[1997] 2 F.C. 154
T-1407-96
Harbans Singh Pawar, for Himself and as Representative of All Those Also Improperly Denied Benefits (Plaintiff)
v.
Her Majesty the Queen (Defendant)
Indexed as: Pawar v. Canada (T.D.)
Trial Division, Hargrave P.—Vancouver, September 9 and December 2, 1996.
Practice — Parties — Standing — Class actions — Action on behalf of all Canadian citizens, permanent residents, aged 65, but not residing in Canada for 10 years leading up to pensionability as required by Old Age Security Act — As directly affected by legislation, taking only reasonable, effective means of bringing issues to Court, plaintiff having standing — Plaintiff would fairly, adequately represent class — Having written authorization of 250 people — Unreasonable to expect proceeding to begin with exhaustive list of class — Unnecessary to obtain consent of other members of class before commencing action — Persons for whom class action taken must be identified but defendant’s revealing all class members.
Practice — Pleadings — Motion to strike — Portions of statement of claim to reduce representative proceeding to action with sole plaintiff — Action on behalf of all Canadian citizens, permanent residents, aged 65, but not residing in Canada for 10 years preceding pensionability as required by Old Age Security Act — Onus on party seeking to strike under R. 419 to show plain, obvious action cannot succeed — Elements of class proceeding — Not plain and obvious action cannot succeed — Class identifiable as individual’s date of arrival in Canada, status, age, part of easily accessible records in defendant’s possession — Common grievance, interest, defences — Class action may be only access to judicial system for many due to cost of litigation — Possible saving to public in avoiding similar actions — Quantum of damages simple bookkeeping exercise.
This was a motion pursuant to Federal Court Rules, Rule 419 to strike out portions of the statement of claim to reduce the representative proceeding to an action in which Mr. Pawar is the sole plaintiff. Mr. Pawar is a 67-year-old resident of Canada who arrived here in 1987. On reaching age 65 in 1993 he applied for an old age security pension, which was denied because he had not resided in Canada for the ten years preceding approval of a pension application as required by Old Age Security Act, subparagraph 3(1)(b)(iii). On behalf of the class composed of Canadian citizens or permanent residents, who are 65, but who have not resided in Canada for the required ten consecutive years leading up to pensionability, the statement of claim seeks a declaration as to pensionable status, and damages equivalent to the pensions each member of the class would have received had he or she been granted a pension on reaching 65. Mr. Pawar produced an authorization signed by 250 people who wished him to represent them, and recently advertised for individuals to add to the group. Federal Court Rules, Rule 1711 provides that where numerous persons have the same interest in any proceeding, the proceeding may be begun and continued, by or against any one or more of them representing all or as representing all except one or more of them.
The issues were: (1) whether the plaintiff had standing to pursue a class action or whether he was an appropriate representative plaintiff to fairly and adequately represent the class; and (2) whether the members and number of the proposed class, and the common interest and grievance were properly identified.
Held, the motion should be dismissed.
(1) The plaintiff had standing. He was directly affected by the legislation and took the only reasonable and effective means of bringing the issue before the Court.
The plaintiff would fairly and adequately represent the class. He already speaks for 250 people, which may be a small sample of the proposed class, but it is unreasonable to expect such a proceeding to begin with an exhaustive list of the class. Further it is unnecessary, in a representative action, for the plaintiff to obtain the consent of other members of the class before commencing the action, even if there are some members of the class who do not wish to be joined as plaintiffs. It is necessary that there be proper identification of the persons for whom the class action is taken.
(2) The test to be applied in striking out a pleading under Rule 419 is whether it is plain and obvious that the class action cannot succeed. Among the circumstances to be considered in the exercise of discretion under Rule 419 are that a representative action is preferable to a plethora of similar proceedings; the economics of litigation i.e. litigation may be more feasible when individuals join together in a class or representative proceeding; the balance of convenience and judicial economy: a class action may be an appropriate vehicle by which to resolve a common issue at a reasonable cost to the public; and, while one proceeding ought to be enough to establish a precedent, the same might be said about all class actions, and the individuals involved likely each feel that it is their right to have their day in court, even if only by proxy. A representative proceeding under Rule 1711 should be approached from a practical point of view for the Rule is “not a rigid matter of principle, but a flexible tool of convenience in the administration of justice”.
The basic elements for a class proceeding are: (1) the parties must have the same interest in the action; (2) the grievance must be common; and (3) the relief must be beneficial to all. The three sub-elements are: (i) the purported class must be capable of clear and definite definition; (ii) the principal issues of fact and law must be essentially the same with regard to all members of the class; and (iii) assuming liability, there must be a single measure of damages applicable to all members.
