Court of Appeal for Ontario
Citation: Ludwig v. 1099029 Ontario Limited, 2007 ONCA 266 Date: 2007-04-13 Docket: C45078
Between:
Jim Ludwig and Alison Causton, individually and doing business as SERE FARMS, August Keller, Ilse I. Keller, Ernesto Delciancio and Mary Delciancio individually, Ernie and Mary Delciancio and Eric Seppalla Plaintiffs (Appellants)
- and -
1099029 Ontario Limited, Horti-Pak Inc., Siemens Canada Limited. Ed Gibbs Electric Limited, SimplexGrinnel, a Division of Tyco International of Canada Ltd. and Gould Electronics Inc. Defendants (Respondent)
- and -
The Corporation of the Town of Kingsville, The Electrical Safety Authority, The Ontario Clean Water Agency Third Parties
Before: Feldman, Cronk and Blair JJ.A.
Counsel: Susan M. Chapman for the Appellants S. Gordon McKee for the Respondent
Heard: November 9, 2006 On appeal from the judgment of the Divisional Court (Aston, Valin and Pierce JJ.) dated November 15, 2005.
Overview
[1] The appellants were part of a group of plaintiffs in a proposed class action. The class action was certified but the appellants were excluded from the class. They are appealing that decision to the Divisional Court. The issue before this court is whether they are entitled to appeal directly to the Divisional Court under s. 30(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6, because it is an appeal "from an order refusing to certify a proceeding as a class proceeding", or whether they may only appeal with leave under s. 30(2), because it is "an order certifying a proceeding as a class proceeding".
Procedural Background
[2] The appellants were all named plaintiffs in the action that is the subject of the class proceeding. The action arose as a result of a fire at a manufacturing facility in Kingsville, Ontario. The fire sent a plume of smoke sailing out from the plant and caused the evacuation of about 3200 people. The proposed class included people within an area 100 times the size of the evacuated area. On the motion for certification of the action, Patterson J. certified the class action, but limited the class to "those individuals who were evacuated from the evacuated area…."
[3] The plaintiffs who were excluded from the class appealed the decision to the Divisional Court under s. 30(1) of the Class Proceedings Act. The respondent moved to quash the appeal on the basis that the appellants required leave to appeal under s. 30(2) of the Act. Subsections 30(1) and (2) provide:
- (1) A party may appeal to the Divisional Court from an order refusing to certify a proceeding as a class proceeding and from an order decertifying a proceeding.
(2) A party may appeal to the Divisional Court from an order certifying a proceeding as a class proceeding with leave of the Ontario Superior Court as provided in the rules of court.
[4] On June 21, 2005 Rady J., sitting as a single judge of the Divisional Court, dismissed the respondent's motion to quash. She found that the certification order was, in effect, a dismissal of the certification motion of those plaintiffs who were excluded from the class, and that that dismissal finally determined their rights for the purpose of this class proceeding. As the order was therefore a final order for the appellants, they were entitled to appeal as of right.
[5] The respondent appealed the order of Rady J. to a full panel of the Divisional Court. The Divisional Court allowed the appeal, holding that because Patterson J.'s order was an order that certified a class proceeding, an appeal from that order lies only with leave under s. 30(2). The court stated that the words of s. 30 are clear and that the question whether the order of Patterson J. was final or interlocutory is not a relevant inquiry.
[6] The appellants obtained leave from this court to appeal the decision of the Divisional Court.
Analysis
[7] The appellants recognize that they must fit within the requirements of s. 30(1) of the Class Proceedings Act in order to be able to appeal as of right to the Divisional Court. They therefore characterize the order being appealed as an order that refuses certification to the appellants. In my view, this characterization is flawed.
[8] The order of Patterson J. granted certification of the action. It also dealt with the issues mandated by s. 8(1) of the Act: the description of the class; the names of the representative parties; the nature of the claims asserted by the class; the relief sought by the class; the common issues; and the manner and date for opting out. In the description of the class, the motion judge determined that the geographical area describing the residential criteria that defined the class was too large. His solution was to redefine the area by limiting it to the section from which residents were evacuated as a result of the fire. The effect was to remove the appellants from the class that was certified. That did not, however, make the order one that refuses certification.
[9] The definition of the members of the class is one of the terms of a certification order. Under s. 8(3), a certification order can be amended. One of the possible amendments is to change the description of the class. However, the order remains a certification order.
[10] Under s. 10(1), in certain circumstances a court may either amend the certification order, it may decertify "the proceeding", or it may make any other order it considers appropriate. Unlike amendment, decertification means there no longer is a class proceeding. In that case, under s. 10(2), "the court may permit the proceeding to continue as one or more proceedings between different parties."
