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Lubus v. Wayland Group Corp. and Section 29.1 Motions for Delay – Does Context Matter?
The mandatory dismissal for delay provision under s. 29.1 was introduced in a relatively recent amendment to the Class Proceedings Act, 1 and came into force on October 1, 2020. On a motion under this section, the court is to dismiss a class proceeding unless, by the first anniversary of the day on which the proceeding was commenced,
a) the representative plaintiff has not filed a final and complete motion record in the motion for certification;
b) the parties have agreed in writing to a timetable for service of the representative plaintiff’s motion record in the motion for certification or for completion of one or more other steps required to advance the proceeding, and have filed the timetable with the court;
c) the court has established a timetable for service of the representative plaintiff’s motion record in the motion for certification of for completion of one or more other steps required to advance the proceeding; or
d) any other steps, occurrences or circumstances specified by the regulations have taken place.2
Section 29.1 provides that if none of the requirements are satisfied by the one-year anniversary, the proceeding “shall” be dismissed for delay. The new provision’s relationship with s. 12 of the CPA, which provides the court with wide-ranging case management powers, remains unclear. In the initial jurisprudence under the new provision, judges have interpreted s. 29.1 as a mandatory provision that is impervious to the flexibility usually found under s. 12.
Initial Case Law
This interpretation was first applied in Bourque v Insight Productions,3 where Justice Belobaba dismissed proposed class action for delay after the plaintiff submitted her certification motion record 6 days past the s. 29.1 deadline.4 While the plaintiff argued that a timetable had been established by the court, Justice Belobaba disagreed, finding that an agreement that the plaintiff would serve her motion materials “when she can” does not constitute a timetable as per s. 29.1.5 Further, Justice Belobaba noted that while the CPA should be interpreted generously, broadly and purposively, the purpose of s. 29.1 is to help advance of class action proceedings. Therefore, s. 29.1 should be given a plain language interpretation and provisions such as s. 12 of the CPA could not be applied to override mandatory language in the statute, including s. 29.1.6
Justice Belobaba’s analysis has been followed in subsequent decisions under s. 29.1. Justice Gomery adopted the reasoning in Bourque in her decision in Lamarche v Pacific Telescope
Corp,7 stating that a timetable requires an undertaking to do something within a specified deadline. As such, emails between counsel providing vague deadlines such as “in a couple months” will not be considered a timetable for the purposes of s. 29.1(b).8 Finally, although the plaintiff argued that the recent amendment creates hardship for plaintiffs, Justice Gomery held that the court and class counsel must live with the section as enacted and adapt their practices accordingly.9 Similarly, in LeBlanc v The Attorney General of Canada,10 Justice Akbarali re-affirmed that s. 12 of the CPA could not be used to override the mandatory language in s. 29.1.11
However, the recent decision of Justice Morgan in Lubus v Wayland Group Corp12 has provided a new perspective on s. 29.1. Justice Morgan held that while the end result in previous decisions may have been correct, he disagreed with the approach taken by his colleagues. More specifically, he reasoned that context must be taken into account when interpreting s. 29.1.
Lubus v Wayland Group Corp.
Lubus is a proposed securities class proceeding brought against Wayland, its underwriters, and its former CEO, alleging that the defendants made several actionable misrepresentations.13
The plaintiffs initially issued the claim on September 3, 2019. In December of 2019, the defendant Wayland became insolvent and entered under the protection of the Companies’ Creditors Arrangement Act,14 which stayed the class proceeding against them. The court in the CCAA proceedings permitted the action to move forward against the other parties on July 9, 2020. In accordance with the enactment of s. 29.1 of the CPA on October 1, 2020, the plaintiffs had until October 1, 2021 to comply with the provision.15 By that date, the plaintiffs had not yet filed certification motion materials, and there was disagreement as to whether a timetable had been established. The defendant underwriters brought a motion to dismiss the claim for delay under s. 29.1.16
At issue before Justice Morgan was whether the plaintiffs had indeed established a timetable in accordance with either s. 29.1(b) or (c). The plaintiffs argued that their motions to change the venue of proceedings and amend the statement of claim qualified as steps in the action for the purposes of defeating the delay allegation. This was rejected by Justice Morgan, who found that such steps were administrative in nature and did not qualify as steps to “advance the proceedings.”17 Further, the plaintiffs argued that the measures taken to lift the stay in the CCAA
proceeding was a step to “advance the proceedings” under s. 29.1. This was similarly rejected, as steps taken in other proceedings are not what s. 29.1 refers to.18
However, Justice Morgan did accept the plaintiffs’ final argument that the court had established a timetable that met the requirements of s. 29.1(c) during the initial case conference in July 2021. During this case conference, the plaintiffs proposed a timetable seeking to set a schedule for the certification motion. This timetable was not adopted because there were other issues had to be dealt with first.19 The plaintiffs undertook to resolve these issues and in doing so, they were required to submit several motions in writing.
In determining whether the plaintiffs satisfied any of the requirements under s. 29.1, Justice Morgan disagreed with the strict approach taken in previous cases, stating:
“The aim of the exercise in a section 29.1 motion is not to implement the section literally no matter what the context or to apply a form of ‘zero tolerance’ regime to the delay question. Like any adjudicative question, it is the court’s role to interpret the statute as befitting the specific context and to apply to the circumstances the purpose that the statute seeks to address: Re Rizzo & Rizzo Shoes Ltd., 1998 CanLII 837 (SCC),  1 SCR 27, at para. 27. Adjudication of a delay question necessarily requires a careful consideration of the factual/procedural distinctiveness of the case at bar.”20
In the circumstances of this case, the plaintiffs sought a written timetable from the court and received instructions to complete certain steps to facilitate movement in the proceeding before the timetable for certification could be set. Although the court did not specify a date for the completion of these steps, the plaintiffs completed them as quickly and efficiently as possible.21 Justice Morgan held that the court had, in effect, established a form of timetable by directing the next steps to be taken at the initial case conference, meeting the terms of s. 29.1(c).22 As such, he dismissed the motion and allowed the class action to continue.23
As s. 29.1 is a relatively new provision and there is not yet guidance on its interpretation from appellate courts, it is understandable that judges have taken differing approaches when deciding whether a class proceeding should be dismissed for delay under this section. Although Justice Morgan did not explicitly consider the role that s. 12 may take with regards to s. 29.1 motions, he demonstrated a flexible approach by basing his decision on a contextual interpretation of what would fall under the meaning of the term “timetable”.
While the early case law on s. 29.1 tended to strictly construe its mandatory language to require dismissal where the statutory criteria have not been met, Justice Morgan’s approach allows for
discretion by requiring careful consideration of the relevant circumstances of each case rather than automatically granting a dismissal. This allows for flexibility where, as in this case, the plaintiff is working diligently to move the case forward but has not technically met any of the requirements under s. 29.1. It remains to be seen which approach will be followed in future decisions.
This article was written by Class Actions Lawyer Jonathan Bradford and Articling Student Chanele Rioux-McCormick