It was not plain and obvious that the action could not succeed because the class could not be properly defined and identified, by reason of lack of a common grievance, interest or defence, or because it did not fit into an accepted framework for a representative proceeding. The class proposed by the plaintiff was not difficult to define. It is a class that has the same interest: a pension for a Canadian citizen or resident at age 65, regardless of the place of residence over the ten years leading up to pensionability. That the defendant may be the only entity with records to show all who fall into the class, or that the class is very large does not detract from its identification. The class herein was unambiguous in that the individual’s date of arrival in Canada, status, and age were part of easily accessible records, and the plaintiff was taking steps to bring in more of the class. Much of the information needed to define the class was already in the defendant’s hands.
The class had a common grievance, with similar issues of law and fact for all of the class and with no apparent different defences which might apply to a given individual. Once a person qualified for the class, it is difficult to see how real different defences might arise. Statute of limitation defences are not a reason to strike out under Rule 419. Any limitations which might apply may be dealt with by the trial judge in further delineating the class, if necessary.
There may be a need for a class action. Sometimes a class action is the only access many people have to the judicial system because of the prohibitive cost of litigation. There may also be a saving in avoiding similar actions by others. If successful, the measure of damages should be a formula and bookkeeping exercise.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Class Proceedings Act, S.B.C. 1995, c. 21, s. 4.
Federal Court Rules, C.R.C., c. 663, RR. 5, 419, 1711.
Old Age Security Act, R.S.C., 1985, c. O-9, s. 3(1)(b)(iii).
Rules of Court, B.C. Reg. 310/76, R. 5.
Rules of the Supreme Court 1965 (U.K.), S.I. 1965/1776, Ord. 15, r. 12.
CASES JUDICIALLY CONSIDERED
APPLIED:
Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959; (1990), 74 D.L.R. (4th) 321; [1990] 6 W.W.R. 385; 49 B.C.L.R. (2d) 273; 4 C.C.L.T. (2d) 1; 43 C.P.C. (2d) 105; 117 N.R. 321; Waterside Ocean Navigation Co., Inc. v. International Navigation Ltd., [1977] 2 F.C. 257(T.D.); Creaghan Estate v. The Queen, [1972] F.C. 732; (1972), 72 DTC 6215 (T.D.); Knowles v. Roberts (1888), 38 Ch. D. 263 (C.A.); John v. Rees, [1970] Ch. 345; Bedford (Duke of) v. Ellis, [1901] A.C. 1 (H.L.); Oregon Jack Creek Indian Band v. Canadian National Railway Co. (1989), 56 D.L.R. (4th) 404; 34 B.C.L.R. (2d) 344; [1990] 2 C.N.L.R. 85 (C.A.); General Motors of Canada Ltd. v. Naken et al., [1983] 1 S.C.R. 72; (1983), 144 D.L.R. (3d) 385; 22 C.P.C. 138; 46 N.R. 139; Shaw et al. v. Real Estate Board of Greater Vancouver, [1973] 4 W.W.R. 391 (B.C.C.A.); Irish Rowan, The, [1989] 2 Lloyd’s Rep. 144 (C.A.); Markt & Co., Ld. v. Knight Steamship Company, [1910] 2 K.B. 1021 (C.A.); Bendall v. McGhan Medical Corp. (1993), 14 O.R. (3d) 734; 106 D.L.R. (4th) 339; 16 C.P.C. (3d) 156 (Gen. Div.).
DISTINGUISHED:
Kiist v. Canadian Pacific Railway Co., [1982] 1 F.C. 361 (1981), 123 D.L.R. (3d) 434; 37 N.R. 91 (C.A.).
CONSIDERED:
Alberta Pork Producers Marketing Board v. Swift Canadian Co. (1981), 33 A.R. 541; 129 D.L.R. (3d) 411; 16 Alta. L.R. (2d) 313; 26 C.P.C. 72 (Q.B.).
