"PARADISE LOST"?: RETHINKING
QUEBEC'S REPUTATION AS A
HAVEN FOR CLASS ACTIONS
Eleni Yiannakis and Noah Boudreau
Abstract: Quebec has often been labelled a "class action paradise" in which petitioners' motions for authorization to institute class actions are "rubber stamped" by courts biased
against corporate defendants. This perception has encouraged
many defendants to reserve their time, energy, and money
to challenge such actions at a trial on the merits, rather than
at the authorization stage. However, Quebec defendants and
their counsel should not be entirely pessimistic about the
likelihood of defeating a proposed class action either before
or at the authorization stage. Indeed, an examination of the
caselaw over the last thirteen years reveals that Quebec's
class action regime is not as petitioner-friendly as it has been
made out to be. While the province's class actions regime is
comparatively broad and flexible where defendants deploy
their resources in a targeted and effective manner, the preauthorization stage and authorization hearing can serve as an
invaluable opportunity to put an end to a class action before
costly trials on the merits. Ultimately, making smart choices
and investing resources at an early stage of proceedings can
end up saving defendants precious time and money.
38S
"PARADISE LOST"?: RETHINKING
QUEBEC'S REPUTATION AS A HAVEN
FOR CLASS ACTIONS*
Eleni Yiannakis and Noah Boudreau**
A. INTRODUCTION
Quebec is often singled out as a "class action paradise" — a "haven"
in which petitioners' motions for authorization to institute class actions
are "rubber stamped" by courts biased against corporate defendants. The
perception that the authorization stage of a class action lawsuit in Quebec is a mere formality has undoubtedly encouraged many defendants
to reserve their time, energy, and money in order to challenge such actions on the merits (rather than at the authorization stage). This article
seeks to challenge the validity of this perception. In fact, an analysis of
the caselaw over the last thirteen years reveals that Quebec's class action regime is not as petitioner-friendly as it has been made out to be.
Indeed, far from being a "rubber-stamp" procedure, the authorization
stage represents an invaluable opportunity for class action defendants to
have proposed class actions dismissed before they reach the trial stage.
In order to provide a framework for our analysis, Part B of this article
provides a brief background on the history of class actions in Canada and
in Quebec. Part C will then address the perception that Quebec is a "class
action paradise" in which nearly all class actions are authorized. Part D
will examine cases in which motions for authorization have been refused
in Quebec, and draw out identifiable trends in the jurisprudence. Part
E focuses on the recent decision from the Supreme Court of Canada in
Infineon Technologies AG y Option consommateurs' and its potential impact
on the trends previously discussed. Finally, Part F will demonstrate how
**
1
An excerpt of this article was previously published in: Civil Writes — Canadian
Bar Association National Civil Litigation Section Newsletter, December 2013.
Eleni Yiannakis is a partner and Noah Boudreau is an associate with Fasken
Martineau in Montreal. The authors wish to thank summer student Alexandra
Lazar for her help in the research and drafting of this article.
2013 SCC 59 [Infineonl.
387
388 THE CANADIAN CLASS ACTION REVIEW
these trends can be used to the advantage of clients seeking to defend
against a proposed class action at the authorization stage.
B. BACKGROUND
1) History of Class Actions in Canada
In 1978, Quebec became the first Canadian province to adopt class action legislation. Drawing heavily from American sources, legislation was
introduced to amend Book IX of Quebec's Code of Civil Procedure (CCP).2
Like those amendments enacted in other jurisdictions, Quebec's class
action regime was envisioned as a means of promoting access to justice
while simultaneously reducing congestion in the courts. 3
Though the rest of Canada eventually followed suit, it was nearly
fifteen years before Ontario enacted its Class Proceedings Act, 19924 (Ontario CPA), becoming the second class action jurisdiction in Canada.
Thereafter, the remaining common law provinces began to enact parallel
legislation, the most recent being Nova Scotia in 2007. Today, all Canadian jurisdictions, apart from Prince Edward Island and the territories,
have enacted class action legislation. In the four remaining jurisdictions,
courts have permitted class actions to proceed under the ordinary rules
of procedure and have used their inherent powers to "fill the void" with
respect to such claims. This practice has been constitutionally mandated
by the Supreme Court of Canada. 3
2)
Criteria to Authorize a Class Action
Article 1003 CCP stipulates that a court is to authorize 6 the bringing of a
class action where, in its estimation, the following four criteria are met 7
(a) the recourses of the members raise identical, similar or related questions of law or fact;
2 RSQ c C-25 [CCP].
3 Ministère de la Justice, Summary: Report of the Civil Procedure Review Committee (Quebec: Ministère de la Justice, 2001) at 1 [CPRC Summary Report].
4 SO 1992, c 6 [Ontario CPA].
5
Western Canadian Shopping Centres Inc v Dutton, 2001 SCC 46 at para 34.
6 `Authorization" is used in Quebec law in lieu of the term "certification," which
is used in common law jurisdictions. For the purposes of this article, the two
terms should be understood as interchangeable.
7 It should be noted that the precise text of this article laying out the criteria for
authorization has not changed since it was first enacted some thirty-five years
ago.
VOLUME 9, N° 2, FEBRUARY 2014 389
(b) the facts alleged seem to justify the conclusions sought;
(c) the composition of the group makes the application of article 59 or
67 difficult or impracticable; and
(d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately. 8
Until 2003, the procedural rules stipulated that the petitioner was
required to support the allegations in the suit by way of one or more affidavits. Prior to the hearing on authorization, the defence was permitted
to conduct an out-of-court examination of the proposed representative
and to contest the motion for authorization in writing by submitting its
own affidavits and evidence rebutting the petitioner's allegations.
3) Where Does Quebec's Reputation as a "Class Action
Haven" Come From?
From the beginning, Quebec's class action regime was regarded as relatively favourable to petitioners. Even with some safeguards in place to
protect defendants' procedural rights, it was considered quite easy to get
a class action authorized in Quebec . 9 This reputation was not wholly undeserved.
First, Quebec's criteria for authorization are framed quite broadly,
and have historically received a liberal interpretation by judges. The four
requirements set out in article 1003 CCP are relatively lenient. Though
modelled on Rule 23 of the US Federal Rules of Civil Procedure, the wording of the CCP provisions is, upon closer inspection, far less rigorous?'
For example, Quebec law does not require that common issues predominate over individual ones, or that a class action be the most effective means
of resolving the dispute." Furthermore, Quebec courts have historically
applied a liberal approach with respect to the interpretation of these four
criteria. This willingness to interpret the CCP broadly and with a view
8 Art 1003 CCP.
9 See: Catherine Piché, "Quebec: The Canadian Jurisdiction of Choice
for Class Actions?" (2005) 26:5 Class Action Reports 599 [Piché]; Enrico Forlini, "Recent Developments in Class Action Law" Fasken Martineau Dumoulin (September 2005) online: http://www.fasken.com/
files/Publication/8effa8f 1-e315-4f96-bcec-lbf2e42c71 da/Presentation/
PublicationAttachment/1c5885f9 33f9-428e-blfa-25d878fb5230/RECENT_
DEVELOPMENTS_IN_QUEBEC_CLASS_ACTION_LAW.pdf [Forlini].
10 Piché, ibid at 559.
11 Ibid at 562.
390 THE CANADIAN CLASS ACTION REVIEW
to flexibility is evident in the case of Riendeau c Cie de la Baie d'Hudson. 12
In that decision, the Quebec Court of Appeal explicitly stated that the
requirement in article 1003(b) CCP (ie, that "the facts alleged seem to
justify the conclusions sought") should be interpreted to mean that the
court must examine the petitioner's motion assuming all of the facts alleged to be true 1 3 A more explicit statement of this principle is found in
Conseil québécois sur le tabac et la santé et JY Blais cJTI MacDonald Corp et
al, where the Superior Court authorized a class action brought by Quebec
petitioners against tobacco companies 1 4 In his reasons, Pierre Jasmin J
explicitly stated that the provisions relating to authorization ought to be
interpreted broadly, and that any cases of doubt ought to be resolved in
favour of the petitioner. 15 It is interesting to note that an almost identical action brought against tobacco companies in Ontario failed at first
instance, with the judge expressing concerns over the definition of the
group and the general workability of such a case. 16 In Quebec, this interpretive approach has remained a defining feature of class action law
over the years. In fact, its importance was just recently reconfirmed by
the Supreme Court of Canada in Infineon. In the context of an action in
price-fixing brought against DRAM microchip manufacturers, the Court
stressed that the evidentiary burden provided for by article 1003 CCP is
a low one. It also reiterated that at the authorization stage, the court is to
act only as a "filter" and should not allow the process to become a preemptive trail on the merits.
