In Home Depot of Canada Inc. v Hello Baby Equipment Inc., 2020 SKCA 7, the Court of Appeal confirmed that in Saskatchewan, individual class members have no right to appeal settlement approval orders – even where they appear as objectors and make submissions before the court of first instance.
This decision is consistent with the approach taken by other appellate courts across the country. Home Depot and Wal-Mart have attempted to appeal from related settlement decisions across the country. To date, they have had their appeals quashed on similar bases by the courts of appeal in Ontario, British Columbia, and Quebec, and have now sought to appeal from those decisions to the Supreme Court. But, unless the Supreme Court determines otherwise, the Court of Appeal’s decision means that individual class members have no right of appeal from decisions approving settlement agreements.
Class proceedings were initiated in British Columbia in 2011 against banks that issue credit cards in Canada, including Visa Canada Corporation, Mastercard International Incorporated and National Bank of Canada Inc. Similar actions were also commenced in Alberta, Saskatchewan, Ontario and Québec.
Then, in 2017, settlements were reached in these class proceedings between the representative plaintiffs and Visa, Mastercard and National Bank. Pursuant to the class action legislation in each province, before the settlements became effective, court approval was required.
The settlements then went before the provincial superior courts in British Columbia, Alberta, Saskatchewan, Ontario and Québec. Before each court, Home Depot and Wal-Mart objected to the settlements. Yet despite these objections, the courts in each province approved the 2017 settlements. Home Depot and Wal-Mart subsequently appealed these decisions to the appellate courts in each respective jurisdiction.
Prior to the matter coming before the Court of Appeal in Saskatchewan, the appellate courts in British Columbia and Ontario found that Home Depot and Wal-Mart were without a right of appeal from the settlement approval decisions. They did so on the basis that class members are not “parties” to the litigation and settlement approval is not a “judgment on common issues” nor a “determination of aggregate damages” under the legislation.
More broadly, the British Columbia and Ontario courts focused on the policy reasons why class members should not be entitled to appeal settlement orders. They found that this would be problematic in several ways because it would ultimately lead to uncertainty and inefficiency. Consequently, the courts quashed the appeals brought by Home Depot and Wal-Mart.
The Saskatchewan Decision
As in the other jurisdictions, the Saskatchewan Court found that individual class members have no right of appeal from decisions approving settlement.
Wal-Mart and Home Depot advanced three arguments. Specifically, they argued that (i) they were “parties” for the purposes of The Class Actions Act and entitled to exercise the rights of appeal conferred upon parties, (ii) the rights of appeal in The Class Actions Act are not exhaustive, and they could exercise the general rights of appeal established by The Court of Appeal Act, 2000, and (iii) they should be granted leave to act as the representative plaintiff for the purposes of bringing an appeal.
The Court of Appeal’s conclusions with respect to these arguments under The Class Actions Act can be summarized as follows:
- class members are not “parties” for the purposes of the appeal provisions;
- while Home Depot and Wal-Mart relied on the definition of “party” in The Queen’s Bench Act, 1998, this definition did not apply to class members because they were not persons served, or entitled to be served;
- even if Home Depot and Wal-Mart were parties, a settlement approval order is not a “judgment on common issues” from which parties have a right to appeal;
- section 39 of The Class Actions Act specifies and limits the appeal rights of class members such that the general rights of appeal contained in The Court of Appeal Act, 2000 do not apply; and
- Wal-Mart and Home Depot should not be granted leave to act as the representative plaintiff for the purposes of the appeal pursuant to s. 39(4) of The Class Actions Act, because representative plaintiffs can appeal “judgments on common issues” – which the order approving the settlement was not.
Throughout its reasons, the Court of Appeal placed considerable emphasis on the nature of the statutory scheme set out in The Class Actions Act. It found that class members are protected by the provision of opt-out rights, the requirement of court approval of any settlement and the court’s discretion to hear submissions from class members at settlement hearings. Echoing the Ontario Court of Appeal, it found that permitting class members to appeal from a settlement approval decision “would introduce uncertainty into the negotiation and approval of settlements, undermine the authority of the representative plaintiffs and of class counsel, and impede settlement”.
Looking ahead, the Court of Appeal’s decision further affirms:
- it is representative plaintiffs who are given the authority to control the conduct of class proceedings;
- individual class members are not “parties” to class proceedings; and
- instead, individual class members are protected through means such as opt-out rights, the court approval requirement and the court’s discretion, rather than through the provision of appeal rights.
Further, the Court of Appeal has now clarified – subject to the Supreme Court deciding otherwise – that individual class members have no rights of appeal from decisions approving settlement agreements.