COURT FILE NO.: CV-16-543766-00CP

DATE: 20221020

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DONALD D’HAENE, KEITH SANFORD, MARY SALMON, MICHAEL VETTESE, NIDHI PRASHAR, and JOSÉE GAULIN

Plaintiffs

• and –

BMW CANADA INC./BMW GROUP CANADA, BMW NORTH AMERICA, LLC, BMW MANUFACTURING CO. LLC, BMW AG, FORD MOTOR COMPANY OF CANADA LIMITED, GENERAL MOTORS COMPANY AND GENERAL MOTORS OF CANADA LIMITED, MITSUBISHI MOTOR SALES OF CANADA, INC., MERCEDES-BENZ CANADA INC., VW CREDIT CANADA, INC. and VOLKSWAGEN GROUP CANADA, INC.

Defendants

Proceeding under the Class Proceedings Act, 1992

Harvey T. Strosberg, K.C., Justin Smith, and James K. Ball for the Plaintiffs

Matthew Fleming and Ara Basmadjian for the Defendants Mercedes-Benz Canada Inc.

Lawrence G. Theall and Jeffrey A. Brown for the Defendant Mitsubishi Motor Sales of Canada Inc.

Cheryl M Woodin and Michael C. Smith for the Defendants General Motors Company and General Motors of Canada Limited

Peter J. Pliszka and Zohaib I. Maladwala for the Defendants BMW Canada Inc./BMW Group Canada, BMW North America, LLC, BMW Manufacturing Co. LLC, and BMW AG

Hugh M. DesBrisay for the Defendant Ford Motor Company of Canada Limited

David Morritt and Sonia Bjorkquist for the Defendants, VW Credit Canada, Inc. and Volkswagen Group Canada, Inc.

HEARD: In writing

PERELL, J.

REASONS FOR DECISION

The phoenix is an immortal bird associated with Greek mythology (with analogs in many cultures) that cyclically regenerates or is otherwise born again. Associated with the sun, a phoenix obtains new life by rising from the ashes of its predecessor. Some legends say it dies in a show of flames and combustion, others that it simply dies and decomposes before being born again. [Wikipedia “Phoenix (mythology)”]

A. Introduction

[1] Pursuant to the Class Proceedings Act, 1992,[^1] Donald D’Haene, Keith Sanford, Mary Salmon, Michael Vettese, Nidhi Prashar and Josée Gaulin bring a proposed class action against six car manufacturers, BMW, Ford, General Motors, Mercedes-Benz, Mitsubishi, and Volkswagen.

[2] The proposed class action is one of a group of six national actions commenced against 12 groups of car manufacturers; namely: BMW, Chrysler, Ford, General Motors, Honda, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Subaru, Toyota, and Volkswagen.

[3] The six actions have been brought by a Consortium of Class Counsel after a recall of defective and dangerous automobile parts supplied by Takata Corporation and TK Holdings, collectively “Takata”. The six actions, which I have been case managing, are being pursued by the Consortium with the primary objective of protecting Class Members from a safety risk. What’s the risk? When deployed by a motor vehicle collision, Takata airbags may explode like a grenade spewing shrapnel, killing, or maiming the occupants of a vehicle.

[4] Because of bankruptcy, Takata is no longer a party to any of the six actions.

[5] The immediate action now before the court is against six of the car manufacturers. Of these six, General Motors, Mercedes-Benz, and Mitsubishi brought a motion to have the immediate action dismissed for delay pursuant to s. 29.1 of the Class Proceedings Act, 1992. General Motors, however, entered into a standstill agreement with the Plaintiffs and it seeks to adjourn the dismissal motion insofar as it is concerned. Mercedes-Benz and Mitsubishi persist in their effort to terminate the immediate action for delay pursuant to s. 29.1 of the Act. BMW, Ford, and Volkswagen take no position on Mercedes-Benz’s and Mitsubishi’s motion.

[6] For the reasons that follow, the action against Mercedes-Benz and Mitsubishi is dismissed pursuant to s. 29.1 of the Class Proceedings Act, 1992 with costs payable for the motion to dismiss to Mercedes-Benz and Mitsubishi. However, the dismissal is on terms that the dismissal order - but not the costs order - shall be set aside provided that the Representative Plaintiffs file a final and complete motion record in the motion for certification within thirty days, failing which the action shall be dismissed as against Mercedes-Benz and Mitsubishi with costs.

B. Facts

[7] Takata was a co-Defendant in six proposed products liability class actions under the Class Proceedings Act, 1992: (1) Mailloux v. Takata Corporation, CV-16-543763-00CP; (2) Coles v. Takata Corporation, CV-16-543764-00CP; (3) D’Haene v. Takata Corporation, CV-16-543766-00CP; (4) Des-Rosiers v. Takata Corporation, CV-16-543767-00CP; (5) McIntosh v. Takata Corporation, CV-16-543833-00CP; and (6) Stevenson v. Mazda Motor Corp., CV-18-00607848-00CP.

