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Res Judicata - Reconsideration. David v. Loblaw Companies Limited
In David v. Loblaw Companies Limited (Ont CA, 2025) the Ontario Court of Appeal dismissed a second class proceeding certification motion, here where the plaintiff filed "an amended pleading which, in their view, corrected its deficiencies ...".
Here the court finds that the plaintiff, by their loss on the first certification motion (and by not appealing that), incurred res judicata such that seeking an amendment of the certification order was barred:[3] The principal issue in these appeals is the effect of the provision in the Certification Order refusing to grant certification against Maple Leaf on the “no cause of action” ground, namely that the pleading did not disclose a cause of action against Maple Leaf.
[4] For the reasons that follow, I conclude that a decision to refuse certification against a defendant on the no cause of action ground gives rise to res judicata and has preclusive effect. In the absence of a successful appeal of that decision it is not open to a representative plaintiff to later seek to amend the pleading and the Certification Order so as to resurrect the class proceeding against that defendant. Although in narrow circumstances a court may exercise a discretion not to apply res judicata, this is not such a case.
[5] I agree with the conclusion of the motion judge and would therefore dismiss the appeals.
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[10] In his reasons for the Certification Order,[6] the certification judge explained that the pleading against these four parent corporations simply lumped them in with their subsidiaries who actually produced or retailed bread and who were alleged to have actually taken the steps that constituted the conspiracy. The pleadings did not make particularized allegations that these parent corporations did anything to participate in the alleged conspiracy and did not plead facts that would allow the court to ignore their separate legal personalities vis-à-vis their subsidiaries.
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5. The Motion Judge’s Decision
[18] The motion judge, who was the same judge who made the Certification Order, dismissed the representative plaintiffs’ requests and granted those of Maple Leaf.
[19] Following Obodo v. Trans Union of Canada, Inc., 2022 ONCA 814, 164 O.R. (3d) 520, leave to appeal refused, [2023] S.C.C.A. No. 12, the motion judge considered that the decision to refuse certification against Maple Leaf finally decided the question of whether the representative plaintiffs could proceed against Maple Leaf. In his view neither the pleading amendment provisions of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, nor the provisions of s. 8(3) of the CPA (that permit amendments to certification orders) or s. 12 of the CPA (that permits the court to make orders respecting the conduct of a class proceeding) allowed for the revisiting of a matter that had been finally decided and had not been successfully appealed.
[20] The motion judge noted that relitigation of matters already decided based on new evidence was permitted only when a strict standard was met. He adopted, as that standard, the test for re-opening a trial to hear new evidence set out in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, which he interpreted to require evidence that would probably have changed the result if initially presented and that could not have been obtained before the initial hearing. He concluded that the evidence put forward by the representative plaintiffs, for various reasons, did not meet the test. For instance, the ASF and the court’s finding of guilt were not evidence against Maple Leaf, other evidence was not particularly new or fresh having been previously available to the representative plaintiffs, and the emails were unattested to and thus unsworn hearsay. He excluded some of the evidence as inadmissible.
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2. Discussion
a. Paragraph 5 of the Certification Order Has Preclusive Effect
[26] At the heart of the resolution of the appeals is the effect of paragraph 5 of the Certification Order which I reproduce again for ease of reference:
THIS COURT ORDERS that the causes of action alleged against Walmart Inc. (formerly known as Wal-Mart Stores, Inc.), Empire Company Limited, Grupo Bimbo, S.A.B de C.V, and Maple Leaf Foods Inc. do not meet the requirements for certification set out in section 5(1)(a) of the CPA, and shall not be certified.
[27] Bound up in the appellants’ arguments is the proposition that paragraph 5 of the Certification Order was not “final” in the sense that it did not “finally” dispose of the claim against Maple Leaf. Rather, on the appellants’ interpretation, the determination that the pleadings disclosed no cause of action against Maple Leaf was transitory – in effect unless and until the representative plaintiffs amended their pleadings, something the appellants say they maintained the right to do. Equally, according to the appellants, the determination that the causes of action alleged against Maple Leaf shall not be certified was also subject to revision in changed circumstances such as an amended pleading.
