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SUPREME COURT OF CANADA

Comité Régional des Usagers v. Q.U.C.T.C., [1981] 1 S.C.R. 424

Date: 1981-05-11

Civil procedure — Authorization to bring a class action — Colour of right — Meaning of the phrase "seem to justify" — Obligations of carrier — Commencing legal action and putting in default — Code of Civil Procedure, arts. 752, 847, 1002, 1003(b) — Civil Code, arts. 1067, 1673.

Following a strike by respondent's bus drivers, appellant, acting on behalf of pass holders, applied for authorization to bring a class action against respondent for a refund of part of the cost of the passes and damages. The Superior Court allowed the motion, but its judgment was reversed by the Court of Appeal.

Held: The appeal should be allowed.

The matter for decision was essentially whether under para. (b) of art. 1003 of the Code of Civil Procedure the Court, in order to authorize institution of the class action, must decide the merits in law of the conclusions, having regard to the facts alleged, or whether it was sufficient that the allegations supported the conclusions prima facie or disclosed a colour of right. There was no basis for applying to the phrase "the facts alleged seem to justify the conclusions sought", in art. 1003(b), the meaning of the phrase "the facts alleged justify the conclusions sought" contained in art. 847, regarding the remedy in evocation, as the words "seem to justify" and "justify" could not have the same effect. The phrase "seem to justify" meant that there must be in the judge's view a good colour of right in order for him to authorize the action, though he was not thereby required to make any determination as to the merits in law of the conclusions, in light of the facts alleged.

Additionally, the respondent had a legal obligation to the users, and this obligation derived not from respondent's enabling Act but from the obligation of conveyance imposed on all public carriers by art. 1673 of the Civil Code; similarly, the statement in the pass holders' handbook that "Passes are not refundable" did not mean

[Page 425]

even on its face that the holder was deprived of the right of claiming monetary compensation. Finally, appellant's failure to put respondent in default could not be entertained, since art. 1067 C.C. states that commencement of a suit constitutes putting in default.

François Nolin Ltée v. Commission des Relations de Travail du Québec and François Asselin, [1968] S.C.R. 168; Pérusse et Papa v. Les Commissaires d'écoles de St-Léonard de Port-Maurice, [1970] C.A. 324; Bélanger v. The Montreal Water and Power Company (1914), 50 S.C.R. 356; Dufresne v. Forest, [1976] C.A. 416, referred to.

APPEAL from a judgment of the Court of Appeal of Quebec[1], reversing a judgment of the Superior Court. Appeal allowed.

Jacques Larochelle and Mario Bouchard, for the appellant.

Denis Houle, for the respondent.

English version of the judgment of the Court delivered by

CHOUINARD J.—This case concerns a class action as provided in arts. 999 et seq. of the Code of civil Procedure, adopted in 1978 and effective on January 19, 1979.

On the morning of January 29, 1979, respondent's bus drivers went on strike and public transportation service in the Quebec Urban Community was paralyzed.

Two days later, on January 31, appellant caused to be served on respondent a motion to be designated as the representative of pass holders for January 1979, and to be authorized to bring against respondent a class action to obtain a refund of part of the cost of the passes and damages. A few days later, appellant substituted for its original motion an amended motion which, inter alia, limited the claim for a refund to the three days in January during which service was not available.

By leave of the judge, pursuant to rule 53 of the

Rules of Practice of the Superior Court, respondent

[Page 426]

challenged appellant's motion in writing. Applying rule 55 of the Rules of Practice, the Court admitted no other evidence and decided the motion on the basis of the documents and affidavits submitted by the parties.

By a judgment dated March 13, 1979, the Superior Court judge allowed appellant's motion and authorized the class action.

By a unanimous decision[2], the Court of Appeal reversed the judgment of the Superior Court: hence this appeal with leave of this Court.

The argument concerned para. (b) of art. 1003 C.C.P. For a clearer understanding of the matter, arts. 1002 and 1003 must be reproduced in their entirety.

