Bancroft-Snell et al. v. Visa Canada Corporation et al.
[Indexed as: Bancroft-Snell v. Visa Canada Corp.]
Ontario Reports
Court of Appeal for Ontario
Strathy C.J.O., MacPherson, Sharpe, Tulloch and Benotto JJ.A.
October 17, 2019
148 O.R. (3d) 139 | 2019 ONCA 822
Case Summary
Civil procedure — Class proceedings — Appeal — Class member who is not representative plaintiff having no direct right of appeal from settlement approval order in class proceedings — Class member having no right to seek leave to appeal settlement approval order under s. 30(5) of Class Proceedings Act as settlement approval order is not "judgment on common issue" or "determination of aggregate damages" — Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 30(5).
Two class members, neither of which was a representative plaintiff, appealed an order approving a partial settlement of a certified class action. The moving parties moved to quash the appeal on the ground that the class members had no standing to appeal.
Held, the motion should be granted; the appeal should be dismissed.
Dabbs v. Sun Life Assurance Company of Canada is still good law in Ontario and should not be overruled. Class members who are not representative plaintiffs have no direct right of appeal from an order approving a settlement. Class members' rights of appeal in class proceedings are found in the Class Proceedings Act, 1992 ("CPA"), and are not supplemented by the general appeal rights in s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Moreover, a settlement approval is neither a "judgment on common issues" nor a determination of aggregate damages, so a class member who is not a representative plaintiff has no right to seek leave to appeal the settlement approval order under s. 30(5) of the CPA. Finally, there are sound policy reasons why class members should not be permitted to appeal a settlement approval order where the representative plaintiff declines to do so. To permit a class member to appeal a settlement proposed by the representative plaintiff, recommended by class counsel, and approved by the class proceedings judge, 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.
Counsel
Reidar Mogerman and Katie Duke, for Jonathan Bancroft-Snell and 1739793 Ontario Inc., moving parties (M50130), responding parties (M49808 and M50041).
Robert E. Kwinter, for Visa Canada Corporation, moving party (M50130), responding party (M49808 and M50041).
Jeffrey B. Simpson and James B. Musgrove, for Mastercard International Incorporated, moving party (M50130), responding party (M49808 and M50041).
Katherine L. Kay, for Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank, moving parties (M50130), responding parties (M49808 and M50041) (no submissions made).
Sean Griffin and Antoine Brylowski, for National Bank of Canada Inc., moving party (M50130), responding party (M49808 & M50041).
James C. Orr and Kyle R. Taylor, for Home Depot of Canada Inc., moving party (M49808), responding party (M50130).
Edward J. Babin, Cynthia L. Spry and Michael Bookman, for Wal-Mart Canada Corp., moving party (M50041), responding party (M50130).
Judgment
The judgment of the court was delivered by
[1] Introduction
This appeal focuses on the procedural rights of class members in certified class proceedings, specifically the right to challenge settlement approval orders by way of appeal under the Class Proceedings Act, 1992, S.O. 1992, c. 6 ("CPA").
[2] Nature of Class Proceedings
The nature of a class proceeding and the goals of the CPA impact the procedural rights afforded to class members. Class actions permit the efficient resolution of disputes in a manner that is fair to all parties and promote access to justice, judicial economy and behaviour modification. In part, efficiency is achieved through the appointment of one or more class members as representative plaintiffs, to conduct the litigation in the best interests of all class members.
[3] Status of Class Members
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.
[4] Role of Representative Plaintiff
In contrast to class members who do not play an active role, the representative plaintiff has carriage of the litigation on behalf of the class and, with the advice of class counsel, makes all litigation decisions on behalf of the class, including the decision to accept or reject a defendant's settlement offer. Significantly, it is the representative plaintiff who bears the litigation risk, including the risk of an adverse costs award.
[5] Facts of the Present Appeal
In the present appeal, two class members, Wal-Mart and Home Depot (the responding parties to Motion M50130, "responding parties"), neither of which is a representative plaintiff, have appealed an order of Perell J. of the Superior Court of Justice approving a partial settlement of this certified class action. They did not avail themselves of an opportunity to opt out of the class action at the time of an earlier settlement. Accordingly, subject to their right to object at the settlement approval hearing, they were bound by any judgment or settlement in the class action. They took advantage of the opportunity to object before the settlement approval judge, who did not give effect to their objections.
