COURT OF APPEAL FOR ONTARIO DATE: 20210922 DOCKET: M52599 (C69417)

Lauwers, Coroza and Sossin JJ.A.

BETWEEN

Glenn Johnson, Michael Smith and Timothy Hayne Plaintiffs (Respondents/Responding Parties)

and

Her Majesty the Queen in Right of Ontario Defendant (Respondent/Moving Party)

Counsel: Rita V. Bambers and Lisa Brost, for the moving party Mirilyn R. Sharp, Nancy Sarmento Barkhordari and Nital S. Gosai, for the responding party Donald Parker Kevin Egan and Michael Peerless, for the responding parties Glenn Johnson, Michael Smith and Timothy Hayne

Heard: September 2, 2021 by video conference

Lauwers J.A.:

A. Overview

[1] In an order dated April 16, 2021, the motion judge refused to extend the period of time within which Donald Parker could opt out of this class proceeding under s. 9 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, which provides that “[a]ny member of a class … may opt out of the proceeding in the manner and within the time specified in the certification order.” In an order dated May 10, 2021, the motion judge also ordered Mr. Parker to pay costs in the amount of $20,850 and did not permit him to set off the costs against future payments to be made in the class proceeding. Mr. Parker appealed to this court.

[2] Her Majesty the Queen in Right of Ontario moves to quash Mr. Parker’s appeal on the basis that the motion judge’s order was interlocutory and therefore appealable only to the Divisional Court under s. 19(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Is a motion judge’s decision to refuse to extend the time within which a class member can opt out of a class proceeding final or interlocutory? This is a novel question.

[3] I would dismiss Ontario’s motion to quash the appeal on the basis that the order was final, for the reasons that follow.

B. Factual Context

[4] Mr. Parker was an inmate in the Elgin Middlesex Detention Centre in December 2016. He alleges that when he regained consciousness after a drug incident, he noted pain and swelling in his left arm. He alerted detention centre staff, but they did nothing. His pain and swelling worsened. Three days after the onset of his symptoms, he was taken to the hospital where it was discovered that the muscle in his left arm had become necrotic. He endured three emergency surgeries and now has a permanent disabling injury.

[5] Mr. Parker claims that he discovered his cause of action in November 2018 when he received a copy of his medical chart from the treating hospital. The chart confirmed the causal relationship between his delayed presentation at the hospital and his injury. Mr. Parker sued Ontario and a number of other entities and individuals claiming general, special, punitive, and aggravated and exemplary damages for negligence and under s. 24(1) of the Canadian Charter of Rights and Freedoms for breaches of ss. 7 and 12. His total claim comes to more than $6 million.

[6] When he started his lawsuit, Mr. Parker was not aware of the existence of two class actions that had been certified and consolidated on behalf of persons incarcerated at the Elgin Middlesex Detention Centre between January 1, 2010 and May 18, 2017.

[7] The motion judge’s certification order of May 18, 2017 specified that the opt-out deadline was June 20, 2018.

[8] On the evidence before the motion judge, which Ontario does not dispute, the class proceeding did not come to Mr. Parker’s attention. In August 2017, Mr. Parker was transferred from the Elgin Middlesex Detention Centre to Maplehurst and then to Joyceville Institution, a federal prison near Kingston, Ontario, where he was held until December 2019. The notice process under the class action plan proceeded. A long-form notice was sent to Mr. Parker, but not at Joyceville. It was sent to the apartment he had shared with his father in St. Thomas, Ontario immediately before his arrest. His father lived at the address at all material times.

[9] Mr. Parker deposed that he learned of the class proceeding only when he received a letter from counsel for Ontario dated June 5, 2020, which accompanied Ontario’s notice of intent to defend Mr. Parker’s action. Ontario asked Mr. Parker’s counsel to discontinue the action or to limit the claim to post May 18, 2017 conduct in view of this class action.

