Dismissal for Delay Under the Ontario Class Proceedings Act: The First Application of a New Rule

January 27, 2022

Written By Ranjan K. Agarwal and Alexander C. Payne

On October 1, 2020, significant amendments to Ontario’s Class Proceedings Act, 1992, came into force, implementing major changes to the test for certification, appeal routes, carriage motions and settlement approval.

Although these amendments generally apply only to proceedings commenced after October 1, 2020, one change applies to older proceedings: the new dismissal for delay regime under section 29.1 of the Act.

Under section 29.1 of the Act, unless certain steps are taken within the year following the start of the proceeding (such as filing “a final and complete motion record” in the motion for certification, or the court establishing a timetable for the completion of “one or more steps required to advance the proceeding”), the court “shall, on motion, dismiss for delay a proceeding.”

Under section 39(2) of the Act, all proceedings commenced before October 1, 2020, are deemed to have been commenced on October 1, 2020, for section 29.1 (making the deadline October 1, 2021, to take steps).

After the amendments came into force, there was a flurry of debate and commentary from the Ontario class actions bar as to how the courts would interpret this new provision. We now have at least one answer.

In Borque v Insight Productions Ltd., 2022 ONSC 174, Superior Court Justice Edward Belobaba (one of four judges on the Toronto Class Actions List) dismissed an action for delay under section 29.1 of the Act. In reaching his decision, Justice Belobaba made several findings, which provide direction on how the dismissal for delay provision may be interpreted moving forward:

• Dismissal for delay is mandatory. If none of the steps detailed in section 29.1(1) are taken by the one-year anniversary date, the proposed class action “shall” be dismissed for delay. The court has no discretion, including under section 12 of the Act, which gives the court broad discretionary powers to determine the conduct of the proceeding. As Justice Belobaba noted, there is nothing in section 29.1 that says “unless the court orders or directs otherwise” or “unless there is good reason not to dismiss for delay.”

• Avoiding dismissal for delay is a low bar. To avoid the application of section 29.1(1), only one of the conditions in subsections (a), (b) or (c) must be satisfied—no other relevant steps or circumstances have been specified by regulation under subsection (d). For example, a representative plaintiff can avoid dismissal for delay by establishing and filing a timetable for the service of the plaintiff’s certification motion record. Justice Belobaba defined a timetable as “a plan of times at which events are scheduled to take place, especially toward a particular end.”

In obiter, Justice Belobaba observed that compliance with section 29.1 is “easy” and non-compliance although “inconvenient, is not particularly onerous” since a different representative plaintiff can start a different proceeding asserting the same causes of action against the same defendants (assuming such a new claim is not otherwise subject to a limitation time-bar).

This comment is arguably at odds with Justice Belobaba’s other comments that the purpose of section 29.1 of the Act is “to help advance class action proceedings that otherwise tend to move at glacial speed."

In particular, if a class proceeding can simply be reconstituted by the same class counsel, making the same allegations, with a different representative plaintiff—thereby restarting the section 29.1 clock—the effect of section 29.1 may prove to be limited (assuming that a limitation bar has not intervened), and its legislative intent may not be satisfied.

Justice Belobaba’s application of the section 29.1 test for dismissal strictly follows the text of the legislative amendment. Other judges may adopt his reasoning, or decide that a more liberal interpretation of section 29.1 is necessary. It is also possible that the plaintiff in Borque appeals the decision, allowing the Court of Appeal to make a binding decision.

Whether a class proceeding can simply be reconstituted as suggested, or whether the defence of abuse of process applies, remains to be litigated another day.

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