COURT FILE NO.: 05-CV-287428CP Divisional Court File No: 460/08 DATE: 20090122

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

BILL SAUER Plaintiff

• and -

THE ATTORNEY GENERAL OF CANADA on behalf of HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTRY OF AGRICULTURE, JOHN DOE, JANE ROE AND RIDLEY INC. Defendants

Cameron Pallet, for the plaintiff (Respondent on the Motion)

Dale Yurka and Roslyn Mounsey for the Defendant (Moving Party) The Attorney General of Canada

HEARD AT TORONTO: November 24, 2008

JANET WILSON, J.

Introduction

“On May 20 2003, a single case of bovine spongiform encephalopathy (BSE) was detected in Alberta. The discovery set off a series of events that devastated Canadian cattlemen and other livestock producers and that continue to do so. The immediate closing of borders across the industrialized world to Canadian cattle and beef products sent cattle prices spiraling downward, led to the building of record levels of cattle inventories, dramatically raised feed costs, drained cattlemen’s cash positions and completely eliminated any chance for profitability in 2003, with little prospect for recovery in the immediate and foreseeable future.”[^1]

[1] In 2003 and following, the plaintiff Bill Sauer was a commercial cattle farmer residing in the Town of Niagara Falls, Ontario. Mr. Sauer brings this class action on behalf of all cattle farmers resident in Canada (except the province of Quebec). He claims damages for economic losses arising from the discovery of Bovine Spongiform Encephalopathy (BSE) in a cow in Alberta in 2003 and for the consequences of the ensuing international bans on the importation of Canadian beef and cattle.

[2] On September 3, 2008 Lax J. certified the plaintiff’s action as a class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (CPA).

[3] There is a separately constituted class action proceeding in the province of Quebec that was certified on June 15, 2007 (see Bernèche v. Canada (Procureur général), 2007 QCCS 2945 (C.S.Q.)).

[4] The Attorney General of Canada on behalf of Her Majesty the Queen (HMQ) seeks leave to appeal from the decision of Lax J. pursuant to Rule 62.02(4)(a) and (b) of the Rules of Civil Procedure. HMQ submits:

• The learned motions judge erred in concluding that there was an identifiable class of plaintiffs within the meaning of the CPA.
• The learned motions judge erred in certifying the question of negligence as a common issue.
• There are conflicting cases with respect to whether causation and proof of loss can be proved on a class-wide basis, such that these issues should be considered by a full panel of the Divisional Court.
• The learned motions court judge erred in concluding that s. 24 of the CPA may apply to allow an aggregate assessment of damages, obscuring the plaintiff’s obligation to prove loss and causation in establishing liability.
• As a result of the above noted errors counsel for the defendants submits the motions court judge failed to properly conduct the weighing of competing factors in the commonality and preferability test to determine whether certification as a class proceeding was appropriate in all the circumstances.

Background

[5] BSE is a fatal neurological disease of cattle that is contracted when healthy cattle eat ruminant meat and bone meal (RMBM). RMBM was routinely added to calf starter and feed rations in order to boost the protein content of the feed and enhance growth until the Canadian government prohibited this practice in October 1997.

[6] In May 2003 the first case of BSE in a Canadian-born cow was confirmed in Alberta. Following this discovery, governments of 34 countries, including the United States and Mexico, closed their borders to Canadian beef and cattle.

[7] Ridley Inc. (Ridley) manufactures and distributes animal feed products throughout Canada and is incorporated pursuant to the laws of Manitoba.

[8] HMQ was at all material times responsible for the prevention and control of infectious diseases of animals that could have a deleterious effect on either public health or the livestock industry in Canada pursuant to the Animal Disease and Protection Act, R.S. 1985, c. A-11 as rep. by the Health of Animals Act, S.C. 1990, c. 21, and the Feeds Act, R.S.C. 1985, c. F-9.

