CITATION: Ottawa Police Association v. Ottawa Police Services Board, 2014 ONSC 1584

DIVISIONAL COURT FILE NO.: 12-DV-1841

DATE: 2014-04/29

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

PARDU, McCARTNEY, HENNESSY JJ.

BETWEEN:

Ottawa Police Association

Plaintiff

(Respondent)

– and –

Ottawa Police Services Board, Her Majesty the Queen in Right of Ontario, Omers Administration Corporation and Ontario Public Service Pension Board

Defendants

(Appellants)

Christopher C. Rootham, for the Plaintiff (Respondent)

David A. Stamp and Kevin O’Brien, for the Defendants (Appellants)

Charles Hofley, for the Ottawa Police Services Board and Lisa Mills

Judie Im, for Her Majesty the Queen in Right of Ontario

HEARD: November 6 and 7, 2013,

at Ottawa

HENNESSY J.:

[1] This is an appeal from the order of Justice R. Smith (the “Motion Judge”) which granted the plaintiff’s motion for a representation order under Rule 12.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Overview of the plaintiff’s motion

[2] The underlying action is based primarily upon a claim of negligent misrepresentation by omission concerning information provided (or not provided) to a group of Ontario Provincial Police (“OPP”) officers when they were considering a transfer to the Ottawa-Carleton Police Services Board in the mid to late 1990’s. When those 74 officers transferred employers, they exited one pension plan, the Public Sector Pension Plan (“PSPP”), and entered another pension plan, the Ontario Municipal Employees Retirement System (“OMERS”). The plaintiffs claim that prior to the transfer, all of the officers were provided with a common written document (“General Overview”) and common meetings were held in November and December 1996. The plaintiffs allege that at these meetings they were not advised that their overall pensions may be lower if they elected to transfer to the Ottawa-Carleton Police Services Board.

[3] In 2007, the transferring officers learned that they had to pay various sums ranging from $2,267.80 to $59,244.72 in order to pay for the difference in their pension benefits between the two plans. The transferring officers allege that the defendants acted negligently by failing to properly advise them of this possibility when they transferred to the Ottawa-Carleton Police Services Board now named the Ottawa Police Services Board (“OPSB”).

[4] The Ottawa Police Association (“OPA”) is an unincorporated association that represents its members in its employment relationship with the employer, the OPSB. It started a claim on behalf of the transferred officers in 2009 and brought a motion appointing it, the OPA, to be named the litigation representative under Rule 12.08 for the group of transferred officers. The motion judge granted that relief in part. He allowed the action to proceed as a representative proceeding conditionally and ordered that the OPA be substituted by an appropriate person (a member of the group of transferred officers) as the representative plaintiff.

Grounds of appeal

[5] There are three appeals brought against the order permitting the action to proceed in a representative fashion. All three appellants seek an order setting aside the order of the motion judge.

[6] The grounds raised by appellants include:

1. The motion judge erred in his interpretation and application of Rule 12.08.

a) The Rule has limited scope and must be brought “on behalf of or for the benefit of all members”.

b) The Rule is intended to be used for collectively held claims that arise out of the individuals’ capacity as members of the union or association.

c) There was no evidence that a class proceeding would be unduly expensive or inconvenient.

2. The motion judge erred by making a conditional order directing the OPA to identify an appropriate representative plaintiff.

3. Negligent misrepresentation by omission cannot be a common issue.

4. The motion judge erred in finding that a representational proceeding was a preferable procedure.

Standard of review

[7] The parties agree that the standard of review with respect to questions of law, including the issue of the scope and interpretation of Rule 12.08 is correctness: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.

[8] The issue of whether this action falls within the scope of Rule 12.08 is a question of mixed fact and law. The standard of review on mixed questions of fact and law is a palpable and overriding error.

[9] Whether an issue is a common issue and whether a representative order is a preferable procedure are exercises of discretion and are reviewable on the basis of an error in principle or a palpable and overriding error: Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, 111 O.R. (3d) 501 at para. 68.

Scope of Rule 12.08: must the action be brought “on behalf of or for the benefit of all members”?

The appellants submit that Rule 12.08 is not the appropriate procedure for the proceeding as set out in the Statement of Claim. Rule 12.08 reads:

Where numerous persons are members of an unincorporated association or trade union and a proceeding under the Class Proceedings Act, 1992, would be an unduly expensive or inconvenient means for determining their claims, one or more of them may be authorized by the court to bring a proceeding on behalf of or for the benefit of all.

