[Editor's note: This is a long post. But it's quite an important case.]
Appellate jurisdiction in Ontario class action litigation is divided between the Divisional Court and the Court of Appeal. Jurisdiction depends on both the Class Proceedings Act (“CPA”) and the Courts of Justice Act (“CJA”) and determining it can be a tricky exercise in statutory interpretation, especially when an order has characteristics that suggest both the Divisional Court and Court of Appeal may have claims to jurisdiction. And what happens when a Superior Court judge makes simultaneous orders, the appellate jurisdiction of which is divided between the Court of Appeal and the Divisional Court?
The decision of the Ontario Court of Appeal in Cavanaugh v. Grenville Christian College, released on March 8, 2013, considered these issues and addressed them in depth. The resulting clarification in the law is very important.
The plaintiffs-appellants were residential students at a private religious school in Brockville. They sued the school, two Anglican priests who ran it, and the Anglican diocese responsible for administration of Anglican activities in the area, alleging psychological and physical abuse. The claims were grounded in various torts as well as breach of fiduciary duty.
Perell J. dismissed the motion for certification but for reasons that greatly differed for the various defendants. He held that the claim against the diocese did not reveal a cause of action as required under s. 5(1)(a) of the CPA – he thus ordered that the claim against it be dismissed “immediately.” With respect to the other defendants-respondents, he held that the appellants had not demonstrated that a class action was the “preferable procedure” to bring their claim, as is necessary for certification under s. 5(1)(d) of the CPA.
Before the Court of Appeal, all parties agreed that the appeal of the former dismissal lay to the Court of Appeal while the appeal of the latter lay to the Divisional Court. They also agreed, however, that the Court should exercise its discretion under s. 6(2) of the CJA to join the appeals.
After reserving decision on the issue, Doherty J.A. (Blair J.A. concurring – O’Connor A.C.J.O. had retired) agreed that the Court of Appeal did have jurisdiction over the appeal of the order dismissing the action against the diocese. He also gave reasons for the Court’s previous decision at the hearing to not exercise its discretion to join the appeals and thus transfer the appeals over all matters not involving the diocese to the Divisional Court.
It is important to take note of various statutory provisions to understand the jurisdictional issues in the case. Section 6(1)(b) of the CJA provides that:
An appeal lies to the Court of Appeal from, a final order of a judge of the Superior Court of Justice, except an order referred to in clause 19(1)(a) or an order from which an appeal lies to the Divisional Court under another Act [emphasis added]
All parties agreed that clause 19(1)(a) was not applicable, but the CPA is an Act that provides for appeals to the Divisional Court. Section 30(1) of the CPA reads:
A party may appeal to the Divisional Court from an order refusing to certify a proceeding as a class proceeding and from an order decertifying a proceeding.
The denial of certification against the non-diocesan defendants, being a denial of certification due to failure to satisfy s. 5(1)(d) (the preferable procedure requirement), was clearly appealable to the Divisional Court. But how did the order dismissing the action against the diocese for failing to disclose a cause of action fit into this analysis? Doherty J.A. noted the difficulty posed in this case:
[17] With respect to the Diocese, the motion judge also refused to certify the action, albeit because the claim as pleaded did not reveal a cause of action as required by s. 5(1)(a). If the motion judge’s order in respect of the Diocese is properly characterized as a refusal to certify a class proceeding, the appeal lies to the Divisional Court. However, the motion judge’s order does much more than simply refuse to certify the action as a class proceeding against the Diocese. The order dismisses the claim “immediately”. The motion judge’s order goes well beyond a determination that the Diocese will not be part of any class proceeding. Under that order, the appellants are barred not only from proceeding against the Diocese by way of a class action proceeding, but are precluded from proceeding against the Diocese entirely. If that order stands, the appellants’ action against the Diocese is over. [Emphasis added.]
Doherty J.A. found nothing in the CPA authorizing a Superior Court judge to dismiss an action in its entirety. However, he also noted that a “Superior Court has the inherent power to dismiss an action when the claim does not disclose a reasonable cause of action” (para. 19). While this is usually dealt with by way of a Rule 21 motion, the Court’s power remains inherent.
With this background, Doherty J.A. was satisfied that the Court of Appeal had appellate jurisdiction over this issue:
[22] I do not think that the absence of a Rule 21.01(1)(b) motion is determinative on the jurisdiction question. The appropriate appellate forum should be determined by the substance of the order made. The fact that a motion judge dismissed an action in the absence of a motion under Rule 21.01(1)(b) may give rise to procedural fairness arguments on appeal. Those arguments must, however, be made in the appropriate forum.
[23] The language of the motion judge’s order could not be clearer. The action against the Diocese was “immediately dismissed”. If there is no power in s. 30 of the CPA to appeal the dismissal of the action against the Diocese to the Divisional Court, then under the terms of s. 6(1)(b) of the CJA, the appeal is to this court.
