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Are national classes still possible? Quebec Court refuses stay, questions whether other provinces can include Quebec class members

On April 19, 2022, the Quebec Superior Court in Option Consommateurs v. Nippon Yusen Kabushiki Kaisha (NYK), 2022 QCCS 1338 refused a stay of proceedings of a Quebec class action in the context of parallel competition class actions filed across Canada. This decision highlights the importance of judicial discretion in obtaining stay requests and departs from the notion of pan-Canadian national class actions, calling into question whether they even remain possible outside limited circumstances.

Background

In the context of a Quebec class action filed against various international shipping and transportation companies (“Defendants”), Defendants filed an Application to stay the Quebec class action in favour of a parallel class action proceeding before the Supreme Court of British Columbia (“BC Court”), until final judgment on the common issues was rendered in that file. This Application to stay was contested by Option Consommateurs ("Plaintiff").

In the Quebec class action, Plaintiff alleged that Defendants colluded to unduly limit competition and unreasonably inflate the prices of vehicle carrier services by roll-on/roll-off cargo ships (“RoRo”), and that Defendants participated in a cartel to fix, maintain, increase and artificially control the prices of vehicle carrier services by RoRo. The claim is based on the Competition Act as well as extra-contractual liability pursuant to the Civil Code of Quebec (“CCQ”).  

The Quebec class action was filed on behalf of all persons in Quebec who purchased vehicle carrier services by RoRo or who purchased or leased in Quebec a new vehicle, new agricultural machinery or new construction equipment transported by RoRo between February 1, 1997 and December 31, 2012. This class included direct and indirect purchasers, as well as umbrella purchasers (essentially, persons who purchased a product that was neither manufactured nor supplied by the cartel members but who are alleged to have suffered similar impacts from the Defendants’ conduct).

At the time of the Application to stay, both the Quebec and BC class actions had been authorized and were progressing on the merits, but the BC class action was only on behalf of BC residents and excluded any Quebec class members, as well as any umbrella purchasers. A parallel class action had also been filed in Ontario on behalf of a national group (excluding BC and Quebec residents), but had not gone through certification yet.

While filing their Application to stay in Quebec, Defendants jointly filed two other applications, one in BC and one in Ontario. Through these combined applications, Defendants essentially sought to stay the Quebec and Ontario class actions, add Quebec class members to the BC class action, and have one trial in BC on the common issues for all Defendants with a national class.

Decision

The Quebec Superior Court (per Justice Donald Bisson) dismissed Defendants’ Application to stay the Quebec class action. The Court addressed in detail each potential argument for the stay of proceedings.

Jurisdiction of BC Court

Justice Bisson considered that it was not appropriate, proportional nor in the interest of class members or Defendants to suspend the Quebec case while awaiting a decision from the BC Court on the request to add Quebec residents. Justice Bisson then explained that Defendants had to demonstrate that the BC Court had jurisdiction over Quebec class members regarding Quebec law. However, given that Defendants’ Application to stay did not contain any allegations regarding BC law or the jurisdiction of the BC Court, Justice Bisson concluded that this lack of allegations alone justified the dismissal of Defendants’ stay request. Justice Bisson nevertheless continued his analysis of the other potential avenues for the stay of proceedings.

Forum non conveniens

The principle of forum non conveniens, pursuant to article 3135 CCQ, provides that even though a Quebec authority has jurisdiction to hear a dispute, it may, exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another state are in a better position to decide the dispute. In a 2002 decision,[1] the Supreme Court of Canada set out the 10 relevant criteria that must be considered when deciding on forum non conveniens, but specified that none of them were determinative on their own. If, after analyzing these criteria, there is no clear impression that emerges in favour of the foreign jurisdiction, then the court must refuse to decline jurisdiction.

