On December 2, 2008, in McCutcheon v. The Cash Store Inc., the Ontario Superior Court of Justice approved a settlement of a class proceeding on behalf of all persons who had obtained and repaid a payday loan from any Cash Store or Instaloans location in Canada, other than British Columbia and Alberta, as of the date of the settlement approval (the “Ontario judgment”). A motion was then brought by the defendants in the Manitoba class action, Meeking v. The Cash Store Inc. et. al., 2012 MBQB 58, to recognise and enforce the Ontario judgment. Justice Hannsen held that certain provisions were unenforceable due to deficiencies in the Notice of the Ontario judgment (the “Notice”).
The Notice had a one line bold heading across the top of the page that stated:
NOTICE OF SETTLEMENT OF PAYDAY LOAN CLASS ACTION AGAINST THE CASH STORE INC./RENTCASH INC.
Important to Justice Hannsen's decision was the fact that the Notice's heading did not mention Instaloans, although the body of the Notice made it clear that the settlement was to apply to loans borrowed from Instaloans. Without the inclusion of Instaloans in the heading of the Notice, a customer of Instaloans could easily conclude that the Notice did not concern them and not read it.
Despite the fact that Instaloans was not identified in the heading of the Notice, more Instaloans customers than Cash Store customers made claims and received settlement funds under the Ontario judgment. Nonetheless, Justice Hannsen held that the actual take-up rate was immaterial to the legal sufficiency of the Notice. “The test to be applied to the notice is an objective one. The way in which the notice was written was likely to confuse its intended recipients and could have led them to conclude that it did not concern them”.
As a result, the Notice was found inadequate with respect to the Manitoba class members who had obtained payday loans from Instaloans.
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