REFERRED TO:
Micromar International Inc. v. Micro Furnace Ltd. (1988), 22 C.I.P.R. 79; 23 C.P.R. (3d) 214 (F.C.T.D.); Logan et al. v. Canada (1994), 89 F.T.R. 37 (F.C.T.D.); Cairns v. Farm Credit Corp., [1992] 2 F.C. 115 (1991), 7 Admin. L.R. (2d) 203; 49 F.T.R. 308 (T.D.); Government of Canada v. Perry et al. (1981), 41 N.R. 91 (F.C.A.); Thorson v. Attorney General of Canada et al., [1975] 1 S.C.R. 138; (1974), 43 D.L.R. (3d) 1; 1 N.R. 225; Minister of Justice of Canada et al. v. Borowski, [1981] 2 S.C.R. 575; (1981), 130 D.L.R. (3d) 588; [1982] 1 W.W.R. 97; 12 Sask. R. 420; 64 C.C.C. (2d) 97; 24 C.P.C. 62; 24 C.R. (3d) 352; 39 N.R. 331; Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607; (1986), 33 D.L.R. (4th) 321; [1987] 1 W.W.R. 603; 23 Admin. L.R. 197; 17 C.P.C. (2d) 289; 71 N.R. 338; Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236; (1992), 88 D.L.R. (4th) 193; 2 Admin. L.R. (2d) 229; 5 C.P.C. (3d) 20; 8 C.R.R. (2d) 145; 16 Imm. L.R. (2d) 161; 132 N.R. 241; Twinn v. Canada, [1987] 2 F.C. 450 (1986), 6 F.T.R. 138 (T.D.); Mayrhofer v. Canada, [1993] 2 F.C. 157 (1993), 61 F.T.R. 81 (T.D.); American Pipe& Construction Co. v. Utah, 414 U.S. 538 (1974); Karlsson (R.) v. Canada, [1991] 2 C.T.C. 282; (1991), 91 DTC 5611 (F.C.T.D.); BMG Music Canada Inc. v. Vogiatzakis (1996), 67 C.P.R. (3d) 27; 110 F.T.R. 34 (F.C.T.D.).
MOTION pursuant under Rule 419 to strike out portions of the statement of claim to reduce the representative proceeding to an action with a sole plaintiff. Motion dismissed.
COUNSEL:
Lewis Spencer for plaintiff.
Leigh Taylor for defendant.
SOLICITORS:
Lewis Spencer, Vancouver, for plaintiff.
Deputy Attorney General of Canada for defendant.
The following are the reasons for order rendered in English by
Hargrave P.: The defendant’s motion to strike out portions of the statement of claim has as its purpose to reduce this representative proceeding to an action in which Mr. Pawar is the sole plaintiff.
BACKGROUND
Mr. Pawar is a sixty-seven year old resident of Canada who arrived in Canada in 1987. On reaching the age of sixty-five, in about December of 1993, he applied for an old age security pension, which was denied on the basis of subparagraph 3(1)(b)(iii) of the Old Age Security Act, R.S.C., 1985, c. O-9, which requires, as one of its conditions of eligibility, residence in Canada for the ten years leading up to the approval of an application for a pension.
Mr. Pawar, who attended in the courtroom with a number of people whom he wishes to represent, defines the class, in his statement of claim:
13. The Plaintiff seeks to represent all like situated individuals, either Canadian citizens or permanent residents, who have similarly been wronged and denied benefits under the requirements of ten years residency in Canada of the Old Age Security Act, R.S. Chap. O-9.
The class, composed of Canadian citizens or permanent residents, who are sixty-five years of age, but who have not resided in Canada for the required ten consecutive years leading up to pensionability, seek a declaration in this representative action as to their pensionable status. If the group is successful its members then ask for damages equivalent to the pensions each would have received had each been granted a pension on reaching sixty-five years of age. There seem to be enough people in this class who are actively pursuing a pension that the Income Security Programs branch of the Government of Canada has a standard form rejection letter.
The group who wish Mr. Pawar’s representation has apparently been put together from a number of sources, including members of Mr. Pawar’s East Indian community and a local seniors’ community centre. His organization is also working through agencies, societies and community organizations in Vancouver, Edmonton and Calgary, and has recently advertised for individuals to add to the group.
Included in the material is an authorization signed by some two hundred and fifty people who wish Mr. Pawar to represent them: see Mr. Pawar’s affidavit filed by Court order of September 5, 1996.
STRIKING OUT: GENERAL PRINCIPLES
The test I must apply in striking out a pleading is that set out by Madam Justice Wilson in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, at page 980:
Most recently, in Dumont v. Canada (Attorney General), [1990] 1 S.C.R. 279, I made clear at p. 280 that it was my view that the test set out in Inuit Tapirisat was the correct test. The test remained whether the outcome of the case was “plain and obvious” or “beyond reasonable doubt”.
Thus, the test in Canada … assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be “driven from the judgment seat”. Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect … should the relevant portions of a plaintiff’s statement of claim be struck out ….
