



COURT OF APPEAL FOR ONTARIO

CITATION: Amyotrophic Lateral Sclerosis Society of Essex

County v. Windsor (City), 2017 ONCA 555

DATE: 20170630

DOCKETS: C63030, C63032, C63246,
    C63247 and M47662

Hoy A.C.J.O., van
    Rensburg and Roberts JJ.A.

BETWEEN

Amyotrophic Lateral Sclerosis Society of Essex
    County

Plaintiff/Appellant

and

The Corporation of the City of Windsor

Defendant/Respondent

BETWEEN

Belle
    River District Minor Hockey Association Inc.

and Essex County Dancers
    Incorporated

Plaintiffs/Appellants

and

The Corporation of the City of Tecumseh

Defendant/Respondent

Robert B. Bell and Brian N. Radnoff, for the appellants

Brendan van Niejenhuis and Fredrick Schumann, for the
    respondents

Heard: June 20, 2017

On appeal from the orders of Justice Terrence Patterson
    of the Superior Court of Justice, dated November 1, 2016 and January 13, 2017.

van Rensburg
    J.A.:

[1]

These appeals arise in the context of related class actions, commenced
    in 2008 and certified in 2012, that are being case managed by Patterson J. (the
    case management judge).

[2]

The appellant charitable organizations seek remedies for what they
    characterize as unconstitutional or illegal taxation by the respondent
    municipalities. They take issue with bingo license and administration fees the
    municipalities charged.

[3]

The appeals are from four orders of the case management judge, two in
    each proceeding.

[4]

First I will deal with the orders dated January 13, 2017, granting a
    motion to lift orders in the two proceedings dated June 9, 2016, protecting
    from disclosure the identities of persons who opted out of the class (the
    protective orders). The respondents moved to quash the appeals to this court
    on the basis that the orders lifting the protective orders are interlocutory
    and that the route of appeal is to the Divisional Court with leave, under s.
    19(1)(b) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43. The court
    granted the motion to quash these appeals, with reasons to follow.

[5]

Second, I will address with the appeals of orders of the case management
    judge dated November 1, 2016, refusing leave to the appellants to amend their
    amended statements of claim. These appeals were dismissed following oral
    argument, with reasons to follow.

A.

Motion to Quash: Appeals of the January 2017 Orders

[6]

Some background to the January 2017 orders is useful. The proceedings
    were certified as class actions in 2015. The opt-out period ran from January 15
    to May 15, 2016. The respondents organized a campaign to encourage class
    members to opt out. The case management judge determined the respondents went
    over the line and created undue influence, and consequently ordered that
    those who had opted out be given a reconsideration period, which ran from
    August 11 to October 10, 2016.

[7]

During the reconsideration period, the case management judge ordered the
    respondents not to communicate further with class members. Separately, and on
    consent, the protective orders were made, permitting the respondents counsel
    to know the number and identities of opt-outs, but preventing them from sharing
    this information with their clients. The protective orders also provided for
    any information filed with the court revealing the identity of opt-outs to be
    sealed, however no such information was filed.

[8]

Once the reconsideration period ended, the respondents counsel sought
    to lift the protective orders so they could share the opt-out information with
    their clients. They asserted the protective orders were interim only for the
    reconsideration period, which had expired. Class counsel did not oppose the
    provision of information as to the number and identities of opt-outs to the
    respondents clients, but sought conditions to protect the confidentiality of
    such information and a declaration that the implied and deemed undertaking
    rules applied to the information concerning the opt-outs. Class counsel argued
    that if the identities of the opt-outs were disclosed, the public would be able
    to deduce the identities of the class members.

[9]

The case management judge ordered that the protective orders be lifted
    immediately. He characterized the protective orders as similar to sealing
    orders and, in determining whether the protective orders should be continued or
    lifted, applied the test in
S
ierra Club of Canada v.
    Canada (Minister of Finance)
, 2002 SCC 41, [2002] 2 S.C.R. 522
, requiring
    a serious risk to an important interest. He concluded that there was
    insufficient evidence of a serious threat to the commercial interests of the
    appellants in this case. He observed that, while anonymity is part of class
    actions, and it is not unusual that a potential class members identity is not
    known in the early stages of a class action, the identity of the class members
    would become public in any event when they proved their claims, and at an
    earlier stage if leave were granted to conduct cross-examinations. The case
    management judge concluded that, in any event, the protective orders were made
    on an interim basis and only related to the reconsideration issue, which had
    expired.

