COURT OF APPEAL FOR ONTARIO DATE: 20240102 DOCKET: COA-22-CV-0067 & COA-23-CV-0315 Lauwers, Hourigan and George JJ.A.
BETWEEN
Sandra Martin and John Charles Deveau Plaintiffs
and
Wright Medical Technology Canada Ltd., Wright Medical Technology, Inc., and Wright Medical Group, Inc. Defendants (Respondent/ Appellant by way of cross-appeal)
Proceeding under the Class Proceedings Act 1992
Joel P. Rochon, Golnaz Nayerahmadi, Megan B. McPhee, and Nicole J. Kelly, for the appellants/respondents by way of cross-appeal Alan Chamberlain, Tony Kinney, Pierre Marchand, and Lorrie Chamberlain Peter J. Pliszka and Rachel Hung, for the respondent/appellant by way of cross-appeal Wright Medical Technology, Inc. Lawrence G. Theall and Christiaan A. Jordaan, for the respondents MicroPort Medical B.V., MicroPort Scientific Corporation and MicroPort Orthopedics Inc.
Heard: November 14, 2023
On appeal from the order of Justice Paul M. Perell of the Superior Court of Justice, dated July 22, 2022.
Lauwers J.A.:
A. Overview
[1] This appeal concerns a motion judge’s order adding a discontinued cause of action and defendants to a class action operating under the old Class Proceedings Act, 1992, S.O. 1992, c. 6, and ordering that the action be governed by the amended Act. The motion also denied the appellants leave to add a party as a defendant in the action.
[2] On February 27, 2014, Sandra Martin (now deceased) and her spouse, John Charles Deveau, started a class proceeding against the Wright respondents alleging negligent manufacturing of a prosthetic hip implant for resurfacing surgery, with Rochon Genova LLP as proposed class counsel.
[3] On September 24, 2014, Gayle Rowland started a class proceeding against the Wright respondents and certain named MicroPort entities alleging negligent manufacturing of a prosthetic hip implant for arthroplasty surgery, with Kim, Spencer, McPhee Barristers P.C. as proposed class counsel.
[4] On October 1, 2020, amendments to the Class Proceedings Act came into force. For clarity and brevity, I will refer to the unamended Act as the old Act and the amended version as the amended Act. Section 39 of the amended Act sets out the transition provisions for the move from the old Act to the amended Act. Essentially, the old Act continues to apply to cases started before October 1, 2020, and the amended Act applies to cases started after that date.
[5] This distinction in the application of the old and amended Acts matters because the amendments have been taken as largely “pro-defendant,” as I will explain; these include a stricter certification test (s. 5) and mandatory dismissal for delay (s. 29.1). Plaintiffs would therefore prefer the old Act to apply to their class actions.
[6] There are two provisions in the amended Act of particular importance to the underlying motion and this appeal. Section 29.1 of the amended Act provides for mandatory dismissal of actions for delay “unless, by the first anniversary of the day on which the proceeding was commenced,” one of four steps has been taken.
[7] Class counsel in the Martin action took an appropriate step before October 1, 2021 to avoid mandatory dismissal of the action under s. 29.1. As a result, the old Act continues to apply to the Martin action. Because class counsel in the Rowland action did not do so, the Rowland action was exposed to mandatory dismissal for delay under s 29.1 of the amended Act. It is common ground that a new and substantively similar action asserting the causes of action in the Rowland action could be started under the amended Act after such a dismissal.
[8] Class counsel in both actions wanted the Rowland cause of action to continue against the defendants, including the MicroPort defendants, using the amended Martin action as the vehicle, but under the friendlier certification provisions of the old Act, not the amended Act.
[9] Without repeating the complicated procedural history the motion judge laid out, he had three theoretical options: 1) Allow the pleadings in the Martin action to be amended to add the Rowland cause of action and the Rowland defendants, with the action to continue under the old Act; 2) Allow the pleadings in the Martin action to be amended to add the Rowland cause of action and the Rowland defendants, with the action to continue under the amended Act; 3) Leave the Martin action to continue under the old Act with a re-constituted Rowland action commenced under the amended Act, which would give rise to the possibility that the two actions could be tried separately or together. Class counsel argued for the first option; the Wright and MicroPort respondents argued for the second, and alternatively for the third. The motion judge preferred the second option and, purporting to exercise discretion under s. 12 of the Act (either amended or old), ordered the “recast” Martin action to proceed under the amended Act for all purposes. [1]
[10] The motion judge adopted the second theoretical option, but neither the first nor the second options were legally open to him. I would allow the appeal and the cross-appeal in part.
