In the recent case ofFischer v.
IG, 2015 ONSC 2491, the Divisional Court has
settled any debate as to whether s. 31(1) of theClass Proceedings Act, 1992, S.O.
1992, c. 6 ("CPA") is intended to apply asymmetrically in
favour of plaintiffs; it is not.
Section 31(1) of the CPA reads:
31.(1) In exercising its discretion with respect to costs under
subsection 131(1) of the Courts of Justice Act, the court may
consider whether the class proceeding was a test case, raised a
novel point of law or involved a matter of public interest.
Over the years, class action plaintiffs' counsel has
attempted to argue that this section of the CPA is intended to
provide protection only to plaintiffs and not defendants. They have
argued that it is not open to the court to reduce or deny a costs
award to a successful plaintiff. Plaintiffs have relied upon the
Ontario Law Reform Commission Report on Class Actions (1982), in
which the Commission noted a concern that the risks inherent in the
costs regime at the time operated to discourage potential
representative plaintiffs from commencing meritorious class
actions. Though the Commission recommended a "no costs"
regime, the legislature instead adopted the ordinary costs rules
that govern individual actions. These rules were, however, adjusted
in two ways: (1) consideration of the three factors identified in
s. 31(1) of the CPA and (2) the availability of the Class
Proceedings Fund to cover adverse costs awards against
Plaintiffs' counsel also relied upon Garland v.
Consumers' Gas Co. (1995), 22 O.R. (3d) 451 (OCJ) in which
Winkler J. (as he then was) declined to award costs to the
successful defendant in light of the s. 31(1) factors. He stated,
"The case law reflects the Court's inclination to refrain
from awarding costs against unsuccessful plaintiffs in class
proceedings where some or all of the criteria in s. 31(1) are
The argument that s. 31(1) of the CPA should operate
asymmetrically has been rejected before. In Holley v. Northern
Trust Co., 2014 ONSC 3047, Perell J. said in respect of s.
31(1): "An adverse costs system is what the Legislature
intended; it did not intend a costs regime that removes the risk.
And it did not impose a public interest burden on defendants, who
are also entitled to access to justice, by imposing an asymmetrical
system of costs."
In Fischer v. IG, the plaintiffs had originally been
unsuccessful on the certification motion. The defendant mutual fund
companies had argued that the proposed class action did not meet
the "preferable procedure" criterion in s. 5(1)(d) of the
CPA – required for a class action to be certified –
because a probe by the Ontario Securities Commission that resulted
in settlements totaling over $150 million with five mutual fund
companies had accomplished what the proposed class action intended
to do – compensate investors. On the certification motion,
Perell J. agreed with the defendants' position and declined to
certify the action.
Given the novel nature of the argument and the fact that the
action would have been certified but for the novel argument, the
motion judge ordered that each side should bear its own costs. The
certification decision was appealed all the way up to the Supreme
Court and the action was ultimately certified. Perell J. was asked
to revisit his costs decision given the plaintiffs' ultimate
success on certification. The plaintiffs claimed $500,000 for the
certification motion. The motion judge considered the issue de
novo and again decided that there should be no order as to
costs given the novelty of the arguments. The plaintiffs sought
leave to appeal.
Harvison Young J., sitting as the Divisional Court, dismissed
the motion for leave to appeal. She held, "I see no support,
either in the wording or legislative history of s. 31(1), or in the
case law, for the proposition that the discretion may only be
applied asymmetrically in favour of plaintiffs."
The plaintiffs also argued that the principle of access to
justice demands that costs arising from novelty must be
asymmetrically applied. Harvison Young J. acknowledged that access
to justice is important and is a factor to be considered in costs
decisions, but it is not a principle that operates only to the
benefit of plaintiffs. She found no support for the proposition
that access to justice concerns must always entitle plaintiffs to
their costs of successful certification motions.
David Di Paolo and Margot Finley acted as counsel for the
defendant AIC Ltd. in this matter.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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