Zechel v Navistar Canada Inc., 2022 ABKB 806

Court of King’s Bench of Alberta Citation: Zechel v Navistar Canada Inc., 2022 ABKB 806 Date: 20221202 Docket: 1403 16425 Registry: Edmonton Between: Edmund Zechel doing business as Zechel Trucking Representative Plaintiff - and - Navistar Canada Inc., Navistar Inc., and Navistar International Corporation Defendants - and - N&C Transportation Ltd., representative plaintiff in the Supreme Court of British Columbia Action No. S144960 Intervenor _______________________________________________________ Endorsement of the

Honourable Justice Peter Michalyshyn _______________________________________________________ Introduction [ 1 ] This is a class proceeding case management matter in which a decision is sought regarding the sequencing of certain applications. Background [ 2 ] The Intervenor has applied for an order staying or striking the within action. The Defendants, supported by the Plaintiff, in turn have applied for the action to be certified conditionally, and for approval of their proposed settlement.

The parties are unable to agree on the sequencing of these applications. [ 3 ] The parties and the court agreed to deal with the sequencing issue by way of written submissions. Not long after those submissions were received, the British Columbia Court of Appeal on May 16, 2022 released reasons in the related litigation of N&C Transportation Ltd v Navistar International Corporation , 2022 BCCA 164 . Soon after, the Quebec Court of Appeal on August 5, 2022 released reasons in the related litigation of N&C Transportation Ltd c 4037308 Inc. , 2022 QCCA 1092 .

At my request, the parties in the within litigation agreed to provide updated written submissions as to the impact on sequencing, if any, of the BCCA and QCCA decisions. [ 4 ] The BCCA’s Navistar decision affirmed an October 19, 2021 decision of a case management judge in N&C Transportation Ltd v Navistar International Corporation , 2021 BCSC 2046 . The decision affirmed on appeal had certified the BC action as a multijurisdictional class proceeding, with the class comprising all residents of Canada who meet the class definition, except those resident in Quebec.

The BCSC decision took into account the relatively advanced state of the related Quebec class proceedings litigation, and the relatively un-advanced state of the related Alberta class proceeding. [ 5 ] With regard to the Quebec action, in May, 2021 the parties in that action reached an agreement to settle which was approved in October, 2021: 4037308 Canada Inc c Navistar Canada , 2022 QCCS 110 .

The appeal of that approval, brought by the same Intervenor as in the within action, was dismissed on August 5, 2022. [ 6 ] The Alberta action was commenced on November 10, 2014 and a proposed settlement was reached on September 15, 2021. On January 4, 2022 the Representative Plaintiff in the BC action (N&C Transportation Ltd., since named the Intervenor in the within action) filed its application to stay or strike.

Days later, on December 6, 2021, the Plaintiff gave notice of its intention to seek approval of the September 15, 2021 proposed settlement. [ 7 ] As noted in the Defendants and Plaintiff Briefs filed April 11 and 12, 2022 respectively, an unfiled copy of their application was provided to all concerned, with the intention of formally filing it once a hearing date is scheduled. The Plaintiff indicates he attempted to file a Certification and Notice Approval Application dated March 19, 2022, but was advised by the clerk of the court that it could not be filed until again a date was scheduled for the application.

And as to the absence to date of a complete record of evidence, the Defendants argue that once the question of sequencing is decided, this court and the parties can move on to

schedule hearing dates and deadlines for the submission of materials. I am satisfied with this approach. The absence of further materials to date does not detract from my finding that there is sufficient information before me to decide the issues arising in this contested sequencing application. Analysis [ 8 ] All parties agree with the law stated in Ravvin v Canada Bread Company , 2020 ABCA 424 and like authorities governs the sequencing determination. The determination is a discretionary one.

A stay application may be decided before certification where the court has a sufficient understanding of the nature of particulars in the proposed class proceeding. Only applications likely to dispose of litigation, or more efficiently address the objectives of the Class Proceedings Act , SA 2003 c C-16.5 (“the Act ”) should be determined before the certification hearing.