[8] Spread out over the six actions with some defendants added during the course of the proceedings, Takata’s co-Defendants are 12 car manufacturers. In their respective actions, the Plaintiffs pled that the airbag inflator installed in the Class Members’ vehicles had one or two dangerous and life-threatening defects. The defects are a result of the design and manufacturing negligence of Takata.

[9] The national Consortium of law firms for these six actions are: (a) the Consumer Law Group PC; (b) Garcha and Co.; (c) Kim Orr Barristers PC; (d) McKenzie Lake Lawyers LLP; (e) Merchant Law Group LLP; (f) Rochon Genova LLP; and (g) Strosberg Sasso Sutts LLP.

[10] From this Consortium, the proposed co-lead Class Counsel for the immediate action now before the court are McKenzie Lake Lawyers LLP and Strosberg Sasso Sutts LLP.

[11] On November 7, 2014, John M. McIntosh commenced an airbag class action against Takata and Toyota, and Rick A. Des-Rosiers and Stephen Kominar commenced an airbag class action against Takata and Honda.

[12] On April 10, 2015, Jeff Mailloux commenced an airbag class action against Takata and Nissan.

[13] On April 11, 2015, Donald D’Haene and Keith Sanford commenced the immediate action, an airbag action eventually against Takata, BMW, Ford, General Motors, Mazda, Mercedes-Benz, Mitsubishi, Subaru, and Volkswagen.

[14] On May 12, 2015, Gary Coles commenced an action against Takata and Chrysler.

[15] On January 12, 2016, in the immediate action, Mitsubishi was joined as a defendant and the Plaintiffs were granted leave to issue and file a Fresh as Amended Statement of Claim.

[16] By April 7, 2016, a national Consortium to prosecute the airbag actions had been formed.

[17] On April 11, 2016, in the immediate action, the Plaintiffs delivered an Amended Fresh as Amended Statement of Claim.

[18] On June 7, 2016, in the immediate action, at a case conference, I set a deadline of June 17, 2016 for the Plaintiffs to bring a motion to stay the claim against Takata and deliver amended claims, a deadline for the delivery of the defendants’ Ragoonanan motions, as well as deadlines for the exchange of other pleadings, and I scheduled a case conference for December 19, 2016.

[19] On June 13, 2016, in the immediate action, the action as against Takata Corporation was stayed.

[20] On July 7, 2016, in the immediate action, the Plaintiffs delivered a Third Amended Fresh as Amended Statement of Claim.

[21] On July 15, 2016, in the immediate action, I ordered that the stay order of June 13, 2016 was without prejudice to the right of all defendants to crossclaim as against Takata Corporation.

[22] On July 16, 2016, I granted a motion brought by Takata in the Coles, Des-Rosiers, Mailloux, McIntosh actions and the immediate action to strike six paragraphs from the respective Statements of Claim for contravention of the Apology Act, 2009.[^2]

[23] By order dated August 25, 2016, in the immediate action, I ordered that Beverly Cyr, Josée Gaulin, Mira Melien, Nidhi Prashar, Mary Salmon, and Arlene Stevenson be added as Plaintiffs and that Mercedes-Benz and Volkswagen be joined as defendants. I granted leave to issue a Second Fresh as Amended Statement of Claim. I ordered that Statements of Defence be delivered.

[24] On August 30, 2016, in the immediate action, the Plaintiffs delivered a Second Fresh as Amended Statement of Claim.

[25] On October 26, 2016, in the immediate action, General Motors and Subaru respectively delivered Statements of Defence.

[26] On October 27, 2016, in the immediate action, Ford delivered its Statement of Defence.

[27] On October 28, 2016, in the immediate action, Mazda delivered its Statement of Defence.

[28] On December 1, 2016, in the immediate action, BMW delivered its Statement of Defence.

[29] On December 19, 2016, in the immediate action, I removed Beverly Cyr as a plaintiff and I granted leave to remove Fuji Heavy Industries, Ltd. as a defendant. I added Michael Vettese as a plaintiff and granted the Plaintiffs leave to issue a Third Fresh as Amended Statement of Claim, which was delivered on December 22, 2016.

[30] On May 1, 2017, in the immediate action, General Motors delivered an Amended Statement of Defence.

[31] On June 16, 2017, Takata filed for bankruptcy protection in the United States and on June 25, 2017, Takata commenced Chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware.

