Decision clarifies application of anti-delay provision in Class Proceedings Act
The Ontario Court of Appeal has upheld the dismissal of a proposed class action against personal injury firm Diamond & Diamond Lawyers LLP, ruling that the plaintiffs did not comply with Ontario class action rules that require them to meet certain filing deadlines.
Section 29.1(1)(c) of the Class Proceedings Act went into effect in 2020 to tackle delays in the class action process. It requires class action plaintiffs to complete one of several tasks within a year of initiating a proceeding or have their case dismissed.
However, in its Jan. 2 decision, the OCA clarified that applying s. 29.1(1)(c) “is not simply a mechanical exercise.” Instead, judges evaluating compliance “should decide on a case-by-case basis whether a timetable for a step required to advance the proceeding has been established,” the court said.
Teodora Obradovic, an associate at Fogler, Rubinoff LLP who represents Diamond & Diamond, told Law Times on Monday that the OCA’s decision is a significant addition to the still-nascent case law on the application of s. 29.1(1)(c) to class actions.
Moving forward, “judges are going to be encouraged to apply a contextual approach,” Obradovic says. “I think the message that that sends to proposed plaintiffs is that they need to move things forward, it's their obligation to do so, and they need to be very aware of whatever steps they are taking to ensure that they do actually advance the proceeding.”
At the same time, defendants should be aware “that while they have the right to apply for dismissal [under s. 29.1(1)(c)], they should also be aware that they themselves can't act in an obstructive manner or in a way that's just designed to delay,” Obradovic says.
Justice Sarah Pepall wrote the decision for the court. Justices Bradley Miller and Darla Wilson concurred.
William Tataryn initiated the dispute in 2018 when he filed a notice of application with the Ontario Superior Court of Justice. Tataryn, injured in a car accident, alleged that Diamond & Diamond breached fiduciary duties with its client referral practices and contingency fee agreements. Tataryn also alleged that the firm breached the provisions of the Solicitors Act and the Consumer Protection Act.
In the years that followed, Tataryn filed a statement of claim and multiple amendments in response to objections by the firm, which contested, among other things, the plaintiff’s naming of individual lawyers and partners as defendants. Tataryn also sought to add another plaintiff, Daya Nand Rajan, to the case.
A motion judge dismissed the action in November 2023, ruling that its delays breached s. 29.1(1)(c). Under that provision, courts must dismiss proposed class actions a year after they are initiated unless the representative plaintiff has filed a final motion record in their motion for class certification; the parties have agreed to a timetable for filing a final motion record, and filed the agreement with the court; the court has established such a timetable; and certain other steps or circumstances have taken place.
Tataryn and Rajan appealed, but the OCA upheld the motion judge’s decision. “In my view, there is no judicial discretion engaged in the one-year time parameter,” Pepall wrote. “Thus, absent any other enumerated exceptions, once a motion judge finds that no timetable for completion of one or more other steps required to advance the proceeding has been established, the proceeding must be dismissed.”
However, the justice added, s. 29.1(1) “does not involve a mechanical administrative dismissal but a motion before a judge who must consider the contextual framework imported by the words ‘a timetable … for completion of one or more other steps required to advance the proceeding.’” Pepall added “there is some flexibility associated with the interpretation to be given to ‘completion of one or more steps required to advance the proceeding.’”
Diamond & Diamond has faced controversy in recent years. In 2023, a Law Society Tribunal disciplinary panel fined managing lawyer Jeremy Diamond and barred him from practicing law for three months after he was found guilty of misleading advertising.
Diamond, who served as the face of the brand, had previously admitted that between 2013 and 2017, he improperly marketed legal services without disclosing that the firm referred thousands of potential clients to other lawyers in exchange for fees.
An appeal panel overturned the disciplinary panel's decision, finding that the disciplinary panel's chair had demonstrated a potential for bias against Diamond on social media. The appeal panel sent the case back to the disciplinary panel, which ordered on Dec. 6 that Diamond be reprimanded and pay the Law Society of Ontario $40,000.
Counsel for Tataryn and Rajan declined to comment.
Editor's Note: This story has been updated with additional details about Jeremy Diamond's case.
