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Jurisdictional Decisions Shape Class Actions in Q4 2024

By: Steve J. Tenai and Kate Findlay

The last quarter of 2024 saw a number of class action decisions addressing jurisdictional issues, including:

Decisions this past quarter also set a high standard for reconsidering an unsuccessful certification decision; cautioned about pre-discovery summary judgment motions on factual issues; and offered guidance on what may qualify as a schedule for purposes of avoiding a dismissal for delay. As in previous quarters, Ontario courts also continue to part ways from those in British Columbia on the court’s jurisdiction to hear causes of action under other provinces’ privacy statutes.

Pan-Canadian Government Class Constitutional

Can multiple Canadian governments join in a single class action, in one province, before one province’s superior court, without unconstitutionally sacrificing their autonomy or sovereignty? The Supreme Court of Canada said yes in Sanis Health Inc. v. British Columbia, 2024 SCC 40, holding section 11 of British Columbia’s Opioid Damages and Health Care Costs Recovery Act (“ORA”) constitutional, essentially because its purpose and effects were procedural in nature and other Canadian governments had the choice to allow their claims to be addressed in the British Columbia proceeding while their claims would still be determined in accordance with their respective substantive law.

In doing so, the Supreme Court affirmed that commonality of issues between a resident representative plaintiff and non-resident class members suffices to establish a real and substantial connection for adjudicative jurisdiction over the class (this having served the basis for a provincial court to preside over national class actions). Section 11 of the ORA was seen as an example of the important role that national class actions play in matters which span the country, by providing a mechanism to help multiple governments co-operate while working toward the same goal.

ORA

British Columbia’s government commenced a proposed class action against various manufacturers, marketers and distributors of opioid products, alleging various common law torts and breaches of the Competition Act for allegedly contributing to opioid-related addictions, illnesses and deaths. British Columbia sought to certify a class comprised of all federal, provincial and territorial governments and agencies that paid health-care, pharmaceutical and treatment costs related to opioids. A few months after the commencement of that proceeding, the British Columbia legislature passed ORA. ORA created a direct, statutory cause of action, introduced new evidentiary rules and other procedural mechanisms in the litigation, and authorized British Columbia to bring an action on behalf of the class named in the proceeding while permitting a class member to opt out as provided under that province’s Class Proceedings Act.

Constitutional Challenge

Several of the defendants applied for an order striking out the provision in ORA that authorizes British Columbia to bring an action on behalf of other Canadian governments challenging its constitutionality. Specifically, the defendants argued that section 11 of ORA did not respect constitutional territorial limits on provincial legislative competence and further undermined the sovereignty of other governments.

Legislative Competence

The Supreme Court of Canada (the “Court”) approached the issue of legislative competence by first considering section 11’s purpose and effect to characterize the provision within the constitution’s division of powers. The Court found the provision’s purpose was to provide a procedural mechanism through which the broader provisions in the ORA could apply to B.C.’s existing proposed class action, and not to create substantive rights for the B.C. Crown to engage in litigation under the Class Proceedings Act it could not otherwise do.

Likewise, section 11’s effect was to procedural and not substantive rights of other governments. The Court noted that while participating in a class action involves some sacrifice of litigation autonomy, this does not mean that section 11 is a substantive provision or that its effects are an unconstitutional sacrifice of substantive rights. A Crown’s choice to participate is an exercise of litigation autonomy. A class member, including a Crown, gains the benefits of a class action in exchange for the burdens, including sacrificing other elements of autonomy. But, even then, the Court observed that many aspects of litigation autonomy remain available through the procedural protections offered to non-representative plaintiffs within class proceedings (e.g., leave to participate as an intervener, application to replace a representative plaintiff, the ability to object to a proposed settlement). The Court added that the substantive rights of any foreign Crown who chooses to participate in the proceeding will still be determined in accordance with their own laws, which remain subject to change by their legislature, and its successor.

As section 11 of the ORA was procedural in its purpose and its effects, the Court held it is properly classified under the authority of each province to legislate in relation to the administration of justice in the province under subsection 92(14) of the Constitution Act, 1867.

