A Report on Quebec Consumer Class Actions

August 22, 2024

Written By Pascale Dionne-Bourassa and Francesca Taddeo

Challenging Consumer Class Actions on the Merits

Lussier v Expedia Inc. (Lussier)

On March 5, 2019, the Superior Court of Québec authorized (i.e., certified) a class action against the operators of various hotel booking websites.

The plaintiff alleged that the defendants violated various provisions of the Quebec Consumer Protection Act and the Regulation Respecting Travel Agents by failing to include hotel fees, establishment fees or resort fees charged directly by hotels (hotel fees) on certain website pages displaying search results for available hotels. In the reservation process, the hotel fees appeared only after a customer selected a particular hotel. The hotel fees and the currency in which they must be paid were also identified in the email received by customers confirming their booking. These fees were ultimately charged to the customer’s credit card when completing the checkout process upon leaving a hotel after a stay.

The plaintiff alleged that class members paid higher prices for hotel rooms than advertised on the defendants’ websites as the result of the defendants’ failure to disclose complete pricing.

The class action proceeded to trial on the merits in the summer of 2023 and a decision was rendered by the Superior Court of Québec on February 19, 2024, dismissing the action.

The trial judge began by recognizing that the defendants are third-party intermediaries (i.e., a marketplace) for hotel bookings. In this capacity, they do not determine hotel room availability and pricing, nor do they participate in consolidating information related to hotel policies, which is the responsibility of the hotels themselves. While the defendants do make a commission based on the cost of the hotel reservation, they do not make commission on hotel fees, nor have they ever requested, invoiced or collected any such fees.

The trial judge found that the defendants had not engaged in any practice prohibited by statute as no evidence had been led supporting the plaintiff’s allegation that they were trying to hide the existence of the hotel fees. Although the hotel fees did not appear on the first page of the website displaying hotel search results, they were not “hidden”, as they are announced early on in the reservation process and are clearly reiterated in the booking confirmation sent to customers. Furthermore, the manner in which the hotel fees are presented on the defendants’ websites is clear and legible. The trial judge was careful to note that due to the manner and sequence in which the hotel fees were presented and reiterated throughout the reservation process, the “drip pricing” provision of 224(c) of the Consumer Protection Act—which provides that merchants, advertisers and manufacturers cannot charge consumers a higher price than what is advertised—did not apply.

The trial judge also concluded that the fact that hotel fees have to be paid at checkout is easily understandable, even to a “credulous and inexperienced consumer”. The concept of a credulous and inexperienced consumer does not extend to customers who make no effort to learn the extent of their obligations, particularly those that are clearly set out.

The plaintiff’s personal claim also played an important role in the trial judge’s decision dismissing the case, as he found that the plaintiff’s ignorance of the hotel fees was attributable to his own conduct. The plaintiff’s pre-trial examination revealed that he had chosen to pre-pay for his hotel room so all that was left for him to pay upon checkout of his hotel were the hotel fees. He further admitted to not having read the page confirming the conditions of his hotel room reservation on which the hotel fees were listed and conceded that the disclaimer about the hotel fees to be paid at checkout was clear.

The trial judge’s damages analysis confirmed recent precedent confirming the need to prove the existence of damages even when the Consumer Protection Act provides for a presumption of prejudice. In this case, the plaintiff sought reimbursement of the hotel fees paid and an award for punitive damages. The trial judge held that, even if he had concluded that the defendants had committed a prohibited practice (which he did not), he would have dismissed any claim for damages. In relying on the 2022 Québec Court of Appeal decision in Fortin v Mazda, the trial judge would have denied the damages claim on the basis that the plaintiff had not proven that he suffered any damages, as he had benefitted from all the services for which he paid. Relying on the presumption of damages would not have been sufficient to ground the plaintiff’s statutory claim, especially in a case where the plaintiff had pleaded his own turpitude.

Looking Forward

Lussier confirms that facts remain key in determining whether a violation of the Quebec Consumer Protection Act has occurred. It highlights the importance of examining elements relating to the conduct of the plaintiff (and class members, when applicable) in determining whether a defendant engaged in a prohibited practice under the statute.

Lussier also serves as a reminder for litigants that, when defending a claim under the Quebec Consumer Protection Act, the nature of a defendant’s business will be considered by the Court. In this case, the fact that the defendants merely provided a marketplace was integral to the trial judge’s liability analysis. 

Finally, this decision confirms that, in the consumer protection context, damages must be proven, even where the statute provides for a presumption of prejudice in cases where a prohibited practice has been found to take place.

