Canada: Lépine v. Canada Post Corporation And What It Says About Class Action Notice

Class action notices must be precise, unambiguous and accessible to satisfy the requirements of procedural fairness. That is just one of the key messages delivered by the Supreme Court of Canada in Canada Post Corporation v. Lépine, 2009 SCC 16.

In September of 2000, Canada Post Corporation began marketing a lifetime Internet access service in Canada. Consumers purchased software that was sold for $9.95, and agreed to have advertising transmitted to their computers in exchange for free Internet service. Canada Post discontinued the service on September 15, 2001. Consumer complaints and the filing of various proceedings across Canada ensued.

On February 6, 2002, Michel Lépine filed a motion to institute a class action against Canada Post with the Québec Superior Court on behalf of every natural person residing in the province who had purchased the Internet package. Class proceedings were later commenced in Ontario and British Columbia. In Alberta, a settlement was reached in December 2002. An enhanced settlement was then offered in Québec, Ontario and British Columbia. The settlement offers were accepted in British Columbia and Ontario. Mr. Lépine, the petitioner in the proposed Québec class action, which was still pending at the time of the settlement discussions, refused to participate.

The Québec Superior Court heard the motion for authorization on November 5, 6, and 7, 2003, and the judge reserved his decision. As of November 2003, the Ontario application for certification included residents of every province in Canada except British Columbia, and included Québec residents. On December 22, 2003, the Ontario Superior Court of Justice certified the class proceeding and approved the settlement for residents of every Canadian province except for British Columbia. This was done despite a letter sent to the judge by Mr. Lépine's attorney asking that jurisdiction be declined with respect to Québec residents. The very next day, on December 23, 2003, the Québec Superior Court authorized a class action on behalf of a class composed of Québec residents only.

In June of 2004, Canada Post applied to the Québec Superior Court to have the Ontario judgment recognized and enforced. The application was dismissed on the basis that the Ontario decision was rendered contrary to the fundamental principles of procedure. The Québec Court of Appeal dismissed Canada Post's appeal and unanimously reaffirmed the decision in first instance.

In a unanimous ruling, the Supreme Court of Canada upheld the decisions in first instance and appeal, although it disagreed with some aspects of the Court of Appeal's reasoning. Justice LeBel explained that the basic principle articulated in Article 3155 of the Civil Code (C.C.Q.) is that any decision rendered by a foreign authority must be recognized unless one of the limited exceptions specified in that provision is found to apply. He stated that a court must limit itself to considering whether the requirements for recognizing a foreign judgment have been satisfied. A court may not review the merits of the case.

Despite the broad wording of Article 3164 C.C.Q., Justice LeBel found that it does not give Québec courts the power to refuse to recognize an external judgment on the basis that the foreign court should have declined jurisdiction because it was not the most convenient forum. To apply the doctrine of forum non conveniens when considering an application for recognition would be to overlook the basic distinction between establishing jurisdiction and exercising it.

In deciding to recognize a judgment, however, a Québec court must determine whether the steps leading up to the decision and its implementation are consistent with the fundamental principles of procedure.

In class actions, because any decision will affect not only the representative and the defendant, but all the members of the class, adequate information is necessary to ensure that individual rights are safeguarded. Notification is essential because it informs the class members of how the certification judgment affects them, of their rights under the judgment — and occasionally, as here, in regards to the settlement of the litigation.

In this case, the notice approved by the Ontario Superior Court was not consistent with the fundamental rules of procedure because it did not properly explain the impact the settlement would have on Québec class members. The enforcement of the judgment in Québec was therefore precluded by Article 3155 (5) C.C.Q. Notices must be crafted to ensure relevant information will reach the intended recipients. The wording of the notice must take into account the context in which it will be published and the situation of the recipients. These requirements constitute a fundamental consideration in the class action setting and are no less compelling in a case involving the recognition of a judgment rendered by another Canadian court. Justice LeBel noted clarity was particularly important in this context, where parallel proceedings had been commenced in Québec and Ontario.

As for the question of lis pendens, the uncontested evidence clearly demonstrated that the motion for authorization had been filed with the Québec Superior Court prior to December 23, 2003, and that the Québec Court had been the jurisdiction first seized of the litigation. The recognition of the Ontario judgment was therefore impossible under the circumstances.

McCarthy Tétrault Notes

This decision by the Supreme Court is significant because it underscores the importance of providing adequate notice, whether in the international or inter-provincial setting, a point already made in the common law context by the Ontario Court of Appeal in Currie v. McDonald's Restaurants of Canada Ltd., 2005 CanLII 3360. Notices that are imprecise, ambiguous, misleading or improperly distributed run the serious risk of being considered in breach of the fundamental rules of procedure (in Québec) or those of natural justice (in the rest of Canada).

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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