Docket: T-237-16
Citation:
2017 FC 447
Ottawa, Ontario, May 5, 2017
PRESENT: The Honourable Madam Justice Strickland
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PROPOSED CLASS PROCEEDING
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BETWEEN:
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POUNDMAKER CREE NATION REPRESENTED
BY THE COUNCIL OF POUNDMAKER
CREE NATION AND CHIEF DUANE ANTOINE
AND ONION LAKE CREE NATION REPRESENTED
BY THE COUNCIL OF ONION LAKE CREE NATION
AND CHIEF WALLACE FOX
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Plaintiffs
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and
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HER MAJESTY THE QUEEN
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Defendant
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ORDER AND REASONS
[1]
This is a motion brought on behalf of the
Defendant seeking an Order, pursuant to Rule 8 of the Federal Courts Rules,
SOR/98-106 (“Rules”), extending the time for service and filing of the
Defendant’s statement of defence in this proposed class proceeding until after
the decision on the motion for certification has been rendered.
[2]
On February 8, 2016, the Plaintiffs filed their
statement of claim in this proposed class action. The proposed class members
are defined as those Indian Nations, including the Poundmaker Cree Nation
(“Poundmaker”) and the Onion Lake Cree Nation (“Onion Lake”), on whose behalf
the Crown accepted a designation of rights and interests in oil and gas on
their reserve lands under the Indian Act, RSC 1985, c I-5. Poundmaker
and Onion Lake are the only named proposed class members at this time. The claim
alleges that the Crown breached its fiduciary obligations to Indian Nations and
was negligent in failing to: fully and properly exploit the class members’ oil
and gas rights on designated reserve lands; protect the loss of class members’
oil and gas rights; and, properly collect and account to the class members in
respect of their oil and gas rights, all resulting in the class members
suffering damages.
[3]
By Order of the Chief Justice dated February 23,
2016, I was appointed as the Case Management Judge in this matter as assisted
by Prothonotary Lafrenière. At the initial case management teleconference held
on January 18, 2017, amongst other things, the timing of a request for
particulars and the filing of the statement of defence by the Defendant were discussed.
In the result, on January 19, 2017, I ordered that the Defendant provide the
Plaintiffs with its request for particulars on or before January 20, 2017, that
a follow up case management teleconference be held on February 10, 2017 and, in
the interim, that pursuant to Rule 8 the time within which the Defendant must
file its statement of defence was extended pending further order of this
Court. On February 10, 2017, the parties confirmed that the request for
particulars had been made and responded to, however, that the issue of the
timing of the statement of defence remained outstanding. Accordingly, the
Defendant was directed to file a motion seeking to extend the time for filing
the statement of defence until after the certification hearing. The motion was
set down to be heard on April 18, 2017. Both parties duly filed and served
their motion records. By letter dated April 13, 2017, the Defendant advised
that the parties had agreed that the motion need not be heard orally but could
proceed on the basis of the written submissions. Accordingly, on April 13, 2017,
I issued a direction permitting the motion to be converted to a motion in
writing and requiring the Defendant file a reply no later than April 20, 2017.
[4]
This Order is in response to that motion.
Defendant’s Position
[5]
The Defendant submits that Rule 385 provides the
Court with authority, as a matter of the exercise of judicial discretion, to
extend the time for filing a statement of defence pursuant to Rule 8 (Always
Travel Inc v Air Canada, 2003 FCT 212 (FCTD) at para 4 (“Always Travel”);
Rules 8 and 385) and that the case management judge is best positioned to
determine whether in a proposed class action the filing of a statement of
defence is necessary or useful prior to the certification hearing (Always
Travel at para 4; MacLean v Telus Corp, 2005 BCCA 338 at para 12 (“MacLean”)).
[6]
This issue has been before this Court on only two
prior occasions which resulted in written reasons and, in both instances, the
Court held that a statement of defence was not essential to the determination
of the issues on the certification motion and would not be of assistance to the
Court (Always Travel; Horseman v Canada (Attorney General),
Docket: T-1784-12, Order and Endorsement dated December 3, 2012 (“Horseman”)).
