On October 30, 2020, a six-judge majority of the Supreme Court of Canada confirmed, in Asselin v Desjardins Cabinet de services financiers inc, 2020 SCC 30, that a class action concerning allegedly misleading investment products against Québec-based financial services co-operative Caisse Desjardins can proceed, despite initial judicial skepticism about the allegations and logic supporting the claim.

The Québec judge who first opined on the issue declined to certify (or “authorize” under Québec law) the claim as a class action, mainly because the plaintiff had not shown a “colour of right” (an authorization requirement). The judge cited concerns relating to bald or speculative allegations, the lack of supporting documentation, and whether the claims are suitable for adjudication in a class action format.

But the Court of Appeal of Québec and, now, the Supreme Court of Canada have sent the case forward as a class action. Both levels of court reaffirmed the “flexible”, “liberal”, and “generous” approach to authorization set down in previous Supreme Court of Canada decisions applying Québec class actions law, including Infineon Technologies AG v Option consommateurs, 2013 SCC 59 and Theratechnologies inc v 121851 Canada inc, 2015 SCC 18.

The majority’s decision suggests that, so long as claims are not frivolous or clearly wrong in law, then speculative, unsupported, or incomplete allegations or legal theories might not be disqualifying under Québec’s authorization test. This result tracks prior decisions, but it brings Québec further out of sync with the prevailing approach to certification elsewhere in Canada (especially after recent amendments to Ontario’s class proceedings statute introduced a stricter certification test—see our post on those changes: Major Changes to Ontario’s Class Proceedings Act Come into Force). This decision also leaves unanswered important questions about how far a judge may go to “read between the lines” when a claim, as articulated, is flawed.

Background and Procedural History

Ronald Asselin invested in principal-protected term deposit products named “Perspectives Plus Term Savings” and “Alternative Term Savings”, both non-cashable until maturity, offered by the financial services co-operative Caisse Desjardins.

After the 2008 financial crisis, Caisse Desjardins informed Mr. Asselin that his principal, though still protected, would yield no return, and would remain non-cashable until maturity. Mr. Asselin sought authorization to institute a class action against multiple Caisse Desjardins entities, based on two theories of alleged civil liability:

1. Caisse Desjardins represented its products to be safe, but those products, in fact, involved a specific risk that could (and did) affect yields; and
2. Caisse Desjardins had designed and managed the products in a reckless and incompetent manner, inconsistent with the risk associated with purportedly safe financial products.

The motion judge refused authorization, finding that Mr. Asselin had not satisfied the colour of right and common questions requirements under article 1003 of Québec’s former Code of Civil Procedure (corresponding to article 575 of its new Code of Civil Procedure, CQLR, c C‑25.01).

The Court of Appeal of Québec granted Mr. Asselin’s appeal, overturning the motion judge’s refusal to authorize the proposed class action (see Québec Court of Appeal Confirms Wide and Liberal Approach to Class Action Authorization on that decision). In sum, the Court of Appeal endorsed the wide and liberal approach from Infineon (reaffirmed and restated more recently by Justice Brown, for a five-judge majority of the Supreme Court, in L’Oratoire Saint‑Joseph du Mont‑Royal v JJ, 2019 SCC 35), interpreting that test to mean that Québec judges should avoid a close or formalistic critique of a claim’s merits at the authorization stage.

Supreme Court Authorizes the Class Action

The six-judge majority of the Supreme Court in Asselin agreed almost entirely with the Court of Appeal of Québec. The Supreme Court found:

1. the authorization judge in this case had erred in his analysis of the authorization criteria;
2. the Court of Appeal of Québec “adhered perfectly to the principles laid down in Infineon” which remain the governing framework of analysis and set a low threshold for authorization under Québec law;
3. the authorization judge’s role is to “filter out frivolous claims, and nothing more”;
4. the authorization judge may “read between the lines”, going beyond the claim’s wording to “discover the full message it conveys, including the necessarily implied message”;
5. under Québec law, authorization only requires a “common question that can advance the action in a not insignificant manner”; and
6. because Mr. Asselin’s assertions were neither frivolous nor clearly unfounded in law, authorization was appropriate.

Three dissenting judges of the Supreme Court, meanwhile, would have authorized only part of the claim, significantly narrowing the class action. Those judges agreed that Infineon governs, but interpreted it as consistent with a “rigorous procedure” at the authorization stage. Echoing the approach in common-law provinces, the dissenters cautioned that authorization should be “more than a mere formality” and that the court cannot “take on the role of party or counsel and change the purpose of the action as presented by the applicant”. Under this more robust conception of the authorization judge’s role as gatekeeper, the dissent stated that the court should ensure the allegations are “clear and complete, not vague, general or imprecise” — “defects of form can be excused, but substantive defects cannot be.”

Asselin reaffirms Québec’s low bar for authorizing class actions, and may arguably lower it further, especially if future courts strictly apply the idea that authorization judges should “filter out frivolous claims, and nothing more”.

The next battleground in Québec class proceedings may be how to draw the line between defects of form and substance, and how far authorization judges may go to “read between the lines”. In Ontario, in contrast, the Court of Appeal has noted the importance of scrutinizing pleadings at the certification stage, acknowledging in Das v George Weston Limited, 2018 ONCA 1053, for example, that the certification judge should not assume to be true “bald conclusory statements of fact and allegations of legal conclusions unsupported by material facts”.

So, for now, Québec remains something of an outlier in Canadian class actions: authorization judges in Québec are to look to screen out frivolous cases, but are otherwise directed to assess claims with a comparatively generous eye if they can identify legally recognizable causes of action.