James Richardson v. Samsung Electronics Canada Inc., 2019 ONSC 6845
CITATION: James Richardson v. Samsung Electronics Canada Inc., 2019 ONSC 6845
DIVISIONAL COURT FILE NO.: 47/18
DATE: 20191126
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Pierce, Ducharme and Tausendfreund JJ.
BETWEEN:
James Richardson Plaintiff (Appellant)
– and –
Samsung Electronics Canada Inc. Defendant (Respondent)
Michael J. Peerless, Matthew D. Baer and Emily Assini, for the Appellant
Scott Maidment and Nicole Rozario, for the Respondent
HEARD: November 25, 2019
REASONS FOR JUDGMENT
Ducharme J.:
Introduction
[1] The Appellant/Plaintiff appeals from the Order of the Honourable Justice Rady (the "Motions Judge") of the Ontario Superior Court of Justice dated October 16, 2018 in which the Motions Judge dismissed the Appellant's motion seeking certification of this action as a class proceeding pursuant to section 5(1) of the Class Proceedings Act, 2002. The Appellant asks that the decision of the Motions Judge be reversed, and the action be certified as a class proceeding pursuant to section 5(1) of the Class Proceedings Act, 2002. The Respondent requests that the Motions Judge’s order be affirmed.
Issues
[2] This Appellant raises the following four issues:
Whether the Motions Judge erred in concluding that the pleadings did not plead a viable cause of action under the consumer protection legislation;
Whether the Motions Judge erred in concluding that the pleadings failed to raise common issues;
Whether the Motions Judge erred in concluding that a class proceeding was not the preferable procedure for resolution of the common issues; and
Whether the Motions Judge erred in failing to address the suitability of the proposed representative Plaintiff.
Jurisdiction and Standard of Review
[3] Pursuant to section 30(1) of the Class Proceedings Act, 2002, the Motions Judge's decision to refuse to certify this proceeding is properly appealed directly to this Court. As a statutory appeal, the Housen v. Nikolaisen standard applies to this case. Review is on the standard of correctness for questions of law and palpable and overriding error for questions of fact. Considerable deference is afforded to judges on class certification proceedings. The Court of Appeal has stated at para. 12 of Anderson v. Wilson, 1999 3753 (ON CA), 1999 CarswellOnt 2073 (C.A.) that “intervention by this court at the certification level should be restricted to matters of general principle.”
The Test for Certification of a Class
[4] The test for certification of a class is set out in section 5 of the Class Proceedings Act, 2002 which provides as follows:
(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).
[5] It should be noted that the requirements set out in section 5 of the Class Proceedings Act, 2002 are conjunctive, that is all of the requirements must be satisfied for a class to be satisfied. However, where the requirements are satisfied then certification is mandatory.
Decision of the Motions Judge
[6] Section 5(1)(a) of the Class Proceedings Act, 1992 requires that the Plaintiff have a tenable cause of action. Where it is “plain and obvious” that a claim cannot succeed or that it has a radical defect, the claim is not tenable. The plaintiff must plead all the material facts on which it relies, and all of the facts which it must prove to establish a cause of action which is legally complete. The pleading must be drafted with sufficient clarity and precision to enable the defendant to know the case it will be required to meet. The Motions Judge ultimately dismissed the certification motion on the grounds that the claim failed to meet the s. 5(1) requirements. Specifically, the claim failed on three grounds: (1) the cause of action, (2) commonality of issues, and (3) preferability of the class proceeding.
[7] The Motions Judge concluded that the pleadings failed to disclose a cause of action and were untenable. The plaintiff’s pleadings with respect to the Competition Act and the Consumer Protection Act both simply repeated the general language set out in the acts and were not set out with sufficient particularity. Further, there was no contractual privity between the consumers and Samsung (as a manufacturer), which was necessary for such claims. This privity issue extended to the claims advanced under the Sale of Goods Act. The Appellant also advanced several negligence claims. The Motions Judge concluded that these claims were improperly pleaded with respect to causation, commonality, and thresholds of harm.
[8] The Appellant relied heavily on expert evidence to establish common issues. The Motions Judge concluded that this expert evidence was insufficient to establish commonality. There were two reasons for this. First, the expert acknowledged under cross-examination that some class members may have suffered no damages whatsoever. Second, much of his report was found to have been taken, word-for-word, from a previous report about defective airbags. The Motions Judge was not confident that his opinion had been grounded in the facts of the instant case.
[9] Finally, with respect to preferability, the Motions Judge concluded that a class action was not the preferable procedure. She found that the defendant’s compensation program was the preferable procedure and that it addressed any access to justice and behaviour modification concerns. The Motions Judge acknowledged that the program might leave some customers out of pocket, but she stated that the law does not demand perfect compensation in recall programs and that any stress or inconvenience associated with the recall does not rise above the de minimis level.
Issue 1: Whether the Motions Judge erred in concluding that the pleadings did not plead a viable cause of action under the consumer protection legislation.
[10] With respect to both s. 52 of the Competition Act and ss. 14 and 17 of the Class Proceedings Act, 2002 the motions Judge noted that in advancing claims for misrepresentation in tort, the plaintiffs failed to plead the full particulars of the misrepresentation as required by Rule 25.06(8). In this regard, she properly referred to Lysko v. Braley, 2008 CarswellOnt 1758 (C.A.) and Dugal v. Manulife Financial Corp., 2011 ONSC 3. In our view she correctly decided this issue as well as deciding that this lack of particulars would not satisfy s. 52(4) of the Competition Act that requires the court to consider the impression the misrepresentation would create in the mind of the reader.