Other than Nova Scotia, where the class proceedings legislation (Class
Proceedings Act, SNS 2007, c 28, s 4(6)) specifically provides that a
statement of defence need not be filed until after certification, in all other
Canadian jurisdictions the defendants are either not required to deliver a
defence prior to the certification hearing or the usual practice is not to do
so (Hoffman v Monsanto Canada Inc, 2002 SKCA 120 at para 23 (“Hoffman”);
Field v GlaxoSmithKline Inc, 2013 SKQB 113 at para 45 (“Field”); Warner
v Smith and Nephew Inc, 2016 ABCA 223 at para 105 (“Warner”); Dominguez
v Northland Properties Corp, 2012 BCSC 328 at para 130 (“Dominguez”)).
And while Justice Perell of the Ontario Superior Court does sometimes order the
delivery of the statement of defence prior to certification, he does not do so
in every case (Crosslink Technology Inc v BASF Canada, 2014 ONSC 1682,
leave to appeal denied in 2014 ONSC 4529 (“Crosslink”); Fanshawe
College of Applied Arts and Technology v Sony Optiarc Inc, 2013 ONSC 1477; Pennyfeather
v Timminco Ltd, 2011 ONSC 4257 (“Pennyfeather”); Brazeau v Canada
(Attorney General), 2016 ONSC 7836) and his view that pleadings motions should
be brought prior to certification has not been adopted by other judges and courts
(Hoffman).
[7]
The Defendant submits that the purpose of the
certification hearing is to determine the proper form of the action and whether
it should advance as a class proceeding, it is not meant to test the merits of
an action (Tihomirovs v Canada (Minister of Citizenship and Immigration),
2006 FC 197 at para 34 (“Tihomirovs”); Pro-Sys Consultants Ltd v
Microsoft Corporation, 2013 SCC 57 at para 99 (“Pro-Sys Consultants”)),
which distinguishes it from the role of the statement of defence. The first
criteria under Rule 334.16 for certification of a class action requires that “the pleadings disclose a reasonable cause of action”.
As the facts in the statement of claim are assumed to be true and no evidence
may be considered (Rule 334.16; Canada v John Doe, 2016 FCA 191 at para
23 (“John Doe”); Gottfriedson v Canada, 2015 FC 706 at para 31),
there is no need for a statement of defence in order to decide the first
criteria for certification (Kornblum v Canada (Human Resources and Skills
Development), 2010 FC 656 at para 30). As to the remaining four criteria,
the Plaintiffs have the burden of adducing evidence to show “some basis in fact” that these criteria have been met
(John Doe at para 24). Pleadings are not evidence (Hawthorne v
Markham Stouffville Hospital, 2016 ONCA 10 at para 8; Emerging Equities
Inc v Strand, 2008 ABCA 23 at para 5). Thus, these four criteria are not
established or defeated by reference to the pleadings but rather by reference
to evidence that the parties will put forward on the certification motion. A
statement of defence is therefore of no assistance to the Court in evaluating
the evidence put forward to determine if these criteria are met.
[8]
The Defendant also submits that production of a
statement of defence at this stage is a wasteful endeavor. Class actions are
unique in that the plaintiff’s theory of a case may evolve up to and through
the certification process (Dugal v Manulife Financial Corp, 2011 ONSC
6761 at para 13; Harvey v Western Canada Lottery Corporation, 2015 SKQB
102 at paras 31-32, leave to appeal denied in 2015 SKCA 75). In the result,
the statement of claim may be significantly amended or there may even be a wholly
new pleading and, in such circumstances, the statement of defence would have to
be re-written (Brown v Canada (Attorney General), 2010 ONSC 3095,
reversed in 2011 ONSC 7712; Ewert v Canada (Attorney General), 2016 BCSC
962). There is also the possibility that the proposed class action will not be
certified in which case the preparation of the statement of defence would have
been particularly wasteful.