Second, it is less costly for Quebec petitioners to institute (and ultimately to try) a class action than it is for their counterparts in other jurisdictions. One unique feature of Quebec's class action regime is the existence
of the Fonds d'aide aux recours collectifs (the Fund). Created by virtue of
An Act Respecting the Class Action,'' the Fund is a legal person established
in the public interest whose mandate is to ensure the financing of class
actions and to disseminate information respecting the exercise of such
actions. Petitioners launching class action suits may apply to the Fund
for support. The Fund's most recent annual report indicates that it currently funds around 35 percent of class action suits in Quebec.'$ Further-
12 2000 CanLII 9262 (QC CA).
13 Forlini, above note 9 at 3.
14 2005 CanLII 4070 (QC CS) [Conseil québécois sur le tabac].
15 Ibid at para 40.
16 Caputo y Imperial Tobacco Ltd (2004), 236 DLR (4th) 348 (Ont SCJ).
17 RSQ (1978), c R-2.1.
18 Fonds d'aide aux recours collectifs, Rapport annuel 2010-2011 (Quebec: Fonds
d'aide aux recours collectifs, 2011) at 14.
VOLUME 9, N° 2, FEBRUARY 2014 391
more, petitioners in Quebec do not face the prospect of significant costs
being awarded against them in the event that authorization is denied. In
many jurisdictions, the threat of a significant cost award being ordered
against them is enough to deter plaintiffs from seeking authorization.
For example, in Kerr y Danier Leather Inc, the Supreme Court of Canada
upheld a cost award of over $500,000 against a would-be petitioner following the rejection of a proposed securities class action. 19 Conversely,
where a motion for authorization is denied in Quebec, the petitioner is
generally only required to pay minimal court costs 2 0
Finally, the CCP regime provides for an asymmetric right of appeal in
respect of judgments rendered on motions for authorization. Article 1010
CCP provides that while a judgment dismissing a motion for authorization
is subject to appeal pleno jure (as of right), a judgment granting a motion
for authorization is without appea1. 2' This is not the case in the other
common law provinces.
4) Codal Reform in Quebec: The 2003 Amendments
Quebec's class action regime was amended in January 2003 as part of
a sweeping reform of the province's Code of Civil Procedure (the 2003
Amendments). The Civil Procedure Review Committee was charged with
enacting new procedural rules that would make the class action authorization process more efficient, more accessible, and less costly. 22
While the text of article 1003 CCP, which lays out the four criteria
for authorization, was left untouched, other aspects of the class action
regime were drastically changed. The following are some of the most
significant changes to Quebec's class action regime:
• Applicants are no longer required to execute affidavits in support of
the facts alleged in their motion. As a corollary, defendants have also
lost the automatic right to depose the petitioner prior to the authorization hearing;
• Defendants can no longer file a written contestation of the motion to
authorize. They are only entitled to present their defence orally;
19 2007 SCC 44.
20 Stuart Kugler & Robert Kugler, "Quebec: The Class Action Haven" (2004) 1:1
Can Class Action Rev 155 at 157 [Kugler & Kugler].
21 Art 1010 CCP.
22 CPRC Summary Report, above note 3 at 1.
392 THE CANADIAN CLASS ACTION REVIEW
• Defendants can no longer file expert reports or bring any evidence at
the authorization stage, unless explicitly granted permission by the
judge; and
• The definition of class "member" has been expanded to include (under
certain conditions) legal persons established for a private interest,
partnerships, and associations. 23
The general purpose behind the 2003 Amendments was to render
the authorization process faster and less costly. 24 On a more fundamental level, it was to ensure that the authorization stage be used to filter
out only the most frivolous and unsubstantiated claims and to ensure
that the authorization process was not being used by judges to render
pre-emptive decisions on the merits. 25 The new rules were widely criticized by the defence bar, who viewed the changes as further advantaging petitioners in a system already biased in their favour. Nevertheless,
the Quebec Court of Appeal affirmed the constitutional validity of these
amendments in Pharmascience inc y Option Consommateurs. 26 Judicial
support for the amended regime served to reinforce the growing perception that Quebec was North America's "class action haven" 27
Further to these new rules, many believed that Quebec would become a jurisdiction characterized by a "rubber-stamp procedure" in
which overly lenient judges interpreted and applied the rules in an overly
liberal manner. 28 Did this prediction actually come true? The following
sections of the article tackle this very question. Surprisingly, the 2003
Amendments do not appear to have had any real impact on the number of
class actions that were authorized. Will the tide change with the recent
decision of the Supreme Court of Canada in Infineon?
23 Ibid at 22.
24 Brian Burton, "Mégantic's Shifting Liability" Lexpert (October 2013) at 17
[Burton].
25 Kugler & Kugler, above note 20 at 156.
26 2005 QCCA 437.
27 See, for example: Kugler & Kugler, above note 20 at 155; Burton, above note 24
at 17; and André Durocher & Claude Marseille, "The Court of Appeal Renders
Judgement in the Piro Case: Québec Continues to be Canada's Class Action
Heaven," Fasken Martineau Dumoulin (May 2005) online - http://www.fasken.
com/files/Publication/add6ff55-bd0c-4a3a-b7c3-850b9e5d7ffc/Presentation/
PublicationAttachment/b79d155d-c8d5-46e2-80aa-94de2cdfel3b/PIRO V
PHARMASCIENCE_COURT_OF_APPEAL.PDF.
28 Piché, above note 9 at p 59.
VOLUME 9, N° 2, FEBRUARY 2014 393
C. DISPELLING THE MYTH
1) Methodology
In assessing the question of whether Quebec is (or ever was) a "class action paradise" relative to its common law counterparts, a close analysis
of the statistical data is relevant. 29 To this end, judgments regarding the
authorization or dismissal of proposed class actions dating back to the
year 2000 were closely analyzed. For each decision, the following data
was recorded: (1) the date of the decision; (2) whether the request for authorization was granted or denied; and (3) in cases where authorization
was refused, the specific reason(s) given for that refusa1. 30
2) How Often Are Motions for Authorization Granted in
Quebec?
Between the years 2000 and 2013, 232 motions for authorization were
granted, 163 motions for authorization were refused, and 42 motions
were settled at the pre-authorization stage. Stated otherwise, approximately 53 percent of motions for authorization were granted, 37 percent
were refused, and 10 percent were settled. Given the widespread perception that the authorization stage is treated as a mere formality in Quebec,
an authorization rate of 53 percent is far from automatic. Moreover, when
the number of claims settled are considered along with those granting
authorization, a refusal rate of nearly 40 percent constitutes a significant
departure from the perception that Quebec is a "haven for class actions."
Figures C.2.1 to C.2.3 below illustrate, by year, the precise number
of motions for authorization that were granted, refused, and settled.
29 The statistical data was gathered for the sole purpose of the article and for information purposes only. We are not responsible for the accuracy of this data.
30 The statistical analysis covers the period from 1 January 2000 to 31 October
2013. The data for 2013 (marked with an * in the figures) may therefore be
incomplete, as it does not consider any decisions rendered in the months of
November and December. Note also that the "date of the decision" refers to the
date in which the final decision on authorization was rendered in the case (in
the event that the lower court judgment was appealed). Judgments reversed on
appeal thus do not factor into these statistics.