[10]

In their appeals, the appellants assert that the case management judge
    erred in treating the motion as if it were a request for a sealing order and in
    failing to consider whether the implied or deemed undertaking rules apply to
    the information at issue and whether any conditions should be imposed on the
    respondents with respect to the use of the information.

[11]

As the point of departure, I note that the January 2017 orders were made
    in the case management judges exercise of his authority under s. 12 of the
Class
    Proceedings Act, 1992
, S.O. 1992, c. 6 (the CPA).  The fact that the
    protective orders and the January 2017 orders were made under s. 12, which
    provides for orders to be made respecting the conduct of a class proceeding, does
    not necessarily determine the character of such orders as interlocutory. Section
    30 of the CPA provides for a non-exhaustive list of orders that may be appealed
    and the routes of appeal. There is no reference in s. 30 to orders made under
    s. 12. When a judge of the Superior Court makes an order under the CPA that is
    not referred to in s. 30, the
Courts of Justice Act

governs the
    appeal route:
Locking v. Armtec Infrastructure Inc.
, 2012 ONCA 774, 299
    O.A.C. 20, at para. 8;

Waldman v. Thomson Reuters Canada Limited
,
    2015 ONCA 53, 330 O.A.C. 142, at para. 5;
Parsons v. Ontario
, 2015
    ONCA 158, 125 O.R. (3d) 168, at para. 39.

The question here is whether
    the January 2017 orders are final and appealable to this court under s. 6(1)(b)
    or whether they are interlocutory and appealable to the Divisional Court with
    leave under s. 19(1)(b) of the
Courts of Justice Act
.



[12]

The respondents contend that the January 2017 orders are interlocutory
    because they do not determine the real matter in dispute between the parties 
    the very subject matter of the litigation:
Hendrickson v. Kallio
,
    [1932] O.R. 675 (C.A.), at p. 678.

[13]

In support of their contention that the orders are final, the appellants
    make two main arguments.

[14]

First, they say that while the orders in question do not dispose of an
    issue in dispute in the litigation, they are
res judicata
and therefore final,
on the issue of
    whether the identities of opt-outs can be disclosed without any qualifications,
    and respecting the application to such information of the deemed and/or implied
    undertaking rules.

[15]

In
Waldman
,

MacFarland J.A. rejected a similar argument, stating, at para. 22, [t]his
    submission presumes that, to be a final order, an order need only dispose
    finally of whatever issue was before the motion judge irrespective of whether
    the order terminates the action or resolves a substantive claim or defence of
    the parties. Were that so, the distinction between interlocutory and final
    orders would cease to exist. Further, as stated in
Hendrickson
,
at p. 678
, an interlocutory order may be final in the sense that it determines
    the very question raised by the application but it is interlocutory if the
    merits of the case remain to be determined.

[16]

Stoiantsis v. Spirou
, 2008 ONCA 553, 91 O.R. (3d) 184, a
    decision relied on by the appellants, involved an order that determined a
    preliminary factual matter in a medical malpractice action. Although the issues
    in the action were only partially resolved, the order was final because its effect
    was to deprive the defendants of a defence that could have been determinative
    of the entire action. Similarly, in
Almrei v. Canada (Attorney General)
,
    2011 ONCA 779, 345 D.L.R. (4th) 475, also referred to by the appellants, the
    finding, in a summary judgment motion, that issue estoppel from a prior
    proceeding did not apply, deprived the appellant of a substantive right that
    could have been entirely determinative of the defendants liability.

[17]

Here, by contrast, while the orders are
res judicata

on
    the question of whether the identities and other information concerning the
    opt-outs can be revealed, they are not
res judicata

and did not
    determine on any final basis any substantive issue or right that could be
    determinative of the action.

