Desjardins Financial Services Firm Inc. v. Desjardins Global Asset Management Inc., a lawfully constituted legal person,, 2020 SCC 30

SUPREME COURT OF CANADA Citation: Desjardins Financial Services Firm Inc. v. Asselin, 2020 SCC 30, [2020] 3 S.C.R. 298 Appeal Heard: December 5, 2019 Judgment Rendered: October 30, 2020 Docket: 37898 Between: Desjardins Financial Services Firm Inc. and Desjardins Global Asset Management Inc., a lawfully constituted legal person, formerly Desjardins Asset Management Inc. Appellants and Ronald Asselin Respondent Official English Translation Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.

Reasons for Judgment: (paras. 1 to 159) Reasons Dissenting in Part: (paras. 160 to 304) Kasirer J. (Wagner C.J. and Abella, Karakatsanis, Brown and Martin JJ. concurring) Côté J. (Moldaver and Rowe JJ. concurring) desjardins v. asselin Desjardins Financial Services Firm Inc. and

Desjardins Global Asset Management Inc., a lawfully constituted legal person, formerly Desjardins Asset Management Inc. Appellants v. Ronald Asselin Respondent Indexed as: Desjardins Financial Services Firm Inc. v. Asselin 2020 SCC 30 File No.: 37898. 2019: December 5; 2020: October 30.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ. on appeal from the court of appeal for quebec Civil procedure — Class action — Authorization to institute class action — Conditions for authorizing action — Motion for authorization to institute class action in contractual liability for breach of duty to inform and in extracontractual liability for breach of duties of competence and management against financial institutions with respect to term savings investments — Superior Court dismissing motion — Court of Appeal setting aside judgment and authorizing class action — Whether Court of Appeal was justified in intervening in Superior Court’s decision — Code of Civil Procedure, CQLR, c.

C-25, art. 1003 . A is a member of a caisse populaire in the Desjardins Group. Between March 2005 and June 2007, he purchased two types of investments from his caisse populaire, Perspectives Plus Term Savings (“PP”) and Alternative Term Savings (“ALT”), by entering into deposit agreements. The investments essentially involved capital that was guaranteed at maturity and corresponded to the original value of the deposit, and a potential return that was variable.

It is alleged that the investments were purchased as a result of representations made by a financial planner and mutual fund representative who was a subordinate or mandatary of Desjardins Financial Services Firm Inc. (“Firm”), which is part of the Desjardins Group and which specializes in financial services. Both the financial planner and various documents promoting the investments allegedly represented them as being safe and as providing an attractive return, despite the fact that they involved a specific risk that affected their return potential.

It is alleged that the investments were designed and managed by Desjardins Global Asset Management Inc. (“Management”), which is also part of the Desjardins Group and which specializes in asset management. In March 2009, A received a letter informing him that he would obtain no return on his PP and ALT investments up to the time they matured. In February 2010, A received an investment statement indicating that his investments had in fact yielded a return of 0 percent for 2009.

In September 2011, A filed a motion in the Quebec Superior Court seeking authorization to institute a class action against Firm and Management. He argued that Firm was contractually liable to the members of the class action group for breaching its duty to inform. He claimed that Firm had not adequately informed him and the other members of the group of the risks associated with the investments, alleging both direct and indirect fault. He argued that Management was extracontractually liable to the group’s members for breaching its duties of competence with regard to design and management.

He alleged that Management had used risky investment strategies, including strategies involving investments in asset-backed commercial paper (“ABCP”), that had resulted in a loss of all the assets allocated to the return. The Superior Court dismissed the motion for authorization to institute a class action against Firm and Management. The authorization judge found that A had not shown that his proposed action in contractual liability against Firm and in extracontractual liability against Management had a good colour of right as required by art. 1003(

b) of the former Code of Civil Procedure of Quebec (“former C.C.P. ”). The judge also found that there were no common questions as required by the condition set out in art. 1003(