Madam Justice Wilson was dealing with a rule for striking out an action contained in the British Columbia Rules of Court [B.C. Reg. 310/76], which is similar to our Rule 419 [Federal Court Rules, C.R.C., c. 663]. In short, the test I must apply is whether it is plain and obvious, or phrased another way, beyond a reasonable doubt, that the class action cannot succeed.
In the present instance, the defendant says, among other things, that the plaintiff has failed to identify the members and number of the proposed class, that he has failed to identify the common interest and grievance of the members of the class and that the plaintiff does not have standing to pursue a class action on his own. The plaintiff relies upon paragraphs 419(1)(c), (d), and (f) of the Federal Court Rules, which provide that an action may be struck out if it is either scandalous, frivolous or vexatious, or if it may prejudice, embarrass or delay the fair trial of the action, or is otherwise an abuse of process.
The test for striking out an action, on the basis that it is frivolous, under paragraph 419(1)(c) of the Rules, is at least as stringent as that under paragraph 419(1)(a). Indeed, “The Court will not stop a proceeding and deny a plaintiff the right to have a case heard unless it is clear that the action is frivolous or vexatious … and that to permit the action to proceed is an abuse of its process”: Waterside Ocean Navigation Co., Inc. v. International Navigation Ltd., [1977] 2 F.C. 257(T.D.), at page 259.
A vexatious or frivolous action is one in which the claimant can present no rational argument based upon the evidence or law, in support of the claim, an action without reasonable cause, which will not lead to a practical result. The test I should apply was set out by Mr. Justice Pratte in Creaghan Estate v. The Queen, [1972] F.C. 732 (T.D.), at page 736:
(3) Finally, in my view, a statement of claim should not be ordered to be struck out on the ground that it is vexatious, frivolous or an abuse of the process of the Court, for the sole reason that in the opinion of the presiding judge, plaintiff’s action should be dismissed. In my opinion, a presiding judge should not make such an order unless it be obvious that the plaintiff’s action is so clearly futile that it has not the slightest chance of succeeding, whoever the judge may be before whom the case could be tried. It is only in such a situation that the plaintiff should be deprived of the opportunity of having “his day in Court”.
The principal portion of paragraph 419(1)(d) of the Rules upon which the defendant might rely is that of delay of a fair trial, for the plaintiff does not raise prejudicial matters or plead so as to embarrass: indeed, the statement of claim sets out the plaintiff’s claim in a neat fashion. The onus, to have the claim struck out under this heading, is again a difficult onus. However, the duty to exercise a discretion to strike out under this Rule is one that I must utilize in a fit case “and a fit case will be that which fulfils the definition of the rule, and in which there are no other circumstances which make it inappropriate, and inconvenient, or unjust to apply the power”: Lord Justice Bowen in Knowles v. Roberts (1888), 38 Ch. D. 263 (C.A.), at page 271. Among the circumstances I must keep in mind are that a representative action may be more involved, but that is the nature of a representative action: it is preferable to a plethora of similar proceedings. I must also consider the economics of litigation: litigation today is a luxury for one person, but may become feasible when individuals join together in a class or representative proceeding. Yet another consideration is the balance of convenience and judicial economy: a class action may be an appropriate vehicle by which to resolve a common issue at a reasonable cost to the public who pay the lion’s share of the cost of the justice system. Finally, while on the one hand the defendant submits one proceeding ought to be enough to establish a precedent, on the other hand such might be said about all class actions and further, the individuals involved in a class proceeding likely each feel it is their right to have their day in court, even if only by proxy.
An action that is clearly frivolous, vexatious or contrary to good faith, or one that is pleaded in such a manner that the Court may not properly regulate the proceedings, or an action in which there are allegations without factual information to sustain them, may be struck out as an abuse of the process of the Court, for the Court has the jurisdiction to protect itself from the abuse of its process. The defendant says the class action proceeding is an abuse of process.
In the case of abuse of process, the test to strike out a statement of claim under paragraph 419(1)(f) of the Rules is as stringent as the test under paragraph 419(1)(a), if not more so: Micromar International Inc. v. Micro Furnace Ltd. (1988), 22 C.I.P.R. 79 (F.C.T.D.). I now turn to some basic principles governing class actions.
CLASS ACTION: GENERAL PRINCIPLES
Rule 1711 and its Application
Our class action provisions, contained in Federal Court Rules, Rule 1711, apply to both class and representative actions: Logan et al. v. Canada (1994), 89 F.T.R. 37 (F.C.T.D.). I will set out only the first section of the Rule:
Rule 1711. (1) Where numerous persons have the same interest in any proceeding, the proceeding may be begun, and, unless the Court otherwise orders, continued, by or against any one or more of them representing all or as representing all except one or more of them.
