Last week, in 1250264 Ontario Inc. v. Pet Valu Canada, Justice Belobaba rejected class counsel’s late-breaking attempts to recast the representative plaintiff’s claim. After receiving feedback from the court during the hearing of a summary judgment motion, the plaintiff moved to amend its pleadings and add a new common issue prior to the release of the decision on the summary judgment motion. Justice Belobaba held that allowing the plaintiff’s motion would have caused prejudice to the defendants.
No absolute rule emerges from the decision – indeed, a different result was reached on an attempt to recast a case on appeal last year. Nonetheless, the case demonstrates that courts are cognizant of the very real prejudice that defendants can suffer when plaintiffs attempt to radically recast a claim after years have passed and key steps have taken place in class action litigation.
The decision emerged in a certified class proceeding after the defendant brought a summary judgment motion that turned out to be largely successful. (The Court of Appeal dismissed a motion by the plaintiff to file a late notice of appeal of the decision dismissing most of the plaintiff’s claim last week.) Justice Belobaba nonetheless had to delay his decision on two of the common issues when the plaintiff brought a motion, after the summary judgment motion had been heard, to amend its pleadings and add a new common issue.
Though Justice Belobaba noted that “it is only in unusual situations that a proposed amendment to the statement of claim will be denied”, he nonetheless dismissed the claim solely on the grounds of prejudice. He held:
- Absent his intervention, “the summary judgment motion would have concluded and the defendant would likely have prevailed on most of the common issues”.
- The defendant encountered actual prejudice in respect of the proposed amendments and the new common issue, having been “in a position to obtain complete summary judgment on the existing common issues as well as a probable cost award against the representative plaintiff” that likely would have ended the litigation.
- The representative plaintiff is a defunct corporation that likely has no assets to satisfy a judgment and would therefore likely not have commenced a new class proceeding on the new common issue.
- Allowing the motion would have tilted the proceeding in the plaintiff’s favour. In this respect, he cited decisions in which Justice Perell noted that “defendants, just as much as plaintiffs, are entitled to access to justice” and courts “should also be aware that the procedure of a class action is meant to level the playing field, not tip the field in the favour of plaintiffs.”
Justice Belobaba noted that there appeared to be some merit to the plaintiff’s new allegations, and he would have allowed the amendment, albeit only partially, had he reached a different conclusion on the issue of prejudice. This case is an important recognition that an attempt by a representative plaintiff to radically recast a claim years after it has been commenced can be very unfair and should in such circumstances not be permitted.