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Cassano v. TD — Confirming a Paradigm Shift towards Certification of Class Actions


June 30, 2008


Donald Bisson
Warren B. Milman
Julie K. Parla
Sean S. Smyth
Harry Underwood

In one of his first substantive decisions as Chief Justice of Ontario, Mr. Justice Winkler (for a unanimous panel of the Court of Appeal) has sent a strong message favouring certification of class actions in consumer cases where individual claims are small. Chief Justice Winkler’s interpretation of the Class Proceedings Act (CPA) reconstitutes it as a flexible and powerful tool whose purpose in achieving access to justice should not be undermined at the certification stage.

The case involved a claim by TD Visa cardholders who alleged that conversion and issuer fees charged in respect of foreign currency Visa transactions are not authorized by the cardholder agreements. The certification judge, Justice Cullity, had found that determining whether any particular class member suffered a loss would require individual investigations into how each class member would have used his or her Visa card had he or she known of the fees — and that the need for these individual assessments precluded an award for the aggregate damages contemplated in the CPA. The one proper common issue, that of whether TD breached the cardholder contract, was not sufficient to conclude that a class proceeding was the preferable procedure. Accordingly, the certification motion was dismissed. The dismissal was upheld by the Divisional Court.

Chief Justice Winkler overturned the lower courts’ decisions. In so doing, he emphasized the fundamental policies that class proceedings are meant to uphold, namely access to justice, judicial economy and behaviour modification of the defendants. He went on to illustrate how a proper interpretation of the CPA is one in which the provisions are construed broadly and flexibly to further the statute’s purpose, instead of undermining it.

Chief Justice Winkler focused on three ways in which the CPA is meant to be flexible so that it can overcome what may appear to be insurmountable problems with individual assessments:

1. Aggregate damages — Chief Justice Winkler confirmed that aggregate damages would be available where liability can be established on a class-wide basis, but entitlement to monetary relief may depend on individual assessments. In this case, he confirmed that if TD is found to have breached the cardholder agreements, the breach would render improper the conversion and issuer fees charged for foreign currency transactions. He did not accept TD’s response that the process of reviewing all of the individual cardholder statements during the relevant period would take an inordinate amount of work (estimated by TD to be equivalent to 1,500 people working full-time for one year). To allow this position to undermine certification would be inequitable and would, as Chief Justice Winkler states, "pervert the policy underpinning the statute."

    2. Flexibility in estimating individual damages — Whether a court needs to assess entitlement of a particular class member to aggregate damages or individual loss in cases where aggregate damages are not available, the CPA provides the court with creative options to conduct the assessments in an efficient manner. For example, the CPA authorizes a court to:

    • order that class members share an aggregate award on an average or proportional basis, if identifying entitlement on an individual basis would be inefficient or impractical;

    • require claim forms, individual affidavits or sample auditing to confirm eligibility to participate in an aggregate claim; and

    • direct procedures (including hearings, references, inquiries, etc.) undertaken to determine individual issues following resolution of common issues at trial.

    3. Flexibility in distributing damage awards — Chief Justice Winkler further confirmed that the CPA allows for a range of options in distributing amounts awarded to class members, including by way of credit or abatement.

The court concludes that the flexibility inherent in the CPA exists precisely for the purpose of addressing the difficulties posed by individual assessments in relatively small claims, and will support the conclusion, as it did in this case, that a class proceeding is the preferable procedure. As Chief Justice Winkler stated, "The statute is a powerful procedural mechanism that permits the court to take a variety of approaches in resolving the claims of class members."

McCarthy Tétrault Notes:

This case solidifies a growing trend towards certification of class actions in Ontario. The liberal and flexible approach endorsed by the Court of Appeal will make defeating a motion for certification extremely difficult in the future. The class action battle will no longer be fought in the certification stage now that the arena has moved to the common issues trial.