Early 2022 decisions interpreting Ontario’s new mandatory dismissal for delay regime were glad tidings for defendants, suggesting the regime would be strictly applied. However, over the course of 2022, the pendulum swung in the other direction, with an increasingly flexible approach being applied.
The more recent approach of Ontario courts suggests that the dismissal for delay regime is not the dipositive blunt instrument that defendants may have hoped it would be.
The dismissal for delay regime now applies to all Ontario class actions. The Class Proceedings Act (the Act) states that the court shall, on motion, dismiss a proposed class proceeding for delay, unless by the first anniversary of when the proceeding was commenced:
The first decision interpreting the dismissal for delay regime was Borque v. Insight Productions Ltd. [Borque], a proposed class action alleging employee misclassification by television production companies.
On the motion for dismissal for delay, Justice Belobaba found that because none of the steps contemplated by section 29.1(a) to (d) had been taken, he had no discretion not to dismiss. Justice Belobaba emphasized the mandatory language of the Act, finding, simply, that: “s. 29.1 of the CPA means what it says.”
The second dismissal for delay decision was rendered in Lamarche v. Pacific Telescope Corp. [Lamarche], a proposed class action regarding alleging price-fixing by telescope manufacturers.
Justice Gomery's approach tracked that of Justice Belobaba—Justice Gomery rejected novel arguments why the proceeding should not be dismissed for delay, including the arguments that (1) the class action was meritorious (Justice Gomery found this was “irrelevant”), and (2) section 29.1 creates hardship for plaintiffs in class proceedings involving foreign defendants (Justice Gomery found “class counsel...must live with the section as enacted”).
The next four section dismissal for delay decisions diverged from the strict approaches taken in Borque and Lamarche, suggesting an increasingly flexible approach to the regime.
In St. Louis v. Canadian National Railway Company [St. Louis], Justice Gordon presided over a dismissal for delay motion heard in 2022. In St. Louis, the parties had attended at a case conference on October 13, 2017. At that case conference, a second case conference was scheduled for mid-June 2018.
When considering whether to dismiss for delay, Justice Gordon ultimately found that the scheduling of the mid-June 2018 case conference met the requirements of section 29.1(c), being a timetable set by the Court for the completion of one or more steps to advance the proceeding. Justice Gordon commented that “[i]t is to be noted that s. 29.1 (1)(c) does not require the actual advancement of the action or that the parties proceed with scheduled steps. It only requires the court to have established a timetable for a single step required to advance the proceeding.”
Justice Gordon further commented in obiter that the plaintiffs “were not sitting entirely still” and were making efforts to have environmental studies conducted. Those efforts were hampered by COVID-19. This "not entirely sitting still" theme seems to have been picked up in subsequent decisions.
In Lubus v. Wayland Group Corp. [Lubus], a proposed class proceeding arising out of alleged misrepresentations made by a cannabis company and its underwriters, the dismissal for delay analysis turned on whether either the steps in section 29.1(b) or (c) had been met. In assessing whether to dismiss, Justice Morgan stated that “context counts”, and found that his decision to decline to schedule any step in the proceeding until the plaintiffs resolved the issues raised by their decision to commence multiple proceedings with the same allegations—which the plaintiffs did do—provided “room to conclude” that the terms of section 29.1(c) had been met.
In D’Haene v. BMW Canada Inc., Justice Perell considered a motion for dismissal for delay in one of a cluster of six national proposed class actions against 12 groups of car manufacturers. Two of the manufacturers sought dismissal. Justice Perell noted that the moving manufacturers had advanced “a straightforward argument” that none of the criteria of section 29.1 had been met, and accordingly, the action as against them must be dismissed for delay.
However, while Justice Perell found that he was required to dismiss the action, he held he could do so on terms. In particular, the dismissal order would be set aside if the representative plaintiffs filed a final and complete certification record in 30 days, which he described as a “Phoenix Order.”
Justice Perell explained that a Phoenix Order was appropriate because “there is a great deal of procedural gamesmanship and opportunism and very little actual procedural prejudice” to the two defendants, which had “been active participants in activities in the immediate action, and from time to time they have been engaged in activities that have affected all six” actions.
There is also at least one instance of a Judge proactively deeming that his order constituted a section 29.1 step. In Buis v. Keurig Canada Inc., Justice MacLeod presided over a case conference in a proposed Ontario class proceeding, with overlapping proposed class proceedings in Federal Court and in British Columbia.
In order to permit time for the carriage dispute to be resolved, Justice MacLeod ordered and directed the plaintiff to serve its certification record on a date “to be fixed by” the Court. Arguably contrary to earlier section 29.1 decisions that indicated the “timetable” contemplated by the section 29.1 steps required some specificity (but consistent with the ruling in Lubus) Justice MacLeod ordered that his “date to be fixed by” timetable “shall be deemed to comply with s. 29.1(c) of the Act”.
The jurisprudence developed over the course of 2022 evidences a range of approaches taken by Ontario Superior Court judges to the interpretation and application of section 29.1.
However, Justice Belobaba’s comment in Borque that “compliance is easy” has proven increasingly accurate. The current state of the law suggests that defendants may face real challenges on a dismissal for delay motion unless (1) the plaintiff concedes, or (2) the plaintiff has taken no steps whatsoever since the launching of the action. The presence of some action by plaintiffs was a common factor in the decisions rendered in the latter part of 2022 refusing (or effectively refusing) to dismiss for delay.
It remains to be seen whether an Ontario appellate court will render a decision in 2023 that solidifies the approach to motions under section 29.1, and if so, the flexibility of that approach.