Law in Quebec

News about Quebec legal developments

Class actions

  • Appeal court authorizes class action against Mazda

    A class action against an automobile manufacturer that was dismissed by a lower court was partially overturned by the Quebec Court of Appeal after it held that Mazda Canada Inc. failed to disclose “important information” to consumers in a timely manner.

    Hailed as a victory for consumers, the appeal court’s decision bucks the nationwide growing trend against economic loss based tort claims, and serves a clear reminder to manufacturers that it is in their best interests to promptly inform consumers over “important facts” regarding their products and to fix products afflicted with latent defects expeditiously, according to consumer law experts.

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  • Ruling clarifies circumstances under which securities can be ordered

    Tobacco companies suffered a second legal setback in less than a month after the Quebec Court of Appeal ordered two cigarette makers to set aside nearly $1 billion in security, the largest ever in the province’s history, to ensure that money is available to pay victims who won a landmark $15.5 billion class action lawsuit earlier this year.

    In a ruling that clarifies the exceptional circumstances under which securities can be ordered, the appeal court ordered Imperial Tobacco Canada Ltd. to pay $758 million in seven quarterly instalments and Rothmans, Benson & Hedges Inc. $226 million in six quarterly instalments, beginning in December until next year. If the tobacco manufacturers are successful in having the $15.5 billion judgement overturned on appeal, the security will be returned to them. If not, it will be available for distribution to victims who launched the class action suit. (A motion for security was not sought against JTI-MacDonald Corp. because one of the lawyers became ill).

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  • Tobacco healthcare recovery cost law constitutional, rules appeal court

    Tobacco companies lost another legal battle in Quebec after the appeal court sided with the provincial government in a ruling that opens the door province to sue tobacco companies to recover billions in healthcare costs related to smoking.

    Nearly three months after a landmark ruling ordered three leading Canadian tobacco companies to pay $15.5 billion in moral and punitive damages to Quebec smokers, the Quebec Court of Appeal upheld a lower court ruling that found that while the province’s healthcare recovery legislation does deprive tobacco companies some traditional means of defence it does not affect their right to a fair trial.

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  • Tobacco companies do not have to pay initial $1.13 billion in tobacco class action suit

    Three Canadian tobacco companies will not have to make an immediate $1.13 billion payment to Quebec smokers who won a landmark class action suit after the Quebec Court of Appeal held that the justification for the provisional execution is weak, the prejudice to the firms serious, and that the balance of convenience weighs in their favour.

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  • Securities class actions harder to launch after Supreme Court ruling

    A ruling by the Supreme Court of Canada that dismissed a proposed securities class action against a Montreal pharmaceutical company will likely make it more difficult for investors to launch these kinds of lawsuits in the future, say class action and securities lawyers.

    In a ruling that marked the first time the nation’s highest court examined a case involving secondary securities market liability regimes, the SCC held that in order for plaintiffs to be able to proceed with a securities class action they must provide courts with “sufficient evidence” to show a “realistic chance” of success.

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  • Only one kind of class action member, rules appeal court

    A lower court ruling that classified class action members into distinct categories, and would have allowed class action defendants to obtain detailed contact information of “registered” members as well as would have authorized counsel of the class action defendants to meet with “unregistered” members was overturned by the Quebec Court of Appeal in a majority decision.

    In a precedent-setting ruling that affirms the rights of class action plaintiffs and significantly restrains class action defendants from examining members of the class, the appeal court categorically concludes that there is no such thing as multiple categories of members. There are only members — including the representative and, if any, interveners — and those who chose to exclude themselves from the group.

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  • OSFI exchanges with insurers and financial institutions not confidential

    The Quebec Court of Appeal upheld a lower court ruling that could have a chilling effect on the flow and quality of confidential information financial institutions disclose to regulatory authorities, and even potentially undermine the “safety and soundness” of Canada’s financial system, according to business lawyers.

    In a majority decision in line with two Ontario Superior Court decisions, the Quebec Court of Appeal held that documents and exchanges between federally regulated firms such as banks and insurance companies with the Office of the Superintendent of Financial Institutions (OSFI) are protected by statutory confidentiality provisions imposed by Regulations under the Insurance Companies Act, with some exceptions. While the regulations were enacted to limit the communication of supervisory information, the appeal court found that sections 2 and 3 of the Regulations did not create an absolute prohibition on disclosure and could be subject to production in civil proceedings.

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  • More fallout from Norshield financial scandal

    Nearly eight years after a high-flying hedge fund with ostensibly $1-billion in assets collapsed under the weight of a flurry of investor redemptions, the fallout from the Norshield Financial Group financial debacle continues unabated.

