Ontario Court of Appeal reaffirms importance of procedural fairness
In Levac v. James, 2017 ONCA 842, the Ontario Court of Appeal emphasized the importance of procedural fairness in certification hearings and related motions. In particular, the Court noted that while a motion judge has the discretion to formulate the wording of a common issue, the requirement of procedural fairness imposes a limit on how and when this discretion can be exercised.
Factual Background & Procedural History
This proceeding arose after a bacterial infection outbreak at a Toronto pain management clinic which affected several patients, including the respondent, Ms. Levac. Dr. Steven James, the appellant, was an anaesthesiologist at the clinic who administered injections to Ms. Levac and several other patients. Subsequent testing revealed that Dr. James was infected with the same bacterial strain as Ms. Levac and other patients. Ms. Levac commenced an action against Dr. James, the clinic, and other clinic staff, alleging that Dr. James caused the outbreak by negligently implementing substandard infection control procedures.
Ms. Levac brought a motion seeking: (i) certification of a class action; and (ii) partial summary judgment against Dr. James. The motions were heard together. Justice Perell certified the class proceeding against all defendants and granted summary judgment against Dr. James.
The defendants did not oppose certification, but the parties disagreed about the wording and scope of the common issues regarding breach of the duty of care. At the hearing of the certification motion, the parties each put forward a different formulation of the question. The motion judge then put forward a third formulation of the question and this version was accepted by all parties (the “Agreed Question”) and Justice Perell orally ruled that the Agreed Question was certified as a common issue. However, in his written reasons on the summary judgment motion, Justice Perell replaced the Agreed Question with a reformulated question (the “Reformulated Question”)
Dr. James appealed on two grounds: (i) the motion judge compromised procedural fairness by certifying and granting summary judgment on a different formulation of the common issue from the formulation that he had orally approved when hearing the certification motion, and (ii) the motion judge erred in finding that Dr. James breached his duty of care.
Procedural Fairness in Certification Hearings and Related Motions
The Court of Appeal allowed the appeal and ordered a new hearing of the motion for certification and summary judgment on the basis that Dr. James was deprived of procedural fairness when the motion judge certified and granted summary judgment on the Reformulated Question, without addressing any prejudice to Dr. James. As such, the Court did not consider the finding that Dr. James breached his duty of care.
The Court of Appeal agreed with the respondent that a certification judge has discretion in formulating the common issues and is not confined to the wording proposed by the parties. However, the Court found that the requirements of procedural fairness impose a limit on how and when that discretion may be exercised. In this case, the Court held that the motion judge did not appropriately exercise that discretion.
Importantly, the Court noted that the difference between the Agreed Question and the Reformulated Question was substantive and could not be considered a “distinction without a difference”. The Court found it was instructive that Justice Perell clearly understood that the Reformulated Question captured “permutations of the duty of care issue” that were missing from the Agreed Question. The Court noted that whether or not the Reformulated Question added these new permutations without introducing issues that are not amenable to a resolution on a class-wide basis, should have been a question that the parties could address through submissions at the motion.
The Court highlighted that the following factors strengthened Dr. James’ position: (i) it was reasonable for Dr. James to expect that the motion judge would adhere to the Agreed Question in the summary judgment motion, (ii) the common issues were important to the action as a whole, and (iii) the motion judge failed to take any steps to address the potential prejudice caused by changing the common issues on the summary judgment motion. With respect to the certification motion, the Court found that it was significant that Dr. James could have contested certification altogether had he known that the certified common issue would be the Reformulated Question and he was, therefore, unfairly deprived of an opportunity to contest not only the common issue, but the certification of a proceeding premised on that common issue.
Moreover, the Court found that the denial of procedural fairness could not be cured through the appeal process. Citing Cassano v. The Toronto Dominion Bank, 2007 ONCA 781, the Court noted that it is “crucial” that litigants receive a fair process at the certification motion, particularly because a certification judge’s substantive conclusions are not easily set aside on appeal.
This decision reaffirms that certification motion judges must carefully exercise their discretion when formulating the common issues, in particular, where the common issues impact a related motion like the summary judgment motion in this case. Where a motion judge reframes a common issue, rendering it substantively different from the common issues proposed by the parties, the motion judge is obligated to take steps to address any prejudice to a party that may arise from that reformulation. This should include allowing the parties to contest the reformulation of the issue or it’s repercussions at the hearing, or in supplementary submissions if it is done after the hearing as it was in this case.