B. The Issues
[11] The order under appeal gives rise to two issues: 1) Did the motion judge err in ordering that the amended Martin action would be governed by the amended Act for all purposes, including a more onerous certification test? 2) Did the motion judge err in declining to add MicroPort Orthopedics Inc. as a defendant, based on the operation of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B?
C. Analysis
[12] The motion judge had no authority to require the amended Martin action to be governed by the amended Act. He also erred in dismissing the motion to add MicroPort Orthopedics Inc. as a defendant based on the Limitations Act. I address each issue in turn and then consider how the actions might proceed.
(1) The motion judge erred in ordering that the amended Martin class action was to be governed by the amended Act
[13] As noted, the motion judge ordered that the amended Martin action with the added Rowland causes of action and the Rowland defendants was to be governed by the amended Act. The effect of the order was to override s. 39 of the amended Act, which provides expressly that the old Act would continue to apply to class actions commenced before October 1, 2020 – such as the Martin action. The motion judge noted, at para. 105, that “the transition provisions of the amended Act … do not directly speak to the situation of what happens when an action to be governed by the older certification test is amended before the certification motion.” He effectively purported to find a gap in the legislation, which enabled him to make his ruling under s. 12 of the Act. He offered no explanation for this assertion and did not engage with the applicable principles of statutory interpretation.
[14] The motion, and the appeal, turn on the interpretation of s. 39 of the amended Act, which distinguishes sharply between actions started under each of the old Act and the amended Act, how s. 39 relates to automatic dismissal for delay under s. 29.1, and whether s. 12 gives a motion judge the overriding authority he asserted.
(a) The Governing Principles of Statutory Interpretation
[15] I begin by reviewing the governing principles of statutory interpretation. The task of interpretation requires the court to consider the text of the legislation, the context within which it operates, and the particular purpose for the provisions at issue. In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at para. 118, the Supreme Court identified a legal expectation that is critical in statutory interpretation: “Those who draft and enact statutes expect that questions about their meaning will be resolved by an analysis that has regard to the text, context and purpose.” This reflects the “modern approach” to interpretation, which “requires that the words of a statute be read ‘in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament’”: 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, [2020] 2 S.C.R. 587, at para. 6, citing Elmer A. Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87, quoted in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21. See also Vavilov, at para. 117.
(i) The statutory text
[16] Section 39 is a transitional provision that specifies that the old Act continues to apply to cases started before October 1, 2020. The amended Act applies to cases started after that date:
39 (1) Except as otherwise provided by this section, the Act, as it read immediately before [the amendments] came into force [on October 1, 2020], continues to apply with respect to,
(a) a proceeding commenced under section 2 before that day; …
[17] An exception to this rule is found in s. 39(2), which provides that actions started under the old Act are subject to mandatory dismissal for delay under s. 29.1 of the amended Act.
[18] Section 39(2) applied to both the Martin and the Rowland actions, but only class counsel in the Martin action met the s. 29.1 test and avoided mandatory dismissal. The motion judge correctly approved the class counsel’s motion for leave to discontinue the Rowland action as an alternative to dismissal and ordered costs payable to the defendants in that action.
(ii) Context and purpose
[19] Legislative history can inform the court’s appreciation of the legislative intention in enacting the changes brought about by legislative amendments: Valilov, at paras. 167, 180, and 195.
[20] The legislative history shows that the amended Act followed upon the Law Commission of Ontario’s Final Report entitled: Class Actions: Objectives, Experiences and Reforms (Toronto: July 2019) (“the Report”). The Report called for a “culture shift” to address the “consistent concern with almost all stakeholders consulted [about] the enormous expense and slow pace of class actions”: at p. 51. The Report noted that “[c]ertification motions are often the epicentre of cost and delay complaints” because “[c]ontested certification motions are lengthy, expensive and hard to manage”: at p. 51. As part of its recommended strategy “to promote a culture shift and improve the efficiency, timeliness and finality of certification motions,” the Commission recommended:
Amending s. 2(3) of the Act to establish a deadline of one year within which the certification motion is to be scheduled and plaintiffs’ motion material filed;
Introducing an automatic dismissal and costs provision for cases that are not advanced by plaintiff firms in a timely or appropriate manner;
Amending s. 12 of the Act to give courts more expansive authority to manage cases… (at p. 6)
[21] As can be seen from the amended Act, these recommendations find some reflection in s. 29.1 – mandatory dismissal for delay – and in s. 12 of the amended Act.
