In Atlantic Lottery Corporation Inc. v Babstock, 2020 SCC 19, the Supreme Court of Canada delivered a strong message to would-be representative plaintiffs and courts faced with the task of considering certification: the claim must be viable, and certification must be a “proportionate procedur[e] for adjudication” or it should not be certified (you can read our analysis of Atlantic Lottery, here).
One year later, it is clear that the message has been received. In this article, we discuss two recent cases where the Court weeded out hopeless claims and refused to certify due to a lack of supporting evidence: Spring v Goodyear Canada Inc, 2021 ABCA 182, and Maginnis and Magnaye v FCA Canada et al, 2021 ONSC 3897.
Spring v Goodyear Canada Inc.
Goodyear concerned an alleged systemic manufacturing defect in tires. The proposed representative plaintiff alleged that he was driving his vehicle on a highway when one of his tires from Goodyear failed and he was injured. The plaintiff received a recall notice for his tires but was told that his tires were manufactured prior to the period covered by the specific recall. His accident and injuries occurred three days later.
The action was certified by the case management judge. The central issue on appeal was whether there was “some basis in fact” to support that common issues and whether they could be resolved through a class proceeding.
The only evidence that the plaintiff presented at the certification hearing of a defect in the tires was the recall notice. He did not produce any evidence that pointed to the cause of the tread separation of his tires or any tires covered by Goodyear’s recall, or whether any systemic manufacturing defect lead to his accident. As a result, there was no evidence of a common defect – any number of factors could have caused the failure of his tires versus any other tires subject to the recall. While the plaintiff pointed to evidence of “clusters” of returns of similar tires to Goodyear, this did not assist as there was no evidence to support an inference that the clusters and the tires affected by the recall suffered from the same defect.
Furthermore, the Court soundly rejected the Plaintiff’s claim that Goodyear had deliberately and intentionally selected an inappropriate recall notice, as being utterly devoid of an evidentiary basis. The Court stated:
 The case law is clear that the evidentiary threshold for certification is very low, but as observed in Simpson v Facebook Inc, 2021 ONSC 968 at para. 50: “. . . while certification remains a low hurdle it is nonetheless a hurdle”. There need only be “some basis in fact” to support the claim. Claims should not be certified, however, if there is a complete absence of evidence to support the claim. That is particularly so in the case of allegations of intentional misconduct. The allegations implying dishonesty should not have been certified on this record. If evidence subsequently emerged in support of those allegations, the remedy would be to amend the certification under s. 9(4) of the Class Proceedings Act.
The Court of Appeal went on to strike the other claims for unjust enrichment, restitution, and disgorgement as doomed to fail, relying heavily on Atlantic Lottery. Ultimately, Goodyear demonstrates that a claim with a complete absence of evidence on a required element will not be certified.
Maginnis and Magnaye v FCA Canada et al
Maginnis also concerned a manufacturing defect, but in this case, the defect, which was a device installed in diesel-engine vehicles, was well established. The defendants launched a repair program, and was subject to regulatory proceedings in the United States.
The plaintiffs failed to provide any evidence of compensable loss since the vehicles had either been repaired or would be repaired free of charge. However, compensable loss was a required element of the claim. As a result, the motions judge refused the application for certification concluding that a class action was not the preferable procedure for resolution of the claim. See our analysis of the motions judge’s decision, here.
On appeal, the Ontario Divisional Court upheld the decision of the motions judge. The Divisional Court found that the motions judge properly considered the evidence before him and concluded there was no evidence of compensable harm. This was not an impermissible requirement that the representative plaintiff prove loss, or an assessment of the merits of the case. Rather, the motions judge properly considered whether there was some basis in fact to conclude a class proceeding was the preferable procedure. A claim that includes compensable loss as a required element will not be certified absent some evidence of compensable harm.
The Court held that in the absence of evidence of compensable harm, a class action was not the preferable procedure as “nominal damages were not enough to justify certification” and accordingly, “a class proceeding would not be a wise use of judicial resources” (para. 48). The Divisional Court dismissed the appeal, noting the motions judge’s decision was consistent with Atlantic Lottery.
The courts in Goodyear and Maginnis came to the same conclusion: the plaintiff must provide some evidence that the required elements of the claim exist. If there is no evidence, it is unlikely that the requirements of commonality or preferability will be met, and the claim ought not be certified. As exemplified in Maginnis, it is particularly important that the proposed representative plaintiff come forward with some evidence of compensable harm, because to certify a claim for only nominal damages “would not further the principal goals of class actions, namely judicial economy, behavior modification, and access to justice” (para. 27, citing Atlantic Lottery at para. 68). As the Supreme Court of Canada held in Atlantic Lottery, it is not proportionate, nor in the interests of access to justice, to certify claims with no real chance of a meaningful remedy.