Plaintiffs’ Position
[9]
The Plaintiffs submit that while the Court has
discretion to delay the filing of a statement of defence until after
certification, the redress is far from automatic (Always Travel at para
7). There must be a compelling reason for the Court to exercise this
discretion (Pro-Sys Consultants Ltd v Microsoft Corp, 2015 BCSC 74 at
para 33 (“Pro-Sys BCSC”). And, in exercising discretion, the Court
should consider among other factors whether the defence would be useful to
and/or necessary for the determination of the issues on certification (Scott
v TD Waterhouse Investor Services (Canada) Inc, 2000 BCSC 1786 at para 40
(“Scott”); Pennyfeather at paras 86, 88-92); an extensive
reformulation of the statement of defence is likely to be required after
certification (Shaver v British Columbia, 2017 BCSC 108 at para 80 (“Shaver”));
undue time and effort would be required to deliver the statement of defence
prior to certification (Murray v Alberta (Minister of Health), 2007 ABQB
231 at para 29 (“Murray”); Smith v Sino-Forest Corp, 2012 ONSC
1924 at paras 51-52 (“Smith”)); and, any unfairness to the defendant
would result from requiring a statement of defence to be delivered prior to the
certification hearing (Murray at para 29; Smith at paras 49,
53-54). The nature of the proceedings and the rights asserted are also
relevant contextual factors in this determination (Murray at para 25).
[10]
The onus is on the Defendant to persuade the
Court that an extension is warranted. This requires an evidentiary basis,
however, the Defendant has not adduced any evidence, by affidavit or otherwise,
in support of its motion (Always Travel at paras 8-9).
[11]
The Plaintiffs submit that while historically
Courts have exercised their discretion to delay the filing of a statement of
defence until after the certification motion, as it would have little utility (Smith
at paras 45; Shaver at para 81), in recent years courts in Ontario,
British Columbia, Alberta and elsewhere have urged judges to end this
convention (Shaver at para 82; Pennyfeather at paras 83-84; Pro-Sys
BCSC at para 31; Gay v Regional Health Authority 7, 2014 NBCA 10 at
para 25 (“Gay”)). Courts have recognized that such a delay is most
often a tactical manoeuvre by the defendants (Smith at paras 52-54; Shaver
at para 81).
[12]
Moreover, requiring the Defendant to deliver a
statement of defence is more effective and cost efficient as it defines the
issues early and addresses any disputes about the cause of action, such as the
Court’s subject-matter jurisdiction (Scott at para 48; Smith at
paras 49 and 88; Pennyfeather at para 89). It also assists in the
analysis of the certification criteria (Scott at paras 35 and 48; Pennyfeather
at paras 89-90), in particular, with isolating common questions or issues.
[13]
The Plaintiffs also submit that even if the
adequacy of the claim is not an issue, the filing of a statement of defence
before the certification is consistent with and would assist the Court in
analyzing the remaining certification criteria, particularly the common
questions/issues (Scott at para 35; Smith at para 48; Pennyfeather
at paras 89-90). Isolating the common issues, which can be relevant to the
certification motion, requires the pleadings in the originating action to be
closed (Scott at paras 40-41; Smith at para 48: Shaver at
para 82). For example, a limitation defence must be plead and if this is done
then it becomes a common issue/question. As the certification motion will be
better informed once the Plaintiffs know the Defendant’s pleaded position, it
follows that the Court will be better informed as to decide the true issues
between the parties (Shaver at paras 82-84).
[14]
The Plaintiffs also submit that the filing of a
statement of defence may also assist the Court in understanding the legislative
and historical framework within which the case is being assessed (Murray at
para 29). Given the centrality of historical background to the issues in this
case, a statement of defence will assist the Court in determining the extent to
which there is an agreement or disagreement as to the accuracy of the
historical narrative and duties, thereby saving time and resources by not
dealing with uncontentious matters (Pro-Sys BCSC at para 33).
