The modern rule governing class actions in the United States was passed in 1966. The passage of the Class Proceedings Act on August 1, 1995 heralded the creation of this procedural remedy in British Columbia. The BC Act was modelled very closely to the Ontario Act which was passed in 1992. Quebec has had class action legislation since 1978. Other provinces that now have class action legislation are Manitoba, Saskatchewan, Alberta and Newfoundland and Labrador.

Claims for failure to provide students with a proper education referred to as "educational malpractice" based in negligence or on breach of contract have been forcefully rejected by Courts in both Canada and the United states. The Supreme Court of Canada in Jones v. The Queen [1986] 2 SCR 284 summarized it as follows:

"The courtroom is simply not the best arena for the debate of issues of educational policy and the measurement of educational quality".

This should not be construed to mean that educational bodies are immune from class actions. Since the passage of the Class Proceedings Acts in the various provinces a number of class actions have been launched.

Not everyone has a clear understanding as to exactly what is meant by the term "Class Action". It is important to recognize that a class action is not a new species of a cause of action. All the Class Proceedings Act did was to provide a new procedural remedy.

Let’s use one of the first class actions that was started when the BC Class Proceedings Act was passed, namely, the breast implant litigation as an example. Helen Harrington sued Dow Corning as a result of the damages she suffered from the use of a breast implant. In her pleadings, she took the additional step of alleging that there were a number of other women just like her who had suffered damages from the use of breast implants. She claimed the right to sue on their behalf as well as on her own behalf.

Ms. Harrington needed the Court’s approval to represent those other unnamed women, hence she applied for "certification" of her case as a class action. She was successful and the Court certified the case and it became a class action. Had she failed on the certification application her case would have proceeded in the normal fashion as a claim by her alone for damages against the manufacturer. Therefore, it is possible to convert an ordinary case into a class action if the Court agrees. If the Court does not agree and refuses certification as a class action, it will remain an ordinary case.

Essentially, there are five requirements under the various provincial Acts:

1. Do the pleadings disclose a cause of action?

2. Is there an identifiable class?

3. Are there common issues raised?

4. Is a class proceeding the preferable procedure?

5. Is there a suitable representative plaintiff?

The Court typically will address and weigh each of these factors when determining whether or not to certify a class action.

Certification is the pivotal step in the litigation; it transfers an action into one where the financial stakes can rise dramatically for the defendant. Accordingly, defendants usually strenuously resist certification motions.

The main advantages to certification from a plaintiff’s perspective are:

1. The representative plaintiff is not liable for costs,

2. The limitation period for claims is suspended,

3. Unless a person opts out, everyone is in the class, which increases the damages the defendant will face,

4. Once the case is certified, defendant will usually attempt to settle the class action rather than continue to litigate the case further.

Several cases have been launched against educational institutions based on misrepresentation. They have been met with mixed success. A class proceeding which alleges a single common misrepresentation may be appropriate for certification, if common issues exist and their resolution will advance the proceeding.

In cases where there have been numerous representations or different representations to different class members, certification will be denied because no commonality will exist.

One such case that illustrates this principle is the Ontario case of Mouhertos v. DeVry Canada Inc. (1998) 41 OR (3d) 63. The defendant DeVry was a private for-profit post secondary educational institution with four campuses. The plaintiff alleged that through advertisements and representations, DeVry misrepresented the quality of their programs and facilities and the marketability of their graduates.

The evidence before the Court established that in the six year period in question there were 67 different television commercials and 30 different newspaper advertisements. In addition there were 122 admissions officers who had interviews with prospective applicants.

The Court denied certification because the nature of the representations, whether they were false or misleading and whether they were made negligently or fraudulently would vary according to the content of the advertisements and the statements made by the various admissions officers. There was no uniformity in the representations received by each student so there were no meaningful common issues.

In the remarkably similar BC case of McKay v. CDI Career Development Institute Ltd. (1999) 64 BCLR (3d) 386 certification was denied. The student alleged that through advertising and representations he was misled as to the nature of the course, its contents and its capacity to provide him employment on graduation.

