Jurisdiction In Class Actions: Certification Of A Global Class

Three recent class action decisions in Ontario have considered when it is appropriate to extend the class—and consequently the jurisdiction of the Ontario court—to include persons who are not resident in Canada. The court in each of these decisions has focused on the question of where non-resident putative class members would reasonably expect their claims to be adjudicated.

These decisions demonstrate that when an Ontario action includes what are in substance foreign claims, a jurisdiction challenge can dramatically narrow the class or even defeat the action entirely. However, where claims have a significant nexus to Ontario, the Ontario courts are prepared to certify a global class, even if many class members, and many of the key facts, are located elsewhere.

A connection to Ontario

Abdula v Canadian Solar Inc.1 is the first decision in Ontario to consider, and grant, certification for alleged misrepresentations of a global class of all shareholders, regardless of their residency, in a corporation the shares of which were traded only on a foreign exchange.

Canadian Solar's shares were publicly traded on NASDAQ and did not trade on any Canadian stock exchange. In a prior decision in the same proceeding, the Court of Appeal for Ontario had confirmed that a company does not have to be publicly traded in Ontario to be a "responsible issuer" under Part XXIII.1 of the Ontario Securities Act,2 and therefore subject to that legislation. The Court of Appeal had also confirmed that, despite its principal place of business in China, Canadian Solar had a real and substantial connection to Ontario, based on its registered office, executive office, annual meetings, private placements, involvement in solar projects and the release of shareholder documents by the company, all of which occurred in the province.

In Canadian Solar, the court held it could certify a global class if there was a "real and substantial connection" between the claims asserted on behalf of the foreign class members and Ontario.

Following the 2013 decision of the Court of Appeal for Manitoba in Meeking v. Cash Store Inc.,3 the Ontario Superior Court found that a real and substantial connection was made out by what it called a new presumptive connecting factor in class action proceedings, which was established where (i) the court has territorial jurisdiction over both the defendant and the representative plaintiff in a class action proceeding; and (ii) there are common issues...