Authors: Jason Mohrbutter, Adryan Toth
This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.
This is an update of our previous blog entry titled “Class Action Turf Wars: BCE Inc. v Gillis, 2015 NSCA 32”. The Alberta Court of Appeal has recently held, similar to that of decisions in Nova Scotia, Manitoba, and B.C., that there is impropriety in the same class counsel simultaneously commencing virtually identical class actions in numerous provinces across Canada. In Turner v Bell Mobility Inc., 2016 ABCA 21 [Turner], the Alberta Court of Appeal made clear that litigating a class proceeding in this way amounts to abuse of process.
To repeat some of the background from our prior blog entry, in 2004 Merchant Law Group commenced actions in nearly every province against virtually every telecommunications company in Canada. The underlying allegation in these actions was that it was wrongful for the defendants to charge monthly system access fees (“SAF”).
After a contested certification hearing, the action was ultimately certified in 2007 as a class action on an opt-in basis (meaning non-residents of Saskatchewan could join the action by opting into it). In 2008, there was a change in the law such that class actions in Saskatchewan were permitted to be certified on an opt-out basis (meaning non-residents would be deemed a part of the class action unless they specifically opted out of it). Shortly after the change, Merchant Law Group unsuccessfully attempted to have the Saskatchewan courts change the certification of the SAF action to an opt-out basis.
Outside of Saskatchewan numerous defendants began moving to stay the SAF actions in the other jurisdictions. The defendants were successful in the provinces of Nova Scotia, Manitoba and B.C. (see respectively: BCI Inc. v Gillis, 2015 NSCA 32, Walkin v BCE Inc., 2015 MBQB 175 (currently under appeal), and Drover v BCE Inc., 2013 BCSC 131). In respect to Alberta, however, the defendants were unsuccessful at first instance. The lower court reasoned that because the Saskatchewan action was an opt-in action, access to justice for Alberta residents was threatened. The lower court went on to hold that it would not be an abuse of process to allow a parallel SAF action to proceed in Alberta.
The defendants appealed. The Alberta Court of Appeal reversed the lower court, stating that the Turner action indeed was an abuse of process. Three main reasons were given. First, the Court of Appeal highlighted the fact that the decisions of the Saskatchewan courts to certify the Saskatchewan SAF action on a national opt-in basis were decisions made by competent courts. While the lower court held that the Alberta residents might not be properly represented through the opt-in action, the Court of Appeal noted that there was no evidence to support such a view. In the Court of Appeal’s view, sufficient notice to Alberta residents of the need to opt into the Saskatchewan action was entirely possible. (at para 38)
Second, the Alberta action was viewed as an obvious collateral attack on the decision of the Saskatchewan courts to certify a national class action on an opt-in as opposed to an opt-out basis. Merchant Law Group was trying to obtain a national opt-out class action through the Alberta courts when it had been unsuccessful in obtaining one through the Saskatchewan courts (at para 42). The Court of Appeal stated that this type of collateral attack in the class action context “is not in the public interest, and undermines the efficiencies, coherence and social purposes sought to be achieved by national class action proceedings.” (at para 42).
Finally, the Court of Appeal held that the Turner action was an abuse of process because it created a situation where if the unjust enrichment claim failed in the Saskatchewan courts, the same cause of action could then be pursued a second time through the Alberta courts. Just like the Saskatchewan action, the Turner action advanced unjust enrichment as its cause of action. The Court of Appeal powerfully condemned this approach to litigating class actions by concluding at para 43:
43 …[The Turner action] is an obvious case of [Merchant Law Group] repeatedly using lawsuits in different jurisdictions (as, in effect, the law firm promised to do) to get around the rulings in the Saskatchewan Courts. This is an abuse not just of the courts of Alberta but is also a trammeling of the reputation of class proceedings legislation, which serves important social goals. It also invites juridical dissonance in Canada.
With the decision in Turner, courts in four provinces, including two appellate level courts, have now held that it is an abuse of process for the same counsel to simultaneously commence virtually identical class actions through numerous jurisdictions in Canada.