Executive Summary: Key Legal and Evidentiary Issues

• The appeal challenges a motion judge's refusal to certify a proposed class action against Facebook, Inc. under the Class Proceedings Act, 1992.
   
• Appellants sought certification of common issues concerning breach of contract, disgorgement, and the workability of a proposed class definition.
   
• Evidentiary gaps regarding compensatory damages complicated the disgorgement and preferable procedure analyses.
   
• Individual inquiries into whether each class member's data was shared undermined commonality for the breach of contract claim.
   
• Disgorgement for breach of contract was treated as exceptional relief unavailable at the plaintiffs' election.
   
• Deference to the motion judge's discretionary findings shaped the standard of review applied on appeal.
   

Facts of the case

Douglas Donegani, Matthew Howat and Lyne Brassard, plaintiffs in a proposed class action, appealed the October 24, 2025 order of Akbarali J. dismissing their motion to certify the proceeding as a class action under the Class Proceedings Act, 1992. The appellants alleged that Facebook, Inc. (now known as Meta Platforms, Inc.) made the Facebook data of users' friends available to third-party applications without those friends' consent, when the friends themselves had not installed the third-party programs in question. The claim, narrowed to nine third parties — AirBNB, Amazon, Apple, Lyft, Microsoft, Netflix, RBC, Yahoo and This Is Your Digital Life — sought damages of two billion dollars or such other amount as the court determined appropriate, along with declaratory relief, disgorgement of profits, restitution for unjust enrichment, nominal damages for breach of contract, and punitive damages. The proposed class definition covered "Affected Friends" in Canada from 2009 to the present, excluding Quebec residents and Facebook-affiliated parties, with membership to be determined through a proposed "Master Class List" process. The motion judge addressed the certification criteria across two endorsements: a 2024 Endorsement dealing with cause of action and common issues, and a 2025 Endorsement addressing class definition, preferable procedure, and litigation plan.

Policy and legislative provisions at issue

The appellants pleaded that a contract was formed when users agreed to Facebook's Terms of Service, which incorporated by reference its Data Use Policy, in exchange for access to a Facebook account. They alleged breaches of that contract, including failures to comply with section 5(3) and Principle 4.3 of Schedule 1 of the Personal Information Protection and Electronic Documents Act, disclosure of data without adequate consent, and failure to safeguard account information despite representations that users could control access through privacy settings. Additional pleaded causes of action included breach of confidence, negligence, intrusion upon seclusion, unjust enrichment, breach of consumer protection legislation, breach of provincial privacy statutes, and breach of the Competition Act. Certification itself turned on the requirements of section 5 of the CPA, including whether the pleadings disclosed a cause of action, whether an identifiable class existed, whether there were common issues, and whether a class proceeding was the preferable procedure.

Reasoning and analysis

Vermette J., writing for the Divisional Court panel that included Varpio and Brownstone JJ., applied the standards of review from Housen v. Nikolaisen, 2022 SCC 33: correctness for questions of law, and palpable and overriding error for questions of fact or mixed fact and law. On class definition, the court found it unnecessary to resolve the appellants' arguments given its conclusions on the other issues, and assumed without deciding that the proposed definition should have been accepted. On breach of contract, the court held that the motion judge correctly applied the commonality principles from Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, and Vivendi Canada Inc. v. Dell'Aniello, 2014 SCC 1, and was entitled to find that the broad question of whether Facebook breached its contracts, and how, could not be resolved without individual inquiries into whether each class member's data was actually shared — a conclusion consistent with Rumley v. British Columbia, 2002 SCC 69, which cautions against certifying issues that are common only in the most general terms. Narrower contract-related issues, including those tied to PIPEDA obligations and the duty of honesty, good faith and fair dealing, had already been certified and were not disturbed. On disgorgement, the court relied on Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, which characterizes disgorgement for breach of contract as exceptional relief unavailable simply at a plaintiff's election. Because the record left ambiguity about whether class members had suffered compensatory damages, and because the appellants had not unconditionally disclaimed compensatory relief, the motion judge did not err in finding that disgorgement could not be determined in common; a footnote also noted consistent reasoning in Sharp v. Royal Mutual Funds Inc., 2021 BCCA 307. On preferable procedure, the appellants conceded their argument was contingent on disgorgement being certified, and the court found no error in the motion judge's discretionary weighing of the relevant factors, which is owed deference under Carcillo v. Ontario Major Junior Hockey League, 2025 ONCA 652.

Ruling and overall outcome

The Divisional Court dismissed the appeal, upholding the motion judge's refusal to certify the proposed class proceeding in favour of Facebook, Inc., the respondent. Costs were ordered against the appellants and in favour of the respondent in the all-inclusive amount of $35,000.00, an amount the parties had agreed upon.