[32] On June 28, 2017, an Initial Recognition Order was issued in Ontario pursuant to Part IV of the Companies’ Creditors Arrangement Act[^3] recognizing and enforcing, among other things, the U.S. Chapter 11 proceedings and granting a stay of proceedings against Takata, the Chapter 11 Debtors.

[33] In July 2017, the Consortium began negotiations to resolve some of the actions with some of the car manufacturers.

[34] On August 29, 2017, in the immediate action, Volkswagen delivered its Statement of Defence.

[35] On March 14, 2018, Justice Hainey issued an order pursuant to the Companies' Creditors Arrangement Act, recognizing and giving full force and effect to the Order of the United States Bankruptcy Court for the District of Delaware dated February 21, 2018. The Order confirmed the Fifth Amended Joint Chapter 11 Plan of Reorganization of TK Holdings Inc. and its Affiliated Debtors. Under the Chapter 11 Plan, Takata, a "Released Party", was "deemed conclusively, absolutely, unconditionally, irrevocably and forever released and discharged, to the maximum extent permitted by law." The Chapter 11 Plan became effective on April 10, 2018. The car manufacturers, which had claims over against Takata, were left to pursue those claims in the Chapter 11 Plan proceedings.

[36] On October 30, 2018, in the immediate action, to facilitate the implementation of a settlement, Mazda and Subaru were removed as defendants and Arlene Stevenson and Mira Melien sued them in a new action, the Stevenson action.

[37] On November 6, 2018, in the immediate action, I granted leave to discontinue the action as against Mazda and Subaru, I granted leave to remove Arlene Stevenson and Mira Melien as plaintiffs, and I granted the Plaintiffs leave to issue a Fourth Fresh as Amended Statement of Claim.

[38] On February 21, 2019, the parties signed settlement agreements to settle the claims against Mazda, Subaru, and Toyota in the McIntosh and Stevenson actions.

[39] On February 25, 2019, I certified the McIntosh action against Toyota[^4] and the Stevenson action against Mazda and Subaru[^5] for settlement purposes.

[40] On February 25, 2019, March 28, 2019, and April 8, 2019, in light of the Chapter 11 Plan, dismissals against Takata were granted in the class actions against BMW, Ford, General Motors, Honda, Mazda, Mercedes-Benz, Mitsubishi, Subaru, and Toyota.

[41] On March 28, 2019, in the immediate action, I dismissed the action as against Takata. I granted leave to the Plaintiffs to issue a Fifth Amended Fresh as Amended Statement of Claim, which was delivered on April 3, 2019.

[42] On May 14, 2019, the action against Honda was settled.

[43] On May 15, 2019, I certified the action against Honda, the Des-Rosiers action, for settlement purposes.[^6]

[44] On February 11, 2020, the action against Mazda and Subaru settled.

[45] On February 12, 2020, I approved the settlements against Toyota, Mazda, and Subaru in the McIntosh and Stevenson actions.[^7]

[46] On February 19, 2020, in the immediate action, Mercedes-Benz delivered its Statement of Defence.

[47] On October 1, 2020, pursuant to the Smarter and Stronger Justice Act, 2020,[^8] amendments to the Class Proceedings Act, 1992 came into force. For present purposes, the relevant sections of the amended act are sections 12, 28, 29, 35, and 39, which state:

Court may determine conduct of proceeding

12. 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. 2020, c. 11, Sched. 4, s. 14.

Limitations

Suspension in favour of class member

28 (1) Any limitation period applicable to a cause of action asserted in a proceeding under this Act is suspended in favour of a class member on the commencement of the proceeding and, subject to subsection (2), resumes running against the class member when,

(a) the court refuses to certify the proceeding as a class proceeding;

(b) the court makes an order that the cause of action shall not be asserted in the proceeding;

(c) the court makes an order that has the effect of excluding the member from the proceeding;

(d) the member opts out of the class proceeding;

(e) an amendment that has the effect of excluding the member from the class is made to the certification order;

(f) a decertification order is made under section 10;

(g) the proceeding is dismissed without an adjudication on the merits, including for delay under section 29.1 or otherwise;

(h) the proceeding is abandoned or discontinued with the approval of the court; or

(i) the proceeding is settled with the approval of the court, unless the settlement provides otherwise.

Effect of appeal

(2) If there is a right of appeal in respect of an event described in subsection (1), the limitation period resumes running as soon as the time for appeal has expired without an appeal being commenced or as soon as any such appeal has been finally disposed of.

Suspension in favour of defendant

(3) Any limitation period applicable to a claim by a defendant for contribution and indemnity in a proceeding commenced under section 2 is suspended in favour of the defendant on the commencement of the proceeding, and resumes running against the defendant as soon as the time for appeal of the court’s decision to certify or refuse to certify the proceeding has expired without an appeal being commenced or as soon as any such appeal has been finally disposed of.