[28] I do not accept the appellants’ proposition. Paragraph 5 of the Certification Order is a final determination of the rights of the representative plaintiffs to proceed against Maple Leaf on any claim that it is liable for the conspiracy to fix the price of Packaged Bread in Canada referred to in their action. Paragraph 5 of the Certification Order gives rise to res judicata, barring any further proceedings between the parties or their privies for the same subject matter.
[29] This conclusion follows directly from Obodo, this court’s leading decision on the effect of a refusal to certify a claim because the pleadings did not disclose a cause of action. At issue in Obodo was whether such an order could be appealed directly to the Court of Appeal, which (at the time) would be the case only if the order was final. In concluding that it was final in this sense, Obodo determined that, unless successfully appealed, such an order meant the claim against the defendant could not go forward in any forum. At paragraph 16, Doherty J.A. stated:I agree with Trans Union that the order under appeal is for some purposes properly characterized as an order certifying a proceeding as a class proceeding. To the extent that the Class Proceedings Act, 1992 governs rights of appeal, the appeal from the order certifying the proceeding as a class proceeding goes to the Divisional Court with leave. However, the motion judge’s [certification] order does more than identify the claims that can and cannot go forward as part of a class action. By holding that the intrusion upon seclusion claim did not disclose a cause of action against Trans Union, the motion judge effectively determined that the claim could not go forward. The order was a final order. Mr. Obodo cannot pursue the intrusion upon seclusion claim against Trans Union in any forum, absent a successful appeal. [Emphasis added.] [30] The appellants contend that Obodo is distinguishable because the problem with the pleading in that case went beyond an absence of particularized allegations. According to the appellants, the fatal flaw in the Obodo pleading was so pronounced as to be incurable, while here it was the absence of particularized allegations. I do not accept that distinction. The effect of an order that refuses to certify a claim because the pleading fails to disclose a cause of action is the same, irrespective of the flaw in the pleading that gave rise to that order being made. One does not go behind the order and consider how close to asserting a cause of action the unsuccessful plaintiff came.
[31] The appellants do not otherwise challenge the proposition that, following Obodo, paragraph 5 of the Certification Order was final for the purpose of appeal. They resist the implications of that conclusion, both as to what the order decided and the order’s effect on further attempts to litigate the same issue, but in my view the implications are irresistible.
[32] An order is final for the purpose of appeal when it “determine[s] the real matter in dispute between the parties—the very subject matter of the litigation—or any substantive right to relief of a plaintiff or substantive right of a defendant”: Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, at para. 16. That is what paragraph 5 of the Certification Order did. It determined the subject matter in dispute between the representative plaintiffs and Maple Leaf by determining that the representative plaintiffs had not asserted a cause of action, in other words, they had no substantive right to relief against Maple Leaf arising out of the conspiracy to fix prices for Packaged Bread that is the subject of their action.
[33] As for the effect on further attempts to litigate the same or a similar issue, an order that is final for the purposes of an appeal has preclusive effect. It “gives rise to a plea of res judicata in subsequent proceedings on the same issue or issues”: V.K. Mason Construction Ltd. v. Canadian General Insurance Group Limited (1998), 1998 CanLII 14615 (ON CA), 42 O.R. (3d) 618 (C.A.), at para. 19. The doctrine of res judicata[8] prevents the relitigation of previously adjudicated matters, where the basis of the cause of action was argued or could have been argued in a prior action, the same parties were involved, and the underlying decision is final: The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, 145 O.R. (3d) 759, at paras. 50-51, leave to appeal refused, [2019] S.C.C.A. No. 284. Applying these principles, a determination on a certification motion that a pleading failed to disclose a cause of action has been held to give rise to res judicata barring a subsequent attempt to amend the pleading: Turner v. York University, 2011 ONSC 6151, at paras. 6, 60-65.
[34] The requirements for the application of res judicata to the representative plaintiffs’ motion to amend are present here.
[35] First, whether better particularized or not, the amended pleading asserts, in the relevant sense, the same claim as was rejected by the Certification Order, namely, a claim to substantive relief from Maple Leaf arising from the same alleged conspiracy. The amendment sought to the Certification Order reinforces that conclusion, as it seeks to reverse the effect of paragraph 5 and to place Maple Leaf in the category of a Certified Defendant facing Certified Claims, the very outcome that was rejected by the Certification Order itself.
