Keatley Surveying Ltd. v.Teranet Inc., 2014 ONSC 1677

In this case, Keatley Surveying Ltd. (the “Appellant”) appealed a decision of Horkins J., denying a motion to certify a class proceeding under the Class Proceedings Act (“CPA”). The proposed class action alleges that Teranet Inc.’s (the “Respondent”) database constitutes copyright infringement in the plans of survey under the Copyright Act. In denying the certification, the motion judge held that four of the five criteria required  by the CPA were not met, namely (1) there was no identifiable class; (2) the proposed common issues would not significantly advance the litigation; (3) a class proceeding was not the preferable procedure; and (4) the representative plaintiff did not adequately represent the interests of the class nor did it put forward a workable litigation plan. On appeal, the Appellant significantly revised its certification request.

On appeal, the Divisional Court found that the Appellant’s revisions to its request for certification made it appropriate for its case to proceed as a class proceeding. While the Respondent alleged that the Appellant’s case on appeal constituted an abusive and prejudicial re-formulation of the case on almost all of the certification criteria, the Court disagreed. The Court found no prejudice (but noted that if there were prejudice, this is exactly the sort that can be addressed through costs), and favoured deciding the matter itself, rather than remitting it back to the certification judge for a new hearing; in the Court’s view, this approach recognized the goals of judicial economy and access to justice.

With respect to the ‘identifiable class’ criterion, the motion judge found that the Appellant had not met this criterion because the class definition was “merit-based”, and because the Appellant had failed to provide satisfactory evidence that there were two or more persons “interested” in joining the action. On appeal, the Appellant submitted a new class definition, and the Court agreed that it was no longer ‘merit-based’. With respect to whether there were two or more persons “interested”, the Court found that the motion judge erred in principle when, as part of her identifiable class criterion analysis, she required the Appellant to adduce evidence that there was someone, in addition to the Plaintiff, who also wished to pursue a claim for copyright infringement against the Respondent. The Court found that the CPAdoes  not (nor does the case law) require evidence of a desire among class members to pursue an action.

With respect to the ‘common issues’ criterion, the Appellant filed a revised list of common issues on appeal, seeking to meet the concerns identified by the motion judge. The Court found the revised common issues to be suitable for certification. And with respect to the ‘preferable procedure’ criterion, the Court found that, given the revised list of common issues, the action now met the preferability criterion as well. The Court also noted that three other copyright infringement cases involving electronic databases that raised significant individual issues were also found suitable for certification.

With respect to the final issue, and whether the representative plaintiff had a workable litigation plan, the Court agreed with the motion judge that the Appellant’s circumstances were atypical of most surveyors in Ontario. However, the fact that its circumstances were “atypical” did not render it unsuitable to be a representative plaintiff. Noting that litigation plans are a “work in progress” and may have to be amended during the course of proceedings, the Court held that, if the Appellant amends its Statement of Claim to abandon its claim for an injunction, it can fairly and adequately represent the interests of the class.

As such, and subject to the Appellant amending its Statement of Claim, the Court allowed the appeal, set aside the decision of the motion judge and certified the modified common issues.