Law Times

Law Times • sepTember 7, 2009 NEW An online resource tool 1.800.263.3269 Bestcase earlug.indd 1 3/26/08 11:52:01 AM Focus On CLASS ACTIONS Lépine only touches on vexing issue Top court dashes hopes for national class clarity BY JULIUS MELNITZER For Law Times ecause most Canadian provinces have class action legislation, class defi nitions can and do overlap jurisdictional boundaries. Nevertheless, the exact status of national class actions — and whether settlement of parallel class actions binds residents of a particular province — are issues that courts have not had to face squarely. Earlier this year, however, the Su- B preme Court of Canada faced those questions in Canada Post Corp. v. Lépine. Because the case gave the court the opportunity to deal with the issue directly, expectations were high that it would provide useful guidance. But arguably, it all came to naught. "Lépine is certainly much less of a statement in favour of national classes than many lawyers would have liked to see," says Barry Glaspell of Borden Lad- ner Gervais LLP's Toronto offi ce. Th e case revolved around the cutting of a free Internet service and the subse- quent imposition of a monthly charge. Th ree class actions were fi led: one in Quebec on behalf of that province's res- idents; one in Ontario on behalf of all Canadian residents save those in Que- bec; and one in British Columbia on behalf of B.C. residents. Eventually, the Ontario and B.C. actions settled, but the Quebec plain- tiff s refused to participate. Th e Ontario settlement, approved by the Superior Court, included a provision that pur- ported to bind Quebecers. Th e motion for authorization in Que- bec was heard and reserved while the B.C. and Ontario settlements were pending approval. While the decision was still re- served, the Ontario court approved the settlement there. Two weeks later, the Quebec court granted authorization. Sev- eral months after that, the B.C. courts approved the local settlement. Th e defendant, Canada Post, then moved to have the Ontario agreement recognized in Quebec. Citing confu- sion in the public notices of the On- tario and B.C. settlements, the Quebec Court of Appeal refused to recognize the Ontario ruling. It also suggest- ed the Ontario court ought to have declined jurisdiction over Quebecers. "Th e diffi culty in Canada is there is no harmonization in the law with re- spect to recognition and enforcement of class action judgments that have extra- provincial eff ect," says Donald Bisson of McCarthy Tétrault LLP's Montreal of- fi ce. "It's an issue that hasn't been settled by the Constitution, so the provinces are fi ghting over it." Adding to the diffi culty is the fact Quebec's Code of Civil Procedure has unique enforcement rules. "Th ese rules are sometimes diffi cult to reconcile with the statutes and jurispru- dence from other provinces," says Bisson. Th e issue is an important one for plaintiff s and defendants alike. "Plaintiff s are interested in having full recognition because it's easier to have a settlement enforced across the board as opposed to starting all over again," says Bisson. "And defendants are interested in the certainty and fi nality that a fully enforceable settlement brings." In the end, the Supreme Court unani- mously upheld the Quebec Court of Ap- peal's decision to refuse enforcement of the Ontario settlement. But the ruling turned largely on the inadequacy of the notices issued to the class. On the other hand, the high court disagreed with the Quebec Court of Appeal's conclusion that the Ontario courts had no jurisdiction to approve a settlement with Quebec residents. It is this aspect of the judgment that some observers see as an affi rmation of the propriety of national classes. Otherwise, however, the court ducked the national class and parallel actions is- sues, dealing with them only briefl y near the end of its reasons that smacked of afterthought. "In addition to its conclusions of Barry Glaspell believes Lépine signals a very cautious approach to national classes. law, the Quebec Court of Appeal seems to have had reservations or concerns about the creation of classes of claim- ants from two or more provinces," the court wrote. "We need not consider this question in detail. However, the need to form such na- tional classes does seem to arise occasion- ally. Th e formation of a national class can lead to the delicate problem of creating subclasses within it and determining what legal system will apply to them. In the context of such proceedings, the court hearing an application also has a duty to ensure that the conduct of the pro- ceeding, the choice of remedies, and the enforcement of the judgment eff ectively take account of each group's specifi c in- terests, and it must order them to ensure that clear information is provided. "As can be seen in this appeal, the creation of national classes also raises the issue of relations between equal but diff erent superior courts in a federal system in which civil procedure and the administration of justice are under provincial jurisdiction. Th is case shows September Specials Visit our web site and save 20% The Appeal Book Robert B. White, Q.C. and The Honourable Joseph J. Stratton, Q.C The Art of Trial Robert B. White, Q.C. Class Actions in Canada Ward Branch Summary Judgment S. John Page and Timothy Pinos that the decisions made may sometimes cause friction between courts in diff er- ent provinces. Th is of course often in- volves problems with communications or contacts between the courts and between the lawyers involved in such proceedings. However, the provincial legislatures should pay more attention to the framework for national class ac- tions and the problems they present. More eff ective methods for managing jurisdictional disputes should be estab- lished in the spirit of mutual comity that is required between the courts of diff erent provinces in the Canadian le- gal space. It is not this court's role to de- fi ne the necessary solutions. However, it is important to note the problems that sometimes seem to arise in conducting such actions." Glaspell believes Lépine signals a very cautious approach to national classes. "Th e court talks about the fact that the need for national classes arises 'oc- casionally,' which to my mind means that it considers the norm to be provin- cial classes rather than national classes," he says. "I think that springs from the court's view that provincial classes are the most respectful of the property and civil rights issues at stake, which often involve provincial legislation." But the overriding message to the class action bar, it appears, is this: until legislative action intervenes, boys and girls, fi gure it out for yourselves. "So now, it's clearly our problem," says Ward Branch of Vancouver's Branch MacMaster. Indeed, there's room for the view that on the issue of national classes, Lépine's in- conclusiveness raises the spectre of more problems than the case resolves. "For example, some people are inter- preting the decision as creating a race- to-the-courthouse situation, where the fi rst national class action fi led will have precedence," says Glenn Zakaib of To- ronto's Cassels Brock & Blackwell LLP. "I'm not at all sure that's a satisfactory outcome." LT PAGE 9 www.lawtimesnews.com Web Discount (LT 1-4x5).indd 1 9/2/09 11:05:40 AM

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• Ottawa Shutdown
• Access to Justice
• Focus On Class Actions