2013 Theme 2: The Increasing Number of (Unsuccessful?) Refusals Motions in Class Actions

The story of class actions in 2013 has some interesting themes, some of which were furthered by the long-awaited commentary from the Supreme Court of Canada. This is the second of five posts in which we highlight five themes we saw in 2013 and how we expect them to develop in 2014.

This second theme is the increase in refusals motions in class actions – both in respect of cross-examination of affidavits prior to certification and on discovery prior to common issues trials. With recent guidance from the Supreme Court of Canada reiterating the low threshold for certification in the common law provinces (a threshold that is even lower in Quebec), we anticipate more focus on the merits of cases in 2014 such that refusals motions will become even more common.

We have already seen two 2013 Ontario Superior Court decisions illustrating this. The vast majority of contested refusals have been held to be justified as the questions went beyond the scope of what was at issue.

  • In Caponi v. Canada Life, the defendant was seeking answers to questions about the representative plaintiff’s income that it said were relevant to calculating damages. Aggregate assessment of damages was not certified as a common issue. As such, Justice Conway held that the questions went beyond what was relevant to the common issues trial, noting that “[t]he general rule on a class action is that discoveries are restricted to the issues certified.” The Divisional Court denied leave to appeal this decision.
  • In CIBC v. Deloitte, Justice Perell reiterated that discovery in class proceedings, post-certification, is generally limited to the common issues. (Though he added that “this is not an absolute rule.”) In this case about auditors’ liability, he ordered that many questions be answered. But he also held that both parties overreached in discovery and dozens of refusals were justified as falling into one of eight categories of proper refusals in class proceedings: unanswerable, immaterial, irrelevant, untimely, idiosyncratic or uncommon, answered, disproportionate, and privileged. (We have previously discussed the state of the law in this respect here.)

However, this line of Ontario cases was explicitly rejected in the British Columbia case of Stanway v. Wyeth Canada Inc. Justice Gropper distinguished the Ontario and British Columbia regimes and held that “the scope of examination for discovery in the context of class proceedings shall also be defined broadly. It will not be limited by the common issues.” The British Columbia Court of Appeal declined to grant leave to appeal this decision.

At the end of the day, the results in Ontario refusals motions can be seen as attempts to keep class actions focussed and on track. As class action practice continues to mature, the higher courts may have to clarify the law in this respect.