On March 14, 2016, the decision Hafichuk-Walkin v. BCE was rendered by the Manitoba Court of Appeal, dismissing the appeal, thereby confirming the motion judge’s decision to unconditionally stay the duplicative proceeding on the ground of an abuse of process.
This case began more than a decade ago in 2004 when Merchant Law Group (“MLG”) instituted the Frey/Chatfield action in Saskatchewan seeking certification of a national class action against almost all the Canadian wireless telecommunications companies with regard to “system access fees” (“SAF”). The same action was then filed by MLG before eight other jurisdictions with similar claims and overlapping class members.
Based on the court record, the Court of Appeal concluded that MLG never had the intention to pursue the claims filed elsewhere than Saskatchewan which was the only jurisdiction before which MLG successfully certified one aspect of its claims, that is, on the ground of unjust enrichment. In the other jurisdictions, the proceedings remained dormant for 10 years at the pleadings stage until the various defendants sought to have them stayed, and succeeded in having them either stayed or dismissed in Nova Scotia, Alberta, British Columbia, Saskatchewan and Manitoba:
- In Nova Scotia, in Gillis v BCE Inc., the Supreme Court of Nova Scotia declined to grant the stay sought by defendant. The Court of Appeal, in BCE Inc. v Gillis, reversed that decision and granted an unconditional stay.
- In Alberta, a first SAF class action was commenced by MLG and dismissed for delay in 2014 in the decision Pappas v BCE Inc. A second SAF class action was then filed in which the Court of Queen’s Bench of Alberta initially declined to grant a permanent stay. This decision was reversed by the Alberta Court of Appeal in Turner v BCE Inc.
- In British Columbia, the class action was stayed conditionally as an abuse of process in the decision Drover v BCE Inc.
- In Saskatchewan, MLG filed a second SAF class action in 2009, the Collins action, that was essentially the same action as the Frey/Chatfield action, with the only difference of being an opt-out action for non-residents rather than opt-in. The Court conditionally stayed the action on the ground of an abuse of process in the decision Collins v BCE Inc.
The court opined that the plaintiffs demonstrated very little diligence with regards to these proceedings. In closing, the Manitoba Court of Appeal described these proceedings as “carbon copies” and concluded to their abusive nature.
The Manitoba Court of Appeal pointed out that parallel multi-jurisdictional class actions on behalf of overlapping class members from one or more jurisdictions are not inherently abusive. They can be justified by a variety of circumstances, such as the lack of a national framework for the prosecution of class actions, issues concerning the recognition by other jurisdictions’ judgments in a national class action, concerns on the tolling of limitation periods for non-residents of the opt-in jurisdiction. The court considers it an abuse of process when simultaneous class actions in various jurisdictions are filed as an overall strategy, or as the court puts it, “as nothing more than a form of insurance for the possibility of an unsuccessful result in that jurisdiction on the claim of unjust enrichment”, with the intention of only advancing it in one jurisdiction.
Leave to appeal to the Supreme Court of Canada
Leave to appeal has been sought from plaintiffs regarding the decisions from the Alberta and Nova Scotia Courts of Appeal. It remains to be seen how the Supreme Court of Canada will decide this particularly unique question.