The Ontario BSE Action

[9] In the statement of claim dated April 8, 2005, the plaintiff alleges that Ridley manufactured the contaminated feed that was consumed by the Alberta cow. The plaintiff alleges that Ridley was negligent in using RMBM as an ingredient in its feed products. The plaintiff also alleges that the HMQ was negligent as the regulator of the cattle industry in Canada, and that the negligence of HMQ caused or contributed to allowing BSE to enter the feed chain that infected the Alberta cow. That cow in turn instigated the drastic response of the international community.

The Motions to Strike and the Ridley Settlement

[10] In November 2005, Ridley and the Attorney General sought an order pursuant to Rule 21.01(1)(b) of the Rules of Civil Procedure striking the plaintiff’s claim alleging that the claim failed to disclose any cause of action against Ridley and that it failed to disclose a cause of action in negligence against HMQ. Both the Superior Court and the Court of Appeal for Ontario declined to strike the claims, concluding that it was not “plain and obvious” that the claims should be struck at that stage in the proceedings. In July 2008, the Supreme Court of Canada dismissed applications by HMQ and Ridley for leave to appeal.

[11] Lax J. certified the plaintiff’s action against HMQ as a class action on September 3, 2008. Ridley reached an agreement with the plaintiff after mediation and Lax J. approved the resulting settlement. Ridley therefore takes no position on this application for leave to appeal the certification decision.

The Certification Motion

[12] In June 2008, the plaintiff moved to certify this action as a class proceeding against HMQ. HMQ opposed the plaintiff’s motion.

[13] Section 5 of the CPA sets out the test for certification:

5(1) The court shall certify a class proceeding on a motion under section 2, 3 or 4 if,

(a) the pleadings or the notice of application discloses a cause of action;

(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant;

(c) the claims or defences of the class members raise common issues;

(d) a class proceeding would be the preferable procedure for the resolution of the common issues; and

(e) there is a representative plaintiff or defendant who,

(i) would fairly and adequately represent the interests of the class,

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members. 1992, c. 6, s. 5 (1).

[14] Lax J. concluded that there is inevitable overlap between the individual certification criteria specified in s. 5 of the CPA. She summarized the various certification requirements of s. 5 in this way:

There must be a cause of action, shared by an identifiable class, from which common issues arise that can be resolved in a fair, efficient and manageable way that will advance the proceeding and achieve access to justice, judicial economy and the modification of behaviour of wrongdoers.

[15] To certify an action as a class proceeding under s. 5, the plaintiff requires a “minimum evidentiary basis for a certification order” for each of the elements stipulated in s. 5(1). It is necessary that the plaintiff “show some basis in fact for each of the certification requirements”, with the exception of the requirement in s. 5(1)(a), as a certification motion is not an inquiry into the merits of the action (see: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at paras. 16, 25; Cloud v. Canada (Attorney General) (2004), 73 O.R. (3d) 401 (C.A.) at para. 38).

[16] HMQ concedes for the purpose of this motion for leave to appeal that certain of the certification requirements have been met including:

• The requirement of s. 5(1)(a), as the pleadings motion confirmed that the pleadings disclose a cause of action against HMQ.
• The elements of s. 5(1)(e), as:
  • Bill Sauer is a representative plaintiff who would fairly and adequately represent the interests of the class.
  • The plaintiff has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding.
  • The plaintiff does not have an interest in conflict with the interests of other class members on the common issues.

[17] HMQ seeks leave to appeal Lax J.’s determination that the requirements of ss. 5(1)(b), (c) and (d) of the CPA have also been met.

Analysis

Standard of Review

[18] The standard of review applicable on appeal from a motions judge’s decision with respect to certification of a class action, is one of considerable deference, given the expertise of motions judges and the flexibility afforded to certification proceedings under the CPA. An appellate court should only intervene with the motions judge’s decision where matters of general principle are at stake: Anderson v. Wilson (1999), 44 O.R. (3d) 673, leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 476; Cloud v. Canada (A.G.) (2004), 73 O.R. (3d) 401 (C.A.), leave to appeal to S.C.C. refused, [2005] S.C.C.A. No. 50.

[19] However, this deference is not afforded to a motions judge’s legal errors on matters “central to the proper application of s. 5 of the CPA”: Hickey-Button v. Loyalist College of Applied Arts & Technology (2006), 267 D.L.R. (4th) 601 (Ont.C.A.).