Legislative Sovereignty

In considering whether ORA’s section 11 respects the territorial limits under section 92 of the Constitution Act, 1867, the Court further addressed whether section 11 has a meaningful connection to British Columbia, as the enacting province, while respecting the legislative sovereignty of other Canadian legislatures.

The defendants argued that there was no meaningful connection as section 11 enables a class action where the substantive claims of foreign Crowns, for alleged wrongs occurring in foreign provinces and territories, according to foreign law, will be prosecuted by the government of British Columbia and decided by a British Columbia court. The Supreme Court rejected this argument by noting that courts have long endorsed the idea that the common issues shared between the non-resident class members and the resident representative plaintiff suffice to establish a real and substantial connection with the jurisdiction. It added that accepting the defendants’ argument would “contradict decades of established jurisprudence affirming that superior courts can preside over class actions that are national in scope.”

Lastly, on the question of whether ORA’s section 11 respects the legislative sovereignty of other Canadian governments, the Court noted the distinction between legislative and executive authority. The legislature of one level of government cannot transfer its authority to legislate to another government. But no such rule applies to the executive delegation of litigation conduct, nor does the potential for overlap and conflict between different legislatures’ ORA-type statutes and the litigation they authorize impinge legislative sovereignty. Multi-jurisdictional legislative authority is normal in a federation, the Supreme Court observed; so long as it occurs within the proper legislative authority of the enacting governments, it is not problematic. Multi-Crown participation in a national class action, where each is authorized by its own law, represents co-operation between different governments and comity between the courts. Class action goals are met where governments co-operate with one another to have their claims litigated efficiently in one action before one province’s superior court, whose proceedings and judgment will be respected through the principles of comity in other courts. Hence, section 11 of the ORA serves as an example of the important role that national class actions play in matters which span the country, by providing a mechanism to help multiple governments co-operate while working toward the same goal.

Anti-Competitive Agreements Made Outside of Canada

Canadian courts have jurisdiction to adjudicate civil claims for breaches of the Competition Act, even where the elements to make out the breach all occurred outside of Canada, provided the anti-competitive effects extend to Canada. That was the outcome of the Federal Court of Canada’s decision in Pass Herald Ltd. v. Google LLC et al., 2024 FC 1623. Subject to appeals, the decision affirms civil claims can be brought in Canada for harms realized in Canada from anti-competitive acts under Canada’s Competition Act, regardless of where those acts occur.

A proposed class action raising claims of breaches of various provisions of the Canadian Competition Act (section 36, 45 and 47) against various Google companies and Meta/Facebook concerning an agreement made between the defendants outside of Canada was the subject of a motion to stay or dismiss those claims for lack of subject matter jurisdiction in Pass Herald Ltd. v. Google LLC et al., 2024 FC 1623.

Alleged Anti-Competitive Conduct

The proposed class action before the Federal Court of Canada was brought on behalf of publishers who used a digital display advertising product or service (“Google Tools” supplied by Google) or who sold an impression for display on a website. The plaintiff alleged that Google and Facebook entered into an arrangement pursuant to which Facebook agreed, among other things, to abandon plans that would compete with certain Google Tools in exchange for certain advantages for Facebook’s success in placing impressions.

Motions to Stay

Google and Facebook each brought motions which sought to stay or dismiss claims against the Irish-based defendants for lack of personal jurisdiction and against all of the defendants for lack of subject matter jurisdiction and, further, to strike out the underlying pleading for failing to disclose a reasonable cause of action.

Alternative Relief Triggering Attornment

The motion judge, the Chief Justice of the Federal Court, found both Google Ireland and Facebook Ireland to have attorned to the Canadian court when they joined as moving parties to Notices of Motion seeking both jurisdiction relief and, alternatively, relief going to the merits. The failure of Google Ireland and Facebook Ireland to first request relief from the court from being found to attorn proved fatal to the Irish defendants’ arguments of lack of in personam jurisdiction.

