Court File and Parties
COURT FILE NO.: CV-14-21072 CP DATE: 2023-05-18 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: RICKEY BAGGIO, MARGARET MARENTETTE, DANIELLA WENZLER and DENNIS WENZLER Plaintiffs
- and - GENERAL MOTORS OF CANADA LIMITED and GENERAL MOTORS COMPANY Defendants Proceeding under the Class Proceedings Act, 1992
Counsel: Harvey T. Strosberg, K.C., Justin Smith, Michael J. Peerless, and Sabrina Lombardi for the Plaintiffs Sandra A. Forbes for the Defendants
HEARD: In writing
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] This is a motion for the following relief:
a. an Order that this Action be discontinued, without costs, and without prejudice to putative Class Members other than the Plaintiffs (in respect of which individual Plaintiffs this Action shall be discontinued with prejudice);
b. c. an Order that the discontinuance of this Action is a defence to a subsequent action by any Plaintiff against any Defendant, arising from or related to the subject matter of this Action;
d. an Order that Plaintiffs’ counsel shall provide notice of the discontinuance of this Action in the form set out in Exhibit “D” to the Affidavit of Justin Smith (the “Notice of Discontinuance”) by posting a copy of the Notice of Discontinuance and a copy of the Order on its websites for one month from the date of the Order and by sending a copy of the Notice of Discontinuance and a copy of the Order by email or regular mail to every putative Class Member who has contacted counsel for the Plaintiffs in connection with this Action and for whom counsel for the Plaintiffs has an email address and/or mailing address; and
e. an Order that there shall be no costs of this motion.
[2] For the reasons that follow, the motion is granted as requested.
B. Factual and Procedural Background
[3] The Plaintiffs, Rickey Baggio, Margaret Marentette, Daniella Wenzler, and Dennis Wenzler commenced this proposed class action by way of Statement of Claim on July 25, 2014.
[4] The Action concerns the alleged negligent and dangerous design, manufacture and installation of the defective “Transmission Shift Cable” (a cable that runs from the cabin gear shift to the transmission linkage) in certain vehicles manufactured by the Defendants. The Plaintiffs allege that the Defendants failed to warn owners of these vehicles and the public about this allegedly defective Transmission Shift Cable.
[5] The putative Class is defined as comprising all persons in Canada who, on April 29, 2014, owned one of the approximate 109,110 affected vehicles.
[6] The Action has not yet been certified as a class proceeding.
[7] The Defendants have not yet filed a Statement of Defence.
[8] I was assigned to case manage this action, and on October 11, 2016, I stayed the action pending further order of the Court. The stay has recently been lifted.
[9] Recent developments in the law have placed limits on the compensation available in product liability cases and have increased the litigation risk associated with products liability class actions. The Supreme Court of Canada has clarified the law delimiting the recoveries for pure economic losses for dangerous defective products, establishing that: (a) apart from a few exceptions, tort law leaves pure economic losses to be addressed by the law of contract; (b) there is no right to compensation for a threat of injury unless the product defect presents an imminent threat; (c) the scope of recovery is limited to mitigating or averting the danger presented by the defective product; and, (d) to the extent that it is feasible for the plaintiff to simply discard the defective product, the danger to the plaintiff’s economic rights as well as the basis for recovery fall away. [See Atlantic Lottery Corp Inc v. Babstock, 2020 SCC 19 at para. 33; 1688782 Ontario Inc v. Maple Leaf Foods Inc., 2020 SCC 35 at paras. 45-50; Coles v. FCA Canada Inc, 2022 ONSC 5575 at paras. 164-70.]
[10] As a result of these changes in the law delimiting the recoveries for pure economic losses resulting from dangerous products, the prospect of a substantial award for putative Class Members has been significantly curtailed in the immediate case.
[11] However, when the action was first commenced, a substantial award appeared possible. In light of the recent changes to the law and the diminished prospects for economic value in this proposed class action, the Plaintiffs and their counsel decided that they were no longer prepared to take on the risks of prosecuting this proposed class action.
[12] Courts have previously considered a shift in litigation risk to a particular type of class action as a relevant factor for consideration in a discontinuance motion. [See e.g. Johnson v. North American Palladium Ltd, 2021 ONSC 3346 at para. 6.]
[13] On September 15, 2016, claims with respect to the allegedly defective Transmission Shift Cable in parallel US class action litigation were discontinued voluntarily after they turned out not to be viable.
[14] In all these circumstances, the Plaintiffs have instructed their counsel to discontinue this Action. The Defendants consent to the relief requested.
C. Discussion and Analysis
[15] Section 29 of the Class Proceedings Act, 1992 requires court approval for the discontinuance, abandonment, dismissal or settlement of a proceeding commenced under the Act. Section 29 states:
Discontinuance, abandonment and settlement
- (1) A proceeding commenced under this Act and a proceeding certified as a class proceeding under this Act may be discontinued or abandoned only with the approval of the court, on such terms as the court considers appropriate.
Settlement without court approval not binding
(2) A settlement of a class proceeding is not binding unless approved by the court.
Effect of settlement
(3) A settlement of a class proceeding that is approved by the court binds all class members.
Notice: dismissal, discontinuance, abandonment or settlement
(4) In dismissing a proceeding for delay or in approving a discontinuance, abandonment or settlement, the court shall consider whether notice should be given under section 19 and whether any notice should include,
(a) an account of the conduct of the proceeding;
(b) a statement of the result of the proceeding; and
(c) a description of any plan for distributing settlement funds.
[16] A motion for discontinuance or abandonment should be carefully scrutinized, and the court should consider, among other things: whether the proceeding was commenced for an improper purpose; whether, if necessary, there is a viable replacement party so that putative class members are not prejudiced; or whether the defendant will be prejudiced. [See Green v. The Hospital for Sick Children, 2021 ONSC 8237; Batten v. Boehringer Ingelheim, 2021 ONSC 6606; Johnson v. North American Palladium Ltd, 2021 ONSC 3346; Bardoul v. Novartis Pharmaceuticals Canada Inc., 2021 ONSC 2261; Winter v. C.R. Bard, 2020 ONSC 3532; Naylor v. Coloplast Canada Corporation, 2016 ONSC 1294; Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2012 ONSC 5288; Frank v. Farlie, Turner & Co, LLC, 2011 ONSC 7137; Hudson v Austin, 2010 ONSC 2789; Sollen v. Pfizer, 2008 ONCA 803; Logan v. Canada (Minister of Health).]
[17] Pursuant to s 28(1) of the Class Proceedings Act, 1992, the limitation periods applicable to the causes of action asserted in this proposed class action have been suspended in favour of the proposed Class since the commencement of this Action and will remain suspended until this Action is discontinued; therefore, any putative Class Members who wish to commence an individual action are not prejudiced by the elapsed time in this present Action. [See Chopik v. Mitsubishi Paper Mills Ltd at para 13 (Ont. S.C.J.).]
[18] I am satisfied that the action was commenced for a proper purpose and the test for a discontinuance has been satisfied in the immediate case. The putative class members are not prejudiced by the discontinuance and the proposed notice to them is adequate in all the circumstances.
[19] For the above reasons, the motion is granted.
Perell, J. Released: May 18, 2023