394 THE CANADIAN CLASS ACTION REVIEW
Figure C.2.1: Motions for Authorization Granted
2013*
2012
2011
2010
2009
2008
2007
21
30
30
19
10
13
18
2006
2005
2004
2003
2002
2001
2000
23
17
16
12
12
2
9
Figure C.2.2: Motions for Authorization Refused
2013*
2012
2011
2010
2009
2008
2007
8
22
15
14
19
14
14
2006
2005
2004
2003
2002
2001
2000
18
12
11
8
3
3
2
Figure C.2.3: Motions Settled Prior to Authorization
2013*
1
2006
2012
2005
2004
1
2003
1
2002
1
2008
8
5
5
2
9
4
2
2001
2007
1
2000
2
0
2011
2010
2009
Again, these numbers do not appear to support the perception that
Quebec's class action regime is strongly biased in favour of petitioners.
In fact, when viewed as a whole, these numbers do not seem to support
any clear trend at all. An analysis of the data gathered reveals no evidence
that authorization rates vary over time, or according to any discernible
pattern. Surprisingly, the figures do not even reveal any significant variation following the enactment of the 2003 amendments.
Ultimately, the only clear pattern revealed by these statistics is that
the overall number of proposed class actions tends to rise each year, and
VOLUME 9, N° 2, FEBRUARY 2014 395
has significantly increased over time. Figure C.2.4 (below) tracks this
increase, which has been relatively steady since the year 2000. This trend
is particularly observable over the past three years. While this increase is
present in all Canadian provinces, Quebec continues to see — by far —
the highest number of proposed class actions each year. However, it is
important to note that this increase in the overall number of proposed
class actions has not affected the proportion of motions for authorization
granted by the courts. 3' So, while it is true that the number of class actions
authorized each year continues to grow, it should be borne in mind that
there has been no corresponding increase in the total number of actions
authorized compared to those which have been dismissed.
Figure C.2.4: Total Number of Judgments on Authorization per Year
2013*
2012
2011
2010
2009
2008
2007
30
60
50
38
31
36
33
2006
2005
2004
2003
2002
2001
2000
45
31
28
21
16
7
11
3) How Does the Authorization Rate in Quebec Compare to
Other Provinces?
Jean-François Lehoux and Shaun Finn assert that Quebec's class action
regime "is not different in kind from that of the other provinces" and
that the perception of Quebec as a "paradise" for class actions is thus
mistaken.32 To conduct a detailed examination into the class action regimes of the other Canadian provinces (as we have done here for Quebec)
is outside the scope of this article. That being said, this section seeks to
compare the trends uncovered in Quebec to those in two other provinces: Ontario and British Columbia.
31 Julius Melnitzer, "Are Class Actions Going to Trial More Often?" Law
Times (2 September 2013) online: Law Times News www.lawtimesnews.
com/201309 023419/fo cus-on/focus-are-class-actions-going-to-trial-more-often.
32 Jean-François Lehoux & Shaun Finn, "Fall From Grace? Is Quebec Still Canada's Class Action Paradise?" (2008) 5 Can Class Action Rev 3 at 4 [Lehoux &
Finn].
396 THE CANADIAN CLASS ACTION REVIEW
a) Ontario
Lehoux and Finn suggest that as Quebec becomes more rigorous in its
interpretation of the procedural criteria for authorizing class actions,
Ontario courts are demonstrating a countervailing tendency to interpret
their own criteria more liberally. 33 For example, it used to be notably
difficult for consumers with small individual claims to meet the requirement of commonality found in section 5(c) of the Ontario CPA. However,
cases such as Markson y MBNA Canada Bank34 and Cassano y The Toronto
Dominion Bank35 have demonstrated a readiness on the part of Ontario
judges to adopt a more liberal approach in interpreting the criteria for
certification.
In fact, Adrian C Lang and Mel Hogg argue that of all the common
law provinces, Ontario currently appears the most willing to "certify
now, ask questions later " 36 They present statistical data demonstrating
that between the years of 2009 and 2010, the rate of certification of class
actions in Ontario was 64 percent, compared to only 38 percent in the
rest of Canada 3 7 These numbers are remarkably similar to the numbers
that we observed in Quebec, as illustrated by the figures. above. Lehoux
and Finn agree, going as far as to suggest that "if indeed there is a class
action heaven in Canada, the gates of paradise lie not in Quebec ... but
perhaps in a jurisdiction just west of the Ottawa River." 38
b) British Columbia
If we are looking for an alternative "class action paradise" within Canadian borders, some would argue that British Columbia ought not to be
ruled out. In an article published in the Financial Post, Julius Melnitzer
argues that British Columbia is likely to be the "next Mecca for class
actions" 39 As an example, he points to parallel class action suits alleging
price-fixing in relation to an "Access Plan" implemented by Toyota Canada. The Plan was implemented across Canada, but class actions were
33 Ibid at 27.
34 2007 ONCA 334.
35 2007 ONCA 781.
36 Adrian C Lang & Mel Hogg, "Certification Rates in Ontario Versus the Rest of
Canada: Why the Disparity?" (2010) 6 Can Class Action Rev 431 at 433 [Lang
& Hogg].
37 Ibid at 436-37.
38 Lehoux & Finn, above note 32 at 28.
39 Julius Melnitzer, "Is British Columbia the Next Mecca for Class Actions?"
Financial Post (23 March 2011) online: http://business.financialpost.
com/2011/03/23/is-british-columbia-the-next-mecca-for-class-actions [Melnitzer, "Is British Columbia the Next Mecca for Class Actions?"].
VOLUME 9, N° 2, FEBRUARY 2014 397
filed against Toyota separately, by province. In Quebec, both the Superior
Court and Court of Appeal refused to authorize the action, holding that
the motion failed to meet the requirements of article 1003(a) and (b)
CCP.40 Yet, a parallel action proposed in British Columbia saw a completely different outcome on the motion for certification. Justice Hinkson
of the British Columbia Court of Appeal reversed the judgment at first
instance, which had rejected certification on the basis that the petitioners had failed to show that proof of loss on a class-wide basis was possible.4' As such, the motion against Toyota Canada proceeded to trial in
British Columbia, but not in Quebec. It is noteworthy to point out here
that provinces are not bound by extra-provincial judgments even if they
are rendered on the same facts. So, if authorization of a class action is
refused in one province it does not necessarily mean that the same class
action will be refused in another.
It is true that the authorization or certification rates in British Columbia are not as high as they are in either Quebec or Ontario. However,
this might be at least partly explained by the fact that British Columbia
is currently an "opt-in" jurisdiction. That being said, it is rumoured that
British Columbia is considering amending its class action regime to become an "opt-out" jurisdiction (similar to the current regimes in force in
Quebec and Ontario). If this change occurs, British Columbia is likely to
see a rise in the number of class actions filed in the province, which may,
in turn, have the effect of increasing the province's certification rates 42
c) Conclusion
Ultimately, there might not be any clear-cut answer to the question of
which Canadian jurisdiction is the most "petitioner-friendly." Most recent publications agree that "there isn't an automatic venue of choice of
class actions in Canada" and that there really isn't any single province
deserving of the title of "class action haven "43
It may well be that we have been looking at this question from the
wrong perspective. A positive outcome for would-be plaintiffs at the authorization stage may very well depend more on the nature of the suit than on
which province the motion for authorization is filed in. For example, it
40 Harmegnies c Toyota Canada Inc, 2008 QCCA 380, aff g 2007 QCCS 539.
41 Steele y Toyota Canada Inc, 2011 BCCA 98 at para 3, rev'g 2008 BCSC 1063.
42 Daryl-Lynn Carlson, "Deciding Where to Launch a Class Action in
Canada" The Canadian Bar Association (2013) online: www.cba.org/CBA/
PracticeLink/12-11-BC/class.aspx [Carlson].
43 Ibid; and Lehoux & Finn, above note 32 at 29.
398 THE CANADIAN CLASS ACTION REVIEW
has been suggested that Quebec is the most favourable province in which
to bring an environmental class action suit 4 4 It has also been claimed
that Ontario is the best jurisdiction in which to propose a securitiesrelated class action, because the bench is highly specialized in the area 45
D. EXAMINING BASES FOR DISMISSAL
An examination of the caselaw reveals that Quebec is not quite the "paradise" it has been presumed to be. In fact, on average, nearly 40 percent of
motions for authorization instituted over the past thirteen years in Quebec have been dismissed. This raises the question as to why these actions
are being refused and what legal bases are being most commonly relied
upon to dismiss such actions?
