As we have discussed before, Canadian courts are grappling with a number of considerations involved in multijurisdictional class actions. Justice Perell’s recent carriage decision in a securities class action is one such example, which involves a discussion of the interplay of relevant factors when class counsel launch multiple class actions across the country.
In this carriage fight, the most prominent and contentious element which strongly influenced Justice Perell’s decision was the interrelationship between the proceedings in British Columbia, Ontario and Québec. In fact, this factor was “substantial” and the “determinative tipping point factor” in Justice Perell’s decision to provisionally grant carriage to the proposed Representative Plaintiff in one of the Ontario actions, Ms. Kowalyshyn, and to temporarily stay the proposed class action of the proposed Representative Plaintiff in the other Ontario action, Ms. O’Brien, subject to the stay being lifted if one of the following conditions were met:
- Mr. Catucci (the Representative Plaintiff in the proposed class action in Québec) or the Defendants bring a motion to stay the Kowalyshyn Action;
- Ms. Kowalyshyn agrees that Ms. O’Brien’s action be consolidated with her action; or
- Ms. O’Brien shows strong cause that the temporary stay should be lifted.
Questions on a Carriage Motion
The questions of significance raised by this carriage motion are two-fold:
- How far the court can and should explore the likelihood of whether the competing case theories would succeed on the merits and yield optimum compensation for the putative Class Members; and
- The relevance of parallel and multijurisdictional class actions.
Before addressing these questions, Justice Perell summarized the test for carriage as follows:
“the court will grant carriage to the putative class counsel whose proposed action in the province is better for the interests of the putative class members while being fair to the defendants and while promoting the prime objectives of class proceedings, which are access to justice for plaintiffs, class members, and defendants, behaviour modification, and judicial economy”
Justice Perell identified and examined the applicability of a list of 14 non-exhaustive factors established by case law. For the purposes of this case, Justice Perell added two factors: prospect of success against the Defendants and the interrelationship of multijurisdictional class actions.
A Critical Examination of the Qualitative Merits?
In his treatment of the case theories and the factors connected to it, such as the prospect of success against the Defendants, Justice Perell characterized such a merits-based analysis as “a serious feasibility and jurisdictional problem for the court”, holding that such determination “cannot be properly made on a carriage motion”. In determining that class counsel went “far beyond” substantive and evidentiary arguments that may arise even at the certification stage, Justice Perell noted that:
“the court on a carriage motion is as likely to predict who will win the litigation as were the bookies in England who set the odds at 5000-to-1 that Leicester would win the Premier League”
However, courts can still look at case theories for the limited purpose of identifying conspicuous or egregious problems, or readily apparent advantages and disadvantages, that may arise on the face of the competing theories.
Avoiding a Multiplicity of Proceedings
In situating his decision in the broader context of class actions, Justice Perell noted that “carriage motions are an aspect of the larger problem of avoiding a multiplicity of proceedings, which is a complex problem”. Further, Justice Perell upheld judicial economy and avoidance of a multiplicity of proceedings as foundational principles of civil procedure and, in turn, class proceedings.
There are numerous considerations identified in the decision that are engaged by a multiplicity of proceedings in the class actions context, such as constitutional law, conflicts of law rules, policy goals, economics, court parochialism and insularity, lawyer avarice and lawyer conflicts of interest. Justice Perell identified “at least six problems”, including the absence in Canada of a mechanism that exists in the United States to consolidate proceedings that are initiated in several jurisdictions.
Justice Perell held that the carriage motion was a “camouflaged stay motion” brought by Ms. O’Brien for her ally Mr. Catucci, who commenced a global action in Québec, noting that the purpose of Ms. O’Brien’s Ontario action was “not entirely clear”. Justice Perell found that Ms. O’Brien’s Ontario action was likely aimed at maintaining class size and Class Member loyalty and protecting the viability and strength of the global Québec action. In finding this, Justice Perell held that the multiplicity of proposed class actions strongly favoured granting carriage in Ontario to Ms. Kowalyshyn.
Justice Perell noted that the ultimate question which requires litigation and is in the best interests of the Class Members across Canada and most fair for the Defendants, is how many class actions are needed to serve the purposes of the class action regimes across the country.
Take-Aways of this Decision
This carriage decision highlights the complexity of interdependent factors involved in multijurisdictional class actions and the weighing of access to justice and judicial efficiency by the courts in exercising their discretion to effectively manage class actions across Canada. It also demonstrates the court’s willingness to take an expansive view of the overall proceedings, both jurisdictionally and substantively, with a view to assessing the best interests of the class.