Quebec Court of Appeal Clarifies the Calculation of the Class Action Assistance Fund Levy: A Single Percentage Applied to the Residual Amount

Background

On April 8, 2026, the Quebec Court of Appeal rendered an important decision concerning the calculation of the levy payable to the Fonds d'aide aux actions collectives (the “Fund”) where a residual amount remains after distributions to class members and payment of fees (Fonds d’aide aux actions collectives v. Ticketmaster Canada Ltd., 2026 QCCA 476).

The issue arose in the context of the Abihsira v. Ticketmaster class action. Following several distributions to class members, an unclaimed residual amount of approximately $320,998 remained. The central question concerned the portion of that residual amount that had to be remitted to the Fund pursuant to the Regulation respecting the percentage withheld by the Fonds d'aide aux actions collectives. Where a residual amount results from a collective recovery, the Regulation sets out the percentage payable to the Fund based on the amount of the residual.^[1]

At first instance, Justice Pierre Nollet adopted a progressive calculation method, applying different percentages to different portions of the residual amount, in a manner similar to a tax bracket system (namely, 50% on the portion under $100,000, 60% on the portion between $100,000 and less than $200,000, and 70% on the portion exceeding $200,000 and less than $500,000). This approach resulted in a levy of approximately $194,699.

The Fund appealed the decision, arguing that the Regulation requires the application of a single percentage to the entire residual amount, based on the bracket corresponding to the total residual. In this case, that meant applying a 70% rate to the full residual amount, resulting in a levy of approximately $224,699.

The Court of Appeal agreed with the Fund.

The Court of Appeal’s Decision

The appeal turned on the following question: where a residual amount falls between $200,000 and $500,000, should a 70% rate be applied to the entire residual amount, or should the calculation be broken down by applying successive rates of 50%, 60%, and then 70% to different portions of the amount?

The Court of Appeal conducted a thorough analysis of the text of the Regulation, its context, and its purpose. It concluded that the Regulation is clear: it provides for the application of a single percentage to the entire residual amount, based on the bracket corresponding to the total amount. The Court emphasized that the wording “on all of the residual amount” does not allow the residual to be divided into successive portions. Introducing such a progressive approach would amount to rewriting the Regulation.

The Court acknowledged that this method may lead to certain anomalies, where a small variation in the residual amount results in a substantial increase in the levy. For example, as Justice Nollet noted, a residual amount of $99,999 would trigger a 50% levy, or $49,999.50, whereas a residual amount of $100,001 (only two dollars more) would result in a 60% levy, or $60,000.60.

However, the Court of Appeal held that these “imperfections” do not justify departing from the ordinary meaning of the text. As the Court explained, the existence of application anomalies that may potentially arise in very specific situations cannot justify a different interpretation. If the scheme appears imperfect, it is for the legislature—not the courts—to correct it.

The Court also noted that the interpretation it adopted aligns with the longstanding and consistent practice of the courts and promotes legal stability. This well-established approach has created legitimate expectations and cannot be altered without risking significant consequences.

Key Takeaways

This decision clarifies that the Fund’s levy on a residual amount is not calculated on a progressive, bracket-by-bracket basis. Instead, the applicable category must be determined based on the total residual amount, and a single percentage applies to the full amount.

For parties to class actions, this clarification has concrete implications for the final allocation of unclaimed sums, particularly as between the Fund and the beneficiary organizations designated by the court.

More broadly, this decision underscores that where regulatory text is clear and a consistent practice has developed, it is not for the courts to alter that meaning in order to remedy potential anomalies. Such reform falls within the legislature’s purview.

^[1] “1. For the purposes of section 42 of the Act respecting the Fonds d’aide aux actions collectives (chapter F-3.2.0.1.1), the percentage withheld by the Fonds d’aide aux actions collectives from the balance or from a liquidated claim shall be as follows:

1°  on the balance established under article 596 of the Code of Civil Procedure (chapter C-25.01):

a)  50% from any balance less than $100,000;

b)  60% from any balance exceeding $100,000 but less than $200,000;

c)  70% from any balance exceeding $200,000 but less than $500,000;

d)  90% from any balance exceeding $500,000;”