[20] For leave to appeal to be granted HMQ must satisfy the two-part test enunciated in either 62.02(4) (a) or (b) of the Rules of Civil Procedure:

Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

5(1)(b): An Identifiable Class

[21] HMQ contests that there is an identifiable class of two or more persons that would be represented by the plaintiff in accordance with s. 5(1)(b).

[22] In Gariepy v. Shell Oil Company (2002), 23 C.P.C. (5th) 360 at para. 47, Nordheimer J. emphasised the need for clarity in the definition of the class:

... a clearly defined class is also required in order that persons will know if they are members of the class so that they may, in turn, decide if they wish to have their rights determined within the class proceeding, or if they would prefer to opt out of the class proceeding and have their rights determined in another fashion, or not at all. It is extremely important, therefore, that the class definition be one where any person can tell, with a minimum of effort, whether he or she is a member of the proposed class.

[23] The plaintiff submitted that the following class definition should be certified:

All persons who as at May 20, 2003 were resident in Canada (except the province of Quebec) and farmed cattle including, but not limited to, cow-calf, backgrounder, purebred, veal, feedlot and dairy producers.

In this class definition ‘person’ means any individual, partnership, corporation, cooperative, communal organization, trust, band farm or other association who as at May 20, 2003 was farming cattle within the meaning of the Income Tax Act.

[24] The plaintiff submits that this class has approximately 115,000 potential members.

[25] HMQ argued before Lax J. that the plaintiff’s proposed class definition failed to state any objective criteria for class membership, and that the proposed class definition is not rationally connected to the proposed common issue of negligence.

[26] Lax J. disagreed with both of these arguments. The same arguments were reiterated before me.

[27] Lax J. concluded that the proposed definition constitutes a properly and easily identifiable class. Cattle farmers know who they are. HMQ knows who they are. The non-exhaustive categories of cattle farmer listed in the class definition provides context for self-identification of class members. Whether a given person is a member of the class can be determined without reference to the merits of the action.

[28] Although cattle farming is not a homogeneous industry, as Lax J. points out all members of the intended class “have a relationship to the farming of cattle from which they earn their livelihood in whole or in part” (para. 25). At the margins, Lax J. acknowledges that there may be some questions about class membership, but the core of the definition is clear. She notes that “for the overwhelming majority of class members … most if not all will know whether they farmed cattle on May 20, 2003” (para. 28). There are therefore clear and objective criteria for class membership.

[29] HMQ argues that as the plaintiff has not shown that harm has been suffered on a class-wide basis, there is no rational connection to the plaintiff’s claim of negligence by HMQ.

[30] Lax J. confirms that “Class membership identification is not commensurate with the elements of the cause of action. There simply must be a rational connection between the class member and the common issue”.

[31] Lax J. concluded for two reasons that the rational connection test had been met. First, the documentation relied upon by the plaintiff illustrates the enormity of the economic consequences to cattle farmers of the discovery of BSE. Regardless of the harm caused to individuals, all class members share an interest in knowing whether HMQ caused or contributed to the situation. This common interest, Lax J. concluded, is sufficient to meet the rational connection test.

[32] Second, Lax J. concluded that the rational connection issue is implicitly dealt with by the results and conclusions reached by the Ontario courts on the Rule 21 motion. She states at para. 35:

It would be an extraordinary paradox for the defendants to be in a relationship of proximity to Canadian cattle farmers to potentially owe them a duty of care, but for the plaintiff to have failed to show a rational connection between the class and the common issues.

[33] I agree with Lax, J’s common sense analysis of this criterion. It must not be forgotten, as confirmed by McLachlin J. in Hollick, supra at paras. 14-15, that the CPA is a procedural statute designed to promote access to justice and should be interpreted with practicality and generosity, as opposed to technical rigidity. I conclude that there is no merit to the arguments of HMQ with respect to the definition of the class. Neither Rule 62.02(4)(a) nor (b) of the Rules of Civil Procedure is engaged.