[22] But tellingly, there are two significant differences between the Report and the amended Act. The first is that the amended Act stiffened the certification criteria even though the Commission had recommended against doing so, and specifically recommended against adopting rule 23 of the U.S. Federal Rules of Civil Procedure, noting at p. 47:
Some stakeholders made the suggestion that Ontario adopt certification criteria akin to that of the United States. It is widely believed that the US test for certification is considerably more stringent than that of Ontario. Recent statistics suggest that the success rate at contested certification hearings is now approximately 64%. The LCO evaluated the US certification test and concluded that there is no reason to adopt it.
[23] In the amended Act, the Legislature plainly rejected this recommendation by the Commission. Instead, amended section 5(1.1) moves Ontario class actions closer to the American certification rule, as commentators note: “As of October 1, 2020, the preferable procedure portion of Ontario's certification test has been made more rigorous and now largely reflects US Rule 23.” [2]
[24] Professor Suzanne Chiodo explains that the certification test across Canada had become “a fairly low bar, including the consideration of whether a class proceeding is the preferable procedure.” [3] She added that the new requirements: “may make it more difficult to bring class proceedings where a common issue makes up a very limited aspect of the liability question and many individual issues remain to be decided (for example, in cases involving systemic negligence).” [4]
[25] I observe that, had the Legislature followed the Commission’s advice and left the certification criteria as they were, there would have been no need for s. 39 as a transition provision to mitigate stricter certification requirements.
[26] Indeed, the legislative history supports Doherty J.A.’s trenchant observation in David v. Loblaw Companies Ltd., 2022 ONCA 833, at para. 16: “The Legislature drew a bright line between class action proceedings commenced before the 2020 amendments came into effect, and class action proceedings commenced after that date.” He stated: “the language of s. 39(1) could not be clearer”: at para. 16. Because the David action had been started under the old Act, the old Act governed; this court quashed the appeal because it should have been brought to the Divisional Court under the old Act and not to the Court of Appeal, as for new actions under the amended Act: at paras. 16-17.
[27] In Bourque v. Insight Productions, 2022 ONSC 174, Belobaba J. dismissed a class action started under the old Act for delay under s. 29.1 of the amended Act. He summarized his decision, at para. 19:
If s. 29.1 of the amended CPA is to achieve its intended purpose — to help advance class action proceedings that otherwise tend to move at glacial speed — then it’s to everyone’s advantage (both putative class members and defendants) that the mandatory dismissal provision be interpreted and applied as written. Particularly when compliance is easy and the consequence of non-compliance (dismissal of the action) although inconvenient is not particularly onerous — in the vast majority of cases, the dismissed proceeding can be refiled against the same defendants with just a change in the proposed representative plaintiff.
[28] Most other Superior Court decisions have taken the same approach: see e.g., St. Louis v. Canadian National Railway Company, 2022 ONSC 2556; Lamarche v. Pacific Telescope Corp., 2022 ONSC 2553; LeBlanc et al. v. The Attorney General of Canada et al., 2022 ONSC 3257; Westgate v. WestJet Airlines Ltd., 2022 ONSC 4190; D’Haene v. BMW Canada Inc., 2022 ONSC 5973; and A. (B.) v. University of Ottawa, 2023 ONSC 310.
[29] In Bourque, Belobaba J. was invited to exercise discretion under s. 12 to relax the application of s. 29.1. He stated, at para. 15: “There is nothing in s. 29.1 that says ‘unless the court orders or directs otherwise’ or ‘unless there is good reason not to dismiss for delay.’” In his view, “[t]he statutory language and legislative intent could not be plainer.” In rejecting the use of s. 12, he explained, at para. 17, that even though the court has “wide-ranging case management powers respecting the conduct of a class proceeding,” there is no legal basis on which a motion judge can override the Act’s mandatory provisions, including the certification criteria or dismissal for delay requirements, noting that counsel could provide no authority to the contrary. This approach is consistent with authority. See Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572, 387 D.L.R. (4th) 603, at para. 68.
(b) The Principles Applied
[30] The text, legislative history, and jurisprudence concerning s. 39 supports the inference that the Legislature intended there to be a bright line between actions started under the old Act and actions started under the amended Act.
[31] Under s. 39, the Martin action is to be governed by the certification criteria in the old Act. The plaintiffs in the Rowland action are entitled to “refile”, following discontinuance of their action, but under the amended Act. Putting it differently, the Rowland defendants are entitled to have the certification criteria in the amended Act apply to that refiled action. Whether the differences in the criteria will make any difference in the certification decision for each is unknown and will depend on the facts as they unfold.
[32] In brief, the motion judge erred in using s. 12 of the amended Act to conjure up a gap needing to be filled. There is no gap in the amended Act. The consequences of the statutory changes for class actions started before and after October 1, 2020 were addressed by the Legislature and must be given full force and effect.