Generally speaking, there are two reasons for which a Quebec court
can dismiss a motion for authorization: (1) there is jurisdictional or other
procedural flaw that proves fatal to the claim; or (2) the proposed class
action does not meet one or more of the four criteria set out in article
1003 CCP. Both of these bases for refusal will be examined in turn.
Furthermore, recent examples illustrate how judges justify the dismissal
of a motion for authorization.
1) Rejection on the Basis
of a Preliminary Issue
In general, there are four broad reasons for which a motion to authorize
a class action could be dismissed on preliminary grounds: (1) lack of
jurisdiction; (2) lack of standing; (3) litispendence; and (4) res judicata. The
remainder of this section will be devoted to exploring and examining these
preliminary bases for rejection. In the years reviewed, a total of twentyeight judgments on authorization were rejected based on one of these
four grounds. This number represents approximately 17 percent of the
total motions for authorization rejected in Quebec. The breakdown is
illustrated below, in Figure D.I.
44 Carlson, ibid; and Burton, above note 24 at 17.
45 Carlson, ibid.
VOLUME 9, N° 2, FEBRUARY 2014 399
Figure D.1: Preliminary Reasons for Refusal of a Motion to Authorize
a Class Action
Lack of jurisdiction
20
Lack of standing
4
Litispendence
3
Res judicata
1
a) Lack of Jurisdiction
Lack of jurisdiction is by far the most common reason for which a motion
to authorize a class action is dismissed on a preliminary basis. There
are several jurisdictional bases on which defendants may base their preliminary motion which can be fatal to the motion for authorization, for
example, lack of territorial jurisdiction, lack of jurisdiction because of
an arbitration clause, or lack of jurisdiction over the subject matter of the
claim. In order to serve the interests of justice and efficiency, these declinatory exceptions are addressed and resolved prior to the authorization
hearing 46 Of the twenty-eight judgments refusing authorization, twenty
of them (about 71 percent) were decided on the basis of jurisdictional
issues.
i) Lack of Territorial Jurisdiction
A class action is generally refused on the basis of a lack of territorial jurisdiction in one of two cases. First, the claim may be subject to a forum
selection clause which assigns jurisdiction to the courts of a particular
count ry, state, or province. Second, the rules of private international law
contained in the Civil Code of Quebec (CCQ) 47 may dictate which court is
entitled to assume jurisdiction over a given matter. It should be borne in
mind that even where a Quebec court has jurisdiction to hear a case, it
may choose to decline jurisdiction pursuant to article 3135 CCQ, where
it determines that it is not the most competent court to rule on the matter.
Recent cases in which a class action was dismissed on the grounds of
a lack of territorial jurisdiction demonstrate that Quebec courts take this
matter seriously — a merely tenuous connection to the province will not
suffice. For example, in Anvil Mining Ltd. v Association canadienne contre
l'impunité 48 the Quebec Court of Appeal refused to assume jurisdiction in a
proposed class action against an Australian-based company in relation to
46 Quebec (AG) c Charest, 2004 CanLII 46995 at para 7 (QC CA) [Charest].
47 LRQ, c C-1991.
48 2012 QCCA 117.
400 THE CANADIAN CLASS ACTION REVIEW
events that occurred in the Democratic Republic of the Congo. It refused
to find that crisis management activities, which had taken place in Quebec several months after the events in question, constituted a "real and
substantial connection" to the Province of Quebec within the meaning of
article 3148(2) CCQ. In St Arnaud v Facebook Inc,49 the Superior Court of
Quebec refused to authorize a class action brought by Quebec residents
against social media giant Facebook. Judge Michael Déziel found that the
defendant Facebook had no connection to the Province of Quebec aside
from the fact that its website was accessible through provincial internet
service providers. In the absence of a real and substantial connection (for
example, if the damage had been suffered in Quebec, or the defendant
was headquartered in Quebec), it would not be appropriate for a Quebec _
court to assume jurisdiction.
However, we must note that this exact question was addressed by the
Supreme Court of Canada in Infineon. The Court adopted a very broad interpretation of article 3148(3) CCQ, which confers jurisdiction on a Quebec authority in a personal action of a patrimonial nature where "a fault
was committed in Quebec, damage was suffered in Quebec, an injurious
act occurred in Quebec or one of the obligations arising from a contract
was to be performed in Quebec" 50 In so doing, it confirmed that a flexible and permissive approach ought to be adopted in assessing whether
Quebec is entitled to assume jurisdiction in a matter with significant
extraterritorial aspects. In this case, the Court concluded that Quebec
courts had jurisdiction since the petitioner, a Quebec resident, had suffered an economic loss (she had overpaid for her computer purchased
over the Internet due to a price-fixing scheme that occurred in the United
States). In such an instance, the Court found that the damage had been
suffered in Quebec.
-
ii) Arbitration Clauses and Lack of Jurisdiction over Subject Matter
Two other instances merit attention when considering the issue of lack
of jurisdiction. First, the claim may be subject to an alternative dispute
resolution clause which bars recourse to all levels . of court in any jurisdiction. Multiple cases have reaffirmed the primacy of arbitration clauses
in resolving this question of jurisdiction, the most notable being the Su-
49 2011 QCCS 1506.
50 Infineon, above note 1 at paras 43-47.
VOLUME 9, N° 2, FEBRUARY 2014 401
preme Court of Canada's decision in Dell Computer Corp
y
Union des con-
sommateurs.5'
Second, the Superior Court of Quebec may not have proper jurisdiction to hear the matter as a result of the particular substance of the dispute. Article 1000 CCP assigns the Superior Court of Quebec exclusive
jurisdiction to hear class action cases_ However, in Fédération des associations de families monoparentales recomposées du Québec c Québec, 52 Marie
Gaudreau J declined to accept jurisdiction since the claim, although
framed as an action in damages, was a claim that really dealt with bursary applications, a matter over which the minister of education had sole
jurisdiction. The Court made clear that where the Superior Court would
not have ratione materiaejurisdiction to decide a particular case if it had
been brought on an individual basis, the fact that it was brought on a collective basis does not in itself bestow ratione materiaejurisdiction.
Courts have also confit med that class actions cannot bypass the jurisdiction afforded to administrative tribunals. As such, as was the case in
Quebec (Attorney General) c Charest, courts will refuse to hear a class
action where exclusive jurisdiction has been delegated to a particular
administrative tribunal. 53
b) Lack of Standing
After jurisdiction, the most common basis for the dismissal of a motion
for authorization before the authorization hearing is lack of standing on
the part of the proposed petitioner or proposed group. Pursuant to article
55 CCP, anyone who brings a legal action must have a sufficient interest in the object of the action. Where no such interest is present, article
165(3) CCP allows the defendant to have the motion dismissed on the
basis of lack of standing. Of the twenty-eight judgments refusing authorization prior to the authorization hearing, four were decided on the basis
of lack of standing. It is interesting to note that no class action in Quebec
has been rejected on this basis since 2007.
In Union des consommateurs c Toronto Dominion Bank, 54 the union and
petitioner Josée Marcil sought authorization to institute a class action
against ten Canadian banks on behalf of a group of accountholders that
had allegedly been charged fees in relation to unauthorized withdrawals
51 2007 SCC 34. See also 9064-1622 Québec inc c Société Telus Communications
(Telus Mobilité), 2008 QCCS 2975.
52 2010 QCCS 5877.
53 Charest, above note 46 at para 17.
54 2007 QCCS 1313.
402 THE CANADIAN CLASS ACTION REVIEW
from their accounts. Judge Lise Matteau of the Superior Court of Quebec
held that Marcil only had standing to bring suit against her own bank,
not against the other nine, and the only group she could act on behalf of
was a group composed of accountholders at that same bank. In this case,
the courts refused to allow broad and sweeping actions against multiple
defendants where the petitioner lacks standing to bring a claim with respect to the entire group.
