Canada: Québec Court Of Appeal Clarifies The Role Of The Representative Plaintiff And How To Apply The Proportionality Principle In The Context Of Article 1003 CCP

On February 5, 2015, the Québec Court of Appeal (QCA) rendered its decision in Lévesque v. Vidéotron, s.e.n.c., concluding that the level of competence that a proposed representative must demonstrate to prove that he or she is in a position to represent the members of the proposed class adequately is minimal, and that the amount of inquiry to be performed to demonstrate such competence depends on the nature of the action. In the particular circumstances of the case, the QCA concluded that the petitioner need not attempt to find other potential class members or estimate their number since Vidéotron had the information necessary to do so. The QCA confirmed that the principle of proportionality must be considered when assessing the four authorization criteria and does not constitute a separate authorization criterion. The QCA added, though, that when a judge uses his or her discretionary power to rely on the principle of proportionality in conjunction with one of the authorization criterion to dismiss the authorization, the judge must expressly explain the basis of the conclusion. The QCA concluded that the motion judge failed to do so. The QCA granted the appeal, and authorized the bringing of a class action.

Background

The petitioner filed a motion for authorization to institute a class action on behalf of television subscribers who used an on-demand service to rent adult films and found that their rentals expired prior to end of the 24-hour rental period. The petitioner claimed that Vidéotron breached its contract and made misrepresentations contrary to consumer protection legislation when it failed to warn customers of the shorter rental period for adult films. The petitioner sought refunds of rental fees incurred during the 24-hour period or alternatively refunds pro-rated to missing hours, and $5 million in punitive damages.

The motion judge dismissed the motion for authorization on the basis that the petitioner failed to demonstrate that he could adequately represent the members of the proposed class and therefore did not meet the criterion of art. 1003(d) of the Code of Civil Procedure (CCP). The judge based her conclusion on the petitioner's failure to investigate or locate other subscribers who had similar problems to those raised in the proposed class action, and his claim that he did not and could not know the identity of potential class members. Furthermore, the motion judge concluded that the proposed class action was "perilous," and that allowing the action to go forward would violate the principle of proportionality found in art. 4.2 CCP, assessed in conjunction with the requirement of art.1003(d) CCP.

The petitioner appealed this decision to the QCA.

The Adequate Representation of the Class Members Requirement

The QCA examined the adequate representation of the class member requirement for the authorization of a class action in Québec pursuant to art. 1003(d) CCP, which stipulates that "the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately." The QCA reiterated the recent lessons from the Supreme Court of Canada that there are three elements to consider when this requirement of art. 1003(d) CCP is examined: (1) interest in the suit; (2) competence; and (3) absence of conflict with the class members, and that such elements must be interpreted liberally. In the present case, only the element of competence was at stake.

While the QCA recognized that, generally, a petitioner seeking authorization to institute a class action must not base his request solely on his personal case and must take certain steps to identify other potential class members and estimate their number, the level of inquiry required depends on the nature of the case. When it is obvious that there is a significant number of other consumers in an identical situation, it is not necessary to try to identify them, since their existence can be inferred from the circumstances. Applying these principles on the interpretation of the competence element of the adequate representativeness of the proposed representative, the QCA found that it was reasonable to presume that a reasonable portion of the 1.8 million television subscribers of Vidéotron used on-demand service to rent adult films, and that Vidéotron had all the information necessary to identify them. In addition, the QCA considered that, since one of the questions raised by the proposed class action was whether or not Vidéotron breached consumer protection legislation when it failed to warn customers of the shorter rental period for adult films, it was not necessary to make a more thorough inquiry to verify whether other consumers were unsatisfied with this policy.

The Principle of Proportionality

The QCA found that the motion judge did not err in considering the principle of proportionality in conjunction with the weakness of the proposed action. However, the QCA concluded that the reasoning of the judge was not clear since she did not explain why she considered the proposed action as "perilous." She seemed to rely on the weakness of the proposed action to conclude that allowing the action to go forward would violate the principle of proportionality found in art. 4.2 CCP, but then associated her assessment of the principle of proportionality with the requirement of art.1003(d) CCP. The QCA, however, was of the view that the weakness of a proposed action refers to the criterion of art. 1003(b) CCP about the colour of right, and the motion judge had concluded that this criterion was met.

Conclusion

The QCA's decision on the interpretation of art. 1003(d) CCP is not surprising considering in light of the Supreme Court recent decisions interpreting authorization criteria in a very liberal manner. However, the QCA's judgment turns on the particular nature of this case and its very specific circumstances. The fact that Vidéotron was in possession of all the information necessary to identify potential class members was a determinant factor for the QCA. This will not always be the case, and it will still generally be possible to argue that the proposed representative must take steps to identify other potential class members and estimate their number.

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.

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