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Canadian Class Actions Monitor

Flooding Damage Class Action in Manitoba: The Court of Appeal Comments on Common Issues and Preferability in Anderson v Manitoba

Posted in Class Actions
Theodore StathakosAnna-Marie Manley

In Anderson v Manitoba,[1] the Manitoba Court of Appeal overturned a decision that had denied class certification of a nuisance claim on the basis that some of the claims did not contain common issues and that a class proceeding was not the preferable procedure.  In so doing, the Court of Appeal provided guidance regarding the application of the common issues test in nuisance claims, and confirmed the importance of access to justice as a factor in certifying a class action.

Background

The representative plaintiffs in Anderson are members of four First Nations in Manitoba that were affected by flooding in 2011. They allege that the Government of Manitoba’s improper operation of a dam and certain other water control structures diverted excess water onto their lands causing extensive property damage and requiring many to be evacuated from their homes. The plaintiffs framed their claims against Manitoba in nuisance, negligence, breach of treaty rights and breach of fiduciary duty.

The Manitoba Court of Queen’s Bench found that the claims in negligence and breach of treaty rights contained common issues but that the claims did not have common issues with respect to nuisance and breach of fiduciary duty.[2]  The certification judge’s reasoning was evidently based on his view that many of the members of the proposed class may not have actually been affected by the flooding.  As the Court considered that the nuisance claim was an important cause of action to the plaintiffs, the Court reasoned that a class proceeding was not the preferable procedure to resolve the common issues that did exist.

The plaintiffs sought and obtained leave to appeal on the questions of whether the certification judge applied the correct legal test to the question of common issue with respect to nuisance and, if not, whether that error affected his decision on the question of preferability. The plaintiffs succeeded in the appeal with respect to both issues.

The Common Issue Test

According to The Class Proceedings Act (Manitoba),[3] claims of the class members must raise a common issue, whether or not the common issue predominates over issues affecting only individual members.[4] A “common issue” may relate to common but not necessarily identical issues of fact, or common but not necessarily identical issues of law that arise from common but not necessarily identical facts.[5]

The certification judge concluded that the question of any interference with the class members’ use and enjoyment of their properties would necessarily have to be done on an individual, rather than common, basis.

The Court of Appeal held that the certification judge failed to properly consider the common issue which focused not on the effects the flooding, but on their cause.[6]  The certification question under consideration was whether Manitoba, by its actions, caused the flooding. The fact that the effect of the flooding would have to be determined on an individual basis was not a bar to certification. Indeed, the Court of Appeal found that the certification judge effectively disallowed certification on the basis that an individual assessment of damages would be required, contrary to the explicit terms of the CPA.[7]  The Court of Appeal emphasized that the test is whether the resolution of the common issue was necessary to the resolution and a substantial ingredient of each class member’s claim. A determination of whether Manitoba caused the flooding was both substantial and necessary – a common issue that could be determined even if the effect on, or damages suffered by, each individual class member would have to be assessed individually.

The Preferability Analysis

The determination of the common issue in nuisance had been a significant factor in the certification judge’s decision to refuse certification. The Court of Appeal, after finding a common issue in nuisance, determined that the certification judge’s decision on preferability should also be overturned.  While the question of preferability is an explicit exercise of judicial discretion that is accorded significant deference, when the common issue in nuisance was recognized, the balance had tipped in favour of certification on the basis of judicial economy.[8] The Court of Appeal further noted that many residents of rural First Nations who had lost their homes or had been displaced due to flooding would benefit from the ability to share the costs of litigation.  Had they been required to proceed individually, many would be unable to do so.  As such, the goal of access to justice also made a class proceeding the preferable procedure.

Lessons Learned

As always, in Anderson the framing of the common issue questions was very important. By focusing on causation the plaintiffs were eventually successful in certifying their class proceeding.  The causation issue here was particularly significant – the question of whether Manitoba caused the flooding will likely require much expert evidence and a lengthy trial to decide, and any finding may affect how governments manage excess water issues in the future.  At the time of writing, Manitoba has not sought leave to appeal to the Supreme Court of Canada, but we will continue to monitor this case for any new developments.

[1]      2017 MBCA 14 [“Anderson”].

[2]      2014 MBQB 255.

[3]      The Class Proceedings Act, CCSM, c C130, s 4 [“CPA”].

[4]      CPA, s 4(c).

[5]      CPA, s 1.

[6]      Anderson at para 41.

[7]      CPA, s 7(a).

[8]      Anderson at para 59.