Subject Matter Jurisdiction Over Agreements Made Outside Canada

The defendants further contended that the Canadian court did not have jurisdiction to address claims concerning an alleged anti-competitive agreement made outside of Canada. They first maintained that subsection 6(2) of the Criminal Code limits the territorial reach of criminal offences to offences committed in Canada. Second, they contended that there could be no “real and substantial link” between Canada and offences that arise on entering an agreement made outside of Canada (even if it has anti-competitive effects in Canada). Third, the defendants asserted that the impugned sections of the Competition Act do not apply to conspiracies, agreements or arrangements entered into outside of Canada and, hence, as a statutory court, the Federal Court has no subject matter jurisdiction over alleged conspiracies, agreements or arrangements made outside of Canada.

In terms of subsection 6(2) of the Criminal Code, the Chief Justice drew on prior jurisprudence in noting that while that provision provides that no person shall be convicted in Canada for an offence committed outside of Canada, it should not be read as stating that conduct occurring outside Canada cannot constitute a criminal offence in Canada, nor that it limits the availability of any civil remedy for that conduct.

As to a “real and substantial link” between the alleged offences and Canada, the Chief Justice held that the test is flexible and permits a court to take into account all relevant facts that take place in Canada, including where the “fruits of the impugned conduct were obtained, and where the harm occurred.” It is not necessary for those relevant facts to be confined to the constituent elements of the offence. Anti-competitive effects in Canada can provide a basis for finding a real and substantial link between Canada and an anti-competitive agreement made outside Canada.

Last, as the class proceeding sought damages pursuant to s. 36(1) of the Competition Act for alleged breaches of that legislation, and s. 36(3) confirms the Federal Court as a court of competent jurisdiction for any action brought under s. 36(1), the Chief Justice rejected the defendants’ argument that the court lacked jurisdiction. The Chief Justice did not interpret sections 45 or 47 of the Competition Act to exclude agreements or arrangements entirely outside Canada from their reach. He noted that neither section demonstrated an intention by Parliament to confine those provisions to only domestic agreements or arrangements and underscored that words should be interpreted in their grammatical and ordinary sense harmoniously with the Act and its objects. A conspiracy to lessen competition is the antithesis of the Act’s objective.

Presumptive Jurisdiction Rebutted

Merely being incorporated under Canadian law and aspects of your business operations occurring in Ontario is insufficient for Ontario courts to adjudicate acts outside of Canada on behalf of a non-resident class, according to Matiko John v. Barrick Gold Corporation, 2024 ONSC 6240. The decision is a helpful precedent to rebut jurisdiction for certain ESG claims brought in Canada for harms to a putative class of persons outside of Canada. More of a connection to Ontario is needed than merely business activities taking place in Ontario that are entirely unrelated to the impugned conduct. 

Violence at a mining site, owned by a Tanzanian company whose majority shareholder was Barrick Gold (a B.C. corporation whose head office is in Vancouver), was the subject matter of a proposed Ontario class action on behalf of persons and their families injured or killed by members of the Tanzanian Police Force (“TPF”), contracted to provide additional security services by an affiliate Tanzanian company. Although no Barrick employee or officer directed the actions of the TPF, the plaintiffs alleged that Barrick was answerable for injuries that occur on the mine property and had undertaken to be responsible for human rights at its mines worldwide. Barrick moved to have the action dismissed for lack of jurisdiction.

Although Barrick has a relatively small physical presence in Ontario, and hence carried on business there, a presumptive factor for a real and substantial connection, that presumption was rebutted as Barrick demonstrated there was no relation between the subject matter of the litigation (violence at the Tanzanian mine causing injuries and death) and Barrick’s activities in Ontario (finance, legal and communications). The court held that the presence in Ontario of communications personnel and the emanation of regulatory filings and other communications about Barrick’s global policies of sustainability and human rights do not bring actual management, supervision and security measures at the Tanzanian mine into Ontario. To find otherwise would result in Ontario becoming an international hosting court for any number of international disputes that have no real or substantial connection to Ontario.

No Second Try at Class Certification

The Class Proceedings Act (“CPA”) and the Rules of Civil Procedure’s permissive approach to amendments do not support the reconsideration of an unsuccessful certification decision from which no appeal has been sought. This was the outcome in David v. Loblaw, 2024 ONSC 5818, in which the plaintiffs moved to have the court reconsider its denial of certification against Maple Leaf Foods (“MLF”). The court commented that the CPA “does not provide an open platform for parties to try certification and then try again.” Nor can simply issuing an amended pleading allow for a certification decision to be brought back where certification has been denied for lack of a cause of action. On the facts, the court found that none of the new evidence was particularly new, and the amendment was not particularly fresh.