[10] The plain reading of Rule 12.08 sets out three criteria that must be met before a party may obtain an order.

1. There must be numerous persons who are members of a trade union or unincorporated association..

2. The numerous persons must assert a claim that would be unduly expensive or inconvenient to pursue under the CPA..

3. The claim must be on behalf of or for the benefit of all of the persons on whose behalf the representative order is made.

[11] The appellants submit that Rule 12.08 has a limited and narrow scope and is intended to be used exclusively for claims that arise out of individuals’ capacity as members of a union or unincorporated association and where they are asserting a collective or corporate right for the benefit of the entire association (e.g. when suing on a lease or other contract to which the union is a party). This is a two pronged argument, first that the right asserted must be a collectively held right and second that the action must be to the benefit of every member of the association.

[12] In further support of their proposition that the action must be brought on behalf of “all” members, the appellants rely on the plain reading of the Rule. They submit that the requirement that the action must be brought for the “benefit of all” members of the union or the association is consistent with their interpretation of the limited scope of the Rule.

[13] The appellants argue that the group of transferred officers, who are still employed by the OPSB is a small subset of the entire OPA membership of 2000 and that the entire OPA membership would not benefit from this action.

[14] The respondent argues that a plain reading of the Rule requires only that the action benefit “numerous persons” on behalf of whom the proceeding has been commenced. They further argue that the term “benefit” does not require that each member of the organization receive a direct financial benefit from the action, but rather that the court may consider the collective interests of the organization that will be served by the action as a “benefit” within the meaning of the Rule.

[15] I find that the interpretation urged on us by the appellants is not consistent with the reading of the Rule. The Rule does not explicitly say that the word “all” must be read to mean all of the members of the union or association. The Rule simply requires that the representation action is on behalf of or for the benefit of numerous persons: Kelly v. Canada (Attorney General), 2013 ONSC 1220, [2013] 3 C.N.L.R. 333 at para. 91 reversed 2014 ONCA 92, [2014] O.J. No. 532. The Court of Appeal reversed the decision of the motions judge on other grounds, however, specifically upheld the motion judge’s conditional approval of a representative action.

[16] In this case, the numerous persons directly benefiting from the representative action would be the group of transferred officers who are members of the OPA.

[17] This conclusion is further supported by looking to the French language version of the Rule. The French and English versions are equally authoritative: Official Languages Act, R.S.C. 1985, c. 31 (4th Supp.). Where the English version of a statute may raise an ambiguity, reference can be made to the other official language version to determine whether the meaning is plain and unequivocal: Ruth Sullivan, Sullivan on the Construction of Statutes (5th ed. 2008), at pp. 99-116.

[18] The French language version of the Rule clarifies any ambiguity in the interpretation of the English version. The French version of the Rule reads as follows:

Si de nombreuses personnes sont membres d’une association sans personnalité morale ou d’un syndicat et qu’une instance prévu par la Loi de 1992 sur les recours collectifs constituerait un moyen indument couteux ou incommode de décider de leurs demandes, le tribunal peut autoriser l’une ou plusieurs d’entre elles à introduire une instance au nom ou au profit de toutes.

[19] In the French text, the proceeding must be “au profit de toutes”. The word “toutes” refers to “les nombreuses personnes”. It cannot be said to mean that the action must be for the benefit of all members of the Association. In that case, the drafters would have used the word “tous”.

[20] I am satisfied that Rule 12.08 does not require that any representative proceeding be for the benefit of all members of the unincorporated association or the union but only for the benefit of numerous persons. In his finding on this point, the motion judge was correct.

Scope of Rule 12.08: is the use of the Rule limited to collective actions?

[21] The appellants submit that Rule 12.08 should be given a limited reading and strictly construed so as only to apply in claims for collectively-held interests or rights. In support of this argument the appellants rely on the decision in Ginter v. Gardon (2001), 53 O.R. (3d) 489 (S.C.) and McGee v. London Life Insurance Co., [2008] O.J. No. 1760 (S.C.).