a) of the former C.C.P . , though she neglected to deal with that condition in relation to the action against Management. The Court of Appeal allowed A’s appeal and authorized the class action against Firm and Management. Held (Moldaver, Côté and Rowe JJ. dissenting in part): The appeal should be allowed in part . Per Wagner C.J. and Abella, Karakatsanis, Brown, Martin and Kasirer JJ.: The Court of Appeal was correct to authorize the class action proposed by A both against Firm and against Management. The authorization judge erred in analyzing certain aspects of the conditions set out in subparas. (

a) and (

b) of art. 1003 of the former C .C.P. (which correspond to subparas. (1) and (2) of art. 575 of the new Code of Civil Procedure ). However, the appeal should be allowed in part for the sole purpose of varying paras. 8 and 9 of the Court of Appeal ’s judgment in order to clarify the scope of the claim for punitive damages . T he Court of Appeal adhered perfectly to the analytical framework established in Infineon Technologies AG v. Option consommateurs , 2013 SCC 59 , [2013] 3 S.C.R. 600, Vivendi Canada Inc. v. Dell’Aniello , 2014 SCC 1 , [2014] 1 S.C.R. 3, and L’Oratoire Saint-Joseph du Mont-Royal v.

J.J. , 2019 SCC 35 , [2019] 2 S.C.R. 831, even though the last of these cases was decided after the judgment under appeal. T he threshold for authorizing a class action in Quebec is a low one . Once the four conditions set out in art. 1003 of the former C.C.P. are met, the judge must authorize the action; the judge has no residual discretion to deny authorization on the pretext that a class action is not the most appropriate vehicle . Questions of law may be resolved by an authorization judge if the outcome of the proposed action depends on the judge’s doing so, but this choice is generally a discretionary one .

This reflects the purpose of the authorization stage of the class action: the judge’s role is to filter out frivolous claims, and nothing more . In analyzing a motion, an authorization judge must avoid adopting a rigid approach and must read the wording of the motion to discover the full message it conveys, including the necessarily implied message. Finally, there is no requirement in Quebec that the common questions predominate over the individual ones . On the contrary, a single common question is enough if it advances the litigation in a not insignificant manner .

It is not necessary that the common question be determinative of the outcome of the case .

Here, the allegations are sufficient to establish an arguable case against Firm in accordance with the condition set out inart. 1003(

b) of the former C.C.P. It is in principle not appropriate at the authorization stage for the court to make any determination as tothe merits in law of the conclusions in light of the facts being alleged. The proposed syllogism is neither frivolous nor clearly unfoundedin law. The allegations are precise enough to be assumed to be true, and there is a sufficient basis for them in the evidence adduced. A’s syllogism is based on a breach by Firm of its duty to inform. In his motion, A explains right in the

summary that he isalleging that Firm and Management breached and violated the obligations and duties of information, competence and management. Firmallegedly failed to inform adequately the group’s members of the risky transactions conducted using the amounts the members hadentrusted to it. With regard to injury, A explains the loss of a return resulting from risky investment strategies; with regard to causation,he states that he would never have agreed to invest in the PP and ALT investments if Firm had adequately informed him of the risksassociated with them.

The faults are described with sufficient precision, and the information missing for the entire group relates, amongother things, to the level of risk involved in the investments, their volatility and the way they worked, including the leverage used. It can be understood from these allegations that the proposed action is based not on a breach of the deposit agreements, butrather on a generalized and systematic breach of the duty to inform.

A alleges that Firm systematically breached this duty by notadequately informing all of its representatives of the risks and characteristics of the investments (the direct fault). According to the factsalleged in the motion, the representatives, having received false, misleading or incomplete information, then failed to provide adequateinformation to the group’s members (the indirect fault). Firm’s alleged dual fault, and the basis for the action, is a generalized andsystematic breach of its general duty to inform.

This dual fault refers, in other words, to two sides of the same coin: Firm’s breach of itsduty to inform the group’s members directly itself, and to inform them indirectly through its representatives. A person who provides financial services is indeed subject to a duty to inform, and failure to comply with that duty may giverise to civil liability, for which the principal or mandator of the financial adviser at fault must answer.

