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Class Proceeding (Fed) - Appeals. Brink v. Canada [SOR for 'cause of action']
In Brink v. Canada (Fed CA, 2024) the Federal Court of Appeal considered the appellate standard of review (SOR) for issues of striking of pleadings, and as well here for the related legal step of certification of a class action:V. Standard of Review
[40] Whether a pleading discloses a cause of action is primarily a question of law. The standard of appellate review of the Federal Court’s decision on both the motion to strike and the first certification condition is thus that of correctness: Canada (Attorney General) v. Nasogaluak, 2023 FCA 61 at para. 21; Pioneer Corp. v. Godfrey, 2019 SCC 42 at para. 57; Canada (Attorney General) v. Jost, 2020 FCA 212 at para. 21. On this standard, this Court owes no deference to the Federal Court: Housen v. Nikolaisen, 2002 SCC 33 at para. 8. . Canada v. Hudson
In Canada v. Hudson (Fed CA, 2023) the Federal Court of Appeal considered (and dismissed) Crown appeals of stays issued [under Federal Court Act s.50(1)(b)] against two RCMP-related uncertified class actions (Hudson and Pierrot), here on the basis that they were duplicative of pre-existing (and certified) class actions (Greenwood and AMPMQ).
Here, the court characterizes the nature of class action 'certification':[69] First, I do not accept that there is an extricable question of law. It is well-established that certification is not a determination of the merits of claims in a class proceeding: Hollick at para. 16; Pro‑Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 at para. 99; Bowman v. Ontario, 2022 ONCA 477 at para. 37. Certification simply means that the action is appropriately prosecuted as a class proceeding: Hollick at para. 16. . Jensen v. Samsung Electronics Co. Ltd. [SOR for 'cause of action' element]
In Jensen v. Samsung Electronics Co. Ltd. (Fed CA, 2023) the Federal Court of Appeal considered the standard of review that applies to the determination of whether a 'reasonable cause of action' exists, here for class action certification pleadings purposes:[33] The appellants and the respondents joined issue over the standard of review with respect to the first question. The appellants argued that the assessment of the reasonable cause of action requirement is a pure question of law reviewable on the correctness standard, whereas the respondents are of the view that in this case, the issue lies not so much on the requirements of the asserted cause of action (a question of law), but on whether the pleaded facts satisfy these requirements (a question of mixed fact and law).
[34] Having carefully reviewed the case law submitted by both parties in their reply and sur-reply memoranda, I come to the conclusion that the applicable standard of review in the particular circumstances of this case is the palpable and overriding standard.
[35] The appellants rely on the decision of the Supreme Court of Canada in Godfrey, as well as on this Court’s decision in John Doe and numerous provincial appellate courts decisions, for the proposition that "“whether a pleading discloses a reasonable cause of action is a question of law, reviewable on the standard of correctness”" (Appellants’ Reply Memorandum at para. 6). In my view, this is an inaccurate and distorted reading of the case law.
[36] In most cases, determining whether a pleading discloses a cause of action involves essentially the identification of the proposed cause of action and whether it is cognizable in Canadian law. This was precisely the case in Godfrey, where the issue was whether "“umbrella purchasers”" (i.e., purchasers of products manufactured and supplied by someone other than the defendants, but who allege that the defendants’ price-fixing conduct raised the market price of the product) have a cause of action under paragraph 36(1)(a) of the Act. As the majority stated at paragraph 61 of its reasons, this was a question of statutory interpretation. It was clear that if the answer to that question was positive, the facts pleaded made out the claim; in that context, whether umbrella purchasers had a cause of action was undeniably a question of law reviewable on a standard of correctness (Godfrey at para. 57).
[37] The same was true in all the other cases referred to by the appellants in their reply memorandum (footnotes 5 to 10), and in the John Doe decision of this Court upon which the appellants rely extensively. At issue in that case was whether the statement of claim disclosed a reasonable cause of action for breach of contract, negligence, breach of confidence, intrusion upon seclusion, publicity given to private life and breach of the right to privacy under sections 7 and 8 of the Canadian Charter of Rights and Freedoms. These issues were first and foremost of a legal nature, and it is in this context that must be read the comments of the Court relied upon by the appellants. In that context, the Court stated that the assessment of the reasonable cause of action criterion differs from the last four certification criteria because it "“involves essentially legal reasoning, that is, whether the applicable legal criteria to make out a certain claim have been met”": John Doe at para. 30. Other cases of this Court are to the same effect: see King v. Canada (Attorney General), 2010 FCA 122, [2010] F.C.J. No 634 (QL) at para. 5; Jost at paras. 21, 47-48; Bauer v. Canada, 2018 FCA 62, 289 A.C.W.S. (3d) 880 at para. 7.
