A proposed class action in British Columbia against fund manager, Mackenzie Financial Corp., and InvestorCOM Inc., in connection with a data breach that exposed clients’ personal information is being allowed to proceed, alongside a similar suit in Ontario.
Last June, the Supreme Court of B.C. dismissed an application from the firms seeking to have the proposed class action in B.C. dismissed as an “abuse of process” on the basis that a parallel case had already been filed in Ontario, and that the lawsuits overlap.
The lawsuits stem from a data breach that took place in February 2023, when hackers allegedly stole personal information from Mackenzie investors that were held on InvestorCOM’s servers.
While the B.C. Supreme Court acknowledged that the “stay applications raise an interesting and vexing question about the propriety of parallel actions in class action proceedings involving different plaintiffs in different provinces,” it ultimately declined to stay the B.C. suit, saying that there are also legitimate reasons for parallel actions to be brought in different provinces.
“A proposed class action is not necessarily an abuse of process simply because there is another class action ongoing in another jurisdiction dealing with the same subject matter,” it said.
The firms appealed, arguing that the lower court judge was wrong in that decision.
Now, that ruling has been upheld by the Court of Appeal for B.C., which found that the lower court judge did not err in refusing to throw out the case simply because a parallel case has been filed in Ontario too.
“Mere similarity of the claims proposed in the class action does not establish an abuse of process,” the appeal court said. “The chambers judge understood there were legitimate reasons for [the plaintiff] to choose to sue in B.C. There were no facts to suggest that the action was brought or continued for an improper purpose.”
Among other things, the appeal court noted that the B.C. case was filed within a year of the data breach, soon after the Ontario action (just over two months), and “it advanced both a wider scope of claims and claims against an additional defendant, than did the Ontario action, which initially was commenced against Mackenzie only.”
It also said that different provinces may take different approaches to data breach cases, and there are differences between the class action regimes too.
“Here, given the nature of the tort and the class action legislation in B.C., and his residence in B.C., there are legitimate reasons for [the plaintiff] to pursue relief in B.C. rather than in Ontario, and it cannot be inferred he had improper motives for doing so simply because of the fact that other plaintiffs are pursuing a claim in Ontario,” the appeal court said.
And, the proposed class actions could only be considered redundant if they are both certified as national class actions, the court suggested.
“It is only if and when each action becomes certified as a class action covering a broad number of claims for a class of people, that the potential for overlapping and duplicated claims crystallizes,” it said.
At that point, the question of the preferable jurisdiction would be addressed, the court said, in dismissing the firms’ appeal and allowing the B.C. suit to continue.