[22] In Ginter v. Gardon, the court considered two actions, “the 1999 action” and “the 2000 action”. Nordheimer J. granted a representation order in the 1999 action permitting a union local to commence an action for declarations that certain employment agreements and escrow agreements were null and void. In that case, the local was a subset of the union and the action did not benefit the entire union. Nordheimer J. denied however, a request for a representation order in the 2000 action where he found that the claim was an “accumulation of personal claims”.

[23] As outlined at paras. 16-20 of the Ginter v. Gardon decision, the refusal to grant the representation order in the 2000 action was based on four factors:

1. The proposed representatives had individual claims in addition to the representative claims and there was a real risk of conflict arising between the two.

2. Three of eleven executive board members did not wish to be parties and there was no evidence that the other members wished to be represented.

3. The claims in certain aspects were individual claims (e.g. loss of reputation, back pay etc.) and the nature the claim raised the concern that it would be unfair to the defendants to be denied the opportunity to examine each of the claimants for discovery.

4. The small number of parties involved meant that there were no appreciable savings of costs or other efficiencies to be achieved.

[24] At paragraph 20, Nordheimer J. goes on to say:

…this action in many respects is very much an accumulation of personal claims as opposed to a claim on behalf of an definable class. The former are not intended to be the subject of a representative action - see Northdown Drywall & Construction v. Austin Co. (1975), 8 O.R. (2d) 691, 59 D.L.R. (3d0 55 (Div.Ct.)

[25] The decision in Ginter v. Gardon does not stand for the proposition that the Rule is limited to actions brought in the name of or in respect of the collective, rather in fact Nordheimer J. referred to claims on behalf of an “definable class”. Of the four factors taken into account by Nordheimer J. to deny a representative order, none specifically point to the existence of individual claims per se as a reason to deny the representative action. A close reading of his reasons suggests that Nordheimer J. took into account factors which, in a class proceedings analysis, would be considered under the questions of identifiable class, appropriate representative plaintiff, and preferable procedure.

[26] In Northdown, a union manager was attempting to bring an action against the defendants for conspiring to breach a collective agreement. The court held that it was not proper for the action to proceed as a class action where damages being sought were simply calculated based on the accumulation of the individual lost wages/lost opportunity of members of the local union. The court held that this type of claim is not properly the subject of a class action because it would be “manifestly unfair” to the defendants to have to meet such a claim without an adequate means for discovering the real amount of the claims. The court found that the action was an “accumulation of claims for personal relief” and not a claim for the “benefit of the class” (para. 5).

[27] Northdown does not represent current jurisprudence on what type of claims are for the benefit of the class. There is now significant jurisprudence in the area of claims for lost wages which have been certified as class actions. In Fresco, Winkler C.J.O. confirmed that the proper approach for the court on a certification motion was to ask whether there was some basis in fact for the allegation that the defendant’s conduct caused loss or damage to the plaintiff. He said that the proper approach involved asking “whether there is some basis in fact for the appellant’s allegations that CIBC’s bank-wide practices and policies prevented class members from receiving overtime compensation in accordance with the express or implied terms of their employment contracts” (para 86).

[28] In McGee, Lax J. stated at paragraph 36 that notwithstanding the Class Proceedings Act (“CPA”), representative proceedings are preserved in a limited way where the procedure of the CPA was too elaborate and complex (and unnecessary) for some claims by trade unions and unincorporated associations. Lax J. does not make any reference to the Rule being limited to collective actions.

[29] The appellants also referred the court to the cases of Ryan v. Ontario (Municipal Employees Retirement Board) (2006), 29 C.P.C. (6th) 24 (Ont. S.C.), Incorporated Synod of the Diocese of Huron v. Delicata, 2011 ONSC 4403, [2011] O.J. No. 4083, Keewatin v. Ontario (Minister of Natural Resources) (2006), 32 C.P.C. (6th) 258 (Ont. S.C.), Trusksa v. Dziemianczuk, [2008] O.J. No. 615 (S.C), and Payne v. Ontario (Minister of Energy, Science and Technology, [2002] O.J. No. 1450 (S.C.). Although it is acknowledged that the claims in these cases, as well as those in Ginter v. Gardon, Northdown, and McGee, are examples of collective actions, the decisions do not purport to limit the scope of the Rule to collective actions.