[18]

Second, the appellants assert that the orders are final because they
    directly affect the substantive rights of the opt-outs, who are not parties to
    the litigation. The appellants rely on
Hollinger Inc. v. The Ravelston Corp.
,
    2008 ONCA 207, 89 O.R. (3d) 721, a case involving the appeal of an order
    continuing a protective order that sealed motion material making it unavailable
    to the public. This court characterized the order as final, in the context of
    an appeal by the Globe and Mail newspaper.

[19]

The
Hollinger
case is readily distinguishable from the present
    case because it involved the final determination of the rights of a third party
    who brought an application before the court. An order that is otherwise
    interlocutory does not become final, as between the parties, simply because it affects
    the rights of a third party:
Royal Trust Corporation v. Fisherman
(2001),
    55 O.R. (3d) 794 (C.A.), at para. 12. Here the appellants are the
    representative plaintiffs in the action. The opt-outs are not parties to the
    litigation, nor, as counsel emphasized in argument before this court, are they
    represented by or owed any duties by the appellants counsel.

[20]

I therefore reject the appellants contention that, because the order may
    affect the rights of those who have opted out of the class, the order is final.
    As between the parties to the litigation, it is an interlocutory order that
    does not determine any rights or issues in the proceedings on a final basis.

[21]

Finally, the case management judge observed that the protective orders
    were interim in nature, designed to safeguard the integrity of the
    reconsideration period and that they should not outlast it. As the protective
    orders were interim only, a decision to lift a protective order that was in
    place for a period that has expired is in effect a decision not to continue a
    protective order. Such an order is interlocutory. See
Hollinger
, at
    paras. 52-59.

[22]

For these reasons the court quashed the appeals of the January 2017
    orders.

B.

Appeal: November 2016 Orders

[23]

After the opting out period had expired, the
    appellants sought to amend the statements of claim in both actions
nunc
    pro tunc
.

[24]

In the actions as currently framed, the
    representative plaintiffs seek declarations that the lottery licensing fees and
    lottery administration fees paid by the plaintiffs and the other class members
    to the defendant municipalities are taxes levied without legislative and
    constitutional authority and are
ultra vires

the defendant municipalities.  They also claim an accounting of
    lottery licensing fees and administrative fees
paid
    by the plaintiffs and other class members

from and
    after October 24, 1993, and restitution in accordance with the accounting.

[25]

The proposed amendments, in addition to the
    declarations, seek an accounting of licensing and administration fees
received by the municipalities
found to
    be levied without authority or
ultra vires
,
    and disgorgement of such fees, with an alternative claim of restitution of fees
    charged to the plaintiffs and other class members in accordance with the
    accounting. The proposed amendments respond to the opting out, and seek to
    recover for the class, fees received by the respondents from persons no longer
    in the class.

[26]

The case management judge refused the proposed
    amendments on the basis that they would fundamentally change the nature of the
    actions that had been certified. He had case managed the actions since 2008,
    and had provided three certification orders. In his opinion the language of the
    claims was clearly an action for refund of monies paid by individual class
    members. The case management judge rejected the appellants arguments that
Kingstreet
    Investments Ltd. v. New Brunswick (Finance)
, 2007 SCC 1, [2007]
    1 S.C.R. 3 supported the amendments.
Kingstreet

involved claims of individual taxpayers for recovery of user fees
    admitted to have been an unlawful tax. The court held that the plaintiffs
    claims were for recovery of taxes as a public law remedy and not based on
    unjust enrichment. The case management judge noted, among other things, that
Kingstreet
did not support the appellants argument that any tax paid gives
    rise to a claim for disgorgement of all monies received by the government for
    the entire tax paid. The case management judge also observed that the
    amendments would result in improperly taking funds from those who had opted out
    for distribution to the remaining members of the class.  The case management
    judge also refused amendments to the statements of claim to claim aggregate
    damages on the basis that such amendments were unnecessary.