The intent of a representative action under this Rule is that all persons with the same interest be bound in one action and by one judgment. In John v. Rees, [1970] Ch. 345, Mr. Justice Megarry, who subsequently for many years was Vice-Chancellor of the Court, considered the English Order 15, rule 12 [Rules of the Supreme Court 1965 (U.K.), S.I. 1965/1776], which is nearly identical to our Rule 1711. He cited Bedford (Duke of) v. Ellis, [1901] A.C. 1 (H.L.), at page 8 in which Lord MacNaghten referred to the Chancery form of the rule which later became Order 15, rule 12, pointing out that it was a rule of convenience, a rule of which one ought to take a broad and liberal view and that if it were not possible to make everybody interested a party, the plaintiff must bring in enough claimants so the matter might be fairly and honestly tried. Mr. Justice Megarry then went on to say “This seems to me to make it plain that the rule is to be treated as being not a rigid matter of principle but a flexible tool of convenience in the administration of justice” (page 370).
Elements Basic to a Class Action
This is a convenient place at which to refer to the basic elements for a class proceeding as set out in the Duke of Bedford’s case (supra) which involved a predecessor rule to Order 15, rule 12 and thus also a predecessor to our Rule 1711. First, the parties must have the same interest in the action; second, the grievance must be common; and third, the relief must be beneficial to all. These principles appear in and are discussed in many of the modern decisions, see for example General Motors of Canada Ltd. v. Naken et al., [1983] 1 S.C.R. 72, to which I will refer later.
Still dealing with basic elements, the B.C. Court of Appeal, in Oregon Jack Creek Indian Band v. Canadian National Railway Co. (1989), 56 D.L.R. (4th) 404 referred [at page 413] to three subissues arising out of Rule 5(11) of the B.C. Rules of Court, which is nearly identical to our Rule 1711. These three issues are:
1. Is the purported class capable of clear and definite definition?
2. Are all the principal issues of fact and law essentially the same as regard all members of the class? and
3. Assuming liability, is there a single measure of damages applicable to all members?
In the present instance the defendant has selected some of these basic elements and issues and submits it is plain and obvious and beyond reasonable doubt that the plaintiff will fail by reason of leaving unsatisfied one or more of those basic elements and issues.
Some Relevant Case Law
The defendant submits that Rule 1711 does not adequately deal with class or representative actions and that I ought to, by way of Rule 5, the Gap Rule, look to the British Columbia Class Proceedings Act, S.B.C. 1995, c. 21, and particularly section 4 which sets out some of the tests which, if met, require a court to certify a proceeding as a class proceeding. I am not convinced this is necessary. I prefer to follow the lead of Mr. Justice Teitelbaum, in Logan et al. v. Canada (1994), 89 F.T.R. 37 (F.C.T.D.), at page 50. He considered a number of cases in order to glean various principles. He also noted, “the Federal Court Rules do not really address the interests required to bring a representative action” and looked to various cases involving comparable or similar rules. There are many such cases.
Mr. Justice Denault of the Federal Court earlier considered a class action in Cairns v. Farm Credit Corp., [1992] 2 F.C. 115 (T.D.), at page 121, in which the class was composed of farmers who had borrowed from the Farm Credit Corporation and who were or may be in financial difficulty:
The plaintiffs’ statement of claim describes the proposed class of plaintiffs to this action as including all “farmers, borrowers from the F.C.C. who have been, are or may be in financial difficulty”.
For a matter to be appropriate for the institution of a class action, the persons in the class must have a common interest and a common grievance. Furthermore, the relief sought must in its nature be beneficial to all members of the class, or as it has sometimes been described, “if the plaintiffs win, all win” (Bedford (Duke of) v. Ellis , [1901] A.C. 1 (H.L.); General Motors of Canada Ltd. v. Naken et al., [1983] 1 S.C.R. 72; Kiist v. Canadian Pacific Railway Co., [1982] 1 F.C. 361(C.A.); Copeland v. Mr. Justice McDonald, [1978] 2 F.C. 815(T.D.)).
Rule 1711 requires that the plaintiffs and those they seek to represent have the “same interest” in the proceedings. In the case of General Motors of Canada Ltd. v. Naken et al. , [1983] 1 S.C.R. 72, the Supreme Court of Canada interpreted this term to mean that the plaintiffs must all have the same interest in the outcome of the judgment.