[30] A brief history of Rule 12.08 is set out by Perell J. in Kelly v. Canada, paras. 89-96 (Ont. S.C.). Perell J. noted: “The enactment of class action legislation did not, however, make class actions the exclusive means to advance a claim on behalf of numerous persons” (para. 95). Class actions under the CPA and representation orders under the Rules of Civil Procedure are alternatives, and one or the other may be preferable depending on the particular circumstances of the case (para 96). Throughout this discussion of the jurisprudence under Rule 12.08 and its predecessor, there is no mention of a limitation on the scope of the Rule as advocated by the appellants.

[31] The scope of the Rule is not defined by the type of claim so much as it is by the three factors included in the Rule. See paragraph 10 above. So long as those three factors exist, the consideration of whether a representation order should be made is best done within the preferable procedure analysis which includes a consideration of the factors raised in Ginter v. Gardon.

[32] In any event, the appellants’ characterization of this claim as an accumulation of individual or personal claims fails to acknowledge part of the “collective” benefit sought by the respondents. The respondents assert that this case is based on an assertion that the appellant had a duty with respect to the quality of pension information provided to the members of the organization. The respondents claim that the appellants had a duty to provide full and complete information. Although the quantum of damages will be individually calculated for the officers directly affected by the appellant’s alleged negligence, the respondents argue that the liability questions will be determined on the basis of a duty owed to the group of transferring officers, a finding which would be of collective benefit to the entire association.

Scope of Rule 12.08: the unduly expensive or inconvenient criteria

[33] The appellants argue that there was no evidentiary foundation on which to base the finding that a proceeding under the CPA would be unduly expensive or inconvenient. In McGee, Lax J. included the word “unnecessary” when she referred to this criterion (para. 36).

[34] The Rule provides for an alternative to the CPA in recognition that groups like trade unions and unincorporated associations may have characteristics that make it unnecessary and unduly cumbersome to use the CPA procedures to pursue a claim on behalf of the group.

[35] In paragraph 31 of his reasons, the motion judge noted that the issue of whether the proceedings would be unduly expensive was not argued before him. Similarly, on this appeal, the appellants did not present any jurisprudence on this issue or make any argument other than to assert that there was no evidentiary record. The respondent submits that the expense and inconvenience of certification motions, notice to class members and other procedural aspects of the CPA are notorious and would have been known to the motion judge.

[36] The 2000 member OPA is a not an unsophisticated association. Its responsibilities include collective bargaining and contract administration in a complex environment. Presumably, the plaintiffs in this, or any case, came to the determination of which of the alternate types of class actions to pursue based on a cost and convenience analysis. The motion judge was entitled to take this into consideration when he determined whether a class proceeding was necessary or would be unduly expensive and inconvenient. It was not unreasonable, nor an error in principle, for the motions judge to find that the OPA could manage the action on behalf of its members without the unnecessary cost and inconvenience that would have been imposed on class members under the CPA.

[37] The motion judge made no error in his application of Rule 12.08 to the present claim.

Appropriate representative plaintiff

[38] Before moving to the other grounds of appeal, it is useful to set out the framework for the analysis of a representative proceeding. The court should approach the question of whether a representative order should be granted by following the same approach, with necessary modifications, that is taken to determine whether a class should be certified under the CPA (Ginter v.Gardon, at para. 14):

1. The court should be satisfied that there is a proper cause of action.

2. The claims raise common issues.

3. A representative action is the preferred procedure for the resolution of the common issues.

4. A proposed representative would fairly represent the interests of the numerous persons.

The motion judge found that each of these four criteria were met but that with respect to the fourth criteria he made his order conditional upon finding a proper representative plaintiff. The motion judge remains seized of that issue.

[39] In his reasons, the motion judge found that the OPA could not be the plaintiff in this action because the Rule requires that the action be brought by one of the “numerous persons” on behalf of whom the action is brought. The appellants do not take issue with this finding. The motion judge noted in his reasons that the OPA made a request in the alternative, that if the OPA was not deemed to be a viable representative plaintiff under the Rule, one or more of the transferred officers be named as representative(s). The motion judge granted this alternative relief, substituting one or more persons, subject to the respondent providing adequate background information to establish that the proposed representative members of the class have no interest in conflict and are capable of adequately representing the interests of the members. Only if a suitable representative plaintiff is approved by the court will the matter proceed as a representative action.

[40] The appellants submit that the motion judge made a palpable and overriding error in granting this conditional order in the absence of the evidentiary foundation that there exists an appropriate representative plaintiff.