The group’s members were linkedto Firm by a contract for services within the meaning of art. 2098 of the Civil Code of Québec or, if the services were not paid fordirectly, a similar sui generis contract. Grounded in the general obligation of good faith (arts. 6, 7 and 1375 of the Civil Code of Québec),the duty to inform relates to all contracts and, in principle, applies to all contracting parties. There is a distinction between the duty toprovide advice and the duty to inform.

The obligation to inform is an obligation to reveal to another facts that the latter, in order to adjusthis or her conduct, may legitimately expect to receive. The obligation to provide advice is an obligation to provide counsel to another inthe furtherance of the latter’s interest. The duty to inform is less onerous and less individualized than the obligation to provide advice. In Bank of Montreal v.

Bail Ltée, (SCC), [1992] 2 S.C.R. 554, the Court observed that the scope of theobligation to inform is assessed on the basis of the following criteria: (1) knowledge of the information, whether actual or presumed, bythe party which owes the obligation to inform; (2) the fact that the information in question is of decisive importance; (3) the fact that it isimpossible for the party to whom the duty to inform is owed to inform itself, or that the creditor is legitimately relying on the debtor ofthe obligation.

In the case at bar, Firm knows or is presumed to know the characteristics of the investments it recommends. A alleges thathe would never have agreed to invest in the PP and ALT investments if he had been adequately informed of the risks associated withthem and that it was impossible for him to inform himself of Management’s investment strategies. The motion does not allege a positive misrepresentation; it alleges an omission corresponding to a breach of the duty toinform, which, unlike the duty to provide advice, is an obligation of result.

Mere proof by the creditor that the result was not achieved issufficient to give rise to a presumption that the debtor is liable. At the authorization stage, the applicant bears the burden ofdemonstrating that the proposed legal syllogism is arguable, not the burden of proving each element of the syllogism on the usual civilbalance of probabilities standard. In this context, the evidence adduced by A in support of allegations that must be assumed to be true ismore than sufficient. The action can be authorized without proof on a balance of probabilities that A was not given the information.

Afiled many documents to support allegations concerning Firm’s failure to disclose, to all clients, the risks associated with the methodsused to manage the investments. It is argued that the choice made by Firm and its representatives to rely on the documents is evidence ofthe breach of the contractual duty to inform alleged in support of Firm’s indirect contractual liability. A’s pre-hearing examination is alsorelevant evidence with respect to the non-performance of an obligation to do something, such as an absence of advice or information.

Thebreach amounts to a negative, which is inherently difficult to establish persuasively, but which can be proved simply by testimony. The common questions condition set out in art. 1003(

a) of the former C.C.P. is also met with respect to the proposed actionagainst Firm. At the authorization stage, the decisions of the Quebec courts and of the Court require a flexible approach to the commoninterest that must exist among the group’s members. As a result, even where circumstances vary from one group member to another, aclass action can be authorized if some of the questions are common. The fact that the situations of all members of the group are notperfectly identical does not mean that the group does not exist or is not uniform.

In Quebec, a single common question is sufficient aslong as it advances the litigation in a not insignificant manner. The class action in this case concerns a contractual breach of the duty toinform that grounds both Firm’s direct liability and its indirect liability. In both cases, the alleged omissions are systematic in nature anddo not depend on each client’s individual characteristics. The systematic nature of these omissions in both cases makes it possible toidentify common questions in the proposed action against Firm under art. 1003(a).

The motion filed by A indicates that the group’s members were systematically misinformed. By giving its representativesdocuments that were misleading or incomplete, Firm misinformed them and did not give them the means to adequately inform thegroup’s members. The information provided to the members was therefore necessarily wrong or insufficient, if not false, deceptive ormisleading. The systematic nature of Firm’s breach is thus clearly alleged and must be assumed to be true.

