Court File and Parties

CITATION: Berg v. Canadian Hockey League 2017 ONSC 6719

DIVISIONAL COURT FILE NO.: 284/17

DATE: 20171116

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Samuel Berg and Daniel Pachis, Plaintiffs

AND:

Canadian Hockey League, Ontario Major Junior Hockey League, Ontario Hockey League, Western Hockey League, Quebec Major Junior Hockey League Inc. et al, Defendants

BEFORE: Kiteley J.

COUNSEL: Theodore P. Charney, counsel for the Plaintiffs

Lisa Talbot, Sarah Whitmore and Irfan Kara, counsel for the Defendants

HEARD at Toronto: September 21, 2017

ENDORSEMENT

[1] In reasons for decision released April 27, 2017[^1] on a motion pursuant to the Class Proceedings Act, Perell J. certified the claims for breach of employment law statutes and unjust enrichment; did not certify the claims for breach of contract, negligence, breach of duty of honesty, good faith and fair dealing, conspiracy and waiver of tort (referred to by the motion judge as “redundant causes of action”); did not certify the action as against the American teams (referred to by the motion judge as “U.S. Defendants”) and amended the class definition accordingly; amended the definition of the class to close the class period as of the date of the certification motion; did not certify the common issues for the redundant causes of action; appointed Berg and Pachis to be Representative Plaintiffs. With those revisions, the motion judge certified the action as a class action.

[2] This is a motion by the defendants to quash the plaintiffs’ appeal from the order to the extent that it did not certify the action as against the U.S. Defendants. It is also a motion by the plaintiffs for an extension of time to seek leave to appeal that aspect of the order of Perell J. and a motion for an extension of time to seek leave to appeal the order not certifying the redundant causes of action. What should have been straightforward matters digressed into what the motions judge described in paragraph 10 as “evidentiary boarding, cross-checking, slashing, and spearing”. For the reasons that follow the motion to quash is granted; the motion to extend time to seek leave to appeal from the order with respect to the U.S. Defendants is dismissed; and the motion to extend time to seek leave to appeal from the order with respect to the redundant causes of action is granted.

Chronology

[3] As indicated at paragraph 16 of the motion judge’s reasons, in this and the companion actions, Berg and Pachis in Ontario and Walter, McEvoy and O’Connor in Alberta are the plaintiffs in which the defendants include the Canadian Hockey League, Ontario Major Junior Hockey League, Ontario Hockey League, Western Hockey League, Quebec Major Junior Hockey League and many local hockey clubs.

[4] By consent order dated July 22, 2015 in this action, the claims against the Western Hockey League and the Quebec Hockey League and the clubs of the WHL and QMJHL were stayed. As a result of that consent order the Berg and Pachis action continues in Ontario and the Walter, McEvoy and O’Connor continues in Alberta. Class counsel and defendants’ counsel in both proceedings are from the same firms.

[5] On March 21-23, 2017, the motion judge heard submissions on the plaintiffs’ certification motion in the Ontario action.

[6] On April 27, 2017, the motion judge released reasons for decision summarized in paragraph 1 above.

[7] Counsel for the defendants immediately pointed out to class counsel that if an appeal was contemplated, it would be pursuant to s. 30(2) of the Class Proceedings Act and as a result of the decision by the Court of Appeal in Ludwig v. 1099029 Ontario Ltd.[^2], leave was required. Counsel also pointed out that the deadline for the plaintiffs to serve a notice of motion for leave to appeal from the denial of certification against the U.S. Defendants was May 12, 2017.

[8] On May 29, 2017 pursuant to s. 30(1) the plaintiffs served a notice of appeal to the Divisional Court in which they asked for an order setting aside the portions of the order refusing to certify the action as a class proceeding against the four U.S. Defendants and for an order certifying the action as a class proceeding against the U.S. Defendants.

[9] Counsel for the defendants again took the position that the plaintiffs required leave to appeal. Class counsel did not agree.

[10] On June 13, 2017, counsel for the defendants served what is referred to as a notice of cross-appeal but it is a motion pursuant to rule 62.02(4)(b) for leave to cross-appeal several aspects of the April 27 order including representative plaintiffs and common issues. At the same time, counsel for the defendants served a motion without a return date for an order quashing the plaintiffs’ appeal. It did not have a return date because the protocol is that counsel are expected to agree on how long the motion will take before the Divisional Court schedules the hearing.

[11] On June 15, 2017, Hall J. released his decision[^3] in which he did not certify the U.S. Defendants but he disagreed with the motion judge and he did certify all causes of action. On that date, the plaintiffs were aware that the decision of Hall J. with respect to the redundant causes of action appeared to be in conflict with the decision of the motion judge. The 15 day deadline for serving a notice of motion for leave to appeal from the April 27 decision on that ground expired on June 30.

