Hollick 25

Hollick 25 sounds like a tasty brand of BBQ sauce. It’s my short hand reference to a fundamental paragraph in Canadian class actions law. Cloud 50 is another such paragraph.

At certification, a plaintiff has a minimum and evidentiary burden. In Hollick v Metropolitan Toronto (Municipality), [2001] 3 SCR 158, McLachlin C.J.C. required a representative to show “some basis in fact” for each criteria.

[25] ... In my view, the class representative must show some basis in fact for each of the certification requirements set out in s. 5 of the Act, other than the requirement that the pleadings disclose a cause of action.

Hollick did not give a detailed recipe of how to establish each criteria. In Hollick, the standard at para. 26 was whether “many individuals besides the appellant were concerned about noise and physical emissions from the landfill.” In practice, “some basis in fact” has been demonstrated by showing that there are others who complain of what a plaintiff complains of. In Taub v Manufacturers Life Insurance Co. (1998), 40 OR (3d) 379 (Gen. Div.), certification was dismissed without prejudice to reapply on a different record where the applicant did not show that mould was found anywhere other than in her own apartment:

[4] ... I do not say that there must be affidavits from members of the class or that there should be any assessment of the merits of the claims of other class members. I do say, however, that there must, at the very least, be some basis in fact for the court to conclude that at least one other claim exists and some basis in fact for the court to assess the nature of those claims that exist that will enable the court to determine whether the common issue and preferability requirements are satisfied.

There are at least four aspects to “some basis in fact”. An initial aspect is that it is a very low burden – lower than a “balance of probabilities”. See Ring v Canada (Attorney General), 2010 NLCA 20, ¶10-17. In appropriate categories of cases, certification may issue with no or very little evidence. A second and related aspect is that those who oppose certification must put forward their evidence, but their onus is inversely high – ‘no basis in fact’. In Lambert v Guidant Corp., (2009), 72 CPC (6th) 120 (Ont. S.C.J., Cullity J.) (“Lambert”), ¶56-82:

[68] The legislative history was relied on in Hollick as justifying the very weak evidential burden of “some basis in fact” that was held to apply to each of the statutory requirements for certification, other than that relating to the disclosure of a cause of action. It must, I believe, follow logically that, although a defendant would be entitled to deliver affidavit evidence in rebuttal, the standard of proof is inversely heavy. It is not enough for the defendant to establish on a balance of probabilities that facts that bear on the existence of “colourable” claims differ from those asserted by the plaintiff - the onus must be to demonstrate that there is no basis in the evidence for the latter.

At all stages of a class action, class members are not before the Court. As it affects class members, who are unrepresented, a certification hearing is in a sense ex parte. Before certification, courts should consider, guard, and protect their interests. Defendants should disclose all known facts that could influence the Court’s decision. That’s been codified in British Columbia, Canada, and Newfoundland. In McCarthy v Canadian Red Cross Society, (2001), 8 CPC (5th) 350 (Ont. S.C.J.), Winkler J. (later C.J.O.):

[21] By comparison, a class proceeding by its very nature involves the issuance of orders or judgments that affect persons who are not before the Court. These absent class members are dependent on the Court to protect their interests. In order to do so, the Court must have all of the available information that has some bearing on the issues, whether favourable or unfavourable to the moving party. It is the obligation of counsel to provide that information in a manner that is consonant with the duty to make full and frank disclosure. Moreover, that information must be provided in a manner that is not misleading or even potentially misleading.

A third aspect of “some basis in fact” is that the parties may not ask the Court to weigh competing evidence.

A contextual application of “some basis in fact” also factors in timing. Certification is intended to be brought early, and in most provinces within 90 days of the time for a defence. Certification is not a merits determination. Parties may later move to amend the certification order, including to refine the class definition and common issues, or to decertify altogether. These legislative provisions are consistent with legislative intent that certification is generally to be the first procedural step in a class action. As stated at Bouchanskaia v Bayer Inc., 2003 BCSC 1306, ¶93, it is not appropriate to make any determination of contentious issues at certification as the claim is “at a preliminary stage, and the plaintiff has not had the opportunity to explore the evidence regarding the underlying claims.”

