British Columbia Class Action Lawsuits are governed by the BC Class Proceedings Act.

When a Plaintiff files a claim in the BC Supreme Court and wishes to get it ‘certified’ as a Class Action what factors are considered by the court?  Reasons for judgement were released this week by the Mr. Justice Goepel of the BC Supreme Court discussing this area of the law.

In this week’s case (MacFarlane v. United Parcel Service Canada Ltd.) the Plaintiff filed a claim against UPS Canada for allegedly improperly collected charges.  The Plaintiff sought to be appointed as the representative of the following class of persons:

All persons who paid to United Parcel Service Canada Ltd., while resident in British Columbia, Fees charged by United Parcel Service Canada Ltd., which include Custom Brokerage Fees, Disbursement Fees (also known as Bond Fees) and C.O.D. Fees plus applicable Goods and Services Taxes.

Mr. Justice Goepel found that this case was not appropriate certification and dismissed the Plaintiff’s motion.  In doing so he discussed the law relating to the factors relevant to certification as follows:

REQUIREMENTS FOR CERTIFICATION

[25]        The requirements for certification are set out in s. 4(1) of the CPA:

4(1)      The court must certify a proceeding as a class proceeding on an application under section 2 or 3 if all of the following requirements are met:

(a)        the pleadings disclose a cause of action,

(b)        there is an identifiable class of 2 or more persons,

(c)        the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members,

(d)        a class proceeding would be the preferable procedure for the fair and efficient resolution of common issues, and

(e)        there is a representative plaintiff who

(i)         would fairly and adequately represent the interests of the class,

(ii)        has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii)       does not have, on the common issues, an interest that is in conflict with the interests of other class members.

[26]        Section 7 of the CPA illustrates the legislative intention that courts should take a broad remedial approach to the certification of actions.  It eliminates many of the possible impediments to the certification of class actions:

7   The court must not refuse to certify a proceeding as a class proceeding merely because of one or more of the following

(a)        the relief claimed includes a claim for damages that would require individual assessment after determination of the common issues;

(b)        the relief claimed relates to separate contracts involving different class members;

(c)        different remedies are sought for different class members;

(d)        the number of class members or the identity of each class member is not known;

(e)        the class includes a subclass whose members have claims that raise common issues not shared by all class members.

[27]        In recent years, the courts have developed some general principles of law which govern certification applications.  These principles were reviewed in Knight v. Imperial Tobacco Canada Ltd., 2006 BCCA 235, 54 B.C.L.R. (4th) 204 at para.  20:

The Supreme Court of Canada has discussed the approach that ought to be taken by a court to certification issues in a number of recent cases, including Hollick v. Toronto (City), [2001] 3 S.C.R. 158, 2001 SCC 68; [Hollick]; Rumley, supra; and Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 SCR 534, 2001 SCC 46.  What I distill from those cases is that class proceedings legislation ought to be construed generously.  Class actions serve judicial economy by avoiding unnecessary duplication in a multiplicity of actions, improve access to justice and serve to modify wrongful behaviour.  It is necessary that the statement of claim disclose a cause of action, but the certification stage is not a test of the merits of the action.  What the certification stage focuses on is the form of the action.  The key question is whether the suit or portions of it are appropriate for the trial of common issues.

[28]        In determining whether a class proceeding is an efficient and fair procedure by which to try a claim, consideration must also be given to whether the claims have an “air of reality”: Nelson v. Hoops L.P., 2003 BCSC 277 at para. 38.  As noted by Bauman J. (as he then was) in Samos Investments Inc. v. Pattison, 2001 BCSC 1790 at paras. 155-57, 22 B.L.R. (3d) 46, aff’d 2003 BCCA 87, 10 B.C.L.R. (4th) 234:

[155 ]   If certified, this proceeding would subject the defendants to an exceedingly expensive defence against allegations of the most serious nature. One cannot imagine a fraud or conspiracy more scandalous than that pled here. And because of s. 37 of the Act, if certified, the plaintiff will prosecute the proceeding protected from an award of costs against it if it does not make out its allegations, subject only to the limited exceptions set out in s. 37(2).

[156]    This leads counsel, in particular Mr. Wood for CIBC and Mr. Taylor for Mr. Selman, to urge that the court, at the end of its analysis of the statutory criteria for certification, must conduct a reality check, that is, it must ask itself: is there an air of reality to the plaintiff’s claim of an identifiable class with common issues such that considerations of fairness, efficiency and access to justice tip the balance in favour of certification?

[157]    Or is this the case of the artful pleader, who has crafted a claim that meets the “cause of action” criterion (low as the threshold for that is) but one which is utterly lacking in reality as a class proceeding