[33] As a matter of statutory interpretation applied to the facts of these two class actions, only the third option set out above was legally available – to continue the Martin action under the old Act, alongside a re-constituted or re-filed Rowland action to be commenced under the amended Act, to be tried separately or together.
[34] There is no merit to the argument of the Wright respondents that different certification tests would be “entirely unmanageable and unworkable” owing to the application of different criteria and different appeal routes. In questioning from the bench, counsel were unable to substantiate these unmanageability claims and I would give them no credence.
[35] Belobaba J. made pertinent observations in the unreported case of Robertson v. Ontario (21 January 2022), CV-20-648597-CP (Ont. S.C.), at para. (vi):
Old CPA, new CPA, same proceeding. There will be occasions, perhaps even here, where the certification judge will need to consider and apply the differently-worded certification requirements for different claims in the same proceeding. I have every confidence that class action judges, myself included, will be able to do so and explain their analyses in a reasonably straight-forward fashion. The prospect of old and new CPA provisions applying in the same certification may make for detailed judicial analysis but the analysis is manageable and should not be a cause for concern.
[36] I share Belobaba J.’s confidence that motion judges will be able to manage the application of different criteria in actions that are processed together because of similar causes of action and factually related evidence.
(2) The motion judge erred in declining to add MicroPort Orthopedics Inc. as a defendant based on the operation of the Limitations Act
[37] The outcome on the first issue affects what might be seen as the “joinder motion.” The motion judge dismissed the motion to add MicroPort Orthopedics Inc. as a defendant to the Martin action as he would have reconstituted it.
[38] There is no doubt that the reconstituted Rowland action can be brought, and it will be subject to the amended Act in all respects. It is the only vehicle by which MicroPort Orthopedics Inc. can be added as a defendant. Because of the broad basis on which the motion judge refused the joinder motion, it is necessary for this court to address the limitations issue.
[39] The motion judge stated: “The… limitation period has continued to run against MicroPort Orthopedics Inc. since before 2014… and it is conceivable that some individual causes of action may be barred by the 15-year absolute limitation period of the Limitations Act, 2002”: at para. 92. Because “the Joinder motion seeks to add a party and to pursue causes of action against a party after the limitation period has [expired], … an amendment to the Statement of Claim is not permissible”: at para. 94.
[40] I rely on the observations of Winkler C.J.O. in Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, 111 O.R. (3d) 501, at para. 108, in the context of an appeal of a motion refusing certification: “The issue of limitation periods is not an ingredient of the class members’ claims, but instead may be relied upon by CIBC in its defence.” He continued: “The question of how individual issues are best resolved is a procedural matter that would follow after the common issues trial”: at para. 108.
[41] Similarly, this court stated in Smith v. Inco Limited, 2011 ONCA 628, 107 O.R. (3d) 321, at para. 164, that, “If … the evidence does not establish that all class members were not aware of and ought not to have been aware of the material facts, then the application of the Limitations Act to the claims is an individual and not a common issue.”
[42] Reinforcing this approach is the difficult issue of discoverability in the context of a class action involving personal injuries. There were no ultimately dispositive facts before the motion judge on which he could base such a sweeping ruling, particularly since the products at issue continue to be sold today. There is no impediment to a reconstituted Rowland class action naming MicroPort Orthopedics Inc. as a defendant. Whether there is a viable limitation defence is a matter for a future judicial determination.
D. Disposition
[43] Much of the order was not appealed. It must be amended to take account of these reasons. Counsel should be able to agree on the revised wording of the order, but if not, then each side may file written submissions within four weeks of the date of this decision setting out their respective positions.
[44] Because the outcome was mixed, I would decline to order costs of the appeal and cross-appeal, except to award the appellants $7,000 all-inclusive as agreed payable by MicroPort Orthopedics Inc. on the limitations issue.
Released: January 2, 2024 “P.D.L.”
“P. Lauwers J.A.” “I agree. C.W. Hourigan J.A.”
“I agree. J. George J.A.”
[1] Section 12 of the amended Act provides: “The court, on its own initiative or on the motion of a party or class member, may make any order it considers appropriate respecting the conduct of a proceeding under this Act to ensure its fair and expeditious determination and, for the purpose, may impose such terms on the parties as it considers appropriate.” The underlined words are new, and “proceeding under this Act” replaces “class proceeding” in s. 12 of the old Act.
[2] Mike Eizenga and Mike Peerless, “Class Actions: From Case #1 to the 2020 Amendment in Ontario” (2022) 40 Adv. J. 21, at p. 23.
[3] “Safety in Numbers or Lost in the Crowd? Litigation of Mass Claims and Access to Justice in Ontario” (2023) 39 Windsor Y.B. Access Just. 48, at p. 49
[4] Chiodo, at p. 49.