[10] Mr. Parker responded by seeking an extension of the time within which he could opt out of the class action. By refusing to extend the time, the motion judge effectively terminated Mr. Parker’s civil action.

C. The Governing Principles

[11] As noted, interlocutory orders are appealable only to the Divisional Court and final orders are appealable to this court. Zarnett J.A. gave a compressed statement of the distinction between interlocutory and final orders in Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, at para. 16:

An interlocutory order is one which does not determine the real matter in dispute between the parties—the very subject matter of the litigation—or any substantive right to relief of a plaintiff or substantive right of a defendant. Even though the order determines the question raised by the motion, it is interlocutory if these substantive matters remain undecided: Hendrickson v. Kallio, [1932] O.R. 675 (C.A.), at p. 678; Ball v. Donais (1993), 13 O.R. (3d) 322 (C.A.).

See also Buck Brothers Ltd. v. Frontenac Builders Ltd. (1994), 19 O.R. (3d) 97 (C.A.).

[12] Hoy A.C.J.O. discussed the rationale for the distinction between interlocutory and final orders in Skunk v. Ketash, 2016 ONCA 841, 135 O.R. (3d) 180, at para. 31:

The reason for the distinction is explained by Paul M. Perell and John W. Morden in The Law of Civil Procedure in Ontario, 2d ed. (Markham: Lexis-Nexis Canada Inc., 2014), at p. 910:

¶12.41 In general terms, the policy underlying the distinction between interlocutory and final orders is the proportionality principle. For judicial decisions that are of comparatively less importance to the parties and the public than other decisions (particularly those other decisions that are determinative of the outcome of the litigation), there should be no appeal at all, or the right of appeal should be curbed by a leave requirement. [Footnote omitted.]

See also Gerard Kennedy, “Civil Appeals in Ontario: How the Interlocutory/Final Distinction Became So Complicated and the Case for a Simple Solution?” (2020) 45:2 Queen’s L.J. 243, at pp. 255-57.

[13] There is no need to set out the many different circumstances in which this distinction has been judicially elaborated because Mr. Parker focuses on two areas: the forum in which the dispute will be finally resolved, and the effect of the order under appeal on his substantive rights. I address each of these after considering the jurisprudence on opt-out rights.

(1) Opt-Out Rights

[14] Ontario argues that the Class Proceedings Act is “entirely a procedural statute” and submits that any right under it, such as the right to opt out, should also be seen as nothing more than procedural, certainly not substantive. Ontario cites Nutech Brands Inc. v. Air Canada, [2008] O.J. No. 1065 (S.C.) per Leitch R.S.J., at para. 18: “Opting out affects a procedural right, not a substantive right – it requires class members to choose the venue in which to pursue their substantive claims.”

[15] However, one can speak of the right to opt out as itself a substantive right. In 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2012 ONSC 4317, rev'd on other grounds 2013 ONCA 279, 112 O.R. (3d) 294, rev’d on other grounds 2013 ONCA 279, 115 O.R. (3d) 653, Strathy J. (as he then was) noted, at paras. 58 and 59:

The right of a party to opt out is fundamental to the court’s jurisdiction over unnamed class members. It is also fundamental to preserve the legal rights of those who wish to exercise those rights other than through the class action.

This court has consistently spoken of the importance of a fair and informed opt–out process…. [Citations omitted.]

He cited the decision of Sharpe J.A. in Currie v. McDonald’s Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321 (C.A.), at para. 28, who pointed out the substantive effects of opting out:

The right to opt out is an important procedural protection afforded to unnamed class action plaintiffs. Taking appropriate steps to opt out and remove themselves from the action allows unnamed class action plaintiffs to preserve legal rights that would otherwise be determined or compromised in the class proceeding. Although she was not referring to inter-jurisdictional issues, in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, at para. 49, McLachlin C.J.C. identified the importance of notice as it relates to the right to opt out: "A judgment is binding on a class member only if the class member is notified of the suit and given an opportunity to exclude himself or herself from the proceeding." The right afforded to plaintiff class members to opt out has been found to provide some protection to out-of-province claimants who would prefer to litigate their claims elsewhere: Webb v. K-Mart Canada Ltd. (1999), 45 O.R. (3d) 389 at 404 (S.C.J.).