[41] It is not uncommon in certification proceedings that certain elements of the certification are met and the parties return to court at another time to address those elements which did not satisfy the court in the first instance. In Graham v. Impark, 2010 ONSC 4982, 74 B.L.R. (4th) 172 at para. 201, Perell J. made a similar decision, certifying a class action conditional upon the substitution of a new representative plaintiff. In 6323588 Canada Ltd. v. 709528 Ontario Ltd. (c.o.b. Panzerotto Pizza and Wing Machine), 2012 ONSC 2985, [2012] O.J. No. 2324, Strathy J. (as he then was), found that where all the conditions for a certification had been met except the existence of an eligible representative plaintiff, it was appropriate to adjourn the proceeding in order to provide the plaintiff with an opportunity to substitute a new representative plaintiff. I agree with Strathy J.’s assessment at paras. 101-102 that:

101. Having found the action otherwise suitable for certification, it would be a waste of time, money and judicial resources to require that the class start afresh, if indeed there is a will amongst franchisees to pursue the matter. […]

102. This approach is supported by the authorities. In Martin v. Astrazeneco Pharmaceuticals PLC, [2009] O.J. No. 3847 (S.C.J.), Cullity J. observed, at para. 20, that our courts have not generally been receptive to arguments that the action has to go back to square one if the putative plaintiff is found wanting:

Even if defendants' counsel were correct in their submission that other persons could not then be substituted as plaintiffs, there would be nothing to prevent the commencement of a new and otherwise identical action by such persons. As one of the fundamental features of proceedings under the CPA is the existence of a class of similarly situated claimants, the likelihood that a substitute plaintiff would be available cannot, in my opinion, be dismissed as fanciful or unduly speculative. In view of the important responsibilities of representative plaintiffs, it has become quite common for changes to be made - and sometimes more than once - in those proposed to act as such as the proceeding moves towards certification. The court has, moreover, not generally been receptive to submissions that the removal or withdrawal of plaintiffs requires a new action to be commenced rather than a substitution of new plaintiffs. [Citations omitted.]

[42] Also, it is noteworthy that in the context of a 12.08 motion specifically, in Kelly v. Canada, the Court of Appeal (2014 ONCA 92) approved the appointment of a representative plaintiff on a conditional basis (para. 21).

[43] The way this action is framed, a representative plaintiff could be any of one of the transferred officers who alleges that the OPSB negligently misrepresented the pension risk and cost of transfer and who detrimentally relied upon that representative. The motion judge did not make a decision on a representative plaintiff in the absence of an evidentiary basis. There will still be a judicial determination of the propriety of the proposed representative plaintiff. In this regard, I find that there are such persons within the group who, in all likelihood, would qualify as an appropriate representative plaintiff and it is reasonable for the motion judge to allow the group to bring forward a new, eligible, representative plaintiff.

[44] The motion judge made no error by making a conditional order and remaining seized of this outstanding issue.

Common Issues

[45] The motion judge found three common issues:

1. Did any of the defendants owe a special duty of care to the members of the class?

2. Did any of the defendants make a misrepresentation by omission, by failing to fully advise the members of the class of the possibility that, if they transferred employment to the OPSB, their total pension benefits on retirement could be lower than if they remained with the OPP?

3. Whether any such misrepresentation by omission was made negligently by any defendants?

[46] OPSB argued that the motion judge erred in finding questions two and three as common issues. They submit that if there was an omission in the “General Overview” document that was provided to all members of the group, an individual inquiry will still be necessary to assess whether other subsequent communications with each individual officer cured any alleged omission.

[47] The appellant argues that the second common issue requires an individual analysis of reliance and damages to make out the tort of negligent misrepresentation by omission. They submit the motion judge misapprehended the evidence underlying these individual issues and that an inquiry into any supplemental information provided to officers could result in individual responses.

