Canada: Nova Scotia Class Proceeding Permanently And Unconditionally Stayed As Abuse Of Process

Last Updated: April 13 2015
Article by David H. Elman

Most Read Contributor in Canada, September 2016

In BCE Inc. v. Gillis, 2015 NSCA 32, issued on April 9, 2015, the Nova Scotia Court of Appeal considered the doctrine of abuse of process in the context of a proposed class proceeding where a virtually identical action, commenced by the same plaintiffs represented by the same counsel (Merchant Law Group), had already been certified in Saskatchewan. Expressing its disapproval of the practice of having the same plaintiffs file lawsuits in multiple jurisdictions to obtain collateral future advantages, the Court of Appeal overturned the decision of the motions judge and ordered that the Nova Scotia action be permanently and unconditionally stayed. In the course of its judgment, the Court made several notable observations regarding the nature of class proceedings, the role of the Court, and what is (and is not) appropriate conduct by plaintiffs and their counsel. The various Bell defendants /appellants were represented by Robert Deane of Borden Ladner Gervais LLP.

The case was one of many across Canada. In 2004, the same group of plaintiffs (all represented by Merchant Law Group) filed a series of actions in nine provinces alleging that various telecommunications providers had been improperly charging "system access fees". Although the Nova Scotia action was first filed on November 2, 2004, no steps were taken to advance it until 2014.

In the interim, the plaintiffs' efforts were focused exclusively on the action commenced in Saskatchewan, which was certified by an order dated on February 13, 2008 (Frey v. Bell Mobility Inc., 2007 SKQB 328, leave to appeal denied Microcell Communications Inc. v. Frey, [2012] S.C.C.A. No. 42). The certified class was limited in that it excluded customers with arbitration clauses in their contracts and was limited to claims for unjust enrichment based on the contracts. Non-residents, including residents of Nova Scotia, could opt-in to participate in the action (in accordance with Saskatchewan legislation in effect as of 2008). Saskatchewan residents were included on an opt-out basis. The plaintiffs attempted to convert the certification to an opt-out model but were unsuccessful (Frey v. Bell Mobility Inc., 2009 SKQB 165).1

Before analyzing the Nova Scotia claim, the Court of Appeal surveyed the treatment of the various other claims filed by the same plaintiffs in other provinces. In British Columbia (Drover v. BCE Inc., 2013 BCSC 1341), the court found it would be an abuse of process to allow the plaintiffs to litigate matters in Saskatchewan and then re-litigate the same matters in British Columbia. The Alberta Court of Queen's Bench dismissed one Alberta action for reasons of delay (Pappas v. BCE Inc., 2014 ABQB). In another Alberta action (Turner v. Bell Mobility, 2015 ABQB 169), a stay was refused on the basis that proper access to justice may be denied to Albertans with an opt-in regime (although the decision is under appeal). The Manitoba action (Hafichuk-Walkin v. BCE Inc., 2014 MBQB 175) was stayed (although the decision is under appeal).

The Court of Appeal analogized the plaintiffs' approach in filing identical lawsuits in numerous jurisdictions to "planting legal cherry trees across the country." The Court rejected the plaintiffs' submission that it was an appropriate tactic to do so to accommodate future changes in the law. Rather, the Court held that plaintiffs were attempting to "go from jurisdiction to jurisdiction picking only the cherries they like in jurisdictions they have totally neglected for a decade." The Court of Appeal highlighted the danger of such "selective harvesting" and that, if permitted, it would require defendants to re-litigate the same issues repeatedly, potentially having divergent outcomes.

Although commencing class actions in multiple jurisdictions is not necessarily always an abuse of process, the court must review the facts of each case to "assess whether there has been an abuse of process in the circumstances of the litigation as it has been prosecuted with in that jurisdiction."

In assessing whether the Nova Scotia action constituted an abuse of process, the Court of Appeal considered the following factors:

  • whether the plaintiffs actually intended to prosecute the Nova Scotia action when it was filed;
  • the plaintiffs' delay in advancing the Nova Scotia action;
  • the distinction, if any, between opt-in and opt-out class action schemes;
  • the danger of multiplicity/duplicity of proceedings;
  • the conduct of counsel;
  • whether the action was brought for the collateral (and, the Court held, improper) purpose of obtaining carriage of a class action, or to toll the limitation period; and
  • the importance of maintaining comity among the courts of the various provinces.

The Court of Appeal emphasized that absent an intention to prosecute the Nova Scotia claim, the action in Nova Scotia did not serve a proper purpose. The plaintiffs' objective had consistently been to pursue the Saskatchewan action, and that only changed when events in Saskatchewan made it more advantageous to try to proceed elsewhere. The Court held that the plaintiffs were bound by the national litigation strategy adopted by their counsel.

Perhaps most significantly, and contrary to the finding of the Alberta Court of Queen's Bench in Turner, the Court of Appeal was not satisfied that the distinction between opt-in and opt-out statutes put Nova Scotia residents at a disadvantage or at least a disadvantage that the Court should seek to remedy. The Court noted that there may be good reasons why Nova Scotia residents may not opt-in to the Saskatchewan class, including that "class actions may result in significant legal fees for plaintiffs' counsel but not result in any money in the pockets of class members." In response to the assertion that few individuals will make the effort to opt-in, the Court queried "why the court  and its resources should be more devoted to the financial self-interest of private litigants than they are themselves."

The Court of Appeal viewed the actions of class counsel as attempting to re-litigate issues decided in other jurisdictions. The Court emphasized that the Nova Scotia action was a second attempt by the plaintiffs to certify an opt-out class action and, thus, a collateral attack on the Saskatchewan decision which refused to allow certification for non-residents on an opt out basis. To allow a re-litigation of this issue in Nova Scotia would result in an "extraordinary abuse of process and it would undermine the administration of justice."

In the Court's view, the Nova Scotia action was an abuse of process from the outset, compounded by the filing of nine virtually identical claims. The plaintiffs had made it clear many years earlier that Saskatchewan was their forum of choice and the Court held that they must live with that decision. As the Court put it, "it is time the respondents  be forced to pick cherries from a single tree; one groomed for so many years, while the one in Nova Scotia was neglected."

The Court of Appeal's decision in Gillis is a clear statement that forum-shopping is as impermissible in the class action context as it is in individual claims. Where a claim may be brought in multiple jurisdictions, plaintiffs must generally select their jurisdiction of choice, and not start "planting legal cherry trees across the country" in the hope of  being able to harvest a different tree if matters do not proceed as desired in the original jurisdiction. Although the Court left open the possibility that there may be circumstances where multiple similar claims across different jurisdictions would be allowed to continue, the record demonstrated that the intention of the plaintiffs and their counsel here was to seek to re-litigate issues that had already been determined. Such conduct constituted an abuse of process warranting a permanent and unconditional stay of proceedings.


1 Canadian provinces exhibit two different class action schemes. Those provinces with an opt-in class actions scheme require individuals that become members of a class action. In opt-out provinces, all persons fall within the defined class are a part of the plaintiff class unless they opt-out.

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