[15]
The Plaintiffs submit that the outcome of the
certification motion is unlikely to prompt a drastic reformulation of the
statement of defence (Smith at paras 50-51). And, where the Defendant
has not attacked the claim, the benefit of filing a statement of defence prior
to certification is the likelihood that the Plaintiffs will leave the
certification hearing with their pleadings intact. Further, it is not enough
for the Defendant to simply assert that the outcome of the certification motion
will impact the content of the statement of defence (Murray at paras
28-29). It is also well established that the filing of a statement of defence
prior to certification is not a burden likely to generate extensive duplicative
work (Murray at para 29) because the Defendant will already have investigated
the facts and law in preparation of affidavits for the certification hearing
and, once this is done, the preparation of a draft statement of defence is
usually completed. The delivery of an amended statement of defence will be a
minimal incremental effort and expense (Pro-Sys BCSC at para 32).
Further, the Defendant’s concern that it will have wasted time and money
delivering an amended statement of defence is exaggerated as given the legal
cost of class actions, the cost of delivery of an amended statement of defence
is a mere bagatelle.
[16]
Finally, the Plaintiffs submit that there is no
unfairness in denying the Defendants this tactical manoeuvre (Smith at
paras 52-53). Doing so will lead to the just, efficient and cost effective
resolution of the action and is in line with the tenet of civil litigation that
Plaintiffs are entitled to know the case they have to meet (Shaver at
para 83; Smith at para 49). The Defendant has also adduced no evidence
nor is it stated in its written argument that it would be prejudiced by filing
its statement of defence prior to certification.
Defendant’s Reply
[17]
In reply the Defendant submits that neither Always
Travel or Horseman required an evidentiary basis to justify deferral
of filing of a statement of defence. In Always Travel the Court reached
a decision based on the statement of claim. In this case the Plaintiffs’
statement of claim demonstrates a considerable amount of complexity as it
challenge’s all aspects of the Indian Oil and Gas Canada agency as well as oil
and gas rights and drainage issues on all Indian reserve lands in Canada. It
also contains what the Plaintiffs describe as an extensive historical
narrative. The Defendant submits that it cannot be disputed that a proper
defence to the claim will require a substantial outlay of resources, time and
expense. Nor has the Plaintiff argued or put forward any evidence that they
would be prejudiced if the statement of defence is not filed until after the
action is certified.
[18]
The Defendant also submits that the Plaintiffs
have not cited a certification decision that relies on a statement of defence
in establishing the common issues and that this is because the issues in
certification are determined based on evidence and not on the pleadings.
Further, the only concrete example given by the Plaintiffs as to why a
statement of defence will be useful for determining issues on certification,
being the pleading of limitation periods, is necessary only for a determination
of the merits of the claim. The class period is part of the certification
process, to be dealt with based on evidence and legal argument, and cannot be
looked at in isolation from the applicable limitation periods and
discoverability issues irrespective of the statement of defence not having been
filed (Pro-Sys BCSC at para 26).
Analysis
[19]
As noted by the parties, the Rules do not
contemplate the filing of a statement of defence subsequent to the
determination of the motion for certification of a proposed class proceeding.
[20]
Rule 204 requires that a defendant shall defend
an action by serving and filing a statement of defence within 30 days after
service of the statement of claim, if the defendant is served in Canada.
Pursuant to Rule 8, on motion, the Court may extend or abridge a period
provided by the Rules or fixed by an order. Rule 3 states that the Rules shall
be interpreted and applied so as to secure the just, most expeditious and least
expensive determination of every proceeding on its merits. And, pursuant to
Rule 385(1)(a) and (b), a case management judge may give any directions or make
any orders that are necessary for the just, most expeditious and least
expensive determination of a proceeding on its merits and, notwithstanding any
period provided for in the Rules, fix the period for completion of subsequent
steps in the proceeding. Part 5.1 of the Rules deal with class proceedings.
As to the time for service and filing of a notice of motion for the
certification of a proceeding as a class action, in the case of an action, Rule
334.15(1) states that motions shall be made returnable no later than 90 days
after the later of: (a) the day on which the last statement of defence was
filed, and (b) the day on which, under Rule 204, the last statement of defence
is required to be served and filed. More generally, Rule 334.11 states that,
except to the extent that they are incompatible with the Rules in Part 5.1, the
Rules applicable to actions and applications, as the case may be, apply to
class proceedings.
