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On October 17, 2019 the Court of Appeal of Ontario released its decision in Bancroft-Snell v. Visa Canada Corporation, 2019 ONCA 822. The Court of Appeal’s unanimous five-judge panel decision confirmed individual class members have no right to appeal settlement approval orders even where they appear and object to the issuance of the settlement approval order.

Overview

In 2011 Jonathan Bancroft-Snell and his company brought a class action against the defendant credit card companies and banks, alleging conspiracy to fix, maintain, or increase or control Merchant Discount Fees, including Interchange Fees, paid by merchants who accepted payment by Visa or MasterCard, in Canada. The class action was certified.

At a settlement approval hearing before Justice Perell, two class members, Wal-Mart and Home Depot (the “Responding Parties”), who had failed to opt-out at an earlier settlement hearing, objected to the partial settlement. Justice Perell did not give effect to the Responding Parties’ objections and issued an order approving the partial settlement. The Responding Parties appealed that order.  

The representative plaintiffs as well as several of the defendants (the “Moving Parties”) moved to quash the appeal on the grounds that the Responding Parties did not have standing to appeal the settlement approval. Both Wal-Mart and Home Depot brought related motions: the former sought leave pursuant to s. 30. (5) of the CPA to act as a representative plaintiff for the purpose of the appeal; and, the latter for an order granting leave to act as the representative plaintiff in the event the appeal was quashed.

The Responding Parties requested a five-judge panel, in hopes of overturning the 1998 decision of the same court in  Dabbs v. Sun Life Assurance Co., 1998 CanLII 7165 (ON CA) (“Dabbs”). Dabbs had held that an individual class member, who is not a representative plaintiff, has no right to appeal a settlement approval order.

Dabbs Lives On

Justice Strathy dismissed the Responding Parties’ motions and quashed the appeal. Justice Strathy held Dabbs remains good law despite the Responding Parties’ submissions that its authority had been undermined by subsequent decisions.  

The Court of Appeal summarized appeal rights under the CPA, as follows:

  • Section 30 of the CPA designates specific appeal rights to parties to a class proceeding and divides the appellate jurisdiction of such appeals between the Division Court and the Court of Appeal;
  • Where s. 30 does not specifically address the appeal route, for parties, of a particular type of order or judgment, s. 6(1)(b) of the Courts of Justice Act will govern whether an appeal lies to the Division Court or the Court of Appeal; and
  • Class members who are not representative parties have no direct right of appeal pursuant to s. 30. If a representative plaintiff does not appeal pursuant to s. 30(3) or abandons an appeal pursuant to s. 30(3), class members have a right to seek leave to appeal pursuant to s. 30(5). That right exists only in respect of those matters specified in s. 30(3), those being judgments on common issues or determinations of aggregate damages.

Justice Strathy then turned to the question of whether settlement approval orders should be considered “judgments on common issues” or “determinations of aggregate damages”.  If so, ss. 30(3) and 30(5) of the CPA would in turn provide a class member with standing to appeal the disposition with leave, assuming the representative plaintiff fails to pursue an appeal. Justice Strathy rejected this notion, quoting Justice Harris in Coburn and Watson’s Metropolitan Home, 2019 BCCA 308: “a judgment on a common issue involves an adjudication by a court of contested issues. It does not capture an order approving a settlement in which, typically, liability is disavowed as a condition of the settlement.”

Justice Strathy concluded allowing class members the right to appeal settlement approval would introduce uncertainty into the negotiation and approval of class action settlements, undermine the authority of the representative plaintiff and class counsel, and impede settlement.

The Court of Appeal’s decision reaffirms that representative plaintiffs, as the individuals taking on the risk of litigation, remain the drivers of litigation and settlement approval. While individual class members should expect representative plaintiffs to act in their best interest, their rights in the settlement approval context do not extend to the right to initiate appeals from settlement approval orders, even where they appear and voice an objection to the order at first instance. 

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