Duguay v General Motors du Canada ltée

On April 8, 2016, the Superior Court of Québec authorized a class action against General Motors of Canada and General Motors LLC (GM) on behalf of persons in Canada having purchased or entered a long-term lease for Chevrolet Volt electric vehicles.

The plaintiff alleged that GM had made false and misleading representations on its website and in brochures in advertising that the Volt did not require the consumption of any gasoline or emit greenhouse gases when the vehicle’s battery was charged. They alleged that GM gave the false and misleading impression that the Volt’s gas-powered generator would only kick in upon the battery’s depletion when, in reality, the generator would kick in to warm up the vehicle’s interior and battery in cold temperatures and therefore consumed a small quantity of gasoline even if the battery was charged. The plaintiff further posited that the disclaimer that the generator could start in cold temperatures was in and of itself misleading, and that the font was small and not in sufficient proximity to the “central message” concerning the Volt.

The class action proceeded to trial on the merits in February 2023, and a decision was rendered by the Superior Court of Québec on July 31, 2023, dismissing the action.

In contesting the merits of the claim, the defendants argued that the purpose of its representations was to present the function of the Volt in a summary manner, and that the website and brochures were not meant to be technical and detailed reference documents. The owner’s manual and vehicle guides provided to all owners and long-term lessors of the vehicles—as well as GM’s service bulletins—described the Volt’s functionality explicitly, including the activation of the vehicle’s gas-powered generator in cold temperatures.

In the lead-up to the trial on the merits, the Court granted the defendants the ability to examine 10 class members and the evidence derived from these examinations received significant attention from the trial judge at the trial. They revealed that many of the examined class members had neither consulted, read nor seen the representations at issue prior to purchasing or leasing their Volt. Three class members testified that they had explicitly been informed at the dealer that the gas-powered generator could become temporarily activated in cold temperatures. In analyzing the transcripts, the representations themselves, and the owner’s manual and vehicle guide, the trial judge concluded that the plaintiff had simply not convinced the Court, on a balance of probabilities, that GM had consistently presented false and misleading statements to customers concerning the operation of the Volt, or that the class members had even taken note of any representations. Rather, the transcripts revealed that customers had been drawn to the Volt due to its innovative design and the fact that it addressed “range anxiety” by prolonging battery life.

The trial judge declined to presume that the class members would have been made aware of the representations at issue prior to purchasing or leasing their Volt, since there were insufficiently serious, precise and concordant facts in the record to support any such conclusion.

The Court also emphasized that in considering whether a representation is false or misleading, it cannot be considered by way of isolated excerpts, but instead must be considered in the context of the document in which they are made. The trial judge concluded that the disclaimers concerning the Volt’s operation were neither false nor unclear, and that a credulous and inexperienced consumer who did indeed read the representations would have been left with the impression that the autonomy of the Volt’s battery would at times be interrupted and require the consumption of some gasoline, which reflected the Volt’s function in reality.

Looking Forward

Duguay highlights the strategic and substantive benefits of seeking leave to examine class members prior to trials on the merits. It also clarifies the plaintiff’s burden of proof at the merits stage of a class action, especially where the impugned representations are not complete representations or central messaging relating to a particular product, but rather excerpts relating to a product as found in a set of promotional materials. Duguay serves as a reminder that the consumer protection context does not lower the plaintiff’s burden of proof in satisfying presumptions as to class members’ knowledge and decision-making processes.

Causation in the No-Fault Liability Context

On March 4, 2020, the Superior Court of Québec dismissed a class action following a trial on the merits in Lalande v Compagnie d’arrimage de Québec ltée (Lalande). In Lalande, the plaintiffs sought compensation for residents living in the vicinity of the Port of Québec who claimed to have suffered various nuisances resulting from the presence of abnormal dust produced by the activities of the Compagnie d’arrimage de Quebec (CAQ) on the premises of the Port. The Port, as well as the Administration Portuaire de Québec (APQ), which managed the Port, were also defendants in the action. 

The factual record at the 50-day trial on the merits was particularly dense. It included the testimony of over 100 class members and exhibits totaling nearly 50,000 pages. However, none of the class members testified as to the source of the dust and to the dust’s mineralogical composition, nor that the allegedly excessive dust came from the CAQ’s activities. They were only able to speculate in this regard, which the trial judge rejected as subjective testimony. The trial judge also did not accept the opinions of the plaintiff’s experts. While the trial judge found that there was an amount of dust in the Port’s vicinity causing serious inconvenience to its residents, he concluded that there were multiple sources of dust and that the evidence supported that the CAQ’s activities only negligibly contributed to this problem. No evidence put forth by the plaintiff’s fact or expert witnesses supported that the CAQ’s activities materially contributed to the presence of dust. Thus, the causation requirement was not met, both under the Civil Code of Québec civil liability regime in article 1457 and the no-fault liability regime in article 976.

