In Li v British Columbia, the British Columbia Supreme Court directed that a summary trial application proceed before the certification hearing. In doing so, the Court clearly saw value in determining the central issue in the lawsuit without first putting the parties through a time-consuming and costly certification hearing.

Background

The plaintiff had commenced class proceedings to challenge the validity of certain provisions of the Property Transfer Tax Act, which impose a 15% tax on the purchase by foreign entities of residential property in Vancouver. The plaintiff alleges that the impugned provisions: (i) offend the division of powers under the Constitution Act; (ii) do not comply with s. 15 of the Charter; and/or (iii) are not justified under s. 1 of the Charter.

The defendant argued that these constitutional issues should be determined first in a summary trial. In its view, resolution of the constitutional issues could entirely dispose of the litigation, and avoid the complexity and cost of certification proceedings.

The decision: The summary trial must proceed first

Mr. Justice Bowden considered the Cannon factors to determine whether to proceed with the summary trial application before the certification hearing. He also considered the strength of the defendant’s arguments, on a preliminary basis, and concluded that those arguments seemed “strong” and “sound”.

Ultimately, Justice Bowden concluded that in the interests of efficiency and judicial economy, the constitutional issues should be determined first. He found that these issues were well suited for determination in a summary trial, as the evidence could be provided by affidavits and/or expert reports, and credibility was not likely to be an issue.

Implications of the decision

Li v British Columbia helps clarify the circumstances in which a summary application will be allowed to proceed before a certification hearing. The decision demonstrates that courts may be more willing to exercise their discretion to hear a summary application before certification where the proposed application: (i) is not limited to a particular plaintiff; (ii) will resolve the central issue in the case; and, (iii) is otherwise well suited to a summary process. It will also be helpful for defendants to demonstrate a strong prima facie case on the merits. In such circumstances, defendants may be successful in arguing that they should be allowed to proceed first to a summary application, without bearing the significant costs of a certification hearing.

The decision in Li v British Columbia can be contrasted with the Ontario Superior Court’s decision in Keatley Surveying v Teranet, which we have previously discussed on this blog. In that case, the defendant filed a summary judgment motion to dismiss certain of the plaintiff’s claims shortly after the plaintiff had filed its certification motion. However, the original case management judge decided that the certification motion should be heard first. We commented that it was “unclear why the prior case management judge did not permit argument of the defendant’s motion at the same time as argument of the certification motion”, particularly in light of the Court’s later comments that “recent case law has moved in favour of earlier summary judgment motions”. By allowing a summary trial application to proceed in advance of the certification hearing, Li v British Columbia is more in line with such recent case law. It therefore provides a valuable precedent for defendants facing proposed class proceedings that raise issues well suited to summary judgment.