Canada: Quebec Court Of Appeal Finds Statistical Evidence Insufficient To Establish Proof Of Damages To Support Class Action

Last Updated: April 25 2013
Article by Belinda A. Bain and Estelle Hjertaas

Most Read Contributor in Canada, October 2018

In the recent case of Lorraine v. Petro Canada 2013 QCCA 332, the Quebec Court of Appeal refused to authorize a proposed class action based on alleged inaccuracies in the measurement of gasoline, leading to inflated prices at gas pumps.

Facts

The proposed class action is based on statistics compiled by Measurement Canada, which is a federal organization responsible for the integrity and accuracy of measurement in the marketplace. In conducting gas pump inspections from 1999 to 2007, Measurement Canada found a number of errors in the accuracy of the measurement of the delivery of gasoline from the pumps. Under the Weights and Measures Act (R.S.C., 1985, c. W-6), the authorized margin of error is 0.5%, which is equivalent to a difference of 100 millilitres on 20 litres. According to the results of the inspections, 8% of inspected pumps had an error – 6% to the detriment of the consumer, and 2% to the detriment of the seller. The Ottawa Citizen concluded that mistakes were unfavourable to consumers 74% of the time.

Based on this information, on May 21, 2008, Alexandre Lorrain requested authorization to begin a class action and to be designated as representative. The class action targets the errors made by the respondents or people operating gas stations under their banner with regard to the calibration of gas pumps. The group that Mr. Lorrain aims to represent is all physical persons and individual businesses, and all legal persons with less than 50 employees in Quebec who, since January 1, 1999, purchased gas from one of the defective pumps and suffered damages accordingly. The requested damages are the excess paid by consumers for the purchase of gasoline during the affected period.

On July 27, 2011, the Superior Court of Quebec refused to authorize the class action. That decision was appealed on August 26, 2011.

Court of Appeal decision

The Court of Appeal upheld the Superior Court's decision and refused to authorize the class action. In doing so, the Court of Appeal considered four main issues:

1. Did the judge err in setting out the general principles applicable to the authorization of a class action?

The Court of Appeal found that the judge made no error in this regard. Article 4.2 of the Code of Civil Procedure (CPC), which states that "the parties must ensure that the proceedings they choose are proportionate, in terms of costs and time required, to the nature and ultimate purpose of the action or application and to the complexity of the dispute", does not have the effect of importing from other provinces the principle that the judge can refuse to certify a class action if it is not the most appropriate means of bringing the case. However, the principle of proportionality under article 4.2 does apply to class actions, as it does to all other cases under the CPC.

The existence of a serious right or issue is also an appropriate consideration.1

2. Did the judge err in the application of paragraph 1003 b) ("Facts alleged seem to justify the conclusions sought") of the Code of Civil Procedure?

While the Court of Appeal identified two errors by the lower court, which were (1) preferring some expert witnesses despite not having heard any of them testify and (2) determining that the data from Measurement Canada was not reliable, it agreed with the lower court that the requirement under paragraph 1003(b) that the "facts alleged seem to justify the conclusions sought" was not met.

While the appellants argued that the statistical evidence gathered by Measurement Canada demonstrated that some consumers had been overcharged, and thereby prejudiced, the Superior Court noted that there was an absence of any direct evidence of prejudice to the designated persons. None of the designated persons were able to show receipts or other evidence that they had purchased gasoline from one of the affected pumps.

While the appellants further argued that, given time, they would be able to show a direct prejudice,2 this argument flies in the face of the proportionality rule under article 4.2 of the CPC. If the designated persons were launching an individual action, they would have to prove that they had suffered a prejudice – the same must apply for a class action.

3. Did the judge err in the application of paragraph 1003 a) ("Identical, similar or related questions of law") of the Code of Civil Procedure?

As found by the lower court, there was an absence of identical, similar or related questions of law with regard to the prejudice suffered by each member of the group. The level of damages could vary infinitely within the affected class, as one member may have had only one transaction with an affected gas pump and another may have had many. This is doubly so since each transaction may also vary with regard to the level of error at the pump. Combined with the difficulty of proving damages, it is clear that the criteria are not met.

4. Did the judge err in the application of paragraph 1003 d) ("the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately") of the Code of Civil Procedure?

On this point, the Court found that a person with a weak claim could not adequately represent the whole group, as the representative's claim is the basis for the court to analyze the case, and a class action is not intended as a method to circumvent principles of civil law: there must be a fault, a damage, and a casual relationship between the two.3

In addition to the failure to demonstrate a direct and personal prejudice affecting the designated persons, there are also factors that lead the lower court to question the seriousness and openness of the process to represent the members of the group.

Conclusion

This decision represents a forceful rejection of an increasing trend of attempts to establish proof of harm in class actions through the use of statistical evidence. If similar reasoning is applied elsewhere in Canada, it appears it will not be enough for class counsel to establish that, based on a statistical analysis, someone MUST have suffered harm as a result of the alleged wrong. Rather, it must be established, through direct evidence, that someone DID in fact suffer such harm.

Footnotes

1 Para 66.

2 Para 84.

3 Para 94.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions