Canada: Have Too Many Knights Passed? Knight v Imperial Tobacco And Want Of Prosecution In Certified Class Actions

Last Updated: November 14 2017
Article by Joanne Colledge-Miller and Jason Mohrbutter

Can a plaintiff's tactical choice to not pursue a class action result in it being dismissed for want of prosecution?

Recently the British Columbia Supreme Court, in Knight v Imperial Tobacco Canada Ltd., 2017 BCSC 1487, has opened the door to the possibility that a certified class action can be dismissed in circumstances where the test for dismissing for want of prosecution have otherwise been met.

The defendant tobacco company in Knight applied for an order dismissing the action for want of prosecution because of the 14-year delay since the claim was commenced in 2003. The claim related to the defendant's sale of tobacco products branded as "light" and "mild" and the alleged deceptive marketing of those products as having a reduced health risk.

The action was certified as a class proceeding in February 2005 and the plaintiff delivered a list of documents in 2009 but took no further action until October 2016 when a notice to admit was served on the defendant. In the meantime an appeal of the certification was decided in May 2006 and a number of procedural steps involving third-party proceedings occurred between July 2007 and July 2011.

In March 2017, the defendant applied for an order dismissing the action for want of prosecution, asserting that it had been significantly prejudiced because of the plaintiff's delay in moving the action forward.

Before assessing whether the facts of Knight met the four-part test for dismissing for want of prosecution, Justice Nathan H. Smith first reviewed whether a certified class proceeding could be dismissed for want of prosecution under the statutory regime of the B.C. Class Proceedings Act [CPA].

An application to dismiss for want of prosecution is permitted by the B.C. Supreme Court Civil Rules. However, s. 40 of CPA asserts that the Civil Rules will only apply to class proceedings to the extent that they do not conflict with the CPA. Despite noting that s. 35 of the CPA requires special requirements for ending a class proceeding (being notice to the class and court approval), Justice Smith concluded that so long as putative class members were notified of the result, a decision on the want of prosecution motion would provide the requisite court approval. Consequently, he concluded the statutory framework of the CPA did not prohibit a certified class proceeding from being dismissed for want of prosecution.

Justice Smith went on to find that while the 14-year delay since the claim was commenced was inordinate under the test, he found the delay was excusable given the plaintiff's evidence that his counsel was awaiting the outcome of comparable litigation in Quebec.

That Quebec litigation had been commenced against three tobacco companies, including the Knight defendant, raising a number of issues, including the alleged deceptive practices of marketing "light" and "mild" cigarettes. The Quebec trial court found the defendants in that case liable for certain alleged misrepresentations, awarding a $15 billion judgment in doing so, though the allegations regarding "light" and "mild" cigarettes were dismissed by the Quebec court and the appeal of that decision was still pending.

Justice Smith rejected the defendant's argument that the plaintiff's delay was purely tactical and instead concluded that the decision to wait for the outcome of comparable litigation in another jurisdiction (which he recognized was a common occurrence in class proceedings in Canada) was a reasonable response that served legitimate objects of the justice system.

Justice Smith also rejected the defendant's argument that delay would not be excusable, even where done to await the outcome of similar litigation in another jurisdiction, unless all the parties understood the reasons for and agreed to such delay. While he concluded it was preferable for parties to agree to wait for the outcome of comparable litigation, the absence of such agreement could not, by itself, render delay inexcusable. Instead, this was simply one factor to be considered under the test.

Finally, Justice Smith concluded that the defendants had failed to establish they would suffer serious prejudice and that the interests of justice favoured allowing the claim to proceed – especially where, as here, the delay was not due to the actions or decision of the plaintiff or the class, but was instead due to the good faith decision to await the outcome of similar Quebec litigation.

In the result, this decision opens the door for defendants to argue that where a plaintiff or their counsel have elected to not advance a certified class action after many years, such a claim can be exposed to dismissal for want of prosecution. Such exposure to dismissal should be exacerbated where a plaintiff cannot establish a legitimate basis for the decision to permit a certified class action to languish without advancing the interests of the class.

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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