Factors include efficiency (including delay), judicial economy, duplicative proceedings, fairness, and access to justice, amongst others. [ 9 ] The Intervenor relies heavily on the existence of the BC-certified multi-jurisdictional class proceeding.

It says that whether a stay of the Alberta action is appropriate can be determined largely by reference to the fact of the multi-jurisdictional class proceeding. [ 10 ] The Plaintiff and Defendants argue the stay application alone cannot be said to be dispositive because the court will need to understand appreciably the merits of the proposed settlement to give meaning to it.

As such, if the stay application fails, the merits case would have to be raised a second time in a full hearing into the approval of the proposed settlement. [ 11 ] The Plaintiff and Defendants note the absence of case authority in which a court has stayed a parallel class proceeding that has been settled in favour of one that has still to be litigated. [ 12 ] There is no question that once multi-jurisdictional stay issues arise, the court must resolve them. The Intervenor refers to s 5(6) of the Act :

If a multi-jurisdictional class proceeding or a proposed multi-jurisdictional class proceeding has been commenced elsewhere in Canada that involves subject-matter that is the same as or similar to that of a proceeding being considered for certification under this section, the Court must determine whether it would be preferable for some or all of the claims or common issues raised by the prospective class members to be resolved in the proceeding commenced elsewhere. [ 13 ] The real question is the extent to which, in making the s 5(6) determination, it is necessary to consider the merits of the proposed settlement of the Alberta action. [ 14 ] I agree with the submissions of the Plaintiff that in order for this court to assess the merits of the stay application, it is not only fair but essential that I consider to some extent, and amongst other things, the merits of the proposed settlement and whether it is fair and reasonable in the circumstances.

I agree as well that the now-final outcome in the related Quebec class proceeding is relevant to this inquiry, as were the observations of the Quebec Superior Court in 4037308 Canada Inc c Navistar Canada , 2022 QCCS 110 , at paragraphs 54-72 . [ 15 ] I agree further that the Intervenor’s objection – expressed too in the related Quebec litigation – that the parties in the Alberta action are engaged in a ‘race to the bottom reverse auction’, can only be assessed with an appreciation for the fairness and reasonableness of the proposed Alberta settlement.

Having raised the possibility of a ‘race to the bottom reverse auction’, in my view the Intervenor itself has invited this court to consider the reasonableness of the proposed settlement. Put another way, it has invited the court to have before it what all agree is a prerequisite stated in Ravvin , at para 50 : a “sufficient understanding of the nature and particulars of the proposed class proceeding”. What will satisfy that “sufficient understanding” is a question that can be answered only in the circumstances of the case.

Again, here it must be an appreciable consideration of the merits of the proposed settlement. [ 16 ] The Intervenor argues further that comity in multi-jurisdictional proceedings is a factor strongly in favour of a dispositive stay application. [ 17 ] Turning back to the BCCA’s reasons from May 16, 2022, I acknowledge the court confirmed the case management justice’s decision that the multijurisdictional class proceeding in BC was the preferable proceeding in which to determine the claims. [ 18 ] I disagree however with the submission of the Intervenor that comity considerations would require this court to grant its stay or strike application, thus making its application dispositive of the action. [ 19 ] The BCCA noted at para 32 of its reasons, In the domestic Canadian context, the principle of comity requires that courts in one province should give “full faith and credit” to the judgments of a court in another province or territory when they are acting appropriately within their respective jurisdiction [citations omitted] [ 20 ] Giving “full faith and credit” to the BCCA judgment includes recognizing its findings at paragraphs 37-38, that notwithstanding the then-unadvanced state of the Alberta action, it would still be open to a party to apply to revisit the earlier multijurisdictional certification order of October 19, 2021.

