Langevin v Aurora Cannabis Inc, 2021 ABQB 887

Court of Queen’s Bench of Alberta Citation: Langevin v Aurora Cannabis Inc, 2021 ABQB 887 Date: 20211109 Docket: 2001 07541 Registry: Calgary Between: Lisa Marie Langevin and Terrance Long Plaintiffs/Respondents - and - Aurora Cannabis Inc, Aurora Cannabis Enterprises Inc, Auroraco, Aleafia Health Inc, Emblem Cannabis Corporation, Aleafiaco, Hexo Corp, Hexoco, Cronos Group Inc, Cronosco, Tilray Canada Ltd, High Park Holdings Ltd, Tilrayco, Organigram Holdings Inc, Organigramco, ˆ Canopy Growth Corporation, Canopyco, Aphria Inc, Broken Coast Cannabis Ltd, Aphriaco, Emerald Health Therapeutics, Inc, Emeraldco, Canna Farms Limited and Cannaco Defendants/Applicants _______________________________________________________ Reasons for Decision of the Honourable Madam Justice M.H.

Hollins _______________________________________________________ [ 1 ] This is a prospective class action lawsuit against a host of cannabis industry companies. The Defendants have applied, as a group, for an Order deferring their obligation under Rule 3.31 of the Alberta Rules of Court to file their Statements of Defence until after the certification motion in this proceeding is heard and decided. [ 2 ] For the reasons that follow, the Defendants’ application is dismissed and their respective Statements of Defence will be due

as directed. Background [ 3 ] Class actions do not become class actions until and unless they are certified as such. If the named Defendants oppose certification, that determination is made after the hearing of the certification motion of the Plaintiff(s). The material for that motion consists of the Pleadings, the Affidavit evidence of both parties and cross-examinations thereon (called the Certification Record) and written legal arguments. [ 4 ] The criterion for certification is set out in s.5 of the Class Proceedings Act , SA 2003, c.C-16.5 (paraphrased): (

a) The Pleadings disclose a cause of action; (

b) There is an identifiable class of persons; (

c) The claims of the prospective class members raise a common issue; (

d) A class proceeding is the preferable procedure for a fair and efficient resolution; and (

e) There is an eligible and appropriate representative Plaintiff. [ 5 ] The issue in this application is whether or not I should suspend the obligation of the Defendants to file their Statements of Defence until after the certification motion is heard and decided. [ 6 ] The Defendants say that requiring them to file Statements of Defence prior to the certification hearing adds little or nothing to the certification record because the substance of the defences will be canvassed in the Affidavits.

They say that, with reference particularly to the foundational rules, filing defences that may be amended anyway and are not necessary for the certification decision is disproportionately wasteful. [ 7 ] The Plaintiffs say that no circumstances exist which justify a departure from the normal rule requiring pleadings to be closed within the time allowed under the Rules of Court. They also argue that completed Pleadings, including possibly a Reply to Statement of Defence, will assist them in preparing to argue the certification motion and will assist the Court in preparing to hear and decide that motion.

Case Law [ 8 ] The Defendants point to a number of cases in this jurisdiction and others where the filing of defences was deferred until after the certification hearing . The Plaintiffs point to a number of cases in this jurisdiction and others where the filing of defences was required before the certification hearing.

Although some effort was made to identify a trend in Ontario and Saskatchewan to defer defences and an opposite trend in British Columbia and possibly New Brunswick to require defences, I believe that the reality is simply that the cases go both ways. [ 9 ] The Federal Court, in Poundmaker Cree Nation v Canada , 2017 FCC 447, agreed to defer the filing of defences. In doing so, Justice Strickland provided some principles to guide the decision-maker; para.30: (

a) The decision is discretionary; (

b) That discretion should balance flexibility with efficiency and fairness; (

c) The burden of justifying the deferral of the defence lies on the defendant; and (

d) Factors to consider may include whether the helpfulness of the Statement of Defence to the certification process, the cost and time involved in filing defences, the nature and complexity of the matter and any prejudice to the Plaintiff if defences are not filed in advance of the certification motion. [ 10 ] Justice Strickland addressed the contrary view of Justice Perell of the Ontario Superior Court of Justice, that it was generally desirable to have defences filed before the certification motion as expressed in Pennyfeather v Timminco Ltd , 2011 ONSC and Smith v Sino-Forest Corp 2012 ONSC 1924 .

But most importantly, Justice Strickland emphasized the discretionary nature of the decision ...what emerges from the jurisprudence is that the mere fact of the existence of the convention as a usual practice at the Federal Court and in other jurisdictions is, in and of itself, not determinative of whether the filing of a statement of defence is to be deferred until after the hearing of the certification motion.

The case management judge must consider the motion with a view to the just, most expeditious and least expensive determination of the proceeding; para.31 [ 11 ] The New Brunswick Court of Appeal followed the Pennyfeather approach in Gay et al v Regional Health Authority 7 and Dr. Menon , 2014 NBCA 10 at para.25. In Alberta, a number of judges have agreed to defer the defences. For example, the Defendants rely on a statement of Justice Slatter in Warner v Smith & Nephew , 2016 ABCA 223 in which he referred to the deferral of a defence as “the usual practice”.