Discontinuance, abandonment and dismissal for delay

Court approval required

29 (1) A proceeding under this Act may be discontinued or abandoned only with the approval of the court, on such terms as the court considers appropriate.

Notice

(2) In approving a discontinuance or abandonment, or in dismissing a proceeding for delay, other than under section 29.1, the court shall consider whether notice should be given under section 19, and whether such notice should include,

(a) an account of the conduct of the proceeding;

(b) a statement of the result of the proceeding;

(c) any other prescribed information; and

(d) any other information the court considers appropriate.

Mandatory dismissal for delay

29.1 (1) The court shall, on motion, dismiss for delay a proceeding commenced under section 2 unless, by the first anniversary of the day on which the proceeding was commenced,

(a) the representative plaintiff has filed a final and complete motion record in the motion for certification;

(b) the parties have agreed in writing to a timetable for service of the representative plaintiff’s motion record in the motion for certification or for completion of one or more other steps required to advance the proceeding, and have filed the timetable with the court;

(c) the court has ordered that the proceeding not be dismissed and has established a timetable for service of the representative plaintiff’s motion record in the motion for certification or for completion of one or more other steps required to advance the proceeding; or

(d) any other steps, occurrences or circumstances specified by the regulations have taken place.

Notice

(2) If a proceeding is dismissed for delay under subsection (1), the court shall order that the solicitor for the representative plaintiff give notice of the dismissal by,

(a) publishing the notice and a copy of the order on the website of the solicitor or of the law firm or other entity through which the solicitor practices law;

(b) sending the notice and a copy of the order to every class member who has contacted the solicitor to express an interest in the proceeding; and

(c) taking any other steps to give notice that the court may specify.

Same

(3) Section 20 applies, with necessary modifications, with respect to a notice required to be given under subsection (2).

Costs

(4) The solicitor for the representative plaintiff shall bear the costs of giving notice under subsection (2) and shall not attempt to recoup any portion of the costs from the class or any class member, or from the defendant.

Rules of court

35 The rules of court apply to proceedings under this Act.

Transition

39 (1) Except as otherwise provided by this section, this Act, as it read immediately before section 35 of Schedule 4 to the Smarter and Stronger Justice Act, 2020 came into force, continues to apply with respect to,

(a) a proceeding commenced under section 2 before that day;

(b) a proceeding under section 3 or 4, if the motion for certification was made before that day; and

(c) any other proceeding under this Act that may be prescribed, in the prescribed circumstances, including a proceeding commenced under this Act on or after that day.

Same

(2) Section 29.1 applies, with necessary modifications, to a proceeding referred to in clause (1) (a), except that the reference in subsection 29.1 (1) to the day on which the proceeding was commenced shall be read as a reference to the day on which section 35 of Schedule 4 to the Smarter and Stronger Justice Act, 2020 came into force.

[48] For present purposes, the following rules of the Rules of Civil Procedure[^9] are relevant to the motion now before the court:

Definitions

1.03 (1) In these rules, unless the context requires otherwise,

“action” means a proceeding that is not an application and includes a proceeding commenced by,

(a) statement of claim,

(b) notice of action,

(c) counterclaim,

(d) crossclaim, or

(e) third or subsequent party claim

“defendant” means a person against whom an action is commenced;

“plaintiff” means a person who commences an action;

Interpretation

General Principle

1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

Proportionality

(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

Matters Not Provided For

(2) Where matters are not provided for in these rules, the practice shall be determined by analogy to them.

Orders on Terms

1.05 When making an order under these rules the court may impose such terms and give such directions as are just.

Effect of Non-Compliance

2.01 (1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court,

(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute; or

(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part.

(2) The court shall not set aside an originating process on the ground that the proceeding should have been commenced by an originating process other than the one employed.

Court May Dispense with Compliance

2.03 The court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time.

Joinder of Claims

5.01 (1) A plaintiff or applicant may in the same proceeding join any claims the plaintiff or applicant has against an opposite party.

(2) A plaintiff or applicant may sue in different capacities and a defendant or respondent may be sued in different capacities in the same proceeding.

(3) Where there is more than one defendant or respondent, it is not necessary for each to have an interest in all the relief claimed or in each claim included in the proceeding.

Joinder of Parties

Multiple Plaintiffs or Applicants

5.02 (1) Two or more persons who are represented by the same lawyer of record may join as plaintiffs or applicants in the same proceeding where,

(a) they assert, whether jointly, severally or in the alternative, any claims to relief arising out of the same transaction or occurrence, or series of transactions or occurrences;

(b) a common question of law or fact may arise in the proceeding; or

(c) it appears that their joining in the same proceeding may promote the convenient administration of justice.

