The Saskatchewan Court of Appeal formulates test for temporarily staying an individual proceeding in favour of a proposed or certified class proceeding
In Herold v Wassermann, 2022 SKCA 103 the Saskatchewan Court of Appeal formulated the test for temporarily staying an individual proceeding in favour of a proposed or certified class proceeding. Unlike other jurisdictions, including Alberta and Ontario, in Saskatchewan courts will apply the more stringent and traditional test for a stay, with some modifications.
Herold arises from the tragic Humboldt Broncos bus crash in April 2018, which killed 16 people and injured 13 others. Herold was started by five plaintiffs, who sued the driver of the tractor‑trailer unit and several other defendants for damages (the “Herold Action”). Meanwhile, another group of plaintiffs started a proposed class proceeding on behalf of all victims, families of victims and first responders against a wider variety of defendants (the “Brons Action”).
The Herold plaintiffs did not want to participate in the Brons Action if certified. Nevertheless, the Brons plaintiffs sought to have the Herold Action temporarily stayed until after certification in the Brons Action, on the basis that allowing the Herold Action to proceed in tandem with the Brons Action raised the spectre of inconsistent rulings and verdicts.
The Chambers Judge agreed with the Brons plaintiffs, and temporarily stayed the Herold Action until the outcome of the Brons Action’s certification application: Wassermann v Saskatchewan (Highways and Infrastructure), 2021 SKQB 204. Key to the Chambers Judge’s reasons was his conclusion that permitting the Herold Action to proceed would countenance a multiplicity of proceedings, which could imperil the integrity of the judicial process and undermine the policy objectives sought to be advanced by class actions.
The Test in Saskatchewan
The Saskatchewan Court of Appeal overturned the temporary stay and allowed the Herold Action to proceed in tandem with the Brons Action.
As a starting point, the Court recognized that the traditional three stage test for a stay—(a) whether there is a serious question to be tried; (b) whether the applicant would suffer irreparable harm if the application were refused; and (c) which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits—has not been applied in other jurisdictions when considering whether to stay an individual action in favour of a proposed or certified class proceeding. The Court reasoned that this is likely because the first element of the test, which is a preliminary consideration of the strength of the applicant’s case, is irrelevant where there is no claim by one party against the other.
Instead, the fundamental reason for the stay in circumstances like Herold is that each plaintiff is advancing similar claims against overlapping groups of defendants. Thus the Court found that the remaining elements of the traditional test for a stay were applicable, and form “the core of a request for a stay of proceedings” of an individual action in favour a proposed or certified class proceeding; the test for a stay in these circumstances therefore requires consideration of:
- The prejudice or injustice to the applicant if the stay is not granted;
- The prejudice or injustice to the respondent if the stay is granted; and
- A balancing of these competing interests.
In applying this test, the Court may take into account other relevant considerations, such as policy objectives underlying class proceedings, but these types of considerations are not overriding. Further, the Court made it clear that obtaining even a temporary stay is a high bar. A temporary stay will be granted only if necessary to protect the applicant’s interests and will only be as broad as required to do so. If there are other procedural tools that could eliminate or sufficiently ameliorate the deleterious effects of parallel actions, a temporary stay will be refused.
The Test in Other Jurisdictions
Other jurisdictions do not impose such a high bar for staying an individual action in favour of a proposed or certified class proceeding. For example, in Alberta, the Court of Appeal in Hamm v Canada (Attorney General), 2021 ABCA 329 rejected the traditional test for a stay, stating it “should not be blindly extended beyond its context.” Rather, courts have wide discretion to grant stays in situations involving an individual action and an overlapping class proceeding. The exercise of that discretion focuses on balancing the principles underlying class proceedings (access to justice, judicial economy, and behaviour modification) with the right to litigation autonomy, including the right to commence individual actions.
In Ontario, courts have described the test for a temporary stay of an individual action while a class action proceeds as a “lower threshold” (see e.g. Singh v RBC Insurance Agency Ltd., 2020 ONSC 5368 at para 131). The test is whether (a) there is “substantial overlap of issues”; (b) the two cases share the same factual background; (c) issuing a temporary stay will prevent unnecessary and costly duplication of judicial and legal resources; and (d) the temporary stay will not result in an injustice to the party resisting the stay: Rooney v. Arcelormittal S.A., 2013 ONSC 6062 (para. 74); Vaeth v North American Palladium Ltd., 2016 ONSC 5015 (paras. 54-55).
Result in Herold
In Herold, the Chambers Judge granted a temporary stay of the Herold Action using the less stringent test from Ontario jurisprudence. The Court of Appeal overturned, and applied the new test in Saskatchewan to reject a temporary stay. In balancing the prejudice of the Herold plaintiffs against the prejudice of the Brons plaintiffs, the Court found “the effect of the stay on the Herold Plaintiffs is significant. It bars completely their access to the court – a right that is not to be lightly interfered with”. That outweighed any possible prejudice the Brons plaintiffs might suffer through judicial determination of facts in the Herold Action.
Instead of granting a stay, the Court concluded any concerns over duplicate proceedings could be addressed through procedurals tools such as an order that common applications be heard by the same judge at the same time, or even that, ultimately, the actions “be tried at the same time or one after the other.” Thus, it was possible to eliminate the Brons plaintiffs’ possible prejudice through less stringent methods than a stay.