On May 15, 2023, the Superior Court of Québec handed down a judgment in Hébert v. 149667 Canada Inc.,[1] dismissing the defendants’ application to dismiss the application for authorization to institute a class action (the “application for authorization”).
Background and the Parties’ Allegations
Ms. Guylaine Hébert purchased an extended warranty in September 2010 from an office furniture retailer. She filed an application for authorization to institute a class action based on alleged non-compliance with section 256 of the Consumer Protection Act[2] (“CPA”), which requires companies selling extended warranties to deposit the amounts collected in a trust account following the purchase. The defendants allegedly failed to comply with this obligation.
The defendants argued that the application for authorization was inadmissible and unfounded, and requested that it be dismissed on the three grounds set out below.
First Ground: Limitation of Recourse
The court concluded that the limitation on the plaintiff’s personal claim under article 168, paragraph 2 of the Code of Civil Procedure[3] (“CCP”) did not prevent the authorization of the recourse for the other members of the group. The court ruled that before dismissing the application for authorization, the criteria for authorization set out in article 575 of the CCP must be reviewed.
With regard to the substance of the case, the court also mentioned that [translation] “it would be illogical to dismiss a class action on the grounds that a single member’s recourse is prescribed.”[4] A fortiori, this argument should also apply to the preliminary stage.
Second Ground: Inadmissibility of the Claim Due to Res Judicata
The defendants argued that the judgment rendered by Justice Nollet on September 9, 2016, in Cantin v. Ameublements Tanguay inc.[5] had the force of res judicata with respect to the basis of the plaintiff’s claim, but the court disagreed. That claim was based on section 256 of the CPA, as in this case.
In order to rule on this issue, the court concluded that it had to determine whether the judgment in question was final. For the doctrine of res judicata to apply, the first judgment must address the very basis of the case, ruling on the substance of the legal aspect at issue. Given that, a judgment dismissing an application for authorization to institute a class action on procedural grounds without ruling on the merits of the application for authorization does not have the force of res judicata in respect of a second application, except as regards the procedural issue that was the subject of the decision.
The court concluded that since the judgment in Cantin did not rule on the legal basis of the case or the legal syllogism of the claim, the principle of res judicata did not apply.
Third Ground: Abuse of Process
Considering the dismissal of the application for authorization in Cantin due to the insufficiency of the allegations and the similarities with their case, the defendants claimed that the application had no chance of success and was abusive.
However, the court concluded that the dismissal of one application due to insufficient allegations did not impede a new application with the same basis. The court therefore did not conclude that the plaintiff’s application was abusive.
Conclusion
This decision acts as a precedent for new arguments that may be raised in defence of an application for authorization, and helps define the criteria governing res judicata and applications to dismiss.
In fact, in another recent judgment,[6] it was ruled that section 256 of the CPA did not apply to extended warranties on purchases made before June 30, 2010. That decision has been appealed, and we will be watching to see the outcome.
[1] 2023 QCSC 1679 (in French only).
[2]Consumer Protection Act, CQLR c. P-40.1
[3] Code of Civil Procedure, CQLR c. C-25.1.
[4] Service aux marchands détaillants ltée (Household finance) v. Option consommateurs, 2006 QCCA 1319.
[5] Cantin v. Ameublements Tanguay inc. 2016 QCSC 4546 (in French only).
[6] Rochon v. Meubles Léon Ltée, 2023 QCSC 1121 (in French only). Set down for appeal on May 2, 2023.