[11] The appellants submit that in interpreting s. 30, the court should have regard to the final/interlocutory distinction and, where the effect of an order is to finally determine the rights of a party, that effect should govern the determination of the appeal route. They say that in this case, the effect of the order of Patterson J. is twofold: while it certifies the class proceeding, it also refuses certification to part of the proposed class and therefore gives those people the right to appeal under s. 30(1). The appellants conclude that the effect of the order is that "it finally determines the substantial issue between them and the defendants and terminates their right to pursue a class proceeding."
[12] I reject this submission for two reasons. The first is that s. 30 defines the rights to appeal both directly and with leave in a specific manner that does not rely on the final/interlocutory distinction. As a matter of pure statutory interpretation, one may conclude that the legislature's decision was a deliberate one.
[13] Bolstering that conclusion is the 1982 Ontario Law Reform Commission Report on Class Actions, which recommended that the appeal provision be explicitly spelled out and not rely on the final/interlocutory distinction. The Law Reform Commission based its recommendation on a review of the U.S. class action jurisprudence on appeals, where the use of the final/interlocutory distinction had resulted in a severe curtailment of the right to appeal orders granting and denying certification (Vol. 3 (Toronto: Ministry of the Attorney General, 1982) at 818, 821-22). Although when it fashioned the Act, the legislature did not adopt the explicit wording of the appeal rights recommended by the Law Reform Commission, it did specifically define those rights in s. 30 without reference to the final/interlocutory distinction.
[14] The second reason why I do not accept the appellants' submission is that the right of the appellants to pursue their action against the defendants was not finally determined by the certification order, nor did it terminate their right to pursue a class proceeding. In his reasons, the motion judge addressed, as he was required to do, the issue of preferable procedure. In that context, he noted that the class action with the evacuated group as the class would determine the issue of the liability of the defendants for the fire as a test case; the excluded claimants could then pursue their claims for damages on an individual basis.
[15] If the test case in the class action were to determine that the defendants are liable for the fire, the doctrine of abuse of process would likely prevent the defendants, who would have had a full and fair opportunity to defend the original claim, from re-litigating that issue.[^1] See Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 at paras. 35-42, 49-51; Garry D. Watson, "Duplicative Litigation: Issue Estoppel, Abuse of Process and the Death of Mutuality" (1990) 69 Can. Bar Rev. 623. There would be no policy reason to preclude the appellants from relying on the judgment in the first action: they are manifestly not "wait and see" plaintiffs; the defendants have every incentive to defend vigorously the action brought by the class that has been certified; and, as the two actions would be tried in the same forum, the same procedural safeguards and opportunities would be available to the defendants in both. See Toronto v. CUPE, supra at para. 53; Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979). At the very least, if the test case assigned liability to the defendants, although the result would not be binding as between the plaintiffs who were excluded from the class (the appellants) and the defendants, it would form a strong basis for the parties to treat the issue of liability as settled, rather than to re-litigate it. Those plaintiffs could then pursue their action for damages.
[16] Moreover, I can see no reason why the appellants, or an appropriate subgroup of them, would be precluded from seeking certification and, if certification were granted, commencing a new class action as a separate class.[^2] What has been determined to date is that it was not appropriate for them to be part of the class in the within action. Whether they can make a case as a separate class has not been determined, should they wish to pursue the issue.
[17] Neither party directed the court to any case that addressed the issue of the proper appeal route that is raised on this appeal. In most other provinces, the appeals from both an order certifying and from an order refusing to certify a proceeding as a class proceeding are either both by leave or both as of right. In British Columbia and Alberta, any party may appeal as of right either from an order certifying or an order refusing to certify a proceeding as a class proceeding, while in Alberta, Manitoba and Newfoundland and Labrador, any party wishing to appeal either an order certifying or refusing to certify must first obtain leave.[^3] The exception is the Quebec statute, which provides that an applicant for certification may appeal an order dismissing a certification order by right and a member of the class may appeal an order dismissing certification with leave, but there is no appeal from an order granting certification.[^4] The Ontario statute is the only one that provides for appeals both from orders certifying and orders refusing to certify a proceeding as a class proceeding, but which requires leave only for the former and allows the latter by right.
