The legal analysis of the judge who declined to certify a proposed $2-billion class action in connection with the 2013 collapse of a plaza in Bangladesh in which 1,130 workers were killed was front and centre at the Ontario Court of Appeal last week.
The legal analysis of the judge who declined to certify a proposed $2-billion class action in connection with the 2013 collapse of a plaza in Bangladesh in which 1,130 workers were killed was front and centre at the Ontario Court of Appeal last week.
Lawyers for the appellants in Das v. George Weston Ltd. argued that Superior Court Justice Paul Perell exceeded his jurisdiction, went on an improper “fact-finding mission” and erred in his interpretation of the plaintiffs’ pleadings.
“Justice Perell did not look at the entire case,” said Peter Jervis on the first day of a two-day hearing at the Court of Appeal.
“He misconstrued the breadth of the negligence claim. He narrowed it to set up a straw claim that he could knock down,” argued Jervis, a partner at Rochon Genova LLP.
If the lower court decision is upheld, it could have a significant impact on class actions alleging negligence related to foreign operations, he suggested.
“Is this court prepared to say that the laws of Ontario will not hold a Canadian company responsible for flaws in its supply chain that it knows about? There has never been a case like this,” said Jervis.
The action stems from the fact that the Loblaw subsidiary Joe Fresh purchased clothes from a company that used a sub-supplier to manufacture the goods inside the Rana Plaza, where the industrial accident occurred. Bureau Veritas, a company that Loblaw retained to conduct social audits of factories in Bangladesh, is also a defendant (Weston is the controlling shareholder of Loblaw).
The class action is being supported financially by the Law Foundation of Ontario’s class proceedings fund. Perell dismissed the action last July. He found that the law of Bangladesh applied to the proposed class and the action was barred by a limitations period in that country.
As well, the defendants’ Rule 21 motion was successful as Perell concluded that there were “no legally viable tort claims” against the defendants.
In awarding $2.3 million in costs to the defendants, Perell was critical of the plaintiffs’ legal approach. Aspects of the pleadings where described as “conclusory, argumentative, rhetorical, tautological, inflammatory and question-begging,” by the judge.
“Loblaws and Bureau Veritas, who did not own or construct Rana Plaza or cause it to collapse, are accused of having and breaching a duty of care by not taking steps to protect the employees and others at Rana Plaza from the villainy of third parties,” stated Perell, in rejecting this position.
In arguing that the Superior Court decision should be upheld, lawyers for Loblaw say that the plaintiffs are trying to impose liability for actions by third parties over which it had no control.
“The real causes of the collapse were all in Bangladesh,” states Christopher Bredt, lead lawyer for Loblaw, in written submissions filed with the Court of Appeal.
“Under the appellants’ approach, factory workers’ rights would be governed by the law of whatever country hosts the corporate headquarters of the customer for whom they happen to be producing items at a particular moment in time,” adds Bredt, a partner at Borden Ladner Gervais LLP.
“This approach frustrates the putative class members’ reasonable expectations and offends comity by arrogating to Ontario courts the power to impose our legal regime on the citizens of Bangladesh,” he wrote.
Loblaw has adopted a corporate social responsibility standard for its domestic and international businesses, which leads to a duty of care, Jervis argued during the Court of Appeal hearing.
“They outsourced for profit. They knew there were dangers,” he told the panel of justices — David Doherty, Kathryn Feldman and Douglas Gray (sitting ad hoc).
“You are pleading assumed responsibility. But the documents don’t say that,” noted Doherty. “If you pleaded to certain documents, is the motions judge not entitled to look at the documents?” he asked.
Perell went beyond what a judge is permitted to do in a Rule 21 motion, Jervis replied.
“He can read them, but they are not evidence. At this stage, he has to take the pleadings as true. At trial, that may be disproven,” Jervis added.
“Justice Perell reduced this case to a purchaser of goods that does not have liability to the workers. The facts that are pleaded, plead proximity. This is not a case of foreign farm workers,” stated Jervis.
At times, the judicial panel appeared skeptical of the characterization of Perell’s legal analysis.
“It is all linked together. I am not convinced he has reduced it,” said Feldman.
On the issue of costs, the Law Foundation of Ontario is asking the Court of Appeal to find either that no costs are payable or, alternatively, reduce the total award to $500,000 from $2.3 million if the appeal is unsuccessful.
The Court of Appeal reserved its decision after the two-day hearing.