Moreover, the information inquestion was objective information that Firm never gave the representatives or the members concerning the risky nature of theinvestments. The position taken in the motion is not based on the individual liability of a financial adviser to a particular client, whichwould depend on evidence of each client’s profile to establish whether the investment was in fact appropriate. The alleged fault is abreach of a general obligation to inform that affected each member, not a breach of an individualized obligation to properly advise aclient.

Although the duty to inform varies with the context, there are circumstances in which all creditors were deprived of information asa result of a systematic omission. In this case, A specifically alleges the existence of such circumstances, in which an informationalimbalance and Firm’s control of the information are common to all the members. Indeed, A alleges that the group’s members could not

have known the information that Firm had about how the investments worked even with all due diligence. A class action based on a brokerage firm’s liability for the conduct of its representatives is therefore possible if the issue is whether the information provided by the firm to its representatives and to the group’s members was insufficient, with the result that a general duty to inform was breached . To conclude otherwise would deprive the class action of part of its role of helping people who, for economic and other reasons, face barriers in asserting their rights.

T he Court of Appeal was accordingly justified in intervening . It appears that the authorization judge considered the common questions condition from the perspective of an action based on the duty to provide individualized advice tailored to each client’s risk tolerance even though that was not the basis for A’s action . It is conceded that it can be argued that Management is liable as the designer of the investments . On the issue of whether the case against Management is an arguable one, the syllogism proposed by A is neither circular nor untenable .

A does not merely say in his allegations that Management’s practices were risky because the investments did not generate a return; he makes concrete allegations against Management. These allegations are sufficiently precise . As for the impact of the 2008 financial crisis on the causal link between Management’s alleged extracontractual faults and the loss for which A is seeking compensation, this is an issue that goes to the merits of the case.

A is claiming punitive damages from Management pursuant to ss. 6 and 49 of the Charter of human rights and freedoms for unlawful and intentional interference with his right to the peaceful possession of his property . For the purposes of that claim, he alleges that a significant portion of the money market investments in the PP and ALT investments consisted of ABCP.

Management submits that any claim relating to ABCP has been extinguished as a result of the Sanction Order made by the Ontario Superior Court of Justice as part of the restructuring of the ABCP market carried out under the Companies’ Creditors Arrangement Act (“ CCAA ”) . The motion judge found that the claim based on ABCP was, on its face, barred, but she did not refer to the distinction between “Affected ABCP” and “Unaffected Claims” as dealt with in the Third Amended Plan of Compromise and Arrangement that was the subject of the Sanction Order .

The Court of Appeal correctly found that t he motion judge could not decide whether the claim was barred at the authorization stage . It is true that a court may decide a pure question of law at the authorization stage if the outcome of the proposed class action depends on its doing so, but the question of whether the ABCP concerned is part of the Affected ABCP covered by the release and listed in its

Schedule “A” is not a pure question of law. It is not the application of the Order that is being contested but rather its scope, which can be argued later. The scope of the Affected ABCP and the unaffected ABCP under the Order is an issue that could, if necessary, be referred to the Ontario Superior Court of Justice . Caution must be exercised at the authorization stage, and any doubt should weigh in favour of the continuation of the proceedings . D eferring this matter will not result in Management losing any rights given that the action must proceed on the merits on the claim for compensatory damages .

T hough difficult, a claim for punitive damages based on unlawful and intentional interference under s. 6 of the Charter of human rights and freedoms in relation to the ABCP not covered by the release remains arguable in this context . However, it must be specified that any payment to each member of the group of an amount in punitive damages may be sought solely in relation to Unaffected Claims within the meaning of art. 1 of the Third Amended Plan of Compromise and Arrangement dated January 12, 2009 . Per Moldaver, Côté and Rowe JJ. (dissenting in part): The appeal should be allowed in part.

Authorization of the proposed class action against Firm should be denied, and authorization of the proposed class action against Management should be granted, but only in relation to the claim for compensatory damages. T he objectives of facilitating access to justice, modifying harmful behaviour and conserving judicial resources that underlie the class action can be attained only if a rigorous procedure is followed for the authorization of such an action . T he class action is a cumbersome procedural vehicle that represents a huge undertaking for all of the participants, including the courts.