[12] On June 29, 2017, two weeks after the decision by Hall J. and after the defendants had served their motion to quash, the plaintiffs made a proposal to settle all appeals arising from the certification order in Ontario and from the certification order in the Alberta action. Counsel for the plaintiffs ought not to have referred to settlement issues in the motion material and I disregard all references to settlement issues or communications (or lack thereof) with respect to settlement.

[13] In the Alberta action, on July 14, 2017, the plaintiffs commenced an appeal with respect tothe refusal to certify the U.S. Defendants and on July 17, 2017, the defendants commenced an appeal with respect to the certification of the common issues.

[14] On July 19, 2017 class counsel served a notice of motion to extend the time to seek leave to appeal from the April 27 order on the issues of the U.S. Defendants and the redundant common issues.

[15] On July 27, 2017 after class counsel responded on how long the motion to quash would take, counsel for the defendants served the motion to quash returnable September 21, 2017.

[16] On July 27, 2017, class counsel served a motion returnable September 21, 2017 for an order for an extension of time to bring a motion to seek leave to appeal the order dated April 27, 2017 on the issue of the refusal to certify the redundant causes of action. And if the defendants’ motion to quash the plaintiffs’ May 29, 2017 appeal was granted, the plaintiffs also sought an extension of the deadline to serve a motion for leave to appeal those portions of the order refusing to certify the action against the U.S. Defendants. In support of that motion, the plaintiffs delivered the unsworn affidavit of Glenn Brandys attached to which were documents relevant to the motion. The affidavit was sworn on August 9, 2017.

[17] Counsel for the defendants conducted a cross-examination of Mr. Brandys on August 17, 2017.

[18] On September 11, 2017 the motion judge released a decision[^4] in which he awarded the plaintiffs costs of $1.2 million and awarded the defendants costs of $200,000.

Defendants’ Motion to quash the notice of appeal dated May 27, 2017

[19] I agree with counsel for the defendants that, on the basis of Ludwig, the plaintiffs require leave to appeal the order not to certify the action to include the U.S. Defendants. The position taken by class counsel that, pursuant to s. 30(1) of the Class Proceedings Act, there is an automatic right of appeal on that issue is untenable. That motion to quash the appeal with respect to the U.S. Defendants is granted.

Plaintiffs’ motion to extend time to seek leave to appeal the order dated April 27, 2017

[20] Pursuant to rules 2.03 and 3.02, the court has discretion to extend any time requirement. The test for granting an extension of time[^5] is as follows:

The test on a motion to extend time is well settled. The overarching principle is whether the “justice of the case” requires that an extension be given. Each case depends on its own circumstances, but the court is to take into account all relevant considerations, including:

(a) whether the moving party formed a bone fide intention to appeal within the relevant time period;

(b) the length of, and explanation for, the delay in filing;

(c) any prejudice to the responding parties caused, perpetuated or exacerbated by the delay; and

(d) the merits of the proposed appeal.

[21] The “justice of the case” is a highly discretionary factor which encompasses, inter alia, the merits of the proposed appeal, any competing considerations in respect of prejudice, as well as any fairness concerns.[^6]

A. Plaintiffs’ motion for an extension of time to seek leave to appeal the order dated April 27, 2017 as it relates to refusal to certify the action involving the U.S. Defendants

[22] The 15 days within which the plaintiffs were required to serve the motion to seek leave to appeal expired on May 12, 2017. Counsel corresponded on the route of an appeal and class counsel served a notice of appeal on May 29. However the evidence does not indicate that the plaintiffs formed a bona fide intention to appeal by May 12, 2017.

[23] The plaintiffs’ notice of appeal was served May 29 based on the position taken by class counsel that s. 30(1) of the CPA applied. That might be a reasonable explanation for the delay except that the decision by the Ontario Court of Appeal in Ludwig clearly established the law and that was brought to the attention of the plaintiffs who chose to ignore it.

[24] There is no evidence that the defendants are prejudiced by the delay from May 12, 2017 to July 27, 2017.

[25] At paragraph 35 of the factum class counsel takes the position that, pursuant to rule 62.02(4)(b) there is good reason to doubt the correctness of the order excluding the U.S. Defendants. At paragraph 36, class counsel asserts that the justice of the case requires an extension. However, there is no basis to find, even on the limited merits analysis required in a motion to extend time to bring a motion for leave to appeal that the appeal involves matters of such importance that leave should be granted. Indeed, since Hall J. did not include the U.S. Defendants, that is a basis for concluding that it would not meet the second part of the test in rules 62.02(4)(b).

[26] The plaintiffs ignored and/or rejected the input of counsel for the defendants as to the route of appeal. I am not persuaded that there is merit. On that basis, I am not satisfied that the “justice of the case” requires that the court grant an extension of time for the plaintiffs to seek leave to appeal on that issue.