In Harvey c Quebec (AG),55 petitioner Hélène Harvey sought authorization to bring a class action against the Quebec government on behalf
of those who were either unemployed or self-employed, and had therefore not paid dues under the Quebec Pension Plan (the Plan). She sought
to have the Act respecting the Quebec Pension Plan declared discriminatory and rendered inoperable, proposing that any person should have
the right to voluntarily contribute to, and thus benefit from, the Plan.
Apart from noting that the claim disclosed no reasonable cause of action,
Robert Legris J held that the petitioner did not have standing to bring the
motion because she had never, in fact, offered or claimed to have offered
any amount as a voluntary contribution under the Plan.
c) Litispendence
A motion for authorization may also be refused on the preliminary basis
of lis alibi pendens, also called litispendence. If there is a parallel or substantially similar case pending against the same defendant in another
jurisdiction, the motion to authorize will be either stayed or refused.
Most often, the case will be stayed until the resolution of the parallel
proceeding, but occasionally the entire action will be refused. Of the
twenty-eight judgments refusing authorization, only two were refused
outright on the basis of litispendence.
One example of an action dismissed on the basis of litispendence
was the case of Gagnon c Imperial Tobacco Ltd 56 The proposed class action
was brought by Quebec residents who had developed illnesses associated
with tobacco smoke. Already defending an action containing substantially similar allegations, the defendant asked that the motion be dismissed,
or at least suspended. Judge Carole Julien of the Superior Court of Quebec chose to dismiss the action altogether. She found that petitioner Yves
Gagnon had not presented his claim in due time, and it would thus be
unfair to the defendant to allow the claim to move forward. She held that
simply suspending the claim would be insufficient, as it would encour55 2005 CanLII 36780 (QC CS).
56 2006 QCCS 4002 [Gagnon].
VOLUME 9, N° 2, FEBRUARY 2014 403
age carelessness among future plaintiffs and could delay related claims
founded on the same factual context.
d) Res Judicata
Finally, a motion for authorization may also be refused on the basis of
res judicata, known in Quebec as chose jugée. If an identical or substantially similar case has already beèn heard and decided, the request for authorization prior to the authorization hearing will be dismissed. Of the
twenty-eight judgments refusing authorization, only one case was decided on the basis of res judicata 57 In the decision of the Superior Court
of Quebec in Gauthier v United Parcel Service of Canada Ltd (Gauthier),58
petitioner Jean Gauthiér brought a motion for authorization to bring a
class action against United Parcel Service of Canada (UPS), alleging that
he and the proposed group members had been charged for unsolicited
and abusive customs brokerage fees in connection with the importation
of goods to Canada. UPS sought to have the motion dismissed on the
grounds that this claim was identical to the motion previously brought
against it in Leblanc v United Parcel Service of Canada Ltd (Leblanc),"
which had been refused only four months earlier. In that case, petitioners
Jean Leblanc and Serge Maurice had brought motions to authorize class
actions, respectively, against UPS and FedEx Trade Networks Transport
et Courtage (Canada) Inc (FedEx). With respect to both claims, William
Fraiberg J had refused authorization on the basis that the motion failed
to meet criteria (a), (b), and (d) outlined in article 1003 CCP. That Superior Court decision was not appealed by either petitioner.
Faced with a remarkably similar claim in Gauthier, FraibergJ granted
UPS's motion to dismiss, concluding that it was chose jugée or res judicata
because it sought to represent the same class, was based on the same
cause of action, and sought the same damages as the one in Leblanc. The
only perceptible difference between the two proposed groups was the time
period, which Fraiberg J held was not in itself sufficient to differentiate
them.60 This is an important judgment as it recognized for the first time
in Quebec that the interests of justice require that the rule of res judicata
apply as much to judgments denying authorization to bring class actions
57 While there were other cases that considered matters involved in the claim
to be subject the doctrine of res judicata (see, for example, Gagnon, ibid, and
Érablière JPL Caron Inc c Fédération des producteurs acéricoles du Québec, 2011
QCCS 6445), there was only one case explicitly decided on this basis.
58 2013 QCCS 1212 [Gauthier].
59 2012 QCCS 4619 [Leblanc].
60 Gauthier, above note 58 at paras 9-10.
404
THE CANADIAN CLASS ACTION REVIEW
as to those that grant it, so long as most of the alleged victims belong to
the same putative classes.
Despite Quebec's "petitioner-friendly" reputation, Fraiberg J's reasons
in this decision demonstrate a clear concern with procedural fairness
and the overall efficiency of the class action regime. In fact, he found
that to decide otherwise would mean that there would never be any
closure of unsuccessful class actions, since successive would-be representatives could continue to pop up, and plaintiff's counsel could simply "cut and paste" the essential allegations of the earlier motion onto
the later one. Judge Fraiberg also expressed disapproval that the entire
initiative against UPS in Quebec was lawyer-driven, not victim-driven.
However, he stopped just short of declaring it an abuse of process, another argument that had been raised by UPS counsel. 61 This judgment
was not appealed by Gauthier and represents an important decision not
only because it is the first of its kind, but because it sends a clear message
to the legal community and public at large that a judgment rendered on
the motion for authorization must dispose only once of all substantially
similar motions that can be instituted against a defendant based on the
same facts. In effect, the Superior Court has confirmed that a defendant
cannot be held hostage by successive would-be representatives of alleged
victims disingenuously claiming to be parties who are different from earlier alleged victims simply because they suffered the damages after the
last dismissal judgment invoked against them.
e) A New Frontier?: Abuse of Procedure
Thus far, no class action has been dismissed purely on the basis of abuse
of procedure in Quebec, as per articles 54.1 and following CCP. And
while Fraiberg J's comments regarding abuse of procedure in Gauthier are
obiter, the possibility of having a class action dismissed on the grounds
that it constitutes an abuse of procedure is a route that appears to have
been left open to defendants.
The idea of "relitigation" being viewed as an abuse of process does
have some precedent in Canadian law. In Marandola y General Motors du
Canada Ltée, Roger E Baker J of the Superior Court of Quebec held that
the simultaneous institution of several similar motions to obtain authorization to institute class proceedings constitutes an abuse of process. 62 A
similar trend is observable in the common law provinces, where courts
(including the Supreme Court of Canada) have explicitly stated that in
61 chid at paras 24-25.
62 2004 CanLII 6469 at para 34 (QC CS).
VOLUME 9, N° 2, FEBRUARY 2014
the context of class actions, courts should look below the surface and ensure that the motion being brought does not threaten the integrity of the
administration of justice or the principles underlying the class action
regime as a whole 63
Articles 54.1 and following can still be considered fairly "new." In
2009, the CCP was amended to include new provisions giving judges the
power to impose sanctions for "improper use of procedure" 64 Indeed,
articles 54.1 and following give judges full discretion to declare an action
or pleading improper. In an attempt to offer some guidance, the article
further states that:
The procedural impropriety may consist in a claim or pleading that is
clearly unfounded, frivolous or dilatory or in conduct that is vexatious
or quarrelsome. It may also consist in bad faith, in a use of procedure
that is excessive or unreasonable or causes prejudice to another person,
or in an attempt to defeat the ends of justice, in particular if it restricts
freedom of expression in public debate.°
Perhaps the most attractive feature of the doctrine of abuse of procedure is that "it is unencumbered by the specific requirements of res
judicata while offering the discretion to prevent relitigation, essentially
for the purpose of preserving the court's process" 66 For this reason, it is
possible that defence counsel and even judges — particularly in Quebec
— will begin to make increasing use of the CCP's new provisions regarding the abuse of procedure and the institution of vexatious proceedings
in the context of class actions.
2) Dismissal on the Basis of Article 1003 CCP
Article 1003 CCP is the provision that lays out the specific requirements
for authorization. As mentioned above, the exact text has remained unchanged since the implementation of Quebec's class action regime in
1978. It reads as follows:
1003. The court authorizes the bringing of the class action and ascribes
the status of representative to the member it designates if of opinion that:
63 See, for example, Toronto (City) y CURE, Local 79, 2003 SCC 63 [Toronto (City)];
and Bear y Merck Frosst Canada & Co, 2011 SKCA 152.
