Jurisdiction in class actions: certification of a global class

Global Publication December 2015

Three recent class action decisions in Ontario have considered when it is appropriate to extend the class—and consequently the jurisdiction of the Ontario court—to include persons who are not resident in Canada. The court in each of these decisions has focused on the question of where non-resident putative class members would reasonably expect their claims to be adjudicated.

These decisions demonstrate that when an Ontario action includes what are in substance foreign claims, a jurisdiction challenge can dramatically narrow the class or even defeat the action entirely. However, where claims have a significant nexus to Ontario, the Ontario courts are prepared to certify a global class, even if many class members, and many of the key facts, are located elsewhere.

A connection to Ontario

Abdula v Canadian Solar Inc.1 is the first decision in Ontario to consider, and grant, certification for alleged misrepresentations of a global class of all shareholders, regardless of their residency, in a corporation the shares of which were traded only on a foreign exchange.

Canadian Solar’s shares were publicly traded on NASDAQ and did not trade on any Canadian stock exchange. In a prior decision in the same proceeding, the Court of Appeal for Ontario had confirmed that a company does not have to be publicly traded in Ontario to be a “responsible issuer” under Part XXIII.1 of the Ontario Securities Act,2 and therefore subject to that legislation. The Court of Appeal had also confirmed that, despite its principal place of business in China, Canadian Solar had a real and substantial connection to Ontario, based on its registered office, executive office, annual meetings, private placements, involvement in solar projects and the release of shareholder documents by the company, all of which occurred in the province.

In Canadian Solar, the court held it could certify a global class if there was a "real and substantial connection" between the claims asserted on behalf of the foreign class members and Ontario.

Following the 2013 decision of the Court of Appeal for Manitoba in Meeking v. Cash Store Inc.,3 the Ontario Superior Court found that a real and substantial connection was made out by what it called a new presumptive connecting factor in class action proceedings, which was established where (i) the court has territorial jurisdiction over both the defendant and the representative plaintiff in a class action proceeding; and (ii) there are common issues between the claim of the representative plaintiff and that of the non-residents.

Order and fairness in the class action context

The class proceedings jurisprudence on global classes draws on the concepts of real and substantial connection employed in the determination of jurisdiction simpliciter, but the inquiry is broader than the test set out in Van Breda,4 in view of the nature of class actions as a procedural mechanism that is available not as of right but for the purposes of promoting the objects of the class actions regime: judicial economy, access to justice and behaviour modification.

The Canadian Solar decision can be contrasted with the recent Divisional Court for Ontario decision in Excalibur Special Opportunities LP v Schwartz Levitsky Feldman LLP,5 where a global class was rejected. Excalibur concerned a proposed class action alleging negligence against a Canadian accounting firm with respect to an audit report on a US corporation. The majority in the Divisional Court upheld the motion judge’s finding that the case was about American investors who purchased shares in an American company in a transaction governed by American corporate and securities law, and that the investors would not expect their claims to be adjudicated in Canada.

In both Canadian Solar and Excalibur, the courts’ concern on the issue of the global class focused on where the substance of the claim (in these cases, the corporation that was the subject of the alleged misrepresentation or negligence) was located and therefore where putative class members would fairly expect their rights to be adjudicated. Thus, in Canadian Solar, the subject corporation had a significant presence in Ontario, even though its shares did not trade there and its main business operations were overseas, whereas in Excalibur, because the subject corporation was found to be American, certification of the global class was dismissed even though the defendant in the case (the auditor) was an Ontario resident.

Constitutional limits

The recent decision of Airia Brands Inc. v Air Canada6 has added a constitutional dimension. Airia Brands concerned an alleged global price-fixing conspiracy in airfreight cargo services for shipments to or from Canada. The defendants presented extensive expert evidence demonstrating that the real and substantial connection test was not the norm outside Canada, and that an Ontario judgment that assumed jurisdiction on the basis of a real and substantial connection would not be enforced in other countries, potentially allowing re-litigation of the class members’ claims.

In rejecting a global class, the court in Airia Brands held that comity, fairness and constitutional limits required that the court only take jurisdiction over class members if they were present in Ontario or had consented to the Ontario court’s jurisdiction. The court distinguished Meeking as being applicable only to a national, but not a global, class, and observed that no previous court had the benefit of the same volume of evidence on foreign law.


Canadian Solar demonstrates the extra-territorial reach of Canadian class actions, but Excalibur and Airia Brands show that defendants can defeat certification of a global class where they can demonstrate that the foreign putative class members’ claims lack a nexus connecting them to the forum, and Airia Brands potentially goes even further.

The trend of looking to foreign claimants’ expectations is likely to continue, and we can expect additional development in this area of the law. While Canadian Solar and Airia Brands are distinguishable on their facts, the constitutional principle stated in Airia Brands does not reconcile with the result in Canadian Solar, and the Supreme Court of Canada has already granted leave to appeal from the Meeking decision. We are likely to see further guidance on jurisdiction in the class actions context in the near future.

Erik Penz and Guy White are members of our transnational litigation team.


  1. 2015 ONSC 53 [Canadian Solar].
  2. Abdula v Canadian Solar, 2012 ONCA 211.
  3. 2013 MBCA 81 [Meeking], leave to appeal granted, 2013 SCCA 443.
  4. Van Breda v Village Resorts Ltd., 2012 SCC 17.
  5. 2015 ONSC 1634 [Excalibur].
  6. 2015 ONSC 5332 [Airia Brands].

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