Are multi-jurisdictional class actions still possible? Perhaps not, if one considers the reasoning of the majority in Hocking v. Haziza [2008], QCCA 800 (CanLII), a Québec Court of Appeal decision that pours cold water on one of the hottest issues to consume the class action debate.

The Facts

Robert Hocking filed a motion for certification of a class action against HSBC Bank before the Ontario Superior Court of Justice. He was seeking to act on behalf of all Canadian customers of HSBC who had made an early payout of their mortgage and incurred penalties as a result. Almost concurrently, David Haziza, a Québec resident, filed a similar motion for certification before the Québec Superior Court, but limited the proposed class to Québec residents only.

Shortly thereafter, Hocking and HSBC entered into a settlement agreement. Despite the Québec petitioner’s objections, Justice Macdonald certified the proceedings and approved the settlement.

Superior Court of Québec Judgment

Justice Roy of the Québec Court dismissed HSBC’s motion for recognition of the Ontario orders. She concluded that the Ontario Court had no jurisdiction over class members residing in Québec, because, among other things, there was no real and substantial connection between the individual claims of each of the class members and the jurisdiction where the class action had been filed.

Québec Court of Appeal

In her reasons for upholding the Québec Court’s decision, Justice Bich explained that a province has no business defining the legal rights and liabilities of residents of another province, and that the territorial limits on the scope of provincial legislative authority prevent the application of the law of a province to matters that are not sufficiently connected to it. Yet since this argument was never raised in the first instance, Bich J.A. did not base her decision on these constitutional considerations (and was not joined by Baudouin J.A.).

Instead, writing for the majority, she stated that Québec courts must first determine whether the requirements of Article 3168 C.C.Q. for personal actions of a patrimonial nature are fulfilled. Second, it is necessary to establish a “substantial connection between the dispute and the foreign authority that is seized of the case” (Article 3164 C.C.Q.). Third, the court can assess the appropriateness of the foreign court’s decision to exercise jurisdiction by examining how well that decision harmonizes with the general provisions of Québec’s rules on international law, including the doctrine of inappropriate forum (Article 3135 C.C.Q.). Bich J.A. added that the fundamental principles of order and fairness must also be considered when determining the jurisdiction of a foreign court. She concluded that the Ontario judgment failed to meet the above requirements, and was rendered in violation of the essential rules that govern civil proceedings since the court had not considered the interests of non-residents. Moreover, she stated that the minimal requirements of adequate notice had not been respected.

Justice Chamberland, writing for the minority, declared that a restrictive interpretation of Article. 3164 C.C.Q. is contrary to the principles of comity and suggests a lack of confidence in other provincial judicial authorities. He also pointed out that adhering to the majority’s view would render national class actions virtually impossible. More recently, in Brito v. Pfizer Canada [2008], QCCS 2231 (CanLII), Justice Grenier of the Québec Superior Court clearly repudiated Bich J.A.’s constitutional position.

McCarthy Tétrault Notes:

The fate of multi-jurisdictional class actions thus remains uncertain. Although the Court of Appeal recognized that they were theoretically possible in Lépine v. Canada Post and Cybersurf, it refused to recognize or enforce the Ontario judgment at issue in that case because the notice provided to Québec class members was deemed inequitable. Bich J.A.’s reasoning goes even further by suggesting that the class action legislation of one province cannot bind members residing in another province unless a strenuous connection exists between each of those members and the judicial forum chosen by the class representative. Although this approach has been called into question by Chamberland J.A. and Grenier J., it has struck a serious blow to the feasibility of national class actions that purport to include Québec class members.

Please note that a version of this article will also be published in the Class Action Defence Quarterly.