He went on to point out that a class action was not to enable the plaintiff to seek numerous types of relief to suit varying needs, but rather each plaintiff must have the same interest in the outcome and, at a minimum, the outcome must have a practical impact on each member of the class. This view is at least substantially the view of the Supreme Court of Canada in General Motors of Canada Ltd. v. Naken et al. (supra).
In the Naken case the plaintiffs sued for themselves and for all other persons who had purchased a certain model of automobile. Mr. Justice Estey, at page 79, referred to the Duke of Bedford’s case (supra), at page 8:
Given a common interest and a common grievance, a representative suit was in order if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent.
Mr. Justice Estey also dealt with variations in the entitlement of the claimant members of the class: he pointed out that differing entitlements were not a disqualification under the British Columbia Rule or under what was then Order 16, rule 9, of the English Rules, and which subsequently became Order 15, rule 12, which I have noted is nearly identical to our Rule 1711. For this proposition, that claims of different amounts are not a defect in a class action, he referred to Shaw et al. v. Real Estate Board of Greater Vancouver, [1973] 4 W.W.R. 391 in which Mr. Justice Bull, of the B.C. Court of Appeal, summarized the case law as to interest. A slightly fuller quotation than used by Mr. Justice Estey, is as follows, at page 395:
It appears to me that the many passages uttered by judges of high authority over the years really boil down to a simple proposition that a class action is appropriate where, if the plaintiff wins, the other persons he purports to represent win too, and if he, because of that success, becomes entitled to relief whether or not in a fund or property, the others also become likewise entitled to that relief, having regard, always, for different quantitative participations.
This reference to “different quantitative participations” is pertinent in the present instance.
Our Rule 1711 refers to persons having the same interest in the proceeding. This does not mean the claims need all be for the same amount, for the Rule is more flexible than that. In addition to the view of Mr. Justice Bull, in the Shaw case (supra), I would also refer to Irish Rowan, The, [1989] 2 Lloyd’s Rep. 144 (C.A.), in which representative defendants, each of whom would have owed a different amount, unsuccessfully sought to have the action against them stayed. Sir John Megaw, who wrote one of the three concurring judgments, conceded there might be instances in which disputes as to quantum of liability, by persons coming into the action by representation, might make the case unsuitable as a representative action, but that the Court could always exercise discretion and forbid the continuance of a representative action (page 156). Lord Justice Purchas, at page 158, in considering the requirement of a similar interest in the proceedings, raised an interesting rhetorical question as to whether or not the Court should approach the problem in a pragmatic manner:
Bearing in mind that the operation of O. 15, r. 12 takes place at an early stage in the development of proceedings, should the Court have in contemplation all possible, even hypothetical, circumstances when considering whether the proposed class of defendants or plaintiffs fulfils the criterion of having the same interest, or should the Court approach the problem in a more pragmatic manner?
From his reasons and the cases to which he refers, it is clear a court should approach the issue of whether the parties have the same interest in the proceedings in a practical way. Indeed it is the view of our Court of Appeal that the class action rule should not be construed in a strict and rigorous sense, but rather should be applied in a broad and permissive manner: see Government of Canada v. Perry et al. (1981), 41 N.R. 91 (F.C.A.), at page 102.
ANALYSIS
Before applying these general principles I will turn first to two matters raised by the defendant which, in my view, are preliminary matters. While conceding the pleadings disclose a cause of action, the defendant questions whether Mr. Pawar either has standing to bring the action or is an appropriate representative plaintiff to fairly and adequately represent the class.
Standing
The defendant, in setting out the grounds of Her motion, questions whether Mr. Pawar has the standing to bring an action challenging the Old Age Security Act. In argument counsel touched on the point. Mr. Pawar, who raises a serious issue, is directly affected by the legislation and takes the only reasonable and effective means of bringing the issue before the Court. As such he has standing: see for example Thorson v. Attorney General of Canada et al., [1975] 1 S.C.R. 138; Minister of Justice of Canada et al. v. Borowski, [1981] 2 S.C.R. 575; Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607 and Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236.
Plaintiff’s Ability to Represent the Class
The defendant submits the plaintiff has done a cursory job of initiating this action. The plaintiff presently speaks for some two hundred and fifty people whom he has located through various local organizations. This may well be a small sample of those who would fall into the proposed class. However, it is unreasonable to expect a proceeding such as Mr. Pawar’s to begin full blown and with an exhaustive list of the class. Lord Justice Moulton of the Court of Appeal, pointed out in Markt & Co., Ltd. v. Knight Steamship Company, [1910] 2 K.B. 1021, that the plaintiff, as a self-elected representative, need not obtain the consent of all whom he purports to represent, even though they will be bound by an estoppel created by the outcome. This is still a valid proposition, notwithstanding that the same court, 80 years later, declined to completely follow the Markt case in Irish Rowan (supra).
