Absent Foreign Claimants in Canadian Class Actions: Where to After Airia Brands?

• Author: Paul-Erik Veel and Graham Henry
• Pages: 27-69

27

ABSENT FOREIGN CLAIMANTS

IN CANADIAN CLASS ACTIONS:

WHERE TO AFTER

AIRIA BR ANDS

?

Paul-Erik Veel and Graham Henry

Abstract: If a tort is committed on an inter national scale, when

can a Canadian court assume jurisdiction in a class proceed-

ing over class members who reside outside of Canada? The

Ontario Court of Appeal’s recent decision in Airia Brands Inc

v Air Canada provided a new framework for answering this

question but, in doing so, expanded Ontario’s jurisdiction

over absent foreign claimants to untenably broad levels. This

new test allows on its face for the assumption of jurisdiction

even when there are no direct connect ions between the absent

foreign claimants and the forum. Rather, it is suff‌icient that

a court have jurisdiction over both the representative plain-

tiff and the defendants, and that the representative plaintiffs

share common issues of fact or law with the absent foreign

claimants. This signif‌ies an exceedingly broad approach to

the assumption of jurisdiction over absent foreign claimants

and a radical ex pansion of Canadian courts’ jur isdiction over

class proceedings. If applied literally, this test will create sig-

nif‌icant problems for a wide range of cla ss actions and would

be inconsistent with norms of comity. Going forward, courts

ought to consider the implications of this test and search for

practical judicial solutions that can temper its negative im-

pacts. These solutions may take the form of a modif‌ied test

that requires greater linkage between absent foreign claim-

ants and the forum or, alternat ively, a more robust application

of the forum non convenie ns analysis subsequent to t he f‌inding

of jurisd iction.

29

ABSENT FOREIGN CLAIMANTS IN

CANADIAN CLASS ACTIONS: WHERE

TO AFTER

AIRIA BR ANDS

?

Paul-Erik Veel and Graham Henry*

A. INTRODUCTION

It is a trite observation that the world has become extremely globalized.

International trade f‌lows affect virtually all consumer products and many

services. Inte rnational f‌inancial t ransactions play a signif‌ica nt role in the

global economy.

Along with that increase in globalization comes an increasing num-

ber of disputes that touch on multiple jurisdictions. International com-

merce and f‌inance have cha llenged the existing rules th at courts apply as

to when they assume jurisdiction over disputes. In the past twenty-f‌ive

years in particular, Canadian private international law has undergone a

sea change, which ha s expanded both courts’ juri sdiction over disputes as

well as the wil lingness to recognize a nd enforce foreign judgments. While

the rules relating to jurisdiction in disputes between only a handful of

parties are now well-under stood, the rules regarding juri sdictional issues

in class actions are in a much greater state of f‌lux. Class actions, by their

nature, raise a whole new set of problems for private inter national law.

Historically, issues of jurisdiction in the private international law

sense were almost alway s raised by defendants. There was seldom any issue

with the court having jurisdiction over the plaintiff, as the fact that the

plaintiff brought a claim in a particula r court was suff‌icient to constitute

attornment and grant that court jurisdiction. As a result, the doctrines

of private international law, particularly as they have developed over

the last quarter century, have been primarily focused on circumstances

* Paul-Erik Veel is a par tner at Lenczner Slaght and a lect urer in law and eco-

nomics at the Univer sity of Toronto. Graham Hen ry is an articling st udent at

Lenczner Slag ht. The views and opinions contai ned in this article ar e those of

the authors, and do not repre sent the views of Lenczner Sl aght or its clients.

Any errors rem ain those of the authors alone.