National Class Action Settlements – Enforceable if Done Properly

In an important decision regarding multi-jurisdictional class actions, the Manitoba Court of Appeal (the "Court") in Meeking v. The Cash Store Inc. et al,.1 confirmed a new presumptive connecting factor for jurisdiction based on the existence of a "common issue" between resident and non-resident plaintiffs. The Court also refused to enforce part of a court-approved settlement in a previous action against the same defendants on the basis that the notice to class members was inadequate. In so doing, the Court upheld the enforceability of multi-jurisdictional class actions, but served notice to the profession that such actions will only be enforced if the notices to class members are comprehensive and fair.

History of the Case

Meeking was a proposed class action that was commenced in Manitoba by a resident of Manitoba against The Cash Store and Instaloans in respect of allegedly illegal interest rates on short term loans. The claims asserted in Meeking had previously been the subject of a class action in Ontario that was certified and settled.

The certification order in the Ontario action defined the class as including "any person in Canada, resident outside the Provinces of British Columbia and Alberta, who borrowed money as a 'payday loan' from a Cash Store location". The judgment in the Ontario action was slightly different, applying also to payday loans from Instaloans.

Notice of the Ontario settlement was provided to all known class members by mail, by posting the notice in each of the Cash Store's locations in Canada (except locations in B.C. and Alberta), by referring to the notice in various press releases, by posting the notice on class counsel's website, by posting the notice on the Cash Store's website, and by class counsel providing a copy of it to any person who requested it. The notice set out the deadlines for class members to opt-out of the class action, but Mr. Meeking did not opt-out.

When the Meeking action was commenced in Manitoba, the defendants brought a motion to enforce the court-approved settlement from Ontario. The plaintiff took the position that the settlement was not binding on persons in Manitoba because the notice was inadequate. He claimed that he was not aware of the settlement as he had not seen the posters in The Cash Store and had not read the mail that was sent to him by the defendants. He also argued that the Ontario court did not have jurisdiction with respect to transactions involving residents of...