Court File and Parties

COURT FILE NO.: 5303/11CP DATE: 20190221 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert Jordan and Paulina Danao, Plaintiffs AND: CIBC Mortgages Inc., Defendant

BEFORE: Justice R. Raikes

COUNSEL: Alex Dimson and Tyler Planeta, Counsel for the Plaintiffs Paul Steep, Caroline Zayid and H. Michael Rosenberg Counsel, for the Defendant

HEARD: August 14, 2018

Endorsement

[1] The plaintiffs brought a motion seeking an interim stay and an adjournment of the scheduled certification motion in order to pursue certification of a national class in a parallel class proceeding in British Columbia. That action was already certified on narrow issues for a provincial class.

[2] I declined the plaintiffs’ motion with reasons to follow. These are those reasons.

Background

[3] This proceeding is one of three parallel actions brought in three different provinces against the defendant, CIBC Mortgages Inc. (hereafter “CIBC”):

1. Sherry v. CIBC Mortgages Inc. (hereafter “the Sherry action”) in British Columbia.
2. Lamare c. CIBC Mortgages Inc. (hereafter “Lamare”) in Québec.
3. Jordan v. CIBC Mortgages Inc. in Ontario.

[4] These actions are being prosecuted by a consortium of law firms including plaintiffs’ counsel in the matter before me.

[5] The Sherry action is the most advanced of the three actions. According to the affidavit of Mr. Wright, the Sherry action has been at all times the lead action.

[6] Both Sherry and Lamare seek to certify/authorize a provincial class. By contrast, the Jordan action has been a proposed national class since inception.

[7] The Sherry action was conditionally certified in June 2014 and fully certified by a supplemental decision rendered in March 2015 by the British Columbia Supreme Court. In June 2016, the British Columbia Court of Appeal maintained certification of the action on a much narrower basis. Some of the causes of action advanced by the plaintiff were dismissed and, as a result, some of the common issues initially certified were eliminated.

[8] Following release of the decision of the British Columbia Court of Appeal, the plaintiff in the Sherry action amended her pleading and brought a motion to amend the certification order accordingly. The defendant brought a motion to dismiss the amended pleading. That motion was heard in November 2017 and was, at the time this motion to stay and adjourn was heard, still under reserve.

[9] The Lamare action has not yet been authorized. Defence counsel advised that the action was in danger of being dismissed for inaction.

[10] The Jordan was commenced in October 2011. As mentioned, this action has always been intended to be a national class. This approach has been quite common in class proceedings litigation owing to differences in legislation between Ontario, British Columbia and Québec. Notably, the British Columbia Class Proceedings Act historically permitted a national class but on an “opt – in” basis only. As will be seen below, the British Columbia legislation was expected to change in the Fall of 2018.

[11] Shortly after I was appointed case management judge in Jordan, a case conference was held with counsel. The decision in the appeal to the British Columbia Court of Appeal in Sherry was then pending. I was asked by counsel to defer scheduling the certification motion in Jordan because that decision was expected to have an impact on the scope or theory of the claim and the issues on certification. I agreed to counsels’ joint request.

[12] After release of the decision of the British Columbia Court of Appeal in Sherry, a further case conference was held at which time counsel signified their intention to proceed with the certification motion in Jordan and provided their estimate of the time required. The plaintiffs’ motion record for certification is dated November 2015 and had already been served.

[13] A schedule was agreed upon between counsel for delivery of the defendant’s responding motion material, delivery of reply affidavit evidence, for cross examinations, delivery of facta and oral argument of the certification motion. The certification motion return date was also agreed more than a year ahead of its return date in order to permit all of these steps to occur.

[14] In July 2018, only a few weeks before the scheduled certification motion, plaintiff’s counsel wrote to the court seeking a case conference by telephone for the purpose of adjourning or staying the certification motion. That request came in while I was out of country on holiday. The request for a case conference was declined.

[15] The plaintiffs then brought this motion to stay this action and adjourn the certification motion returnable at the outset of the certification motion. I pause to note that the defendant had already served its factum for the certification motion by the time the request was made for a case conference.