64 Arts 54.1-54.4 CCP.
65 Art 54.1, para 1 CCP.
66 Toronto (City), above note 63 at para 42.
405
406 THE CANADIAN CLASS ACTION REVIEW
a) the recourses of the members raise identical, similar or related questions of law or fact;
b) the facts alleged seem to justify the conclusions sought;
c) the composition of the group makes the application of article 59 or
67 difficult or impracticable; and
d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately.
The inability of a petitioner to meet any one or more of these four
criteria will necessarily prove fatal to authorization. Conversely, where
all four criteria are met, a judge has no choice but to authorize the action. The text clearly states that "the court authorizes" — not that it can
or may authorize — thus eliminating any residual discretion for Quebec
judges evaluating a motion for authorization. A motion for authorization
may be refused on the basis of one or more criteria. Once the motion
has failed on one criterion, the judge need not address the question of
whether the other elements have been met. This being said, in practice,
judges will often analyze all the criteria even if it is not strictly necessary
to decide the case.
In total, 134 out of 161 cases analysed were dismissed on the basis
of article 1003 CCP, the remainder having been dismissed prior to the
authorization hearing further to preliminary motions. What follows is an
analysis of each requirement and how each one has been understood and
employed by courts as a basis for dismissing proposed class actions. To
illustrate, we will provide specific examples from recent cases rendered
by Quebec courts.
a) Article 1003(a)
Article 1003(a) requires that "the recourses of the members raise identical, similar or related questions of law or fact." This criterion does not
require that all, or even the majority, of the issues be identical, similar, or
related. In fact, the Quebec Court of Appeal has held that a single common, related, or similar issue of law could suffice to satisfy the requirement of 1003(a) if it is significant enough to affect the outcome of the
class action. 67 In approximately 34 percent of cases where a request for
authorization was dismissed, the decision of the court was based, at least
67
Collectif de défense des droits de la Montérégie (CDDM) c Centre hospitalier
regional du Suroît du Centre de santé et de services sociaux du Suroît, 2011 QCCA
826 at para 22.
VOLUME 9, N° 2, FEBRUARY 2014 407
in part, on article 1003(a). In about 5 percent of cases, the decision of the
court was based exclusively 68 on article 1003(a).
Article 1003(a) is often relied upon as a basis for dismissing a class
action in those highly fact-specific cases where resolution of the claims
depends largely on the prior resolution of individual issues. For example,
in Agostino y Allstate du Canada, compagnie d'assurances,69 the Superior
Court of Quebec dealt with a proposed class action relating to the alleged
constructive dismissal of a group of employees. Given the highly casespecific and fact-based nature of the inquiry into whether a given employee was the victim of a constructive dismissal, the individual issues
overwhelmed any common questions. In effect, there would be a duplication of fact-finding and legal analysis because a multitude of individual
trials would be needed to establish facts such as the specific features of
each employment contract, each employee's unique history with the defendant company, and the specific circumstances surrounding each employee's alleged dismissal. Similarly, in Patenaude c Montreal (City),70 the
Superior Court of Quebec refused to authorize a class action against the
City of Montreal in relation to water damage and infiltration resulting
from heavy rains. The proposed group was composed of residents of five
different boroughs. The defendant argued, and the court agreed, that the
size and diversity of the boroughs involved made common resolution of
the question of fault impossible.
Moreover, recent cases have confirmed an important trend with respect to 1003(a). Both the Supreme Court of Canada in Bou Malhab y Diffusion Metromedia CMR inc71 and the Quebec Court of Appeal in Lorrain
c Petro Canada72 (Lorrain) have made clear that a class action will not
be authorized where the question of the defendant's liability cannot be
established on a collective basis; notably, where there exists no collective harm independent of the subjective perception of individual group
members.
-
b) Article 1003(b)
Article 1003(b) requires that "the facts alleged seem to justify the conclusions sought." This is essentially the civil law equivalent of the require68 In the context of this section, we define "exclusively" to mean that a given criterion was either the sole basis for the decision, or was clearly stated as being
the primary basis for the refusal or rejection of a motion.
69 2013 QCCS 3049.
70 2012 QCCS 2402.
71 2011SCC9.
72 2013 QCCA 332, aff'g 2011 QCCS 4803 [Lorrain (CA)]
408 THE CANADIAN CLASS ACTION REVIEW
ment that the pleadings disclose a reasonable cause of action 73 This
criterion is intended to weed out claims which are either frivolous or
manifestly ill-founded in law. However, the courts have been clear that
article 1003(b) ought not to be used to pre-emptively conduct a trial on
the merits. At the authorization stage, the Quebec Court of Appeal has
stated that the burden placed upon the petitioner is "one of logic, not of
proof." 74 Ultimately, this criterion requires only that the facts alleged by
the plaintiff, if taken as true, present a coherent legal syllogism and have
an appearance of right.
This being said, article 1003(b) is by far the most common ground
upon which motions for authorization are refused. In about 80 percent
of cases where a request for authorization was dismissed, the decision of
the court was based, at least in part, on article 1003(b). In approximately
41 percent of those cases, the decision of the court was based exclusively on article 1003(b). Furthermore, the jurisprudence regarding article
1003(b) suggests that there is no single way to approach this criterion.
Generally, an inquiry will be conducted into the specific nature of the civil
action before the court. The facts alleged are taken as true, and the judge
is permitted to consult evidence and examinations included in the file.
Usually, the judge will examine whether the petitioner's claim discloses
a valid cause of action and whether it would have a reasonable chance of
success at a trial on the merits. This is an intensely fact-specific inquiry,
which varies significantly from one case to the next and largely depends
on the nature of the claim.
In theory, then, a claim could fail on the basis of article 1003(b) for
any number of reasons. However, for organizational and comprehensive
purposes, this section will proceed by identifying certain "subcategories" for which a claim may be dismissed on the grounds that the "facts
alleged do not seem to justify the conclusions sought."
i) Syllogism Based on Hypotheses, Impressions, Opinions, or Hearsay
Article 1003(b) requires that the judge, in examining the facts alleged
in the motion, be able to conclude that there is a serious "appearance of
right." At the very least, the court must be confident in the existence of
the essential facts underlying the claim. The simple probability that these
facts exist is not sufficient. Therefore, courts will reject legal syllogisms
which rest on hypotheses, impressions, opinions, or hearsay evidence.
73 See, for example, Ontario CPA, above note 4, s 5(1)(a).
74 Union des Consommateurs c Bell Canada, 2012 QCCA 1287 at para 88 [our
translation].
VOLUME 9, N ° 2, FEBRUARY 2014 409
This is the most common basis upon which a claim will fail to meet the
requirements of article 1003(b).
This principle is well-illustrated in the Lorrain case, in which the
Superior Court of Quebec initially refused authorization in 2011. The
Court of Appeal affirmed that judgment in 2013, and the Supreme Court
recently denied leave to appeal. 75 Lorrain involved a claim brought by
Quebec consumers against several gas companies, alleging that they had
suffered hat ni as a result of errors in the calibration of gas pumps. Their
claim was based on statistical data gathered by Measurement Canada (a
federal organization), which suggested that over a period of at least eight
years, consumers had regularly overpaid for their gasoline. In this case,
the entire claim was based on statistical data. At first instance, Michèle
Lacroix j ruled that the plaintiffs had presented only a hypothetical legal
claim. That is, they had ultimately failed to establish, in fact, that the defendant had committed any fault, or that that any direct harm had been
caused to them.
A series of related cases heard before the Superior Court of Quebec
between late 2011 and early 2012 provide a valuable opportunity to investigate the nature of article 1003(b). 76 All of these cases were ultimately
dismissed on the basis of article 1003(b), and, subsidiarily, on article
1003(a) and (d). Each case involved a proposed group of consumers
seeking authorization to bring a class action against a particular Quebec
store that had sold them extended warranties on goods purchased. Specifically, the consumers alleged that failure on the part of these defendants to warn customers of the existence of a legal warranty constituted
a violation of the Quebec Consumer Protection Act (Quebec CPA)" They
sought a refund of the amount paid for the extended warranty, as well as
punitive damages. The court held that there was no legal obligation on
the part of the defendants to warn consumers of the existence of a legal
warranty, and that the extended warranty did grant protection over and
75 Lorrain c Pétro-Canada,2011 QCCS 4803, aff'd 2013 QCCA 332 [Lorrain (SC)],
leave to appeal denied by the Supreme Court of Canada on 19 September 2013,
online: www.scc-csc.gc.ca/case-dossier/info/dock-regi-eng.aspx ?cas=35335.
