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Judge Awards Aggregate Damages in Class Action




by:
Glenn M. Zakaib
Cassels Brock & Blackwell LLP - Toronto Office

 
July 17, 2014

Previously published on July 9, 2014

In a decision released on June 24, 2014, the Honourable Mr. Justice Belobaba of the Ontario Superior Court of Justice set forth a rationale for determining when aggregate damages can be assessed in a class action claim1 in Ontario.

The claim involved misrepresentations stemming from course calendars issued by George Brown College about the benefits of its International Business Management Program. The common issues trial resulted in a finding that the defendant had engaged in an unfair practice under the Consumer Protection Act and that there had been negligent misrepresentation.

The matter then resumed for the damages phase, at which time class counsel took the position that they would proceed only on the consumer protection claim, thereby seeking to eliminate the need for individual reliance as would be required in a negligent misrepresentation claim. The plaintiffs sought damages under s. 18(2) of the Consumer Protection Act rather than having to prove individual damages under a negligent misrepresentation claim. The Court determined that proof of a causal connection had been sufficiently made for the purposes of s. 18(2) damages.

Justice Belobaba began his reasons with the following statement:

Aggregate damages are essential to the continuing viability of the class action. If all or part of the defendant’s monetary liability to class members can be fairly and reasonably determined without proof by individual class members, then class action judges should do so routinely and without hesitation. Aggregate damage awards should be more the norm, than the exception. Otherwise, the potential of the class action for enhancing access to justice will not be realized.

If, however, all or part of the defendant’s monetary liability cannot be fairly and reasonably determined without proof by individual class members, then individual assessments must be undertaken.

Justice Belobaba indicated that the proposition in section 24 (1) (c) of the Class Proceedings Act, 2002 is clear “that if all or part of the defendant’s monetary liability to some or all of the class members can reasonably be determined without proof by individual class members, the court may do so and give judgment accordingly.” He held that the use of the word “reasonably” indicated a less stringent test was sufficient to allow a court to strike a balance between accuracy and access to justice with the legislature leaning toward access to justice. Citing the Ontario Law Reform Commission report on Class Actions, Justice Belobaba determined that the type of evidence required before a court makes an aggregate assessment is “proof which is sufficiently reliable to permit a just determination of the defendant’s liability.”

He set out the following factors which a court should consider in making a determination whether or not to forego individual proof of damages:

  1. the reliability of the non-individualized evidence that is presented by the plaintiff;

  2. whether use of this evidence will result in any unfairness or injustice to the defendant (for example by overstating the defendant’s liability); and

  3. whether the denial of an aggregate approach will result in a wrong eluding an effective remedy and thus denial of access to justice.

He further noted that even if some class members are overcompensated and others undercompensated, the aggregate damages methodology will be reasonable so long as the defendant’s overall liability has not been overstated.

In the particular case at hand, Justice Belobaba examined each of the heads of claim and arrived at a mixed conclusion as to which claims were capable of assessment on an aggregate basis and which claims would still require individual proof. Of note, the plaintiffs had put forward the opinion of an expert who sought to value the damage claims on an aggregate basis using methodologies which came under considerable attack by the defendant. While some of these attacks prevailed, the Court did accept some of the damage calculations put forward by the plaintiffs’ expert, noting that no opposing calculation or challenges to valuations had been proffered by the defence. The Court was satisfied as the evidence on non-individualized evidence being “sufficiently reliable” to permit a just determination of the defendant’s monetary liability under the particular head of damage.

As this is one of the first class actions in Canada in which the availability of aggregate damages has been decided, it serves as a useful starting point in addressing the issues which the court will have to evaluate, and the approach of the court to the availability of aggregate damages, in class proceedings.


1 Ramdath v. George Brown College, 2014 ONSC 2066

 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Glenn M. Zakaib
Cassels Brock & Blackwell LLP
 
Toronto Office
Practice Area
 
Class Actions
 
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