Defendants In Consumer Class Actions In Québec Fight Back On The Merits, And Are Winning!

As a defendant to a class action in Québec, you have just learned that the Superior Court has authorized a class action against your company. You are considering whether to begin negotiations with the plaintiff to settle the case or go to trial.

While in the past this reflection more often than not led to early settlements, a recent trend has seen more defendants in consumer class actions successfully challenging Plaintiff's claims on the merits.

This short bulletin will look at four recent consumer class actions where the defendants went to trial and won!

Fortin c. Mazda Canada inc., 2022 QCCA 635

A class action was authorized against Mazda over defective door lock mechanisms¹, which comprised two subclasses, one that included people who were robbed or whose car was damaged, and another composed of people who drove a car before a device to reinforce the door lock mechanism that was installed by Mazda.

On the merits, the Superior Court granted the claims of the members of the first subclass but dismissed the claims of the members of the second subclass and in 2022, the Court of Appeal dismissed the appeal.²

The plaintiff argued that the fact that Mazda did not mention the defect in the lock mechanism amounted to a false or misleading representation. Consequently, there was an "irrefutable presumption of prejudice" resulting from the violation of Section 228 of the Consumer Protection Act³ (the "CPA"), which entitled the class members to a reduction in the price of the car under section 272(1)c) of the CPA⁴. The Court held that just because a prohibited practice has taken place does not exempt the plaintiff from quantifying and proving the damages sought pursuant to section 272 of the CPA. In this case, the plaintiff was, in fact, unable to do so despite demonstrating an arguable case for such damages at authorization.

This case thus clarified the need for a plaintiff to prove damages in consumer class actions notwithstanding the presumption of prejudice and the difficulties in doing so on the merits. It is safe to say that Defendants took notice.

Martel c. Kia Canada inc., 2022 QCCA 1140

An automobile owner complained that she had to change the oil in her car more often than after 12,000 kilometres or 12 months, the interval recommended in the owner's manual.

In 2020, the Superior Court dismissed the lawsuit⁵, holding that the manufacturer had not made any false or misleading representations as the owner's manual clearly made the distinction between regular service and service for severe or cold conditions. Further to the plaintiff's examination on the merits, it turned out that she had not read the owner's manual pages on that issue.

The appeal was dismissed⁶.

Union des consommateurs c. Air Canada, 2022 QCCS 4254

The Union des consommateurs filed a class action 16 days after an amendment to the CPA, which made it obligatory to state clearly the totality of the price for a good or a service. Section 224 of the CPA was amended in 2010 to add the underlined words:

It was alleged that the co-plaintiff, Michael Silas, visited the airline's website to book a flight to Las Vegas. The price of $149 did not appear to include the charges and surcharges and the taxes. It was only at the end of the process, at the billing and delivery step, that Silas realized that the price was $273.46 when all the charges, surcharges and taxes were included.

Silas asked for a reduction of the price equivalent to the charges and the surcharges (but not the taxes) plus punitive damages under the CPA. While the case was authorized by the Court of Appeal some eight years earlier⁷, in 2022, the Superior Court dismissed the class action on the merits⁸. The evidence on the merits revealed that the consumers had in fact not been deceived by the airline.

Lussier c. Expedia inc., 2024 QCCS 472

Fast forward to 2024, when a very recent class action was dismissed by the Superior Court against Expedia.⁹

The plaintiff was authorized in 2019 to bring a class action for alleged hidden fees, such as hotel fees that gave access to the pool, the internet and the mini-bar¹⁰. The Plaintiff claimed that Expedia had made a false or misleading representation and asked that he be reimbursed for these additional fees plus punitive damages.

On the merits, the Court ruled that the site stated clearly that these fees would be charged by the hotel, further adding to the trend of authorized consumer class actions being dismissed, absent infringement by the defendants or evidence of prejudice suffered by consumers.

Takeaways

Not every consumer class action that is authorized will necessarily succeed on the merits. The plaintiff's evidentiary burden on the merits to prove infringement of the CPA and a resulting prejudice on a balance of probabilities has proven difficult in many cases.

Once authorized, important questions should be asked by defendants before proceeding. Do the allegations of fault hold? Did the class members really suffer compensable loss? Does the available evidence appear to be contrary of what the plaintiff is alleging? In these cases and others of the same sort, it may be worth it to go to trial.

Footnotes

1. Robitaille c. Mazda Canada inc., 2010 QCCS 2630

2. Fortin c. Mazda Canada inc., 2022 QCCA 635

3. Section 228 of the Consumer Protection Act reads as follows:

228. No merchant, manufacturer or advertiser may fail to mention an important fact in any representation made to a consumer.

4. Section 272 c) of the CPA reads as follows:

272. If the merchant or the manufacturer fails to fulfil an obligation imposed on him by this Act, by the regulations or by a voluntary undertaking made under section 314 or whose application has been extended by an order under section 315.1, the consumer may demand, as the case may be, subject to the other recourses provided by this Act,

[...]

(c) that his obligations be reduced; [...]

5. Martel c. Kia Canada inc., 2020 QCCS 328

6. Martel c. Kia Canada inc., 2022 QCCA 1140

7. Union des consommateurs c. Air Canada, 2014 QCCA 523

8. Union des consommateurs c. Air Canada, 2022 QCCS 4254

9. Lussier c. Expedia inc., 2024 QCCS 472

10. Lussier c. Expedia inc., 2019 QCCS 727

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.