[21]
Given this and the jurisprudence, I agree with
the parties that it is a matter of judicial discretion as to whether, in any
given circumstance, the time for filing a statement of defence should be
extended until after the determination of the motion for certification of the
proposed class action (Always Travel at para 4 and 7; Rules 8 and 385; Shaver
at para 80; Murray at para 20; also see Ward K. Branch, QC, Class
Actions in Canada, (Toronto, ON: Thomson Reuters Canada Limited, 2016) (loose-leaf
updated November 2016, release 46) vol 1 at para 4.1390 (“Class Actions in
Canada”)). This was addressed in Always Travel which also found
that motions of this type will not be granted as a matter of course and that
the defendant as the moving party has the burden of persuading the Court that
it should grant the relief sought. There, Justice Hugessen found that the
absence of any affidavit or other evidence, as is the case in this matter, was
a serious drawback. However, it was not fatal as was he was able to reach a
decision on his reading of the statement of claim. In that regard, given the
complexity of the matter before him, it was unlikely in the extreme that
requiring a statement of defence at that stage of the proceedings would lead to
a less costly and more speedy resolution of the action. He also found that the
statement of defence was not essential to issues which would have to be
determined on the certification motion and was unlikely to be of assistance to
the Court at that stage. Rule 299.18 (now, Rule 334.16(1)) defined and limited
the questions to be addressed on the certification motion which could be
answered solely by reference to the statement of claim and did not require that
there be a statement of defence.
[22]
In Horseman Justice Zinn referenced Always
Travel and went on to state that the fundamental basis for the ruling on
the motion before him was whether the relief sought by the defendant advanced
the purposes of Rule 3, to secure the just, most expeditious and least
expensive determination. Justice Zinn found that the material filed
established that the proposed class action raised complex and important legal
issues and that a proper defence would require a substantial outlay of time,
resources and expense which would be of little assistance in the certification
motion and may have to be duplicated, in part, depending on the result of the
certification motion. Nor was there obvious prejudice to the plaintiffs if the
order sought was granted. Accordingly, he issued an Order which permitted the
time for service and filing of the statement of defence to be extended to 30
days after final determination of the certification motion.
[23]
As noted above, these are the only two decisions
of this Court, identified by the parties, which address a motion to defer the
filing of a statement of defence until after the determination of the
certification motion. However, it appears that it is often the usual practice,
in various provinces, that a statement of defence will not be filed until after
the determination of the certification motion (Hoffman at para 27; Field
at para 45; Warner at para 105; Dominguez at para 130; Ring v
Canada (Attorney General), 2010 NLCA 20 at para 29, leave to appeal to the
Supreme Court of Canada denied in [2010] SCCA No 187 (WL)) and that in Nova
Scotia this is the procedure set out in the Class Proceedings Act of
that province.
[24]
That said, as pointed out by the parties,
Justice Perell, of the Ontario Superior Court of Justice, in Pennyfeather expressed
his view that it was appropriate to revisit the convention whereby defendants
are not required to deliver a statement of defence before a certification
motion. In his view, as a general rule, it would be preferable to close pleadings
before the action moves to a certification motion.
[25]
Justice Perell noted that s 2(3) of the Ontario Class
Proceedings Act, 1992, which is similar to Rule 334.16(1), suggested that
it was the legislature’s intention that the general rule is that the statement
of defence should be delivered before the certification motion. Further, that
pursuant to s 5 (1) of that Act, a plaintiff must satisfy five interdependent
criteria for his or her action or application to be certified as a class
proceeding and that a major advantage of closing the pleadings would be that
controversies about the first of the five criteria for certification might be
resolved or at least narrowed or confined before the certification motion. The
requirement of delivering a statement of defence would “call
out” the defendant to make its challenges to the statement of claim and,
thus, the s 5 (1)(a) criterion might be removed as an issue as would any
challenge to the pleading for wanting in particulars or for breaching the
technical rules for pleading. This would be particularly useful when the
challenge is based on the court not having subject-matter jurisdiction over the
plaintiff's claim. If that challenge is upheld, then the class action would be
dismissed or stayed and the enormous cost of a comprehensive certification
motion avoided (at para 89). Further, hearing an interlocutory motion about
the sufficiency of the pleading might be preferable to having the challenge
heard at the certification motion because a common outcome of the s 5(1)(a)
analysis is to grant the plaintiff leave to amend the statement of claim, which
outcome, at a minimum, exacerbates the complexities of determining the
certification motion because of the interdependency of the certification
criteria (at para 90).