[48] The appellant relies on Nadolny v. Peel (2009), 78 C.P.C. (6th) 252 (Ont. S.C.) in support of their position. In Nadolny v. Peel, at para. 59 Quigley J. quoted with approval Jamieson Livestock v. Toms Grain & Cattle Co., 2006 SKCA 20, 279 Sask. R. 281 at para. 35 where the court stated that “an issue that can be resolved only by inquiry into the circumstances of each individual claim is not a “common issue”, even though the same question maybe posed in each case”. The appellants argue that the determination that an issue is common cannot be dependent upon individual findings. See Parker v. Pfizer Canada Inc., 2012 ONSC 3681, [2012] O.J. No. 286, at para. 77 and Cavanaugh v. Grenville Christian College, 2012 ONSC 2995, [2012] O.J. No. 2293, where at para. 125, Perell J. stated that “an issue is not a common issue if its resolution is dependent upon individual findings of fact that would have to be made for each Class Member”. In Cavanaugh, Perell J. did find that the common issue criteria had been met but ultimately dismissed the motion for certification on the ground that the class proceedings was not the preferable procedure in light of an overwhelming number of individual issues. This decision was overturned by the Divisional Court: 2014 ONSC 290, [2014] O.J. No. 849 on the basis that the motion judge erred by focusing disproportionately on the individual issues that may arise in the case.

[49] The respondent submits that the appellant OPSB did not advance any evidence that pensions were discussed in any of the “individualized communications” and that the only information provided to the officers about pensions came from the “General Overview” document which was provided to every member of the proposed class. The respondents submit that the affiant from the OPSB who was at the individual or small group meetings testified that neither he, nor any representative of the OPSB, provided any pension advice or pension information at those individual or small group meetings. The affiant asserted that the only information about pensions came from the “General Overview” document sent to every transferring officer.

[50] In Western Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, recently affirmed in Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, [2013] S.C.J. No. 57 the court addressed the issue of commonality (paras. 108-109). The underlying question is whether allowing the suit to proceed as a representative one will avoid duplication of fact finding on legal analysis (para. 109). At paras. 39-40 of Western Shopping Centres Inc. v. Dutton, McLachlin C. J. offered the following instructions regarding the common issues analysis:.

1. The question of commonality should be approached purposively.

2. The issue will be “common” only where its resolution is necessary to the resolution of each class member’s claim.

3. It is not essential that the class members be identically situated vis-à-vis the opposing party.

4. Common issues do not have to predominate over non-common issues but determining whether the common issues justify a class action may require the court to examine the significance of the common issues in relation to the individual issues.

5. Success for one class member must mean success for all.

[51] More recently the OCA has reviewed the principles applicable to the analysis of commonality. In Fulawka v. Bank of Nova Scotia, 2012 ONCA 443, 111 O.R. (3d) 346 at para 81, Winkler C.J.O. endorsed the comments of Strathy J. as he then was, in Singer v. Schering-Plough Canada Inc., 2010 ONSC 42, 87 C.P.C. (6th) 276 with respect to the principles of common issue analysis:

• The underlying foundation of a common issue is whether its resolution will avoid duplication of fact-finding or legal analysis

• An issue can be a common issue even if it makes up a very limited aspect of the liability question and even though many individual issues remain to be decided after its resolution

• There must be a rational relationship between the class identified by the plaintiff and the proposed common issues

• The proposed common issue must be a substantial ingredient of each class member's claim and its resolution must be necessary to the resolution of that claim

• A common issue need not dispose of the litigation; it is sufficient if it is an issue of fact or law common to all claims and its resolution will advance the litigation for (or against) the class

• With regard to the common issues, “success for one member must mean success for all. All members of the class must benefit from the successful prosecution of the action, although not necessarily to the same extent.” That is, the answer to a question raised by a common issue for the plaintiff must be capable of extrapolation, in the same manner, to each member of the class

• A common issue cannot be dependent upon individual findings of fact that have to be made with respect to each individual claimant

• Where questions relating to causation or damages are proposed as common issues, the plaintiff must demonstrate (with supporting evidence) that there is a workable methodology for determining such issues on a class-wide basis

• Common issues should not be framed in overly broad terms [Citations omitted.]

[52] In the case before us, the respondents allege that the “General Overview” document omitted mention of the important pension information. If they are correct, the answer to the second common issue identified by the motion judge, whether “any of the defendants made a misrepresentation”, will be in the affirmative. The fact that the appellants argue that there may have been additional pension information provided to certain individuals which may have corrected that provided in the “General Overview” does not result in individual answers to that common issue question. If the plaintiffs do not succeed on this issue, the litigation may be over.