[16] Our society places a high premium on a person’s ability to initiate and participate in litigation as an incident of personal autonomy. Along with it goes the right to appoint counsel of one’s choice, the right to participate meaningfully in the development of litigation strategy, to participate in settlement negotiations, and to settle the action. The legislative right to opt out of a class proceeding recognizes these significant rights.

[17] The cases that point to the importance of opt-out rights implicitly accept this perspective. See for example, the observation of Belobaba J. in Workmen Optometry v. Aviva Insurance, 2021 ONSC 3843, in which he considered a motion to stay individual actions pending the certification of a related class action. He noted, at para. 9, that: “If a plaintiff has good reason to reject the class proceeding and pursue an individual claim, then as a general proposition they should have every right to do so.” He added: “The CPA was designed to enhance access to justice. It would be ironic in the extreme if this important procedural vehicle delayed such access for legitimate individual litigants.” Belobaba J. cited Cullity J.’s earlier observation to the same effect in Dumoulin v. Ontario (Ontario Realty Corp.), [2004] O.J. No. 2778, at para. 8: “The CPA was not intended to prevent, or impede, actions by individuals for no other reason than they are, or may be, members of a putative class in an action commenced by another party.”

(2) The Forum

[18] In general terms, a decision that determines the forum in which the merits of the dispute are to be heard is considered to be a final decision: Buck Brothers (a decision that a jurisdictional question should go to a panel of arbitrators rather than the courts); M.J. Jones Inc. v. Kingsway General Insurance Co. (2003), 233 D.L.R. (4th) 285 (Ont. C.A.) (a decision to deny a motion for a stay based on a lack of jurisdiction or forum non conveniens); Smith Estate v. National Money Mart Company, 2008 ONCA 746, 92 O.R. (3d) 641, leave to appeal refused, [2008] S.C.C.A. No. 535 (a decision to deny a stay of an action in favour of an arbitration); Fontaine v. Canada (Attorney General), 2018 ONCA 832 (a direction that a tribunal outside the jurisdiction of Ontario’s courts determine certain issues).

[19] By contrast, in Locking v. Armtec Infrastructure Inc., 2012 ONCA 774, 299 O.A.C. 20, this court held that an order resolving a carriage dispute between competing law firms over which firm and which class action would proceed was interlocutory because it did not determine the merits of the action. In Drywall Acoustic, this court held that a motion judge’s refusal to stay an Ontario class action in favour of a Quebec class action was interlocutory because, as Zarnett J.A. noted, at para. 27: “[T]he Quebec Plaintiff’s motion to stay did not raise for determination any of the Defendants’ substantive responses to the merits of the Ontario Plaintiff’s claim, let alone result in the determination of any such substantive response.”

(3) Substantive and Procedural Rights

[20] The starting point for determining whether an order is final or interlocutory is Middleton J.A.’s primordial statement in Hendrickson v. Kallio, [1932] 4 D.L.R. 580 (Ont. C.A.) at pp. 583-84:

The interlocutory order from which there is no appeal is an order which does not determine the real matter in dispute between the parties—the very subject matter of the litigation, but only some matter collateral. It may be final in the sense that it determines the very question raised by the application, but it is interlocutory if the merits of the case remain to be determined.

[21] The distinction between substantive and procedural rights was addressed by this court in Sun Life Assurance Co. of Canada v. York Ridge Developments Ltd. (1998), 116 O.A.C. 103, at para. 13:

As stated in [Holmested] and Watson on Ontario Civil Procedure at 62-24: “ … to be final an order must deal with the substantive merits as opposed to mere procedural rights, no matter how important the procedural rights may be. The test focuses on whether the order under appeal finally disposes of the rights of the parties, in the sense of substantive rights to relief (in the case of a plaintiff) or a substantive defence (in the case of a defendant).”