5(1)(c): The Common Issue of Negligence

[34] The plaintiff proposed before Lax, J. the following common issues:

1. Does s. 9 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 bar the Class Members' claims against the federal government of Canada?
2. Were the defendants negligent and if so when and how?
3. What is the appropriate apportionment of fault, if any, between the defendants?
4. Can the amount of compensatory damages, if any, be reasonably determined on an individual basis? If so, how should individual damages be determined?
5. If the answer to question 4 is no, can the amount of compensatory damages, if any, be determined on an aggregate basis? If so, what is the amount of damages and how should they be distributed?

[35] The core issue in this motion for leave to appeal is whether the question of negligence (issue two, above), and in particular the elements of loss and causation can be certified as a common issue.

[36] Section 1 of the CPA defines common issues as “common but not necessarily identical issues of fact” or “common but not necessarily identical issues of law that arise from common, but not necessarily identical facts”.

[37] Cloud, supra at para. 72 confirms that it is preferable to state the common issues initially in general terms that can be later refined with particularity by the judge with carriage of the action as it proceeds.

[38] In Gariepy, supra at paras. 55 and 56, Nordheimer J. combined McLachlin C.J.’s observations in Western Canadian Shopping Centres v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534 and Macpherson J.’s characterization of the ‘low bar’ for determining common issues in Carom v. Bre-X Minerals Ltd. (2000), 51 O.R. (3d) 236 (C.A.). He concluded that:

• the resolution of the common issues must be necessary, but need not be determinative of each class member’s claim;
• The common issues need not predominate over non-common issues;
• the common issues must be a ‘substantial’ common ingredient of each class member’s claim; and
• whether the common issues justify a class action involves an examination of the ‘significance’ of the common issues in relation to the individual issues.

[39] HMQ concedes that the duty and breach of standard of care elements of negligence raise common issues for all class members. HMQ disputes, however, that the elements of causation and loss are capable of being proven on a class-wide basis, and therefore maintains that negligence cannot be certified as a common issue. It argues that the questions of loss and causation inevitably involve examining the individual circumstances of each class member to prove that loss or damage was sustained and that such loss or damage was caused by BSE.

[40] Lax J. rejected the arguments of HMQ and concluded at para. 45 that “for certification purposes the fact of universal damage has been shown.”

[41] The plaintiffs rely on numerous government publications that confirm the devastating economic effect of BSE on the cattle industry. Lax J. correctly rejected the submission by HMQ that minimal weight should be given to the plaintiff’s evidence, as a certification hearing is not an inquiry into the merits.

[42] She concluded in para. 51 that like a plane crash, “BSE was a common disaster for cattle farmers”, and that “there is some basis in fact to believe that all cattle farmers suffered harm from BSE, making the proposed question a common issue”.

[43] Lax J.’s conclusions with respect to causation and loss are clearly supported by the evidence presented by the plaintiff and in particular with regard to the various documents produced by the federal government in the aftermath of the discovery of BSE that were contained in the plaintiff’s Request to Admit. Given the low bar set in Cloud and the “some evidence” test from Hollick, Lax, J.’s conclusion on this point is not open to debate.

[44] HMQ challenges Lax J.’s reliance on the recent decision of the Ontario Court of Appeal in Markson v. MBNA Canada Bank (2007), 2007 ONCA 334, 85 O.R. (3d) 321 (C.A.). In Markson the Court concluded that an aggregate assessment of damages under s. 24 of the CPA is available where potential liability can be established on a class-wide basis, but entitlement to monetary relief may depend on individual assessments, such as in this case.

[45] Section 24 of the CPA provides

24. (1) The court may determine the aggregate or a part of a defendant’s liability to class members and give judgment accordingly where,

(a) monetary relief is claimed on behalf of some or all class members;

(b) no questions of fact or law other than those relating to the assessment of monetary relief remain to be determined in order to establish the amount of the defendant’s monetary liability; and

(c) the aggregate or a part of the defendant’s liability to some or all class members can reasonably be determined without proof by individual class members.

[46] HMQ suggests that there are conflicting decisions emanating from the Ontario, British Columbia and Quebec courts on whether proof of loss on a class-wide basis is available as a matter of law, and that this important issue should be considered by the Divisional Court.