[26]
Justice Perell also noted that in many cases the
technical or substantive adequacy of a plaintiff's statement of claim is not an
issue and, therefore, requiring the completion of the pleadings will involve no
interlocutory steps and the analysis of the other four certification criteria
would be facilitated by a completed set of pleadings (at para 91). For
instance, having the statement of defence before the certification motion would
provide useful information for analyzing the preferable procedure criterion and
the plaintiff's litigation plan (at para 92). Moreover, it may emerge that
there are issues worthy of certification in the defendant's statement of
defence (at para 92).
[27]
In Smith, Justice Perell elaborated upon
his view, including that the defendants were not concerned about wasted time
and effort but did not wish to plead as a tactical maneuver and that no
unfairness arose from denying them that maneuver (at paras 46-56).
[28]
Justice Perell’s view was subsequently reflected
in Shaver, a recent decision of the British Columbia Supreme Court (at
para 81). And, in Gay, the New Brunswick Court of Appeal stated that,
despite the parties’ consent, certification judges should, as a general rule,
insist on the filing and exchange of a full set of pleadings before hearing the
parties and endorsed Pennyfeather in that regard (at para 25). However,
the Ontario Superior Court does not appear to have accepted Justice Perell’s
approach as a matter of course (see Crosslink at para 76) and other
Canadian jurisdictions appear to similarly maintain the practice of permitting
a defence to be filed subsequent to the determination of a certification motion
(see Warner at para 105; Field at para 45).
[29]
I am not bound by Pennyfeather or Smith,
which is not to say that they do not identify legitimate considerations.
[30]
What I take from the case law in whole is as
follows:
i)
whether a defendant must file a defence prior to
certification is purely a matter of judicial discretion (see Class Actions
in Canada, 4.1390 at p 4-85-4-87; Always Travel at paras 4 and 7; Murray
at para 20; Shaver at para 80; MacLean v Telus at para 10) other
than in Nova Scotia where this is the mandated procedure;
ii) whether that discretion should be exercised is fact specific in each
case and should be approached in a flexible and liberal manner seeking a
balance between efficiency and fairness (Western Canadian Shopping Centres
Inc v Dutton, 2001 SCC 46 at para 51; Hoffman at paras 23, 24 and 27;
Murray at paras 24-29; Alberta Municipal Retired Police Officers’ Mutual
Benefit Society v Alberta, 2009 ABQB 44 at paras 4-8; also see MacLean
at para 12 and Pro-Sys BCSC at para 34);
iii) while deferred filing may reflect a general practice or convention,
it is not automatic or to be granted as a matter of course (Always Travel
at para 7 and 9; Gay at para 25;) and the burden of persuading the Court
lies with the moving party (Always Travel at para 8; also see Murray
at para 28);
iv) in that regard, the motion must be grounded on sound reasons which
will generally include an evidentiary basis, however, the Court may also rely
upon the content of statement of claim in appropriate circumstances (Always
Travel at paras 8-9; Murray at paras 28-29);
v) factors to be considered in considering such a motion can include:
a. whether the statement of defence would serve any useful purpose at this
stage in the proceeding. That is, is the statement of defence essential to a
determination of the issues to be addressed at the certification motion or
likely to be of assistance to the Court (Always Travel at para 6, Mangan
v Inco Ltd, [1996] OJ No 2655 (OCJ Gen Div) at para 13 (“Mangan”); Horseman
at p 2; Murray at para 29;
b. whether the relief sought will advance the most just, efficient and
least costly resolution of the litigation (Always Travel at para 9; Horseman
at p 2; Mangan at paras 9-12);
c. whether the nature of the proceedings and the rights asserted are
relevant contextual factors (Murray at para 25);
d. the complexity of the matter (Mangan at para 13; Murray
at para 27; Horseman at p 2; Always Travel at para 9);
e. the amount of time and effort involved to prepare the statement of
defence (Mangan at para 13; Murray at para 29);
f.
