Common Ground? Class Action Updates
Ontario Court of Appeal Articulates Test for Extending Time to Opt Out of Class Action
Date: October 26, 2022
The Ontario Court of Appeal has provided new guidance to litigants seeking to opt out of class proceedings.
In the usual course, a class member has until the deadline set by the court at the time the court certifies a class proceeding to opt out of a class action (i.e. to no longer be considered a member of the class). But what happens when a member who wishes to opt out of the proceeding has missed the deadline to do so?
In Johnson v. Ontario, the Court of Appeal articulated the test for determining when a court should exercise its discretion to extend the time for the class member to opt out of the proceeding.
Simply put, the test for an extension to opt out of a class proceeding requires the class member to show both that their neglect in complying with the court-imposed deadline is excusable (i.e. the neglect occurred in good faith and with a reasonable basis) and an extension will not result in prejudice to the class, the defendant, or the administration of justice (i.e. the integrity of the process will not be compromised).
In the case before it, the Court of Appeal determined that the motions judge erred by not applying the above test and in denying the appellant’s request for an extension of time to opt out of an ongoing class proceeding.
The Court of Appeal found that the appellant did not have actual notice of the class proceeding and therefore his neglect in complying with the court-imposed deadline was excusable. It also stated that an extension of the time to opt out in the form of 30 days would not result in prejudice to the class, the defendant, or the administration of justice. With respect to the issue of prejudice, the Court specifically noted that the respondent did not point to any prejudice that it would suffer and observed that the appellant’s behaviour did not show “… any flouting of, a cavalier attitude toward, or a strategic wait-and-see approach to, the court-ordered opt-out deadline, such that granting him an extension would cause prejudice to the integrity of the process or the administration of justice.”
This decision reaffirms that the right to opt out is integral to the class proceedings scheme under the Class Proceedings Act, 1992. The newly confirmed test balances an individual’s need for a meaningful ability to exercise their right not to participate in a class proceeding against the court’s interest in having its orders (especially those that contain court-imposed deadlines) followed.
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