Case In Point
Appellate Court Considers Certification Under Class Proceedings Act, 1992 and Requirement That Pleadings Disclose a Cause of Action
Date: July 8, 2022
In Bowman v Ontario, the Ontario Court of Appeal considered a motion for certification of a class action under the Class Proceedings Act, 1992 (CPA) which was dismissed by a certification judge. The Court of Appeal allowed the appeal in part, concluding that the judge erred in holding that the proposed class action did not disclose a cause of action. The matter was remitted back to him to consider outstanding issues under the certification test.
Background and Certification Judge’s Decision
In April 2017, the government of Ontario initiated a Basic Income Program (Program), which it announced would run for three years. In July 2018, following an election and a change in government, the government announced its plan to terminate the Program before three years had elapsed. The appellants were the representative plaintiffs on behalf of those enrolled in the program who were approved to receive payments. They commenced a class proceeding against Ontario under the CPA.
The appellants sought damages for the alleged wrongful termination of the Program before the expiry of three years under a number of causes of action including: breach of contract, breach of undertaking, negligence, breach of a public law duty and breach of s. 7 of the Canadian Charter of Rights and Freedoms (Charter).
They brought a motion to court for certification of the action as a class proceeding under s. 5(1) of the CPA, and for other related relief. In addressing the five-part certification test, the parties agreed that there was an identifiable class and agreed on the existence of a representative plaintiff. However, Ontario opposed the motion claiming the appellants failed to establish that: their pleadings disclosed a cause of action (s. 5(1)(a)); the claims of the class members raised common issues (s. 5(1)(c)); and a class proceeding would be the preferable procedure for the resolution of the common issues (s. 5(1)(d)).
The certification judge dismissed the appellants’ certification motion concluding that it did not disclose a reasonable cause of action as required by s. 5(1)(a) of the CPA. Having concluded that the claim did not disclose a cause of action, he did not consider whether the class members raised common issues or whether a class proceeding was the preferable procedure. The appellants appealed the decision.
The Court of Appeal’s Decision
To certify a class proceeding under s. 5(1)(a) of the CPA, the pleadings or the notice of application must disclose a cause of action. The Court of Appeal clarified that the inquiry under s. 5(1)(a) seeks to determine whether the facts pleaded, which are assumed to be true, are capable of supporting a cause of action. Certification does not involve a decision on the merits of the action.
The issue before the Court of Appeal was whether the certification judge erred in his treatment of the appellants’ pleaded causes of action including breach of contract, breach of undertaking, negligence and breach of s. 7 of the Charter?
Breach of Contract
The appellants pled that Ontario entered into a contract with class members for the provision of payments as per the Program for a three-year period, and that contract was breached when the payments ceased before the end of the three-year period.
With respect to this claim, the Court of Appeal held the task of the certification judge was not to determine whether the contract pleaded by the plaintiff was actually formed and/or to determine the proper interpretation of the contract. Rather, the task was only to ascertain whether it was plain and obvious that the facts pleaded could not support a cause of action for breach of contract at law.
The Court of Appeal ultimately found that the certification judge over-stepped the boundaries of s. 5(1)(a) by examining whether the appellants had established that a contract was formed between class members and the government of Ontario. The Court of Appeal allowed the appeal on this ground, setting aside the dismissal order and substituting an order that the claim disclosed a cause of action for breach of contract that satisfies s. 5(1)(a) of the CPA.
Breach of Undertaking, Negligence and Breach of s. 7 of the Charter
The Court of Appeal saw no error in the holdings of the certification judge that it was plain and obvious the pleaded facts did not disclose causes of action for breach of undertaking, negligence or breach of s. 7 of the Charter.
Disposition
The Court of Appeal remitted the matter to the certification judge to consider the remaining criteria in dispute under s. 5(1) of the CPA; common issues and preferable procedure.
Takeaway
This decision confirms the importance of a strategic defence to a class action certification motion, informed by the legal principles developed by the courts. On a jurisprudential level, the decision also confirms that the “cause of action” inquiry under s. 5(1)(a) of the CPA involves a determination of whether the facts as pleaded are capable of supporting a cause of action and does not require a decision on the merits of the substance of the action.
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