Webb v. 3584747 Canada Inc.

69 O.R. (3d) 502

[2004] O.J. No. 215

Docket No. C39473

Court of Appeal for Ontario

O'Connor A.C.J.O., Weiler and Goudge JJ.A.

January 29, 2004

Civil procedure -- Class proceedings -- Court should not appoint judge or judicial officer to conduct reference under s. 25(1)(b) of Class Proceedings Act without first complying with requirements of s. 14(1) of Courts of Justice Act by obtaining authorization of Chief Justice or her designate -- Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 25(1)(b) -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 14(1).

After an action for damages for wrongful dismissal was certified as a class proceeding, the defendant admitted that class members who were not dismissed for cause were entitled to reasonable notice or pay in lieu. The motion judge ordered that individual issues, predominantly the issue of what notice any individual employee was entitled to and whether or not the defendant provided the employee with that notice period, were to be determined by way of individual references under s. 25(1) (b) of the Class Proceedings Act. In the case of claims for $25,000 or less, a Deputy Judge of the Small Claims Court was to be appointed as the Referee to hear the claim, and in the case of claims for more than $25,000, a Judge, Master or Case Management Master of the Superior Court of Justice was to be appointed as the Referee. On appeal by the defendant, the Divisional Court set aside the parts of the motion judge's order appointing judges or judicial officers as Referees. The plaintiff appealed.

Held, the appeal should be dismissed.

The motion judge exercised the power reserved to the Chief Justice under s. 14(1) of the Courts of Justice Act when he appointed judicial officers to conduct [page503] references under s. 25(1)(b) of the Class Proceedings Act. Clearly, the "persons" referred to in s. 25(1)(b) may include judges or judicial officers. However, given that the appointment of a judge or judicial officer as a referee falls outside the responsibilities that have historically been exercised by judges or other judicial officers, and given the potentially enormous impact of such appointments upon the deployment of judicial resources, a court should not appoint a judge or judicial officer to conduct a reference under s. 25(1)(b) of the Class Proceedings Act without first complying with the requirements of s. 14(1) of the Courts of Justice Act by obtaining authorization of the Chief Justice or her designate. The requirement in the motion judge's order that the appointees consent to serve as referees did not amount to compliance with the requirements of s. 14(1).

APPEAL by the plaintiff from an order of the Divisional Court (Blair R.S.J., Lane and Epstein JJ.) setting aside part of an order of a motion judge.

Statutes referred to Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 25(1)(b) Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 14(1), 22 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 54.03

Michael McGowan, Gabrielle Pop-Lazic and David Deluzio, for appellant. John C. Field, Andrea F. Raso and Glenn P. Christie, for respondent.

[1] BY THE COURT: -- The action underlying this appeal involves former employees of Kmart Canada ("Kmart") whose employment was terminated when several Kmart stores were closed as a result of the Hudson's Bay Company acquiring Kmart's shares. The claimants allege that they were wrongfully dismissed. Brockenshire J. certified the action and, subsequently, the respondents agreed that class members who were not dismissed for cause were entitled to reasonable notice or pay in lieu thereof. There are approximately 4,000 members in the class across Canada, excluding British Columbia and Quebec.

[2] The motion judge also established a procedure for determining individual issues, predominantly the issue of what notice period any individual employee was entitled to and whether or not the respondent provided this notice period to the employee. The motion judge ordered that in Ontario the class members' claims would be determined by way of individual "references". At the request of counsel for the representative plaintiff and the class members, retired judges of ADR Chambers were appointed [page504] to conduct these references. That process proved to be expensive in relation to the size of the claims and the amount of the awards. Counsel for the representative plaintiff and the class members then brought a motion to change many aspects of the reference procedure and it is the order made on that motion that is the subject of this appeal.

[3] The relevant part of the motion judge's order is as follows:

1. This Court orders that where a class member residing in Ontario has a claim for $25,000 or less, exclusive of interest and costs, a Deputy Judge of the Ontario Small Claims Court shall be appointed as the Referee to hear the claim as follows

2. This Court orders that where a class member residing in Ontario has a claim for more than $25,000, exclusive of interest and costs, a Judge, Master, or Case Management Master of the Ontario Superior Court of Justice may be appointed as the Referee to hear the claim as follows.

[4] For both types of claims, the class member is to provide the trial co-ordinator for the appropriate court with specified documents, including a copy of the order and a "Request for Appointment of Referee". Further, the trial co-ordinator is directed to endeavour to obtain the consent of the deputy judge, judge, master, or case management master of the Superior Court named in the draft order and to provide it to the local registrar who, unless a problem arises which requires the involvement of the motion judge, is to issue the order appointing the referee. The motion judge assumed that the deputy judges of the Small Claims Court would receive their ordinary remuneration from the government.

[5] The respondent sought and obtained leave to appeal asking that the Divisional Court set aside the two paragraphs of the motion judge's order referred to in para. 3 above. The Divisional Court allowed the appeal. In its reasons, the Divisional Court concluded that the appointment of deputy judges of the Small Claims Court constituted an improper exercise of the power reserved to the Chief Justice of the Superior Court under s. 14(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43. The Divisional Court also struck the order appointing Superior Court judges, masters and case management masters for claims over $25,000 for the same reason. The Divisional Court remitted to the motion judge the matter of the appointment of persons to conduct references.

