BC Courts Require “Good Reason” to Delay Filing RTCCs in Class Actions

Introduction

Recent British Columbia jurisprudence suggests the once common practice of a defendant to a class action proceeding delaying the filing of its Response to Civil Claim (“RTCC”) until after a certification hearing is now disfavoured.

When determining whether to allow for the late filing of an RTCC where a class has yet to be certified, BC judges will presume the timeline established by the Supreme Court Civil Rules, BC Reg 168/2009 (the “Rules”) should be adhered to, absent a “good reason”.

“Good Reason” Required

Rule 3-3(3) provides that, unless otherwise ordered, RTCCs must be filed and served within 21 days of a defendant being served a Notice of Civil Claim within Canada. The time limit extends up to 49 days if a defendant was served internationally. Rule 22-4(2) allows the court to extend or shorten the applicable time period under Rule 3-3.

Ordinarily, where a defendant has failed to file a response in accordance with the Rules, a plaintiff is entitled to seek default judgment. In class proceedings, however, plaintiffs rarely seek default on the basis a defendant has not filed a response, and the issue then becomes the subject of a case planning conference or otherwise dealt with by application to the Court: Shaver v. Mallinckrodt Canada ULC, 2021 BCSC 404 (“Shaver”) at para. 21.

In the past, BC Courts were often willing to extend the timeline established under Rule 3-3 for class proceedings. However, in Pro–Sys Consultants Ltd. v. Microsoft Corporation, 2015 BCSC 74 (“Pro-Sys”), Justice Myers lamented the practice, holding it created difficulties, was not justified by cost savings given the financial stakes in class actions, and generally is not for a legitimate purpose, given that complete pleadings crystallize the issues. Ultimately, the Court determined that if it were to allow an RTCC to be deferred, it ought to be based on a “good reason” (para 31-34).

Referring to Pro-Sys, the Court in Shaver developed the following factors to be assessed when determining whether such a “good reason” exists. At paras 36-37:

1. whether the statement of defence would serve any useful purpose prior to certification because it will be useful to a determination of the issues to be addressed at the certification motion or likely to be of assistance to the Court;
2. whether requiring responses to be filed prior to certification will advance the just efficient and least costly resolution of the litigation;
3. whether the nature of the proceedings and the rights asserted are relevant contextual factors;
4. the complexity of the matter;
5. the amount of time and effort involved in preparing the statement of defence;
6. whether the statement of defence may have to be entirely reformulated, depending on the outcome of the certification hearing; and
7. whether there is any obvious prejudice to the plaintiff.

Regarding factor a), above, the Court held that the requirement is not for a defence to be “essential” to a determination of the issues, as other cases have found, but merely that it be “useful”. Further, there is a presumption an RTCC is useful, and that the burden “is on the defendant to establish that the circumstances are such that the responses ought not to be required when they are due” (para 37).

The decision of Huebner v. PR Seniors Housing Management Ltd., D.B.A. Retirement Concepts, 2020 BCSC 1290 (“Huebner”), illustrates when such a “good reason” will be found. In Huebner, the defendants sought an order to strike affidavits which the plaintiff intended to rely on at the certification hearing. In considering the proposed application, the Court ordered that defences may be filed after the application to strike, but prior to certification, stating in para 15:

Given the basis for the objections and the examples shown to me, I am not persuaded that responses to civil claims will assist in the determination of the issues in the evidentiary hearing. If I am wrong and there are some challenges that do, those objections can be dealt with at a later date.

Thus, the Court allowed late delivery of a class action defendant’s RTCC as it was not necessary for determining the evidentiary application. Nevertheless, it required the defence prior to certification.

Takeaways

Given the recent line of cases in BC, class action defendants can no longer assume they will be permitted to delay filing an RTCC until after a class is certified. Rather, there must exist some “good reason” for such late filing, absent which the courts will presume an RTCC will be useful to the issues determined in the certification hearing and not permit the delay.

If you have any questions, please contact David McKnight, Hollis Bromley, and Jon Peters.