Certification Motion

Following public disclosure of the federal Competition Bureau’s investigation into a price-fixing conspiracy involving packaged bread, a class action was commenced against various defendants, including MLF, which at the applicable time did not produce or sell bread but was simply the majority shareholder of Canada Bread. The action was certified against certain defendants (retailers and producers of bread, including Canada Bread) but dismissed against the parent companies of those alleged co-conspirators like MLF (with the exception of George Weston) for lack of a viable cause of action, based upon the court’s conclusion that there was no reliable evidence of the allegation that MLF was a full participant in the price-fixing conspiracy. No appeal was filed relative to the MLF ruling.

Motion to Reconsider

Approximately a year and a half after the certification decision, the plaintiffs filed a motion to reconsider the denial of certification against MLF or, alternatively, leave to issue a new statement of claim against MLF, delivering a proposed Fourth Fresh as Amended Statement of Claim. The Notice of Motion referred to “new information” that supported the material facts pleaded in support of the original and unrevised cause of action in the amended claim. That new information consisted of an Agreed Statement of Facts (“ASF”) submitted in support of a guilty plea by Canada Bread in criminal proceedings, a second Information to Obtain (“Second ITO”) and MLF’s annual reports for 2015-2021.

New Information

MLF’s ASF was viewed as simply evidence of the plea bargain struck by Canada Bread concerning its own guilt and prepared in the context of a case in which MLF was not a party. It did not constitute evidence against a third party, MLF. Canada Bread’s accusation of a third party as a co-conspirator was information viewed by the Supreme Court of Canada as “inherently unreliable.”

The Second ITO included an allegation that the CEO of MLF, Michael McCain, had knowledge of the matters under investigation and reproduced an email describing a meeting between Mr. McCain and another person with another company in which the pricing of bread was discussed. The Second ITO was available two years before the certification hearing and was unsuccessfully sought to be introduced during the hearing along with MLF’s annual report of December 2020. That annual report referenced that MLF had been named in the class action and was the subject of a parallel price-fixing investigation by the Competition Bureau. The certification judge found these documents were sought to be introduced too late (the last day of the hearing) and did not address a new issue. The additional annual reports sought to be introduced as new information were all published prior to the certification motion and were likewise available to the plaintiffs to have included within their certification materials.

Amendment

Following service of the plaintiffs’ motion record and MLF’s responding materials, the plaintiffs served a Fifth Fresh as Amended Statement of Claim, including new particulars to the same asserted cause of action and a series of emails what were in Canada Bread’s files from 2007 to 2010.

Those emails showed persons from Canada Bread and MLF corresponding with other defendants. The emails had previously been produced in parallel Quebec litigations and provided to the plaintiffs by Canada Bread’s counsel three months prior to the date agreed to by the parties for MLF’s delivery of its responding material. MLF is not a party to the Quebec action and was only made aware of the emails when the plaintiffs delivered their supplementary motion record in reply to MLF’s evidence. MLF moved to have the evidence struck out.

Flexibility vs. Finality

In support of its motion, the plaintiffs raised that section 8(3) of the CPA allows certification orders to be amended on a motion by any party, and that section 12 allows the court to “make any order it considers appropriate respecting the conduct of a proceeding” under the CPA. It was further submitted that class action litigation generally, and certification in particular, is a fluid, flexible and interlocutory process and likewise that the Rules of Civil Procedure establish a liberal regime for amending pleadings.

Although the judge accepted that the CPA creates a generally flexible litigation environment, allowing a case management judge considerable leeway in fashioning workable procedures, appellate jurisprudence does not support revisiting an already decided matter in these circumstances. Finality is a compelling consideration in judicial proceedings – including certification motions – such that the discretion a case management judge has under section 12 of the CPA still must abide with other fundamental aspects of judicial process.

Hence, the court noted that “The CPA simply does not provide an open platform for parties to try certification and then try again.” Certification is not a fluid and flexible process, the court commented. “It cannot be changed, or periodically revisited, as an ordinary part of the case management powers attributed to the court in section 12 of the CPA.” The court described section 8 of the CPA to address clerical errors or accidental slips or omissions, analogous to how Rule 59.06 of the Rules of Civil Procedure addressed the amendment, setting aside or variance of an order.