1002. A member cannot institute a class action except with the prior authorization of the court, obtained on a motion.

The motion states the facts giving rise thereto, indicates the nature of the recourses for which authorization is applied for, and describes the group on behalf of which the member intends to act; the allegations of the motion are supported by an affidavit. It is accompanied with a notice of at least ten days of the date of presentation and is served on the person against whom the applicant intends to exercise the class action.

1003. The court authorizes the bringing of the class action and ascribes the status of representative to the member it designates if of opinion that:

(a) the recourses of the members raise identical, similar or related questions of law or fact;

(b) the facts alleged seem to justify the conclusions sought;

(c) the composition of the group makes the application of article 59 or 67 difficult or impracticable; and

(d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately.

The matter for decision is essentially whether under para. (b) of art. 1003 the Court, in order to authorize institution of the class action, must decide the merits in law of the conclusions, having regard to the facts alleged, or whether it is sufficient that the allegations support the conclusions prima facie or disclose a colour of right. This, as

[Page 427]

one of the counsel stated, is the critical point in the case.

The Court of Appeal held, first, that in order to authorize the action, the Court must rule on the law and determine whether the facts support the conclusions sought. Proceeding to make this determination, the Court concluded, for the three reasons which I shall return to below, that they did not, and dismissed appellant's motion. Bélanger J. A. wrote for the Court:

[TRANSLATION]Accordingly, it must be concluded that the pass holders were not entitled to a refund of the cost of the passes, or to damages, so that the facts alleged in the motion do not support the conclusions presented.

The Court of Appeal drew a connection between para. (b) of art. 1003 and art. 847 C.C.P., which concerns authorization to exercise a remedy in evocation. The first two paragraphs of art. 847 read as follows:

847. The motion seeking authorization to exercise the recourse provided in this chapter must be served upon the judge or functionary who was seized of the case, and upon the parties, with a notice of the date and place of presentation.

The judge to whom the motion is presented cannot authorize the issuance of a writ of summons unless he is of opinion that the facts alleged justify the conclusions sought.

Pigeon J. observed for the Court, with reference to this article, in François Nolin Ltée v. Commission des Relations de Travail du Québec and François Asselin[3] at p. 170:

[TRANSLATION]It should first be noted that by art. 847 of the new Code of Civil Procedure, legislative form has been given to the rule in City of Montreal v. Benjamin News, [1965] Q.B. 376, that before authorizing issuance of a writ of prohibition the judge must rule on the law. It is not enough that the applicant's arguments appear to him to be supported, they must lead him firmly to the conclusion that they are, in his opinion, correct in law in view of the facts alleged; and so that issuance of the writ cannot be obtained on the basis of frivolous allegations, the new Code allows the applicant to be cross-examined on his affidavit (art. 93).

[Page 428]

The Code of Civil Procedure is not as exacting in the case of an interlocutory injunction, and a colour of right will suffice. This emerges from the second paragraph of art. 752:

752. ...

An interlocutory injunction may be granted when the applicant appears to be entitled to it and it is considered to be necessary in order to avoid serious or irreparable injury to him, or a factual or legal situation of such a nature as to render the final judgment ineffectual.

The Court of Appeal has had occasion to construe this provision, in particular in Pérusse et Papa v. Les Commissaires d'écoles de St-Léonard de Port-Maurice[4] in which Brossard J.A. said the following at pp. 329-30:

[TRANSLATION] The judge from whom it is sought cannot either allow it or refuse it by giving the evidence submitted to him, at this stage, the effect of final evidence adduced for a decision on the merits of the action; he should only weigh the evidence so that he can decide whether the applicant does or does not appear to have a good and valid right to enforce: as to the right, the applicant is entitled to have the respondent refrain from or cease performing a given operation if there is a good colour of right; and as to the consequences of granting or refusing the injunction, the judge will be guided in arriving at his interlocutory decision by the serious likelihood that, one way or another, a situation of fact or of law will occur which cannot be remedied by the final judgment.

