In our first blog post in this series, we discussed the decision in Blackford-Hall v Simply Group which is the first case to interpret the new test for carriage motions contained in section 13.1(4) of the Class Proceedings Act (“CPA”). In this fourth blog post, we outline Justice Akbarali’s recent decision in Longair v Akumin Inc. et al. This is the second case to consider s. 13.1 of the CPA and provides further guidance on how the courts are likely to continue to interpret s. 13.1 going forward.
In Longair v Akumin Inc. et al., Justice Akbarali considered two rival proposed class actions: The Kennedy action and the Longair action. These were proposed securities class actions for misrepresentation in the secondary market under the Securities Act, negligent misrepresentation, negligence, and misrepresentation in offering memoranda under the Securities Act. Importantly, Justice Akbarali noted that the claim for negligence in the secondary market required leave to proceed under the Securities Act, and as such, in considering the relative likelihood of success of each proposed class action under s. 13.1(4)(b), she would also consider each proposed action’s likelihood of success on the motion for leave.
Justice Akbarali adopted Justice Perell’s reasoning in Blackford-Hall that the factors in s. 13.1(4) represent a significant and substantial change in the law of carriage motions, particularly the focus on efficiency—factor (a)—and the chances of success of the theory of the case at certification and at the common issues trial—factor (b). Section 13.1(4) directs the court to conduct a case-by-case analysis of efficiency, productivity, proportionality, and access to justice for the needs of class members as opposed to the wants of class counsel.
In ultimately granting carriage to the Longair action, Justice Akbarali noted the three fundamental differences between the two actions: (1) The Longair action proposed a longer class period; (2) pled a greater number and type of misrepresentations on the part of the defendants; and (3) named a greater number of defendants.
While in Blackford-Hall Justice Perell granted carriage to the action with a narrower theory of the case, here Justice Akbarali found that the Longair action’s broader theory was more appropriate. Justice Akbarali rejected the argument that the lengthier class period and the number of alleged misrepresentations would complicate the proceeding and increase cost and delay. Rather, in the circumstances of this case, she noted:
…it cannot be said that the additional aspects of the Longair claim against Akumin and the individual defendants, or the Longair theory of correction, are based on a flawed or toxic theory, nor that advancing that theory would unduly delay or complicate the proceeding. Rather, the broader theory advanced in Longair is more consistent with the goals of access to justice by capturing more viable claims. Moreover, because the Longair action subsumes the Kennedy action, it is likely to be at least as successful as the Kennedy action.
Justice Akbarali noted that the risk of increased complexity caused by the Longair action’s claims against the additional defendants would be outweighed by the risk that viable and proportionate claims held by class members would not be raised in the Kennedy action. As well, counsel in the Longair action had undertaken more work than counsel in the Kennedy action, in particular by consulting more potential experts and a private investigator. Overall, Justice Akbarali concluded that “the Longair action better advances the goals of the CPA, and in particular, behaviour modification, by its inclusion of more defendants, and access to justice, by its longer proposed class period, enabling it to capture claims that would be left out of the Kennedy action.”
Longair demonstrates the case-by-case analysis that the court is required to take when applying the factors contained in s. 13.1(4) of the CPA. In Blackford-Hall, that analysis led to a narrower class action being granted carriage, while in Longair the analysis led to a broader class action being granted carriage. When crafting pleadings, and in particular strategy and theory of the case, plaintiffs’ counsel are well-served to consider the lens of advancing the goals of the CPA—access to justice and behaviour modification—and the claims of class members in an efficient, cost-effective, and proportionate manner.