The differences in provincial class action regimes have been a frequent topic of conversation amongst class action lawyers across Canada, whether they are discussing multi-jurisdictional cases, carriage, or the emergence of a multi-district litigation practice. Class action practice in the Federal Court engages further considerations. Unlike the statutory regime for most Canadian provinces, commencing a class action in the Federal Court does not toll class members’ limitation periods. Instead, these limitation periods are tolled only when the class action is certified.
In the recent case of Jacques v. Canada, 2024 FC 851 (“Jacques”), the Federal Court refused to certify a federal data breach class action because, among other things, class members’ claims were limitations-barred by the time of the certification hearing. The parties had agreed to hold the matter in abeyance pending the resolution of a parallel class action, but had not taken any steps (for example, entering into a tolling agreement) to toll the limitation periods of the class.
Facts
The Jacques class action was commenced in January 2013 on behalf of individuals appealing the denial of disability benefits, and whose personal information was contained on a lost USB key. The USB key contained a wide range of personal information, including but not limited to the names, social insurance numbers, occupations, and level of education of the class members. The class members learned in December 2012 that the USB key containing their information was lost.
Jacques was issued shortly after two similar class actions, including Condon v. Canada (“Condon”), which was appealed to the Federal Court of Appeal and went on to be one of the seminal privacy class action cases in Canada (see Condon v. Canada, 2015 FCA 159). Because of the similarities, the parties in the three class actions agreed at a case conference to use Condon as the lead file, while holding Jacques in abeyance. Condon was eventually certified, and the Federal Court approved a settlement of the matter, effective July 17, 2018. The plaintiffs in Jacques then moved for class certification.
Legal Framework
The test for certification requires, among other things, that there is an identifiable class of two or more persons.
The parties agreed in this case that the applicable limitation period was 6 years, based on section 32 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50 and subsection 39(2) of the Federal Courts Act, R.S.C. 1985, c. F-7.
Application
The Federal Court held that the plaintiffs failed to prove that there was an identifiable class of two or more persons because the class members’ claims had expired in December 2018 – six years after they were informed that the USB key at issue had been lost. The Federal Court rejected the plaintiffs' argument that the class members’ claims had been tolled twice: first, when the parties agreed to hold Jacques in abeyance pending the resolution of Condon, and second, from March 13, 2020, until September 13, 2020, when the limitation periods were suspended due to COVID-19.
Because limitations are substantive rights, a class member’s limitation period can only be suspended by the filing of individual claims or by the clear agreement of the parties. In the present case, the class members had not filed individual claims and the Federal Court noted that the parties’ agreement to keep Jacques in abeyance until the resolution of Condon, which agreement made no mention of the suspension of limitation periods, was not sufficient to suspend limitation periods, especially in the face of contradictory evidence.
The Federal Court thus declined to certify the proposed class action. It did, however, leave open the possibility that limitations issues that apply only to some class members may not prevent certification as it did in Jacques.
Takeaways
The outcome would have been different in other jurisdictions. In Ontario, for example, limitation periods are suspended in favour of class members on the commencement of the proceeding, so tolling in a case like this need not be considered. By contrast, in British Columbia, limitation period suspensions in favour of class members crystallize only when the class action is certified, so tolling should be considered in cases where certification is in doubt.
The decision in Jacques reminds us that limitations are substantive rights, and any suspension must be made explicitly. In this regard, the Federal Court in Jacques suggested in obiter that the parties may have been able to agree to toll the limitation periods for class members, notwithstanding that the putative class was not yet certified, and was also not represented by class counsel. Though we query whether limitation periods could be tolled for a non-represented class, out of an abundance of caution, litigants might consider seeking a court order to recognize a tolling agreement in similar circumstances.
Finally, for those of you reading this that are not yet sick of the one-step/two-step debate (we never get sick of it), the Federal Court reinforced the two-step test with reference to Jensen v. Samsung Electronics Co. Ltd., 2023 FCA 89, at paragraphs 80-82, consistent with the Ontario Court of Appeal’s recent decision in Lilleyman v. Bumble Bee Foods LLC, 2024 ONCA 606, at paragraphs 67-70.
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