In Masella v. Toronto-Dominion Bank Financial Group, 2016 QCCS 4450 (“Masella”), the Quebec Superior Court (Justice David Collier) ruled on an application by the class’ representative plaintiff to appoint a joint expert to assess the total amount of compensatory and punitive damages allegedly owed by the defendant following an increase of the variable annual interest rate (VAIR) on the members’ home equity lines of credit (HELOCs). The Court agreed with the defendant and dismissed the application, allowing each party to retain its own expert(s) regarding the calculation of the alleged damages.

Background

The class action was authorized (certified) on January 15, 2016 by the Quebec Court of Appeal (reversing the Superior Court). One of the common questions identified by the Quebec Court of Appeal was whether the alleged damages should be subject to collective recovery, as opposed to individual recovery. The originating application was then filed by the representative plaintiff on April 13, 2016.

On July 29, 2016, an application to appoint a joint expert was filed by the representative plaintiff as a preliminary motion, to be heard during a case management conference where the parties would also argue before the judge regarding the setting of the case protocol (litigation timetable). The application thus came at an early stage of the proceedings: after the originating application had been filed, but before a case protocol had been set by the parties and accepted by the Court.

The application for the appointment of a joint expert was based upon paragraph 158(2) of the new Code of Civil Procedure (“CCP”) in force in Québec since January 1, 2016, which provides that the Court may appoint a joint expert where the parties fail to agree on joint expert evidence.

Counsel for the representative plaintiff argued that the appointment of a joint expert would be in the interest of judicial economy, and that it would help the Court determine whether collective recovery was possible. The conclusions sought by the representative plaintiff were consistent with a judicial culture that is increasingly favourable to the appointment of joint experts in Quebec following the enactment of the new CCP.

Three-Part Test for Appointment of Joint Experts

Interpreting para. 158(2) of the CCP, the Court determined that it can appoint a joint expert “if it considers that joint evidence satisfies the reasonable requirements of the case (the principle of proportionality), and such evidence is conducive to the efficient resolution of the dispute – without, however, jeopardizing the rights of the parties to make their case.”

The Court thus applied a three-pronged test for the appointment of joint experts on the basis of para. 158(2) of the CCP:

  • proportionality,
  • efficiency, and
  • respect for the parties’ rights.

Proportionality is assessed on the basis of what the Court labeled as the reasonable requirements of the case.

Applying the three-pronged test, the Court concluded that the appointment of a joint expert was not warranted under the circumstances. Since it was not clear at this stage that collective recovery was possible or appropriate, and thus that any expertise would be needed at all on the issue, the Court concluded it would not be reasonable nor useful to order the defendant to participate in a joint expertise. Such an appointment would not be consistent with the principle of proportionality, nor conducive to the efficient resolution of the dispute.

Implications

The Masella ruling is significant for the three-pronged test it proposes, which introduces reasonableness as the standard by which proportionality is assessed.

The ruling is also noteworthy for the circumstances in which the three-pronged test is applied, i.e. at an early stage of a class action, when the recovery mode has yet to be determined.