Developments in Class Action Law: Highlights From Q1 2025

Introduction

A number of important class action decisions were released in the first quarter of 2025. In particular:

• Ocean Pacific Hotels Ltd. v. Lee, 2025 BCCA 57: The British Columbia Court of Appeal ruled that pre-contractual dishonesty does not support a reasonable cause of action for breach of the duty of honest performance;  
• Knisley v. Canada (Attorney General), 2025 ONCA 185: The Ontario Court of Appeal held that class proceedings cannot be “conditionally certified” on a certification motion;
  
• Tataryn v. Diamond & Diamond Lawyers LLP, 2025 ONCA 5: The Ontario Court of Appeal provided its first interpretation of the new mandatory dismissal for delay provision under the Class Proceedings Act, 1992;
  
• Lochan v. Binance Holdings Limited, 2025 ONCA 221: The Ontario Court of Appeal upheld the certification of a securities class action against cryptocurrency company Binance Holdings Limited and its Canadian affiliates in an action brought on behalf of Canadian investors;
  
• Zanin v. Ooma, Inc., 2025 FC 51: The Federal Court stayed a proposed class proceeding advancing claims under the Competition Act and the Trademarks Act, brought on behalf of Canadian consumers, due to the presence of an arbitration clause found in the defendant’s standard form terms and conditions; and
  
• InvestorCOM Inc. v. L’Anton, 2025 BCCA 40: The British Columbia Court of Appeal refused to strike a proposed privacy class action on the basis of it being an abuse of process, despite a parallel class proceeding already having been commenced in Ontario.
  

B.C. Court of Appeal Rules That Pre-Contractual Breach of Duty of Honest Performance Is Not Reasonable Cause of Action

In Ocean Pacific Hotels Ltd. v. Lee, 2025 BCCA 57 (“Ocean Pacific”), the British Columbia Court of Appeal (the “BCCA”) held that a breach of the duty of honest performance does not extend to dishonest representations that occur before a contract is entered into. The decision provides helpful guidance for litigants and contracting parties on when the duty of honest performance begins to apply in the life cycle of a contractual relationship.

(i)     Background 

The plaintiffs were former employees of the defendant, a hotel operator in Vancouver. In 2020, the defendant’s hotel business suffered as a result of the COVID-19 pandemic, and it could no longer provide its employees with regular work hours. Consequently, the defendant offered to replace the plaintiffs’ contracts of regular employment with casual employment contracts. Though the casual contracts eliminated employees’ entitlement to shift hours and severance pay upon termination, they provided extended benefits coverage to casual workers, subject to the policies and terms and conditions of the hotel’s benefits carrier.

In total, 93 employees opted to enter into the casual employment contracts. However, months later, the extended benefits coverage was terminated for many of those same employees.

As a result, the plaintiffs brought a proposed class action on behalf of the employees who entered into casual employment contracts with the defendant. The plaintiffs alleged, among other things, that the defendant breached its contractual duty of honest performance by misleading the plaintiffs about the extended benefits coverage during the parties’ pre-contractual negotiations.

The class action was certified in 2023. At the certification motion, the motion judge acknowledged that the claim for breach of the duty of honest performance was a novel one but held that it nonetheless met the certification requirement of disclosing a reasonable cause of action. The defendant appealed this finding.

(ii)   No breach of duty of honest performance during pre-contractual negotiations

The BCCA allowed the appeal, finding that the motion judge erred in holding that the breach of the duty of honest performance during pre-contractual negotiations was a reasonable cause of action. In doing so, the BCCA held that dishonest conduct during pre-contractual negotiations could not support such a claim, as the duty of honest performance does not extend to dishonesty before the contract at issue is entered into.

The BCCA noted that in both of the seminal cases on the duty of honest performance from the Supreme Court of Canada (the “SCC”), Bhasin v. Hyrnew, 2014 SCC 71 (“Bhasin”) and C.M. Callow Inc. v. Zollinger, 2020 SCC 45 (“Callow”), the SCC required dishonest conduct to be “directly linked” to the performance of a contract to support a breach of the duty of honest performance. However, although the decisions in Bhasin and Callow suggest that the dishonesty must take place during the life of a contract (i.e., after it is entered into) to serve as the basis of a breach of the duty, the SCC did not conclusively rule out the possibility of a breach occurring during pre-contractual negotiations.