[27]

The appellants advance a number of arguments on
    appeal. They say the amendments should be permitted, notwithstanding that the
    action is already certified, as the amendments do not change the character of
    the claim but only clarify the remedy they are seeking, that the amendments were
    or should have been anticipated by the respondents, and there is no prejudice. The
    appellants contend that the respondents agreed that the statements of claim
    disclosed a cause of action under s. 5(1)(a) of the CPA, at the time the
    actions were certified  and that at all times they were asserting a

Kingstreet

claim. At their highest, the amendments
    seek a different remedy (disgorgement) for the same cause of action, and should
    be permitted because no new or additional material facts are pleaded. The
    appellants contend that the remedy of disgorgement is consistent with the
    behaviour modification goal of class proceedings. They also assert that it is
    premature to consider the effect of the amendments on opt-outs, and that the
    court can, if appropriate, avoid any windfall to the plaintiffs and other class
    members that exceed the amount of illegal fees they paid to the defendants.

[28]

I would not give effect to these arguments. The
    proposed amendments are not simply the clarification of a cause of action
    already pleaded, nor do they advance a different remedy for the same alleged
    cause of action or wrong. The amendments seek to recast the claim from one for
    the return of fees paid by class members to a claim for disgorgement of
all
allegedly illegal license and
    administrative fees for bingo operations paid to the respondent municipalities
    within the class period, including those not paid by members of the class.
    Accordingly, the acknowledgment that the claim, as originally pleaded,
    disclosed a cause of action does not assist the appellants in respect of
    amendments that seek to reconfigure the claims.

[29]

Contrary to the appellants arguments, although
Kingstreet

is relevant to the claims as currently pleaded, it does
    not support the proposed amendments. While
Kingstreet

recognizes that a claim can be made for repayment of illegal taxes as
    a public law remedy, it is not authority for a claim for the disgorgement of
all
allegedly illegal fees obtained by
    the respondents during the class period, including those paid by persons other
    than class members. And, characterizing the remedy sought by the appellants as
    a disgorgement does not assist the appellants. Disgorgement permits a
    plaintiff to claim not only its own loss but also the profit or gain of the
    defendant as a result of the wrong to the plaintiff. It is not a vehicle for a
    plaintiff (or a certified class) to pursue a claim for relief owed to someone
    else, who is essentially a stranger to the action. In my view, there is no
    reasonable prospect that the appellants proposed claim for repayment of
    allegedly illegal taxes paid by persons other than class members would succeed.
    The class actions objective of behaviour modification cannot serve to justify
    an amendment that is otherwise not supportable.

[30]

I note that the appellants based their arguments
    in support of the amendments almost entirely on the authority of
Kingstreet
.
As I have explained, I agree with the
    case management judge that
Kingstreet

does
    not support the amendments the appellants seek to make at this stage of the
    already certified class proceedings. There is another aspect of the case
    management judges decision, however, that I would not endorse. At para. 20 of his
    reasons, the case management judge suggested that the Supreme Courts decision in
Alberta v. Elder Advocates of Alberta Society
,
    2011 SCC 24, [2011] 2 S.C.R. 261 narrowed the
Kingstreet

constitutional/public law remedy when illegal taxes were paid to
    cases where the statute was subsequently declared unconstitutional, and that
    the plaintiffs in this case do not claim the unconstitutionality of the
    relevant statutes, resulting in his opinion that the
Kingstreet

remedy was not available. I do not necessarily agree that
Elder
    Advocates

narrowed
Kingstreet

in the manner suggested by the case management judge, or with his
    characterization of the appellants claims in these proceedings. I do however
    agree with the balance of what he says at para. 20, that in these proceedings
    each class members claim is limited to the gain received by the defendants
    from the individual class member and that any refund would only allow the
    individual plaintiffs to recover the defendants gain attributable to the wrong
    done to them.

[31]

Finally, with respect to the proposed amendments
    to claim aggregate damages, the parties agree that the appellants will be able
    to advance such a claim in the proceedings (although the availability of
    aggregate damages is not admitted), whether or not it is asserted in the
    pleadings. Accordingly, there is no need for such an amendment.

C.

Disposition

[32]

For these reasons the appeals of the January 2017
    orders were quashed and the appeals of the November 2016 orders were dismissed.
    The respondents shall have their costs in the amounts agreed between the
    parties: $3,000 for the motion to quash and $15,000 for the dismissed appeals,
    both amounts inclusive of HST and disbursements.

K. van Rensburg J.A.

I agree Alexandra Hoy
    A.C.J.O.

I agree L.B. Roberts
    J.A.

Released: June 30, 2017


