overtime would be paid. Finally, Justice Strathy found that a class
proceeding was the preferable procedure, based in part on the fact
that an aggregate assessment of the class's damages might be
possible. Justice Strathy did refuse to certify one common issue:
whether Scotiabank's overtime policy breached the Canada
The Divisional Court dismissed Scotiabank's appeal. The
bank's arguments were divided into two broad categories: the
causes of action asserted by the plaintiff were bound to fail and
the claims did not raise common issues. The Divisional Court
concluded that Justice Strathy was correct in finding that the
causes of action asserted by the plaintiff met the
plain-and-obvious test. In the court's view, Justice
Strathy's reasons were "appropriately anchored in the
evidentiary record, keeping in mind that the ultimate question of
weight of such evidence is appropriately left to the trial
Similarly, the Divisional Court concluded that Justice Strathy
was correct in finding these to be common issues which could be
adjudicated on a class-wide basis. Scotiabank attempted to cast the
plaintiff's claim as individual in nature. Justice Strathy
found that the claims must be assessed in the systematic terms
advanced by the plaintiff, and the Divisional Court agreed.
Finally, the Divisional Court took no issue with Justice
Strathy's finding that a class proceeding was the preferable
procedure for the determination of the common issues.
The plaintiff cross-appealed Justice Strathy's decision to
strike part of its claim. The Divisional Court quashed the appeal
on the grounds that Justice Strathy's decision on this issue
was a final order and, as such, any appeal should have been brought
to the Court of Appeal.
The Impact of Fresco
Given that CIBC was successful in having the plaintiff's
motion for certification and the subsequent appeal in Fresco v.
Canadian Imperial Bank of Commerce dismissed, Scotiabank
attempted to rely on those decisions in support of its argument.
The Divisional Court made clear that it is "neither possible
nor appropriate" for it to assess the merits of
Scotiabank's appeal with reference to the evidence and
decisions in Fresco.
The appeals in Fresco and McCracken v. Canadian
National Railway Co. are to be heard later this year. It seems
very likely that Scotiabank will seek leave to appeal this decision
to the Court of Appeal. Though the appeals will not be heard
together, the differing opinions of the judges that have heard
these cases, and what may be different opinions from different
panels of the Court of Appeal, may mean that these cases will
ultimately be decided by the Supreme Court of Canada
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