Canada: New Supreme Court Of Canada Ruling On Class Actions: The Question Must Be Common… But The Answer Can Be Different For Each Person

On January 16, 2014, the Supreme Court of Canada issued an important ruling on class actions in Vivendi Canada Inc. v Dell'Aniello¹.

Background

In September 2008, Vivendi unilaterally amended the health insurance plan offered to certain former employees. As a result of the amendments, which were adverse to the former employees' interests, Mr. Dell'Aniello applied to the Quebec Superior Court for authorization to institute a class action against Vivendi in order to have the amendments declared unlawful.

The Quebec Superior Court denied Mr. Dell'Aniello's motion on the grounds that it did not raise "identical, similar or related" questions as required by Article 1003(a) of the Quebec Code of Civil Procedure (C.C.P.). According to the trial judge, Mayer J., too many factors specific to each member of the group had to be considered for one or more of the questions to be decided collectively. He pointed out, for example, that the fact that the members of the group had retired on different dates meant that each member's situation had to be analyzed individually. He also noted that the members of the group lived in six different provinces and therefore the proposed action would involve applying a different law to certain members.

The Quebec Court of Appeal overturned this decision, concluding that the trial judge had taken the analysis of potential distinctions between the individual members of the group too far when the question of the validity of the amendments to the plan was clearly an identical, similar or related question for all the members of the group. The Court of Appeal added that individual questions can coexist with identical, similar or related questions and that this was not a criterion supporting dismissal of a motion to institute a class action.

The decision of the Supreme Court

The Supreme Court of Canada upheld the decision of the Quebec Court of Appeal. It pointed out that, provided it is not insignificant, a question can be considered "identical, similar or related" if addressing it enables all the claims to move forward and avoids duplication of such analysis for each member of the group. The Supreme Court also held that a question can be identical, similar or related even if the answer given to the question might vary from one member of the group to another, provided the answer does not give rise to conflicting interests among the members. It then remarked that the requirement that there be a question that is "identical, similar or related" for all the members of the group is expressed in broader and more flexible terms in Quebec law than is the "common question" requirement in the legislation of other Canadian provinces. In this sense, Quebec law is therefore less stringent than the law in the rest of Canada. Finally, it noted that the mere fact that certain members of the group live in different provinces should not prevent the court from authorizing the class action, given that the Quebec courts can accept proof of the law applicable in the other provinces. The Supreme Court reiterated that the principle of proportionality set out in Article 4.2 of the C.C.P. applies to class actions but is not an additional criterion enabling the court to determine whether a class action is the "preferable" procedure for resolving a dispute. It then concluded by stating that the existence of subgroups within the proposed group is not on its own a sufficient basis for refusing to authorize a class action, provided the members have no conflicting interests.

Conclusion

The Supreme Court's decision proposes a relatively liberal approach to the requirement of Article 1003(a) of the C.C.P. However, it should be borne in mind that Vivendi Canada Inc. v Dell'Aniello was handed down in reference to a contractual relationship between Vivendi and each member of the group. It remains to be seen whether the Quebec courts will be inclined to apply this flexible approach in other circumstances where the individual situations of the various members of the group could prove to be sufficient grounds for dismissing a motion for authorization.

Footnote

1 2014 SCC 1.

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