Case: Johnson v. Ontario, 2022 ONCA 725 (CanLII)
Keywords: class proceedings; “opt-out”; Class Proceedings Act, 1992, S.O. 1992, c. 6
Synopsis:
Class proceedings were commenced in 2013 against Her Majesty the Queen in Right of Ontario by former inmates of the Elgin-Middlesex Detention Centre (“EMDC”). The class consists of all persons incarcerated at EMDC between January 1, 2010 and May 18, 2017. The class action seeks declaratory relief and damages for negligence and violations of the Charter. (See paras. 7-9).
The certification order provides that members of the class can “opt-out” of the class action by providing a written indication of their decision to do so before the July 20, 2018 opt out deadline. (See para. 10). At the time the court-approved notices are disseminated in March of 2018, the Appellant class member, who suffered catastrophic injuries while at EMDC, has been transferred from EMDC to the Joyceville Assessment Unit in Kingston, Ontario. The Appellant denies receiving or seeing the notices, or knowing about the class proceeding “at any time before the opt-out deadline…until receiving a letter from Ontario’s counsel in June 2020 after he had commenced his own action”. (See para. 21).
The Appellant moves for an extension of time to opt-out. The motion judge (Grace J.) dismisses the request. The Court of Appeal (Zarnett, Roberts, and Miller, JJ.A.), allows the Appellant’s appeal, and grants a 30-day extension for him to opt-out. (See para. 65).
Importance:
In the words of Zarnett J.A., “[t]he primary question raised by this appeal is one that has not previously been settled by appellate authority in Ontario. It concerns the test that governs the discretion to extend the time to opt out.” (See para. 4). The Court of Appeal described the applicable test as follows:
the test for an extension to opt out of a class proceeding requires the class member to show that their neglect in complying with the court-imposed deadline is excusable and that an extension will not result in prejudice to the class, the defendant, or the administration of justice. (See para. 5).
The reason this matters is that, with limited exceptions, ss. 27(2)(a) and (3) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 has the effect of binding every class member who has not opted-out to a judgment on common issues or a settlement of class proceedings which has been approved by a court. (See para. 31). Moreover, s. 13 of the Act provides the court with the power to stay any other proceedings related to the class proceeding. (See para. 32). In other words, there are significant consequences for those who would prefer to sue independently but do not opt-out – they typically lose that chance if they have not opted-out in time.
Most significant is that the Court of Appeal has provided guidance to class action case management judges on the exercise of discretion under s. 12 of the Act. That section provides courts with the power to “make any order it considers appropriate…to ensure its fair and expeditious determination” – which would include an order extending the time to opt-out. (See para. 35).
Although the standard of review applicable to a court’s application of s. 12 is “significant deference” (see 1250264 Ontario Inc. v. Pet Valu Canada Inc., 2013 ONCA 279 at paras. 40, 47), the Court of Appeal determined that appellate interference was justified in this case. (See para. 37).
In its reasons, the Court of Appeal outlined the origins of the applicable test for an extension to opt out of a class action, which came from a one paragraph decision of the Ontario Superior Court (Young v. London Life Insurance Co., [2002] O.J. No. 5971), which case relied on the test for an extension of time as derived from jurisprudence from the United States. (See paras. 40-41).
The Court of Appeal has now confirmed that “the excusable neglect/no prejudice test is to be applied on a motion to extend the time to opt out,” as it “balances, on the one hand, the importance of the right to opt out, and, on the other, the importance of there having been a court-ordered deadline for doing so”. (See para. 46). In summary, a court should grant the extension only where:
- the delay in opting-out is due to excusable neglect (i.e. “in good faith and with a reasonable basis”); and
- the court has considered any prejudicial impact on the participating class members, defendants, and the integrity of the process. (See para. 52).
Applying this test to the circumstances of the Appellant, the Court of Appeal determined that excusable neglect had been established, and that the granting of an extension would not cause prejudice to the class, the defendant, the integrity of the process, or the integrity of the administration of justice. (See paras. 60; 62-64).
Counsel for the Appellant: Mirilyn Sharp (Sharp Legal Professional Corporation, Toronto), Nancy Sarmento Barkhordari and Nital Gosai (Gosai Law Professional Corporation, Brampton)
Counsel for the Respondent, His Majesty the King in Right of Ontario: Rita Bambers and Lisa Brost (Min. of Attorney General (ON), Toronto)
Counsel for the Respondents, Glenn Johnson, Michael Smith, and Timothy Hayne: Jonathan Bradford (McKenzie Lake Lawyers, London)
Counsel for the Intervener, The Class Action Clinic at the University of Windsor, Faculty of Law: Andrew Eckart and Jasminka Kalajdzic (The Class Action Clinic, Windsor)