Court of Appeal for Ontario refuses to certify class action for failure to name a necessary party

In Gutierrez v. Watchtower Bible and Tract Society of Canada, 2026 ONCA 665 [“Gutierrez”], the Court of Appeal for Ontario upheld the refusal to certify a class action. The decision confirms two important principles for class action certification in Ontario: failing to name a necessary party can defeat certification, and the Fischer questions are a guide, not a mandatory checklist when determining whether a class proceeding is the preferable procedure.

Background: Why the identity of the defendant mattered

The plaintiffs were current or former members of Jehovah’s Witness congregations, who alleged that they were sexually assaulted or abused by members of the congregation when they were children. The plaintiffs allege that the defendant organization was directly or vicariously liable for the damages they suffered as a result of the abuse.

The sole named defendant was the Watchtower Bible and Tract Society of Canada (the “Society”), an incorporated organization which owns and manages the Canadian property used by Jehovah’s Witness congregations. Importantly, absent from the litigation was the unincorporated Canada Branch, and any member of the Canada Branch. The Canada Branch itself oversees the religious activities of Jehovah’s Witnesses in Canada and is responsible for reporting child abuse to secular authorities, and create and enforce internal policies. However, the Canada Branch has no assets or source of income itself.

Why the Superior Court refused certification

Perell J. at the Ontario Superior Court of Justice found that the plaintiff’s omission of the Canada Branch as a defendant to the action, which was held to be a necessary party, was fatal to certification. He held that allowing the plaintiffs to amend their pleadings (though the plaintiffs never requested leave) would serve no purpose because the action would have otherwise failed certification.

The Canada Branch was found to be a necessary party to the litigation because the evidence offered by the Society demonstrated that it was the Canada Branch which was responsible for reporting child abuse and enforcing internal policies. Therefore, it was the conduct of the Canada Branch which was the subject of the proceeding. Certification was denied as a necessary party to the proceeding was not named, and therefore the proceeding was improperly constituted.

The court opined that the plaintiffs named only the Society and failed to name the Canada Branch because:

• The Canada Branch has no assets;
• The Society has assets and has the capacity to be sued;
• The Society is a secular organization, and the agent of the Canada Branch; and
• The plaintiffs do not know how to sue an unincorporated entity.

Perell J. commented that no purpose would be served in allowing the plaintiffs to amend their pleadings because certification would have otherwise failed, as it was plain and obvious that no reasonable cause of action had been alleged.

A class action proceeding was also found not to be the preferable procedure on the facts. Rather, individual actions against the assailants who committed the abuse and the individual members of the congregation would be preferable due to the individual issue trials which would be necessary if a class proceeding were to ensue. While the court cited the Fischer questions which may be used in the preferability analysis, most of its commentary was focused on the fact that a class proceeding would be overly time-consuming.

The Court of Appeal upheld Perell J.’s decision.

Failing to name a necessary party can defeat certification

A plaintiff who strategically sues one party without including a necessary party whose conduct is in issue risks refusal of certification, and at a minimum should expect to be required to amend their pleadings to name the necessary party.

The court distinguishes between proper and necessary parties as follows:

• A proper party is a party who is likely to be affected or prejudiced by the order being sought.
• A necessary party is a party who should be bound by the result of the litigation, which will enable the court to effectually and completely resolve the dispute.

A necessary party must be named as a defendant in the litigation as their rights are affected by the outcome. The Canada Branch, as the organization which is responsible for reporting child abuse and for creating and enforcing internal policies, was a necessary party. The Canada Branch was suable, and its leaders were known. As such, the organization and its leaders should have been joined to the litigation.

The Court of Appeal criticized the plaintiffs for strategically bringing an action against the asset-holding Society while failing to name the culpable Canada Branch merely because the Canada Branch has no assets and is more difficult to sue because it is unincorporated.

An open question: Can evidence be considered in determining a necessary party?

Gutierrez also raised a procedural question that neither court resolved and will impact the manner in which courts may address the necessary party question. Namely, where a necessary party has not been named, can the certification judge examine evidence to decide whether there is no reasonable cause of action because of this issue?