Bélanger J.A., in the case at bar, found a parallel with art. 847 more appropriate, as I mentioned above, and wrote:

[TRANSLATION] Article 1003 C.C.P. allows the class action to be authorized if the Court "is of opinion that the facts alleged seem to justify the conclusions sought"; the remedy in evocation may be authorized by a judge, under Art. 847 C.C.P., if "he is of opinion that the facts alleged justify the conclusions sought". The wording of the first article is much closer to that of the second than to that of Art. 752 C.C.P., regarding the interlocutory injunction. The courts have held that, in an evocation proceeding, a judge must have arrived at a definite opinion on the legal conclusions, assuming the facts to be proven. The least that can be said with regard to the class action is that the Court should not feel any doubt as to the legal conclusions. Whereas in an interlocutory

[Page 429]

injunction proceeding prima facie proof of the facts must be presented, in authorizing a class action the facts are taken as proven as in an evocation proceeding.

With respect, I cannot subscribe to this view. There is no doubt that the wording of art. 752 is not the same, but quite apart from any comparison with this article there is still a basic difference between the provision of para. (b) of art. 1003 and that of art. 847.

The words "seem to justify" and "justify" cannot have the same effect unless the presence of the verb "to seem" in the first phrase is disregarded. This is where the reference to the passage cited from the opinion of Brossard J.A. in St-Léonard, supra, has its application, as to the meaning to be given to the verb "to seem", as in my opinion it applies equally in the context of art. 1003. The legislator intended the Court to reject entirely any frivolous or manifestly improper action, and authorize only those in which the facts alleged disclose a good colour of right.

I conclude, therefore, that the phrase "seem to justify" means that there must be in the judge's view a good colour of right in order for him to authorize the action, though he is not thereby required to make any determination as to the merits in law of the conclusions, in light of the facts alleged.

However, this does not suffice to dispose of the appeal at bar. The Court of Appeal went further, and held that appellant was not entitled to a refund or to damages, for three reasons which must be considered.

The first reason is that respondent is under no legal obligation to the users, but that the obligation arising out of the operating right conferred on respondent by statute is to the Quebec Urban Community. Further, respondent [TRANSLATION] "has assumed no contractual obligation to the users of passes to provide them with transportation".

[Page 430]

With respect to the legal obligation, Bélanger J.A. observed that he found in appellant's enabling Act no provision subjecting it to any obligation toward possible users of its network, whether ticket holders or not, to keep its buses available for them at all times. He continued:

[TRANSLATION] ... Under the said Act, Statutes of Quebec 1969, c. 83 as amended, the purpose of appellant is to operate a general network for public transport (s. 211); it is invested with authority, with the Council's prior approval, to establish, change, cancel and replace bus lines (s. 235), and to establish tariffs according to the means of transport or the classes of users (s. 237).

In my view, the obligation arising from the operating right conferred by the Act on appellant can only be legal and is owed to the Quebec Urban Community.

He then cites the following cases: Bélanger v. The Montreal Water and Power Company[5], and Dufresne v. Forest[6].

The first case concerned a claim by an owner whose building had been destroyed by fire, and it was made against the firm empowered by contract with the municipality to operate a water main service, including fire hydrants, and to maintain a given pressure at all times. The owner contended that the fire had been aggravated by the fact that the water pressure was considerably below that stipulated. This Court dismissed the appeal on the grounds that there was no contractual relationship between the owner and the firm, and that the contract contained no stipulation conferring on taxpayers a right of action against the firm in the event of a breach of provisions relating to fire protection.

In Dufresne v. Forest, supra, an action was brought by a motorist against a contractor responsible for the upkeep of roads in winter under a contract with the municipality. The contract bound the contractor to the municipality, but not to taxpayers individually.

The situation here is quite different. Although respondent's enabling Act does not impose on it [TRANSLATION] "any obligation to possible users

[Page 431]

of its network, whether ticket holders or not, to keep its buses available for them at all times", there is nonetheless a legal obligation to users, namely, the obligation of conveyance imposed on all public carriers by art. 1673 C.C.:

1673. They are obliged to receive and convey, at the times fixed by public notice, all persons applying for passage, if the conveyance of passengers be a part of their accustomed business, and all goods offered for transportation; unless, in either case, there be a reasonable and sufficient cause of refusal.