    Quebec Superior Court recently certified a $159-million class action against the Royal Bank of Canada, less than four months after yet another financial planner was fined $225,000 by the Court of Quebec after being found guilty of 60 of the 62 charges laid against him by the provincial securities regulator in connection with the illegal distribution of products related to Norshield. So far, ten representatives have been found guilty, incurring fines totalling $628,500. Only one case remains outstanding.

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  • Quebec court authorizes privacy class action against Apple

    A privacy class action suit launched by a software engineer against Apple Inc. and Apple Canada Inc. was granted authorization by Quebec Superior Court.

    Gad Albilia alleges that Canadian residents who purchased an iPhone or iPad and who downloaded free software applications from the Apple’s virtual App store onto their devices have had their privacy rights infringed. He claims that personal identifiable information was collected through the apps and was transmitted, without the knowledge or permission of class members, to third-parties for purposes “wholly unrelated to the use and functionality of their iDevices or the apps.”

    Albilia alleges that the information collected would have included precise home and workplace locations and current whereabouts; unique device identifier (UDID); personal name assigned to the device; and the consumer’s gender, age, postal code and time zone. He also alleges that information was collected on search terms entered, selections of movies, songs and restaurants as well as app-specific activity.

    He also claims that resources such as storage, battery life and bandwidth of their iDevice were consumed and diminished without permission by Apple and downloaded free apps.Albilia, who launched the class action after learning that two similar class actions were filed in the U.S., is suing Apple because it has full control over the apps and the Apple ecosystem.

    He alleges that Apple allowed “for the making of clandestine and intrusive use of personally identifiable information while representing to its clients that they will protect their privacy,” noted Quebec Superior Court Justice Pierre Nollet.

    But because Albilia’s legal arguments are principally based on the application of privacy laws in Quebec, including the Quebec Charter of Human Rights and Freedoms and civil liability arising from the Civil Code, Justice Nollet found that the petitioner failed to establish a real and substantial connection for residents outside Quebec.“The Petitioner has not demonstrated that the legal systems in the twelve and more different jurisdictions that he wishes to apply to this case rely on similar laws and concepts,” noted Justice Nollet.

    The class action is seeking compensation and punitive damages, though it does not state how much. It is also seeking injunctive relief against Apple to stop allowing third parties to collect and disseminate personally identifiable information.

    While “respondents have raised very serious issues and difficulties arising from the motion for authorization as drafted,” Justice Nollet concluded that the “action is clearly not frivolous and manifestly destined to fail.”

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  • Financial institutions ordered to pay $200 million

    Quebec’s business and legal community and consumer protection advocates are concerned over the impact of three related class action rulings by the Quebec Court of Appeal, with some fearing that motions seeking class action authorization will now be more easily granted while others are worried that consumers will pay the price following the court’s interpretation of what is included in the cost of credit.

    In a series of complex and controversial rulings the Quebec Court of Appeal in part overturned a lower court’s ruling that ordered nine different financial institutions to pay damages amounting to almost $200 million for improperly disclosing (or not at all) and charging fees for currency conversions in credit card transactions under the Quebec Consumers Protection Act (Act).

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  • Pendulum swings back in favour of issuers in securities class actions

    Nearly a year after a handful of decisions seemingly leaned towards a permissive approach in securities class actions for misrepresentations in public disclosure, the pendulum seems to have swung back after a couple of recent court decisions tilted in favour of issuers.

    In a 163-page ruling Justice George Strathy of the Ontario Superior Court this week dismissed a secondary market securities class action against CIBC because the plaintiffs had failed to obtain the required leave to proceed with the action within the three-year period mandated by the Ontario Securities Act (OSA). Justice Strathy pointed out that he would have certified the action and allowed it to proceed to trial if he had not found the limitation period had expired.

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  • Class actions create ethical minefields

    Class action ethics, an issue barely broached by academic circles, the legal profession and even by regulatory authorities or bar associations, has now surfaced following a series of rulings that underscore the tension between the singular nature of class action litigation and the traditional position that ethical guidelines governing single plaintiff proceedings also apply to class actions.

    In the absence of rules of professional conduct tailored for class action litigation, the courts have begun filling in the gap and providing guidance, albeit on a case-by-case basis, on the ethical minefields that line the class action landscape, the latest of which was Smith Estate v. National Money Mart Company, 2011 ONCA 233, in which the Ontario Court of Appeal voiced concerns the courts have over an uncontested motion for class counsel fees in the face of an adversarial vacuum.