B. Plaintiffs’ motion for an extension of time to seek leave to appeal the order dated April 27, 2017 as it relates to refusal to certify the “redundant causes of action”

[27] The plaintiffs’ notice of motion for leave to appeal was served July 27: 90 days after the decision by the motion judge and 42 days after the decision of Hall J. There is no evidence that the plaintiffs formed a bona fide intention to appeal by May 12. In fact, the evidence of Brandys is that the plaintiffs did not think there was a basis to seek leave to appeal until the decision of Hall J. The plaintiffs concede they did not form the intention to appeal within 15 days.

[28] There is no evidence that the defendants are prejudiced by the delay from May 12, 2017 to July 27, 2017.

[29] At paragraphs 39-44 of the factum, counsel for the defendants takes the position that there is no conflicting decision within the meaning of rule 62.02(4)(a). Counsel argue that the motion judge and Hall J. both applied well established principles and arrived at a different result.

[30] Without “foreshadowing” the outcome of the motion for leave to appeal, the record does suggest a conflict between the decision of the motion judge and the decision of Hall J. and rule 62.02(4)(a) contemplates that the conflict could be from a judge other than in Ontario. Whether their decisions are in conflict within the meaning of the rule is for the court to decide on the motion for leave to appeal. It remains open whether the plaintiffs can establish that “it is desirable that leave to appeal be granted” but there is a basis upon which the court should exercise its discretion to grant an extension of time where the certification motions were argued on a substantially identical evidentiary record in support of substantially identical claims, argued by the same counsel, and one judge certified all of the common issues and another judge did not. I am satisfied that the plaintiffs have met the limited merits analysis involved at the stage of seeking an extension of time to seek leave to appeal.

[31] As indicated at paragraph 2 above, and as referenced by the motion judge at paragraphs 14 and 230 of the decision dated April 27, this case has generated considerable animosity between class counsel and defendants’ counsel. Indeed, as the reasons for decision on costs indicates, the litigation strategy of each side was considered in the order fixing costs. On this appeal, it was demonstrated by the submission by counsel for the defendants that, in his affidavit, Brandys was misleading the court and in submissions by class counsel that counsel for the defendants was misleading the court as to Brandys evidence. None of that was helpful or relevant to the decision on these motions to extend time to seek leave to appeal. That high conflict litigiousness is a circumstance that the court might consider because the “justice of the case” ought to prevent the continuation of such animosity and the impact on judicial resources as a result. However, there is an issue with respect to non-certification of the redundant causes of action that ought to be submitted to the court on a motion for leave to appeal and to allow that to happen, the motion for an extension of time must be granted.

Costs

[32] Neither counsel provided a costs outline and each made only brief submissions.

[33] The defendants are entitled to costs to reflect success on the motion to quash and success in resisting the motion to extend time to seek leave to appeal on the issue of the U.S. Defendants. That is to be tempered by having not been successful in resisting the motion to extend time to seek leave to appeal on the issue of the redundant causes of action. While successful on obtaining leave to extend the time to seek leave to appeal on the redundant causes of action, the plaintiffs are not entitled to costs because they were seeking an indulgence. The defendants are entitled to costs on that motion as well.

[34] However the amount to which the defendants are entitled should reflect what costs might have been if the issues had been addressed in the straightforward manner that should have been adopted. I allow $1500 for each of the successful motion to quash and the denial of the motion to extend time with respect to the U.S. Defendants and $1000 with respect to the motion for an extension of time to seek leave to appeal on the redundant causes of action issue.

[35] In the hearing before the motion judge on costs of the certification motion, the Law Foundation of Ontario was represented and its role was considered in the outcome of the costs order. On these motions, counsel made no submissions as to when costs ought to be paid. Given the modest amounts involved, I will not afford counsel or counsel for the Law Foundation to make such submissions but the order as to payment takes into account the fact that relationships with respect to costs in class actions are complex.

ORDER TO GO AS FOLLOWS:

[36] The motion by the defendants to quash the appeal dated May 27, 2017 is granted.

[37] The motion by the plaintiffs for an extension of time to seek leave to appeal the order not to certify the U.S. Defendants is dismissed.

[38] The motion by the plaintiffs for an extension of time to see leave to appeal the order not to certify the redundant causes of action is granted. The plaintiffs shall serve and file the necessary record and factum and book of authorities no later than November 30, 2017.

[39] The plaintiffs shall pay costs to the defendants in the amount of $4000.00 in any event of the cause.

Kiteley J.

Date: November 16, 2017

[^1]: 2017 ONSC 2608 [^2]: 2007 ONCA 266 [^3]: 2017 ABQB 382 [^4]: 2017 ONSC 5382 [^5]: Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131 at para 15 [^6]: Rizzi v. Mavros, 2007 ONCA 350 at par 27