[6] The issue on this appeal is whether the Divisional Court erred when it held that the motion judge exercised the power [page505] reserved to the Chief Justice under s. 14(1) of the Courts of Justice Act when he appointed judicial officers to conduct references under s. 25(1)(b) of the Class Proceedings Act, 1992, S.O. 1992, c. 6.

[7] Section 14(1) of the Courts of Justice Act provides:

14(1) The Chief Justice of the Superior Court of Justice shall direct and supervise the sittings of the Superior Court of Justice and the assignment of its judicial duties. [See Note 1 at end of the document]

[8] The appellant's first submission is that the respondent failed to raise the s. 14(1) issue at first instance and ought not to be allowed to raise it now.

[9] We do not accept that submission. To begin, the respondent did not ask that the motion judge appoint deputy Small Claims Court judges as referees. The motion judge did it on his own initiative. In any event, on the appeal to the Divisional Court, the respondent did raise the s. 14(1) issue in its factum.

[10] Next, the appellant submits that the order of the motion judge appointed the deputy judges of the Small Claims Court as referees in their individual capacities and not in their capacities as judges and, as such, s. 14(1) has no application. We do not agree. The terms of the order refer to those judges as judges. Moreover, the order contemplates the use of court staff in an administrative capacity in the conduct of references and the motion judge, in his reasons, assumed that the deputy judges of the Small Claims Court would be paid by the government. Clearly, the motion judge intended that the deputy Small Claims Court judges conduct the references in their judicial capacity.

[11] The appellant then submits that the order does not violate s. 14(1) for two reasons. First, although the Class Proceedings Act was enacted relatively recently, the appointment of referees by judges without the intervention of the Chief Justice is a longstanding element of our judicial system. For example, rule 54.03(1) [Rules of Civil Procedure, R.R.O. 1990, Reg. 194] authorizes a reference to a judge, with that judge's consent, to a registrar or "other officer of the court", or to a person agreed on by the parties. [page506]

[12] We do not think that the fact that references may be ordered in other contexts without case-by-case compliance with s. 14(1) of the Courts of Justice Act answers the concern about compliance with that section for appointments under the Class Proceedings Act. Appointments under rule 54.03 have been an accepted part of the judicial landscape in Ontario for generations and the use of judicial resources for that purpose is done either with the express or implied approval of the Chief Justice. The same cannot be said of appointments of referees under s. 25(1)(b) of the Class Proceedings Act.

[13] The Class Proceedings Act was first enacted in 1992. Section 25(1)(b) creates a process for establishing references under the Act. Given the very nature of class proceedings, the potential number of references that might be ordered under s. 25(1)(b) is enormous. Significantly, the legislature has not limited the scope of those who may be appointed to conduct references to judges or other judicial officers. Instead, the legislature has specified that the court may appoint "one or more persons".

[14] Clearly, the "persons" referred to [in] s. 25(1)(b) may include judges or judicial officers and, subject to what we say below, it would be open to a court acting under s. 25(1)(b) to appoint such a person. However, given that such an appointment falls outside the responsibilities that have historically been exercised by judges or other judicial officers, and given the potentially enormous impact of such appointments upon the deployment of judicial resources, we are of the view that a court should not appoint a judge or judicial officer to conduct a reference under s. 25(1)(b) of the Class Proceedings Act without first complying with the requirements of s. 14(1) of the Courts of Justice Act by obtaining authorization of the Chief Justice or her designate.

[15] The appellant's second argument is that the requirement in the motion judge's order that the appointees consent to serve as referees amounts to compliance with the requirements of s. 14(1). We do not agree. Section 14(1) confers on the Chief Justice the responsibility of directing and supervising the sittings of Superior Courts in assigning judicial duties. The consent of individual judicial officers to their own appointment is not an adequate substitute for the role played by the Chief Justice under s. 14(1).

[16] The functional realities of the administration of justice require that the Chief Justice or her designate, not individual judges, have the overarching responsibility and control of judicial assignments. To hold otherwise could seriously impair the ability of the Chief Justice to coordinate and prioritize the allocation of [page507] already scarce resources. Absent a direction from the Chief Justice, the consent of individual judicial officers to serve in the manner specified in the order does not satisfy the requirements of s. 14(1).

[17] There is no evidence in this record that the Chief Justice assigned the judges, or other judicial officers named in the motion judge's order, to conduct the references contemplated by that order. Accordingly, we are satisfied that the Divisional Court was correct in striking the two impugned paragraphs from the order and remitting the matter of appointments of referees to the motion judge.

[18] We are sympathetic to the efforts of the motion judge to bring about an expeditious resolution of these claims. If the motion judge had appointed Small Claims Court judges as individuals in their private capacity to be paid in accordance with the direction of the referee rather than by the government, and without the involvement of the court's administrative staff, we do not think that s. 14(1) of the Courts of Justice Act would have been contravened. Indeed, we hope that counsel will be able to agree upon an approach to appointing referees that will result in the individual claims being dealt with in an expeditious and cost-effective manner.

[19] Neither the motion judge nor the Divisional Court awarded costs. We award costs of this appeal to the respondent and fix those costs in the amount of $10,000, inclusive of disbursements and GST, provided that such costs are not payable until the proceedings underlying this appeal are finally disposed of.

Appeal dismissed.

Notes

1. Pursuant to s. 22 of the Courts of Justice Act, the Small Claims Court is continued as a branch of the Superior Court of Justice and the Chief Justice of the Superior Court of Justice is named as the president of the Small Claims Court.