[6] Motions Before the Court
The moving parties moved to quash the appeal on the ground that the responding parties have no standing to appeal. This motion is supported by the representative plaintiff and by three defendants, Visa, Mastercard and National Bank. There are related motions before us: one by Wal-Mart, pursuant to s. 30(5) of the CPA, seeking leave to act as the representative plaintiff for the purpose of the appeal; and one by Home Depot, for an order granting leave to act as the representative plaintiff in the event that the moving parties' motion is granted.
[7] Five-Judge Panel
A five-judge panel was convened, at the request of the responding parties, to enable them to advance the submission that the decision of this court in Dabbs v. Sun Life Assurance Co. of Canada (1998), 1998 CanLII 7165 (ON CA), 41 O.R. (3d) 97, [1998] O.J. No. 3622 (C.A.), leave to appeal to S.C.C. refused [1998] S.C.C.A. No. 372 ("Dabbs"), should be overruled. That decision held that a class member has no right to appeal a settlement approval order.
[8] Disposition
I would dismiss the responding parties' motions, grant the moving parties' motion, and quash the appeal. My reasons are set out below.
I. Dabbs Remains Good Law and Has Not Been Overtaken by Other Decisions
[9] Holding in Dabbs
Dabbs held that class members' rights of appeal in class proceedings are found in the CPA and are not supplemented by the general appeal rights in s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the "CJA").
[10] Responding Parties' Contention
The responding parties contend that subsequent decisions have established that s. 6(1)(b) of the CJA can provide an appeal route where the matter is not specifically addressed in the CPA.
[11] Rejection of Submission
I do not accept this submission. Dabbs remains good law. It has stood for more than 20 years and has been consistently applied in Ontario: see, e.g., Cavanaugh v. Grenville Christian College, [2013] O.J. No. 1007, 2013 ONCA 139, 360 D.L.R. (4th) 670; Locking v. Armtec Infrastructure Inc., [2012] O.J. No. 5324, 2012 ONCA 774, 299 O.A.C. 20; Davies v. Clarington (Municipality), [2010] O.J. No. 3703, 2010 ONSC 418 (S.C.J.). Its logic and authority have never been questioned. It was expressly applied in the decision of this court in Directright Cartage Ltd. v. London Life Insurance Co., [2002] O.J. No. 512, 113 A.C.W.S. (3d) 574 (C.A.). See, also, Labourers' Pension Fund of Central and Eastern Canada (Trustees of) v. Sino-Forest Corp., [2013] O.J. No. 6439, 2013 ONCA 500, 19 C.B.R. (6th) 124, leave to appeal to S.C.C. refused [2013] S.C.C.A. No. 395.
[12] Statutory Interpretation
The responding parties have not demonstrated that the ratio of Dabbs is flawed in any way. Appeal rights are statutory. Dabbs was decided on the basis of statutory interpretation. The responding parties have not advanced any other persuasive interpretation of the CPA.
[13] Analysis of Subsequent Decisions
The responding parties' submission that Dabbs has been "superseded" by subsequent decisions is not borne out by an analysis of those decisions, none of which involved an appeal by a class member who was not a representative party. All of those decisions are readily distinguished on that basis: Welsh v. Ontario, [2019] O.J. No. 357, 2019 ONCA 41, 432 D.L.R. (4th) 117 (the appellant was the representative plaintiff); Airia Brands Inc. v. Air Canada, [2017] O.J. No. 5347, 2017 ONCA 792, leave to appeal to S.C.C. refused [2017] S.C.C.A. No. 476 (the appellants were the representative plaintiffs); Waldman v. Thomson Reuters Canada Ltd., [2015] O.J. No. 395, 2015 ONCA 53 (the appellant was a party to the action); Sutts, Strosberg LLP v. Atlas Cold Storage Holdings Inc., [2009] O.J. No. 4067, 2009 ONCA 690, 311 D.L.R. (4th) 323 (the appellants were class counsel); Main v. Cadbury Schweppes plc, [2011] B.C.J. No. 354, 2011 BCCA 21, 20 B.C.L.R. (5th) 11, leave to appeal to S.C.C. refused [2011] S.C.C.A. No. 105 (the appellants were non-settling defendants).