Despite the lack of clarity on the temporal limits of the duty of honest performance from Bhasin and Callow, the BCCA commented there is a “developing consensus” among courts that conduct during pre-contractual negotiations cannot form the basis of a breach of the duty.

The BCCA was of the view that the SCC had not intended to extend the duty of honest performance to pre-contractual negotiations in Bhasin and Callow. It noted there was no need to recognize the duty before the contract was formed – other causes of action, namely negligent and fraudulent misrepresentation, already give plaintiffs a remedy for dishonest conduct during pre-contractual negotiations.

The BCCA rejected the plaintiffs’ argument that it was appropriate for the court to find that such a duty applied, given that the parties’ long-term employment relationship was built on “mutual cooperation and trust,” which distinguished the nature of their contracts from a mere business transaction. The BCCA acknowledged that employment contracts are unique, given the vulnerable position of employees relative to employers, but that the special nature of the relationship does not support a finding that the duty of honest performance extends to pre-contractual negotiations in the employment context.

Lastly, the BCCA rejected the motion judge’s finding that “the [existing] employment agreement and the Casual Agreement must be taken together collectively,” holding that neither Bhasin nor Callow supported such a proposition. The BCCA held that the SCC’s decision in Bhasin requires a direct link between the alleged dishonesty and the performance of a “particular” contract to find a breach of the duty. The BCCA added that confusion would be created if the duty of honest performance could be applied to both a present and a future contract collectively.

In the result, the court ruled that dishonesty intended to influence a counterparty to enter a contract during negotiations was outside of the scope of the duty of honest performance. The court added that, if the opposite were true, floodgates would open to claims for breach of the duty in the context of pre-contractual negotiations because the duty of honest performance operates irrespective of a defendant’s intentions. Accordingly, plaintiffs would be able to advance claims for breaches of the duty that occurred during pre-contractual negotiations regardless of whether the alleged dishonesty was intentional.

(iii) Breach of the duty of honest performance under existing agreements

Notwithstanding that the claim for a breach of the duty of honest performance under the casual employment contracts could not succeed, the BCCA held that the plaintiffs were permitted to amend their claim to allege a breach of the duty solely in connection with the regular employment contracts. The BCCA found that the plaintiffs were not barred from framing their claim in this manner because the alleged dishonesty that occurred during negotiations would not be pre-contractual if it was linked to the regular employment contracts – unlike the casual contracts, the plaintiffs’ regular contracts of employment were in effect during the negotiations.

The court held that the proposed amendments were supported by the SCC’s decision in Callow, pointing out that even the defendant’s factum recognized that Callow is “illustrative of the point that ‘statements made during the negotiation of a future contract may also be directly linked to the performance of an existing contract, such that the duty of honest performance is engaged.’”

The BCCA did not offer insight into whether the claim advanced through the proposed amendments was likely to succeed. However, such claim was, at the very least, not doomed to fail.

Door Is Shut on ‘Conditional Certification’ of a Class Proceeding

In Knisley v. Canada (Attorney General), 2025 ONCA 185 (“Knisley”), the Ontario Court of Appeal (the “ONCA”) definitively shut the door on “conditional certification” of a class proceeding. Knisley makes clear that a motion judge must either grant certification where the preconditions for certification have been met or reject certification where they have not. There is no in-between.

(i)     Background

The underlying action in Knisley was a proposed class proceeding brought against the Canadian government on behalf of veterans who suffered damages arising from delays in the administration of service-related disability benefits. Certification was granted on the condition that the plaintiff fixed the proposed class definition.

In the motion decision below, the judge found the plaintiff’s proposed class proceeding had met all of the requirements for certification except for the “identifiable class” criterion. The plaintiff’s class definition was overly narrow in that it excluded potential class members who would otherwise have a valid cause of action against the government for the harms being alleged. Instead of denying certification, the motion judge opted to certify the class action on the condition that the plaintiff fix the class definition to satisfy the identifiable class requirement “to the satisfaction of the parties and the court.” Notably, the motion judge gave no direction on how the class definition could have been fixed.