In an article titled "Réflexions sur le fondement juridique de la responsabilité civile du transporteur de personnes", (1960-61) 7 McGill L.J. 225, Prof. Paul A. Crépeau writes, at p. 236:

[TRANSLATION] If we look closely at arts. 1672 et seq. of the Civil Code, regarding the duties of the carrier of persons, it can be seen that the Quebec legislator imposes a duty only on the "public" carrier and imposes only one duty: that of conveyance.

Carriers, according to art. 1673 of the Civil Code:

"are obliged to receive and convey, at the times fixed by public notice, all persons applying for passage, if the conveyance of passengers be a part of their accustomed business ..."

The carrier must therefore, unless he has a reasonable excuse, convey passengers who seek to be conveyed; and it is clear that a carrier who leaves his passengers on the platform or abandons them on the way will be held contractually liable.

Article 1673 does not create an absolute duty depriving respondent of any defence, and I make no comment on the substance, but it creates a relationship between users and respondent, whose duty is no longer only to the Quebec Urban Community.

Faribault, commenting in the Traité de Droit civil du Québec, vol. 12, on art. 1673, wrote at pp. 375-6:

[TRANSLATION] In theory, those in the business of carriage are not free to refuse to convey persons or goods presented to them.

Despite this duty imposed on the carrier, a genuine consensual contract is formed between him and his customer by the purchase and sale of a ticket of passage

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in the case of the carriage of persons, or by the delivery to him of goods presented in the case of the carriage of goods.

[…]

In the case of the carriage of persons, there is nothing to prevent the carrier from selling his tickets or reserving seats in advance. The contract is then formed by such a sale or reservation, and the carrier is required to perform his duty if the traveller appears, at the specified time, to occupy the seat so purchased or reserved.

In the case at bar, the direct contractual relationship between pass holders and respondent appears on the pass, which states, inter alia:

[TRANSLATION] I—ENTITLEMENT—Subject to the conditions and limitations hereinafter stated, this pass entitles its holder to use, at any time and on any regular route, the public transportation service of the QUCTC, within the territory of the Schedule B municipalities (Q.U.C. Act).

In the reasons in support of its decision, the Court of Appeal stated:

[TRANSLATION] In my view, the sole contractual obligation resulting from the issue of passes is that of accepting their holders without any additional cost, on presentation of the card, on all regular routes then a part of its transportation network; appellant undertook no duty toward users as to operation of the routes while the card was in effect; it undertook no contractual duty to users of passes to provide them with transportation. In the circumstances of the case at bar, the latter are entitled to no refund or compensation in the form of damages.

Does this mean that respondent, which collected the cost of the passes, can with impunity fail to provide services, without justification or excuse? The passage cited cannot mean that, and in light of the relationship described above between respondent and pass holders, I do not think it can be said at this stage, of deciding whether to authorize the action, that the facts alleged do not seem to justify the conclusions sought.

The second argument of law allowed by the Court of Appeal is that the pass is not refundable, and that:

[TRANSLATION] ... the contractual link established between appellant and pass holders anticipates the possibility

[Page 433]

of a strike that could interrupt its services; in that event, subscribers are entitled to a credit, covering the period for which service was interrupted. The preceding clause confirms that the pass cannot be refunded. The result is to create not a duty of payment, but a claim for transportation to be subsequently provided.

This argument is based on the following extract from the pass holders' handbook:

[TRANSLATION]

REFUND

Passes are not refundable.

CREDIT

In the event of a strike which interrupts service, the QUCTC undertakes to provide pass holders with a credit covering the period during which service is interrupted. The QUCTC will distribute the appropriate information when necessary.

The pass holders' handbook is a publication by respondent designed to explain to the pass holder his privileges, rights and duties. Aside from the fact that it does not appear from the record and that it was not possible for counsel for the respondent to explain at the hearing how or by what circumstances this document took effect between the parties so as to govern their contractual relations, I do not think that even on its face the statement that "Passes are not refundable" has the meaning given to it.