The evidence disclosed that CDI advertised extensively in newspapers and on radio and television emphasizing different themes and words so there was no single misrepresentation. In addition, there were six separate BC campuses which all did some of their own advertising as well as having separate admission representatives to handle enrolment inquiries. Certification was denied on the basis there were no common issues given the variables attached to each proposed class member’s situation.

The recent June 15, 2006 decision of the Ontario Court of Appeal in Hickey-Button v. Loyalist College of Applied Arts and Technology (2006) O.J. 2393 is instructive because there the claim was narrowed down to a single misrepresentation concerning a fast track program for entry into the Queen’s University nursing program.

The plaintiffs were two students who entered the nursing program at Loyalist College in 1997 and 1998 respectively. They claimed that when they enrolled they were offered "the Queen’s option".

This option was described in the written material provided by Loyalist to prospective applicants. In essence, the Queen’s option offered students who successfully completed two years of the three year diploma course at Loyalist the option of obtaining a degree in nursing from Queen’s University by completing two additional years of the Queen’s nursing program. Those two years could be completed on-site at Loyalist.

After the plaintiff enrolled in the fall of 1997 she learned the Queen’s option did not in fact exist. She was further advised that negotiations were on-going between Loyalist and Queen’s to establish the option by the fall of 1999 when she could avail herself of the option.

In February 1999 she learned the negotiations had broken down between Loyalist and Queen’s and the Queen’s option would not be available. She sued claiming a breach of contract and in the alternative negligent misrepresentation and brought a motion for certification as a class action.

The motion judge refused to certify the action as a class action. He held that the contract claim was a "verbal" contract which would vary from student to student. He also held the negligent misrepresentation claim also could only be determined on a student by student basis.

On appeal the Divisional Court noted that the motion judge had mischaracterized the plaintiff’s allegations when he said it was a "verbal" contract. However, the court did agree that the allegations made could only be determined on a student by student basis and upheld the decision to deny certification.

On further appeal the Ontario Court of Appeal held that both the motion judge and the Divisional Court were in error because there were common issues. The common issues identified were:

• Was the relationship between Loyalist and those students who entered the nursing program in 1997 and 1998 a contractual relationship?

• If there was a contractual relationship, did the contract include the Queen’s option and, if so, what were the terms of that option?

• If there was a contractual relationship, and if the contract included a promise to provide the Queen’s option, did Loyalist breach that contract?

• If there was a contract and if there was a breach, do any of the general defences advanced by Loyalist (e.g. the availability of the "Athabasca University" alternative) provide a complete defence to the claims?

These common issues were central to the plaintiff’s contract-based claim. Insofar as the negligent misrepresentation claim the court identified the following common issues:

• Did Loyalist owe a duty of care when making representations to students who eventually enrolled in the nursing diploma course?

• Did Loyalist make representations as to the availability of the Queen’s option?

• Were those representations untrue, inaccurate or misleading?

• Was Loyalist negligent in making those representations to persons applying to the nursing program?

After identifying the common issues with respect to the contract claim and the misrepresentation claim the Court went on to review the five requirements for certification and concluded the case should be certified as a class action.

The Hickey-Button case illustrates that the terms of the educational contract are not necessarily to be found only in the course calendar.

One of the submissions by Loyalist was that the terms of the contract between a student and his or her college or university are found exclusively in the course calendar. Accordingly the statements in the material supplied to students was not binding on Loyalist and did not form part of the contract. The Ontario Court of Appeal said this was a matter for argument at trial. The Court went on to say that those case authorities which treated the course calendar as a contractual document did not go so far as to say the terms of the educational contract are limited to the course calendar.

The Hickey-Button case also illustrates the significant amplification of the exposure to monetary damages if certification of a class action is granted. Since the result of not having the Queen’s option available was an extra year of schooling the plaintiff was claiming monetary damages of $75,000 per class member.

There were 23 persons in the 1997 year and 57 persons in the 1998 year for a total of 90 potential class members. It is unlikely that everyone who entered the nursing program in 1997 and 1998 was intent on obtaining a university degree. Some members of each class were probably intending to obtain the three year diploma. If it is assumed only 50% were intent on obtaining the four year university degree then the damage exposure is still $3,375,000.

If you have any questions regarding this article, please contact Derek Mullan at 604.643.3162 or email djm@cwilson.com.