On January 30, 2025, the Québec Court of Appeal rendered a judgment in Salko c. Financière Banque Nationale inc., 2025 QCCA 74 (Salko) providing clarity on the application of the Quebec Consumer Protection Act (QCPA) and on the principles governing the partial authorization of class actions in Québec.
In Salko, the applicant sought to institute a class action against securities brokerage firms for the collection of conversion fees on foreign currency transactions made by putative class members, alleging that the defendants violated various provisions of the Civil Code of Québec (CCQ) and of the QCPA. While the applicant’s civil claim regarding the defendants’ alleged receipt of undue payments was authorized pursuant to sections 1491 and 1554 of the CCQ, the Superior Court refused to authorize the consumer claim on the grounds that the impugned transactions fell under section 6(a) QCPA, which provides that business practices and contracts regarding transactions governed by the Québec Derivatives Act and Securities Act (QSA) are exempt from the QCPA’s application.
The Court of Appeal clarified that pure questions of law can (and should) be decided at the authorization stage even if the question being examined does not determine the entire claim but only a portion of it. The Court of Appeal thus took no issue with the lower court’s authorization of the applicant’s claim on the basis of the CCQ while dismissing authorization of the QCPA claim. Recognizing that both decisions turned on the same factual bases, the Court of Appeal, clarified that in assessing whether the authorization criteria are met under article 575 of the Quebec Code of Civil Procedure (CCP), it is appropriate for each distinct alleged cause of action to be assessed on a stand-alone basis with respect to whether the facts can justify the conclusions sought (i.e., 575(2) CCP) and whether the issues raised by the applicants do in fact constitute common questions (i.e., 575(1) CCP).
On the QCPA claim, the applicant argued that section 6(a) of the QCPA should be interpreted to only include “transactions governed by” the QSA. As such, the collection of the conversion fees, which occurred outside of the purchase and sale of the securities, should not qualify as a security transaction. The Court of Appeal rejected this interpretation of the QCPA. The Court held that the QCPA extends to all commercial practices and contracts between parties and not solely to securities transactions, and that the QCPA could not apply to the applicant’s claim because the collection of the conversion fees cannot be isolated from the object of the contract (i.e., the transaction of buying and selling securities). To have these transactions fall under the scope of application of the QCPA would create a “dual jurisdiction,” which the legislator unequivocally intended to avoid.
This decision emphasizes the significance of considering the legislator’s intent, the sound management of judicial resources and the fair and equitable resolution of disputes at the authorization stage. Defendants now have a clearer framework for narrowing the scope of class actions in Quebec at the certification stage when, as a matter of law, portions of the legal basis on which a claim is founded obviously warrant dismissal. We expect defendants to test the application and limits of these principles in authorization hearings in 2025 (and beyond).