Canadian Class Action Defence Blog

In memoriam Keatley Surveying: A retrospective on lessons learned

Oct 12, 2017 6 MIN READ
W. David Rankin

Partner, Disputes, Toronto

After seven years of litigation, Keatley Surveying Ltd. v. Teranet Inc. is no more (unless the plaintiff attains leave to appeal to the Supreme Court of Canada from the dismissal of the action).

On September 28, 2017, the Court of Appeal for Ontario affirmed Justice Belobaba’s decision granting the defendant’s summary judgment motion and dismissing the action. Unless leave to appeal is attained, this brings to an end what has been a rich proceeding for the development of class actions law. This blog has written about iterations of Keatley Surveying on no fewer than five occasions. In honour of its (perhaps) last stand, this retrospective brings together several of the significant developments that Keatley Surveying has added to the class proceedings jurisprudence.

Recasting certification on appeal

Keatley Surveying will be perhaps best remembered for allowing the plaintiff to significantly recast its certification motion on appeal.

The plaintiff was unsuccessful at first instance in having its copyright case certified as a class action. On appeal to the Divisional Court, and later to the Court of Appeal, the plaintiff narrowed the relief sought, revised the putative class definition, and amended the proposed common issues (withdrawing several altogether). As we have previously written, both appellate courts found this to be acceptable in the circumstances, but neither court endorsed the practice of recasting certification on appeal. In fact, both appellate courts adopted the same caution to future plaintiffs:

Nothing in these reasons should be taken as endorsing the practice of recasting certification motions on appeal. This practice clearly undermines the way class action certification motions should proceed through the courts. Using appellate courts to hear matters de novo both deprives the courts of the expertise of the judges who have been assigned to hear these cases at first instance and requires three judges to determine issues that could and should have been heard by one judge.

This caution has not been lost on the cases following Keatley Surveying. Although Good v. Toronto (City) Police Services Board relied on Keatley Surveying without expressly referencing the non-endorsement, the concern underlying the passage quoted above was recently affirmed in Hodge v. Neinstein. Likewise, the Court of Appeal distinguished Keatley Surveying in 1250264 Ontario Inc. v. Pet Valu Canada Inc. and refused to grant the plaintiff latitude to propose a new common issue. Unlike in Keatley Surveying, the parties had already argued a post-certification summary judgment motion, and adding a new common issue would have caused the defendant actual prejudice not compensable in costs. See our post on Pet Valu for further discussion of this aspect of the decision.

Evidence of a class of two or more persons

There was more to Keatley Surveying than a recast certification motion on appeal. Each level of court entered the contentious arena of what evidence is required to satisfy the identifiable class criterion. As we previously wrote, the Divisional Court held that this criterion did not require, at least not in Ontario, the plaintiff to establish the actual existence of two or more potential class members who intend to pursue their claims through a class action. A theoretical class may be sufficient. As we subsequently wrote, this approach was an outlier among class actions in Canada.

On appeal, the Court of Appeal added a layer of nuance to the Ontario approach to this question, holding that the evidentiary threshold for establishing the existence of a class “will vary from case to case.” Following Keatley Surveying, there are essentially two categories: (1) cases where the existence of more than one claim is apparent “from the very nature of the claim being advanced”; and (2) cases where the existence of multiple claims is not apparent, in which case “some evidence that multiple claims exist may be required.” In the context of Keatley Surveying, the Court of Appeal affirmed the Divisional Court’s rejection of the proposition that the plaintiff must “show that there are class members, other than the plaintiff, who wish to pursue claims as a class action.”

As we have previously noted, the approach in British Columbia continues generally to require evidence of two or more actual potential class members who have a complaint they intend to pursue in the class action. This was recently affirmed by the British Columbia Supreme Court in Harrison v. Afexa Life Sciences Inc., which is currently on appeal to the British Columbia Court of Appeal.

Sequencing dueling summary judgment motions

In March 2016, we wrote about a short but significant decision of Justice Belobaba addressing which of two dueling summary judgment motions should proceed first. The defendant had filed a pre-certification motion for summary judgment, which was adjourned pending the certification motion. After the revised case was certified on appeal, the defendant sought to reschedule its motion. In response, the plaintiff filed a post-certification motion (styled as a “cross motion”) seeking summary judgment in favour of class members on each of seven certified common issues.

Justice Belobaba determined that, given the certification of the class action on appeal, the “only order […] that would ensure the ‘just and expeditious determination’ of this class proceeding is an order that would allow the adjudication of the certified common issues.” That is, only the plaintiff’s “cross motion” – converted to a motion proper – ought to proceed in the wake of the certification order. In contrast, the defendant’s pre-certification motion would have bound only the plaintiff and not the class. The more sensible course, in Justice Belobaba’s view, was to proceed with an adjudication on the merits of the common issues that had actually been certified in the proceeding.

In the final act, on the merits

The plaintiff’s success in sequencing its summary judgment motion to be heard first resulted in the complete dismissal of the class action, binding on all class members. Although the Court of Appeal’s decision on the merits turned primarily on the application of copyright law, the (perhaps) final decision in Keatley Surveying leaves us with at least one last lesson in class actions procedure.

Of the common issues certified, the parties agreed that the resolution of one of them (Common Issue 2) in favour of the defendant would result in the dismissal of the action. For future defence counsel, Keatley Surveying demonstrates that it pays to identify that one (or those few) common issues the resolution of which could alone defeat a class action on its merits. Having done so in Keatley Surveying, the defendant prevailed on the strength of a single determinative common issue.

Where a certified class action is vulnerable to be dismissed based on the resolution of a single (or a few) common issues, defence counsel may have an opportunity to craft a summary judgment motion that has only upside. Success on the motion could result in the complete dismissal of the action (as in Keatley Surveying), whereas failure would not necessarily result in judgment in favour of the plaintiff. If the common issue cannot be resolved summarily, it may have to proceed to trial.