Canada: Quebec Court Of Appeal Confirms National Classes Still Possible

On April 19, 2023, the Quebec Court of Appeal in Nippon Yusen Kabushiki Kaisha v. Option Consommateurs, 2023 QCCA 513 dismissed the appeal from a decision of the Quebec Superior Court, refusing to stay a Quebec class action in favor of a parallel class action filed in British Columbia. The lower court's decision had caused concerns because it contained comments calling into question pan-Canadian national class actions. The Court of Appeal decision is of interest because even if it upholds the first instance decision, it declines to echo the lower court's comments on pan-Canadian class actions, saying it is not necessary to do so in order to resolve the parties' dispute.

This decision also reiterates the importance of judicial discretion in obtaining stay requests.

Our analysis of the lower court's decision as well as a summary of the facts can be found here.

Background

The appellants are defendants in a Quebec class action that had been authorized and was proceeding on the merits. The appellants had applied to stay the Quebec class action in favour of a parallel class action proceeding in British Columbia, until final judgment on the common issues was rendered in that file.

However, the Quebec class members were not part of the class in the BC case. As a result, the appellants sought to add Quebec class members to the BC class action and have one trial in BC on the common issues for all defendants with a national class. The appellants alternatively sought to stay the Quebec class action until the BC court adjudicated their request to add Quebec residents to the BC case.

Superior Court of Quebec's Decision

On April 19, 2022, the Quebec Superior Court (per Justice Donald Bisson) dismissed the application to stay the Quebec class action. Justice Bisson first dismissed the alternative request to suspend the Quebec case while awaiting a decision from the BC court on the request to add Quebec residents. Justice Bisson considered this was not appropriate or proportional nor in the interest of class members.

Justice Bisson then found that the stay application did not contain any allegations regarding BC law or the jurisdiction of the BC court. He concluded that this lack of allegations alone justified the dismissal of the stay application given that the defendants failed to demonstrate that the BC court had jurisdiction over Quebec class members regarding Quebec law. Justice Bisson nevertheless continued his analysis to determine if the Quebec Superior Court was forum non conveniens and should decline jurisdiction in favor of the BC court, pursuant to article 3135 of the Civil Code of Quebec.

Justice Bisson ultimately dismissed the forum non conveniens argument and concluded that, if Quebec class members were ever added to the BC class action, a judgment by the BC court involving Quebec class members could not be recognized in Quebec. Justice Bisson specified that it was not sufficient for defendants to submit to the jurisdiction of the BC court. This required the acceptance of the plaintiff, and in the context of a class action, the Court must analyze this from the perspective of the Quebec class members. Unlike the case of a typical plaintiff, the submission of the Quebec class members to the BC court cannot be assumed here because they did not institute the proceedings there. This therefore constituted a fatal obstacle to any forum non conveniens argument.

Justice Bisson specified that this decision does not make it impossible in all cases to have national class actions decided outside of Quebec. When for instance Quebec class members consent, or if there are connecting factors with the relevant province outside of Quebec, then a national class in another province (outside of Quebec) would still be possible. However, other than in those circumstances, Justice Bisson held that it may be impossible for national class actions to be heard in BC or elsewhere. He then noted that his decision calls into question the established notion of pan-Canadian national class actions.

Quebec Court of Appeal's Decision

Later in 2022, the BC court (per Justice Basran) dismissed the appellants' request to add Quebec residents to that case (Ewert v. Nippon Yusen Kabushiki Kaisha, 2022 BCSC 1908). The decision was appealed, but the appeal was dismissed (Nippon Yusen Kabushiki Kaisha v. Ewert, 2023 BCCA 142). Therefore, the class definition in the BC case does not include Quebec residents.

The Quebec Court of Appeal then rendered its decision. It noted that Justice Bisson's analysis of the forum non conveniens argument and his remarks calling into question the established notion of pan-Canadian national class actions constitute a non-binding obiter that is not necessary to resolve the parties' dispute.

The Court of Appeal concluded that because the Quebec residents were not part of the certified BC class action, Justice Bisson did not need to go further and was justified to decline the application to stay the Quebec class action on this basis alone. The Court of Appeal reminded litigants that in any case, the power to order a stay of proceedings is ultimately a discretionary decision by the Superior Court judge, thereby suggesting that it could not be easily reviewed by higher courts. The Court ultimately dismissed the appeal.

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