A further theme of 2014 was the potential impact of general
litigation decisions on class action practice. In particular, two
decisions released by the Supreme Court in 2014 – Hryniak and Sattva – could significantly
affect how defendants approach the defence of class actions:
Hryniak, by giving defendants a stronger tool for
disposing of claims prior to trial, and Sattva, by opening
the door to new arguments against certification of issues involving
interpretation of contracts.
Hryniak: Summary Judgment Now a Stronger Tool in the
Class Action Defendant's Toolbox
In particular, the strengthening of summary judgment provides a
more viable option for defendants to dispose of novel claims
without incurring the time and expense of a full common issues
trial. Although the Hryniak case concerned the summary
judgment rule in Ontario, the Supreme Court did not limit the
application of its reasoning to Ontario.
Within a few months of the release of Hryniak, we saw
evidence that courts across Canada would apply Hryniak to
dispose of issues in class actions efficiently. As we discussed in
earlier blog post, in March 2014, the Alberta Court of Appeal
partially overturned a lower court's
dismissal of an application for summary judgment in an
environmental contamination class action. In dismissing part of the
representative plaintiff's claim, the Court of Appeal held that
Hryniak's emphasis on promoting timely and affordable access to
justice should also be applied to Alberta's summary judgment
Given the lead time required to bring a summary judgment motion,
we anticipate that 2015 will bring more decisions on summary
judgment motions in class actions, which will provide more clarity
as to how class action defendants can most effectively employ
Sattva: Common Contractual Terms May Not Raise Common
In Sattva, the Supreme Court re-classified the
interpretation of contractual terms as a question of mixed fact and
law, as opposed to a question of law. In reaching this holding, the
Court emphasized the importance of "surrounding
circumstances" to the interpretation of contracts. The Court
also noted that "the nature of the evidence that can be relied
upon under the rubric of 'surrounding circumstances' will
necessarily vary from case to case."
The Supreme Court's comments
suggest that it could be argued that the same term in two
separate contracts could be interpreted differently, depending on
the "surrounding circumstances" in which each contract
was made. This argument could potentially be raised to defeat
certification of issues concerning the interpretation of standard
form contracts, which are often found at the centre of consumer
class actions and franchise class actions, among others.
In light of Sattva, in cases where plaintiffs propose
to certify issues of contractual interpretation, defendants will
have to consider whether they can reasonably argue that,
notwithstanding common language in contracts with class members,
the interpretation may vary from contract to contract, depending on
the surrounding circumstances, and thus the interpretation is not a
common issue suitable for certification. We may very well observe
such an argument in 2015 as class action defendants consider the
implications of Sattva for cases involving common
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