Authorization is meant to be more than a mere formality . Its purpose is to protect the interests of all those involved in the class action — not only the interests of the representative and the absent members, but also those of the defendants and even of the administration of justice. T he authorization stage is what confers full legitimacy on the class action . Even though the court plays a more active role in the context of a class action, it may not take on the role of party or counsel and reorient the action as presented by the applicant however it likes.

The court’s role is not to read between the lines in order to guess the basis for the action whose authorization is being sought, or for the legal syllogism, where no specific allegations are made in relation to a key element of the cause of action . The court hearing the motion for authorization can supplement the allegations using the evidence in the record and can draw inferences and presumptions from them .

However, the court is not required to assume the applicant’s legal allegations to be true; it may decide a pure question of law at the authorization stage if the outcome of the proposed class action depends on its doing so . W hen a judge decides a question of law on which the outcome of a class action depends at the authorization stage, this furthers the objectives of predictability of the law and judicial economy that underlie the system of administration of justice .

T he judge’s role at the authorization stage is to screen out frivolous or untenable actions, but also to verify that all the conditions of art. 1003 of the former C.C.P. are met . A motion that does not meet all the conditions is not for that reason alone frivolous . Because the court must assume that the alleged facts are true, the allegations must be clear and complete, not vague, general or imprecise . Defects of form can be excused, but substantive defects cannot be. T he allegations must be read carefully in order to determine whether the legal syllogism they propose is an arguable one.

A t the authorization stage, judges have considerable leeway in assessing whether the conditions set out in art. 1003 of the former C.C.P. are met. If a judge is of the opinion that each condition is met, he or she must authorize the action and has no discretion to decline to do so . A n appellate court’s power of intervention is limited, and it must defer to the judge’s assessment of the conditions . T he applicable standard for appellate intervention is that of palpable and overriding error.

In this case, t he motion judge did not err in stating that Firm could not be contractually liable on the basis of the deposit agreements for the PP and ALT investments because the parties to those agreements were the clients and their respective caisses populaires. The contract that could give rise to Firm’s contractual liability is instead the one that it entered into with clients through its representatives, which was a contract for services whose sole object was the giving of advice .

While the giving of advice was the core prestation under the contract, this did not preclude a duty to inform from existing as well . T he judge also analyzed the action against Firm as it had been presented, that is, from the standpoint of Firm’s contractual liability for a breach of the duty to inform. This was

analyzed in relation to a contractual basis for the action arising from the mandator-mandatary relationship between Firm’s representatives and the clients . The judge’s assessment of the authorization conditions was entitled to deference on appeal absent a palpable and overriding error . The common questions requirement set out in art. 1003(

a) of the former C.C.P. is not met with respect to the proposed action against Firm. The liability of financial advisers for a breach of the duty to inform and the duty to provide advice is not well suited to a class action because of the highly individual nature of the relationship between a client and an adviser in the context of a contract for investment services. In such a case, the liability analysis would have to be repeated for each individual claim. The case law is consistent in this regard: there can be no common questions in such circumstances.

However, if an applicant can show that the breach was systematic in nature, the common questions condition will not be an impediment to authorizing the action. A, on the other hand, has neither alleged nor shown any kind of systematic breach of the advisers’ duty to inform that might be imputed to Firm. By his own admission, he has no idea whether other clients were in the same situation as him. It is therefore the absence of a systematic breach that is fatal to A’s action, not the fact that the action concerns financial advisers.

T he duty to inform is more general than the duty to provide advice owed by Firm’s representatives; the duty to inform is, however, a variable obligation shaped by the circumstances of each case , as was affirmed in Bail . This is especially true in cases where the duty to inform is an accessory to a main prestation whose object is the giving of advice . In this case, the obligation to inform arose in the broader context of the provision of a financial adviser’s services, which varies in accordance with several factors, including the length of the relationship and the client’s goals and level of expertise .

