BC Court of Appeal sets aside certification in Basyal v Mac’s Convenience Stores Inc

We previously wrote about the B.C. Supreme Court’s order in Basyal v Mac’s Convenience Stores Inc., which certified a class action by individuals from the United Arab Emirates who had been recruited as candidates for employment in convenience stores in Western Canada under Canada’s Temporary Foreign Worker Program (“TFWP”). On June 8, 2018, the B.C. Court of Appeal set aside the certification order. In doing so, the Court of Appeal affirmed the importance of having proper, clear and organized pleadings at the certification stage, but nonetheless gave the vulnerable plaintiffs an opportunity to amend their deficient pleadings.

Background

As previously noted, the plaintiffs in Basyal raise two core allegations: first, Mac’s Convenience Stores (“Mac’s”) promised jobs to the class members and failed to provide them; and, second, Mac’s and the co-defendants (three immigration companies) unlawfully collected fees from prospective temporary foreign workers that Mac’s had agreed to hire. The first claim was based on alleged breaches of employment contracts by Mac’s (the “Contract Claim”), while the remaining claims were based on various other causes of action, including agency, conspiracy, unjust enrichment and breaches of fiduciary duties (the “Other Claims”).

The chambers judge certified both the Contract Claim and the Other Claims. In doing so, he: (i) relied on Dominguez v Northland Properties Corp., a prior case in which the B.C. Supreme Court certified a class proceeding involving the TFWP; and, (ii) found that a class proceeding was most efficient and fair, given that the case involved the interpretation of standard contractual terms, and whether they were breached.

The Court of Appeal decision

Mac’s and the other defendants appealed the certification order. They argued, among other things, that the chambers judge erred in certifying the class action because the plaintiffs failed to properly plead each cause of action in their notice of civil claim. As a result of this allegation, the Court of Appeal disagreed with the chambers judge that Dominguez was “remarkably” similar to the case at bar. Indeed, while Dominguez also involved a restaurant chain that hired low-skilled workers from foreign countries under the TFWP, the defendants in that case acknowledged that the claim disclosed causes of actions, and that those causes had been properly pleaded. As such, Dominguez was distinguishable.

In its decision, the Court of Appeal was also critical of the plaintiffs’ notice of civil claim, finding that it was “disorganized”, “unclear” and “lengthy”. However, the Court concluded that the claim: (i) disclosed a cause of action for breach of contract (although the chambers judge erred in certifying an overbroad class); (ii) disclosed a cause of action against the co-defendants for breach of fiduciary duty; and, (iii) failed to plead the material facts to demonstrate the required elements of the remaining causes of action.

Ultimately, notwithstanding the incompleteness in most of the causes of action, the Court of Appeal reluctantly exercised its discretion to permit the plaintiffs to amend their claim to rectify the deficiencies. In doing so, the Court emphasized that the plaintiffs were “obviously vulnerable”, and that making access to justice possible for vulnerable people is a key purpose of the Class Proceedings Act (“CPA”). Accordingly, the action was stayed pending the plaintiffs’ amendment of its claim, so that the material facts relating to each cause of action could be properly plead.

Lessons learned

The appeal decision in Basyal ensures that defendants will know the “outline” of the case they must meet prior to certification. It directs plaintiffs to draft pleadings that: (i) are clear, concise and organized; and, (ii) contain the material facts to support the causes of action asserted in the proposed class action. Where plaintiffs fail to do so, they risk failure at the certification stage.

However, the decision also demonstrates that the courts will give more leeway to vulnerable plaintiffs, in order to advance the goals of the CPA. Indeed, the Court of Appeal held that it was preferable to permit a class action to proceed in respect of the Contract Claim (provided that a subclass was properly identified) because the particular circumstances of the plaintiffs made it difficult for them to mount individual actions and bear the expense of doing so.

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Editors

Deborah Glendinning

Partner, Litigation

Sonia Bjorkquist

Partner, National Chair, Litigation

Éric Préfontaine

Partner, Litigation

Christopher Naudie

Partner, Litigation

Craig Lockwood

Partner, Litigation

Tristram Mallett

Partner, Litigation

Karin Sachar

Associate, Litigation