In its recent decision in Cavanaugh v Grenville Christian College, the Ontario Divisional Court applied the Supreme Court of Canada’s recently “refined” analytical framework for the preferable procedure inquiry to reverse the decision of an experienced class actions judge and certify a class action against a boarding school and individual employees.

The Claim

In Cavanaugh, the plaintiffs alleged that they were subjected to systematic and pervasive physical and psychological abuse while they attended Grenville. The plaintiffs asserted claims for breach of fiduciary duty, negligence, assault, battery and intentional infliction of mental suffering.

Certification Denied by Justice Perell

At first instance, Justice Perell denied certification on the basis that the plaintiffs had failed to satisfy the preferable procedure requirement of the certification test.

In reaching his decision, Justice Perell noted that “a class proceeding will not satisfy the requirement that it be the preferable procedure to resolve the common issues if the common issues are overwhelmed or subsumed by the individual issues such that the resolution of the common issues will, in substance, mark just the beginning of the process leading to a final disposition of the claims of class members”. However, Justice Perell also noted that a class proceeding may be the preferable procedure even though significant individual issues remain to be resolved after the common issues trial.

After considering the nature of the plaintiffs’ claims and the circumstances of the case, Justice Perell determined that, although the class members could rely on the findings from the common issues trial, in order to prove causation and damages, they would have to replicate the fact-finding and legal analysis from the common issues trial. Justice Perell concluded that such a process:

  1. Would impede, not facilitate, access to justice; and
  2. Would not achieve the objectives of judicial economy or behaviour modification.

Certification Granted by the Divisional Court

The Divisional Court determined that Justice Perell made a palpable and overriding error in both his analysis and decision on the preferable procedure requirement because he failed to consider the “other relevant criteria” and proceeded on the basis that the common issues would be overwhelmed by the individual issues.

Justice Rady noted that Justice Perell did not have benefit of the Supreme Court of Canada’s December 2013 decision in AIC Limited v Fischer – a decision that she characterized as “refining” the framework for the preferable procedure inquiry. Justice Rady focused on the access to justice component of the “refined” framework. She determined that the costs order issued against the plaintiffs following the unsuccessful certification motion suggested that most individuals would not be able to “pursue litigation on this scale” and, therefore, she concluded that there was a powerful economic barrier to access to justice. Justice Rady also determined that the proposed common issues would move the litigation forward and, therefore, a class action would achieve the objective of judicial economy. As a result, she concluded that a class action was the preferable procedure.

An Unequal Balance?

The Divisional Court’s decision in Cavanaugh is noteworthy because it is one of the first decisions that relies upon Fischer.

The Divisional Court’s decision (which appears to be based to some degree upon the certification of other cases involving similar circumstances and common issues) did not address in detail the concerns that Justice Perell concluded were fatal to the plaintiffs’ certification motion. In particular, the Divisional Court did not discuss the nature and significance of the individual issues that would need to be resolved following a common issues trial – issues that Justice Perell determined related to the fundamental questions of causation and damages.

Instead, the Divisional Court resolved the preferable procedure inquiry on the basis that:

  1. Since a significant costs order was made against the plaintiffs in connection with the failed certification motion, there was a powerful economic barrier to access to justice that would be addressed by a class action; and
  2. Since there were common issues, there would necessarily be judicial economy.

The Divisional Court’s approach emphasizes the goal of access to justice, but does not provide a detailed discussion of whether the class action be fair, efficient and manageable. How this approach will influence certification motions, particularly in jurisdictions where costs are not available, remains an open question.