whether the statement of defence may have to be
entirely reformulated in response to the outcome of the certification hearing (Mangan
at para 13; Murray at paras 27-28); and
g. whether there is any obvious prejudice to the plaintiff (Horseman
at p 3);
[31]
Put otherwise, what emerges from the
jurisprudence is that the mere fact of the existence of the convention as a
usual practice at the Federal Court and in other jurisdictions is, in and of
itself, not determinative of whether the filing of a statement of defence is to
be deferred until after the hearing of the certification motion. The case
management judge must consider the motion with a view to the just, most
expeditious and least expensive determination of the proceeding. In making
this determination, the extent to which the statement of defence will assist
the Court, the complexity of the legal issues, the extent to which the
statement of defence may need to be reformulated, the time and expense that
preparation of a statement of defence will entail at this stage are all
important considerations. The burden is on the defendant to persuade the Court
that the delay should be permitted and the absence of an evidentiary basis,
while not necessarily determinative, is certainly not helpful to the defendant.
[32]
As applied in this matter, with respect to the first
factor, as noted by the Defendant, the case law is clear that the test for
certification does not concern the merits of the action but rather it’s form (Tihomirovs
at para 34; Pro-Sys Consultants at para 99). The test for certification
under Rule 334.16 states that a judge shall certify a class proceeding if:
a. the pleadings disclose a reasonable cause of action;
b. there is an identifiable class of two or more persons;
c. the claims of the class members raise common questions of law or
fact, whether or not those common questions predominate over questions
affecting only individual members;
d. a class proceeding is the preferable procedure for the just and
efficient resolution of the common questions of law or fact; and
e. there is a representative plaintiff or applicant who
i)
would fairly and adequately represent the
interests of the class,
ii) has prepared a plan for the proceeding that sets out a workable
method of advancing the proceeding on behalf of the class and of notifying
class members as to how the proceeding is progressing,
iii) does not have, on the common questions of law or fact, an interest
that is in conflict with the interests of other class members, and
iv) provides a summary of any agreements respecting fees and
disbursements between the representative plaintiff or applicant and the
solicitor of record.
[33]
In John Doe the Federal Court of Appeal noted
that when considering the first criteria, the facts alleged in the statement of
claim are assumed to be true and that the plaintiffs must establish that there
is a reasonable prospect of success should the claim be permitted to proceed
towards trial. Further, that for the other four criteria, the plaintiffs have
the burden of adducing evidence to show some basis in fact that these criteria
are met (at paras 23-24).
[34]
In this matter neither party suggests that there
are anticipated disputes about the cause of action, such as subject matter
jurisdiction, which seems unlikely. Nor am I convinced that the statement of
defence is necessary for analyzing the remainder of the certification
criteria. Thus, I tend to agree that the statement of defence has no real
utility in determining the issue of certification per se. The first
part of the test is based on what is disclosed in the statement of claim and
the remainder is based on evidence, and a statement of defence does not contain
evidence.
[35]
However, in this case, as in Always Travel,
the Defendant has not provided any affidavit evidence or other evidence in
support of its position that its motion ought to be granted. Its written
argument essentially articulates the legal basis upon which courts across
Canada have traditionally permitted the late filing of a statement of defence
until after certification.
[36]
That said, in the absence of an evidentiary
basis for the motion, in Always Travel Justice Hugessen turned to the
statement of claim to determine whether the motion should still be granted. On
that pleading, Justice Hugessen held that if he were to require that statements
of defence be produced within the usual time or some reasonable extension of
time, the logical next steps would be documentary production and discoveries. Thus,
in an action in which certification had not yet been granted and where it was
uncertain whether or not the action would go forward as a class action or at
all, it would be “uncommonly burdensome” for
both plaintiffs and defendants to undertake that kind of work, documentary
production and discoveries, without any assurance that it would produce any
benefit for anybody in the event that the action was not certified or is only
partly certified (at para 12).
