There are several key jurisdictional questions raised by this case relating to the enforceability of class action judgments issued in one province that purport to bind class members from other provinces.  The case is now before the Supreme Court of Canada which will be considering such issues as (a) what are the territorial limits under the Canadian Constitution on a provincial court’s assertion of jurisdiction in a class proceeding over residents of other provinces and (b) whether a provincial court has a more expansive jurisdiction in a class proceeding than in an ordinary proceeding to determine the rights of residents of another province concerning transactions occurring wholly within that province.  The answers to these questions could have a  significant impact on the future of national class actions in Canada.

The story begins in Ontario where The Cash Store and its affiliated company, InstaLoans,  settled a class action against them and obtained a judgment that purported to be binding on all their customers across Canada (other than those in B.C. and Alberta), including customers in Manitoba (the “Ontario Judgment”).  Mr. Meeking was a Manitoba customer who claimed he did not receive notice of the Ontario settlement and who brought a class action in Manitoba against the Cash Store and InstaLoans in respect of some of the matters covered by the Ontario settlement that had occurred in Manitoba.

The Cash Store and InstaLoans responded by bringing a motion in Manitoba for an order recognizing and enforcing the Ontario Judgment.  Mr. Meeking argued that  the Ontario court did not have jurisdiction over Manitoba residents such as himself who dealt with The Cash Store in Manitoba.

The court held that the Ontario Judgment should be enforced in Manitoba “if (a) jurisdiction was properly assumed by the court in Ontario; (b) the principles of order and fairness were met insofar as Manitoba class members were concerned; and (c) there is no statutory provision in Manitoba or common law rule precluding enforcement of the judgment” (para. 47).  The court held that all three conditions were satisfied.

However, the court held that the notice that was distributed to customers under the terms of the Ontario Judgment was only sufficient to bind The Cash Store’s customers and only with respect to payday loans.  The notice was not sufficient to bind Manitoba customers with respect to other types of loans offered by The Cash Store in Manitoba, or to bind InstaLoans customers in respect of any loans.

Mr. Meeking appealed the court’s refusal to let him proceed with his action against The Cash Store in respect of payday loans, and The Cash Store and InstaLoans appealed  the court’s order that Manitoba customers were not bound by the Ontario Judgment in respect of any loans offered by InstaLoans or the other loans offered by The Cash Store.  The Court of Appeal upheld the original decision and so all parties appealed to the Supreme Court of Canada which will consider the appeals in November.

The decision of the Supreme Court of Canada will hopefully bring some clarity (and finality) to the  issues involved with national classes. This will be particularly important for defendants who need to know whether a judgment or a settlement on a national basis will absolve them of liability right across the country or whether they could still end up paying for the same conduct twice!