Hafichuk-Walkin V BCE: Manitoba Becomes The Fifth Province To Shut Down Duplicative Class Actions As 'Abuse Of Process'

On March 14, 2016, the Manitoba Court of Appeal issued its long-awaited decision in Hafichuk-Walkin v BCE, 2016 MBCA 32, joining the increasing number of Canadian appellate courts that have stayed duplicative class actions using the "abuse of process" doctrine.

In 2004, the Merchant Law Group (MLG) instituted nine essentially identical proceedings in every province in Canada except Prince Edward Island, seeking to certify a national class action against various wireless telecommunications companies with regard to "system access fees" charged in connection with cellular phone service. MLG chose to pursue the proceedings in Saskatchewan, at the time a "no costs", opt-in1 jurisdiction, while leaving the others dormant. MLG was only partly successful in certifying a class proceeding before the courts in Saskatchewan, with the court certifying a national class action only with regard to one aspect of its claim, but not others. MLG then made numerous unsuccessful attempts to convert the Saskatchewan proceeding from an opt-in to an opt-out proceeding and to reintroduce the various causes of action that had been denied class certification - including by introducing a second, duplicative new class action in Saskatchewan. However, MLG took no action to advance the class action proceedings in other provinces for 10 years.

Eventually, the various defendants (including those represented by Davies) started applying to stay MLG's duplicative proceedings on the grounds that they served no purpose other than to (potentially) re-litigate matters decided by the court in Saskatchewan and thus constituted an abuse of process. One by one, courts across the country agreed, starting in Saskatchewan itself2 and proceeding to British Columbia,3 Nova Scotia,4 Alberta5 and now Manitoba.

In Hafichuk-Walkin, the Manitoba Court of Appeal accepted the defendants' distinction between "parallel" and "overlapping" class actions, and agreed that although the former may be permissible in a federal system, "multi-jurisdictional class actions are abusive when they are duplicative and no legitimate purpose would be served by allowing more than one class action to proceed on behalf of overlapping class members from one or more provinces" (para. 40).

The Court concluded that MLG's Manitoba proceedings constituted an abuse of process, both due to the "extreme delay" in prosecution and because they were introduced not with a bona fide intent to pursue, but rather "as nothing more...