Canada: Class Action Regional Overview

The body of class action jurisprudence from Atlantic Canada continues to grow. Newfoundland and Labrador has had its class actions legislation in force since 2002 and, given its size, has a relatively large number of class action decisions. New Brunswick and Nova Scotia have had their class actions legislation in force since 2007 and 2008, respectively, while Prince Edward Island has not yet passed any legislation in respect of class proceedings. The number of certified class actions continues to grow in Atlantic Canada, as does the number of actions with certification applications pending. It appears that the class action legislation is being generously applied in Atlantic Canada, including in respect of the certification requirements, the admissibility of evidence on certification and the participation of third parties at certification.

In 2011, the Newfoundland and Labrador Court of Appeal in Acreman & Lee v. Memorial University of Newfoundland upheld a certification decision in an action commenced by University pensioners. The class alleged that the University had historically paid the full premium for their post-retirement health insurance and had wrongfully required them to begin contributing to same. Representations, in the form of retirement letters or retirement seminars, were made to some members of the class, although not all class members received a representation as to future entitlement and the representations varied. In upholding certification, the Court of Appeal appears to have based its decision on the common bond that all members of the class, at one time, received their post-retirement benefits at no cost and were now compelled to contribute. In an apparent attempt to refute the concerns of the university, the Court also noted that the creation of subclasses or decertification might be considered in the future. The Court of Appeal was referred to Nadolny v. Peel, a 2009 decision in which the Ontario Superior Court of Justice had no hesitation in denying certification on almost identical facts, but did not refer to it in its decision.

Also in 2011, the Newfoundland and Labrador Supreme Court denied the plaintiff's application to stay third-party proceedings pending certification. In Rice v. Atlantic Lottery Corp., the plaintiffs alleged that video lottery machines provided for use by the defendant were inherently deceptive and rendered them addictive and dangerous when used as intended. The defendant brought third-party proceedings against the manufacturers, suppliers and designers of the machines. The Court placed particular emphasis upon the 2008 New Brunswick Court of Queen's Bench decision in Bryson v. Canada (Attorney General) and, in holding that the third-parties could participate at the certification hearing, noted that the third party claims were not mere claims for indemnity, but instead involved the determination of many of the same issues at play in the main action.

In Best v. Nunatsiavut Assembly, three proposed class actions alleged that the class members had been denied membership in the Labrador Inuit Association and claimed monetary damages for the corresponding loss of benefits pursuant to the applicable land claims agreement. The Newfoundland and Labrador Trial Division set aside the actions for want of jurisdiction, holding that the land claims agreement expressly provided for a right of judicial review on membership decisions to the Federal Court. On appeal in 2011, and in reliance upon the recent Supreme Court of Canada decision in McArthur v. Canada, the Court of Appeal allowed the appeal, finding that a distinction must be drawn between claims for damages which rely on the decision of a tribunal and cases which seek to impugn tribunal decisions through judicial review. The court remitted the matter back to the Trial Division to permit the plaintiffs to apply to amend their pleadings, after which time it would be determined whether a valid cause of action had been pleaded within the jurisdiction of the Supreme Court.

In Gay v. Regional Health Authority 7, a 2009 decision of the New Brunswick Court of Queen's Bench, the court allowed an inquiry report conducted pursuant to an Order-in-Council of the Provincial Government to be admitted into evidence at the certifi cation hearing. In Gay, it was alleged that a pathologist had made numerous errors. The action was brought on behalf of a proposed class of over 15,000 individuals whose tissue samples underwent pathology testing in the class period and whose samples were subsequently retested in light of concerns about the quality of the doctor's services. The inquiry report was prepared to investigate into the pathology services in question. In allowing the inquiry report to be introduced at the certification hearing, the court distinguished the 1998 Ontario Court of Justice decision in Robb Estate v. St. Joseph's Health Care Centre and noted that the object of the plaintiffs in introducing the inquiry report was not for the purpose of determination of liability but was instead principally relevant to a determination of the existence of common issues, to class definition and to the preferable procedure analysis.

By decision released in March, 2012, the New Brunswick Court of Queen's Bench denied the plaintiff's certification application in Gay. Although the court expressed concern with various aspects of the proposed action, including the claim for mental distress, the principal basis of denying certification was the court's finding that proof of the alleged negligence could only be made on an individual basis. The court noted that any finding of negligence in an individual case could not be extrapolated to other cases and also noted that there is no legal duty of competency that would allow the plaintiffs to avoid having to prove negligence on an individual basis.

The Nova Scotia Supreme Court certified a class action in 2011 in Crooks v. CIBC World Markets. In Crooks, approximately 100 people were involved in a particular series of option trades when a third party contractor of the defendant made a calculation error resulting in losses to a defined group. The defendant attempted to compensate the group by cancelling, at its expense, all trades from the date of the error, but this approach eradicated gains as well as losses. This method of compensation was unilaterally imposed by the defendant. The court certified the action notwithstanding the defence's argument that damages would be the principal issue requiring determination and would necessarily involve an individual assessment. The court noted that there were numerous common issues in respect of liability and that the defendant had not made an unequivocal admission of same.

In MacQueen v. Sydney Steel Corporation, a 2011 decision of the Nova Scotia Supreme Court, an environmental class action related to the Sydney Tar Ponds was certified. The claim was made on behalf of current property owners and former property owners within a prescribed boundary, and alleged various causes of action, including nuisance, breach of fiduciary duty and strict liability. The remedies sought included property remediation, identification of health risks and medical monitoring, and did not include any claims for personal injury. In allowing certification, the court did not fully accept the plaintiff's expert evidence concerning the proposed boundaries of property for the class.

Going forward in Atlantic Canada, it will be interesting to review the findings in the first common issues trial in Newfoundland and Labrador in the case of Sundance Saloon v. Newfoundland and Labrador Liquor Corporation, in respect of which final arguments were concluded in January, 2012 and to see if further common issues trials occur. It will also be interesting to see if the Nova Scotia courts ever expressly consider their non-resident opt-out requirement, where Nova Scotia is the only province in Atlantic Canada to arguably contemplate that residents of other provinces would have to actively opt-out of a class proceeding in Nova Scotia.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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