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Class Actions in the Absence of Legislation

4 minute read

Of the ten provinces and three territories in Canada, only Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec and Saskatchewan have enacted class actions legislation. These nine provinces have enacted some form of class proceedings or class actions statute that govern the process for class proceedings from commencement of the action to its resolution. Notably, the first class actions legislation in Canada was enacted in Quebec.

The Supreme Court of Prince Edward Island (“PEI”) was recently faced with the question of what to do when a class action is proposed in a province without class proceedings legislation. PEI is the only province in Canada without a statute governing the procedure for class actions in the province. In King & Dawson v Government of PEI, 2019 PESC 27, the Honourable Justice Gregory A. Cann considered a motion for a proposed class action in PEI. The plaintiffs claimed that their equality rights under the Canadian Charter of Rights and Freedoms were violated by the defendant’s, the Government of PEI, policy of excluding people with disabilities caused by mental illness from qualification for benefits through the Disability Supports Program. The plaintiffs seek remedies under the Charter.

Justice Cann was satisfied that the plaintiffs fulfilled the requirements for certification and ordered the certification of the proposed class action against the Government of PEI. An absence of class proceeding legislation was not a bar to certification in this case.

In determining whether a class proceeding was appropriate, Justice Cann referred to the Supreme Court of Canada’s decision in Western Shopping Centres Inc v Dutton, 2001 SCC 46. In that case, the Supreme Court of Canada established four conditions necessary to a class action: (1) A class capable of clear definition; (2) Issues of fact or law common to all class members; (3) With regard to the common issues, success for one must mean success for all. Put another way, a class action should not be allowed to proceed if class members have conflicting interests in the outcome of common issues; (4) a suitable party to represent the class. The Supreme Court of Canada, in Hollick v Toronto (City), 2001 SCC 68, added an additional criteria, that the pleadings disclose a cause of action.

The nine provinces with class proceedings legislation have codified these five requirements in one form or another. In Ontario, these requirements appear in section 5(1) of the Class Proceedings Act, 1992, and require that the court shall certify a class proceeding if: (a) the pleadings or the notice of application disclose a cause of action; (b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant; (c) the claims or defences of the class members raise common issues; (d) a class proceeding would be the preferable procedure for the resolution of the common issues; and (e) there is a representative plaintiff or defendant who, (i) would fairly and adequately represent the interest of the class, (ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and (iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members. These criterion are commonly referred to as the certification test.

Interestingly, in addition to certifying the class proceeding, Justice Cann drafted an appendix which forms part of the decision in King & Dawson. At Appendix A, appended to the decision, Justice Cann borrows heavily from the language of the Class Proceedings Act of Newfoundland and Labrador including identifying the test for certification as follows: (1) The pleadings disclose a cause of action; (2) There is an identifiable class of two or more persons that would be represented by a representative party; (3) The claims of the class members raise a common issue, whether or not the common issue is the dominant issue; (4) A class proceeding would be the preferable procedure for the fair and efficient resolution of the dispute; (5) There is a representative party who, (a) would fairly and adequately represent the interests of the class, (b) has produced a plan for the class proceeding that sets out a workable method of advancing the class proceeding on behalf of the class and of notifying class members of the class proceeding, and (c) does not have, with respect to the common issues, an interest that is in conflict with the interests of other class members.

Through Appendix A, Justice Cann sets out procedural direction and other matters beyond certification. While noting that legislation is the best way to provide for class proceedings, at paragraph 16 of the decision, Justice Cann comments “in the absence of legislation, this decision is at least a start.”

This will be the first class action to go forward in PEI. Whether the province of PEI codifies Justice Cann’s Appendix A in the King & Dawson decision or enacts similar class proceedings legislation will be something to watch out for. Until then, Justice Cann’s Class Proceedings in Prince Edward Island included as Appendix A to his decision, will provide both a precedent and a roadmap for parties seeking to certify a class proceeding in PEI.

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Jacqueline M. Palef

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