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  • News roundup: Tainted water, a falling-tree fatality and a lawyer fined for tax evasion

    The Minister of National Defence is considering appealing a recent class action ruling that awarded $15,000 to residents of a small town near Quebec City inconvenienced  by the contamination of well water by a known carcinogen.

    Quebec Superior Court Justice Bernard Godbout ruled that the class action suit launched by the townspeople of Shannon failed to prove that trichloroethylene (TCE), a solvent used on a nearby army base to clean artillery and ammunition, was responsible for abnormally-high cancer rates in the town. Shannon, a community of 2,000 people, is located near the Canadian Forces Base Valcartier, a huge military defence complex.

    “The evidence did not demonstrate that it is probable that the spilling of TCE contaminated the groundwater under the municipality of Shannon, making it the cause of an abnormally-high number of cancer cases, disease and other allergic reactions,” Godbout wrote in his judgment.

    Justice Godbout found however that the contamination of well water of TCE was an inconvenience to residents and ordered the government to pay compensation of $15,000 to about 300 affected residents who were among the 2,700 present and former residents lending their name to the class-action suit.

    “We will review the decision in order to evaluate next steps,” said Minister of National Defence Peter MacKay in a press release.

    In August 2006, a 27-year old Quebecer was in the driver’s seat of his parked car when an old poplar tree crashed down onto his vehicle during a violent storm, and killed him.

    A coroner’s report on Gabriel Rossy’s death confirmed the tree that fell on him was found to be 90 per cent rotten and had been “dangerous” for at least one or two years.

    His family sued the City of Westmount for failing to maintain the tree, but a Superior Court judge dismissed the action, saying it was a matter that should be dealt with through the province’s Automobile Insurance Act – a ruling that was overturned by the Quebec Court of Appeal in November 2010 who found that the car had nothing to do with Mr. Rossy’s death.

    In a ruling that marked the first the Supreme Court of Canada tackled Quebec’s no-fault insurance plan, the nation’s highest court restored the lower court ruling and dismissed the lawsuit against Westmount. The top court ruled Rossy was using his vehicle as a means of transportation when the accident occurred, and as a result his family must turn to Société de l’assurance automobile du Québec (SAAQ), the provincial automobile insurance board, for compensation.

    “This is enough to find that the damage arose as a result of an “accident” within the meaning of the Act and that the no-fault benefits of the scheme are triggered. Therefore, the respondents’ civil claim is barred and they must turn instead to the SAAQ for compensation,” wrote the SCC in a 7-0 decision.

    “The Court of Appeal erred in interpreting the Act too narrowly,” added Justice Louis LeBel who penned the decision. “Such an interpretation risks unduly restricting the  intended application of Quebec’s no-fault scheme and must therefore be rejected.”

    A Montreal lawyer, charged following a Canada Revenue Agency investigation of an art-donation scheme, was fined $840,000 after pleading guilty to a tax evasion charge before the Court of Quebec.

    Stéphane Saintonge “voluntarily contravened the Income Tax Act in 2003 by enabling a third party to obtain an ineligible amount of tax deductions for the donation of artwork to the Municipality of Larouche,” said Canada’s Revenue Agency.

    The scheme consisted of backdating a series of transactions in order to unduly boost the tax credits claimed, according to the Revenue Agency.

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  • Class action legal landscape in Canada is maturing

    Class action lawsuits appear to be an increasingly pervasive force in today’s business world, with organizations of all stripes, from top publicly-traded companies to small regional enterprises, looking over their shoulders, anxiously watching an ever-evolving legal landscape to see where things are heading next.

    And it’s not necessarily looking good as recent rulings appear to be favouring consumers, and not companies.When a deeply divided Supreme Court of Canada recently held that disgruntled customers in British Columbia can launch class action proceedings even though the fine print of their contracts calls for disputes to be settled through private and confidential mediation and arbitration, it seemed that the long-awaited decision in Seidel v. TELUS Communications Inc. 2011 SCC 15 was but the latest in a growing line of cases that highlights the growing exposure Corporate Canada faces over class action proceedings. (more…)

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  • Class actions seemingly alive and well in Quebec

    Class actions appear to be thriving in Quebec. A series of suits launched recently seem to enhance the province’s reputation as a have for class action suits. But that may be illusory.

    Yesterday FTQ-Construction, the largest construction union in Quebec, was slapped with a class action following an illegal strike that paralyzed much of the industry in late October.

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Law in Quebec
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