[37]
In Horseman, while it is not apparent
from that decision whether Justice Zinn had before him an evidentiary basis upon
which to grant the defendant’s motion, he stated that on reading the materials
filed he agreed with the submissions of the defendant that the proposed class
action raised complex and important legal issues involving eleven separate
treaties negotiated over a significant period of time, and well as the actions
or inactions of the defendant over a longer time period. A proper defence at
that time would require a substantial outlay of resources, time, and expense
which would be of little assistance to the Court on the certification motion
and may have to be duplicated, in part, depending on the result of the
certification motion. Further, that there was no obvious prejudice to the
plaintiffs if the order sought was granted.
[38]
In my view, in this motion neither party has provided
a particularly compelling argument as to why, based on the specific facts and
circumstances of this matter, the filing of the statement of defence should or
should not be deferred until after the certification motion. This may be because
of the very early stage of the proceeding when no steps have been taken other
than the filing of the Statement of Claim and the making of and response to a request
for particulars.
[39]
Further, at this time only two potential class
members have been identified although the Plaintiffs assert that there are 70
other First Nations reserves that may be captured by the proposed class action.
During the case management conference, the Defendant indicated that there are
currently other active claims before this Court that are much further advanced
than this action and which also allege drainage issues and other issues
pertaining to the Defendant’s control and management of leases in reserves for
oil and gas development. The Defendant also indicated that other such actions
have been stayed and/or are in case management. Thus, First Nations in other such
claims have brought actions on their own behalf yet, in this matter, the
Plaintiffs purport to be suing on their own behalf, on behalf of each other and
on behalf of other First Nations. The Defendant was of the view that a class
action is not necessary or conductive because there would be many individual
issues that pertain only to the reserve of each of the First Nations. I would
also note that the Plaintiffs assert that they do not have information
pertaining to the identification of other potential class members but that this
lies with the Defendant.
[40]
The composition of the class pertains to the
certification of the proposed class action and is not the issue now before me.
However, this highlights that the preparation and filing of a defence at this
time and in this circumstance is unlikely to be of assistance to the Court and
clearly will not lead to a less costly and more speedy resolution of the
action. Put otherwise, these matters will inevitably be addressed during the
certification hearing and it is not clear what utility, if any, a statement of
defence would have at this stage. As demonstrated by the Statement of Claim,
the matter is complex as it will involve the treaty and other rights of each of
the proposed class members which may, or may not, overlap as well as the manner
in which the Defendant addressed those rights. As well, the Statement of Claim
raises potentially complex legal issues grounded in historical and scientific
considerations as the Plaintiffs assert that here are 70 designated reserve
lands that were producing oil and gas under the control of Indian Oil and Gas
Canada (“IOGC”) in British Columbia, Alberta, Saskatchewan and Manitoba.
[41]
A reading of the Statement of Claim also indicates
that the proposed class proceeding engages with the potential legal obligations
owed by several entities including the Department of Indian Affairs and
Northern Development (now Indigenous and Northern Affairs Canada and
hereinafter referred to as (“Department”)), the Crown and IOGC; it similarly
engages with the legal obligations arising from the terms of various
legislative provisions; the claim identifies at least 12 fiduciaries duties;
the claim identifies 17 reasons why the Crown, the Department and the IOGC owed
and reasonably expected that they did owe, a fiduciary duty to each class
member; the claim identifies 5 reasons why the class members were owed a duty
of care; the claim identifies 26 circumstances in which the Crown, the Department
and IOGC failed to meet the required standard of care; and as noted by the
Plaintiffs in the response to the request for particulars, expert evidence will
be led in the context of the assessment of damages which it appears will be a
highly complex determination given the nature of the economic losses claimed
and their cause.
[42]
Ultimately, I have concluded that, at this
stage in the process, I will exercise my discretion and extend the time within
which the statement of defence must be filed. However, with leave, the
extension can be revisited in the event, as the matter proceeds, it becomes
apparent that there would be utility in requiring the filing.
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