Motion judge failed to consider or apply 'excusable neglect and no prejudice' test
The Ontario Court of Appeal has granted an extension to a class member’s time to opt out of a class proceeding because the individual had good reason for not knowing the original deadline and such an extension would not cause prejudice to the class.
In Johnson v. Ontario, 2022 ONCA 725, a consolidated class action covered a class consisting of those incarcerated at the Elgin-Middlesex Detention Centre (EMDC) in London, ON, between Jan. 1, 2010, and May 18, 2017. The action sought declaratory relief and damages based on negligence and violations of the Canadian Charter of Rights and Freedoms arising from the conditions at and the operation and management of EMDC at that time.
A 2017 certification order said that class members could opt out by June 20, 2018, pursuant to the provisions of the court-approved notices, which included short-form notices published in newspapers, long-form notices posted on class counsel’s website, and regular mail to each class member’s last known address. Class counsel received opt-out forms from 24 class members by the deadline. The appellant did not opt out.
The appellant became an EMDC inmate in July 2016. Upon his admission, he gave an address in Parkside Drive to EMDC staff. He transferred to another institution in August 2017 and stayed there until 2019. In April 2020, before he knew about the class action, he filed an individual action against Ontario and EMDC employees, among others. He alleged the following:
A June 2020 letter from Ontario’s counsel to the appellant’s counsel stated that the appellant failed to opt out by the deadline, his individual claim overlapped with the class action, and the individual action should be discontinued against Ontario and the proposed defendants who were provincial employees relating to events covered by the class period.
The appellant moved for an extension of time to opt out. He alleged that he first became aware of the class action via the June 2020 letter.
A judge dismissed this motion. He found that he had jurisdiction to extend the opt-out period, Parkside Drive was the appellant’s last known address, and the appellant would not have opted out by the deadline even if he knew of his right to do so. The judge said that he did not have to answer the question of whether it was appropriate to extend the opt-out period in a situation where the class member allegedly did not know about the existence of their cause of action until after the opt-out deadline expired.
The Court of Appeal allowed the appeal and set aside the motion judge’s orders. The appellate court extended the time within which the appellant could opt out of the consolidated class action to 30 days following the release of the reasons.
The Court of Appeal ruled that the excusable neglect/no prejudice test – recognized in Young v. London Life Insurance Co., [2002] O.J. No. 5971 – was applicable to a motion to extend the time to opt out of a class proceeding.
The test required a class member to show that their neglect in complying with the court-imposed deadline was excusable and that an extension would not result in prejudice to the class, the defendants, or the administration of justice, the appellate court explained. The test balanced the importance of a class member’s opt-out right and of having a court-ordered deadline for doing so, the appellate court added.
According to the Court of Appeal, the motion judge failed to articulate or to apply this test, failed to consider the issues of excusable neglect and prejudice, and adopted an overly narrow approach to his discretion to extend the opt-out period.
Upon a proper application of the test and a consideration of the relevant factors, the appellate court concluded that an extension was proper. First, the appellant was able to show that his delay in opting out arose from excusable neglect, the appellate court said.
Second, the Court of Appeal found that the motion judge failed to address or to make any finding about whether there was prejudice to the class, to Ontario, or to the integrity of the process or the administration of justice.
The appellate court noted that class counsel did not oppose the appeal, Ontario did not identify any prejudice that it would suffer, and the appellant did not show a cavalier attitude or a strategic wait-and-see approach relating to the court-ordered opt-out deadline.