(ii)   Unavailability of ‘conditional certification’

On appeal, the ONCA held that the motion judge’s decision was based on an incorrect reading of a single sentence of the Supreme Court of Canada’s decision in Hollick v. Toronto (City), 2001 SCC 68 (“Hollick”), which reads:

“Where the class could be defined more narrowly, the court should either disallow certification or allow certification on condition that the definition of the class be amended […]” [emphasis added]

The ONCA held that, contrary to the motion judge’s decision, this sentence from Hollick does not mean that a proposed class action can be certified on the condition of the plaintiff amending the class definition. Instead, the ONCA held that the sentence means that, rather than dismissing the certification motion, a motion judge can certify the class proceeding if the motion judge, not any of the parties, chooses to amend the class definition to make it acceptable for certification.

The ONCA gave three “principal reasons” for why Hollick cannot stand for the proposition that class proceedings can be certified conditionally:

1. First, the Class Proceedings Act, 1992 (the “CPA”) does not contain any language that contemplates or permits the conditional certification of a class proceeding. Rather, it is clear that all of the prescribed preconditions to certification need to be met before a class action can be certified. Accordingly, the very notion of a conditional certification is contrary to the express language of the legislation.
2. Second, the class definition is intrinsically tied to the analysis of other requirements for certification, namely common issues, preferable procedure and representative plaintiff. The class definition therefore cannot be remedied after the court has already conducted an analysis of the other criteria. The court noted that it was unclear how an analysis could have been conducted regarding the other requirements for certification without a proper class definition.
3. Third, conditional certification gives rise to procedural issues. For instance, though the motion judge’s order required the plaintiff to amend the class definition “to the satisfaction of the parties and the court,” it is unclear what would occur if the parties could not agree on a class definition.

Based on these reasons, the ONCA set aside the motion judge’s conditional certification of the class proceeding. Consequently, the ONCA remitted the matter back to the motion judge to reconsider and determine whether the plaintiff’s class definition satisfied the identifiable class requirement.

Ontario Court of Appeal Interprets Mandatory Dismissal for Delay Provision

In 2020, the Ontario government introduced a mandatory dismissal for delay provision by way of section 29.1(1) of the CPA. The provision provides that the court “shall” dismiss a proceeding for delay if at least one of the specified steps have not been completed within one year of the proceeding being commenced. Such steps include, among other things, where a timetable for the completion of one or more other steps required to advance the proceeding has been agreed to and filed by the parties or such a timetable has been established by the court.

Since coming into effect, lower courts have taken various approaches to interpreting section 29.1(1) of the CPA.^[1] Q1 of 2025 saw the provision’s first interpretation by the ONCA in Tataryn v. Diamond & Diamond Lawyers LLP, 2025 ONCA 5 (“Tataryn”), giving much-needed clarity on how the provision is to be interpreted moving forward.

The underlying proceeding in Tataryn was commenced on May 17, 2018. Pursuant to a motion brought under section 29.1(1) of the CPA, the proceeding was dismissed for delay on November 1, 2023.

On appeal to the ONCA, the court upheld the motion judge’s dismissal of the proceeding. Key takeaways of the appeal decision are below.

(i)     No discretion to extend one-year deadline

The ONCA confirmed that judges have no discretion to extend the one-year deadline under section 29.1(1).

The ONCA clarified that the one-year deadline does not change for additional plaintiffs who are later added to a proceeding. In Tataryn, the second of two of the plaintiffs had been added to the proceeding on June 6, 2023, after the proceeding was already commenced by the first plaintiff. Despite joining the action later, the court held that the second plaintiff was subject to the same deadline as the first.

The court reasoned that section 29.1(1) is clear that a “proceeding” must be dismissed unless one of the specified criteria is satisfied within one year from its commencement. The mere addition of a plaintiff did not change the fact that the “proceeding” had been commenced in 2018. The second plaintiff was not permitted to avoid the consequences of section 29.1(1).

(ii)   Context matters

Although the one-year deadline is to be strictly applied, judges have some flexibility in determining whether the specified criteria have been complied with before the deadline.

In particular, the ONCA held that judges must look at the context of the entire proceeding in determining whether a timetable has been established for the completion of “one or more other steps required to advance the proceeding.” As noted above, where such a step has been timetabled, a plaintiff’s proceeding will not be dismissed for delay.

The ONCA recognized that not all steps are required to advance a particular proceeding. In some cases, a certain procedural step might be required to advance the proceeding. Accordingly, the ONCA held that judges must undertake a contextual case-by-case analysis in determining whether a timetabled step is actually one that is “required to advance the proceeding.” This was held to include, at the very least, motions that the CPA treats as “valuable and necessary pre-certification steps.”