Multiple Defendants or Respondents

(2) Two or more persons may be joined as defendants or respondents where,

(a) there are asserted against them, whether jointly, severally or in the alternative, any claims to relief arising out of the same transaction or occurrence, or series of transactions or occurrences;

(b) a common question of law or fact may arise in the proceeding;

(c) there is doubt as to the person or persons from whom the plaintiff or applicant is entitled to relief;

(d) damage or loss has been caused to the same plaintiff or applicant by more than one person, whether or not there is any factual connection between the several claims apart from the involvement of the plaintiff or applicant, and there is doubt as to the person or persons from whom the plaintiff or applicant is entitled to relief or the respective amounts for which each may be liable; or

(e) it appears that their being joined in the same proceeding may promote the convenient administration of justice.

Joinder of Necessary Parties

General Rule

5.03 (1) Every person whose presence is necessary to enable the court to adjudicate effectively and completely on the issues in a proceeding shall be joined as a party to the proceeding.

Claim by Person Jointly Entitled

(2) A plaintiff or applicant who claims relief to which any other person is jointly entitled with the plaintiff or applicant shall join, as a party to the proceeding, each person so entitled.

Claim by Assignee of Chose in Action

(3) In a proceeding by the assignee of a debt or other chose in action, the assignor shall be joined as a party unless,

(a) the assignment is absolute and not by way of charge only; and

(b) notice in writing has been given to the person liable in respect of the debt or chose in action that it has been assigned to the assignee.

Power of Court to Add Parties

(4) The court may order that any person who ought to have been joined as a party or whose presence as a party is necessary to enable the court to adjudicate effectively and completely on the issues in the proceeding shall be added as a party.

Party Added as Defendant or Respondent

(5) A person who is required to be joined as a party under subrule (1), (2) or (3) and who does not consent to be joined as a plaintiff or applicant shall be made a defendant or respondent.

Relief Against Joinder of Party

(6) The court may by order relieve against the requirement of joinder under this rule.

Disposition of Motion

37.13 (1) On the hearing of a motion, the presiding judge or officer may grant the relief sought or dismiss or adjourn the motion, in whole or in part and with or without terms, and may, […]

[49] On December 22, 2020, I approved the settlement in the action against Honda.[^10]

[50] On March 10, 2021, a timetable was set for the certification motion in the Chrysler Action.

[51] On March 12, 2021, I approved the dismissal of Mr. Coles’ action as against Takata.[^11]

[52] On August 13, 2021, Mr. Coles served his certification motion record in the action against Chrysler Canada, and on August 16, 2021, I set the timetable for the certification motion.

[53] On November 11, 2021, in light of the Chapter 11 Plan, I approved the dismissal of the Mailloux action against Takata in the Nissan Action.[^12]

[54] On June 24, 2022, in the immediate action, pursuant to s. 29.1 of the Class Proceedings Act, General Motors, Mercedes-Benz, and Mitsubishi brought this motion to have the Plaintiffs’ action dismissed for delay.

[55] General Motors’, Mercedes-Benz’s, and Mitsubishi’s motion was supported by the affidavit of Tania Kerman.

[56] On July 6, 2022, Class Counsel confirmed that the Plaintiffs had not yet delivered a certification motion nor filed a timetable with the Court. Class Counsel advised that the Plaintiffs treated the Chrysler action as a “test case.” Class Counsel submitted that three defendants cannot invoke s. 29.1 of the Class Proceedings Act unless all the defendants are moving parties. Class Counsel also stated that in the event that the court dismissed the action, Class Counsel would “re-file” the matter.

[57] The Plaintiffs resist the motion, and they rely on the affidavit dated July 26, 2022 of Sabrina Lombardi. Ms. Lombardi is a partner at McKenzie Lake Lawyers LLP.

[58] On August 15-16, 2022, the certification motion in the Chrysler action was argued. I reserved judgment.

[59] On September 30, 2022, I dismissed the certification motion in the Chrysler action.[^13]

[60] October 7, 2022, in the immediate action, was the notional hearing date for Mercedes-Benz’s and Mitsubishi’s motion to have the action dismissed for delay pursuant to s. 29.1 of the Class Proceedings Act, 1992.

C. Discussion and Analysis

[61] Mercedes-Benz and Mitsubishi make a straightforward argument, whose correctness is supported by authority.[^14]

[62] Mercedes-Benz’s and Mitsubishi’s argument is that pursuant to sections 29.1 and 39 of the Class Proceedings Act, 1992, the Plaintiffs had until October 1, 2021 to satisfy the conditions of section 29.1, failing which: “the court shall, on motion, dismiss for delay [the] proceeding commenced under section 2.” In the immediate case, however, the Plaintiffs did not satisfy the conditions of section 29.1(1) by October 1, 2021 and, therefore, the court must dismiss the action for delay.