[16] The plaintiffs indicate that two recent unanticipated events have impelled the request for a stay/adjournment:

1. Lead counsel in the Sherry action died on January 30, 2018. His practice is being wound down by his nephew pursuant to an arrangement with the Law Society in British Columbia. It is anticipated that counsel with an experienced class-action firm in British Columbia will be retained although they were not yet retained as at the date this motion was argued. The Siskind firm would act as counsel in Sherry in the interim.
2. In April 2018, the Attorney General of British Columbia announced proposed amendments to the province’s class proceedings legislation which would enable certification of national classes on an “opt-out” basis. Transitional provisions would enable plaintiffs in previously certified actions to apply to amend the certification order to certify a national class. Royal Assent was given in May 2018 and it was announced in late June 2018 that the amendments would come into force October 1, 2018.

[17] According to para. 17 of the plaintiffs’ factum,

As can be expected, the combination of these legislative changes and the death of the lead lawyer in the case necessitated a rethinking of the consortium’s litigation strategy for the combined actions, even as the Jordan certification motion approached.

[18] The defendant rejected the plaintiffs’ request to stay this action and to proceed in British Columbia under the transition provisions to convert the already certified class proceeding to a national class. CIBC wanted the certification motion to proceed in Ontario on the schedule previously agreed to.

[19] The certification motion proceeded immediately following dismissal of the plaintiffs’ motion to stay/adjourn. The reserved decision in the Sherry action has been released since then, and the parties were given the opportunity to make written submissions concerning its import to the Jordan certification motion issues.

[20] The plaintiffs submit that the request for a stay and adjournment amount to the same relief. In Toronto-Dominion Bank v. Hylton, 2010 ONCA 752 at para. 38, the Ontario Court of Appeal indicated that when weighing an adjournment, a court should consider:

• the evidence and strength of the evidence of the reason for the adjournment request;
• the history of the matter including deliberate delay or misuse of the court process; and
• the prejudice to the party resisting the adjournment and the consequences to the requesting party.

[21] Perell J. summarized the factors to be considered on an adjournment request in Ariston Realty Corp. v. Elcarim Inc. at para. 34 as follows:

• the overall objective of a determination of the matter on its substantial merits;
• the principles of natural justice;
• that justice not only be done but appear to be done;
• the particular circumstances of the request for an adjournment and the reasons and justification for the request;
• the practical effect or consequences of an adjournment on both substantial and procedural justice;
• the competing interests of the parties in advancing or delaying the progress of the litigation;
• the prejudice not compensable in costs, if any, suffered by a party by the granting or the refusing of the adjournment;
• whether the ability of the party requesting the adjournment to fully and adequately prosecute or defend the proceeding would be significantly compromised if the adjournment were refused;
• the need of the administration of justice to orderly process civil proceedings; and
• the need of the administration of justice to effectively enforce court orders.

[22] Plaintiffs’ counsel argued that in order to demonstrate that the plaintiffs were not attempting to engage in forum shopping, the plaintiffs were prepared to unconditionally commit to seek certification of a national class exclusively in British Columbia and abide by the determination of the British Columbia court on whether to certify a national class. In short, the plaintiffs were prepared to commit to a single jurisdiction. The court should defer to counsel’s choice of forum.

[23] The plaintiffs also argued that proceeding in British Columbia as they proposed avoids a multiplicity of proceedings with the possibility of inconsistent findings. With a decision in the British Columbia Supreme Court on the amended pleading still under reserve, there was a significant risk of a conflicting decision on the certification motion before me.

[24] Further, they argued that there has been no deliberate delay or misuse of the court by the plaintiffs. The defendant will not be prejudiced in any manner not compensable by costs. By contrast, determination of the Ontario certification motion would prevent Ontario plaintiffs from ever seeking a national class in British Columbia under the amended legislation.

