In Dufault v. Toronto Dominion Bank, 2021 ONSC 6223 (“Dufault“), a recent Ontario Superior Court of Justice decision, the Court considered section 4.1 of the amended Class Proceedings Act (“CPA”) for the first time. Section 4.1 addresses the sequencing of pre-certification motions. The decision confirms defendants’ presumptive right to have certain dispositive motions, and in particular summary judgment motions, heard prior to a certification hearing. This new presumption on motions sequencing will have significant implications for class actions in Ontario.
The evolution of pre-certification motion sequencing
On October 1, 2020, several amendments to the CPA came into force, including section 4.1, which provides the following:
Early resolution of issues
4.1 If, before the hearing of the motion for certification, a motion is made under the rules of court that may dispose of the proceeding in whole or in part, or narrow the issues to be determined or the evidence to be adduced in the proceeding, that motion shall be heard and disposed of before the motion for certification, unless the court orders that the two motions be heard together.
The section 4.1 amendment codified the Law Commission of Ontario’s recommendation regarding sequencing, set out in its Final Report on Class Actions. The Law Commission’s recommendation was made in response to concerns about the slow pace at which class actions in the province have tended to proceed. Effectively, the amendment marks a complete turnaround in how the Courts in Ontario had been treating pre-certification sequencing.
Prior to the Supreme Court of Canada’s seminal decision in Hryniak v. Mauldin, 2014 SCC 7 (“Hryniak”), which mandated a judicial “culture shift” to prioritize the early adjudication of claims in order to enhance access to justice, it was rare for courts to order that summary judgment proceed prior to a class action certification motion.
Hyrniak ushered in a new paradigm which elevated the status and prevalence of preliminary motions capable of early resolution of matters. Following the decision, it became more common for summary judgment to be heard together with the motion for certification, and in some cases prior to certification.
The section 4.1 amendment to the CPA has codified and further extended the post-Hyrniak trend toward a heightened emphasis on early adjudication in class actions.
The Dufault guidance
In Dufault, a proposed class proceeding involving alleged improper charges incurred by the putative class, the defendant bank moved under section 4.1 to have summary judgment heard prior to a motion for certification.
First, Justice Belobaba canvassed the legislative history of section 4.1 and found the legislative intent behind the amendment to be clear: if a pre-certification motion can arguably dispose of the proceeding in whole or in part, or can narrow the issues or the evidence, the motion must be heard before certification, unless the court orders that the two motions be heard together.
The Court therefore held that the section 4.1 amendment provides that, where summary judgment is appropriate, defendants have a presumptive right to have the summary judgment motion heard prior to certification.
Dufault provides useful guidance on the degree to which judges may exercise discretion to depart from this presumption. Justice Belobaba explained that, while section 4.1 ultimately gives the motion judge “the last word” on sequencing, he was of the view that this discretion is not “unbounded”. His Honour found that the words of the provision, on balance, send a “strong legislative signal” directing that discretion should be exercised narrowly to depart from the presumption.
The plaintiff can rebut the presumption of pre-certification summary judgment by persuading the Court that there is for the summary judgment and certification motions to be heard together. Justice Belobaba provided two examples of “good reasons” to deny a request for pre-certification summary judgment:
- the defendant’s motion does not raise any genuinely arguable issues that can narrow or dispose of all or part of the litigation and appears to be a delay tactic; or
- the defendant’s motion does raise genuinely arguable issues that can narrow or dispose of all or part of the litigation but the existing or proposed dates for the certification motion and the summary judgment motion are sufficiently close that it makes sense to hear the two motions together.
Notably, Justice Belobaba’s guidance and examples may suggest that section 4.1 precludes a plaintiff’s ability to have a certification motion heard prior to a motion for summary judgment.
The shifting presumption on pre-certification motion sequencing will likely have significant implications for plaintiffs seeking to advance class claims in Ontario.
First, where there are liability-related issues being considered on summary judgment, plaintiffs may now face challenges in proving their burden on a summary record. Generally speaking, on summary judgment, document production is dealt with as an aspect of the cross-examinations of witnesses through requests for undertakings. Given that it is often the case that the evidence necessary to establish liability will largely be in the possession of defendants, achieving full production of this evidence may be more difficult in the absence of broad discovery obligations. That said, there are additional mechanisms that allow parties to seek production of relevant evidence prior to the summary judgment hearing. This may be especially true in the class action context where the motion judge has broad discretionary authority to determine the conduct of the proceeding pursuant to section 12 of the CPA.
Second, and perhaps most significant to plaintiffs, even where a plaintiff may be successful in responding to a summary judgment motion, the summary judgment process will likely cause a significant delay in advancing a claim to the certification stage. Further, it will mean greater disbursements, fees and time incurred by plaintiffs at an earlier stage of the proceeding.
A key consideration for plaintiffs’ counsel in deciding whether to pursue a proposed class action is often the estimated length of time it will take to bring the matter to resolution. In this analysis, the certification motion is generally considered to be the catalyst for resolution. Once an action is certified, cost-benefit considerations can shift considerably in favour of negotiating settlement.
Due to the section 4.1 amendment, it reasonable to expect greater numbers of pre-certification summary judgment motions. Dufault may mean that plaintiffs will more closely consider the merits and prospects of recovery when deciding whether to pursue a proposed class proceeding in Ontario.