It is tempting for lawyers to look at their cases as moving in a straight line, with each phase building towards the next. However, as class proceedings progress, new facts or circumstances may arise that undermine the issues for which the proceeding was certified for in the first place. In such circumstances, Defendant’s counsel should take a step back to analyze whether a motion for decertification is potentially appropriate.

Plaunt: An example of a recent decertification motion

This is exactly what happened in Plaunt v. Renfew Power Generation Inc.[1] In Plaunt, a class of approximately 450 individuals in Ontario who owned property surrounding Round Lake had their action certified against Renfrew Power Generation (“RPG”). The class claimed damages in trespass for water that allegedly encroached on their property. They alleged that the water damage was caused by the operation of the Tramore Dam, owned by the defendant RPG.

At the time of certification, there was little evidence showing the boundary of class members’ lands. One of the issues that was certified as a common issue was whether a specific contour line did or did not create a boundary line between public lands and private lands.

After the class was certified, the parties retained surveyors to determine the legal description and boundaries of the cottage owners’ lands and to prepare expert reports. RPG obtained an expert report that fractured the commonality of the class. The report showed that the contour line was not a relevant consideration in determining the boundary between many of the cottages’ private property and public lands. Accordingly, five years after certification, the Defendants brought a motion for decertification.

Justice Smith heard the motion. The basis for a decertification motion is found in s. 10(1) of the Ontario Class Proceedings Act (“CPA”). This section provides that if the conditions for certification, as outlined in s. 5(1) of the CPA, are no longer satisfied, the Court may amend the certification order, decertify the proceeding, or make any other order it considers appropriate.

The Superior Court’s decision in Pearson v. Inco Ltd.[2] is informative on when the Court will grant such a motion. In Inco, the Court held that decertification should be granted where the Court is satisfied that the requirements for Certification are no longer present due to new evidence, subsequent facts, or developments. The Court held that the “new evidence” requirement is governed by the same principles that apply in civil litigation generally, and, in particular, those approved in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.[3] The test in Sagaz requires that fresh evidence should be admitted when: (1) the evidence could not have been obtained with reasonable diligence in the first instance; (2) the evidence would probably have an important influence on the results of the case; and (3) the evidence is apparently credible.[4]

In Plaunt, the Plaintiffs argued that RPG should be estopped from bringing the decertification motion because they could have presented the survey evidence at the original certification motion, making it a “disguised” late appeal of the certification decision. The Court disagreed and held that the requirements of section 5(1) of the CPA were no longer met in light of truly “new” evidence. However, the judge allowed the parties more time to make additional submissions, and has not yet decided whether the motion should be granted.

Key Lessons from Plaunt

The key lesson from Plaunt is that the decertification motion is a strong tool that can be used by defence counsel to undermine inappropriately certified proceedings. If new facts or circumstances come to light that militate against the class having been certified in the first place, then defence counsel should evaluate bringing a decertification motion. The questions that defendants should ask themselves are:

  1. Does the “new evidence” qualify as fresh evidence under the test in Sagaz?
  2. If so, does the “new evidence” show that one of the factors in s. 5(1) of the CPA are no longer present?

If the answer to both of these questions are yes, then the decertification motion may be an appropriate tool to use to defend the class proceeding.