*This article was originally published on 5/31/2024 and updated on 6/5/2024.
The British Columbia Court of Appeal has upheld a decision of the British Columbia Supreme Court confirming that section 2(1) of the Class Proceedings Act, RSBC 1996, c. 50 (the “CPA”) limits standing to commence a class action in British Columbia to British Columbia residents only.
Section 2(1) of the CPA states:
A resident of British Columbia who is a member of a class or persons may commence a proceeding in the court on behalf of the members of that class.
In MM Fund v. Excelsior Mining Corp., 2024 BCCA 163 (affirming 2022 BCSC 1541), the Court clarified that while non-residents may “piggyback” on class proceedings filed in British Columbia as members of the proposed class, there is no right for a non-resident to commence the action.
The defendant, Excelsior Mining Corp., brought an application to strike the plaintiff, MM Fund’s, certification application and amend its pleadings to reflect that the action would be brought in an individual capacity on the basis that MM Fund was a trust established under the laws of Ontario with no registered address, office or business operations in British Columbia. Notably, the lower court exercised its discretion to sequence the defendant’s application prior to the plaintiff’s certification application.
MM Fund argued that it had sufficient connection to British Columbia to establish itself as a resident for the purposes of s. 2(1) of the CPA, which it argued should be interpreted generously and flexibly. This argument was rejected by the lower court and on appeal.
In coming to its conclusion, the Court of Appeal held:
- The residency requirement in s. 2(1) of the CPA is not a mere technicality.
- The term “residency” in s. 2(1) of the CPA should be interpreted in accordance with its ordinary meaning. In the case of a corporation or trust, this is where its central management and control takes place. Residency is not to be conflated with issues of jurisdiction, presence, or carrying on business, which are issues which may relate or intersect but whose meanings differ.
- The purpose of the residency requirement in s. 2(1) of the CPA is to limit standing to bring a putative class proceedings n to the British Columbia courts to members of the public resident in and served by the courts of British Columbia.
The key takeaway is that proposed class proceedings commenced by a non-resident representative plaintiff risk being struck or forced to proceed as an individual action. In this case, the plaintiff did not request leave to amend their claim to substitute a representative plaintiff who met the residency requirements of the CPA. In the event such an application is brought, defendants would be prudent to consider any defences including whether the filing of an action which does not comply with the requirements of the CPA results in any limitations defences or any prejudice to the defendants resulting from expense and delay caused by defending a non-compliant action, or any others.
For more information on this topic, please reach out to the authors, Emma Irving and Jaclyn Vanstone.
