The Potential Risk of Default Judgments in Quebec Class Actions: Frank-Fort Construction inc. v. Porsche Cars Canada Ltd.
In Frank-Fort Construction inc. v. Porsche Cars Canada Ltd., the Quebec Superior Court (Justice Donald Bisson) recently ruled on an Application to be relieved of default for failing to file an Answer to a Motion to Authorize the Bringing of a Class Action within the prescribed 15-day time limit. Filing of an Answer is the equivalent of filing an Appearance under the New Code of Civil Procedure (“new CCP”) in force in Québec since January 1, 2016.
The authorization motion was filed on November 10, 2015 and served on the last Respondent on November 17, 2015. Under the new CCP, the deadline to file an Answer is 15 days after being served with the motion. As none of the four Respondents had filed an Answer, on December 11, 2015, the Petitioner filed for Default Judgment. Although a Default Judgment filing is highly unusual in class actions proceedings, it remains available to the Petitioner.
The authorization motion was heard ex parte in February 2016 (Justice Pierre C. Gagnon).
On February 23, 2016, while the matter was under advisement, counsel for the Respondents wrote to Justice Gagnon asking that a new authorization hearing take place. The Respondents filed their Answers on the same day. Justice Gagnon, a former partner at the firm representing three of the four Respondents, recused himself and agreed to simply not render a decision on the ex parte authorization hearing. In March 2016, the Respondents filed applications to be relieved from the default of having filed an Answer.
Seized with the Respondents’ motion, the new judge, Justice Bisson, held that the 15-day time limit to file an Answer is not a strict one and therefore the Respondents did not have to demonstrate that it was impossible for them to act sooner. Justice Bisson held that where an Answer is not filed within the time limit the question before the Court is whether the Court should extend the time period for the Respondents to file the Answer, pursuant to article 84 of the new CCP.
Justice Bisson held that an extension of time should be granted and relieved the Respondents from their default. Justice Bisson held that (i) the balance of convenience was in the Respondents’ favour; (ii) the Respondents had a serious defence to present against the Motion to Authorize the Bringing of a Class Action; (iii) refusing to relieve the Respondents from their default would violate their fundamental right to be heard (audi alteram partem); (iv) it was in the interest of justice that a contradictory debate take place on the Motion to Authorize the Bringing of a Class Action; and (v) it was reasonable not to file an Answer before the validity of the service of the Motion to Authorize the Bringing of a Class Action could be confirmed.
Despite this favourable judgment, any Respondent to a Motion to Authorize the Bringing of a Class Action should keep in mind that the deadline to file an Answer is 15 days after being served with an authorization motion. Respondents should comply with this deadline in order to avoid the hassle and legal costs related to Default Judgement proceedings and a potential ex parte judgment authorizing the bringing of a class action.
Default Judgment ex parte file an Answer New Code of Civil Procedure (CCP)