[24] The provisions in s. 30 of the CPA which direct appeals to the Divisional Court refer to “an order refusing to certify a proceeding” (s. 30(1)), “an order certifying a proceeding as a class proceeding” (s. 30(2)), and orders “determining an individual claim” (s. 30(6)-(11)). None of the provisions that create appellate jurisdiction in the Divisional Court under s. 30 refer to orders dismissing an action. A plain reading of s. 30 of the CPA does not give the Divisional Court the jurisdiction to hear appeals from orders dismissing claims even though the order is made in the context of a class proceeding motion. Instead, s. 6(1)(b) of the CJA gives this court jurisdiction over this appeal.
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[32] In summary, the order as it relates to the Diocese is an order dismissing the action. It is not an order granting or refusing certification. Under the terms of s. 6(1)(b) of the CJA, the order dismissing the action against the Diocese is appealable to this court unless there is an appeal to the Divisional Court. If there is an appeal to the Divisional Court, it must be found within the terms of s. 30 of the CPA. None of the provisions in that section directing appeals to the Divisional Court have any application to an order dismissing the action. Therefore, there is no appeal from that order to the Divisional Court. The appeal is to this court.
[33] Finally, I see no practical difficulties in holding that this court is the appropriate appellate forum. Experience shows that in most cases in which the defendant intends to challenge the adequacy of the pleadings on a certification motion, an appropriate Rule 21 motion will be brought in conjunction with the certification motion. If the Rule 21 motion is brought, everyone accepts that the appeal comes to this court. My conclusion that the appeal still comes to this court even when there is no formal Rule 21 motion does nothing to complicate the appellate landscape. The distinction between orders referable to certification, which is a procedural issue, and orders dismissing a claim is not difficult to make. That distinction determines the appropriate appellate forum.
Though this precise issue had not arisen before, Doherty J.A. was also satisfied that the Court had jurisdiction over the matter by comparing and contrasting the Court of Appeal’s decisions in Dabbs v. Sun Life Assurance Company of Canada (1998), 41 O.R. (3d) 97 (C.A.), and Locking v. Armtec Infrastructure Inc., 2012 ONCA 774, and how the CPA and CJA had been interpreted in those cases.
After detailed analysis, Doherty J.A. upheld Perell J.’s dismissal of the action against the diocese, largely in light of the Diocese’s very arms-length relationship with the school. He accepted that it would have been preferable if a formal Rule 21 motion to dismiss had been brought, but held that the plaintiffs were not prejudiced by the absence of a formal motion.
With respect to the joinder issue, s. 6(2) of the CJA states:
The Court of Appeal has jurisdiction to hear and determine an appeal that lies to the Divisional Court ... if an appeal in the same proceeding lies to and is taken to the Court of Appeal.
Doherty J.A. noted that this provision is to promote efficiency and prevent inconsistent results. As such, in cases where there are multiple appeals to different courts arising in the same matter, and the parties agree that they should be heard together, joinder will generally be ordered. However, he concluded that this case was an exception:
[87] The jurisdiction to join appeals in s. 6(2) is, however, discretionary and not mandatory. There will be cases when factors relevant to the administration of justice are sufficiently strong to override the wishes of the parties to the appeal and any efficiencies achieved by joinder. This is one such case.
[88] First of all, I see little to be gained by joinder. The Divisional Court will no doubt await the result of this appeal. These reasons address only the adequacy of the pleadings against the Diocese, an entirely distinct issue from that arising out of the refusal to certify the action against the other respondents. Just as this court had no need to address the certification issues on this appeal, the Divisional Court will have no need to address the adequacy of the pleadings as against the Diocese. Whatever combination of results might have occurred on the two appeals, there is no risk of inconsistent results and very little overlap in the matters to be addressed on the two appeals.
[89] Lastly, and most importantly, I think the very different nature of the issues raised on the two appeals contraindicates joinder. The appeal to this court from the dismissal of the claim against the Diocese raises a straightforward pleadings issue. That issue, while it arises in a certification proceeding because of s. 5(1)(a) of the CPA, is not a certification issue in the sense that it engages any law or procedure particular to certification of class proceedings. The issue before this court could just as easily have arisen, and usually does arise, in litigation that has nothing to do with class proceedings.
[90] The issues raised on the appeal brought against the other respondents do engage the very core of the certification process and the judicial management of that process. Those “nuts and bolts” issues require evaluations best made by those with experience in the practical management of class action proceedings.
[91] Section 30 of the CPA directs appeals granting or refusing certification to the Divisional Court. Members of the Divisional Court, who as Superior Court judges also preside over class action proceedings, have experience in class action matters which members of this court do not have. By directing appeals in respect of certification to the Divisional Court, I think the legislature must be taken as having determined that the practical experience of those judges is important in resolving the difficult and often unique problems that arise in the context of certification applications. The legislature seeks to take advantage of that expertise by directing initial appeals to the Divisional Court while maintaining this court’s ultimate jurisprudential responsibility by allowing a further appeal to this court with leave: CJA, s. 6(1)(a).
[92] Joinder of an appeal properly taken to the Divisional Court which raises certification-related issues, with an appeal in this court that has nothing to do with issues unique to certification, would circumvent the clear legislative choice as to the appropriate appellate forum reflected in s. 30 of the CPA.
The case thus establishes that if a discrete issue arises in the class action context resulting in an appeal to the Court of Appeal, this cannot be used to circumvent the Divisional Court’s proper appellate jurisdiction over matters such as class action certification.