Lord Justice Purchas, of the Court of Appeal, makes it clear in Irish Rowan (supra) that Order 15, rule 12, which is nearly identical to our subsection 1711(1) of the Rules, provides that the class involved in the action may not necessarily cover the whole of the class of persons having the same interest as that of the possible class. In the context of defendants he referred to a passage from the Duke of Bedford’s case (supra), at pages 10-11:
As regards defendants, if you cannot make everybody interested a party, you must bring so many that it can be said they will fairly and honestly try the right.
Further, it is unnecessary, in a representative action, for the plaintiff to obtain the consent of other members of the class before commencing the action. This is so even if there are some members of the class who do not wish to be joined as plaintiffs: see Twinn v. Canada, [1987] 2 F.C. 450 (T.D.), at pages 463-464. Of course it is necessary that there must be proper identification of the persons for whom the class action is taken: see for example Mayrhofer v. Canada, [1993] 2 F.C. 157 (T.D.), at page 177.
Mr. Pawar has gone further afield than merely to obtain written authorization from two hundred and fifty people, in an effort to search for more of the class members. He has recently advertised to contact other members of his proposed class. Mr. Pawar has retained counsel. All of this seems a reasonable approach to date, for it is not necessary in a class action that the plaintiff obtain the consent of other members of the class before commencing the action. In addition, subsection 1711(2) of the Rules provides for an application for directions. There is every indication Mr. Pawar would fairly and adequately represent the class. At this stage I am not prepared to strike out the action on the basis of some argued doubts as to Mr. Pawar’s suitability as a plaintiff to represent others.
An Identifiable Class
The next substantial issue the defendant raises is whether the class, which counsel submits is an overly large class, is identifiable. As noted earlier it consists of Canadian citizens or permanent residents, who are 65 years of age, but who have not resided in Canada for the required ten consecutive years leading up to pensionability.
The size of a class is not a bar to a representative proceeding. In Bendall v. McGhan Medical Corp. (1993), 14 O.R. (3d) 734 (Gen. Div.) the plaintiffs successfully sought certification, as representatives of 150,000 persons, as a class proceeding. Indeed, a very large number of individuals would not realistically be able to have access to the judicial system other than through a class action.
There are many cases which touch on the identification of the class to be represented. At one end of the scale there have been intended class actions which proposed a nebulous or a vague class, for example, “those who suffer discrimination on the basis of race, and the number are known to the defendant”, which was a class proposed in the Mayrhofer proceeding (supra). Mr. Justice Teitelbaum pointed out it was insufficient to simply identify the members as those who were discriminated against by reason of race and then to say those persons are known to the defendant. In the present instance the class is much more tightly defined. Granted, while the plaintiff does not say so, the defendant may be the only entity with records to show all who fall into this class. However that does not detract from the certain parameters of the class which the plaintiff has set. Further, that the class is a very large one does not detract from its identification.
At the other end of the scale are cases such as Alberta Pork Producers Marketing Board v. Swift Canadian Co. (1981), 33 A.R. 541 (Q.B.), in which the class was tightly delineated as being hog producers who by reason of a tortious conspiracy by the defendants received an artificially contrived low price. The class consisted of persons engaged in the same enterprise and who had sold under the same conditions.
The Supreme Court of Canada had to deal with the identity of the group in the Naken case (supra) in which the class action was to be by a group of persons with reference to ownership of an identifiable property, a Firenza vehicle owned by each at the commencement of action. The Court felt the identification required some further determinative process as there was a difference between the type of proceedings which Ms. Naken wished to bring and, for example, a simple shareholder type proceeding in which the class might be easily and unambiguously defined. In the present instance the class proposed by Mr. Pawar, if it falls somewhere between, is certainly closer to the shareholder example, for it is unambiguous in the sense that an individual’s date of arrival in Canada, the individual’s status and the individual’s age are all part of easily accessible records. There should be no difficulty with any of this, particularly in that the plaintiff appears to be taking steps to bring in more of the class. Further, the plaintiff quite correctly points out that much of the information needed to define the class is clearly in the hands of the defendant.
At this point I am not prepared to say it is plain and obvious, or beyond doubt, that the action cannot succeed because the class cannot be properly defined and identified.