[11] The Motions Judge also found that the pleadings did not disclose a viable cause of action as there was no contractual privity between the Plaintiffs and the respondent, Samsung. She properly relied on Singer v. Schering – Plough Canada Inc. 2010 ONSC 42 for the proposition that there must be contractual privity to advance a claim under s. 18 of the Class Proceedings Act, 2002. Similarly, privity was required to advance a claim under the Sale of Goods Act. She noted that no contractual privity was pleaded nor was the fact that the vendors of the Note7’s were agents of Samsung. We are not satisfied that the Motions Judge erred in coming to this conclusion.
[12] The Motions Judge also said that the pleadings failed to disclose a claim for negligent design and manufacture. In his submissions before us, the Appellant did not take any issue with respect to this conclusion except as discussed below.
[13] The Appellant argues that the Motions Judge should have granted the Appellant leave to amend the pleadings to address the deficiencies she had identified. The Appellant never requested such leave from the Motions Judge. Prior to the motion, the claim had been amended on four separate occasions. On the motion, the Appellant argued that his claims were viable as they then stood. In our view he should not be permitted to alter his position now. As this Court has noted in Risorto v State Farm Mutual Automobile Insurance Co, 2009 CarswellOnt 1247 (Div. Ct), at para. 35 when overturning a certification Judge’s decision to re-open the certification motion “There is a strong interest in finality, which should only be departed from in exceptional circumstances. Parties make strategic decisions in the course of litigation, and except in narrow circumstances they must be held to those decisions.” This recognition of the importance of the principle of finality is equally applicable here.
[14] Given that all of the requirements of section 5 of the Class Proceedings Act, 2002 must be met to certify a class, our conclusion that the Motions Judge did not err with respect to this issue, necessitates that this appeal be dismissed. However, as it was fully argued, we shall also address the second issue.
Issue 2. Whether the Motions Judge erred in concluding that the pleadings failed to raise common issues.
[15] The Motions Judge correctly identified the commonality issue, “The burden on the plaintiff under this heading is to demonstrate that the common issues can be answered across the class”. The Court of Appeal endorsed this approach in Fehr v Sun Life 2018 ONCA 718 at para. 86 “it is entirely reasonable for a certification motion judge to expect the parties to produce evidence relevant to whether there is some basis in fact that the issue is common across the class.”
[16] There could be no recovery in this case absent proof of harm or loss. The Appellant therefore proposed the following common issue that was clearly intended to determine whether harm or loss had occurred, “Did the Defendant provide adequate compensation to Class Members subject to the Note7 recall?” The only evidence the Appellant offered to demonstrate the commonality of that question came from his economics expert, Mr. Stockton. However, Mr. Stockton only gave evidence about how damages might be calculated. His opinion was, “methods exist by which it is possible to estimate some or all of the economic harm suffered by class members on a class-wide basis.” However, Mr. Stockton offered no evidence to show that any question of harm, loss or “adequate compensation” could be determined on a class-wide basis. Indeed, he admitted that he had assumed everybody in the class had suffered harm, thereby assuming away the problem.
[17] In Pro-Sys Consultants Ltd v Microsoft Corp, 2013 SCC 57 at para 118, the Supreme Court of Canada said:
In my view, the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement. This means that the methodology must offer a realistic prospect of establishing loss on a class-wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class (i.e. that passing on has occurred). The methodology cannot be purely theoretical or hypothetical, but must be grounded in the facts of the particular case in question. There must be some evidence of the availability of the data to which the methodology is to be applied. [Emphasis added.]
[18] This raised a further issue. The Motions Judge concluded that Mr. Stockton’s evidence was not sufficiently grounded in the facts of the case. This conclusion is justified by the fact that Mr. Stockton did not conduct any independent investigation of the facts of the case. Additionally, the Motions Judge found that his opinion might not be reliable given that he conceded that he had cut and pasted sections from a previous opinion that he had prepared with respect to an unrelated case involving defective automobile airbags.
[19] As the respondent’s evidence shows, there were a variety of ways in which members of the proposed class acquired the devices at issue and then responded to the recall, necessitating an individual trial for each member of the class in order to ascertain whether there were damages, and if so, to what extent. We agree with the motion judge’s conclusion that there did not, therefore exist, commonality among the class.
Conclusion
[20] For the foregoing reasons the appeal is dismissed and leave to appeal the costs decision is denied. On consent, costs are payable to the defendants in the amount of $55,000 all inclusive.
“Justice T. Ducharme”
Ducharme J.
I agree
“Justice H. Pierce” Pierce J.
I agree
“Justice W. Tausendfreund”
Tausendfreund J.
Released: November 26, 2019
James Richardson v. Samsung Electronics Canada Inc., 2019 ONSC 6845
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Pierce, Ducharme and Tausendfreund JJ.
BETWEEN:
James Richardson Plaintiff (Appellant)
– and –
Samsung Electronics Canada Inc. Defendant (Respondent)
REASONS FOR JUDGMENT
Released: November 26, 2019