Standard form contracts: B.C. court confirms preferability of class proceeding
In considering a proposed 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, the British Columbia Supreme Court in Basyal v. Mac’s Convenience Stores Inc. held that the proceeding was suitable for class certification, in light of the proposed common issues and its finding that the individual issues did not “outweigh” the common issues in this case. The B.C. Court held that the “essence” of this case was about the interpretation of the standard contractual terms and whether those terms were breached, and accordingly, the case could be tried on a class-wide basis.
The core allegations of the plaintiffs were two-fold: first, Mac’s Convenience Stores (“Mac’s”) had promised jobs to the class members and failed to provide them, and second, Mac’s and the other defendants had unlawfully collected fees from prospective temporary foreign workers who Mac’s had agreed to hire. The plaintiffs sought relief on the basis of a number of causes of action, including breach of contract, agency, conspiracy, unjust enrichment and waiver of tort, and breach of fiduciary duty.
The plaintiffs named Mac’s as a defendant, as well as a number of recruiting companies who had been involved in processing immigration documents for the candidates and who had helped the candidates navigate the Canadian immigration process. These co-defendants had also entered into agreements with certain candidates who were hired by Mac’s.
In opposing class certification, Mac’s argued that there were different circumstances among the prospective class members such that a class proceeding was not the preferable procedure for the fair and efficient resolution of the proposed common issues. For example, Mac’s argued that candidates received various representations regarding the availability of jobs and that candidates relied on representations in different ways. Further, Mac’s argued that the employment contracts at issue contained material differences depending on the identity of the class member, such as differences with respect to the nature and location of the position, the length of the contract and payment of travel costs.
Justice Silverman of the B.C. Supreme Court held that the plaintiffs had met their burden of satisfying the certification criteria of a reasonable cause of action, an identifiable class, common issues, a preferable proceeding and appropriate representative plaintiffs. Among other findings, Justice Silverman reasoned the essence of this case involves an interpretation of the standard contractual terms, and whether they were breached. The Court’s decision lies in direct contrast to a B.C. case that we discussed earlier this year, Vaugeois v. Budget Rent-A-Car of B.C. Ltd., in which the B.C. Court of Appeal upheld the lower court’s decision to refuse certification of a proposed class action in the context of standard form contracts. In that case, the Court had found that the individual questions of fact had “overwhelmed” the common issues at the preferable proceeding stage of the analysis. Both the Mac’s and Budget decisions involved standard form contracts, thus begging the question, what explains the difference between the two results?
In Budget, the B.C. Supreme Court found that to make a finding of liability, the Court would have to conduct individual inquiries to assess the circumstances surrounding each customer’s rental of a Budget vehicle in order to determine whether the defendant improperly charged or over-charged the plaintiffs for body and window glass repairs. As such, the Court determined that the case was not suitable for a class proceeding.
By contrast, in Mac’s, the B.C. Supreme Court reasoned that the dispute would largely turn on the terms of the underlying contracts, and there were similarities in the nature of the contracts that had been signed by the class members. The Court considered the alternative of a series of Small Claims trials as well as how many individual trials might be required if the class was certified. The Court ultimately determined that individual trials would not be required for most of the claims at issue, and that a class proceeding would be most efficient and fair. To a large extent, the Court relied on a B.C. case which shared substantially similar facts to Mac’s, Dominguez v. Northland Properties Corp., in which the Court certified a class proceeding in an employment context.
One lesson from this case for defendants in situations like these involving standard form contracts is to conduct a hard assessment of the core issues of the litigation at hand and whether they can be realistically tried on a class-wide basis. The fact that certain details in each employment contract differed was not detrimental to certification in Mac’s. In contrast, the individual customer experiences in the Budget case with each Budget employee was part of the core analysis required to determine the common issues.
Another lesson learned from this case is the uphill climb that defendants face in circumstances that are substantially similar to other cases that have been certified. In Mac’s, the case relied on by the Court served to fuel the plaintiffs’ arguments in favour of certification.
Finally, defendants should consider the other “reasonable means” of resolving the claims that are more practical or efficient than a class proceeding. For example, the Court in Mac’s held that most class members would likely not pursue their claim at Small Claims Court for a variety of reasons, one of them being the relatively low dollar value of the individual claims.