[38] In some instances, however, the question to be resolved is not so much whether the alleged cause of action is indeed a valid cause of action, but rather whether the pleaded facts, assuming they are true, satisfy the requirements of the asserted cause of action. Even if facts are to be taken as pleaded and need not be proven with evidence, they must still be considered and capable of supporting the cause of action. As this Court stated in John Doe (at para. 23), "“[w]hile the facts alleged are assumed to be true, they must still be pleaded in support of each cause of action. Bald assertions of conclusions are not allegations of material fact and cannot support a cause of action”". That second part of the analysis is not a legal question, but a question of mixed fact and law reviewable on the palpable and overriding error standard.
[39] In the case at bar, there is no dispute as to the first part of the test: a breach of sections 45 or 46 of the Act clearly triggers the section 36 cause of action. What is at stake is whether the facts, as pleaded in the statement of claim, support the cause of action. It is very clear from the jurisprudence that this second part of the analysis does not raise a pure question of law. Nowhere did the Supreme Court state, in Godfrey or elsewhere, that the overall determination of whether a pleading discloses a reasonable cause of action is a pure question of law. That question must be broken down into two parts: (1) whether the alleged cause of action exists in law, and (2) whether the pleaded facts can ground the cause of action. That second part of the question is clearly not a pure question of law.
[40] It is true that in John Doe, this Court did not spell out explicitly these two parts of the test. As explained above, the inquiry about the reasonable cause of action requirement in that case revolved for the most part around the existence at law of the alleged causes of action. That did not prevent the Court, however, from dismissing some of the causes of action on the ground that they were not supported by the pleaded facts. At paragraph 45, for example, the Court stated that there was "“a total lack of any material facts”" to support the pleading of an alleged breach of contract, and that it was "“in and of itself a sufficient basis to dismiss that cause of action”". Similarly, the Court found that the alleged tort in publicity given to private life and of intrusion upon seclusion should have been rejected because they were not supported by any material facts: John Doe at paras. 53, 56 and 58.
[41] Most recently, the Ontario Court of Appeal drew the same distinction between the legal and factual components of the reasonable cause of action requirement in PMC York Properties Inc. v. Siudak, 2022 ONCA 635, 2022 A.C.W.S. 3647. At paragraph 29, the Court wrote:As framed by the plaintiffs’ arguments, the motion judge’s assessment of the defamation claim was not a pure legal analysis. It required the application of the legal standard of the modern, flexible approach to defamation pleadings to an assumed set of facts, a question of mixed fact and law. At their core, the plaintiffs’ submissions did not require the motion judge to determine whether Mr. Siudak’s pleadings disclosed a known and tenable cause of action but, rather, whether the known cause of action was pleaded with sufficient particulars to satisfy the modern, flexible approach to defamation pleadings. The motion judge’s analysis therefore attracted a deferential standard. [42] In light of the above, I agree with the respondents that the decision of the Motion Judge to dismiss the appellants’ certification motion on the basis that the statement of claim does not disclose a reasonable cause of action is reviewable on the deferential standard of palpable and overriding error, as it rests on the Motion Judge’s finding that the pleaded facts do not satisfy the requirements of the asserted cause of action, as opposed to the existence of that cause of action in Canadian law.
[43] On the second question, the parties are in agreement that the applicable standards of review are those set out in Housen. As a result, the identification by the Motion Judge of the test to determine whether there is a basis in fact for the proposed common issues is a question of law to be reviewed on the correctness standard. The application of that test to assess whether the claims’ proposed class members do raise common issues is a mixed question of fact and law, to be reviewed on the standard of palpable and overriding error: see John Doe at paras. 29-31; Horseman v. Canada, 2016 FCA 238, 271 A.C.W.S. (3d) 707 at para. 4; Condon v. Canada, 2015 FCA 159, [2015] F.C.J. No 803 (QL) at para. 7 [Condon].
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