The court noted that a motion to strike pleadings (one of the procedural steps under consideration in Tataryn) may be characterized as such a step. However, by reason of the plaintiffs’ own conduct leading up to the motion in Tataryn (which was characterized by delay and several revisions to their pleadings that were subject to successful challenges), the court determined that the motion to strike in Tataryn could not be considered a step required to advance the proceeding.

(iii) Court puts an end to ‘Phoenix Orders’

The ONCA ruled against the notion that “Phoenix Orders” could be granted in a motion brought under section 29.1(1).

The “Phoenix Order” was created by Justice Perell in D’Haene v. BMW Canada Inc., 2022 ONSC 5973. In that case, His Honour determined that the proceeding should be dismissed pursuant to section 29.1(1) but made a “Phoenix Order” that allowed the action to be revived so long as the plaintiffs filed a final certification motion record within 30 days of the order.

The ONCA agreed with the motion judge that such an order was unavailable as it would be “directly contrary to the policy goal underlying s. 29.1(1).” Otherwise, a plaintiff could simply delay an action until it gets dismissed and then revive it as though nothing happened – which is precisely the type of mischief that section 29.1(1) was intended to address.

Ontario Court of Appeal Upholds Certification of Securities Class Action Against Cryptocurrency Trading Platform

In Lochan v. Binance Holdings Limited, 2025 ONCA 221 (“Lochan”), the ONCA upheld the certification of a securities class action against a Cayman Islands company, Binance Holdings Limited, and its Canadian subsidiaries (collectively, “Binance”). The class proceeding was commenced on behalf of Canadian investors who purchased cryptocurrency derivative products on Binance’s online cryptocurrency trading platform. The plaintiffs alleged common law and statutory causes of action against Binance on the basis of various breaches of securities laws, namely trading securities without registering and distributing securities without a prospectus.

(i)     Background

In the late 2010s, Binance Holdings Limited and/or its Canadian subsidiaries operated the Binance website, through which it marketed and sold cryptocurrency derivatives to Canadian investors. It soon came to the attention of the Ontario Securities Commission (the “OSC”) that, in doing so, Binance was in breach of securities laws for failing to register with the OSC for engaging in the business of trading securities in Ontario and failing to deliver prospectus to its users who purchased cryptocurrency derivatives.

Subsequently, two Canadians who purchased cryptocurrency derivatives on the Binance website brought a proposed class action against Binance, suing for damages and rescission of their contracts under section 133 of the Ontario Securities Act and at common law on the basis that Binance had been trading the cryptocurrency products illegally.

At the certification motion, the plaintiffs’ class action was certified, with the motion judge ruling that the plaintiffs’ claim had satisfied all of the certification requirements under the CPA. Binance appealed the certification decision on the grounds that the motion judge erred in finding that the plaintiffs’ claim satisfied the reasonable cause of action and common issues criteria, and that the motion judge’s findings on those criteria caused his other findings to also be “tainted by error.”

(ii)   Reasonable cause of action

The ONCA held that the motion judge correctly found that the plaintiffs’ claim pled a reasonable cause of action under the Ontario Securities Act and at common law.

With respect to the statutory claim under the Ontario Securities Act, Binance relied on the language in section 71(1) of the statute, which required Binance to deliver “the latest prospectus and any amendment to the prospectus filed.” Binance argued that this language meant that it was only a breach of the statute if Binance “filed” a prospectus with the OSC and failed to deliver the prospectus to investors. Since Binance did not file a prospectus, it argued that the plaintiffs were not entitled to the statutory remedy.

The court acknowledged that there was support for Binance’s argument but that the test under the reasonable cause of action criterion was a low bar. The court pointed out that the plaintiffs’ statutory cause of action was not bound to fail and that there were good reasons to doubt that the plaintiff would be barred from a statutory remedy, even if no prospectus had been filed. For instance, the notion that a statutory remedy would only be available for non-disclosure if a prospectus was filed seemed to be contrary to the purpose of the Ontario Securities Act. Thus, the court held that the plaintiffs had satisfied the low bar presented by the cause of action criterion.