[47] In support of this contention, the defendant relies upon a number of cases from Ontario, which it says stand for the proposition that class-wide proof of loss is not available: Heward v. Eli Lilly & Co. (2008), 239 O.A.C. 273 (Div.Ct.); 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp. (2008), 89 O.R. (3d) 252 (S.C.J.); Risorto v. State Farm Mutual Automotive Insurance Co. (2007), 38 C.P.C. (6th) 373 (Ont.S.C.J.); Chadha v. Bayer Inc. (2003), 63 O.R. (3d) 22 (C.A.), leave to appeal to the S.C.C. refused, 29651 (July 17, 2003).

[48] In addition to the Ontario cases, the defendant relies upon two cases from British Columbia and one from Quebec, which it alleges have rejected or distinguished Markson: Pro-Sys Consultants Ltd. v. Infineon Technologies AG, 2008 BCSC 575, [2008] B.C.J. No. 831; Steele v. Toyota Canada Ltd. 2008 BCSC 1063, [2008] B.C.J. No. 1496; Harmegnies v. Toyota Canada Inc. et al., 2007 QSSC 539 aff’d 2008 QCCA 380, leave to appeal to the S.C.C. refused, 32587 (September 25, 2008).

[49] A close analysis of the cases referred to by HMQ reveals that there is no conflict in the case law, with the exception perhaps of the Steele decision from British Colombia discussed in paragraphs 51 to 53 below. Overall, the results of the various certification cases referred to flow from the facts of each case and the exercise of discretion by the judge in question.

[50] As noted above, in Markson the Court concluded at para. 48 that s. 24 of the CPA applies where potential liability can be shown on a class-wide basis. This principle is adhered to in all the cases cited by HMQ. However, in these cases, potential liability could not be shown, even on the low evidentiary threshold required at the certification stage (see Quizno's at para. 123; Risorto at para. 73; Chadha at paras. 49-51; Pro-Sys at paras. 170, 172). Chadha and Pro-Sys were both price-fixing cases involving indirect purchasers. The evidentiary issues involved in demonstrating harm to indirect purchasers in a price-fixing case are distinguishable from the facts of this case. The Court in Heward acknowledged the defendant’s argument about class-wide proof of loss, but noted that it was based upon the indirect purchaser case Pro-Sys, which was distinguishable for its evidentiary problems (paras. 27-29).

[51] Notably, the only court to hold that class-wide proof of loss is not available in a case involving the law of tort is the British Columbia Supreme Court in Steele. Steele distinguishes Markson as being grounded in contract, not tort. The tort action in Steele alleged that the “Access Programme” offered by Toyota to purchasers was anti-competitive. The B.C. Supreme Court held that proof of loss on a class-wide basis could not be established through econometric evidence.

[52] Steele, if correct, is distinguishable for two reasons. First, the Steele decision is not a case in negligence. Second, the case is distinguishable as the Court concluded in that case that the plaintiffs had failed to lead any evidence that proof of loss on a class-wide basis was possible, due to the myriad of factors specific to each class member (paras. 122-24).

[53] The Steele decision, which may in conflict with the conclusions of Lax J., is clearly distinguishable and is not binding on her.

[54] HMQ also relies on the Quebec decision in Harmegnies. This case is based on the same price-fixing scheme as that in Steele. In Harmegnies, the certification motion failed because according to the Quebec courts establishing loss in that case would require a review of each individual purchase, including such variables as market conditions, ability to negotiate, availability of the particular model, warranties, trade-ins, and so forth. At no time was the question of class-wide proof of loss raised. Harmegnies is a case of the court finding that common issues were overshadowed by individual ones, which is distinguishable from the conclusions of Lax,J. in this case.

[55] The decision of each motions judge with respect to certification as a class action is factually dependant. The plaintiff bears the onus of proof to establish the minimum evidentiary basis for a certification order for each of the elements stipulated in s. 5 of the CPA. If the motions judge concludes that the minimum evidentiary basis has not been established, as has been found in several of the cases relied upon by HMQ, then the request for an order for certification will be refused.

