Executive Summary: Key Legal and Evidentiary Issues

• The motion judge erred by granting conditional certification without establishing an identifiable class as required under the Class Proceedings Act.

• The Ontario Court of Appeal found no statutory authority or jurisprudential basis for conditional certification of class actions.

• The proposed class definition was unworkable, as it excluded and included veterans inconsistently based on their case management status.

• The Court held that the absence of a proper class definition affects the analysis of common issues and preferable procedure.

• The claim in negligence was upheld as disclosing a reasonable cause of action, based on the proximity and reliance between veterans and Veterans Affairs Canada.

• Canada was successful on appeal, with the matter remitted for reconsideration of the class definition and the certification requirements.

Background and facts

Andrew Knisley, a veteran of the Canadian Armed Forces, was seriously injured by an improvised explosive device while serving in Afghanistan in 2009. His injuries included the amputation of his entire right leg, a traumatic brain injury, hearing loss, renal failure, and nerve damage. He alleges that Veterans Affairs Canada (VAC) mishandled his benefits applications, causing delays and administrative errors that aggravated his physical and psychological suffering. For example, VAC incorrectly assessed his leg amputation as a “high-above knee amputation,” leading to a lower disability rating and reduced benefits. It also withdrew several of his applications—such as for hearing loss and renal failure—without explanation, despite supporting medical evidence.

Knisley brought a proposed class action on behalf of other veterans who similarly suffered from VAC’s misadministration of disability benefits. He argued that the failures in benefit processing caused emotional, psychological, and financial harm to a vulnerable group of former military personnel. The motion judge certified the class action on a conditional basis, requiring the parties to amend the class definition to the satisfaction of the court.

The appeal and the issue of conditional certification

The Attorney General of Canada appealed the certification order, challenging both the recognition of negligence as a valid cause of action and the legality of conditional certification. The Ontario Court of Appeal focused primarily on the procedural error made by the motion judge—namely, certifying the class action without first establishing an identifiable class.

The Court of Appeal held that conditional certification is not contemplated under the Class Proceedings Act, 1992. Section 5(1) of the Act sets out five mandatory requirements for certification, including the requirement that an identifiable class be established. The motion judge acknowledged that the proposed class definition was flawed, but still proceeded with certification subject to amendment. The Court ruled that this approach was legally improper. Without a defined class, the court could not meaningfully assess common issues, preferable procedure, or representative adequacy. The conditional nature of the certification created procedural uncertainty, particularly if the parties could not agree on an acceptable definition.

The appellate court also clarified that none of the jurisprudence cited by the motion judge supported conditional certification. The leading authorities either amended the class definition directly or refused certification altogether. In no case was certification granted in the absence of a defined class, pending future agreement or revision.

Negligence as a valid cause of action

Although Canada also challenged the recognition of negligence as a viable cause of action, the Court of Appeal upheld the motion judge’s conclusion on that point. It found sufficient proximity between VAC and the veterans, given that VAC is solely responsible for administering benefits under the Veterans Well-being Act. The Court held that it was reasonably foreseeable that VAC’s failure to provide timely and accurate service would cause harm to injured veterans who rely on those benefits for basic needs and rehabilitation.

The Court emphasized that VAC is not a regulator, but the administrator of a statutory benefits system. It distinguished this case from prior decisions involving government regulators where a duty of care was not found. Applying the Anns/Cooper test, the Court found no residual policy considerations that would negate the duty of care. Instead, it noted that policy considerations supported accountability in cases where the government creates benefit systems and veterans are encouraged to join the military based on promised entitlements.

The pleadings were also found sufficient to disclose material facts supporting the claim in negligence. The Court reiterated that pleadings should be read generously, especially at the preliminary stage of a novel claim.

Outcome of the appeal

The Ontario Court of Appeal allowed the appeal, set aside the certification order, and remitted the matter to the motion judge for reconsideration. The judge was directed to determine whether an identifiable class exists and, if so, to reassess whether the other certification requirements are met in light of a properly defined class. Canada was awarded $30,000 in costs for the appeal.