The Hollick approach is here to stay

In October 2001, the Supreme Court of Canada advocated a liberal and flexible construction of the Ontario Class Proceedings Act, 1992 in Hollick v. Toronto (City). In particular, Chief Justice Beverley McLachlin, on behalf of the court, held the CPA is to be “construed generously” in a manner that gives “full effect to the benefits foreseen by the drafters” — the Hollick approach.

Arguably, this judicial prescription was not fully adopted in Ontario until the Ontario Court of Appeal released its decision in Cloud v. Canada (Attorney General) — more than three years later.

Since its decision in Cloud, the Court of Appeal has applied the Hollick approach in letter and in spirit in a number of cases, including Hickey-Button v. Loyalist College of Applied Arts & Technology, Pearson v. Inco Ltd., Markson v. MBNA Canada Bank, and Cassano v. The Toronto-Dominion Bank. As a result, we are only now beginning to fully enjoy the benefits of class proceedings legislation in Ontario.

In Hollick, the Supreme Court of Canada directed lower courts to refrain from taking an overly restrictive approach to the Class Proceedings Act, particularly at the certification stage. The Supreme Court urged lower courts to construe the CPA generously so as to give full effect to its intended benefits: judicial economy, access to justice, and behaviour modification.

In so doing, the Supreme Court gave effect to the legislative history and intent of the legislation. In particular, the Supreme Court recognized the CPA was adopted to ensure the courts had a procedural tool for dealing efficiently, and on a principled rather than ad hoc basis, with increasingly complicated cases.

The court also recognized the Hollick approach was consistent with the increasing recognition of the procedural advantages of class proceedings. Accordingly, the Supreme Court expanded on the liberal, flexible, and generous approach to class actions described in 2001’s Western Canadian Shopping Centres Inc. v. Dutton.

The Ontario appeal court arguably overlooked key opportunities to apply the Hollick approach in Chadha v. Bayer Inc. and Williams v. Mutual Life Assurance Co. of Canada.

In Chadha, a price-fixing case relating to bricks containing iron oxide, the appeal court upheld the Divisional Court’s decision to deny certification of the action on the basis the class definition was flawed, class-wide loss could not be established, and a class proceeding was therefore not the preferable procedure for the resolution of the common issues.

Similarly, in Williams, a vanishing insurance premiums case, the Court of Appeal upheld the dismissal of the plaintiff’s certification motion using a preferable procedure analysis because it was concerned a class action would ultimately require individual proceedings to prove negligent misrepresentations and reliance as the insurance agents had made separate presentations to individual class members. The Court of Appeal’s later decisions in Cloud, Pearson, Markson Hickey-Button, and Cassano suggest an overly restrictive approach was taken in both Chadha and Kumar.

In fairness, however, the Ontario Court of Appeal effectively applied the Hollick approach, in spirit, in Anderson v. Wilson, a medical negligence class action relating to the transmission of hepatitis B. In that case, the Court of Appeal restored Justice John Jenkins’ decision at first instance and thereby allowed the plaintiffs to pursue claims for nervous shock on behalf of a subclass of potentially exposed but unaffected persons in respect of common issues defined “in the broadest terms.”

Chadha and Williams may well have been decided differently if the Court of Appeal had construed s. 5(1)(d) of the CPA generously and in accordance with the court’s finding in Hollick that “class actions will be allowable even where there are substantial individual issues.”

Instead, the appeal court was overly concerned that multiple individual trials would prove necessary and would overwhelm the advantages of a common issue trial or render it unmanageable.

Fortunately, it appears the Court of Appeal’s concerns in this regard have been alleviated in the post-Cloud era. We have had five class action decisions from the Supreme Court of Canada in the last 100 days or so. Four of the cases were certified.

In the one that was not, the decision was still arguably pro-class action and pro-certification and there was a spirited dissent. In addition, and in each of the cases, the Supreme Court of Canada confirmed the approach used in Cloud, Pearson, Markson, and Cassano was the correct one and motions court judges should err on the side of granting certification.

The court also refused to adopt the Wal-Mart approach recently espoused by the Supreme Court of the United States, despite an express invitation from defence counsel.

Instead, the Supreme Court of Canada resoundingly and undoubtedly confirmed the Hollick approach is here to stay and certification should be the rule, not the exception.

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