[56] As well, although courts may exercise their discretion differently it does not follow that the decisions are in conflict within the meaning of Rule 62.02(4). A conflict occurs when different legal principles are applied, as opposed to when the application of the same principle produces different results (see Axiom Plastics Inc. v. E.I. Dupont Canada Co. (2008), 90 O.R. (3d) 782 (Div.Ct.) at paras. 52-59).

[57] I conclude for these reasons, that there are no conflicting decisions with respect to proof of loss on a class-wide basis, such that clarification of this issue by the Divisional Court is required.

[58] Any concerns raised by HMQ with respect to common issues 4 and 5 that relate to the assessment of damages on aggregate or individual bases are considered in the next section concerning preferability.

[59] There was evidence before Lax J. of damage on a class-wide basis. Lax J. appropriately exercised her discretion and determined that the issue of negligence was properly approved as a common issue on the facts of this case. There is no merit to the arguments advanced by HMQ with respect to section 5(1)(c) of the CPA. Neither s. 62.02(4)(a) nor (b) applies.

5(1)(d): A Class Proceeding as the Preferable Procedure

[60] Lax J. adopts the principles in Hollick, Cloud, and Markson in assessing the preferability requirement of s. 5 of the CPA, finding that the CPA is to be construed generously, and the preferability requirement can be met even when there are substantial individual issues. She states at para. 55:

In Hollick, Chief Justice McLachlin, said that the CPA is to be construed generously and directed lower courts to avoid taking an overly restrictive approach to its interpretation at the certification stage. The court found that the preferability requirement can be met even where there are substantial individual issues. At least since the 2004 decision of the Ontario Court of Appeal in Cloud, it has been recognized that this is a qualitative and not quantitative inquiry and that it is essential to assess the importance of the common issues in relation to the claim as a whole. The Hollick principles were summarized by Rosenberg J.A. in Markson in this way at para. 69:

(a) The preferability inquiry should be conducted through the lens of the three principal advantages of a class proceeding: judicial economy, access to justice and behaviour modification;

(b) "Preferable" is to be construed broadly and is meant to capture the two ideas of whether the class proceeding would be a fair, efficient and manageable method of advancing the claim and whether a class proceeding would be preferable to other procedures such as joinder, test cases, consolidation and any other means of resolving the dispute; and,

(c) The preferability determination must be made by looking at the common issues in context, meaning, the importance of the common issues must be taken into account in relation to the claims as a whole.

[61] HMQ raises before me the same arguments with respect to whether a class proceeding is the preferable procedure that were rejected by Lax J..

[62] The arguments raised and rejected by Lax J. are outlined in para. 56 of her reasons:

HMQ argues that there is too much variation in the individual circumstances of putative class members to meaningfully or fairly assess damages on a class wide-basis and that the individual issues of loss and causation that will remain after resolution of the common issues will dwarf the common issues. I do not agree. The common issues are fundamental to this action. A decision on common issue 1 would potentially terminate the litigation in favour of the defendant. As counsel for the plaintiff said, it is the 'sword of Damocles' hanging over the head of class members. A decision on common issue 2 is the heart of this litigation.

[63] Lax J. notes in para. 58 that “idiosyncratic causation and damages issues did not prevent certification in Bywater, Cloud, Tiboni, or in other negligence cases, where disparate harm to class members required individual assessments of both causation and damage”. She also notes that based upon the evidence presented an aggregate assessment of damages may be undertaken utilizing s. 24 of the CPA.

[64] It must be emphasized, however, that as outlined in Cassano v. Toronto-Dominion Bank, 2007 ONCA 781 at paras. 62-63, s. 24 of the CPA permits, but does not require, an aggregate assessment of damages:

What is sometimes overlooked in the focus on the common issues at the certification stage is that the CPA includes provisions permitting the use of modified procedures for conducting individual assessments of damages. The thrust of these provisions is to ensure that the court has the means to conduct cost-effective and timely determinations of individual issues following the common issues trial. As a result, the fact that damages may not be amenable to aggregate assessment at the conclusion of a common issues trial is not fatal to certification of a class proceeding.