Similarly, Justice Martin (as she then was) said such a practice was “not uncommon”; Andriuk v Merrill Lynch Canada Inc, 2011 ABQB 59 at para. 3 . [ 12 ] I agree with Justice Strickland that there is nothing to commend an automatic acceptance of a “trend” or “usual practice” in a matter so obviously reliant on the exercise of the discretion of the Case Management judge. Indeed, no Alberta judge has said otherwise. [ 13 ] In Murray v Alberta (Calgary Health Region) , 2007 ABQB 231 Justice Martin went the other way and required defences.

While that case may have involved fewer parties and no causation issues that will undoubtedly arise here, the factors that Justice Martin

considered are the same as canvassed in other cases; Murray at paras.24-29. Similarly, in Alberta Municipal Retired Police Officers’ Mutual Benefit Society v Alberta , 2009 ABQB 44 , Justice Kent acknowledged previous authority for deferring but emphasized the exercise of the court’s discretion; para.4. Factors [ 14 ] As mentioned, the onus remains on the Defendants in this application.

It is they who seek to depart from the requirements of the Rules of Court . [ 15 ] In terms of the certification record and the impact of completed pleadings on the motion, I agree with the Plaintiffs that this may assist both them and the Court in preparing for the certification hearing. I appreciate that certification is not a decision on the merits of the claims and thus defences may not be necessary in order to examine whether the Statement of Claim discloses a cause of action.

However, I agree with Justice Matthews that the question is not whether defences are necessary but whether they are likely to be helpful; Shaver v Mallinckrodt Canada ULC , 2021 BCSC 404 at para.37. [ 16 ] It is true that this Court will have many Affidavits from both sides available to it at the certification motion. But Affidavits are not Pleadings. The Defendants’ Affidavits will contain the evidence supporting each Defendant’s argument as to why the class action should not be certified as against it but may not – indeed should not - set out the legal basis for that position.

I agree with Justice Perell that understanding the legal claims and defences may be helpful to the Court in analyzing the causes of action pleaded. [ 17 ] Further, it is conceivable that a Defendant resisting certification may need Affidavit evidence from different individuals within the organization (sourcing, packaging, etc), leaving the reader(

s) to cobble together what the defence is believed to be as opposed to having it in one place and described by the party asserting that defence. [ 18 ] Pleadings also assist in determining what is material and relevant for the purposes of preparation for cross-examination and disposition of objections arising therein.

With the volume of Affidavits and cross-examinations expected, the parties and the Court would be better served to know the scope of the Pleadings rather than trying to glean them from the Affidavits. [ 19 ] The Plaintiffs say that the Defendants may even admit some of the allegations in their defence, thus narrowing issues prior to certification. While the Defendants loudly protest that they will make no such admissions, we should not foreclose that possibility.

Further, requiring each Defendant to enunciate what is at issue for it is not unduly onerous. [ 20 ] While the Defendants argue about the volume of Statements of Defence that will be in circulation, each Defendant will only be formulating its own defence. [ 21 ] In balancing the work of the Defendants in drafting their Statements of Defence against the benefits of having complete pleadings, I still believe that the latter outweighs the former.

Even though Affidavits are not pleadings, in order to prepare their evidence, each Defendant is going to have to formulate its defences, whether in the form of a filed pleading or not; Pro-Sys Consultants Ltd v Microsoft Corporation , 2015 BCSC 74 at para 33 and Murray at para 29 . In my view, this also largely answers any complaints of the Defendants that filing defences will slow this matter down. [ 22 ] The Defendants also raised the likelihood of subsequent amendments following the disposition of the certification motion. Indeed, that seems almost inevitable given the nature of class action proceedings.

The Plaintiffs have already amended their Statement of Claim three times. I am not at all persuaded that deferring Statements of Defence would necessarily obviate future amendments to the Pleadings in an action such as this. Conclusion [ 23 ] The Defendants’ application to defer the filing of their Statements of Defence is dismissed. If the parties cannot agree on the timing for that, they may speak to those deadlines separately. Heard on the 01 st day of June, 2021. Dated at the City of Calgary, Alberta this 9 th day of November, 2021 . M.H. Hollins J.C.Q.B.A.

Appearances: Bruce MacLeod, Noah Hodgson and Margaret Waddell

For the Plaintiffs/Respondents Don Dear, QC, Jeffrey Weidman and Stephanie Lawless For Canopy Growth and as agent for the Defendants/Applicants Tristram Mallett and Olivia Dixon For Aphria and Broken Coast Justin Lambert and Andrea Stempien For Emerald Health Kara Smyth and Grace Waskchuk For Aurora Cannabis Inc. Matthew Fleming and Kelly Osaka For Tilray and High Park Andrew Wilson and Kajal Ervin For Organigram Lara Mason For HEXO Corp Keith Marlowe and Melanie Baird For Cronos Group Inc Pinta Maguire For Emblem and Alefia