Last month we wrote about the ongoing debate in British Columbia over sequencing of certification and other applications in class actions. Now, the B.C. Court of Appeal has weighed in. Its decision in British Columbia v. The Jean Coutu Group (PJC) Inc., 2021 BCCA 219 will shake up law in British Columbia on sequencing in four significant ways.
First, the court rejected outright the notion that there is a presumption that certification should be the first procedural application heard in a proposed class action. Instead, each sequencing application must be decided on its own facts in the context of the particular case. The court was clear that "[t]he cases that have [held there was a presumption certification goes first] were, in my opinion, wrongly decided and should not be followed" (para. 37).
Second, the court reiterated the non-exhaustive factors judges should consider on sequencing applications, which have been developed over time and were recently summarized in Shaver v. Mallinckrodt Canada ULC, 2021 BCSC 455. However, the Court of Appeal clarified that judges need not consider every factor on every sequencing application, because not all factors will be relevant in every case. For example, "an application seeking a pre-certification hearing to challenge the admissibility of evidence will not require the judge to weigh whether the application may dispose of the whole proceeding. It clearly will not" (para. 34).
Third, the court recognized that a defendant suffers real prejudice when it is required to participate in an action and defend certification before being allowed to have its jurisdictional challenge decided, and that this is a relevant and persuasive factor on sequencing. "[T]he judge failed to consider the prejudice to the [defendants] of not having the foundational question of jurisdiction simpliciter considered at an early stage. By requiring the [defendants] to wait until the certification hearing, they will incur considerable expense and remain involved in lengthy and complex litigation without having that foundational issue considered at the outset" (para. 93).
Finally, the court confirmed that any overlap or interplay between the certification application and the issues sought to be adjudicated prior to certification is not determinative: "the question is not whether there is interplay between the issues; it is how best to utilize judicial resources to resolve the issues expeditiously" (para. 88). To that end, the court also confirmed that there will often be a basis for jurisdiction applications to precede certification. Interplay between the issues, "is not a reason to favour hearing the jurisdiction application in conjunction with the certification application. The Court's ability to examine the relevant factors to ground territorial competence is not impaired by hearing the jurisdiction application pre-certification. Indeed, resolution of the jurisdiction challenges prior to certification may actually assist with the efficient resolution of the complex issues" (para. 94).
This decision is the first time the B.C. Court of Appeal has weighed in on sequencing issues in the province, and will provide important guidance to litigants and B.C. courts going forward.
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