[53] The motion judge discussed and was alive to the principles applicable to the analysis of common issues, particularly in negligent misrepresentation cases. The judge appreciated the individual issues in the context of the record before the court and was satisfied that a finding on the common issues would avoid a duplication of fact finding and legal analysis, particularly vis à vis the “General Overview” document which was the only document common to all officers. He found that success for one on this question would be success for all and in that respect would advance the litigation for every member of the class. He recognized that a common issue need not determine liability; it need only be an issue of common fact or law which will move the litigation forward and avoid duplication. The motion judge assessed the common issues against the individual issues. The motion judge did not misapprehend the evidence before him and made no error in this regard.

Preferable Procedure

[54] Following the approach first suggested in Ginter v. Gardon para. 14, the court should also be satisfied that the representative action fulfils the preferable procedure criterion. The assessment of preferable procedure under the CPA is set out in Markson v MBNA, 2007 ONCA 334, 85 O.R. (3d) 321 at para. 69 and Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at para. 27, most recently reaffirmed in AIC Limited v Fischer, 2013 SCC 69, [2013] S.C.J. No. 69 where Cromwell J. said that the court should focus on the relative advantages of a class action over whatever other forms of litigation might be realistically available (para. 23). The preferability of a representative proceeding should be viewed through the lens of the three principle goals of class action proceedings, namely judicial economy, access to justice and behavior modification. The onus is on the moving party to show that the representative action would be a fair, efficient and manageable method of advancing the claim and that it would be preferable to any other reasonably available means of resolving the group members’ claims: Hollick, at para. 31.

[55] The appellants argue that the motion judge made palpable and overriding errors in his assessment of the facts in coming to his finding that a representative proceeding was the preferable procedure, both with respect to whether the individual issues overwhelm the common issues and with respect to his characterization of the issues of damages and detrimental reliance.

[56] The tort of negligent misrepresentation includes the following five elements as laid out by the Supreme Court in Queen v. Cognos Inc., [1993] 1 S.C.R. 87:

1. There must be a duty of care based on a special relationship;

2. The representation in question must be untrue, inaccurate or misleading;

3. The representor must have acted negligently;

4. The representee must have relied in a reasonable manner; and

5. The reliance must have been detrimental, in the sense that damages resulted.

[57] The appellants submit that the outstanding individual issues are important, fact specific, complex issues which would require individual examinations for discovery. They argue that the reasonable reliance element of the test requires proof on an individual basis that “but for” the negligent misrepresentation, the injury would not have occurred: Ault v. Canada (Attorney General), 2011 ONCA 147, 274 O.A.C. 200 at paras. 44-45.

[58] They submit that the resolution of the common issues will have a negligible impact on the proceeding in relation to the individual issues and therefore there will be no judicial economy.

[59] The jurisprudence on class action proceedings for negligent misrepresentation distinguishes between those cases where there have been multiple representations to individuals and those cases where there has been a single representation made to members of a class: McKenna v. Gammon Gold Inc., 2010 ONSC 1591, 88 C.P.C. (6th) 27 at paras. 135-138, recently affirmed in Dugal v. Manulife Financial Corp., 2014 ONSC 1347, [2014] O.J. No. 981 at para. 51 (Div. Ct.). In the case of Nadolny v. Peel, the representative plaintiff could only show that the alleged representation was made to herself. She asked the court to assume that the other members of the proposed class had received the same representation. The court found that there was no evidentiary foundation to support this assumption, thus there was no commonality in the representation (para. 94). The respondent argues that in cases where there was a single representation made to the group or class, it was more likely that this class action would be certified: Hickey-Button v Loyalist College of Applied Arts &Technology (2006), 2011 O.A.C. 301 (Ont. C.A.) and Murphy v. BDO Dunwoody LLP (2006), 32 C.P.C. (6th) 358 at para 4 (Ont. S.C.). I find that in this case, the plaintiffs allege what Sanderson J. called a “core misrepresentation” (Dugal, at para. 54) as opposed to multiple misrepresentations made over a period of time.

[60] The motion judge was alive to the possible individual issues arising from the causation inquiry, including whether there were any other individual communications which may have cured the alleged omission in the General Overview document. He was of the view that the causation issue was manageable and could “largely be addressed by discovery of each individual, possibly by written discovery” (para. 71). In no way did the motion judge determine that this was the only means to assess the individual issues. Having considered that the individual inquiries could be fairly and efficiently managed, he assessed the importance of the common issues and found that a determination of the common issues would apply to all members of the group and thus constitute a substantial saving of court time and advance the proceedings significantly. In this respect, his determination was not based on a misapprehension of facts or an error in principle.

