Ontario Court Confirms That Defendants Now Have “Presumptive Right” to Sequence Dispositive Motions Before Certification
The first decision interpreting the new Section 4.1 of the Ontario Class Proceedings Act 1992, which codifies a presumption that dispositive motions should be heard before certification, was released on September 24, 2021. In it, Justice Belobaba gave effect to the clear legislative intent of Section 4.1 and confirmed it gave defendants a “presumptive right” to have their potentially dispositive motions heard before certification, which presumption can only be displaced if the plaintiff establishes a “good reason”. The decision confirms that Section 4.1 introduced a marked departure from the law under prior sequencing jurisprudence, and will be a useful decision for defendants seeking to bring potentially dispositive motions before certification.
The Proposed Pre-Certification Motion
In Dufault, TD filed a sequencing motion requesting that its summary judgment motion on the Plaintiff’s claim be heard before certification.
The Plaintiff’s action alleges that TD unlawfully charges customers “multiple NSF fees” on a single rejected payment. The Plaintiff alleges he was charged an NSF fee following two payment instructions that TD received from PayPal in December 2020. He does not contest the propriety of the first NSF fee but challenges the second, alleging it was a breach of his account agreement with TD, a breach of the Consumer Protection Act, and resulted in unjust enrichment.
TD sought to bring a summary judgment motion prior to certification, seeking to dismiss the plaintiff’s claim. TD advanced two grounds, either of which TD argued had the potential to entirely dispose of the proceeding. TD argued that if the Bank was successful on its motion, significant time and resources would be saved. The issues would be disposed of entirely or narrowed and the certification motion may not need to be heard at all. The Plaintiff, on the other hand, argued that it would be more efficient to have the motion heard concurrently with certification.
Section 4.1 of the CPA
The new Section 4.1 of the CPA, which came into effect in 2020, provides as follows:
Early resolution of issues
4.1 If, before the hearing of the motion for certification, a motion is made under the rules of court that may dispose of the proceeding in whole or in part, or narrow the issues to be determined or the evidence to be adduced in the proceeding, that motion shall be heard and disposed of before the motion for certification, unless the court orders that the two motions be heard together.
Justice Belobaba held that s. 4.1 now gives defendants a “presumptive right” to have potentially dispositive motions, or motions that would potentially narrow the issues in the proceeding, heard prior to certification. He held that a plaintiff can only succeed in displacing this presumption if there is a “good reason” for the proposed motion to be heard together with certification.
The Plaintiff argued that permitting TD’s summary judgment motion to go before certification risked bifurcated appeals and “litigation by instalment.” Justice Belobaba was not persuaded that this was a “good reason” to hear the motions together, and he held that the clear language of Section 4.1 displaced reasons previously relied upon by courts to deny defendants’ requests to sequence dispositive motions first. He stated (at para 8-9):
The sequencing decision will require judges to balance the first 58 words in the s. 4.1 provision (that set out the legislative preference) against the last 11 words (that preserve some measure of judicial discretion). Some judges may read the last 11 words literally, as preserving an unbounded discretion. They may conclude that many if not all of the “good reasons” that judges have used in the past to deny pre-certification motions — the added costs and delay of injecting a new appeal opportunity, or the need to discourage bifurcation and “litigation by instalment” — are still available even in the face of this amendment.
Other judges, myself included, will take the first 58 words of the sequencing provision as a strong legislative signal that early motions by the defendant that can indeed narrow or dispose of a case before certification should presumptively be heard before certification. After all, both the LCO and the Attorney-General would have understood the costs and delay of adding an opportunity for appeal but obviously concluded that these costs were outweighed by the benefits of pre-certification rulings in certain situations. [emphasis added]
Justice Belobaba commented on the kinds of “good reasons” that might lead to denying a defendant’s request for a pre-certification motion (although those reasons did not apply in the case before him). These include:
- If a defendant’s motion “does not raise any genuinely arguable issues that can narrow or dispose of all or part of the litigation”;
- If the motion instead appears to be a delay tactic; or
- If the proposed dates for the certification and summary judgment motion are sufficiently close that it is practical to hear them together.
Justice Belobaba viewed TD’s proposed summary judgment motion as raising genuinely arguable issues that could narrow or dispose of all or part of the litigation. Further, the Plaintiff’s certification motion had not yet been scheduled, and a certification record not yet filed. There was no good reason to deny TD’s request to have its motion sequenced prior to certification.