76 Tremblay c Ameublements Tanguay Inc, 2011 QCCS 3069; Fortier c Meubles Leon
Ltd, 2011 QCCS 3078; Toure c Brault & Martineau Inc, 2012 QCCS 99; Guindon
c Brick Warehouse, 1p, 2012 QCCS 100; Filion c Corbeil Électrique Inc, 2012
QCCS 101; Tahmazian c Sears Canada Inc, 2012 QCCS 102; Rouix c 2763923
Canada Inc (Centre Hifi), 2012 QCCS 103; Normandin c Bureau en gros (Staples
Canada Inc), 2012 QCCS 104; Blondin c Distribution Stéréo plus Inc, 2012 QCCS
105.
77 Chapter P-40.1.
410 THE CANADIAN CLASS ACTION REVIEW
above the basic protection provided by the law. As such, in all of these
cases, the court held that the legal syllogism was lacking and the facts
alleged therefore did not justify the conclusions sought.
A final example of a proposed class action rejected on this basis has
already been discussed at some length above. In Leblanc, the proposed
group consisted of persons who had purchased goods in the United
States, had them delivered to their homes by courier service, and were
then required to pay customs brokerage fees in relation to those goods.
Leblanc argued that the customs services and related fees were in violation of the CPA mainly because they were unsolicited, disproportionate,
and abusive. Judge Fraiberg held that the facts alleged by Leblanc did not
justify the conclusions sought. He found that neither the Quebec CPA
nor the CCQ was applicable and that Leblanc could not rely on either of
those laws to impose any obligation on the courier because the contract
of carriage in question was governed by American law. In the absence of
a consumer contract, Leblanc had no grounds on which to claim compensatory or punitive damages under the CPA. Furthermore, he held that
the brokerage services are unavoidable, since a good must clear customs,
and are a necessary incident of the contract of carriage. In addition, in
accepting the merchandise and paying for the courier and customs fees,
the petitioner endorsed the services rendered and cannot now complain
that the fees were unauthorized 7 8 The refusal to authorize this motion
for authorization demonstrates that where a petitioner's claim has no
valid legal basis, it can be dismissed pursuant to article 1003(b).
ii)
Class Action Being Used as an Inquiry into a Particular Sector or
Industry
Courts have also dismissed motions for authorization on the basis of
article 1003(b) where it has determined that the petitioners were abusing the class action regime in order to conduct an inquiry into a particular sector or industry. This is true at both the authorization stage
as well as the trial on the merits. 79 However, recent cases demonstrate
that where it is possible to ascertain this improper motive from the outset, authorization will be refused on the basis that the facts alleged do
not seem to justify the conclusions sought. This was the case in Roux
c Commission scolaire des Rives du Saguenay,80 where authorization was
refused after the plaintiff sought to amend the motion for authorization
Leblanc, above note 59.
79 Banque de Montréal c Marcotte, 2012 QCCA 1396.
80 2012 QCCS 6299.
78
VOLUME 9, N° 2, FEBRUARY 2014 411
to add sixty-seven school boards as defendants in a claim related to the
allegedly illegal charging of fees to the parents of schoolchildren. Judge
Carl Lachance held that to permit such amendments would have the effect of transforming a well-defined civil action into a broad commission
of inquiry targeting a particular industry or commercial sector. Similar
reasons were given by the Superior Court of Quebec in Jacques c Pétroles
Therrien inc81 and by the Quebec Court of Appeal in Option Consomma-
teurs c Novapharm. 82
iii) Violation of the Principle of Proportionality in Article 4.2 CCP
In considering whether the requirements of article 1003(b) have been
met, courts will also consider whether the claim in question frustrates
the principle of proportionality, enacted under article 4.2 CCP:
In any proceeding, the parties must ensure that the proceedings they
choose are proportionate, in terms of the costs and time required, to
the nature and ultimate purpose of the action or application and to the
complexity of the dispute; the same applies to proceedings authorized or
ordered by the judge.
While article 4.2. is intended to be read in conjunction with article
1003 as a whole, jurisprudence has demonstrated that it bears a special
relationship to article 1003(b). In Lallier c Volhswagon Canada Inc,83 the
Quebec Court of Appeal clearly provides that articles 4.2 and 1003(b)
CCP ought to be considered in conjunction when deciding whether it is
appropriate to authorize a given class action. The relationship between
the two articles is quite clear. If a proposed claim is disproportionate
within the meaning of article 4.2, the facts alleged in the proposed action
will not justify the conclusions sought. This reasoning is also seen in the
Superior Court of Quebec's recent judgment inJasmin c Société des alcools
du Québec (Jasmin)84, in which the court dismissed an action brought
against the Société des alcools du Québec (the SAQ) for allegedly pricing its
products too high in relation to their acquisition cost. The court held that
in order to demonstrate a solid legal syllogism in conformity with article
1003(b), article 4.2 required the petitioner to prove that the SAQ had
committed some fault. In the absence of such proof, it was held that the
81 2009 QCCS 1862.
82 2008 QCCA 949.
83 2007 QCCA 920 at para 43.
84 2013 QCCS 4162 [Jasmin].
412 THE CANADIAN CLASS ACTION REVIEW
facts alleged did not appear to justify the conclusions sought 8 5 A similar
discussion is also held in the Court of Appeal's recent affirmation of the
refusal of authorization in Lorrain.B 6
c) Article 1003(c)
Article 1003(c) requires that "the composition of the group makes the
application of article 59 or 67 difficult or impracticable." This criterion
asks whether, considering the alternatives, a class action is a preferable
procedure in terms of efficiency and access to justice. History shows that
article 1003(c) is the least likely basis upon which a court would refuse
certification. In approximately 19 percent of cases where a request for
authorization was rejected, the decision of the court was based, at least
in part, on article 1003(c). In less than 2 percent of cases, the decision of
the court was based exclusively on article 1003(c).
The case in which a motion for authorization was rejected solely on
the basis of 1003(c) was Pérès c Quebec (AG). 87 In that case, the Quebec
Court of Appeal found that the petitioner had alleged only theoretical
difficulties, and had failed to concretely show that he had taken the necessary steps to attempt a joinder of the actions. The court stressed that
the purpose of class actions was not to avoid the procedural requirements of articles 59 and 67 CCP where one or both of those provisions
could apply.
More often, article 1003(c) is deemed by courts to not have been
met because of other related problems with the claim. For example, in
MacMillan c Abbott Laboratories,88 Claudine Roy J of the Superior Court
of Quebec held that article 1003 (b) was not met because it was not established that group members actually sustained the alleged harms. Given
this conclusion, she ruled that article 1003(c) was also not met, since the
court was unable to conclude that the group even existed. As such, it
certainly could not foresee the number of potential members of the proposed class, and therefore could not judge whether the group's composition rendered the application of articles 59 and 67 CCP impracticable.
d) Article 1003(d)
Article 1003(d) requires that "the member to whom the court intends to
ascribe the status of representative is in a position to represent the mem85 Ibid at paras 42-43.
86 Lorrain (CA), above note 72 at para 84.
87 2005 QCCA 488.
88 2012 QCCS 1684, aff'd 2013 QCCA 906.