New Evidence

Attempts to have certification decisions reconsidered based on “new” evidence must meet the strict test laid out by the Supreme Court of Canada previously, which requires a court determine whether, first, the new evidence, if presented at first instance would probably have changed the result and, second, whether the evidence could have been obtained before the hearing of first instance. In other words, as noted by the Court, “the new evidence must have been undiscoverable and transformative.”

As noted above, the Second ITO and annual reports were available to the plaintiffs before the certification motion. The emails were further noted as being submitted as evidence without anyone from Canada Bread attesting the emails were authentic, explaining what the emails actually meant or that the information sought to be introduced was true. Their contents did not evidence, on their face, a horizontal agreement between competitors to fix prices. As such, the test for new evidence was found not to be met.

Amendment to Plead New Particular for Same Cause of Action

In terms of the proposed amendment, the motion judge referenced the Ontario Court of Appeal’s previous holding that a finding of no cause of action under section 5(1)(a) of the CPA is a final order and cannot be revisited as the action progresses. Other decisions have similarly barred attempts to revisit dismissals of certification rulings for failing to disclose a cause of action unsuccessfully appealed. Hence, the court held that a matter cannot be brought back for reconsideration by simply issuing an amended pleading. In this instance, the amended pleading against MLF raised the same cause of action as had been raised at certification, without adding anything substantively new.

Timing Summary Judgment Motions

Darmar Farms Inc. v. Syngenta Canada Inc. et al., 2024 ONSC 5968 serves as a caution to moving for summary judgment on an issue of mixed fact and law prior to discovery. It underscores the risk that the summary judgment motion may be found to be premature and unfair because the respondent has not had the benefit of discovery, notwithstanding robust affidavit evidence and cross-examinations. 

The defendants in Darmar Farms Inc. v. Syngenta Canada Inc. et al., 2024 ONSC 5968, a certified class action, moved for summary judgment on the common issue of whether they owed the class a duty of care prior to documentary or oral discovery. In dismissing the defendants’ motion, the motion judge noted a concern that unfairness may result if a decision were made before a more fulsome evidentiary record was available. In doing so, the motion judge viewed cross-examinations as narrower than examinations for discovery and was not prepared to limit the plaintiff’s ability to test the defendants’ assertion that they had already produced any documents relevant to the issue. The motion judge further dismissed the motion on the grounds that there was a genuine issue for trial about whether a duty of care may arise in what was a novel cause of action for premature commercialization.

Premature Commercialization Claim

The defendants’ summary judgment was within the context of a certified class action for the recovery of economic losses allegedly sustained by corn producers from what is claimed to have been the premature commercialization of genetically modified corn seed (Agrisure seed). The representative plaintiff alleges that the defendants undertook to Canadian corn producers that they would not release Agrisure into the North American market before receiving import approval from China. Agrisure was not approved for import until December 2014, and China had rejected shipments of corn from North America in 2013 and 2014 after it discovered some shipments from the United States contained Agrisure. Consequently, it is alleged that a glut of domestic corn supply depressed the price corn producers could charge for even its non-Agrisure corn, giving rise to an economic loss.

Summary Judgment Motion

The defendants moved for summary judgment dismissing the action, focusing on the first certified common issue of whether the defendants owed the class a duty of care. The defendants raised that the plaintiff had failed to lead any evidence of a representation or undertaking by the defendants to Canadian corn growers that they would withhold sale of Agrisure in Canada until Chinese import approval was obtained or that Canadian corn growers relied on that undertaking or representation.

The parties filed fact and expert affidavit evidence and there were extensive cross-examinations. The expert evidence was uniform that the corn market is interconnected and interdependent. They further agreed that the actions of participants in the market can economically affect other market participants. They differed on whether it was possible to measure those economic effects.

Among the evidence filed by the plaintiffs was the affidavit of Gary Martin, the president of the North American Export Grain Association, (“NAEGA”) an industry trade associate, in which Mr. Martin stated, among other things, that on behalf of NAEGA, he had warned Syngenta of its “ill-conceived plan” to provide seeds containing Agrisure for planting without prior importation approval from key export markets like China.

