A Refresher on Judicial Review “Class Applications” in Federal Court
Likely unbeknownst to most, Rule 334.12 of the Federal Courts Rules permits applications for judicial review in the Federal Court to be prosecuted as class proceedings. This is unique to judicial reviews in the Federal Court. It offers a potentially powerful tool for persons or businesses operating in federally-regulated industries that are subject to decisions and regulations affecting more than one industry participant, to challenge certain unfavourable regulations or decisions on judicial review on a class-wide basis.
Wenham v. Canada (Attorney General), 2018 FCA 199, is a recent decision of the Federal Court of Appeal that reminds litigants of this available procedural avenue and provides guidance regarding the test for certification of such a “class application” under the Federal Courts Rules. In particular, Stratas J.A. clarified how the “cause of action” criterion should be assessed at certification of an “application” for judicial review.
The underlying judicial review sought to quash a compensation program established by the Government of Canada for victims of the drug Thalidomide, originally implemented in 1990 but revised in 2015 with new documentary proof requirements. The Applicant in this case sought to prosecute a judicial review of the decision rejecting his individual application on a class-wide basis, on behalf of himself and all others who had been similarly rejected based on a lack of documentary proof under the new requirements alleged to be unfair and impossible to satisfy, and thus “unlawful” pursuant to the various administrative law grounds laid out in s. 18.1(4) of the Federal Courts Act.
The Federal Court denied the Applicant’s motion to certify the application as a class proceeding, finding that none of the certification criteria under Rule 334.16(1) were met. These criteria effectively mirror that found in provincial class proceedings legislation throughout Canada.
The Federal Court of Appeal reversed the lower court and certified the application. Stratas J.A.’s decision provides guidance on how certification will be assessed in class proceedings in the Federal Court generally (an increasing trend), and in cases of judicial review “class applications” specifically. Most importantly, and in a perhaps novel development, Stratas J.A. confirmed the proper test under Rule 334.16(1)(a), which expressly requires that “the pleadings disclose a reasonable cause of action”, even though in the case of “class applications” for judicial review, the proceeding seeking certification is by definition an “application” and not an “action”.
Stratas J.A. held that the test for the “reasonable cause of action” requirement under Rule 334.16(1)(a) is to be treated in the same way as similar requirements found in class proceedings legislation in other Canadian jurisdictions: the court should assume all facts pleaded as true, and a pleading will disclose a cause of action unless it is “plain and obvious” that no claim exists. In the “class application” context in particular, this entails a court assessing whether the notice of application is “so clearly improper as to be bereft of any possibility of success”, focusing on the substance of the notice of application rather than the form, with due regard for the distinct, analytical stages of a judicial review. Stratas J.A. found it was not plain and obvious that the notice of application failed to disclose a “cause of action” grounded in s. 18.1(4) of the Federal Courts Act.
Wenham provides a candid look at certification in this rare type of “class application” for judicial review. As Stratas J.A. himself recognized, these types of cases are effectively confined to the Federal Courts only. To date, they have not received a great deal of judicial scrutiny, let alone appellate scrutiny. Wenham provides important guidance on the certification criteria for such applications. It is also a reminder to potential judicial review applicants in federally-regulated industries about a potential procedural vehicle that could be of use in relation to regulatory decisions that affect industry participants on a class-wide basis.