Canada: Attempt To Revive Failed Certification Fails

What happens when a change in the law arguably gives fresh life to a previously failed certification motion? Justice Perell reminds us in the latest chapter of the "hyper-litigated" Celestica Inc. proceeding that the ordinary doctrines of res judicata, issue estoppel, and abuse of process apply. Prospective representative plaintiffs cannot avoid these doctrines "by atomizing the legal question before the court to find some unexamined atom." Absent an appeal, denial of certification is final.

This does not mean, however, that the motions judge is functus officio. Justice Perell reminds litigants that although denial of certification is final, the Class Proceedings Act, 1992 contains mechanisms for the motions judge to permit the failed class action to proceed in some other form.


Trustees of the Millwright Regional Council of Ontario Pension Trust Fund v Celestica Inc. ("Celestica Inc.") is the latest decision in the nearly decade long dispute over alleged misrepresentations in Celestica's corporate filings. See our blog posts addressing various steps in this matter, some of which went all the way to the Supreme Court (combined with Green v. CIBC).

In brief, the plaintiffs framed their case both in terms of statutory misrepresentation claims under Part XXIII.1 of the Ontario Securities Act, as well as  the common law tort of misrepresentation.

Justice Perell granted leave under Part XXIII.1 and certified one of the alleged statutory misrepresentations claims as a class action (denying leave in respect of the other statutory claims). However, he denied certification of the common law misrepresentation claims on the basis that a class action would not be the preferable procedure. See our blog post addressing this decision.

The plaintiffs' partial success vanished with the release of the Supreme Court's decision in  Green. At the time that Justice Perell certified the statutory claim, the law according to the Ontario Court of Appeal was that the plaintiffs' statutory claims under Part XXIII.1 were not statute-barred. The Supreme Court subsequently reversed this position in Green, with the result being that the plaintiffs' statutory claims were no longer viable because the limitations period had expired. Accordingly, the only claim that was certified by Justice Perell was deemed to be statute-barred.

In this latest chapter, the plaintiffs responded by moving again to certify their common law claims.

Issue Estoppel Or Abuse Of Process

Justice Perell refused to entertain the renewed motion to certify a common law misrepresentation claim. The original certification decision had not been appealed, so re-litigating these very same issues on a renewed certification motion was precluded by the doctrines of issue estoppel and/or abuse of process.

On the premise that – between the original decision and the renewed certification motion – the Green decision had ruled out the statutory claims, the plaintiffs argued that this change resulted in an unanswered question in the original certification decision: if there were no statutory claims as a viable litigation alternative, is a class action for the common law claims now the preferable procedure? Justice Perell did not accept that this question was "unasked," as he had considered whether a class action was the preferable procedure for the common law claims, standing alone.

Moreover, Justice Perell found no injustice to justify exercising his discretion not to apply issue estoppel. The plaintiffs "have had their day in court and they can continue to advance their individual claim." Justice Perell reminds us that "[a] class action is not the exclusive route for mass claims" and that joinder of claims may be an effective way to resolve cases with multiple plaintiffs.

Lessons Learned

Justice Perell's decision in Celestica Inc. provides a powerful response to attempts to revive a failed certification motion, even in the face of a change in law. Unless appealed, a decision refusing to certify a class proceeding is a final and binding decision. The doctrines of issue estoppel and abuse of process may be invoked to preclude the plaintiff from revisiting certification (subject to the motion judge's discretion to not apply these doctrines).

Although Justice Perell rejected the attempt to revive the certification motion, he outlined the proper procedural options available following the denial of certification. In so doing, he noted that the motions judge is not functus officio. If the plaintiffs seek to continue the action in another form, they should bring a motion under section 7 of the Class Proceedings Act, 1992 for orders to "permit the proceeding to continue as one or more proceedings between different parties." Justice Perell expressly left the door open to the plaintiffs in Celestica Inc. to follow this  procedure under section 7, if so advised.

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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