Binance also argued that the plaintiffs’ common law claim to set aside the transactions made on the Binance platform for constituting an illegal “trade” of securities must fail. Among other things, Binance argued that the definition of “trade” under the Securities Act captures purchasers as well as sellers of derivatives, meaning that the plaintiffs and class members would equally be in breach for illegal trade of securities.

The ONCA rejected this argument, stating that it was not plain and obvious that the legislature intended to abrogate from the common law right to relief by the definition of trade under the Securities Act. The ONCA also questioned the practicality of how unsophisticated investors on the Binance platform could have prepared a prospectus before purchasing cryptocurrency derivatives through the platform.

(iii)  Common issues

Binance also attacked the motion judge’s finding that the question of whether the contracts for cryptocurrency derivatives were between class members and Binance was certified as a common issue.

Binance argued that several users had in fact contracted with one another, not Binance, on the Binance platform when they purchased cryptocurrency derivatives and, therefore, the issue could not be resolved in common amongst class members. On appeal, Binance argued that the motion judge erred in finding that there was no documentary evidence supporting Binance’s position on that point.

The ONCA held that it did not matter whether Binance led evidence to contradict the plaintiffs’ position. All the motion judge was required to do was determine whether the plaintiffs had led some basis in fact that Binance was a party to the cryptocurrency derivative transactions that occurred on the platform. The court upheld the motion judge’s determination that any conflicts in the evidence between the parties would be dealt with at the common issues trial, not at the certification motion. Thus, even if the motion judge was incorrect that Binance had led no evidence in support of its position, it had no bearing on the common issue being properly certified.

(iv)  Remaining certification issues

In light of the foregoing, the court rejected the conclusion that the motion judge made any errors that had tainted his findings on the other certification requirements.

Federal Court Stays Class Action in Favour of Arbitration Clause Found in Standard Form Terms and Conditions

In Zanin v. Ooma, Inc., 2025 FC 51 (“Zanin”), the Federal Court stayed a proposed class proceeding in favour of arbitration due to the presence of an arbitration clause found in the standard terms and conditions between the defendant company and the plaintiff consumer. The decision affirms the court’s proclivity to enforcing arbitration clauses, even where the clause in question is found in online terms and conditions and the plaintiff’s claim is for a low value (thereby potentially making arbitrating the dispute financially impractical).

(i)     Background

In 2020, the plaintiff subscribed to the services of the defendant, a phone and telecommunications provider. In doing so, the plaintiff accepted the defendant company’s standard terms and conditions, which contained an arbitration clause, class action waiver clause and forum selection clause (collectively, the “Limitation Clauses”).

When the plaintiff signed up for the defendant’s services, he was given the impression from the defendant’s advertising materials that the services would be free. However, it was allegedly unknown to the plaintiff that the defendant actually charged certain monthly nominal fees and taxes as part of its service plan.

After discovering these monthly fee charges, the plaintiff commenced the proposed class proceeding against the defendant on behalf of individuals who were subscribed to the defendant’s services. The plaintiff alleged the defendant had committed various breaches of the Trademarks Act and the Competition Act for falsely describing its basic home phone services as “FREE” or costing “$0” when it actually cost the plaintiff approximately $5 to $6 dollars in monthly fees and applicable taxes.

The defendant opposed the plaintiff’s action on two grounds. The first was that the Federal Court had no jurisdiction to hear the matter and it should be sent to arbitration and, secondly, that the plaintiff had failed to meet the requirements for certification as a class proceeding.

The court in Zanin dealt with both the plaintiff’s motion to certify the action as a class proceeding and the defendant’s motion that the action should be stayed in favour of arbitration. The following focuses on the court’s findings in relation to the enforceability of the arbitration clause and the consequential granting of a stay in favour of arbitration.

(ii)   Plaintiff accepted and was aware of Limitation Clauses

The court accepted that the Limitation Clauses were part of the terms and conditions the plaintiff accepted when he contracted for the defendants’ services. Notably, the court found that the terms and conditions were accessible to the plaintiff in a hyperlink when he signed up for the defendant’s services online and commented that it is now widely accepted at law that consumers will be bound to terms and conditions presented in a hyperlink, even if a consumer (like the plaintiff) does not read them.

The court also determined that the defendant complied with its obligation to bring the Limitation Clauses to the plaintiff’s attention. In particular, the defendant used capital letters to draw consumers’ attention to those provisions. The court commented that similarly structured clauses had been found to provide adequate notice to consumers in other cases.

