COURT FILE NO.: CV-22-686288-00CP
DATE: 20230809
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Brittany Christopher
AND:
Royal Bank of Canada
BEFORE: J.T. Akbarali J.
COUNSEL: Celeste Poltak, Adam Tanel and Elie Waitzer, for the plaintiff
Jeremy Devereux, Eric Lefebvre, Ted Brook, and Katarina Wasielewski, for the defendant
HEARD: August 9, 2023
Proceeding under the Class Proceedings Act, 1992
ENDORSEMENT
Overview
[1] The plaintiffs move with the consent of the defendants for an order certifying this proceeding as a class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”).
Brief Background
[2] The thrust of the plaintiff’s action is that the defendant bank has a practice of charging multiple NSF fees on a single rejected payment or bounced cheque when a payee attempts to process an already-rejected payment for a second, or subsequent, time.
[3] The plaintiff pleads that the defendant’s standard form contract does not permit the defendant to charge multiple NSF fees for an already-rejected payment; rather, she states that only the first NSF charge is permitted by the contract.
[4] The plaintiff further pleads that the defendant’s practice of charging multiple NSF fees violates consumer protection legislation in Ontario. The plaintiff also claims that the multiple NSF fees constitute an unjust enrichment to the defendant, with a corresponding deprivation to the plaintiff and members of the class, without juristic reason.
[5] Moreover, the plaintiff pleads that the burden of the duplicative NSF fees falls disproportionately on low-income Canadians, who are more likely to maintain low bank account balances. In her affidavit prepared for the certification motion (before the parties compromised to reach an agreement), she deposes that the defendant knew that the burden of the illegitimate charges would fall disproportionately on low-income, racialized, and otherwise marginalized Canadians.
[6] The statement of claim seeks damages for breach of contract equivalent to the value of all monies paid by the plaintiff and class members resulting from the charging of multiple NSF fees on a single cheque issued or payment made, an order for disgorgement of the value of all monies claimed to be illegally paid by the class members, punitive damages, and an equitable rate of interest and costs.
[7] As described in my analysis set out below, the proposed consent certification order provides for a more limited scope of action than that pleaded.
Certification
[8] Pursuant to s. 5(1) of the CPA, the court shall certify a class proceeding if: (a) the pleadings or the notice of application 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 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 who would fairly and adequately represent the interests of the class, has produced a workable plan for the proceeding, and does not have an interest in conflict with the interests of other class members.
[9] Although this is a consent motion, given the court’s role in class proceedings, I consider the elements of the test for certification in turn.
Section 5(1)(a): The pleadings disclose a cause of action.
[10] Certification will not be denied under s. 5(1)(a) unless it is plain and obvious that the pleadings disclose no cause of action: Hollick, at para. 25.
[11] In this case, the defendants do not dispute, and I accept, that the pleadings disclose a cause of action in breach of contract and unjust enrichment, for which the facts are sufficiently pleaded. The claims for breach of consumer protection legislation and punitive damages are excluded from the consent order; I address that exclusion in my discussion of the common issues, below.
Section 5(1)(b): There is an identifiable class of two or more persons that would be represented by the representative plaintiff.
[12] In determining whether there is an identifiable class, the court asks whether the plaintiff has defined the class by reference to objective criteria such that a person can be identified to be a class member without reference to the merits of the action. The class must be bounded, and not of unlimited membership, or unnecessarily broad, and have some rational relationship with the common issues: Hollick, at para. 17, Cloud v. Canada (Attorney General) (2004), 2004 CanLII 45444 (ON CA), 73 O.R. (3d) 401 (C.A.), at para. 45. The class definition needs to identify all those who may have a claim, will be bound by the result of the litigation, and are entitled to notice: Bywater Toronto Transit Commission, [1998] O.J. No. 4913 (Gen. Div.). Defining the class is a technical, rather than a substantive challenge: Waldman v. Thomson Reuters Corp., 2012 ONSC 1138, at para. 122.
[13] The parties’ consent order seeks to certify the following class:
Every individual resident in Canada who is or was a personal deposit account holder with Royal Bank of Canada and whose personal deposit account was charged a non-sufficient funds fee by Royal Bank of Canada on a re-presented pre-authorized debit transaction between August 30, 2020 and August 1, 2022.
[14] I am satisfied that the proposed class meets the requirements of s. 5(1)(b) of the CPA. The class is defined by reference to objective criteria, is bounded, and bears a rational relationship with the common issues which I discuss, below.
[15] I note that the class proposed in the consent order is more limited than the class defined in the statement of claim. While in the statement of claim, the proposed class includes those people charged multiple NSF fees by the defendant “since January 1, 2012”, the consent class definition begins two years before the date of the issuance of the statement of claim (August 30, 2020) and ends on August 1, 2022, a month before the issuance of the statement of claim.