[36] Second, the parties are the same. Indeed, the conspiracy alleged in the amended pleading, is among the same parties, about the same subject matter, harming the same persons, as was alleged in the prior version of the pleading that was held not to disclose any right to substantive relief against Maple Leaf.
[37] Third, as noted above, paragraph 5 of the Certification Order is final.
[38] Paragraph 5 of the Certification Order therefore stands as a bar to the representative plaintiffs’ attempt to relitigate the claim that Maple Leaf is liable for the conspiracy referred to in their action to fix the price of Packaged Bread during the time period in question, by amending their pleadings or by amending the Certification Order. . Del Grande v. Toronto Catholic District School Board [reconsideration]
In Del Grande v. Toronto Catholic District School Board (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal of a JR against school board decisions in which the appellant "was found to have breached the TCDSB’s code of conduct (the “Code of Conduct”) during a public meeting" and was sanctioned."
Here the court considered whether reconsiderations (in themselves) offend "res judicata, issue estoppel, and functus officio" doctrine in an administrative context:(3) The Reconsideration Decision did not offend re-litigation doctrines
[29] The Divisional Court did not err in rejecting Mr. Del Grande’s argument that the Board’s reconsideration of the First Decision offends the doctrines of res judicata, issue estoppel, and functus officio. These doctrines have limited application where an administrative tribunal has authority to reconsider past decisions based on its enabling statute or regulation, or on a procedural by-law it has adopted to exercise its functions pursuant to them.
[30] Relying on Chandler v. Alberta Association of Architects, 1989 CanLII 41 (SCC), [1989] 2 S.C.R. 848, at p. 861, Mr. Del Grande argues that the Board’s First Decision was final and could not be revisited simply because the Board was dissatisfied with the outcome. Chandler recognized, however, that an administrative tribunal can reconsider a past decision “if authorized by statute”. As already mentioned, the Board was broadly empowered, through the Education Act, to adopt appropriate procedures to exercise its functions and carry out its duties. The By-law it adopted expressly permitted reconsideration of past decisions. The Divisional Court therefore did not err in finding that the Reconsideration Decision falls within the exception to the general rule recognized in Chandler.
[31] Mr. Del Grande contends that, in Jacobs Catalytic Ltd. v. International Brotherhood of Electrical Workers, Local 353, 2009 ONCA 749, 98 O.R. (3d) 677, this court held that an administrative tribunal may not revisit its reasons unless its authority to do so is explicitly set out in the enabling statute. In Jacobs Catalytic, at para. 33, the court held that: “Beyond clerical or mathematical errors, or an error in expressing the tribunal’s intention, functus officio generally applies except where varied by statute.” Jacobs Catalytic is not helpful. The issue in that case was not whether an administrative tribunal had the ability to reconsider a decision – its enabling statute expressly conferred that ability – but whether it could issue supplementary reasons in the absence of a formal process of reconsideration.
[32] As held more recently by this court in Stanley v. Office of the Independent Police Review Director, 2020 ONCA 252, 81 Admin. L.R. (6th) 254, at para. 67, leave to appeal refused, [2021] S.C.C.A. No. 39211, a reconsideration power is “a complete answer to the jurisdictional objection” of functus officio. A decision-maker’s determination as to whether res judicata and issue estoppel preclude reconsideration constitutes an exercise of discretion: Fresco v. Canadian Imperial Bank of Commerce, 2022 ONCA 115, 160 O.R. (3d) 173, at para. 81; Bryton Capital Corp. GP Ltd. V. CIM Bayview Creek Inc., 2023 ONCA 363, 8 C.B.R. (7th) 22, at para. 43. As correctly held by the Divisional Court, such an exercise of discretion is entitled to deference by reviewing courts.
[33] The Divisional Court held that it was not unreasonable for the Board to respond to the community’s reaction to the First Decision, given the TCDSB’s nature, mandate, and role within the community. It noted that the Board did not make the Reconsideration and Merits Decisions on the same record as the First Decision:The evidence is that there was a public outcry in response to the First Decision. As a responsive body, the Board called a special meeting to address the issue. At that meeting, over the course of eight hours, numerous delegations including former students spoke to the impact of the First Decision on them. The Applicant’s counsel made both written and oral submissions. The Board took all of those submissions into consideration when it deliberated on the motion to reconsider the First Decision. The Board did not simply bend to public pressure and reverse the First Decision upon receiving a negative response.
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