COURT FILE NO.: CV-18-00607848-00CP DATE: 2019/02/25

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ARLENE STEVENSON and MIRA MELIEN Plaintiffs

• and - MAZDA MOTOR CORPORATION, MAZDA CANADA INC. and SUBARU CANADA INC. Defendants

Counsel: Sabrina Lombardi for the Plaintiffs Daniel Murdoch and Aaron Kreaden for the Defendants, Mazda Motor Corporation and Mazda Canada Inc. Douglas Stewart for the Defendant, Subaru Canada Inc.

Proceeding under the Class Proceedings Act, 1992

HEARD : February 25, 2019

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] Pursuant to the Class Proceedings Act, 1992 [1] Arlene Stevenson and Mira Melien sue Mazda Motor Corporation, Mazda Canada Inc. (collectively “Mazda”) and Subaru Canada Inc.

[2] Mesdames Stevenson and Melien bring a motion: (a) for certification of the action against Mazda and Subaru for settlement purposes; (b) for approval of the notice plan and the notice of the settlement approval hearing; (c) for the appointment of Settlement Notice and Claims Administrator; and (d) for the appointment of the Outreach Administrator.

B. Factual Background

[3] Between April 11, 2013 and August 31, 2018, there were twenty-eight Transport Canada Recalls with respect to the Takata airbag inflators installed in Mazda and Subaru vehicles (Recalls: #2013112, #2014245, #2014285, #2014570, #2015234, #2015237, #2015246, #2015247, #2015624, #2016050, #2015599, #2016257; #2016259, #2017011, #2017012, #2017013, #2017020, #2017021, #2018019, #2018030, #2018036, #2018038, #2018039, #2018040, #2018085, #2018086, #2018466 and #2018467). Hundreds of thousands of vehicles across Canada were affected.

[4] On October 30, 2018, Mesdames Stevenson and Melien commenced a proposed class action by way of Statement of Claim. The pleading was subsequently amended with the most recent iteration of the pleading being the Fresh as Amended Statement of Claim. Mesdames Stevenson and Melien allege that the Defendants were negligent in the engineering, designing, developing, testing, and manufacturing of the Takata airbag inflators in the vehicles.

[5] Class Counsel is comprised of several firms working cooperatively. Those firms include the following: Strosberg Sasso Sutts LLP, McKenzie Lake Lawyers LLP, Rochon Genova LLP, Kim Spencer McPhee Barristers P.C., Merchant Law Group LLP, Garcha & Company and Consumer Law Group P.C.

[6] A related class proceeding was also commenced in Quebec. Counsel in the Quebec Action and Class Counsel are working cooperatively.

[7] Mesdames Stevenson and Melien bring their action on behalf of the following Class:

All persons, entities, or organizations resident in Canada, excluding Quebec Class Members, who own, owned, lease or leased a Subject Vehicle as listed in Exhibits F to the Mazda and Subaru Settlement Agreements, as of the Takata Airbag Inflator Recall(s) dates, but shall not include: (a) Mazda and Subaru, their affiliates and affiliates’ officers, and directors; their distributors and distributors’ officers, and directors; and Mazda and Subaru Dealers and Mazda and Subaru Dealers’ officers and directors; (b) Class Counsel; (c) counsel for Mazda and Subaru; and (d) persons or entities who or which timely and properly exclude themselves from the Class.

[8] The proposed National Class Members includes all persons resident in Canada, other than residents of Quebec. Certification of the complementary class will be sought in Quebec.

[9] On February 21, 2019, the parties signed a Settlement Agreement to settle the claims of individuals across Canada who own, owned, lease or leased a Subject Vehicle as of the Takata Airbag Inflator Recall(s) dates. Pursuant to the Settlement, the subject vehicles will be equipped with replacement Airbags and the settlement will resolve all past, present, and future claims for the alleged Economic Loss of the National Class Members in any way arising out of or relating to the ownership, resale, purchase, acquisition and/or finance and/or lease of the Subject Vehicles.

[10] One of the key features of the Settlement Agreement is the extensive Outreach Program to be undertaken to directly contact all National Class Members who have not yet received the Recall Remedy, to advise them of the availability of the Recall Remedy, as well as direct them to information about the other Settlement benefits.

[11] For the purposes of the settlement, Mesdames Stevenson and Melien propose the following common issue:

Have the Plaintiffs and the Mazda and Subaru National Class Members suffered Alleged Economic Loss arising from the design, manufacture, marketing, sale and distribution of vehicles that contain or contained Takata phase stabilized ammonium nitrate (“PSAN”) inflators in their driver or passenger front airbags that have been recalled or will be recalled or contain a desiccant and that may be subject to a recall by Transport Canada (i.e. the Subject Vehicles) and, if so, what Alleged Economic Loss has been sustained?

[12] Pursuant to the settlement, the parties have agreed on the form and content of the Notice to be given to Class Members and they have agreed on the plan for disseminating the Notice. The proposed Class Notice is made up of: (i) Direct Mail Notice; (ii) a Short Form Notice; and (iii) a Long Form Notice along with, among other things, newspaper publications and internet advertising.

[13] Under the Settlement Agreement, the parties agree to the appointment of Crawford Class Action Services as the Settlement Notice and Claims Administrator to, among other things, disseminate the Notice and to receive opt-out forms and/or written objections from any National Class Members opposed to the Settlement Agreement. Crawford Class Action Services has consented to this appointment.

[14] The costs and fees of the Settlement Notice and Claims Administrator are payable pursuant to the Settlement Agreement by the Defendants.

[15] The parties agree to the appointment of Stericycle as the Settlement Outreach Administrator to, among other things, implement and administer the Settlement Outreach Program. Stericycle has consented to this appointment and has extensive experience performing outreach services.

[16] The costs and fees of the Settlement Outreach Administrator are payable by the Defendants pursuant to the Settlement Agreement.

C. Analysis and Conclusion

[17] The court is required to certify the action as a class proceeding where the following five-part test in s. 5 of the Class Proceedings Act, 1992 is met: (a) the pleadings disclose a cause of action; (b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff; (c) the claims 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 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.

[18] The fact that an action is certified on consent for settlement purposes does not dispense with the need to meet the certification criteria but they may be less rigorously applied in a settlement context. [2]

[19] In the present case, I am satisfied that all of the criteria for certification have been satisfied and that the incidental relief should be granted.

[20] Accordingly, I grant Mesdames Stevenson and Meliens’ motion.

Perell, J.

Released: February 25, 2019

COURT FILE NO.: CV-18-00607848-00CP DATE: 2019/02/25 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: arlene stevenson AND mira melien Plaintiffs - and - MAZDA MOTOR CORPORATION, MAZDA CANADA INC. and SUBARU CANADA INC. Defendants

REASONS FOR DECISION

PERELL J. Released: February 25, 2019

Footnotes:

[1] S.O. 1992, c.6. [2] Osmun v. Cadbury Adams Canada Inc., [2009] O.J. No. 5566 at para. 21 (S.C.J.).