Class Actions Are (Not) Getting Some Appeal in Quebec

On January 1, 2016, the enactment of a new Code of Civil Procedure¹ (“CCP”) brought interesting changes to class proceedings in Quebec. Probably the most significant development of this reform is the reinstitution for defendants of the right to appeal from a judgment authorizing a class action.

Indeed, for years Quebec was infamously known for its “asymmetrical” right of appeal: a judgment denying the authorization to institute a class action was appealable de plano by the Plaintiff, but a judgment authorizing a class action could not be appealed by the defendant. This imbalance has now been partially corrected by providing defendants with a long awaited right of appeal with leave of a judgment authorizing a class action.

The Court of Appeal of Quebec has now rendered various decisions permitting to better assess that new right and appreciate the test to grant leave to appeal of a judgment authorizing a class action in Quebec.

I. The right of appeal to the defendant and its test

Since January 1, 2016, judgments authorizing class actions may be appealed with leave of a judge of the Court of Appeal, while the judgment denying authorization remains subject to an appeal as of right by the applicant:

578. A judgment authorizing a class action may be appealed only with leave of a judge of the Court of Appeal. A judgment denying authorization may be appealed as of right by the applicant or, with leave of a judge of the Court of Appeal, by a member of the class on whose behalf the application for authorization was filed.

The appeal is heard and decided by preference.

Defendants can thus appeal the judgment authorizing a class action after it is rendered, allowing for a better screening of class action and permitting either to revisit the authorization altogether or narrow the scope and extent of the class action before engaging towards a common issues trial. Incidentally, this right also offers greater harmonization with class action legislation in other Canadian provinces.

However, Article 578 is silent with regard to the applicable test for the Court of Appeal to grant leave of the authorization judgment, which had to be defined.

During the spring of 2016, the Court of Appeal was seized with three Motions for leave to appeal under new Article 578 CCP of judgments having authorized class actions in three distinct cases having nothing in common bur for having been rendered after the CCP entered into force. Given the novelty of the issue, a complete formation of the Court dealt with all these motions in a joint hearing.

On November 22, 2016, the Court of Appeal rendered three intertwined decisions² construing this newly enacted right of appeal.

The Court of Appeal first stated that the test for granting leave should not be so severe as to sterilize the right of appeal, nor should it be so flexible that it places both parties to the class action on the same footing and thus becomes a barrier to access to justice which class actions promote. The Court however added that the test must be demanding, an appeal having to be reserved for exceptional cases.

The Court then established the following test under Article 578 CCP: leave to appeal of a judgment authorizing a class action will be granted when a prima facie review shows a material error regarding the interpretation of the criteria to authorize a class action or in the appreciation of the facts related to these criteria, or also in clear cases of want of jurisdiction of the Superior Court.

For the Court, this test is true to the legislator’s intent that appeals are to be limited to the class action authorization criteria, is likely to exclude appeals which are unnecessary or only relate to incidental issues that do not affect the authorization altogether, and is also respectful of the discretion of the judge in authorizing a class action.

Interestingly, none of the three Motions for leave to appeal the Court was seized with met that test, each case being sent back to the Superior Court to move towards a common issues trial.

Since then, the Court of Appeal only granted leave to appeal of authorization judgement parsimoniously.

Firstly, on January 18, 2017, the Court of Appeal granted leave to appeal of a judgment authorizing a class action in La Procureure générale du Canada v. Sarrazin,³ a case claiming damages rooted in alleged discriminatory provisions of the Indian Act. The Court found that the application by the judge of the authorization criterion was warranting further consideration by the Court of Appeal, thus making this case exceptional within the meaning of Article 578 CCP.

Also, the Court of Appeal also granted leave to appeal in Ameublements Tanguay inc. v. Cantin⁴, a consumer law class action raising the potential lack of a legal relationship between the Plaintiff and the Defendant in relation to the issues in dispute.

Otherwise, the Court of Appeal has since denied leave to appeal of a judgment authorizing a class action in cases where the legal issue in dispute was amounting to a defence on the merits.⁵ More recently, leave to appeal of a judgment authorizing a class action was also denied despite the novelty of the issue in dispute and the controversy in the case law nationwide⁶.

II. Conclusion 

It is early to fully grasp the nature of the circumstances or the type of legal issue in which leave to appeal of the authorization judgment could be granted. Despite the current trend, it will sure be interesting to see how the Court of Appeal will apply and modulate this test and what could amount to an “exceptional case” in the upcoming years.

Also of great interest is the standard of review to be applied by the Court of Appeal when seized with the merits of an appeal purporting to revisit the authorization of a class action.

Again, Article 578 promises to yield interesting jurisprudential developments, which are sure to give litigants and practitioners new ways and means to navigate the waters of Quebec class actions law.