[25] The defendant relied on the decision of Strathy J. (as he then was) in Turon v. Abbott Laboratories Ltd., 2011 ONSC 4343 at paras. 13-14 where he admonished against the practice of stakeholder lawsuits – where counsel commence actions in multiple jurisdictions but leave some or all parked indefinitely. It is a matter of fairness to the putative class members, the defendant and the court that actions not be permitted to languish. Counsel must move with reasonable dispatch to advance the litigation. (See Duzon v. Glaxosmithkline, Inc., 2011 SKQB 118 at paras. 36-37 to similar effect.)

[26] I agree with plaintiffs’ counsel that the facts in Turon and Duzon are distinguishable from those present in this case. This is not a case where defence counsel has been kept in the dark as to where and when plaintiffs’ counsel will proceed and what will happen with the parallel litigation. To the contrary, defence counsel was part of the request to defer the certification motion until the outcome of the appeal in Sherry was known. Likewise, plaintiffs’ counsel and defence counsel agreed on the schedule for steps leading up to certification in Jordan. There has been a significant measure of consultation and cooperation between counsel.

[27] In deciding whether to exercise my discretion to stay/adjourn the certification motion, I note that:

1. Plaintiffs’ counsel elected to proceed with a proposed national class in Ontario. It communicated that decision through its pleadings in the various actions and in discussions with defence counsel both outside and before the court;
2. The defendant acted in reliance upon the plaintiffs’ choice of method of proceeding;
3. Counsel entered into an agreement as to the schedule and steps to be taken to get to certification. The plaintiffs’ sudden shift in approach comes well down that road and on the virtual eve of the certification motion;
4. Everything was in place to argue the certification motion without further delay;
5. This action is already nearly seven years old;
6. The death of lead counsel in British Columbia was well known to plaintiffs’ counsel in January 2018 but they did nothing to shift their litigation strategy until the summer of 2018. I am at a loss to understand how this unfortunate fact has any bearing on the decision to stop the Ontario proceeding in favour of British Columbia in any event;
7. As at the date this motion to adjourn was argued, experienced British Columbia class counsel had not yet been engaged despite the passage of almost seven months;
8. It is well-accepted that the size of a class is typically larger where people have to opt out rather than opt in. The size of the class has a direct bearing on the degree of risk on the defendant. It strikes me as likely that the main reason for proceeding with the proposed national class in Ontario is the presence of an “opt out” model. The plaintiffs’ recent decision to stay the Ontario proceeding is directly and inextricably tied to the proposed amendments of the British Columbia legislation. This strikes me as forum shopping. There may well be circumstances where such decisions are appropriate and timely such as at the outset of the litigation; however, in this case the Ontario certification process is near completion and the proceeding has already suffered significant delay;
9. Moreover, there are still uncertainties facing the members of the proposed Ontario class if transplanted into the British Columbia action. For example, will the legislation come into effect on October 1 or not? Will the court amend the class definition in Sherry to include those from Ontario and elsewhere in Canada?; and
10. By counsel’s own admission, the shift to British Columbia will mean acceptance of the narrowed claim arising from the British Columbia Court of Appeal’s decision. Plaintiffs’ counsel indicated that that will foreclose one or more of the claims that might be available in Ontario.

[28] With respect to the potential for conflicting decisions, I note that that risk was inherent in the strategic decision made at the outset to pursue three actions instead of two. It strikes me as somewhat disingenuous to now seize upon a risk counsel willingly accepted to justify a tactical decision made well down the road counsel chose.

[29] In summary, the relatively last-minute request to stay or adjourn the certification motion is inefficient and unfair to the defendant and to class members. The plaintiff picked the forum to bring a national class proceeding. They were content with that choice until a strategic advantage arose through an amendment to legislation that carries with it a measure of uncertainty. In my view, it is too late in the day to reverse field. The defendant is entitled to have the issues raised by the certification motion determined in a timely manner as discussed and agreed.

[30] The reasons given for the proposed stay and adjournment are unsatisfactory. The refusal to grant a stay or adjournment will not affect the plaintiffs’ ability to prosecute the proceeding. Going ahead with the certification motion carries to its culmination a lengthy and involved process with numerous steps already taken.

[31] If the parties cannot agree on costs of the motion to stay/adjourn, they may make written submissions not exceeding 5 pages within 15 days.

Justice Russell Raikes Date: February 21, 2019