[61] The appellants further argue that the motion judge misapprehended the facts when he found that there had already been a calculation of damages. The respondent agrees that the motion judge erred in implying that damages had been calculated. The appellants submit that the issue of detrimental reliance is a fact specific assessment of all of the advantages and disadvantages yielded by the decision which would require individual discoveries: Ault v. Canada, at paras. 115-119.

[62] The respondent submits that s. 6 of the CPA specifically excludes the need to assess damages individually from consideration at the certification stage of a class proceeding. They argue that this statutory provision should inform the court on a motion for a representation order under Rule 12.08.

[63] In Brown v. Canadian Imperial Bank of Commerce, 2012 ONSC 2377, 24 C.P.C. (7th) 251, Strathy J. (as he then was) said at para 195: “I do not regard the potential need for individual assessments as detracting from the preferability of a class action. Not only is this factor specifically excluded from consideration by s. 6(1) of the CPA but practical experience has shown that systems can be devised for the fair and efficient resolution of such issues.” I agree with this statement. In this case, the particular circumstances of the officers at the time of transfer may impact on the question of reliance and the calculation of the pension difference are two of the factors that will be part of the damage assessment. These issue will only arise after a resolution of the common issues and a workable plan for their resolution will be the subject of case management should the need arise.

[64] On the other hand, proceeding with up to 74 individual claims in two branches of court (Small Claims and Superior Court) will require the expenditure of a great deal of court resources and will risk the undesirable outcome of multiple inconsistent findings.

[65] The central question of preferable procedure is whether the proposed representative proceeding may achieve the three goals of the CPA. In this respect, it is important to consider the alternatives. In oral argument, when the appellants were asked if they were suggesting that a class proceeding under the CPA would be preferable, the answer was firmly in the negative. The respondents argued that the only other available means of resolving these claims would be through the pursuit of up to 74 individual claims. The appellants did not put forward any other alternative. Some of the claims within the proposed group are in amounts under $25,000 and thus would be within the jurisdiction of the Small Claim Court.

[66] Although the appellants do not take issue with the finding that a representative proceeding would further the goal of access to justice, they do, however, argue the errors made by the motion judge led to incorrect assessments of the issues of judicial economy and efficiency/manageability of the claim. The motion judge appreciated that the issues of causation, reasonable reliance and damages, and detrimental reliance may require individual inquiry. He also suggested, but did not rule on, one means of addressing these issues. Once the common issues have been determined, the parties can put their minds to the alternative methods by which they may most efficiently handle the individual inquiries. I do not agree that the motion judge made an error in finding that these issues did not overwhelm the common issues. His analysis was made through lens of the principle goals of representative proceeding, not necessarily on the burden it would create for the defendants.

[67] The motion judge’s finding in this regard is consistent with the principles of the preferability analysis especially when considering the alternatives available to the members of the group. The motion judge made no error in finding that a resolution of the three common issues will advance this litigation and in so doing will further the goal of access to justice, will provide judicial economy, and can be efficiently managed. It was open to the motion judge to exercise his discretion in finding that a representative proceeding was the preferable procedure.

Disposition

[68] In the result, the appeal is dismissed. The parties should attend before the motion judge to deal with the issue of the proper representative plaintiff and the other issues which require his assistance as the claim proceeds.

[69] The parties may make submissions in writing on the question of costs if they cannot resolve them. The respondent shall make its submissions within ten days of the release of these reasons; the appellants shall have ten days to file a joint response and the respondent shall have five days to file brief reply submissions.

Hennessy J.

Pardu J.

McCartney J.

Released: 2014-04/29

CITATION: Ottawa Police Association v. Ottawa Police Services Board, 2014 ONSC 1584

DIVISIONAL COURT FILE NO.: 12-DV-1841

DATE: 2014-04/29

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

PARDU, McCARTNEY, HENNESSY JJ.

BETWEEN:

Ottawa Police Association

Plaintiff

(Respondent)

– and –

Ottawa Police Services Board, Her Majesty the Queen in Right of Ontario, Omers Administration Corporation and Ontario Public Service Pension Board

Defendants

(Appellants)

REASONS FOR JUDGMENT

Released: 2014-04/29