(iii)   Enforceability of Arbitration Clause

In assessing whether the arbitration clause should be enforced against the plaintiff to stay the action, the court commented that “Canadian courts have … established a clear policy choice favouring the enforcement of arbitration agreements.”

As the court pointed out, this policy choice is reflected by the legal doctrine known as the “competence-competence principle,” which requires any challenges to an arbitrator’s jurisdiction to first be referred to and dealt with by the arbitrator, not the court, subject to limited exceptions. The court further noted that a clear case is needed to reverse the presumption that the competence-competence principle applies and that arbitration clause is valid and enforceable.

In an effort to overcome the application of the competence-competence principle, the plaintiff raised three core arguments as to why the arbitration clause could not be enforced: first, that the Ontario Consumer Protection Act and the Federal Courts Act override the enforcement of the arbitration clause; second, that the arbitration clause is void for reasons of unconscionability and public policy; and third, that the arbitration procedure prescribed by the arbitration clause is incapable of performance on the basis that the chosen arbitration institution, the Judicial Mediation and Arbitration Services (“JAMS”), would refuse to arbitrate the dispute.

All three of these arguments were rejected by the court.

a.   No legislative overrides applied

The court held that the Ontario Consumer Protection Act and the Federal Courts Act did not override the application of the arbitration clause in the plaintiff’s case.

With respect to the Ontario Consumer Protection Act, the court held that the legislation only invalidates arbitration clauses for certain causes of action commenced by a consumer before the Ontario Superior Court of Justice (not the Federal Court). The Consumer Protection Act had no bearing on the plaintiff’s action, which was commenced in the Federal Court under federal legislation (the Competition Act and the Trademarks Act), neither of which precluded the enforceability of otherwise valid arbitration clauses.

With respect to the Federal Courts Act, the court held that nothing in the statute limits the plaintiff’s lawsuit to the exclusive jurisdiction of the Federal Court, such that other forms of dispute resolution, including arbitration, are inapplicable. The court commented that if the federal government intended to exclude the potential to resolve disputes commenced under federal legislation by arbitration, it would have done so.

b.   Clause was not unconscionable or against public policy

The court held that the plaintiff failed to demonstrate that the arbitration clause is unconscionable or against public policy.

For the arbitration clause to have been found unconscionable, the plaintiff needed to establish: (a) there was an inequality of bargaining power (i.e., the plaintiff was put in a position where they could not adequately protect his interest); and (b) a resulting improvident bargain (i.e., the stronger party is unduly advantaged or the weaker party is unduly disadvantaged). The court found that neither of these factors existed in the plaintiff’s case.

The court determined there was no evidence that the services offered by the defendant were so essential to the plaintiff’s life that would give rise to a finding of inequality of bargaining power. In particular, nothing suggested that the plaintiff was vulnerable or that his livelihood depended on the defendant’s services. Rather, the plaintiff simply could have declined the defendant’s services and gone to a different home phone service provider.

The court also found that there was no evidence to support a finding that he lacked information required to sufficiently understand the defendant’s terms and conditions or the arbitration clause found therein.

With respect to whether the arbitration clause amounted to an improvident bargain, the court held that there was no significant advantage or disadvantage posed by the JAMS arbitration procedure contemplated under the arbitration clause. For instance, the JAMS rules were no more burdensome to the plaintiff than the court system, the upfront costs associated with the arbitration procedure were comparable to the filing fees required by the court and, although the jurisdiction of the JAMS arbitration was California, nothing in the rules actually required the plaintiff to be physically present in California to have his case arbitrated (i.e., virtual/remote arbitration was a possibility).

That said, the court recognized that the mandatory arbitration clause could have the effect of restricting access to justice for consumers with low-value claims, given the expense associated with private arbitration. However, pursuant to the competence-competence principle, the court held that the question of whether the arbitration clause was void for unconscionability was better left to the arbitrator, given that the plaintiff failed to make out a clear case on why the arbitrator’s jurisdiction should be ousted. The court also noted that it would be up to the legislature, not the court, to limit the application of arbitration clauses under federal legislation to address the financial hardship consumers with low-value claims.

c.   Arbitration clause was not clearly incapable of performance

The court also rejected the plaintiff’s argument that the arbitration clause was incapable of performance. The plaintiff argued that the arbitration clause could not be performed because it contradicted the JAMS’ internal arbitration standards, which could result in JAMS refusing to administer the arbitration procedure as contemplated.