Indeed, the resolution of individual issues is an essential element of many class proceedings and is crucial if there is to be an advancement of the goal of access to justice. Put another way, although the prospect of an aggregate assessment of damages is a factor in favour of certification, it is not a prerequisite. An action may well be certified as a class proceeding even in cases where individual assessments of damages in small amounts may be necessary. Absent this possibility, the purposes of the CPA would be seriously eroded.

[65] The plaintiff makes it clear that he is relying not only on the aggregate assessment of damages and s. 24 of the CPA, but also on individual assessment of damages pursuant to s. 25 of the CPA which provides:

25. (1) When the court determines common issues in favour of a class and considers that the participation of individual class members is required to determine individual issues, other than those that may be determined under section 24, the court may,

(a) determine the issues in further hearings presided over by the judge who determined the common issues or by another judge of the court;

(b) appoint one or more persons to conduct a reference under the rules of court and report back to the court; and

(c) with the consent of the parties, direct that the issues be determined in any other manner.

[66] Lax J. considered the issue of the ability to prove damages on an individual basis, and concluded at para. 59 that there was a realistic possibility that procedures could be found to assess damages individually, in the alternative to her findings of a potential aggregate assessment of damages:

While pursuant to s. 25 of the CPA it is for the trial judge to determine the procedures that are to be followed, I must be satisfied that there is a realistic possibility that acceptable procedures can be found. The plaintiff produced evidence from Kerry Eaton, the Vice-President of Crawford Class Action Services, which has successfully administered some of the largest and most complex class action settlements in Canada. He proposes that damages can be assessed in the aggregate by a payout that is calculated based upon a dollar value per head of cattle owned by each individual class member as at May 20, 2003 or by a more complex system akin to the CAIS Program to assess individual damages. The federal government has used both methods to make payments to cattle farmers. Mr. Eaton prepared an Assessment of Damages Plan and provided evidence that the CAIS Program claim form and assessment protocol could be adapted to a fair, workable and cost-effective loss of individual income assessment. Alternatively, an aggregate assessment calculation could be done utilizing the farm cash receipts reports for cattle from Statistics Canada and applying an algorithm developed by an agricultural economist.

Mr. Eaton's proposed individual damages assessment is necessarily broad and preliminary, but I am satisfied that it is a starting point that will permit the trial judge to fashion manageable procedures for resolving the individual issues, given the extensive powers and discretion conferred by s. 25 of the CPA. At this stage, I am not prepared to conclude that individual damage assessment cannot be achieved as the plaintiff has shown that there is some basis in fact to believe that it can. If the trial judge concludes that compensatory damages can be reasonably determined on an individual basis, the defendant will have ample opportunity to participate in the formulation of a fair procedure for the determination of individual claims.

(emphasis added)

[67] Lax J. concludes that the principles of the preferability requirement have been amply met, in light of the support in recent case law including Cloud, Markson, and Cassano for the principle that the Court should strive to use the powerful tools of the CPA in assessing the preferability requirement.

[68] Zuber J. denied leave to appeal from the decision allowing certification in Nantais v. Telectronics Proprietary (Canada) Ltd., [1995] O.J. No. 3069. He concluded that the only way a plaintiff would have access to the court in that case was in a class proceeding. The costs to an individual plaintiff would be “stupendous” and impossible to bear. He states in paras. 7-8:

It is argued that there are in this case a multitude of issues, i.e., that the leads were distributed to many different hospitals, implanted by many different doctors into the bodies of a wide variety of patients. However, in my view, none of these factual variations diminishes the fact that the primary issue is whether or not the defendants were negligent in the manufacture, design, or distribution of the leads, and this is central to the claim of all members of the class.

In my respectful view, this is the kind of case for which the Class Proceedings Act, 1992 was designed. The stupendous financial burden of a case such as this would consume all or almost all of the proceeds of the judgment of any single plaintiff. The defendants (if responsible) would likely, therefore, be insulated from any of these claims because of financial consequences alone. It is only by spreading out the cost that the members of the class have any chance of success. Not only is the class proceeding preferable, it is the only procedure whereby the members of the class will have any real access to the courts.

