B.C. Supreme Court Confirms that British Columbia's No-Costs Rule Does Not Apply to Pre-Certification Applications

September 17, 2024

Written By Jackson Spencer and Katherine Booth

British Columbia is often referred to as a "no costs" jurisdiction for class proceedings because section 37 of the B.C. Class Proceedings Act creates a presumptive no-costs regime in British Columbia for certification applications and after actions have been certified as class proceedings. This is in contrast to some other provinces, such as Ontario, where there is no such rule. However, two recent decisions from the British Columbia Supreme Court confirm that the normal cost rules still apply in British Columbia prior to certification, including to pre-certification applications that are heard concurrently with certification.

In I.F. v Gilead Sciences, Inc., 2024 BCSC 1479 (I.F.), the Court awarded the plaintiffs costs of the defendants' unsuccessful application to dismiss the action. The application was heard at the same time as certification and required the Court to consider the same test as under the s. 4(1)(a) certification criterion, namely whether the pleadings disclosed a cause of action. The defendants argued the application was "inextricably linked" with the certification application so s. 37 should apply, but the Court found it was a pre-certification application. It was analytically addressed by the Court before deciding the certification application, costs would have been awarded if the application was heard separately before certification and, had the defendants been successful, they would have been entitled to costs (which they had sought in their notice of application).

In Latifi v The TDL Group Corp., 2024 BCSC 1659 (Latifi), the Court awarded the defendant costs of its successful summary judgment application, also heard concurrently with certification. The Court confirmed that s. 37 of the Class Proceedings Act is not engaged for pre-certification applications, and applied a B.C. Court of Appeal decision confirming that this is so even where the parties have agreed that a defendant's application to strike will be determinative the s. 4(1)(a) certification criterion.

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• In Latifi, the Court endorsed the notion that, just because a plaintiff brings a proceeding out of a bona fide concern to vindicate their perception of the public interest, that does not mean the plaintiff is insulated from a costs award. In Latifi, there were no novelty or public-interest grounds to justify a departure from the normal cost rules that costs are awarded to a successful party. 
• In I.F., the Court considered four authorities for the general proposition that s. 37 of the Class Proceeding Act does not displace the ordinary cost principles in the Supreme Court Civil Rules prior to certification. Several of these authorities were also relied upon in Latifi for the same proposition.
• The I.F. application and certification decision contains helpful commentary on the distinction between a Rule 9-5 application to strike, which is a challenge on the pleadings, and a Rule 9-6 application for summary judgment, which is a challenge based on a limited review of evidence. 

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