Impleading Third Parties in Class Action Proceedings– Quebec Superior Court Allows Anticipated Recovery Action Against more than 150 Parties
On July 5, 2021, the Honorable Paul Mayer of the Quebec Superior Court allowed a defendant in a class action to implead nearly 150 third parties, including the Attorney General of Quebec in order to determine their liability regarding the allegations raised in the class action (known in Quebec civil law as an action in warranty or a call in warranty). In addition to recalling the criteria applicable to third party opposition to the call in warranty this decision presents a rather singular case of application in the context of a class action, and demonstrates a flexibility that is reminiscent of the approach of Quebec judges at the authorization stage.
On June 7, 2019, in its important decision in Saint Joseph's Oratory of Mount Royal v. J.J., the Supreme Court of Canada authorized a class action against the Province canadienne de la Congrégation de Sainte-Croix (the "Congregation") as well as St. Joseph's Oratory (the “Oratory"), whose affairs were administered by the Congregation. The main issue in the class action is whether the Congregation and the Oratory are liable for sexual abuse perpetrated by members of the Congregation in educational institutions, residences, summer camps, or any other location in Quebec, including the Oratory.
The Call in Warranty
In January 2021, the Congregation filed a writ of forced intervention to call in warranty 130 Fabriques, Bishops and religious corporations (the "Dioceses and Parishes"), 25 School Boards and School Service Centers (the "School Boards"), 11 insurance companies and the Attorney General of Quebec (the "AGQ"). The insurance companies and the Dioceses and Parishes have not contested the intervention.
More specifically, in the event that a judgment on the merits concludes that the Congregation was responsible for the sexual abuse committed by its members, the Congregation maintains that the School Boards and the AGQ would be jointly and severally liable for the prejudices resulting from their extra-contractual faults, i.e. having grossly neglected their duties to visit, verify, inspect or investigate the establishments in which members of the Congregation worked.
Position of the Parties
Representative J.J. objected to the acts of intervention on the grounds that they were "excessive, abusive, disproportionate and unreasonable procedures, which seek to analyze the responsibility of all the actors in the Quebec education system" and which involve an exaggerated number of parties to the litigation.
The AGQ and the School Boards objected to the call in warranty, notably by raising (i) the lack of connection with the main action and (ii) the futility of the calls in warranty for the determination of common issues. The latter argument is of particular interest.
For its part, the Congregation argued that the call in warranty, while significant in scope, was still proportionate, given the issues in dispute. It also argued that recent amendments to the Code of Civil Procedure prevented the School Boards and AGQ from opposing the writ of forced intervention.
The Court first rejected the Congregation's argument concerning the impleaded third parties’ absence of a right to oppose the call in warranty. Indeed, the Court found no indication that the legislator intended to remove the right of third parties to oppose being impleaded in the dispute, especially since the Code of Civil Procedure expressly sets out the conditions under which a third party may make such an opposition.
Nonetheless, the Court found that the conditions for instituting an action in warranty were met, and dismissed the opposition of the School Boards, AGQ and J.J. It noted that the criteria for instituting an action in warranty are to demonstrate (i) a legal relationship between the petitioner and the third party called in warranty and (ii) a connection between the call in warranty and the main action, and that the threshold for instituting an action in warranty is low.
In this case, these conditions were met, given the allegations of common or contributory extra-contractual faults, which give rise to legal solidarity. Indeed, the reproaches formulated by the Congregation against the third parties called in warranty were of the same nature as the faults alleged by J.J. against the Congregation, that is to say, of having allowed sexual assaults to be committed by members of the Congregation on children placed under their responsibility and of having ignored them. Moreover, these allegations caused common injury to the class members.
The Court also rejected claims that the call in warranty was clearly ill-founded, disproportionate, or unnecessary for the purpose of deciding permissible common issues. The mere existence of potential joint and several liability was found to be a sufficient legal syllogism to justify the call in warranty at this preliminary stage of the litigation. It was not for the court to analyze the likelihood of success of the Congregation's claims at this stage, which will require an analysis on the merits.
The Superior Court did, however, grant a motion to dismiss filed by fourteen (14) of the School Boards, given the lack of evidence that a member of the Congregation worked at any time in the schools of those boards.
This decision is of interest for two main reasons: (i) the application of the rules relating to the action in warranty in a class action context and (ii) the large number of third parties called in warranty (over 150).
The Court's decision confirms that the criteria applicable to the action in warranty remain the same in the context of a class action. Thus, at the opposition stage, the courts must not examine whether the call in warranty is useful for deciding the class action or would hinder its progress, but rather whether there is a legal relationship between the plaintiffs and the impleaded third party and whether there is a connection with the class action.
This is therefore a less demanding criterion than the usefulness and/or relevance to the resolution of the authorized common issues, which criteria usually serve to limit the parameters of the class action at the merits stage. Therefore, while case law allows the striking out of allegations or the dismissal of amendments that are not faithful to the framework established by the common issues and the authorization judgment, the Honorable Paul Mayer states that the admissibility of a call in warranty in the context of a class action is rather assessed by its usual criterion, namely that of relatedness. In our opinion, this does not mean that an action in warranty could not ultimately be found to be disproportionate or excessive on its own merits, but it is simply not an argument at the opposition stage.
 Art. 188 C.C.P.