In this case, Justice Bisson analyzed all the relevant criteria, but the key reason for his refusal to decline jurisdiction was in light of criterion #10, which refers to the need to have the judgment recognized in another jurisdiction. Given that this case concerns a “personal action of a patrimonial nature” under Quebec law, the Court first examined article 3168 CCQ, which sets out the only situations in which the jurisdiction of foreign authorities can be recognized in Quebec. The Court considered that none of these situations applied in this case, given that (1) none of the Defendants in the Quebec case were domiciled in BC; (2) none of the Defendants possessed an establishment in BC; (3) the injury to the Quebec class members was suffered in Quebec, not in BC, and was not a result of a fault committed in BC, but rather a cartel that operated internationally; (4) the relevant contract concerned Quebec class members procuring carrier services or vehicles transported by RoRo – nothing indicates that the obligations of this contract would be executed in BC; (5) the parties did not submit any disputes to a foreign authority (i.e. no choice of forum clause); and (6) Defendants had not submitted to the jurisdiction of the BC Court. 

Justice Bisson specified that with regard to point (6), it was not sufficient for Defendants to submit to the jurisdiction of the BC Court. This required the acceptance of the Plaintiff,[2] and in the context of a class action, the Court must analyze this from the perspective of the Quebec class members. Unlike the case of a typical plaintiff, the submission of the Quebec class members to the BC Court cannot be assumed here because they did not institute the proceedings there.[3] This therefore constituted a fatal obstacle to the forum non conveniens argument. 

In other words, Justice Bisson concluded that a judgment by the BC Court involving Quebec class members could not be recognized in Quebec.

Article 3137 CCQ

Article 3137 CCQ  provides that, on the application of a party, a Quebec authority may stay its ruling on an action brought before it if another action, between the same parties, based on the same facts and having the same subject matter is pending before a foreign authority, provided that the latter action can result in a decision which may be recognized in Quebec.

Justice Bisson ruled that a stay pursuant to article 3137 CCQ could not be granted since the BC case could not result in a decision that may be recognized in Quebec, as already explained in the forum non conveniens section.

Articles 18, 49 and 577 Code of Civil Procedure (“CCP”)

Pursuant to these provisions,[4] the Superior Court of Quebec has an inherent power to stay an application for authorization to institute a class action, in favour of a class action before another Canadian court, if the interests of class members and the proper administration of justice warrant it, and when the cases have the same facts, same subject matter and same parties.

Justice Bisson concluded that the interests of the Quebec members was for the case to proceed to trial in Quebec, and refers to the criteria reviewed in the forum non conveniens section of his judgment to justify this.[5] He adds that the interests of class members clearly outweighs any other consideration here. Furthermore, the BC Court did not have jurisdiction over Quebec residents under Quebec law, and decisions of the BC Court could not be recognized in Quebec, as previously explained.

Our Comments

This decision may come as a surprise to some, as it calls into question the established notion of pan-Canadian national class actions. However, Justice Bisson specified that this decision does not make it impossible to have national class actions decided outside of Quebec. When Quebec class members consent to it, or if there are connecting factors with the relevant province outside Quebec, then a national class in another province (outside Quebec) could still be possible. However, other than in those circumstances, Justice Bisson suggested that it may indeed be impossible for national class actions to be heard in BC or elsewhere.

Finally, although it may seem unusual that two trials on the same issue could potentially take place in Canada, the Court noted that the BC Court could eventually decide to suspend its case if the parties make such a request, or the parties could agree as to the choice of the province. The continuation of this case will be of particular interest to the Canadian class actions world.

 

 

 

[1]  Spar Aerospace Ltd. v. American Mobile Satellite Corp., 2002 SCC 78, par. 71.

[2] Hocking v. Haziza, 2008 QCCA 800, par. 190.

[3] Chasles v. Bell Canada inc., 2017 QCCS 5200, par. 56.

[4] Article 18 CCP namely provides that judges must observe the principle of proportionality in managing the proceedings they are assigned, regardless of the stage at which they intervene, and while having regard to the proper administration of justice. Article 49 CCP essentially provides that courts and judges have all the powers necessary to exercise their jurisdiction.

[5] See Section 2.5.2.2 of judgment.

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