Early in the action, “some basis in fact” requires less of plaintiffs than what would be expected on a motion to decertify after discovery. At the initial certification, it would be wrong to weigh the evidence, even if a closer analysis of the merits of the evidence is suitable following discovery. In Smith v Inco Ltd., 2009 CarswellOnt 8019 (S.C.J.), Henderson J. explained:

[24] In my view the Hollick and Pearson decisions stand for the proposition that there is a low threshold to be met by the class representative on a certification motion because the action is usually in an early stage at the time of the certification motion, prior to examinations and prior to full documentary disclosure. However, as the action matures and evidence is revealed a party may ask the court to reopen the certification issue and more closely scrutinize the case as it relates to the criteria in s. 5 of the CPA....[31] Second, a motion for certification is usually brought in an early stage of the proceeding and involves a low evidentiary burden whereby the class representative must establish “some basis in fact” for the certification. The motions judge does not weigh the evidence at that stage, but simply determines if there is an evidentiary basis for the criteria in s. 5 of the CPA....[34] Fifth, on a motion to decertify, either before or at trial, the presiding judge should carefully scrutinize the evidence as it has evolved to that stage of the proceeding and determine if the evidence continues to support the criteria set out in s. 5 of the CPA.

Because of the early stage in which certification is brought, a plaintiff has no burden to thoroughly investigate and challenge competing evidence from defendants. Defendants control information that is necessary to provide a full factual foundation to comprehensively assess the suitability of certification, and they usually selectively present a one-sided case that heavily focuses on the merits of the dispute. The lack of pre-certification discovery supports a low factual threshold: Lambert, ¶59, 62-64, 71. In seeking to discharge the ‘no basis in fact’ burden, defendants will typically do all they can to marshall all evidence that presents their conduct in the best light possible. Plaintiffs have no duty to answer it. In Tiboni v Merck Frosst Canada Ltd. (2008), 295 DLR (4th) 32 (Ont. S.C.J.), Cullity J. emphasized that:

[53] It follows that, when, as here, the defendants’ [sic] deliver affidavit evidence that is relevant only to the merits of the plaintiffs’ claims – as, for example, expert opinions that Merck’s scientific study and testing of Vioxx was “rigorous”, that Merck did everything a responsible company could be expected to do, and that, given the benefits of the drug, the risks involved in its use are tolerable – the plaintiffs have no obligation to challenge the accuracy of such opinions on this motion. Statements by defendants’ counsel that such evidence is “undisputed” may be literally correct for the present purposes. They are also of no significance.

A fourth aspect is that “some basis in fact” is contextual. The test being “in fact”, “evidence” may be unnecessary if the categorical nature of the claim indicates the class definition and common issues. In Caputo v Imperial Tobacco Ltd. (1997), 34 OR (3d) 314 (Gen. Div.), ¶14, Winkler J. (later C.J.O.) stated that the “adequacy of the record will vary in the circumstances of each case.” In Glover v Toronto (City) (2009), 70 CPC (6th) 303 (Ont. S.C.J.), Lax J. explained:

[15] The plaintiffs have an evidentiary burden to show “some basis in fact” for each of the certification requirements other than the requirement in section 5(1)(a) that the claim discloses a cause of action. “Some basis in fact” is an elastic concept and its application can be vexing. It is sometimes easier to articulate what it isn’t, rather than what it is. It is not a requirement to show that the action will probably or possibly succeed. It is not a requirement to show that a prima facie case has been made out. It is not a requirement to show that there is a genuine issue for trial.

Taub explained the contextual nature of certification records:

[4] ...At a minimum, the court must be satisfied that there is a class of more than one person and that the issued raised by the members of the class satisfy the requirement that they raise common issues, and that a class proceeding would be the preferable procedure for the resolution of the common issues. In most class proceedings, these factual matters may well be obvious and require little evidence. Most class proceedings arise from situations where the fact of wide-spread harm or complaint is inherent in the claim itself. Obvious examples are claims arising from mass disasters such as subway or air crashes or claims based on allegations of harm from wide-spread pollution.

At para. 33 of Ernewein, supra, Newbury J.A. referenced some categories of cases that are particularly suited to class proceedings. In Naken v General Motors of Canada Ltd., [1983] 1 SCR 72, Estey J. assessed the suitability of ‘certification’ based solely on the pleadings that had been filed in the Ontario Supreme Court. In Lau v Bayview Landmark Inc. (1999), 40 CPC (4th) 301 (Ont. S.C.J.), Winkler J. observed:

[28] For example, a products liability case, an action arising from a mass disaster or other similar situations represent what may be categorized as “objective” or objectively determinable claims. The harm alleged is not dependent on the plaintiff having certain characteristics but rather arises from the existence of a state of affairs outside the norm, the facts of which are sufficient to establish on the “plain and obvious” test that a cause of action exists. Hence, the evidence of the class, to adopt the words of Sharpe J. in Taub [(1998), 40 OR (3d) 379 (Ont. Gen. Div.), 381], may be “inherent in the claim itself”.

Finally, although it has been referred to as an “evidentiary” burden, “some basis in fact” concerns allegations, not proof. Truth of allegations is for trial.