[69] The same prohibitive cost consequences apply in this case.

[70] The negligence action against HMQ is estimated to take between eight to twelve weeks to complete. Irrespective of the length of the proceeding, no individual class member has the resources to fight the federal government. Access to justice therefore favours certification. The common questions may be modified and particularized as the litigation proceeds under the direction of the judge with carriage of the action. If HMQ is successful on the issues of duty and breach, the more thorny questions of causation and damage will never have to be addressed.

[71] The plaintiff and others in the class suffered a loss beginning in 2003. This action was commenced in 2005. Due to the Rule 21 motion and various appeals to the level of the Supreme Court of Canada the certification motion could not proceed until mid-2008. Access to justice includes not only the right to pursue a claim but also its timely resolution.

[72] I agree with Lax. J.’s analysis of the preferability requirement in this proceeding. Her reasons reflect the approach to certification enunciated in various appellate decisions including Hollick, Cloud and Markson. A class proceeding on the facts and circumstances of this case promotes judicial economy, access to justice and behavioral modification. A class proceeding would be a fair, efficient and manageable means of advancing the claim. There is no realistic alternative to a class action, as no individual would alone be capable of funding the litigation against HMQ. The issues of duty and breach, if resolved in favour of HMQ, will end the proceeding. If the plaintiff is successful, the issue of damages can be refined as the matter proceeds.

[73] There is no basis to grant leave to appeal from Lax J.’s decision that it is preferable to allow the matter to proceed as a class action. Neither Rule 62.02(4)(a) nor (b) of the Rules of Civil Procedure applies in this case.

Conclusion

[74] Justice Lax’s decision for the certification of this class action is entitled to considerable deference. This court recognizes the expertise of motions judges and the flexibility afforded to certification proceedings under the CPA. An appellate court should only intervene with the motions judge’s decision where matters of general principle are at stake: Anderson v. Wilson (1999), 44 O.R. (3d) 673, leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 476; Cloud v. Canada (A.G.) (2004), 73 O.R. (3d) 401 (C.A.), leave to appeal to S.C.C. refused, [2005] S.C.C.A. No. 50.

[75] For leave to appeal to be granted HMQ must satisfy the two-part test enunciated in either 62.02(4) (a) or (b) of the Rules of Civil Procedure. For the reasons outlined I conclude without hesitation that HMQ has failed to meet their onus of proof that either rule 62.02(4) (a) or (b).

[76] I conclude that there are no conflicting decisions requiring clarification, and it is not in my view desirable that leave to appeal be granted. There has already been a delay of three years due to procedural challenges. It is in the interests of justice that this case proceed.

[77] I conclude that there is no reason to doubt the correctness of Justice Lax’s decision. To the contrary, I agree with her careful analysis. This matter does not raise issues of such importance that in my view leave to appeal should be granted.

[78] For these reasons, leave to appeal is denied.

Costs

[79] Counsel for the plaintiff suggested that the appropriate award for costs in a motion for leave to appeal a certification order is in the range of $5000.00 to $15,000.00. The plaintiff seeks costs at the higher end of the scale if successful. HMQ suggests that there should be no costs awarded, either for the certification motion or this motion for leave to appeal. I conclude that an appropriate award of costs within the reasonable contemplation of the losing party in this motion for leave to appeal is $12,000.00.

JANET WILSON J.

RELEASED: January 22, 2009

COURT FILE NO.: 05-CV-287428CP Divisional Court File No: 460/08 DATE: 20090122

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N :

BILL SAUER Plaintiff

• and -

THE ATTORNEY GENERAL OF CANADA on behalf of HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTRY OF AGRICULTURE, JOHN DOE, JANE ROE AND RIDLEY INC. Defendants

REASONS FOR JUDGMENT

JANET WILSON J.

RELEASED: January 22, 2009

[^1]: Parliament, Standing Committee on Agriculture and Agri-Food, “Canadian Livestock Pricing in the Aftermath of the BSE Crisis” by Paul Steckle, Chair (April 2004) at page 6, online: http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=1282498&Language=E&Mode=1&Parl=37&Ses=3