COURT FILE NO.: 05-CV-2925630CP
Div. Ct. File No.: 248/09
DATE: 20091020
SUPERIOR COURT OF JUSTICE - ONTARIO
(DIVISIONAL COURT)
RE: GERARD LAMBERT and ELSA IBBITSON
Plaintiffs
- and -
GUIDANT CORPORATION, GUIDANT CANADA CORPORATION,
GUIDANT SALES CORPORATION and CARDIAC PACEMAKERS INC.
Defendants
BEFORE: JUSTICE JENNINGS
COUNSEL: John A. Campion, Paul J. Martin and Won J. Kim, Megan B.
Sarah J. Armstrong McPhee and Serge
for the Defendants Kalloghlian
for the Plaintiffs
HEARD AT TORONTO: JULY 9, 2009
E N D O R S E M E N T
JENNINGS J.:
[1] The appellants seek leave to appeal the decision of Cullity J. dated May 8, 2009, certifying this action as a class proceeding.
[2] I was told this action is the third of a trilogy of cases seeking damages as a result of allegedly defective heart devices. The two other actions have recently been certified in this province, being Peter v. Medtronic Inc. and LeFrancois v. Guidant Corporation. Leave to appeal the certification orders to the Divisional Court was denied in both cases.
[3] The certification application took seven days to hear. The opening paragraph of Cullity J.’s carefully reasoned thirty page decision is instructive:
The hearing of the motion to certify this proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 was of unusual length due to the elaborateness and comprehensiveness of the attack launched by the defendants on the plaintiffs’ case for certification and the attempted use of evidence for this purpose. Most of the evidence had a direct bearing on the merits of the claims asserted by the plaintiffs on behalf of the class they seek to represent and, although defendants’ counsel went to some pains to relate it to the requirements for certification, its relevance and weight for this purpose were very much in issue.
[4] I deny leave to appeal for the following reasons.
[5] Before me, the main thrust of the moving parties’ forceful argument was that Cullity J. misconstrued the “some basis in fact” standard applicable to the statutory requirements for certification, as established by the Supreme Court of Canada in Hollick v. Toronto, so as to effectively prevent the moving party from leading evidence to challenge that the requirements for certification had been met.
[6] My review of the reasons of Cullity J. must be in the context of numerous directions from the Court of Appeal that deference is owed to those experienced judges hearing certification applications in this province. The cases have been helpfully and recently gathered in the decisions of Ferrier J. in Guidant Corp. v. LeFrancois, 2009 76 (ON SCDC), [2009] O.J. No. 36 and Carnwath J. in Peter v. Medtronic Inc., 2008 22910 (ON SCDC), [2008] O.J. No. 1916.
[7] Mr. Campion quite properly acknowledged the considerable expertise in these matters possessed by Cullity J.
[8] The evidentiary principles to be applied on a certification motion have been clearly established. The plaintiff must establish “some basis in fact” for the certification and must file evidence in support of his or her position. It is for the motions judge to determine what evidence is necessary to permit the determination of the requirements for certification as opposed to evidence directly relevant to the merits of the claim.
[9] In paragraphs 25 through 55 of his reasons, Cullity J. reviewed in considerable detail the evidence led by each party. Some of it he accepted and some of it he did not. He was entitled to do that. He was alive to and fully discussed the tension between admissible evidence relevant to certification requirements and inadmissible evidence going to the merits. In weighing the evidence, Cullity J. was clearly guided by the law established in Hollick to which he made frequent reference.
[10] The moving party submitted that the class definition was overly inclusive. Cullity J. was alive to that concern, (see reasons for judgment paragraphs 94-118) and I have no reason to doubt his conclusion that the class definition was not “unnecessarily overly inclusive” (emphasis in judgment). He correctly concluded his analysis with the observation that the definition of the class may be amended following productions and examinations for discovery.
[11] In my opinion what was really driving this motion for leave was counsel’s concern that courts dealing with certification applications have interpreted s.5(1) of the CPA so as to make any meaningful opposition to certification virtually impossible. I am aware that amongst the members of the class action bar, counsel’s view is not unique. If I am correct I observe that any perceived imperfections in the certification process must be resolved by the Legislature. The judges must work with the legislation that presently exists.
[12] Further, I agree with Cullity J.’s observations on this issue as set out by him in the following paragraphs of his reasons:
A recurring theme in the defendants’ submissions was the prevailing approach to certification in this jurisdiction has departed from the legislative intention embodied in section 5(1) of the CPA. I was told that, rather than acting as a gatekeeper, the courts have been holding the gate open and have “stumbled into a black hole”.
It was repeatedly submitted by defendants’ counsel that decisions certifying proceedings must have an “air of reality”. To the extent that this means that the statutory requirements must be read and applied in the light of the purposes and objectives of the legislation, it is a truism. To the extent, however, that references to an air of reality are intended to introduce a preliminary merits test – disguised or otherwise – they are inconsistent with the analysis in Hollick and the significance that McLachlin C.J. attributed to the rejection of the view of the Ontario Law Reform Commission. In its report released 1982, the Commission was firmly of the opinion that a plaintiff seeking certification should have the burden of establishing that the claims advanced have “substantive adequacy” and apparent validity. In the unanimous opinion of the members of the commission, this would be required in order to eliminate the potential use of the class action procedure to blackmail defendants into agreeing to settle unmeritorious claims. The possibility that such claims could be excluded by a requirement that the pleading disclosed a cause of action was categorically rejected.
(in part) The legislative history was relied on in Hollick as justifying the very weak evidential burden of “some basis in fact” that was held to apply to each of the statutory requirements for certification, other than that relating to the disclosure of a cause of action. It must, I believe, follow logically that, although a defendant would be entitled to deliver affidavit evidence in rebuttal, the standard of proof is inversely heavy. It is not enough for the defendant to establish on a balance of probabilities that facts that bear on the existence of “colourable” claims differ from those asserted by the plaintiff – the onus must be to demonstrate that there is no basis in the evidence for the latter. …
I am also concerned with whether the statutory requirements are adequate to exclude the kind of legalised blackmail that was contemplated by the Law Reform Commission. The analysis in Hollick must be applied and the plaintiff must not be subjected to any more stringent an evidential burden than that affirmed by the Chief Justice. I believe it follows, also, that in determining the weight to be given to the evidence in rebuttal filed by the defendants, I must take into account that it is not the function of the court at this preliminary stage of the proceedings to decide factual issues – and, for such purpose, to weigh, and draw inferences from, the evidence – in the same manner, and to the same extent, as when the court exercises its function as a trier of fact in the exercise of its ordinary jurisdiction.
Most fundamentally, the purpose of the certification stage of a class proceedings is to determine whether the requirements in section 5(1) of the CPA are satisfied and, if so, to define the issues to be tried. It would be a reversal of the process to permit certification to be determined by deciding issues that are likely to be front and centre at a trial.
[13] The ground of conflicting decisions was not aggressively pursued before me. The cases relied upon by the moving party were fact driven and do not establish a conflict.
[14] To conclude in Cullity J.’s very full reasons he made factual findings to which deference is owed and he correctly applied established principles of law dealing with the certification of class actions.
[15] I have no reason to doubt the correctness of his decision. There are no conflicting decisions.
[16] The motion is dismissed with costs payable to the responding parties fixed at $15,000, as agreed by counsel at the hearing.
JENNINGS J.
RELEASED: October 20, 2009