Canada: Ontario Court Of Appeal Divided On Interlocutory V. Final Nature Of Order Permitting Superior Court To Sit Outside Province

The Ontario Court of Appeal's March 13, 2015 decision in Parsons v. Ontario added additional complexity to the procedure surrounding multi-jurisdictional class actions. A sharply divided Ontario Court of Appeal (all three judges wrote separately) held that it was an error of law to hold a sitting of the Ontario Superior Court outside of Ontario in the absence of a video link to a courtroom in Ontario. A majority of the Court held that such a video link was necessary to ensure that the Ontario public has access to the proceedings.

But before turning to that issue (discussed further at the Osler Class Action Defence Blog), a (different) majority of the Court first held that an appeal from an order permitting a sitting of the Superior Court outside of the province is likely to be considered a "final" order rather than an interlocutory order, meaning an appeal of that order is taken to the Ontario Court of Appeal rather than the Divisional Court. It remains to be seen whether this holding will be constrained to the circumstances of Parsons – namely, where a court-approved settlement is being supervised. The decision further provided helpful reminders of the circumstances in which a Court will hear a moot appeal, and the standard of review of discretionary decisions of judges in the class action context.

The Facts

Parsons arose from multi-jurisdictional class actions concerning the infection of persons with Hepatitis C through the Canadian blood supply. Courts in Ontario, British Columbia and Québec certified parallel class proceedings, which were settled in 1999. The settlement assigned a supervisory role to the superior courts of all three provinces. It also provided that all three courts were required to issue identical orders for any order to be effective.

In 2012, class counsel proposed that all three supervisory judges sit together in one location to hear submissions on parallel motions. The Attorneys General of Ontario, British Columbia and Québec all objected to the judges sitting outside the territorial boundaries of their province. Class counsel then sought directions from the courts in all three provinces.

In Ontario, former Chief Justice Winkler held that an Ontario Superior Court judge may preside over a hearing that is conducted outside Ontario in circumstances where it promotes the interests of justice (see Parsons v. Canadian Red Cross Society).

Chief Justice Winkler's Decision was "Final"

Even though none of the parties contested the matter, the Court of Appeal first had to be satisfied that it had jurisdiction to hear the appeal. The Ontario Class Proceedings Act does not specify the Court to bring an appeal from an order made on a motion for directions brought pursuant to the terms of a court-approved settlement agreement. As such, the Courts of Justice Act ("CJA") had to be analyzed. Section 6(1) of the CJA grants the Court of Appeal appellate jurisdiction over final orders of the Superior Court unless the appeal lies to the Divisional Court under another Act. The Divisional Court, on the other hand, has jurisdiction over interlocutory appeals.

Justice LaForme (with whom Justice Lauwers agreed on this point) held that the order under appeal was "final". He held that the fact that the underlying class actions had been resolved by the settlement agreement required that he take a "somewhat modified" approach to the classic test for distinguishing between a final or interlocutory order. He stated that class counsel's request was akin to an application under Rule 14.05(3)(d) of the Rules of Civil Procedure, to determine legal rights. In his view, Chief Justice Winkler:

[51] ... disposed of the motion on the merits by granting declaratory relief in a form that was consistent with the moving party's position. Thus, in my view, the order is final for the same reason that an order resolving a Rule 14 application is final even though another, quite possibly larger, issue between the parties remains to be determined.

Justice LaForme was nonetheless cautious to note that his decision was narrow:

[53] It is important to note that this decision does not stand for the proposition that any appeal from an order of a supervisory judge under a national class action settlement agreement will come directly to this court. The order's final or interlocutory character will turn on the specific order of the supervisory judge acting under a settlement agreement within the discrete context of post-settlement litigation.

Justice Juriansz disagreed, holding that the order under appeal was interlocutory. He turned to Hendrickson v. Kallio, the leading precedent for determining whether an order is final or interlocutory. Hendrickson holds that an interlocutory order "does not determine the real matter in dispute between the parties...it is interlocutory if the merits of the case remain to be determined." Justice Juriansz therefore concluded that Chief Justice Winkler had made an interlocutory order.

Justice Juriansz distinguished case law establishing that orders dismissing challenges to the Superior Court's jurisdiction over a proceeding based on an alleged lack of jurisdiction are final orders. In those cases, the order has the effect of depriving a party of a substantive defence while the "order in this case does not affect any claims or defences of the parties and has no effect on the merits of any litigation whatsoever" (para. 195).

Justice Juriansz rejected Justice LaForme's "different and novel" approach to this question in circumstances where the action has been settled and no claims or defences remain to the tried. He specifically rejected the analogy to an application seeking the determination of rights that depend on the interpretation of a statute or regulation. Notably, the motion for directions before Chief Justice Winkler was not a freestanding application but was connected to a specific and pending dispute. The connection to that dispute permeated his decision. In sum:

[204] the "real matter in dispute between the parties" under the Hendrickson test was whether the court should extend the deadline for filing first claims. The decision on the motion for directions left the merits of that matter to be determined. The decision simply determined the issue of where the court could sit to hear the real matter in dispute.

In any event, Justice Juriansz observed that the issue on the motion for directions could not be heard in a Rule 14.05(3)(d) application (the basis for Justice LaForme's application analogy). This distinguished the case from Fontaine v. Canada, which involved an appeal from a motion related to the implementation of a class action settlement.

Ultimately, Justice Juriansz found no reason to depart from the Hendrickson test because the action has been resolved. Rather, "the focus of the inquiry will simply shift to the real issue in dispute between the parties and to whether the order under appeal finally determined that issue. ... I fear that abandoning the traditional test in favour of a modified approach will lead to greater uncertainty in an already unwieldy area of jurisprudence."

Given that he was dissenting on this issue, however, Justice Juriansz proceeded to consider the merits of the issues.

Mootness

The appeal was technically "moot" as the underlying motions had all been heard and decided. In the circumstances, however, the Court of Appeal unanimously held that it was appropriate to decide the appeal as it addressed an issue of importance that was likely to arise again and there was a social cost to leaving it unresolved.

In Justice LaForme's view:

[56] ... This case, in my view, raises an issue that should be resolved because of its national importance and the continuing social cost of leaving it unsettled: see Borowski v. Canada (Attorney General) [...]. Specifically, it is important to resolve whether a superior court judge has the option of sitting outside his or her home province to facilitate the implementation and enforcement of a national class settlement. The failure to resolve this important question may hinder the administration of national class action settlements such as this one, which are an important vehicle for promoting access to justice, judicial economy and behavior modification.

The Merits

On the merits, Justice Lauwers agreed with Justice Juriansz that the "open court principle" and s. 135(1) of Ontario's Courts of Justice Act require a video link to an Ontario courtroom if the Superior Court is to sit outside of Ontario.

Justice LaForme disagreed, and would have upheld Chief Justice Winkler's order in its entirety. He emphasized that Chief Justice Winkler's decision in this respect was owed deference by the Court of Appeal:

[154] ... "[A discretionary decision in a class proceeding] may only be set aside if it is based on an error of law, a palpable and overriding error of fact, the consideration of irrelevant factors or the omission of factors that ought to have been considered, or if the decision was unreasonable": 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2013 ONCA 279, 115 O.R. (3d) 653, at para. 40."

Conclusion

Litigants should be cognizant of appellate jurisdiction in Ontario class proceedings, noting that this remains a still uncertain area of the law in some respects. Whether the Court of Appeal or Divisional Court will have jurisdiction over a particular matter will very much depend on the facts of a particular case.

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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