[14] British Columbia Court of Appeal Decision
Dabbs was cited with approval by the Court of Appeal for British Columbia in Coburn and Watson's Metropolitan Home v. Home Depot of Canada Inc., [2019] B.C.J. No. 1644, 2019 BCCA 308 ("Coburn"), released August 30, 2019. That case, a class proceeding related to this, raised precisely the same issue as these motions. The court found the reasoning in Dabbs "compelling": at para. 32. It rejected the responding parties' submission that the authority of Dabbs had been undermined by more recent case law. The court observed, at para. 34:
None of the cases directly questioned the authority of Dabbs and some do not refer to it. Rather, the cases deal with different issues and rest on the principle that if the availability of appeal rights are not effectively addressed by the CPA, then the general jurisdiction to entertain appeals governs.
[15] Agreement with Observation
I agree with this observation.
[16] Summary of Appeal Rights
In summary, appeal rights in class proceedings can be described 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 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.
[17] Leave to Appeal Under Section 30(5)
As the responding parties have no direct right of appeal, I turn to the issue of whether they may seek leave to appeal pursuant to s. 30(5).
II. Settlement Approval is Neither a Judgment on Common Issues nor a Determination of Aggregate Damages
[18] Responding Parties' Second Argument
The responding parties' second argument is that a settlement approval order should be understood as a "judgment on common issues" or a determination of aggregate damages, with the result that a class member may appeal the disposition with leave if the representative plaintiff fails to pursue an appeal, pursuant to s. 30(3) and 30(5) of the CPA. The responding parties rely on Dabbs, at paras. 18 to 21, in which O'Connor J.A. considered, and dismissed, a motion by class members for leave pursuant to s. 30(5) of the CPA.
[19] Rejection of Submission
I would reject this submission. There is nothing in the settlement agreement, the order approving the agreement, or the reasons of the class proceedings judge to indicate that the court was pronouncing judgment on a common issue or making an aggregate assessment of damages. It was simply a determination that the settlement was fair and reasonable and in the best interests of the class. I respectfully agree with the observation of Harris J.A. in Coburn, who rejected a similar submission, observing, at para. 21:
In my opinion, a judgment on a common issue involves an adjudication by a court of contested issues. It does not capture an order approving a settlement in which, typically, liability is disavowed as a condition of the settlement.
[20] Clarification on Dabbs
To avoid any future uncertainty on the point, I reject the responding parties' suggestion that the final four paragraphs of Dabbs confirm that a class member may appeal the approval of a settlement, with leave, under s. 30(5) of the CPA. The court in Dabbs indicated that it would have denied leave in any event and did not address the substantive basis of this argument. In my view, for the reasons I have given, a settlement approval is not a judgment on the common issues and s. 30(5) is inapplicable.
III. Giving Individual Class Members the Right to Appeal the Settlement of Class Action would Lead to Uncertainty and Inefficiency
[21] Responding Parties' Third Argument
Third, and finally, the responding parties argue that because the vast majority of class proceedings are resolved through settlement, it would be unreasonable to accept that the legislature intended that there be no avenue of appellate review of settlement approvals. Because access to justice and the protection of class members is a primary purpose of the CPA, it would be unreasonable, they say, to deny class members an opportunity to appeal.
[22] Policy Reasons Against Class Member Appeals
I respectfully disagree. There are sound policy reasons why class members should not be entitled to appeal a settlement order where the representative plaintiff declines to do so. The Court of Appeal for British Columbia identified some of these reasons in Coburn, at paras. 14 and 15. To permit a class member to appeal a settlement proposed by the representative plaintiff, recommended by class counsel, and approved by the class proceedings judge, would be problematic in several ways. It 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. As the moving parties note, abuses have been experienced in the United States where appeals by objecting class members have been permitted. See Abihsira c. Johnston, [2019] J.Q. no 2785, 2019 QCCA 657, at para. 85; B.D. Greenberg, "Keeping the Flies Out of the Ointment: Restricting Objectors to Class Action Settlements" (2010), 84 St. John's L. Rev. 949, at 951.
[23] Law Commission of Ontario Report
Notably, the Law Commission of Ontario, in its recent report, "Class Actions: Objectives, Experiences and Reforms", made no recommendation to this effect, although it did make recommendations concerning appeal routes for parties.
IV. Disposition
[24] Final Order
For these reasons, I would dismiss the responding parties' motions, grant the moving parties' motion and quash the appeal.
[25] Costs
In the event the parties are unable to agree on costs, they may make written submissions.
Motion granted.
End of Document