To refer fully to the BCCA decision in this regard, it stated at paragraphs 37- 38: [37] Thus, it is open to counsel and parties who negotiate a settlement in another province to apply to amend a multi-jurisdictional certification order. The Order made by the judge expressly contemplated the prospect of such an amendment with respect to the Quebec Action. The Order states: 2. The certification order in this proceeding, made November 16, 2016 (the “Certification Order”), be and the same is hereby amended to provide that: … b.

The class comprises all residents of Canada, except those resident in Quebec, who meet the class definition in paragraph 2 of the Certification Order unless they validly opt out of the proceeding in the manner and within the time period established pursuant to a subsequent order of this Court. 3. This order is without prejudice to N&C’s right to apply to further amend the Certification Order to include residents of Quebec in the class definition, depending on the outcome of the settlement approval motion in 4037308 Canada Inc. v.

Navistar Canada ULC et al., Superior Court of Quebec No. 500-06-000720-140 (District of Montréal). [38] The respondents suggest, and the appellants do not dispute, that it would be open to counsel in the Alberta Action to make a similar application to amend the judge’s multi-jurisdictional certification order if the settlement in that action is approved.

With that acknowledgement, there is no basis to suggest that the judge ought to have adjourned the multi-jurisdictional certification application that was before him. [emphasis added] [ 21 ] Flowing from these comments, I agree with the submissions of the Defendant that the BCCA’s acknowledgment of the right of a party to apply to revisit the BC multijurisdictional certification is a significant factor when considering sequencing. [ 22 ] On the whole, I find that a stay or strike application in the circumstances of this case cannot itself be dispositive without the court’s consideration of the merits of the proposed settlement of the Alberta action.

As such, there is no merit to sequencing the stay or strike application ahead of the application to consider the proposed settlement. The two applications should be heard at the same time. To do so does not offend comity, and serves the objectives of efficiency, judicial economy, duplicative proceedings, fairness, and access to justice.

Conditional certification [ 23 ] A further question arises as to the process to follow. [ 24 ] The Plaintiff and Defendants propose an initial consent conditional certification that would serve to provide notice to the class of the proposed settlement. They then propose a subsequent hearing during which the court will determine whether – notice having been given – to approve the proposed settlement.

At that same hearing the Intervenor’s stay or strike application would be considered. [ 25 ] The Intervenor objects strenuously that the conditional certification proposal is without foundation in the Act and stands to create confusion amongst class members given the BC and Alberta actions. [ 26 ] I agree however with the submissions of the Plaintiff and Defendants that it is within this court’s broad discretion under the Act to approve a process based on notice by way of an initial application for conditional certification, followed by the application to approve the proposed settlement, and to consider the Intervenor’s stay or strike application. [ 27 ] The parties may have further submissions as to the particulars of the conditional certification hearing, for example how notice will be given and how the concerns expressed by the Intervenor for confusion amongst class members might be mitigated, if at all. [ 28 ] It is suggested a conditional certification hearing will take one hour.

If that is so, scheduling will not be difficult. On the other hand, scheduling of the longer combined proposed settlement approval and stay or strike hearing will be more complex. The parties should as soon as possible come to terms on the estimated length of that hearing and communicate with the court in that regard, including their respective availability.

Conclusion [ 29 ] As to sequencing, the Intervenor’s stay or strike application will not be heard in advance of the Plaintiff/Defendants’ application for approval of a proposed settlement in the within action. [ 30 ] As to process, a brief conditional certification application is allowed, with the combined stay or strike and proposed settlement approval hearing to follow. [ 31 ] Dated at the City of Edmonton, Alberta this 2 nd of December, 2022 Peter Michalyshyn J.C.K.B.A.

Appearances: Jeff Orenstein and Andrea Grass Consumer Law Group PC for the Plaintiff Sean Smyth, KC McCarthy Tetrault LLP for the Defendants Ben Frenken and Alex McKay Code Hunter LLP

and Robert Anderson, KC Farris LLP for the Intervenor