[18] In a brief endorsement in Billette c. Groupe Dumoulin Electronique inc., [2003] J.Q. No 23162, the Court of Appeal for Quebec said that a member of the plaintiff group who had been excluded from the class had the right to appeal that decision with leave, treating the decision as one that denied certification to the excluded plaintiffs. I would not apply the result in that case to an appeal under the Ontario provisions for two reasons. The first is that the judgment is brief and does not provide any discussion or analysis of the consequences of interpreting the right to appeal from an order denying certification to include an order that limits the class that is certified in the context of the provisions of the Quebec Act. The second is that in Quebec, unlike in Ontario, there is no appeal at all from a decision granting certification. The fact that there is absolutely no appeal, either by right or by leave, from a decision that grants certification may have influenced the court's interpretation of the effect of a decision that excludes some prospective plaintiffs from the certified class.
[19] I can see neither a rule of statutory interpretation nor any policy argument that derogates from the conclusion that the words of ss. 30(1) and (2) of the Class Proceedings Act are clear and logical. Where an order for certification has been made, the action should be able to continue without waiting for an appeal process that may unduly delay the proceeding. Delaying the progress of a class action would be justified only if leave were to be granted, because then there is an issue of particular importance to be determined. On the other hand, if certification is refused, then there is no class action and an appeal in that circumstance is required. To interpret the exclusion of people from the certified class as a refusal to certify the action effectively stops the action while the excluded plaintiffs appeal as of right. In my view, such a result would not advance the purpose of the Act, which seeks to facilitate access to justice and the principles of effective and timely use of the judicial process.
Result
[20] I conclude that the appellants may appeal the decision of Patterson J. to the Divisional Court only with leave under s. 30(2) of the Class Proceedings Act. I would therefore dismiss the appeal with costs, fixed as agreed in the amount of $3,500, inclusive of disbursements and G.S.T.
Signed: "K. Feldman J.A."
"I agree E.A. Cronk J.A."
"I agree R. A. Blair J.A."
RELEASED: "KNF" April 13, 2007
[^1]: Conversely, if the defendants were found not liable in the class action, the appellants and other prospective plaintiffs would not be precluded from re-litigating the issue because they would not have had an opportunity to make out their claim against the defendants.
[^2]: Subject to any relevant limitation issues.
[^3]: The relevant provisions are as follows:
[British Columbia](https://www.canlii.org/en/bc/laws/stat/rsbc-1996-c-50/latest/rsbc-1996-c-50.html) Class Proceedings Act, R.S.B.C. 1996, c. 50, s. 36(1):
Any party may appeal to the Court of Appeal from
(a) an order certifying or refusing to certify a proceeding as a class proceeding,
(b) an order decertifying a proceeding,
(c) a judgment on common issues, and
(d) an order under division 2 of this Part, other than an order that determines individual claims made by class or subclass members.
[Alberta](https://www.canlii.org/en/ab/laws/stat/sa-2003-c-c-16.5/latest/sa-2003-c-c-16.5.html) Class Proceedings Act, S.A. 2003, c. C-16.5, s. 36(1):
Any party may, without leave, appeal to the Court of Appeal from any of the following:
(a) an order certifying or refusing to certify a proceeding as a class proceeding;
(b) an order decertifying a proceeding;
(c) a judgment on common issues;
(d) an order made under Division 2 of this Part, other than an order that determines individual claims made by class members or subclass members.
Saskatchewan Class Actions Act, S.S. 2001, c. 12.01, s. 39(3):
With leave of a justice of the Court of Appeal, any party may appeal to the Court of Appeal from:
(a) an order certifying or refusing to certify an action as a class action; or
(b) an order decertifying an action.
[Manitoba](https://www.canlii.org/en/mb/laws/stat/ccsm-c-c130/latest/ccsm-c-c130.html) Class Proceedings Act, C.C.S.M. c. C130, s. 36(4):
With leave of a justice of The Court of Appeal, a representative plaintiff or defendant may appeal to The Court of Appeal from
(a) an order certifying or refusing to certify a proceeding as a class proceeding; or
(b) an order decertifying a proceeding.
Newfoundland and Labrador Class Actions Act, S.N.L., 2001, c. 18.1, s.36(3):
A party may, with leave of a judge of the Court of Appeal, appeal to the Court of Appeal from
(a) an order certifying or refusing to certify an action as a class action; or
(b) an order decertifying an action.
[^4]: Article 1010 of the Code of Civil Procedure, R.S.Q. c. C-25 provides:
The judgment dismissing the motion is subject to appeal pleno jure by the applicant or, by leave of a judge of the Court of Appeal, by a member of the group on behalf of which the motion had been presented. The appeal is heard and decided by preference.
The judgment granting the motion and authorizing the exercise of the recourse is without appeal.