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Court of Appeal Confirms Class Members Have No Right to Appeal Approval of Settlement

4 minute read

In Bancroft-Snell v Visa Canada Corporation,1 2019 ONCA 822, Chief Justice Strathy writing on behalf of a five judge panel of the Ontario Court of Appeal considered whether class members have standing to appeal a settlement approval order, and specifically whether the decision in Dabbs v Sun Life Assurance Company of Canada (1998),41 OR (3d) 97 (CA), which held that a class member has no right to appeal a settlement approval order remains good law.

In this appeal, two class members, Wal-Mart and Home Depot, appealed the order of Justice Perell approving a partial settlement of the class action. At the settlement hearing, Bancroft-Snell v Visa Canada Corporation,2018 ONSC 5166, the two class members objected to the settlement. However, Perell J. did not give effect to their objections.

In confirming that the decision in Dabbs has not been overtaken by other decisions, the Court of Appeal noted that “Dabbs remains good law. It has stood for more than 20 years and has been consistently applied in Ontario.”4 The Court confirmed the appeal rights in class proceedings as follows:

  • The effect of s. 30 of the CPA is that the Divisional Court and the Court of Appeal have divided appellate jurisdiction with respect to appeals of various types of orders and judgments in class proceedings. Parties have those appeal rights that are expressly designated by s. 30. Appeals, both as of right and with leave, must be taken to the court stipulated in s. 30.
  • Where s. 30 does not specifically address the appeal route for a particular type of order or judgment, s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43 will govern whether an appeal lies to this court or to Divisional Court. Accordingly, parties may appeal final orders of those matters not specifically mentioned in s. 30 of the CPA to the Court of Appeal.
  • Class members who are not representative parties have no direct right of appeal pursuant to s. 30 of the CPA. If a representative plaintiff does not appeal pursuant to s. 30(3) or abandons an appeal pursuant to s. 30(3), class members have a right to seek leave to appeal pursuant to s. 30(5). That right exists only in respect of those matters specified in s. 30(3), those being judgments on common issues or determinations of aggregate damages.5

The Court concluded that class members should not be entitled to appeal a settlement order where the representative plaintiff declines to do so.6 The Court was concerned that doing so would “introduce uncertainty into the negotiation and approval of class action settlements, undermine the authority of the representative plaintiff and class counsel, and impede settlement.”7

Ultimately, the Court of Appeal reaffirmed the limited rights of a class member in a class proceeding noting:

While class members have a sui generis status, they do not possess the same degree of autonomy as parties to the litigation and do not enjoy the rights or bear the responsibilities of parties. Class members have a right to notice of a certified class proceeding, the right to opt out of the class, and the right to object to settlement agreements. However, class members who do not choose to opt out of the class proceeding, are bound by the outcome. A settlement of a class proceeding that is approved by the court binds all class members.8

If a class member has concerns about a settlement, then the class member may exercise its right to object to the settlement at the settlement approval hearing. It will be the discretion of the motion judge to determine whether to give effect to their objections.

[1] Bancroft-Snell v Visa Canada Corporation, 2019 ONCA 822 [Bancroft-Snell].
[2] Dabbs v Sun Life Assurance Company of Canada (1998)
[3] Bancroft-Snell v Visa Canada Corporation, 2018 ONSC 5166.
[4] Bancroft-Snell, supra at para 11.
[5] Ibid at para 16.
[6] Ibid at para 22.
[7] Ibid.
[8] Ibid at para 3.

Jacqueline M. Palef

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