Subject to a few exceptions, s. 37 of
The scope of s. 37-and the exceptions to it-are a recurring issue. BC's Class Proceedings Act defines a "class proceeding" to be a proceeding "that is certified as a class proceeding". In other words, a proposed class proceeding becomes a "class proceeding" under the act only after certification.
For example, s. 12 of the Class Proceedings Act, allows a court "make any order it considers appropriate respecting the conduct of a class proceeding". Earlier this year, BC's
That suggests that s. 37 does not prevent costs awards for pre-certification steps like pleadings, particularly where an action is not certified. However, BC's courts have not always reached this conclusion. The issue arose recently in 0116064
The court refused pre-certification costs. Relying on a 2002 appellate decision, the court held that the use of "class proceeding" in s. 37 did not limit the provision to certified class proceedings. Instead, s. 37 prevents costs awards whether or not a proceeding is certified and becomes a "class proceeding". The court distinguished cases where costs were awarded after a proposed class action was struck out before the certification application was heard. The apparent inconsistency between the interpretation of "class proceeding" in ss. 12 and 37 was not addressed.
However, the court awarded
The court held that the plaintiff's insider trading allegations advanced with the certification application met several of those criteria. The plaintiff knew or should have known that its insider trading allegations were fundamentally flawed because of judgments leading up to the certification application. Indeed, the court had previously awarded costs against the plaintiff under s. 37 following a successful application to strike claims against individual defendants.
The case demonstrates some of the issues that can arise if a successful defendant seeks costs after successfully opposing certification.
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