Normally, the rule for the reasonable cause of action criterion is clear: “no evidence is admissible, and the material facts pleaded are accepted as true, unless patently ridiculous or incapable of proof.” As a result, the facts pleaded form a “deemed evidentiary record,” allowing the court to test whether a claim is legally viable without trying the facts.

However, when considering whether there was no reasonable cause of action because the unnamed Canada Branch was a necessary party, Perell J. considered matters outside the pleadings, specifically, the Society’s own position on its organizational role and history as derived from affidavit evidence offered by members of the Society.

The Court of Appeal acknowledged the tension but did not grapple with it. The Court recognized that Perell J. relied on evidence adduced by the Society as to its organizational structure, despite this evidence conflicting with the facts pleaded by the plaintiffs, and that he “engaged in fact-finding for the purpose of determining whether the Canada Branch was a necessary party.”

The Court of Appeal and Perell J. nevertheless stated the “no evidence is admissible, and the material facts pleaded are accepted as true” rule. However, the Court of Appeal did not criticize the fact-finding exercise, thereby arguably leaving room for the necessary party inquiry to be treated as something distinct from the pleadings-based cause of action analysis, and possibly carving out an exception to the “no evidence” rule.

The general rule that “no evidence is admissible, and the material facts pleaded are accepted as true” already has several exceptions. For example, the Federal Courts have recognized an exception where jurisdiction is challenged on a motion to strike or under the reasonable cause of action criterion holding that the inadmissibility of evidence on these motions “does not apply when it is the jurisdiction of the Court that is challenged”: MIL Davie Inc. v. Société d'Exploitation et de Développement d'Hibernia Ltée (1998), 226 N.R. 369 at para. 8; Berenguer v. Sata Internacional—Azores Airlines, S.A., 2023 FCA 176 at para. 26. There appears to be some similarity between these situations since bringing an action in the wrong forum and failing to name a necessary party are both ways that a proceeding is improperly constituted.

As Gutierrez illustrates, there are practical benefits to recognizing an exception to the no evidence rule where the absence of a necessary party forms the basis of the argument that there is no reasonable cause of action. A plaintiff may, as Mr. Gutierrez did, commence an action against only one defendant for strategic reasons when another’s involvement is necessary to resolve the action. If the pleadings are assumed to be true, a defendant might never be able to demonstrate that the other party must be joined since this can turn on evidence about how operations are divided and who engaged in the impugned conduct. However, at this time, the issue remains unresolved.

The Fischer questions are a guide, not a script

On appeal, the plaintiffs also argued that Perell J. erred in his analysis determining whether a class proceeding was a preferable procedure by focusing only on judicial economy while ignoring the five access to justice questions discussed in AIC Limited v. Fischer, 2013 SCC 69.

In the preferability analysis, the court is to “consider the costs as well as the benefits of the proposed class proceeding in relation to those of the proposed alternative procedure” (Fischer, para. 38). In doing so, Fischer outlined five questions as a tool for that comparison:

1. What are the barriers to access to justice?
2. What is the potential of the class proceedings to address those barriers?
3. What are the alternatives to class proceedings?
4. To what extent do the alternatives address the relevant barriers?
5. How do the two proceedings compare?

The plaintiffs contended that the five Fischer questions are a mandatory analysis in determining the preferability issue, arguing that the Court of Appeal’s decision in Bayens v. Kinross Gold Corporation, 2014 ONCA 901 required the five questions to be answered directly.

The Court of Appeal declined to interpret Bayens in that matter, holding instead that certification judges are not required to “systematically reproduce the questions and answer them” with such a requirement being contrary to Fischer’s own direction. Gutierrez therefore demonstrates that a certification judge need not systematically undertake the Fischer questions, or that a certification decision is reversible merely because it did not reproduce the Fischer framework.

Key takeaways

Gutierrez provides useful guidance on the requirement to name necessary parties to an action and in the preferability of a class proceeding. Future parties to class actions should note the following:

1. Failing to name a necessary party to the proceedings risks refusal of certification. Plaintiffs must ensure that parties whose rights and conduct are necessary to resolving the dispute are properly before the court.
2. Whether evidence can be considered remains unresolved. Gutierrez leaves an important procedural question about evidence used to determine whether an omitted party is necessary.
3. The five Fischer questions are guidance, not a mandatory checklist. Certification judges must assess preferability, but they do not need to apply the questions mechanically.