[63] The Plaintiffs make two counterarguments. The first argument is that Justice Belobaba was wrong in interpreting s. 29.1 as compelling a mandatory non-discretionary dismissal if the conditions of s. 29.1(1) have not been satisfied. The Plaintiffs argue that the proper interpretation of s. 29.1 is that it admits of a discretion. The Plaintiffs argue that the case at bar is an appropriate one for the court to exercise its discretion to not dismiss the action for delay. The Plaintiffs submit that the purpose of the recent amendments was to remove dormant class actions from the administration of justice. The Plaintiffs argue that the new provision was not meant to apply to the circumstances of the immediate case where there were six interrelated class actions that have been triaged, staged, and vigorously litigated, including contested motions, negotiations, settlements, and test case certification motions.

[64] The Plaintiffs’ second argument is that where there are multiple defendants, s. 29.1 of the Class Proceedings Act, 1992 requires a motion by all the defendants, which is not the situation in the immediate case, where there are only two active moving parties, one inactive moving party whose motion is being adjourned, and two defendants who are not moving parties and who take no position with respect to Mercedes-Benz’s and Mitsubishi’s motion to dismiss.

[65] Both of the Plaintiffs’ arguments are wrong.

[66] With respect to the first argument, I agree with Justice Belobaba’s interpretation of s. 29.1 of the Class Proceedings Act, 1992, as amended. I see no error in his application of the canons of statutory interpretation.

[67] The grammatical and ordinary meaning of “shall” is mandatory, whereas the use of the word “may” is generally permissive.[^15] Section 29.1 says “shall dismiss,” and there is no reason in the context of the entire Class Proceedings Act, 1992 to not give “shall” its normal mandatory meaning.

[68] Elmer A. Drieger, in the Composition of Legislation – Legislative Forms and Precedents (2nd ed., rev.), chapter II,[^16] wrote that the verb is the most important word in a legislative sentence because it is the part of speech that expresses the legislative command, prohibition, requirement, power or permission. He wrote that the positive tense “shall” is used to require something to be done; it creates a universal duty. In contrast “may” is a grant of permission, power, or right.

[69] I conclude that Justice Belobaba’s interpretation is correct without giving any weight to the marginal note to s. 29.1, which just happens to be a correct description of the mandatory nature of the law of statutory composition and interpretation.

[70] Since I have been told hundreds of times by Class Counsel, including the Class Counsel of the Consortium, that if the five certification criteria of s. 5 (1) of the Class Proceedings Act, 1992 are satisfied, then I have no discretion and I “shall certify”, I found it all of ironic, odd, and incorrect for Class Counsel to argue that the “shall”s of the Act are discretionary. In the context of the Act as a whole, there is no reason to interpret the “shall dismiss” in s. 29.1 as discretionary and the “shall certify” of s. 5 (1) as non-discretionary. Although it would be nice for me to fantasize that I have discretion to not certify or a discretion to not dismiss, the reality is that I must comply with the mandatory directives of the statute, where “shall” carries its normal meaning.

[71] The Plaintiffs protest that the Legislature could not have intended to terminate a class action such as the one at bar where Class Counsel have been on a mission of public safety since 2015. Perhaps so, but the Plaintiffs were forewarned, and they have had a year to satisfy the preconditions of s. 29.1, and so they have only themselves to blame for the predicament that presents itself. That said, as I shall explain below, the Legislature has empowered the court sufficiently so that the action against Mercedes-Benz and Mitsubishi can rise like the mythical phoenix from the ashes of its predecessor.

[72] Before I explain this fortunate result for Class Counsel and for the putative Class Members, I shall explain why, like its first argument, Class Counsel’s second argument is ironic, odd, and wrong.

[73] In other cases, class actions have had upwards of two dozen independent defendants joined in one class action. In the immediate case, in accordance with the joinder rules under the Rules of Civil Procedure, the Plaintiffs and Class Counsel joined a non-comprehensive group of six manufacturers who installed Takata airbags in their vehicles. Class Counsel could have brought 12 or more separate actions, or they could have sued a comprehensive group of 12 manufacturers. In the immediate case, it was a sensible decision to divide up the Defendants amongst six actions, but that was a practical and tactical decision that, however, does not get around the imperative of s. 29.1 of the Class Proceedings Act.

[74] The irony and the oddness of the second argument is that Class Counsel, including the Class Counsel of the Consortium, frequently join a multitude of different defendants to a single class action proceeding. They do so knowing that they can settle the several causes of action against one or more of the defendants pursuant to s. 29 of the Class Proceedings Act without the participation of the so-called non-settling Defendants. It is ironic and odd that Class Counsel should argue that individual defendants do not have the converse right to resolve the litigation against them as in the immediate instance by a motion under s. 29.1.