[16] I understand that the change in scope of the class reflects the two year-limitation period for claims in breach of contract, in that the agreed start date for the class period is two years prior to the issuance of the statement of claim. I am advised that the proposed end date reflects the date on which the defendant made changes to its standard form contract, and reflect counsel’s assessment that a breach of contract and unjust enrichment claim after that date is not a strong claim. These are rational changes to the definition of the class proposed in the statement of claim which will permit a more efficient hearing of the issues in dispute.
[17] In addition, the agreed-upon class definition also limits class members to only those who paid multiple NSF fees in respect of pre-authorized debits, and excludes those who paid multiple NSF fees for rejected cheques that were re-presented. I am advised that the resultant restriction of the claim to pre-authorized debits and not to NSF cheques reflects differences in the standard form contract language at issue, and is designed to focus the litigation on the strongest issues.
Section 5(1)(c): The claims raise common issues.
[18] When considering whether a claim raises a common issue, the court asks whether it is necessary to resolve the issue in order to resolve each class member’s claim, and whether the issue is a substantial ingredient of each of the class members’ claims. The issue is a substantial ingredient of each claim if its resolution will advance the case or move the litigation forward, and if it is capable of extrapolation to all class members: Vivendi Canada Inc. v. Dell’Aniello, 2014 SCC 1, [2014] 1 S.C.R. 3, at para. 46.
[19] On consent, the parties seek to certify the following common issues:
Breach of Contract
- Did the defendant’s standard form personal deposit account agreement(s) prohibit the defendant from charging non-sufficient funds fees on re-presented pre-authorized debit transactions?
Unjust Enrichment
Has the defendant been enriched by their practice of charging Class members non-sufficient funds fees on re-presented pre-authorized debit transactions?
If the answer to question 2 is yes, have the Class Members suffered a corresponding deprivation?
If the answer to question 3 is yes, is there a juristic reason for the enrichment?
Aggregate Damages
- If the defendant is liable to Class Members, can an award of aggregate damages be made to Class Members?
Interest
- If damages are awarded, should the defendant pay pre-judgment and post-judgment interest? If so, at what annual interest rate? Should the interest be simple or compound?
[20] I am satisfied that these questions are common to all class members, and the resolution of these questions at a common issues trial would advance the action for all class members, avoiding the need for each class member to prove the issues in individual trials. This criterion is satisfied by the common issues proposed.
[21] The proposed common issues are narrower than those pleaded. The claim grounded in alleged breaches of consumer protection legislation and the claim for punitive damages are not included in the common issues. In addition, as I noted above, the claims have been limited to those claims related to pre-authorized debits, and not to cheques rejected and re-presented.
[22] I am advised that counsel negotiated the terms of the consent order over a period of months, and sought to streamline the issues to make their litigation efficient and fair to both parties. The plaintiff is prepared to proceed on the causes of action identified, and makes no claim that a breach of consumer protection legislation would add to the recoverable losses of the class, if any.
[23] Similarly, the parties have agreed to remove the punitive damages claim in settlement of the certification motion to focus the litigation.
[24] These are rational compromises to advance the litigation without the cost and time required for a certification motion, and to ensure that the issues in dispute are litigated efficiently.
Section 5(1)(d): Preferable Procedure
[25] This branch of the test requires that the court be satisfied that a class proceeding would be the preferable procedure for the resolution of the common issues. This inquiry is directed at two questions: first, whether the class proceeding would be a fair, efficient, and manageable way to advance the claim, and second, whether the class proceeding would be preferable to other procedures for resolving the common issues. Section 5(1.1) of the CPA adds two further criteria for the court to consider: superiority and predominance.
[26] Preferable procedure is addressed through the lens of the three goals of class proceedings: Hollick, at para. 27.
[27] I am satisfied that a class proceeding is the preferable procedure to resolve the common issues. The only available alternative procedure is individual actions, which would be inefficient, while a class proceeding to resolve the common issues would be fair, efficient, and manageable. A class proceeding is the superior procedure in this case. Moreover, the common issues proposed in this case are predominate over individual issues (which arise only if liability is established but aggregate damages cannot be awarded).
[28] I thus conclude that this criterion is met.
Section 5(1)(e): There is an adequate representative plaintiff.
[29] To be an adequate representative plaintiff, a proposed plaintiff must be able to fairly and adequately represent the class, have developed a plan for proceeding, and not have a conflict with the class. She must be prepared and able to vigorously represent the interests of the class: Rosen v. BMO Nesbitt Burns Inc., 2013 ONSC 2144, at para. 73.
[30] The proposed representative plaintiff meets all the criteria set out above. Her affidavit reveals that she understands her role and obligations as representative plaintiff. There is no basis to find any conflict between the proposed representative plaintiff and the class, and none is alleged.
[31] Accordingly, I am satisfied that this criterion is met.
Conclusion
[32] I am satisfied that the criteria under s. 5(1) of the CPA are met to certify this action on the basis of the consent order filed by the parties. Order to go in accordance with the draft I have signed.
[33] The parties shall prepare a notice plan for my review and approval.
J.T. Akbarali J.
Date: August 9, 2023