[22] However, in Buck Brothers, Morden A.C.J.O. made an important qualifying distinction. He found that the motion judge’s order, which determined the forum by staying a court action and requiring the parties to submit to arbitration, was a final order even though the real issue in dispute between the parties – the substance of the arbitration itself – was not decided. He explained at paras. 7 and 8:

I read the passage from Hendrickson v. Kallio as referring to “the real matter in dispute between the parties” in the proceeding which is before the court and not in some other proceeding which may, or may not, then be in existence. In accordance with this interpretation, I read "the litigation" in "the very subject matter of the litigation" as referring to the proceeding in which the order in question is made. Similarly, I read "the case" in "if the merits of the case remain to be determined" as also referring to the proceeding in which the order is made.

The foregoing conclusion is not merely a matter of interpreting the words in Hendrickson. It is, in my view, in accord with the purpose of a provision which categorizes orders for appeal purposes. I have difficulty concluding that an order on an issue raised in a proceeding which ends the proceeding is interlocutory simply because it does not finally determine another, quite possibly larger, issue between the parties which may be subsequently determined in some other proceeding or by some other process. [Emphasis in original.]

D. The Principles Applied

[23] In her argument, Mr. Parker’s counsel posed an arresting counterfactual situation. She pointed out that it was open to Ontario to move for a permanent stay in Mr. Parker’s civil action itself. Had Ontario done so, there is no doubt that the motion judge’s decision would have been identified as final and therefore subject to appeal to this court. Should it matter that Ontario instead chose to move in the class proceeding?

[24] McLachlin C.J.C. noted in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534, at paras. 27-29, that class actions have three important advantages. First, they promote judicial economy by avoiding unnecessary duplication in fact-finding and legal analysis. Second, class actions improve access to justice by spreading litigation costs over many plaintiffs, which enables the prosecution of claims that would otherwise be too expensive to pursue individually. Third, class actions present a deterrent to potential wrongdoers who would cause widespread, but individually minimal, harm.

[25] The purposes and advantages of class proceedings are realized for litigants with relatively modest claims who are prepared both to be patient during the long and involved class action process and also to sacrifice a good deal of their potential recovery to finance the legal costs. For an individual with a major claim like Mr. Parker, a class action is self-evidently not the preferable vehicle. Apart from his inability to control the litigation, he is unlikely to be able to achieve anything like the measure of damages he is seeking for the personal injury he suffered.

[26] Although we often distinguish between substantive and procedural rights in litigation terms, they are in fact symbiotic. It is not always possible or wise to distinguish one from the other. In the overall context, Mr. Parker lost substantive rights of significant importance when his motion for an extension of time within which to opt out of the class action was denied. In my view, it is reasonable to treat the order under appeal as a final order for the purposes of determining appeal rights.

[27] Because the removal of Mr. Parker’s substantive rights renders the motion judge’s decision final, it is not necessary to resolve the question of whether foreclosing the opt-out option constitutes a change of forum.

[28] In light of this outcome, it is unnecessary to consider the costs appeal, which is reserved to the panel hearing the appeal on the merits.

[29] If the parties are unable to resolve the costs of this motion, then Mr. Parker may file written submissions no more than 3 pages in length within 10 days of the date of the release of these reasons. Ontario may file written submissions no more than 3 pages in length within 10 days of the date Mr. Parker’s submissions are due. Mr. Parker may file reply submissions no more than 1 page in length within 5 days of the date Ontario’s submissions are due.

Released: September 22, 2021 “P.L.” “P. Lauwers J.A.” “I agree. S. Coroza J.A.” “I agree. Sossin J.A.”