[75] The Plaintiffs’ second argument is just wrong. There is nothing in s. 29.1 that indicates that Mercedes-Benz and Mitsubishi needed the concurrence of their co-defendants in order to bring their motion under s. 29.1 of the Class Proceedings Act, 1992. Thus, I have no discretion but to follow the directive of the Legislature, and I shall dismiss the action as against Mercedes-Benz and Mitsubishi. The action continues as against Ford, General Motors, and Volkswagen, and the dismissal motion brought by General Motors is adjourned as agreed by the parties.

[76] While I cannot avoid dismissing the immediate action as against Mercedes-Benz and Mitsubishi, I do have the jurisdiction to dismiss on terms that would resurrect the action – by the same Plaintiffs – pursuant to the authority of the Class Proceedings Act, 1992 and the Rules of Civil Procedure.

[77] I therefore order that the action against Mercedes-Benz and Mitsubishi is dismissed pursuant to s. 29.1 of the Class Proceedings Act, 1992 with costs payable for the motion to dismiss to Mercedes-Benz and Mitsubishi. The dismissal is on terms that the dismissal order - but not the costs order - shall be set aside provided that the Representative Plaintiffs file a final and complete motion record in the motion for certification within thirty days, failing which the action shall remain dismissed as against Mercedes-Benz and Mitsubishi with costs.

[78] Turning to my explanation for making what might be called a Phoenix Order, I begin with three observations:

a. The first observation is that section 12 of the Class Proceedings Act, 1992 has been interpreted in a generous manner in empowering the court to manage the procedure of a class action.[^17]

b. The second observation is that s. 35 of the Class Proceedings Act, 1992 directs that the Rules of Civil Procedure apply to proceedings under the Act, and rule 1.04 (1) prescribes that the rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits; rule 1.04 (2) prescribes that where matters are not provided for the practice shall be determined by analogy; and rule 1.05 empowers the court to make orders with such terms and to give directions as are just.

c. Third, I observe that it is not uncommon for courts to revive an action that has been terminated. Courts frequently set aside default judgments, administrative dismissals, and orders made in a variety of circumstances in order to revive an action and to allow it to proceed on its merits. While not labelled Phoenix Orders, the court has frequently exercised a jurisdiction to set aside the termination of an action.

[79] These observations reveal that I have the jurisdiction to make a Phoenix Order, but the observations do not explain why I should exercise that jurisdiction in the circumstances of the immediate case.

[80] The explanation of why a Phoenix Order is appropriate in the immediate case is more complicated, but the explanation begins by noting that the Order is proportional, efficient, pragmatic, fair, just, and in the interests of justice.

[81] In the circumstance of the immediate case, an Order reviving the class action is appropriate, and it is the way to manage the immediate class action in accordance with s. 12 of the Class Proceedings Act, 1992 that prescribes that the court on its own initiative … 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.

[82] The Phoenix Order is efficient and pragmatic because it recognizes that there is nothing stopping another putative Class Member from applying to the court for leave to commence another proposed class action or commencing another class action in another jurisdiction where the limitation period has been stayed.[^18]

[83] In Ontario, s. 28 (1) of the Class Proceedings Act, 1992, suspends any limitation period applicable to a cause of action asserted in a proceeding in favour of a class member on the commencement of the proceeding. It would appear that one of the purposes of s. 29.1 (2) of the Act is to require notice of the dismissal so that a putative class member would know that he or she must take steps because they can no longer rely on Class Counsel to advance their claims. In the immediate case, Class Counsel has already signaled that it will take steps to revive this airbag action and so it is inevitable that this airbag action can continue.

[84] In other words, rather than go through the rigmarole of a game of litigation snakes and ladders, where after the player slides down a procedural snake, but the game is not over, it is efficient and fairer and in the interests of justice to just get on with deciding the class proceeding on its merits and not based on gamesmanship. The current Plaintiffs are well positioned to do just that.

[85] In the alternative to my dismissing the s. 29.1 motion, Class Counsel asked that I make an order allowing the action to be refiled. Mercedes-Benz and Mitsubishi responded that a new action would be an abuse of process. I rather doubt that a refiled action would be an abuse of process, but I need not address the point, because I have the authority on my own initiative to make an order under s. 12 of the Class Proceedings Act, 1992 to revive the immediate action without engaging and indeed avoiding any notion of abusive re-litigation.

[86] The explanation of the appropriateness of a Phoenix Order continues by noting that there is a great deal of procedural gamesmanship and opportunism and very little actual procedural prejudice to Mercedes-Benz and Mitsubishi in the immediate case.

