Canada Post Corporation v. Michel Lépine, 2009 SCC 16

In this recent decision, the Supreme Court of Canada addressed the question of multiple overlapping class proceedings. In so doing it adopted the decidedly cautious view that the issue was one for the legislators, not the courts.

The action arose as a result of a lifetime Internet service that was offered by the defendant, Canada Post Corporation. Canada Post subsequently cancelled the service and, as a result, numerous class proceedings were initiated by purchasers. An overlap between two such proceedings - one in Ontario and one in Quebec - gave rise to this case.

In Ontario, a class was certified for the purpose of approving a settlement reached between Canada Post and the plaintiffs. The Ontario class definition included Quebec residents, despite the fact that the Ontario Court was aware that another proceeding based on the same cause of action had already been commenced in the Quebec Superior Court. In fact, the plaintiffs' counsel in the Quebec proceedings wrote to the Ontario Court requesting that it decline jurisdiction with respect to the Quebec residents.

In light of the certification proceedings taking place in Ontario, Canada Post attempted to have the Quebec action stayed. The Quebec Court declined to stay the proceedings and, the day after the Ontario settlement was approved, the institution of a class action on behalf of Quebec residents was authorized by the Quebec Superior Court.

In a final attempt to avoid having to defend multiple proceedings, Canada Post tried to have the Ontario judgment approving the settlement recognized and enforced in Quebec. Under the Civil Code of Québec, a Quebec court must recognize and enforce a foreign or external judgment unless certain specified exceptions apply. These exceptions include, among others, cases where: (1) the decision-maker did not have jurisdiction to decide the matter; (2) the decision contravenes the fundamental principles of procedure; or (3) the dispute was between the same parties over the same issue as a dispute that is already pending in a Quebec court. Based on all three of these exceptions, both the Quebec Superior Court and the Court of Appeal refused to enforce the settlement. The Supreme Court of Canada upheld these decisions and refused to enforce the Ontario settlement in Quebec; however, the Supreme Court differed slightly in its reasons.

Jurisdiction of the Ontario Superior Court

First, the Supreme Court disagreed with the Quebec Courts on the issue of whether the Ontario Court had jurisdiction to approve a settlement that included residents of Quebec. According to the Supreme Court, the Ontario Superior Court had jurisdiction to decide the issue and that the manner in which that jurisdiction was exercised should not have been questioned by the Quebec Courts. This was a positive, although somewhat silent affirmation of national classes.

Sufficiency of Notices to Quebec Residents

The Supreme Court's decisions to uphold the decision of the Quebec Courts and refuse to recognize and enforce the Ontario settlement in Quebec largely turned on the inadequacy of the notices issued pursuant to that judgment.

The problem with the notices was that they did not adequately explain to Quebec class members what the effect the Ontario judgment would have on their rights in respect of the action commenced in Quebec. This inadequacy, according to the Supreme Court, amounted to a contravention of the "fundamental principles of procedure". Thus the Ontario judgment could not be enforced by the Quebec Courts.

Pending Proceedings in the Quebec Courts

The conclusion reached by the Supreme Court regarding the inadequacy of the notices made it unnecessary to consider whether the Quebec Courts could decline to enforce the Ontario judgment because an action was already pending in Quebec. Nevertheless, the Court went on to discuss the issue. The Supreme Court found that the Quebec Superior Court was seized of the dispute before the Ontario Superior Court was, and thus had priority. Accordingly, the Supreme Court agreed with the Quebec Courts' conclusion that they were precluded, pursuant to the third of the above-noted exceptions in the Civil Code of Québec, from recognizing and enforcing the judgment of the Ontario Superior Court.

National Parallel Proceedings

The Supreme Court commented briefly on the problem of having multiple national class actions within Canada against the same defendants in respect of the same issues. Specifically, the Court emphasized the potential of such actions to cause friction between equal courts in different jurisdictions. While acknowledging that "[m]ore effective methods for managing jurisdictional disputes should be established in the spirit of mutual comity that is required between the courts of different provinces in the Canadian legal space", the Supreme Court did not see it as their role to solve this problem. Rather, the Supreme Court concluded that this is an issue for provincial legislatures to deal with and that "the provincial legislatures should pay more attention to the framework for national class actions and the problems they present".