In our previous blog post, we discussed the decision in Bourque v Insight Productions 1 which is the first case to consider the mandatory dismissal provision in section 29.1 of the Class Proceedings Act ("CPA"). In this third blog post of the series, we discuss Justice Gomery's recent decision in Lamarche v Pacific Telescope Corp.2 This is the second case to consider section 29.1 of the CPA. Notably, Justice Gomery ordered the unsuccessful plaintiff to pay costs in the amount of $36,000 to the defendant, signalling the real risk and consequences associated with delay.
The proposed class action was commenced on October 13, 2020. All of the defendants were represented by the same counsel except the one defendant based in China, Ningbo Sunny Electronic Co. Ltd. ("Ningbo Sunny"). In January and February 2021, counsel exchanged emails regarding service and the scheduling of a case conference after Ningbo Sunny had been served with the claim and had responded. No further progress occurred in the action, and on October 14, 2021, the defendants served their motion material for the motion to dismiss.
Section 29.1 of the CPA provides that the court shall, on motion, dismiss a proposed class proceeding if, within one year of the action being commenced, a certification motion has not been served or a timetable has not been filed or ordered by the court.
As was the case Bourque, the plaintiff here argued that the parties had agreed to a timetable and that even if they did not, the court retained discretion to refuse to dismiss the action for delay.
In dismissing the proposed class action, Justice Gomery found that no timetable was agreed to because "a timetable requires an undertaking to do something within a specified deadline. Merely considering, or even committing to, a sequence of events is not enough."3 In this case, the parties had contemplated the service of Ningbo Sunny and the appearance of their counsel before further steps were taken in the action; however, no deadlines were proposed or accepted by counsel. In any event, no timetable was filed with the court, and therefore the plaintiffs had not complied with section 29.1.
Plaintiff's counsel argued that dismissing the action would be pointless because he would simply find another class representative and start another class action against the same defendants, a possibility identified by Justice Belobaba in Bourque. Defence counsel noted that Belobaba J.'s comment on this issue was obiter, and that the defendants reserved the right to argue otherwise, if and when another action was commenced against them after dismissal of this one.4 Justice Gomery agreed.
The decision in Lamarche demonstrates the court's strict interpretation of s. 29(1) and its willingness to enforce the mandatory dismissal provision where its criteria are met. To date, a court has not been faced with this scenario, where plaintiff's counsel simply refiled a proposed class action using a different representative plaintiff after the dismissal of the initial action pursuant to s. 29(1). Defendants faced with this scenario may seek to challenge this tactic, perhaps relying on the doctrine of abuse of process. This scenario will certainly be one to look out for as more cases are dismissed under s. 29(1).
1. Bourque v Insight Productions, 2022 ONSC 174.
2. Lamarche v Pacific Telescope Corp., 2022 ONSC 2553.
3. Lamarche v Pacific Telescope Corp., 2022 ONSC 2553 at para 15.
4. Lamarche v Pacific Telescope Corp., 2022 ONSC 2553 at para 26.
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