[87] Mercedes-Benz and Mitsubishi are just lucky that in an active game of class action football, the Class Counsel quarterback waited too long to snap the ball in the march down the field.

[88] Since 2015, in addition to a watching-brief, from time to time, Mercedes-Benz and Mitsubishi have been active participants in activities in the immediate action, and from time to time they have been engaged in activities that have affected all six airbag actions.

[89] In the circumstances of the immediate case, the appropriate proportionate response to Class Counsel’s failure to play in accordance with the rules of the game, is for the Referee to drop the flag for a delay of game penalty and make a costs order. It is inappropriate and disproportionate to end the class action to the prejudice or at least inconvenience of the putative Class Members, who could resuscitate their claims against Mercedes-Benz and Mitsubishi by a new action.

[90] I do not agree with Class Counsel, who quoting Shakespeare suggest that this motion is “full of sound and fury signifying nothing,”[^19] but the motion does signify that s. 29.1 does not necessarily bring class proceedings to an end. Sometimes, it will be game over; sometimes, however, the court has the jurisdiction to say “game on.”

D. Conclusion

[91] For the above reasons:

a. The action against Mercedes-Benz and Mitsubishi is dismissed pursuant to s. 29.1 of the Class Proceedings Act, 1992 with costs payable for the motion to dismiss to Mercedes-Benz and Mitsubishi.

b. The dismissal is on terms that the dismissal order - but not the costs order - shall be set aside provided that the Representative Plaintiffs file a final and complete motion record in the motion for certification within thirty days, failing which the action shall be dismissed as against Mercedes-Benz and Mitsubishi with costs.

c. If the parties cannot agree about costs or about the content and manner of notice to the Class, they may make submissions in writing beginning with Mercedes-Benz’s and Mitsubishi’s submissions within forty days followed by the Plaintiffs’ submissions within a further twenty days.

Perell, J.

Released: October 20, 2022

COURT FILE NO.: CV-16-543766-00CP

DATE: 20221020

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DONALD D’HAENE, KEITH SANFORD, MARY SALMON, MICHAEL VETTESE, NIDHI PRASHAR, and JOSÉE GAULIN

Plaintiffs

• and –

BMW CANADA INC./BMW GROUP CANADA, BMW NORTH AMERICA, LLC, BMW MANUFACTURING CO. LLC, BMW AG, FORD MOTOR COMPANY OF CANADA LIMITED, GENERAL MOTORS COMPANY AND GENERAL MOTORS OF CANADA LIMITED, MITSUBISHI MOTOR SALES OF CANADA, INC., MERCEDES-BENZ CANADA INC., VW CREDIT CANADA, INC. and VOLKSWAGEN GROUP CANADA, INC.

Defendants

REASONS FOR DECISION

PERELL J.

Released: October 20, 2022

[^1]: S.O. 1992, c.6. [^2]: S.O. 2009, c. 3; Coles v. Takata Corporation, 2016 ONSC 4885. [^3]: R.S.C. 1985, c. C-36. [^4]: McIntosh v. Takata Corp., 2019 ONSC 1317. [^5]: Stevenson v. Mazda Motor Corp., 2019 ONSC 1323. [^6]: Des-Rosiers v. Takata Corp., 2019 ONSC 2932. [^7]: McIntosh v. Takata Corporation, 2020 ONSC 968. [^8]: S.O. 2020, c. 11, Sched. 4. [^9]: R.R.O. 1990, Reg. 194. [^10]: Des-Rosiers v. Takata Corporation, 2020 ONSC 8043. [^11]: Coles v. Takata Corporation, 2021 ONSC 1875. [^12]: Mailloux v. Takata Corporation, 2021 ONSC 7654. [^13]: Coles v. FCA Canada Inc., 2022 ONSC 5575 [^14]: Lubus v. Wayland Group Corp. 2022 ONSC 4606; Martin v. Wright Medical Technology Canada, 2022 ONSC 4318/ Rowland v. Wright Medical Technology Canada, 2022 ONSC 4319; Westgate v. WestJet Airlines Ltd., 2022 ONSC 4190; Gebien v. Apotex Inc., 2022 ONSC 4172; Stokker v. Illumiti Inc., 2022 ONSC 3508; St. Louis v. Canadian National Railway Company, 2022 ONSC 2556; Lamarche v. Pacific Telescope Corp., 2022 ONSC 2553; Bourque v. Insight Productions, 2022 ONSC 174. [^15]: 1420041 Ontario Inc. v. 1 King West Inc., 2012 ONCA 249 at para. 29. [^16]: (Ottawa: The Department of Justice, 1976) [^17]: S.O. 1992, c.6. [^18]: Martin v. Wright Medical Technology Canada, 2022 ONSC 4318. [^19]: Macbeth, Act 5, scene 5, lines 16-27.