On September 12, 2022, the Quebec Court of Appeal confirmed the interpretation of article 3136 of the Civil Code of Quebec (“CCQ. ”) governing the doctrine of the forum of necessity in Quebec law given the entry into force in 2016 of article 491 al. 2 of Code of Civil Procedure (“CCP. ”), which provides that a court’s decision on its international jurisdiction must take into account the guiding principles of the procedure, including proportionality.[1] In Otsuka Pharmaceutical Company Limited v. Pohoresky, 2022 QCCA 1230, the Court of Appeal recalled the exceptional nature of article 3136 CCQ and that it must be limited to cases where it is necessary to avoid a denial of justice. The Court also contextualizes the possible scope of Article 491 para. 2 CPC within the framework of the codified rules of private international law.
This decision is relevant for three main reasons.
First, the decision of the Court of Appeal confirms the case law rendered previously concerning the doctrine of the forum of necessity to the effect that more than an inconvenience is required to trigger the application of article 3136 CCQ Introduction of article 491 al. 2 CCP does not modify the applicable criteria and only adds an additional consideration to this analysis. To take advantage of the forum of necessity doctrine, a foreign plaintiff will have to provide serious evidence of inconvenience and pitfalls jeopardizing his right to justice.
Second, any substitution of a class representative in a class action context should ensure that Quebec courts retain jurisdiction to hear the appeal against all defendants.
Finally, while the Respondents (Plaintiffs) pleaded for a more flexible rule of private international jurisdiction in the context of class actions, the Court of Appeal refused to create such a distinction under article 3136 CCQ Thus, the fact whether a dispute is a class action the action is taken into account in the analysis of the application of the doctrine of the forum of necessity. Consequently, this decision of the Court of Appeal does not encourage “forum shopping” and the possibility for plaintiffs outside Quebec to benefit from the flexible decisions related to the authorization of a class action in Quebec will remain limited. In fact, if the Court of Appeal had endorsed the lower court’s reasoning, the door would have been wide open for foreign plaintiffs to submit their claims to Quebec courts against defendants who are not domiciled in Quebec and do not operate any company. , in order to benefit from flexible and more favorable procedural rules at the stage of authorization of class actions.
Procedural context
In October 2018, a plaintiff domiciled in Quebec filed a Motion for authorization to institute a class action against Canadian pharmaceutical companies having their head office in Quebec, as well as their affiliates abroad (the “Foreign defendants“or the”Callers”) for alleged violations of their obligation to disclose the risks of side effects associated with a drug and to conduct adequate research and testing in relation to those alleged side effects.
In March 2020, new plaintiffs (the “Applicants” Where “Respondents”), both domiciled in Ontario, replaced the initial Quebec plaintiff for the rest of the file.
In January 2021, the foreign defendants filed a motion challenging the jurisdiction of the Quebec courts over them.
On December 3, 2021, the Honorable Suzanne Courchesne of the Superior Court of Quebec (the “Judge”), authorized a pan-Canadian class to bring a class action for damages against all defendants and dismissed the foreign defendants’ jurisdictional challenge. Although the judge concluded that the plaintiffs had not established the jurisdiction of the Quebec courts by means of the connecting factors provided for in article 3148 CCQ, the judge considered that it was appropriate to apply the doctrine of forum of necessity and to assert jurisdiction under article 3136 CCQ on the basis of the disproportionate nature of requiring the plaintiffs to sue in the competent forum, Ontario.
In January 2022, the foreign defendants filed an application for leave to appeal the judge’s decision on the jurisdiction of the Quebec courts. In February 2022, the Honorable Lucie Fournier sitting at the Court of Appeal granted the application for leave to appeal.
Position of parties
The appellants maintained that the judgment contained two errors in the interpretation and application of article 3136 CCQ resulting in a flagrant case of incompetence of the Superior Court:
- The judge could not conclude, under the guise of proportionality, that the mere fact that it would be more convenient for the respondents to act collectively in Quebec was sufficient to justify assuming jurisdiction.
- The judge could not conclude that proportionality favored the application of article 3136 CCQ, since the impact of the principle of proportionality on the decision to be made was, at best, neutral. Consequently, the judge ended up depriving article 3136 CCQ of all meaning and creating a precedent with serious consequences, and thus committing a decisive error justifying the intervention of the Court of Appeal.
The Respondents maintained that the Appellants’ position was based on an overly narrow and rigid approach to the jurisdictional analysis, which did not take into account what they considered to be the manifest desire of the legislator to introduce an element of proportionality into this analysis. by adopting Article 491 para. 2 CCP They maintain that the judge correctly applied this article for the purpose of ruling on the objection and that it would be unreasonable to require the establishment of another parallel remedy against the appellants.
Decision
In a unanimous judgment, the Court of Appeal allowed the appeal and endorsed the appellants’ interpretation of the interaction between articles 3136 CCQ and 491 al. 2 CCP The Court of Appeal considered that the legislator could not wish to interfere with the cumulative conditions of article 3136 CCQ when it would be more convenient or proportionate for a party, in terms of energy and resources, to act in Quebec, even if this action has only a “minimal connection” with Quebec. The Court recalled that the objective of the forum of necessity is not that of convenience but that of avoiding a denial of justice.
In this regard, to allow a party to bring a legal action against a defendant who has no connection with Quebec within the meaning of article 3148 CCQ simply because it would be more proportionate to do so, and putting setting aside the criteria inherent in article 3136 CCQ, “could have significant practical consequences, since plaintiffs who are not certain of being able to establish the international jurisdiction of Quebec authorities according to the usual rules would be encouraged to present an alternative argument related to proportionality” (para. 4). According to the Court, an analysis of the parliamentary debates that led to the adoption of Article 491 al. 2 CCP demonstrates that the legislator could not have wanted to make such a major change as the respondents claim.
Despite the foregoing, the Court left the door open to the possibility that the problems that a party might encounter who would be forced to bring a legal action abroad could justify the use of the forum of necessity by a Quebec authority. when these are “so onerous as to genuinely compromise [the] right of access to justice” (paras. 10-11), for example when they call into question the integrity of a person. Like the criterion that it is impossible to sue outside of Canada, the criterion that it would be unreasonable to require it must, however, be accompanied by the necessary supporting evidence.
However, the judge had no such evidence on the record and could only assume that forcing the respondents to bring a lawsuit abroad (in this case, Ontario, the province in which they reside) against the appellants endangered their right of action. On the contrary, the respondents’ allegations that there would be a risk of contradictory judgment did not represent an unusual inconvenience for such a case and were not sufficient to allow the application of article 3136 CCQ. Consequently, the judge should have concluded that article 3136 CCQ was inapplicable even in light of article 491 al. 2 CCPs
Ultimately, the Court finds that the situation of the respondents vis-à-vis the appellants results in fact from the substitution of the Quebec plaintiff by the respondents residing in Ontario for the continuation of the proceedings rather than from the discontinuance of the claim in favor of the filing of a new class action in the natural forum of Ontario.
An application for leave to the Supreme Court of Canada has been filed.