The plaintiff appealed the decision to the Québec Court of Appeal, which rendered its decision on July 24, 2023, upholding the Superior Court’s ruling. In so doing, the Court of Appeal upheld the Superior Court’s finding that the causation requirement had not been met. The Court of Appeal also reiterated the extremely high threshold for claims related to concerns, fears or worries in the class action context.

Looking Forward

The Court of Appeal’s decision in Lalande highlights the plaintiff’s burden in proving—on a balance of probabilities—causation between a defendant’s conduct and the alleged cause of action and damages suffered, even in the context of no-fault liability regimes. The Court of Appeal also confirmed the existing trend in case law to the effect that concerns, fears or worries about future health problems are not indemnifiable in Quebec law when the nature of the fears is not common or shared, and where each class member may experience differing levels of fear or worry based on their respective levels of tolerance. In so doing, the Court made a clear distinction between the situation experienced by the class members living in the Port’s vicinity and the case of Spieser v Procureur général du Canada, in which the concerns, fears and worries of class members were considered to be objectively verifiable and were supported by public health authorities.

Challenging the Scope of a Proposed Class Based on Jurisdiction

The Québec Court of Appeal recently opined on the sequencing of jurisdiction motions, finding that the timing of such motions will depend on whether the jurisdictional question pertains to the claims of all class members or simply a subset.  

In Bourgeois v Electronic Arts Inc. (Bourgeois), the representative plaintiff sought authorization to institute a class action on behalf of two proposed classes: a Quebec-only class against corporate defendants located in Quebec, and a national class against corporate defendants located outside Quebec. The claim alleged that the various respondents’ design, development and operation of video games with loot boxes constituted unlicensed illegal gambling under Canadian law.

On a preliminary motion prior to the authorization hearing, the non-Quebec defendants challenged the scope of the proposed class, which they argued should be limited to Quebec residents on the ground that the Québec Superior Court did not have jurisdiction to authorize a national class against them. The Québec Superior Court dismissed the motion on the basis that the representative plaintiff had met the prima facie burden of demonstrating that two of the connecting factors conferring jurisdiction on the Court under article 3148 of the Civil Code of Quebec over non-Quebec residents were present: (1) that the Canadian defendants had an establishment in Quebec; and (2) that the dispute related to their activities in Quebec.

The non-Quebec defendants appealed the Superior Court’s decision to the Québec Court of Appeal. While the appellants acknowledged that the Superior Court could authorize the class action against them with respect to Quebec residents, they argued that the class definition should be limited to Quebec residents and that it would be efficient for the declinatory exception to be heard prior to the authorization hearing.

The Court of Appeal upheld the Superior Court’s decision. The Court held that, on the face of the pleading, the Québec Superior Court had clear jurisdiction with respect to Quebec residents because they were alleged to have suffered damages in Quebec . It confirmed that the question of whether any activity had taken place at a Quebec establishment (one of the connecting factors set out in article 3148) must be interpreted as relating to an activity which existed at the time that the cause of action arose. Interpreting the “activity” requirement as ongoing activity would otherwise make it too easy for defendants to evade the jurisdiction of Quebec courts.

As for the non-Quebec class members, the Court of Appeal held that the preliminary motion was unfounded because it did not concern the representative plaintiff’s individual claim. Rather, it concerned the claims of other putative class members who, by virtue of the class action mechanism, could not yet be considered members of the class given that the class action had not (yet) been authorized.

The Court of Appeal also provided guidance on the timing of preliminary motions contesting the scope of a proposed class based on jurisdiction, finding that such motions should be dealt with at the authorization hearing, but can also be revisited at the common issues stage. The Court held that the same is true for any motions to dismiss the action in favour of arbitration with the goal of limiting the scope of the class. However, the Court also recognized that it remains appropriate for the Superior Court to consider and determine preliminary motions challenging the Court’s jurisdiction prior to the authorization stage in cases that “necessarily concern either the representative plaintiff’s individual claim or all of the individual claims”, including that of the representative plaintiff.

Looking Forward

Key takeaways from the Bourgeois decision are that jurisdictional arguments aimed at challenging the scope of a proposed class should be dealt with at the authorization hearing.

That being said, it remains appropriate for motions aimed at contesting the Superior Court of Quebec's jurisdiction to be presented prior to the authorization hearing if these motions concern the individual claims of all class members (for example, where an enforceable arbitration clause applies to the dispute at issue) or that of the representative plaintiff (for example, in a situation where the representative plaintiff does not meet the prima facie burden of proof of demonstrating the application of the connecting factors in article 3148 of the Civil Code of Québec).

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