Common Question, Not Common Answer, Required for Class Action Authorization

In 1977, The Seagram Company Ltd. decided to provide its salaried employees and executives across Canada with post-retirement health insurance coverage. Various employee communications were issued between 1977 and 2003 to outline the terms and conditions of the insurance coverage. In the early 2000s, Vivendi Canada Inc. became the successor of Seagram and became responsible for the insurance coverage for the former Seagram employees. Effective January 1, 2009, Vivendi announced certain changes to the coverage (including an increase of deductibles and the imposition of a $15,000 lifetime cap).

Dell’Aniello, a retired Seagram executive, claimed that the changes were not permitted because they amounted to a modification of the retirees’ vested rights to which they had not consented. He commenced a class action seeking a declaration that the amendments were null and claiming damages for the additional expenses incurred since January 1, 2009. Vivendi sought to have the action dismissed mainly on the basis that it did not meet the common issues test under section 1003 a) of the Quebec Code of Civil Procedure (“CCP”).

Lower Courts

The Quebec Superior Court refused to authorize the class action to proceed because of the important issues that would have required an individualized analysis for each class member. The Court identified 5 subclasses of members who received different communications depending on their retirement date and whose rights may differ from those of the petitioner. A decision regarding the rights of the petitioner would therefore not have resolved the dispute for the great majority of the other class members.

The Court added that the fact that the retirees were employed in 6 different jurisdictions further diluted the commonality of the issues. In the Court’s opinion, additional analyses would have been required not only in respect of each subclass, but also in respect of the members of each jurisdiction. The Court concluded that a trial judge would have had to conduct a minimum of 22 analyses in order to resolve the “common” issues raised by the action.

The Superior Court’s decision was appealed to the Quebec Court of Appeal, which allowed the appeal and authorized the action. The Court of Appeal concluded that the trial judge had erred in finding that art. 1003(a) CCP was not met. According to the Court, the validity of the 2009 amendments was a common question. Vivendi was granted leave to appeal to the Supreme Court.

Supreme Court

On January 17, 2014, the Supreme Court of Canada dismissed the appeal. The Court concluded that the approach taken to the commonality requirement in Quebec civil procedure is a flexible one (more flexible in fact than in the common law provinces). The requirement of art. 1003(a) is merely that there be an “identical, related or similar” question of fact or law (as opposed to a “common” question). This requirement will be met even if the answer to the question raised or the required legal analysis may be different for each member based on his/her individual circumstances.

The Court also confirmed that the distribution of plaintiffs across different Canadian jurisdictions did not prevent the authorization of the class action, given that the Superior Court can accept proof of the law applicable in the other provinces or take judicial notice thereof.

It is still early to assess the full impact this decision will have on the authorization of class actions in Quebec and in Canada, but it will no doubt lead to a certain relaxation of the requirements for authorization (at least insofar as the commonality requirement is concerned).

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Editors

Deborah Glendinning

Partner, Litigation

Sonia Bjorkquist

Partner, National Chair, Litigation

Éric Préfontaine

Partner, Litigation

Christopher Naudie

Partner, Litigation

Craig Lockwood

Partner, Litigation

Tristram Mallett

Partner, Litigation

Karin Sachar

Associate, Litigation