VOLUME 9, N° 2, FEBRUARY 2014 413
bers adequately." This criterion requires that the proposed representative have a personal interest in the case, be competent to serve as the
mandatary for the proposed group members, and not have any conflict
of interest with the group. In about 35 percent of cases where a request
for authorization was dismissed, the decision of the court was based, at
least in part, on article 1003(d). There was only a single case, Lévesque c
Vidéotron, s.e.n.c., 89 in which the decision of the court was based exclusively on article 1003(d). The reason for this is explained by the fact that
petitioner's counsel need only replace the representative in order to successfully retry the motion for authorization 90
In Lévesque, petitioner Raymond Lévesque sought authorization of a
proposed class action against Vidéotron in relation to the rental period
of certain media content, which was alleged to be less than twenty-four
hours. Despite finding that criteria (a) through (c) were met, Carole Hallée
J refused to authorize the class action on the grounds that the representative petitioner was inadequate. She pointed out that Lévesque could not
even estimate the number of members in the proposed class, and had no
way of ascertaining their identities. In fact, he did not even make any attempt to seek out potential group members — he was content to simply
say he did not know 9'
A similar strictness with respect to the criterion of article 1003(d) is
seen in the Leblanc case discussed above. Though that case was primarily
decided on the basis of article 1003(b), the reasoning with respect to the
petitioner is useful. In that case, Fraiberg J held that neither petitioner
had a sufficient interest to bring the class action related to the alleged
charging of unsolicited and abusive customs brokerage fees in connection with the importation of goods into Canada. It was held that Leblanc
did not meet the requirements of article 1003(d) because his payment of
UPS Canada's customs brokerage fees was the result of an error on the
part of his vendor and could have obtained a refund had he asked for it.
The other petitioner, Maurice, was also deemed inadequate as a representative petitioner, as he was held to have suffered no loss at all. He paid
nothing, and the charge was reversed immediately upon his complaint.
InJasmin, the Superior Court of Quebec reiterated the three requirements necessary to satisfy criteria 1003(d). The proposed representative
must: (1) have a personal interest in the litigation; (2) be competent to
89 2013 QCCS 3868 [Lévesque].
90 In such a case, the concept of res judicata does not apply: Hotte v Servier
Canada Inc, [1999] RJQ 2598 (CA), 2601.
91 Lévesque, above note 89 at paras 93-97.
414 THE CANADIAN CLASS ACTION REVIEW
represent the proposed group; and (3) not be in a conflict of interest with
the proposed group members. Despite the fact that the claim in that case
had already been rejected on the basis of 1003(b), the Superior Court
went on to explain that it also failed to meet the requirements of 1003(d)
because the proposed representative was not "competent" to represent
the proposed class. The court noted that while the threshold for this criterion is low, it nevertheless exists 9 2 Moreover, it was revealed that the
petitioner had no knowledge of the facts of the case, even those alleged
in the motion. In fact, he failed to demonstrate any real knowledge of the
legal basis on which the claim was being brought. The court found that
in conjunction with the other problematic aspects of the claim, the proposed representative's lack of knowledge with respect to the file proved
an insurmountable obstacle.
The above examples suggest that Quebec courts are becoming increasingly demanding and strict with respect to their interpretation of
article 1003(d). This being said, because petitioner's counsel can simply
replace the representative and start anew, this criterion should, in theory,
have a low threshold. This was explicitly stated by the Court of Appeal
in Bouchard c Agropur Coopérative, which urged courts to adopt a liberal
approach in assessing the adequacy of the representative and reaffirmed
recently in Infineon 93
E. THE INFINEON EFFECT
Does the recent decision of the Supreme Court of Canada in Infineon
change anything with respect to the trends this paper has identified?
Infineon recently reconfirmed that the evidentiary burden provided for
by article 1003 CCP is a low one. It also reiterated that at the authorization stage, the court is to act only as a "filter" and should not allow the
process to become a pre-emptive trial on the merits. 94 One can argue that
this restatement of the low threshold test will encourage judges to be less
harsh on the application of the 1003 criteria which can lead to a possible increase in the number of class actions to be authorized. Perhaps,
only time will tell. However, we believe that the Infineon decision does
not state anything new with regard to the applicable authorization test,
which had not already been stated by previous cases. Therefore, it should
92 Jasmin, above note 84 at para 80.
93 Bouchard c Agropur, 2006 QCCA 1342 at para 89; Infineon, above note 1 at
paras 147-54.
94 Infineon, ibid at paras 57-61.
VOLUME 9, N° 2, FEBRUARY 2014 415
not have any significant impact going forward on the application of the
criteria outlined at 1003 CCP.
F. USING THE CERTIFICATION PROCESS TO A
CLIENT'S ADVANTAGE
Quebec's reputation (whether deserved or not) as a "haven for class actions" or "rubber-stamp jurisdiction" has likely discouraged many defendants from using precious time and money to have claims dismissed prior
to or at the authorization stage. However, our research suggests that the
authorization stage may actually present a valuable opportunity for defendants to effectively put an end to a class action before it is ever authorized. Indeed, far from being a waste of time or money, it is becoming
increasingly apparent that challenging a motion for authorization may
well be a defendant's cheapest and most suitable course of action.
With the number of motions for authorization and class actions increasing each year, particularly in Quebec, defendants must take care to
protect their legal interests as fully and effectively as possible. What follows is a concise list of "tips" that defendants might consider in seeking
to oppose a motion for authorization.
• Disprove the syllogism: Statistics demonstrate that, by far, the highest number of motions for authorization are dismissed pursuant to
article 1003(b). Defence counsel should therefore direct their attention to challenging a petitioner's legal argument from a logical — as
opposed to factual — perspective. The court may find that the facts
alleged by the petitioner simply do not justify the conclusions sought.
In any event, even if the court finds otherwise, defence council will
have given themselves a head start in disproving the petitioner's claim
at the trial on the merits.
• Attack the quality of the representative petitioner: Many once believed that article 1003(d), perhaps even more so than 1003(c), was a
mere formality at the authorization stage. However, in recent years,
Quebec courts have proven increasingly demanding in assessing this
criteria, and have proven willing to dismiss entire actions based on an
inadequate or ill-informed representative.
• Motions to dismiss- In certain cases, a motion to dismiss will be the
most effective procedural vehicle to put an end to a proposed class
action. This is the case where the proposed class action is outside the
relevant court's jurisdiction, where there is a parallel claim pending in
416
THE CANADIAN CLASS ACTION REVIEW
another jurisdiction, where there is an issue of res judicata, or where
there is a clear abuse of procedure. However, apart from these specific
circumstances, it may not be preferable to wait for the hearing on authorization in order to raise arguments with respect to the relevant
criteria of article 1003.
• Convince the judge it's not worth the trouble: Since 2004, Quebec
judges who authorize class actions have also been required to try the
cases they authorize. Some argue that this has led to concerns over
manageability seeping into judges' reasoning and potentially influencing their decisions on motions for authorization 9 5 In effect, if defence
counsel can convince the judge that a case will give rise to a multitude
of time-consuming "mini-trials," the judge may be less likely to authorize knowing that he or she will be the one presiding over them.
• Take advantage of new trends: In recent years, some Quebec judges
have made clear pronouncements in ruling on motions for authorization, seemingly attempting to deter like cases from being brought in
the future. Take, for example, Fraiberg J's stance against serial class
actions and "lawyer-driven" claims in Gauthier, or Lacroix J's outright rejection of class actions based on purely statistical data in Lorrain. Keeping abreast of such developments is beneficial in defending
against similar or analogous actions that may arise in the future.
• Make sure this advice is right for your particular client: Some clients
may be reluctant to follow the advice given in this article, primarily
because fighting a claim at the authorization stage means divulging
arguments to the adverse party before trial. Strategically, particularly
in highly competitive industries, this might not be the best approach
for the client. Therefore, despite the general suggestions that have
been given in this article, it is important to consider each case on its
own facts in order to determine the best way to defeat a proposed class
action and protect the client's interests.
In conclusion, Quebec defendants and their counsel should not be
entirely pessimistic about the likelihood of defeating a proposed class
action either before or at the authorization stage. A closer examination
of the facts and figures suggests that Quebec's class action regime is not
as petitioner-friendly as it has been made out to be. While the province's
class actions regime is comparatively broad and flexible, where defendants deploy their resources in a targeted and effective manner, the pre95 Melnitzer, "Is British Columbia the Next Mecca for Class Actions?," above
note 39.
VOLUME 9, N° 2, FEBRUARY 2014 417
authorization stage and authorization hearing can serve as an invaluable
opportunity to put an end to a class action before what are often long
and costly trials on the merits. Ultimately, making smart choices and
investing resources at an early stage of proceedings can end up saving
defendants precious time and money.