Common Grievance
The defendant next submits the grievance or interest is not the same for all: for any given claimant the defendant may well have a different defence. In Kiist v. Canadian Pacific Railway Co., [1982] 1 F.C. 361the Federal Court of Appeal decided that a proposed proceeding by grain producers, containing many variables, including additional quotas and the ability of each producer to fill their quota, would depend too much on the circumstances of each individual, would give rise to the possibility of different defences and was thus not suitable for a class action. In the present instance, once a person qualified for the class, by reason of age, citizenship or permanent residency and a shortfall in qualifying time as a resident, it is difficult to see how real different defences might arise.
The defendant, in this context, also raises the possibility of statute of limitation defences and refers to the Naken case, at page 104 and following. There, Mr. Justice Estey, in the course of striking out the action eight years after its inception, mused on the possible predicament of members of the class who might, unless a court were to find the running of the limitation statute had been suspended by the class proceeding, as have American courts (for example see American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), a decision of the American Supreme Court) find themselves statute barred. This might be a possible outcome in any action, but it is a chance those whom the plaintiff represents take, not a reason to strike out under Rule 419. But the defendant also refers to limitation as a defence. There are two answers to this proposition. First, a plea of limitation is not sufficient grounds on which to strike out a statement of claim: see for example Karlsson (R.) v. Canada, [1991] 2 C.T.C 282 (F.C.T.D.), at page 283 and also the additional cases referred to in BMG Music Canada Inc. v. Vogiatzakis (1996), 67 C.P.R. (3d) 27 (F.C.T.D.), at page 33 and following. Second, any limitations which might apply, in this instance, appear quite mechanical and may be dealt with by the trial judge in further delineating the class, if that becomes necessary.
It is not plain and obvious, or beyond a reasonable doubt, that the class action portions of the statement of claim cannot succeed by reason of lack of a common grievance or interest or defences particular to only some of the class.
Suitability as a Class Proceeding
Under this subheading I will deal with various submissions made by the defendant. To begin, the defendant submits that should Mr. Pawar succeed in obtaining his declaration and damages there would be no need for a class action, for everyone who could bring themselves within whatever principle Mr. Pawar was able to establish might also successfully apply for a pension. I have already touched on one reason why this argument is invalid: many people are not able to have access to the judicial system except by way of a class action, for the expense of litigation by individuals is, today, prohibitive: a class action shares that cost burden. A second answer is that should Mr. Pawar not succeed, the result does not necessarily mean that others in the same class might not try different arguments in subsequent proceedings, resulting in many actions, at substantial costs to the litigants and to the public, which is something a class action seeks to avoid.
Next the defendant submits that such a broad class of persons as might come within the class parameters proposed by Mr. Pawar would present difficulties when it came to awarding damages. I have already touched on this aspect in discussing general principles applying to class actions and particularity as to the comments of Mr. Justice Estey in the Naken case (supra) and the Court of Appeal’s views in Irish Rowan (supra). In the present instance damages would become very much a matter of applying a formula of so many years pension eligibility, which could take into account, if necessary, any applicable limitation dates.
The defendant submits the class proceeding aspect of the statement of claim ought to be struck out for there is no economy in this approach as compared with an action by Mr. Pawar alone. This may to an extent be so for a class action, by itself, will be more costly. However there may also be a saving in avoiding similar actions by others. Also a representative proceeding and this is an important point, increases the access to the court, in the case of an action which may well be fairly complex, at very little additional cost. These submissions, individually or collectively, fail to convince me that it is plain and obvious that the action, as a representative action, cannot succeed, or even that it is so unsuitable as a representative proceeding that it ought not reasonably be allowed to continue as such.
CONCLUSION
The defendant has not convinced me that it is plain and obvious that the representative aspects of Mr. Pawar’s action cannot succeed because those aspects do not fit into an accepted framework for a representative proceeding. To the contrary, the class proposed by Mr. Pawar is not difficult to define. As defined it is a class that has the same interest, a pension for a Canadian citizen or resident of Canada at 65 years of age, regardless of the place of residence over the ten years leading up to pensionability. The class has a grievance in common, with similar issues of law and fact for all of the class and with no apparent different defences which might apply to a given individual. If Mr. Pawar were to succeed and his is not an easy or a straightforward action, all will succeed and their measures of damages should be a formula and bookkeeping exercise.
This outcome is not in any way a reflection on the work done and presentation by counsel, both of whom argued their client’s position well. Rather it is a result of two factors. First, there is the very high onus on a party seeking to strike out an order under Rule 419. Second, the case law makes clear a representative proceeding, under our class proceeding rule, should be approached from a practical point of view, for to borrow a phrase from Mr. Justice Megarry in John v. Rees (supra) the rule is “not a rigid matter of principle but a flexible tool of convenience in the administration of justice”.