On July 31, 2013, the Ontario Court of Appeal released its decision in Dennis v. Ontario Lottery Gaming Corporation.1 Justice Robert Sharpe, writing for a unanimous panel, upheld the previous decisions by Justice Cullity of the Ontario Superior Court of Justice and a Divisional Court majority to dismiss the plaintiffs' motion to certify their action as a class proceeding. The proposed class consisted of individuals who signed a "self-exclusion" form at an OLG gaming facility between December 1, 1999, and February 10, 2005.2
"Self-exclusion" is a voluntary program offered by OLG by which patrons consent to being denied entry at an OLG gaming facility. Self-exclusion is a self-help tool to help individuals control their gambling.
The self-exclusion form at issue directed OLG to use "best efforts" to deny entry to OLG facilities. However, the form specifically provided that the gambler accepted that OLG was not liable for any losses if he or she continued to gamble and that the gambler released any such losses.
Peter Dennis, the appellant, claimed to have gambled in breach of his self-exclusion form on multiple occasions until he obtained treatment and stopped gambling in September 2007. He commenced the proceeding on behalf of those who had signed the same self-exclusion form.
Section 5(1) of the Class Proceedings Act3 requires plaintiffs to meet a five-part test in order to obtain certification of an action as a class proceeding: there must be (1) a valid cause of action; (2) on behalf of an identifiable class; (3) raising common issues; (4) for which a class proceeding would be the preferable procedure; and (5) the named plaintiff(s) and counsel must adequately represent the class. At issue in the appeal were the findings of the courts below that Mr. Dennis had not satisfied the identifiable class, common issues and preferable procedure requirements.
Analysis by the Court of Appeal
Is This a "Systemic Wrong" Case?
Before considering the test for certification under s. 5 of the CPA, Justice Sharpe analysed whether this case was one in which "the need for individualized inquiry is so pervasive that it overwhelms the appellants' attempt to treat it as a case of systemic wrong?",4 which he identified as being the central issue.
The appellants submitted that the certification process should not focus on the individual circumstances of the class members, but rather on the alleged wrongdoings of OLG in failing to stop self-excluded gamblers from entering its premises, and characterized their claim as being grounded in a systemic wrong by the OLG. However, Justice Sharpe did not agree.5
In his analysis, Justice Sharpe defined the concept of systemic wrong as being "a wrong that is said to have caused widespread harm to a large number of individuals",6 in which case it would be "entirely proper to use a class proceeding that focuses on the alleged wrong".7 For example, claims arising from overly restrictive overtime policies,8 defective products,9 illegal or unauthorized credit card charges by banks10 or abusive operation of a residential school11 were types of cases where a class proceeding would be appropriate. Liability in such cases turned on unilateral actions of the defendants, and not on the individual circumstances of proposed class members.
In this case, by contrast, Justice Sharpe held that Dennis and other members of his class had caused harm to themselves like "thousands upon thousands of individuals who frequent OLG premises to gamble, and more often than not, lose money",12 regardless of whether they had self-excluded. Like other gamblers, the appellants could not hold OLG liable for their losses based on the sole fact that OLG had failed to eject them from their gaming facilities or prevent entry after they had self-excluded. Therefore, to properly assess OLG's liability for the self-inflicted harms of the appellants, the court would have to engage in a deeply individualized inquiry into the particular circumstances of each gambler.
In his conclusion, Justice Sharpe held that "rather than providing an effective procedural tool to advance the resolution of the claims of the proposed class members, a class proceeding would amount to little more than a general commission of inquiry into the prevention of problem gambling".13
Class Definition – s. 5(1)(b)
The court upheld the lower courts' decisions in holding that the proposed class definition was fatally over-inclusive. For example, those who signed the form and did not return to an OLG gaming facility; those who had returned but were denied entry; and those who returned to gamble but won money would have no claim against OLG.
The Court of Appeal specifically rejected the appellants' argument that if OLG committed an "actionable failure to use its 'best efforts' to exclude those who signed the self-exclusion form",14 everyone who signed the form would have a tenable claim. Instead, the Court held that the "gap between a finding that OLG failed to use best efforts to exclude and an actionable claim in law is unacceptably wide",15 which could only be filled by individualized inquiries. Each class member's claim is dependent upon individual actions following the signing of a self-exclusion form; "any value attached to the promise to use best efforts could only come into play if any when the obligation to use best efforts was triggered by the self-excluder's attempt and success in gaining re-entry". Hence, an individualized inquiry into the nature and severity of addiction and vulnerability to gambling of each claimant would have to be undertaken before liability could be determined.
Common Issues – s. 5(1)(c) / Preferable Procedure – s. 5(1)(d) / Litigation Plan s. 5(1)(e)
The Court of Appeal affirmed the majority decision of the Divisional Court that there was no "rational relationship between the class identified by the plaintiff and the proposed common issues".16 The court agreed with the Divisional Court decision that as all significant proposed common issues raised would require an individual inquiry or involve issues dependent upon finding of liability, certification as class action would not significantly advance the litigation.
In considering whether the class action was the preferable procedure; given that the need for "protracted individualized proceedings into the vulnerability and circumstances of each class member"17 could not be avoided even if a finding of systemic wrong were to be made out at trial, individual actions were determined to be preferable. The court also dismissed the appellants' litigation plan as being inadequate.
The Court of Appeal's decision means that any claim against OLG by members of the proposed class will have to proceed on an individual basis. To date, no Canadian court has recognized a duty of care to prevent self-excluded individuals from continuing to gamble.
- 2013 ONCA 501.
- Dennis v. Ontario Lottery and Gaming Corporation, 2010 ONSC 1332.
- 1992, S.O., c. 6 ("CPA").
- Supra note 1 at para 49.
- Ibid at para 53.
- Fulawka v. Bank of Nova Scotia, 2012 ONCA 443.
- Lambert v. Guidant Group (2009), 72 C.P.C (6th) 120 (ONSC).
- Markson v. MBNA Canada Bank, 2007 ONCA 334; Cassano v. Toronto-Dominion Bank, 2007 ONCA 781.
- Cloud v. Canada (Attorney General) (2004), 73 O.R (3d) 401 (C.A.).
- Supra note 1 at para 55.
- Ibid at para 59.
- Ibid at para 63.
- Supra note 1 at para 68.
- Ibid at para 71.
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