Significant certification decision from the B.C. Supreme Court
Recent certification decisions have emphasized that bald allegations of wrongdoing and speculative claims will not be certified. Chief Justice Hinkson’s certification decision in O’Connor v. Canadian Pacific Railway Limited, 2023 BCSC 1371 is one installment in a line of cases examining the sufficiency of pleadings and evidence at the certification stage.
O’Connor was a proposed class action that alleged various defendants had either caused or contributed to a wildfire. The plaintiff made claims in negligence and nuisance, but had no clear theory as to how any of the defendants caused the wildfire. Certification was denied, although the plaintiff was granted leave to amend.
O’Connor teaches two important lessons about the certification test:
- It confirms a plaintiff must advance “specific material facts” in support of the causes of action they plead, with sufficient particularity to identify the case that each defendant is required to meet and to fulfil the general purposes of pleadings. Although the bar is low to satisfy the cause of action requirement, it is not a free pass; broad and unparticularized allegations are not enough.
- It clarifies the evidentiary standard that applies when assessing the existence of a common issue: A plaintiff is not required to offer actual proof on a balance of probabilities, but they are required to establish “some basis in fact” to support the existence of the issue as something more than mere speculation. The Chief Justice’s analysis compels a shift away from semantics and toward a functional assessment of commonality.
The cause of action requirement and sufficiency of pleadings: A lesson in rigor
Before a class action is certified, the court must be satisfied that the plaintiff’s claim discloses a cause of action that is not destined to fail. The plaintiff must plead not only the essential elements of the causes of action they advance, but also the material facts in support of them. This requirement is typically seen as posing a low bar, as the material facts pleaded must be assumed to be true.
O’Connor establishes that this requirement is not a free pass: The court found that the claims advanced were “very broad and vague” and—critically—there were “no specific material facts pleaded regarding how it is the Wildfire was caused by the conduct of any defendants” (para. 119). On this basis, the court found that none of the claims were viable.
Moreover, the pleading was “overbroad and vague” (para. 196) and did not fulfil the purpose of pleadings. In particular, the plaintiff failed to provide guidance to the defendants—or the court—about the case that each defendant was expected to meet. Similarly, the plaintiff had pleaded the same broad material facts on behalf of all class members, even though they had allegedly suffered different injuries. The court emphasized that it was unfair, particularly in a large and complex case, to certify claims that would leave the defendants in the dark as to “what the case against them is and what the scope of their disclosure obligations would be” (para. 120).
Rethinking commonality: The end of the one-step/two-step debate?
Chief Justice Hinkson also addressed the “one step/two step” commonality debate that has arisen in recent certification decisions. To be certified, the claims of the class members must raise common issues, but recent cases have been divided as to the evidence that is needed to satisfy this requirement. Proponents of the “one-step” test suggest that the commonality requirement is satisfied on proof that the proposed issue is common as between the class members, while proponents of the “two-step” test suggest that an additional prong is necessary, such that the court must also be satisfied that the common issue actually exists.
O’Connor adopted the two-step approach in substance but focused on substance over semantics (para. 263):
I struggle to see how the plaintiff can meet his burden of showing that an issue can be proven in common for the class without providing some basis in fact that there is a common issue in the first place. Thus, whether the one-step or two-step articulation of the test is used, the outcome is the same.
The court rejected the plaintiff’s theory that requiring proof of the existence of the common issue would impermissibly test the merits of his case at the certification stage: While the plaintiff was not required to prove on a balance of probabilities that the defendants had actually caused or contributed to the wildfire, he was nonetheless required to establish some basis in fact to support the existence of this proposed common issue. And the evidence in O’Connor fell short: The Chief Justice found that the plaintiff had “nothing more than wishful thinking, and certainly not enough to amount to a ‘basis in fact’ to support his claim” (para. 270).
An appeal is pending. McCarthy Tétrault LLP is counsel for one of the defendant railway companies in O’Connor.