The court held that the question of whether the arbitration clause complied with JAMS’ internal policies was a highly factual determination and not one that was appropriate for the court to determine. Rather, on the basis of the competence-competence principle, the court held that the question should be referred to the arbitrator to determine. The court added that the issue of whether the arbitration rules were being followed fell squarely within the jurisdiction of the arbitrator, and the mere possibility that the arbitrator may not enforce the arbitration clause was not enough to oust its jurisdiction.

(iv)   Conclusion and other findings

In the result, the court concluded that the arbitration clause was sufficient to grant the defendant’s motion to stay the plaintiff’s action in favour of arbitration. For the sake of completeness, the court went on to find that the other Limitation Clauses were also each individually sufficient to grant the defendant’s request for a stay.

Lastly, the court held that even if the stay was not granted, the plaintiff’s certification motion would have failed in any event due to several deficiencies with the plaintiff’s action.

BCCA Refuses to Strike Privacy Class Action Despite Parallel Proceeding Commenced in Ontario

In InvestorCOM Inc. v. L’Anton, 2025 BCCA 40, the BCCA upheld an application decision refusing to strike the plaintiff’s proposed class action on the basis that a proposed national class action advancing similar claims had already been commenced in Ontario.

(i)     Background

The plaintiff, a former customer of one of the defendants, Mackenzie Financial Corporation (“Mackenzie”), had his personal information stolen by hackers through a data breach in February 2023. Customers’ information was stored on the servers of the other defendant, InvestorCOM Inc. (“InvestorCOM”). The plaintiff brought a proposed national class action in B.C. against the defendants on behalf of past and present customers of Mackenzie who had their information stolen in the data breach.

The defendants sought a stay of the plaintiff’s action, alleging abuse of process on the basis that the action overlapped with another proposed national class proceeding advancing similar claims, which had already been brought by different plaintiffs in Ontario.

The application judge declined to grant the stay, and the defendants appealed the application decision.

(ii)   Parallel proceeding was not abuse of process

The BCCA dismissed the defendants’ appeal. In doing so, it rejected the defendants’ argument that the B.C. action was an abuse of process simply because it was similar to the action commenced in Ontario.

The BCCA held that, at the pre-certification stage of a class proceeding, the mere similarity between claims in different actions is not enough to find an abuse of process. The court added that it is only when each action becomes certified as a class proceeding that the issue of a potential overlap between different class actions becomes realized. Before that point, the proposed class actions were merely actions commenced by different individuals advancing their own claims.

Rather than addressing the issue before certification, the BCCA held that the concerns around the possibility of overlapping class actions is better dealt with at the certification hearing. The court explained that a judge may decline certification if the court finds that it would be preferable to have some or all of the claims advanced in another proceeding commenced elsewhere. As a practical matter, the BCCA also noted that it was more sensible to address the issue of parallel proceedings at certification because a judge would have the benefit of a full evidentiary record to assess the preferability issue.

The BCCA also disagreed with the defendants’ contention that the plaintiff had commenced the action for an improper purpose. The court agreed with the application judge that there was a legitimate reason for the plaintiff to commence his action in B.C. rather than Ontario given that provinces approach claims based on data breaches differently – for instance, claimants in B.C. can advance a statutory breach of privacy tort, whereas claimants in Ontario cannot.

Lastly, the BCCA highlighted that “it is to be remembered that the doctrine of abuse of process is fundamentally concerned with the integrity of the administration of justice.” The court found that the defendants failed to establish that the integrity of the administration of justice was undermined by the plaintiff’s commencement of the B.C. action after the Ontario action had been filed. In particular, parallel class proceedings are consistent with the administration of justice as the B.C. Class Proceedings Act provided a mechanism to address potentially overlapping claims at the certification stage.

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The Class Actions Group at Aird & Berlis LLP has broad class action defence experience in securities law, financial services, mining, oil and gas, consumer products, product liability, pharmaceutical, natural health products, telecommunications, condominiums, competition, copyright, privacy and insurance defence. Please contact the authors or a member of the group for further information.

[1] See our previous article on Key Class Action Developments in 2022 for examples of how various lower court decisions first interpreted the mandatory dismissal for delay provision under the CPA.