Prematurity

The plaintiff submitted that the defendants’ motion for summary judgment on the question of whether a duty of care was owed was premature prior to documentary and oral discovery.

The motion judge viewed cross-examinations as no substitute for examinations for discovery or document production. Of note was the fact that the defendants’ affiant for cross-examination was not with Syngenta Canada until well after the events giving rise to the claim. Furthermore, the defendants’ assurance that they had produced any documents that are relevant to the motion could not displace the plaintiff’s entitlement to test that assertion through the documentary disclosure process under the Rules of Civil Procedure. Hence, in dismissing the defendants’ motion, the motion judge expressed concern that a decision at this stage based on decontextualized affidavit and transcript evidence and before a fuller evidentiary record is available after discovery may result in unfairness.

The lack of evidence by the plaintiff of any undertaking given, or reliance upon such an undertaking not to commercialize Agrisure seeds before Chinese importation approval, was found not to be fatal. The claim for premature commercialization was novel and its contours had not yet been explored, particularly with the benefit of a more complete evidentiary record. The Statement of Claim was found to set out a number of other factors that may well support the finding of a duty of care.

What Qualifies as a ‘Timetable’ for Dismissal for Delay?

McRae-Yu v. Profitly Incorporated et. al., 2024 ONSC 5615 supports taking a contextual approach when considering what preliminary motions may constitute steps advancing certification to resist a motion to dismiss a class proceeding for delay. In this decision, while not a necessary step towards certification, an agreed-to timetable for a preliminary motion (in this case a Mareva injunction) was found to be sufficient to avoid a dismissal for delay because the evidence from the injunction motion would have relevance to the some basis fact requirement for certification. 

Following the commencement of a class proceeding in McRae-Yu v. Profitly Incorporated et. al., 2024 ONSC 5615, much of the year was devoted to efforts to set aside a Mareva injunction obtained by the plaintiff prior to commencement of the proposed class proceeding. However, a motion record for the certification motion was not served by the plaintiff within the year. This gave rise to a motion to dismiss for delay pursuant to section 29.1 of the Class Proceedings Act. The defendant argued that an injunction was not a necessary step towards certification and therefore there were no “timetables for completion of one or more steps required to advance the proceeding” to save the proceeding from being dismissed for delay.

The motion judge observed that context matters and, although an injunction is not a necessary step towards certification, the steps taken toward obtaining and resisting the injunction were not a “mere side show” but previewed evidence on the issues of misrepresentation and fraud likely central to questions relating to certification. The evidence used on the injunction motion was held to have some relevance to the certification motion and the some basis in fact requirement, and that evidence could potentially reduce the need for cross-examination on the certification motion. As such, the motion judge held that while not every preliminary motion can be regarded as a step necessary to advance the class proceeding, the timetables established for purposes of the injunction motion were steps that advanced the proceeding in this case.

Horizontal Stare Decisis Applied to Privacy Class Actions

In our prior quarterly bulletins, we have outlined the divergence between Ontario and British Columbia courts on whether claims under other province’s privacy statutes can be adjudicated by a court in another province. Last quarter, we noted that the British Columbia Court of Appeal held that British Columbia courts may adjudicate disputes arising under Manitoba and Newfoundland and Labrador’s respective privacy statutes. Subsequently, in Donegani v. Facebook, Inc., 2024 ONSC 7153, the motion judge felt compelled by horizontal stare decisis to follow Ontario jurisprudence preceding the B.C. court’s decision, which jurisprudence has held Ontario courts do not have jurisdiction with respect to the claims for breaches of the privacy statutes of British Columbia, Manitoba and Newfoundland and Labrador, which have terms providing its courts with exclusive jurisdiction. The motion judge commented that it is for an appellate court in Ontario to adopt a different approach to the jurisdictional question.

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The Class Actions Group at Aird & Berlis LLP has broad class action defence experience in securities law, financial services, mining, oil and gas, consumer products, product liability, pharmaceutical, natural health products, telecommunications, condominiums, competition, copyright, privacy and insurance defence. Please contact the authors or a member of the group for further information.

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