Once a class action is certified, Ontario’s Class Proceedings Act requires that class members be sent a notice describing, among other things, the nature of the class action, how to opt out, and how the action may affect their rights. The notice must be informative, accurate, balanced, and independent. It should enable class members to make informed decisions about their legal rights and enable them to decide on an informed basis whether to remain in or opt out of the class action. Normally, the representative plaintiff must bear the costs of that notice. However, the court has a broad discretion and there are exceptions to that general rule.
Fantl v ivari represents one such exception. The defendant ivari took the “somewhat counter-intuitive and unexpected” position that the plaintiff’s notice plan was insufficient and asked for a more robust – and expensive – notice plan. Justice Perell accepted ivari’s position. However, that victory came at a cost: as ivari was judged to be the main beneficiary of the more extensive notice plan, it was ordered to pay two-thirds of the associated costs.
The plaintiff originally asserted two claims relating to an investment option known as the Can-Am Fund provided by a predecessor of ivari: (i) a claim for management fee overcharges; and (ii) a claim for breach of contract and negligent misrepresentation based on the Can-Am fund’s alleged underperformance. The management fee claim was settled in 2009. The underperformance claim continued and was certified in 2013.
Following certification, the parties disagreed about the plaintiff’s proposed notice plan. ivari was concerned that the notice would not reach all class members, which in turn could result in courts outside Ontario refusing to enforce a subsequent settlement or judgment in ivari’s favour. The plaintiff did not oppose ivari’s proposed notice plan, so long as ivari paid for it.
ivari’s more extensive notice plan approved
Justice Perell admitted that but for ivari’s submissions, he would have approved the plaintiff’s notice plan. However, he ultimately agreed that ivari’s submissions had merit. He referred to appellate decisions in Ontario, Quebec, and Manitoba that had refused to enforce class action judgments or settlements approved in other jurisdictions on the basis that notice had been deficient. Justice Perell agreed that it was reasonable in the circumstances that ivari wanted a more extensive notice plan because the plaintiff’s action was a national class action where a substantial number of class members resided outside Ontario. Therefore, he approved ivari’s notice plan.
ivari ordered to pay two-thirds of the notice plan costs
Justice Perell then addressed the costs of the notice plan. He noted that the normal order is for the representative plaintiff to bear the costs. However, the court has a broad discretion to make a different order, including ordering that the costs of the notice be shared or borne by the defendant alone. In the case before him, Justice Perell ordered that ivari pay two-thirds of the notice costs. As ivari was the predominant beneficiary of the more robust notice plan, he concluded that it should bear the greater proportion of the costs.
Although the primary focus of a notice plan is on the absent class members that will receive the notice and the adequacy of such notice, the decision in Fantl demonstrates that a court will be willing to account for a defendant’s interests as well and order a more extensive plan to ensure the enforceability of a favourable judgment or settlement. At the same time, that additional benefit can come with a price as defendants may be required to pay if they request a more robust notice plan.