Sixteen years later, proposed class action dismissed for delay
Class actions in Canada routinely lie dormant for years. In Smith v. Armstrong et al. (Smith), the Ontario Superior Court of Justice made clear that its patience for stagnant class actions eventually runs out.
In a rare move, the Court in Smith granted the Defendants’ motion to dismiss for delay a proposed class action commenced in 2000, stating “there comes a time when enough is enough and the civil justice system will no longer tolerate an inordinate and inexplicable delay.”
However, the seemingly hard-line result was tempered by the Court’s determination that other class members can seek to commence identical class actions going forward. Class members’ (and their counsel’s) willingness to commence such subsequent actions may impact the practical result of the motion to dismiss for delay.
The Plaintiff, Ronald Smith, alleged that he and other Canadian Armed Forces members suffered long-term neuropsychiatric side effects from taking an anti-malarial drug as part of their requirements for deployment to Somalia in 1992 and 1993.
In February 2000, the Plaintiff filed a Statement of Claim pleading negligence, battery and breach of Charter-rights against Hoffman-La Roche Limited and The Attorney General of Canada. After the Defendants delivered a Statement of Defence in 2001, the case lay dormant for 15 years despite the Defendants periodically contacting Plaintiff’s counsel for updates.
In November 2016, the Plaintiff changed counsel and proposed a timetable. A case management judge was appointed. The Plaintiff moved for leave to proceed with the certification motion and the Defendants moved to dismiss the action for delay.
Unexplained, inordinate delay
The Court first considered the distinct legal tests applicable to the Plaintiff’s motion for leave to proceed with the certification motion and the Defendants’ motion for dismissal for delay, concluding that “the practical effect to the delay renders the tests largely the same.”
Since there was “no doubt that the delay in this proceeding [was] inordinate,” the Court’s approach was to assess whether the Plaintiff had a reasonable explanation for the delay.
The Plaintiff offered several explanations for the delay, including that: the jurisprudence under the Class Proceedings Act (CPA) and the Charter was still emerging as of the date the class action was commenced; the expert evidence on the drug’s effects on neuropsychiatric symptoms was still in development; and the Plaintiff’s medical condition prevented him from actively pursuing the litigation. While accepting that each of these explanations may have caused some delay, the Court was unconvinced that these were reasonable explanations for the overall inordinate amount of delay in the proceeding.
Presumed prejudice to defendants
The Court then considered whether the Plaintiff had rebutted the strong presumption of prejudice to the Defendants that was created by the delay. The Plaintiff argued that there was no prejudice and, to the extent that any relevant documents had not been preserved, the fault for the resulting prejudice (if any) lied with the Defendants for failing to take adequate steps to preserve such documents.
The Court rejected the Plaintiff’s arguments, stating that they effectively reversed the presumption of prejudice. Further, the Court noted that since the proceeding had yet to be certified, the Defendants ought not to be blamed for waiting until they knew the type of action against them before fully allocating their litigation resources to preserving relevant documents.
Impact on other class members
Importantly, the Court considered whether dismissal of the action would have substantive impact on any purported class members other than the representative plaintiff, Mr. Smith. The Court concluded that the dismissal of Mr. Smith’s action would not preclude a subsequent class proceeding by other class members as the limitation period for their claims had been tolled during the time Mr. Smith’s action was outstanding by virtue of s. 28(1) of the CPA.
The Court also directed that any class members who had contacted Plaintiff’s counsel to enquire about the action should be notified of the dismissal for delay so that they can act on their rights going forward if they choose.
For defendants to inactive class actions commenced many years prior, Smith suggests dismissal for delay should be added to their arsenal of options. One factor defendants would want to consider is whether it is likely that another class member would move the case forward. In theory, following dismissal for delay, the same or similarly constituted class action could be commenced with a different representative plaintiff so long as the limitation period for his/her claim has not run out – although, in some circumstances, this may be considered re-litigation or an abuse of process. Ultimately, the value of Smith may be that it clarifies (for now) the Court’s limit of tolerance for delay in class actions, and may encourage plaintiffs to move more quickly.