The statement that passes are not refundable really means that the holder cannot return his pass at will and have the whole or part of the cost refunded to him. However, in my view, a much clearer clause would be necessary in order to conclude that the holder is deprived of the right of claiming monetary compensation in the event of failure by respondent to provide the services for which it has been paid.

[Page 434]

So far as the meaning of the word "crédit" is concerned, the following definition is given in Le Petit Robert: [TRANSLATION] "Operation by which an individual makes a sum of money available to another; by ext. This sum."

It follows that if credit can take the form of a claim for transportation to be provided subsequently, it can also take the form of money to be paid.

Indeed, this is the interpretation given to it by respondent itself. Thus, on two occasions when service was interrupted in 1978, for two days in April and three days in May, respondent [TRANSLATION] "caused a notice to be published in a Quebec daily newspaper informing people that they would be reimbursed pro rata for the number of days lost in public transportation".

Respondent adopted the same approach in the case at bar. Thus, on February 14, 1979, after service of the motion for authorization to institute a class action, it caused to be published a notice from which the following is an extract:

[TRANSLATION] As a consequence of the suspension of services since January 29, the QUCTC will make a refund to all its subscribers duly holding passes for January or February.

AMOUNT OF REFUND

January pass

Regular: $1.75     Special: $0.90

February pass

Regular: $18        Special: $9

I accordingly conclude that the second argument cannot be entertained.

The third ground of the Court of Appeal is based on appellant's failure to put respondent in default. This ground also cannot be entertained. Commencing a legal action constitutes putting in default and this is indicated in art. 1067 C.C.:

1067. The debtor may be put in default either by the terms of the contract, when it contains a stipulation that the mere lapse of the time for performing it shall have that effect; or by the sole operation of law; or by the commencement of a suit, or a demand which must be in writing unless the contract itself is verbal.

On this point, Mignault states in Le droit civil canadien, vol. 5, at pp. 410-11:

[TRANSLATION] The Code indicates that a debtor is in default in five cases:

[…]

3. When a suit has been commenced, against the debtor, or he has been sent a demand for performance, which must be made in writing, unless the contract itself is verbal: thus, the demand is equivalent to commencing a legal action, but with the difference that if commencement of the action has not been preceded by an out of

[Page 435]

court demand, the debtor in consenting to performance of the obligation may ask that the costs of the legal action be borne by the creditor. Accordingly, commencing the action will only really be of value to the creditor if an out of court demand has already been made.

Does the motion for authorization itself constitute commencing an action, or will this only result from institution of the action after the authorization has been obtained? I do not think I need to answer this question, as it suffices for the purposes of this appeal to hold that absence of prior putting in default does not constitute a bar to exercise of a legal remedy. It comes down to a question of costs. As Mignault observes: [TRANSLATION] " ... if commencement of the action has not been preceded by an out of court demand, the debtor in consenting to performance of the obligation may ask that the costs of the legal action be borne by the creditor."

Respondent raised two other points as well.

The first is that the action is premature because (a) appellant was not put in default, (b) it was not known when the strike would end and (c) it did not have time to make an offer of reimbursement.

I have dealt with the putting in default above.

By its amended motion, appellant limited the action to the last three days of January. This is a clearly determined period and it is not in dispute that service was interrupted for these three days.

With respect to the fact that respondent did not have time to make an offer of reimbursement within such a short period, this might carry weight if the conclusions sought were limited to reimbursement, but appellant is also claiming damages.

The other additional argument put forward by respondent is that the allegations of the motion are insufficient, and it suggests several other allegations, some of which restate wholly or partly in a different form allegations already made. I do not

[Page 436]

think there is any need for me to consider this argument further.

For these reasons I would allow the appeal, reverse the decision of the Court of Appeal and restore the judgment of the Superior Court, with costs in all courts.

Appeal allowed with costs.

Solicitors for the appellant: Bertrand & Associés, Quebec.

Solicitors for the respondent: Bherer, Bernier & Associés, Quebec.



[1] [1979] C.A. 528.

[2] [1979] C.A. 528.

[3] [1968] S.C.R. 168.

[4] [1970] C.A. 324.

[5] (1914), 50 S.C.R. 356.

[6] [1976] C.A. 416.

 

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