Canada: Theme #4: Multijurisdictional Class Actions

In 2015, Canadian courts continued to grapple with a number of complex issues in the context of multijurisdictional class actions. Several decisions were rendered addressing overlapping parallel class actions and issues of jurisdiction. Courts also continued to call for legislative guidance on important issues arising in the context of multijurisdictional class actions.

-The Supreme Court of Canada dismissed the plaintiff's application for leave to appeal from the decision of the Court of Appeal for Ontario in Kaynes v BP. In that decision, the Court of Appeal stayed the claims of proposed Canadian class members who purchased BP securities in the United States and United Kingdom. The Court declined to take jurisdiction on the basis that the US and the UK were clearly more appropriate fora for the hearing of those claims.

After failing to have the claims certified in Canada, the representative plaintiff attempted to bring a class action in Texas on behalf of Canadian purchasers of BP securities who bought in the US. However, the US District Court for the Southern District of Texas dismissed the action on the basis that a class had already been certified in an existing proceeding that included Canadians who purchased in the US.

-In BCE Inc. v Gillis, the Nova Scotia Court of Appeal held that the commencement of parallel class actions in multiple jurisdictions can be an abuse of process where the plaintiff has no intention of pursuing one or more of those actions. The Court of Appeal permanently stayed a class action in Nova Scotia on the basis that class counsel had no intention of continuing the action, which had sat dormant for a decade, and only showed renewed interest in the action once certain relief sought in a parallel action in Saskatchewan was denied.

-In the parallel class action to BCE Inc v Gillis brought in Alberta, Turner v Bell Mobility Inc., the Alberta Court of Queen's Bench did not find that the Alberta class action was an abuse of process. Instead, the Court ordered a limited stay of the Alberta action to allow Alberta residents the opportunity to determine whether they would opt-in to the class in the parallel proceeding in Saskatchewan. The Court further ordered that the Alberta action would only proceed on behalf of those Alberta claimants who opted-out of the Saskatchewan action and for those causes of action not dismissed or barred in the Saskatchewan action.

-In Airia Brands v Air Canada, the Ontario Superior Court of Justice refused to take jurisdiction over the claims of "absent foreign claimants" (who reside outside Canada and who entered into transactions with the defendants outside Canada) included in a proposed global class. The Court noted that "in a multi-jurisdictional class action the court should pay particular attention to whether its assumption of jurisdiction would be consistent with comity, prevailing international legal norms and the reasonable expectations of the parties." In this case, the Court refused to take jurisdiction over the absent foreign claimants on the basis that (i) there was no real and substantial connection between Ontario and the claims of the absent foreign claimants who entered into transactions outside Canada; and (ii) there was a high likelihood that an Ontario decision would not be enforceable in the foreign jurisdictions.

-In Excalibur Special Opportunities LP v Schwartz Levitsky Feldman LLP, the Divisional Court upheld Justice Perell's decision not to certify a proposed global class action in Ontario in part on the basis that there was no real and substantial connection between the matters at issue and Ontario. While the defendant Canadian accounting firm performed its audit of (a since-bankrupt) foreign producer in Canada, the remaining considerations (such as the associated standard of care that would be used to evaluate the audit, the non-resident class members, the underlying investments made in US funds in the foreign producer, and the application of US law) all led to a finding that Ontario did not have jurisdiction.

-In Kutlu v Laboratorios Leon Farm, Justice Perell discontinued a "rival" Ontario class action and deferred to a parallel Alberta proceeding on the basis that (i) the Alberta action, which was brought on behalf of a national class, was farther along (it had been certified for the purposes of settlement); and (ii) that any Ontario plaintiffs who had opted out of the Alberta action could pursue joinder of their individual claims in Ontario. In discontinuing the Ontario action, Justice Perell noted that should the Alberta court not approve the settlement, the preference for the Alberta forum would evaporate and the appropriateness of the Ontario class action would need to be revisited. In his decision certifying the national class in the Alberta action Justice Rooke noted that there is a need for courts across Canada to have some uniform guidance as to how courts should manage multijurisdictional cases with parallel actions.

-This call for guidance by courts to provincial legislatures has led to some legislative activity in Quebec. However, it remains to be seen whether that activity will address or further complicate the issues presented by multijurisdictional class actions. Changes to Quebec's Code of Civil Procedure, set to come into force on January 1, 2016, expressly prohibit courts from refusing to authorize a class action in Quebec on the sole ground that proposed class members are already members of a class in a multijurisdictional action brought outside of Quebec.

-In addition to the decisions regarding overlapping proceedings and appropriate forum, in Parsons v Ontario the Court of Appeal for Ontario addressed the procedural issue of extra-provincial sittings of an Ontario court in a multijurisdictional class action. Specifically, the Court found that it was an error of law to hold a sitting of the Superior Court of Justice outside the province in a multijurisdictional action without providing a video link to a court room located in Ontario (to ensure the Ontario public had access to the proceeding). In making its finding, the Court reiterated the need for comprehensive guidance from the provincial legislature with regards to various issues arising in multijurisdictional class actions.

Looking Ahead

The numerous substantive and procedural issues presented by multijurisdictional class actions may very well come to a head in the proposed Volkswagen class actions. At least six proposed actions have already been filed in Canada, with each seeking to represent a national class (and two seeking to represent a global class). It will be interesting to observe how issues of comity, procedural practicality and judicial efficiency are addressed, and whether this will lead to further guidance from law commissions or provincial legislatures. We will continue to monitor developments in this area.

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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