On September 7, 2016, the Superior Court of Quebec rendered an interesting judgment that clarified the limits of the power of intervention of the Fonds d’aide aux actions collectives (hereinafter referred to as the “Fonds”). The Fonds’s mission is to provide financial support to people who wish to bring a class action and to disseminate information related to the exercise of such action.
History of the case
In this case, the Quebec plaintiffs filed a motion for authorization to exercise a class action against The Cash Store Financial Services Inc. and other defendants and, overall, six motions of the nature of a class action were filed in Canada and in the United States. For efficiency, the parties agreed to proceed only with the class action filed in Ontario and to leave the other actions pending. On September 30, 2015, the dissemination of a notice for a settlement approval hearing was approved by the Ontario Superior Court of Justice and a few months later, a national settlement was approved by the Ontario Court.
For this reason, on November 20, 2015, the Quebec plaintiffs requested that the Superior Court of Quebec approve the discontinuance of the Quebec class action. On January 26, 2016, the Fonds filed a motion to intervene in the case because it opposed the request to grant the discontinuance and considered that it was within the scope of its mission to intervene. On January 27, 2016, the plaintiffs filed an opposition to the Fonds’s intervention.
After having heard the representations of each party, the Court granted the discontinuance and the Fonds’s opposition was rejected by judgment dated September 7, 2016.
The Fonds’s arguments
Mainly, the Fonds argued that the amended distribution protocol did not contain any clear indication concerning the application of the Regulation respecting the percentage withheld by the Fonds d’aide aux actions collectives (hereinafter referred to as the “Regulation”). The aforementioned Regulation specifies what percentage of any cy pres amount is payable to the Fonds. It also argued that the notice for the Quebec members was incomplete because it failed to mention the right of Quebec members to opt out of the class action.
Distribution protocol
Concerning the amended distribution protocol, the Court decided that the protocol clearly stated that the Regulation would apply in case of any cy pres amount. Furthermore, the parties agreed to respect the Regulation and they confirmed this commitment in an e-mail sent to the Court.
Also, the Court stated that the Fonds cannot rely on the article 32 of the Act Respecting the Fonds d’aide aux actions collectives (hereinafter referred to as the “Act”) to claim a participation in the decision making process relating to establishing the formula to calculate the cy pres amount. Citing a decision from the Quebec Court of Appeal, the Court made it clear that the choice of the formula to calculate the cy pres amount belongs to the parties only and the Fonds cannot interfere.
Notice
Concerning the notice for the settlement approval hearing, the Fonds argued that the notice published in the newspapers, in French and in English, was incomplete, because it failed to mention the right of Quebec members to opt out of the class action.
Again, the Court concluded that it was not part of the Fonds’s mission, under article 32 of the Act, to challenge a notice that was already approved by the Court.
With this judgment, the Superior Court of Quebec has clarified the limits of the power of intervention of the Fonds. This decision clearly indicate that the Fonds cannot rely on the article 32 of the Act to intervene regarding issues that relate to the distribution protocol, the cy pres formula or the dissemination of notices to members because these issues are not within the scope of the Fonds’s mission.