The Change Up: Class Action Certifications Reformulated On Appeal

A certification application is a necessary step in which a proposed representative plaintiff shows the court why the action should proceed as a class action. In order to be certified, the proposed representative plaintiff must meet a legislated five-part test. This legislated test is relatively uniform among the common law provinces.1 However, the willingness of courts to revisit these statutory requirements and permit a plaintiff to rework their certification application on appeal (to address the deficiencies that caused them to fail certification), varies among the provinces.

In a recent decision, Andriuk v Merrill Lynch, the Alberta Court of Appeal dismissed an appeal of a denied certification motion.2 In Andriuk, the plaintiffs alleged that Merrill Lynch intentionally depressed the price of a speculative junior bio-tech stock. In the Court of Queen's Bench, Madam Justice Martin denied certification on the basis that it lacked clear articulation of the requisite components of certification. Madam Justice Martin did acknowledge that certification should be approached in a flexible and liberal manner, seeking a balance between efficiency and fairness. However, such an approach was not without limits – for example, a judge must not perform the role of class counsel by making wholesale changes to arrive at a definition the court would accept. In this case, there were so many difficulties in the certification application that even a generous approach could not fill the numerous gaps. Accordingly, certification was denied.3

On appeal, the proposed representative plaintiff argued (among other things) that the certification judge could and should have used her discretion to fix the deficiencies. The Alberta Court of Appeal disagreed. In their view, there was no basis to interfere – the certification judge thoroughly and carefully balanced the compelling interests and made no palpable and overriding error in her reasons.4

This outcome may have been different had Andriuk been argued in Ontario or British Columbia. In those provinces, the courts have demonstrated more willingness to allow plaintiffs denied certification to reformulate or recast the basis on which certification is sought on appeal. For example, the Ontario Court of Appeal has commented that: "Provided the defendant is not prejudiced, it is open to a plaintiff to recast its case to make it more suitable for certification."5 Similarly, the British Columbia Court of Appeal has stated...