Putting the Cart Before the Horse— Saskatchewan Carriage Disputes and Extra-Jurisdictional Class Actions

The Saskatchewan Court of Queen’s Bench recently provided further clarification of the considerations that apply to resolving “carriage disputes”. Carriage disputes involve the situation where overlapping actions are advanced in a single province by competing counsel, who each seek to certify their respective action as a class proceeding. If counsel cannot reach an agreement, it falls to the Court to decide which competing action should proceed.

Recent decisions indicate that the fact a law firm advances parallel actions in other Canadian jurisdictions is not particularly relevant to resolving a carriage dispute between two Saskatchewan actions. In fact, the existence of such extra-jurisdictional proceedings could potentially lower the probability of success on a carriage dispute if it appears that counsel would ignore their Saskatchewan action in favour of their alternate action in another jurisdiction.

In Baumung v Bayer Inc., 2016 SKQB 221 Barrington-Foote J. adjudicated a carriage dispute involving two competing Saskatchewan actions. Clayton Baumung was represented by out-of-province counsel (the “Baumung action”) while the Estate of Mike Tluchak and Verna Tluchak were represented by Merchant Law Group LLP (“Merchant Law”) in a competing action (the “Tluchak action”).

Mr. Baumung applied for carriage and to discontinue the Tluchak action. Barrington-Foote J. instead granted carriage to the Tluchak action, and stayed the Baumung action.

A central feature of Mr. Baumung’s argument was that his lawyers were advancing a parallel proceeding in Ontario (the “Ontario action”). Mr. Baumung argued that the Ontario action was more advanced than Tluchak and would almost certainly be certified. In such circumstances, he argued, granting carriage to Tluchak would result in competing national class actions in two Canadian jurisdictions, a situation best avoided.

However, Barrington-Foote J. held:

[19] It was, in my view, clear – notwithstanding this carefully crafted position – that Baumung counsel do not wish to actively pursue an action in Saskatchewan, and would do so only if and to the extent they were obliged to do so by this Court…

Barrington-Foote J. noted that Schwann J. decided Horstman v Canada, 2014 SKQB 114, 443 Sask R 164 against counsel who advanced actions in Saskatchewan and other Canadian jurisdictions but who did not actually intend to prosecute their Saskatchewan claim. Schwann J. noted that counsel effectively sought to use their Saskatchewan action, and the resulting carriage battle, as an “alternate route” to secure a stay of the Saskatchewan action being advanced by competing counsel.

Barrington-Foote J.’s analysis in Bauman largely parallels Horstman. Although he outlined a number of reasons why Tluchak was preferable, Barrington-Foote J. noted:

[37]… [T]he fact that [Merchant Law] says it is committed to moving forward with its application to certify a national class action in Saskatchewan, and has acted accordingly, weighs in favour of… Tluchak. Baumung counsel, on the other hand, made it clear that they consider the fact that they represent the plaintiff in [the Ontario proceeding], and will pursue that claim, to be the most important factor in this application…

[38] With respect, it is my view that this application is not, in substance an application for the court to choose Baumung as the action that will best advance the interests of the class. Baumung counsel seek carriage with a view to having as little as possible happen in Saskatchewan, as they wish to seek certification of, and vigorously pursue, a national class action in Ontario. There is, of course, nothing wrong with pursuing that strategy. However, in the circumstances of this case, the issue of whether [the litigation] should be dealt with in Ontario rather than Saskatchewan should be addressed at the certification hearing and not through the carriage motion.

Barrington-Foote J. noted that Baumung counsel could apply for a stay at the Tluchak certification hearing on the basis that their Ontario action was preferable to Tluchak. Such an application would be based on the multi-jurisdictional factors outlined in s. 6.1 of The Class Actions Act. This strategy was successfully employed in Ammazzini v Anglo American PLC, 2016 SKQB 53 [Ammazzini], leave to appeal granted 2016 SKCA 73. For an analysis of Ammazzini and the s. 6.1 multi-jurisdictional factors, please see our previous blog post at http://www.mlt.com/class-actions/an-analysis-of-parallel-multi-jurisdictional-class-proceedings-ammazzini-v-anglo-american-plc-2016-skqb-53/.

In Baumung, Barrington-Foote J. did not go so far as to say that the existence of a parallel action in another province will always result in a similar carriage disposition. However, the Courts will clearly be alive to the issue of whether the existence of parallel multi-jurisdictional proceedings is an issue best raised at certification, rather than a carriage battle.