The obligation of advisers or dealers to know their clients shapes their relationship with them; it is clear that the clients’ specific circumstances are of significant importance . It is therefore not surprising that A does not know whether there are other members in the same situation as him . His situation cannot be extrapolated to the other members of the proposed group.

Accordingly, even though a court should not focus on each member’s specific characteristics at the authorization stage of the class action, the fact remains that in this case the elements of fault, causation and injury raised by A on behalf of the group are highly variable. Given the need for such a contextual analysis, there can therefore be no commonality to the question of whether the duty to inform was breached unless it is shown that the breach occurred systematically . The individualized analysis required by the action precludes the possibility of proceeding on a collective basis .

A systematic duplication of fact-finding and legal analysis will be required for each relationship between a financial adviser and a client, which means that the proposed question cannot advance the litigation in a not insignificant manner. In the case of the proposed action against Management, the Court of Appeal ’s intervention was warranted only in part. The Court of Appeal properly authorized the action against Management except in relation to the claim for punitive damages.

On this point, the authorization judge was correct to consider the release with respect to ABCP found in the Sanction Order, and the scope of that release, in concluding that the claim against Management for punitive damages in relation to ABCP did not establish an arguable case. The defences available to a defendant are generally considered at the trial on the merits. However, a court may decide a pure question of law at the authorization stage if the outcome of the proposed class action depends on its doing so. This principle also extends to the

interpretation of a release included in a sanction order made by the Ontario Superior Court of Justice, which has full force and effect in Quebec under s. 16 of the CCAA . The outcome of the part of the proposed action that concerns punitive damages in relation to ABCP depends on how the terms of the release are interpreted. Where evidence is necessary to determine the applicability of a release found in a sanction order, this question should be decided at the trial on the merits.

Conversely, where such evidence is not necessary, as in this case, it would be neither logical nor desirable, from the standpoint of judicial economy and of proportionality of proceedings, to defer making a decision on this question of law when the court has an opportunity to decide it at the authorization stage. This is especially true for releases resulting from a compromise or arrangement sanctioned by a court under the CCAA . These releases advance one of the CCAA ’s important objectives, which is to favour restructuring by preventing the risk of litigation.

Under ss. 16 and 17 of the CCAA , it is imperative that Quebec courts give effect to CCAA orders regardless of the jurisdiction where the proceedings took place. In this case, the release presents two impediments that are fatal to A’s claim for punitive damages based on ABCP. The first impediment arises from the limited cause of action authorized for an Excepted Claim: the claim must be based on express fraudulent misrepresentations made to the potential plaintiff by an authorized representative of the potential defendant.

However, A’s claim for punitive damages is based not on a misrepresentation, but rather on Management’s fault, which lies in flawed design and management contrary to its obligations and duties to act prudently and diligently and to adhere to sound and prudent management practices . The motion does not allege a cause of action covered by the definition of an Excepted Claim. The second impediment to the claim for punitive damages relates to the strict time limit for asserting a claim.

The nine-week time limit began to run on the date of delivery of notice by the Monitor, which was essentially the date on which the Sanction Order was made, namely June 5, 2008 . A’s motion for authorization to institute a class action was served on September 16, 2011. His claim for punitive damages based on Management’s use of an investment strategy that included ABCP was therefore filed out of time . The release stands in the way of A’s legal syllogism with regard to Management’s fault, and the claim based on ABCP must be dismissed because it does not have the colour of right required by art. 1003(

b) of the former C.C.P . Insofar as it is argued that Management is liable as the designer and manager of the products, the action can be authorized in relation to compensatory damages. By referring to the effects of the 2008 financial crisis in declining to authorize this part of the action, the authorization judge decided the merits of the action. However, this aspect of the action is not devoid of foundation. This was an error that warranted the Court of Appeal ’s intervention. Cases Cited By Kasirer J. Applied: L’Oratoire Saint-Joseph du Mont-Royal v.

J.J. , 2019 SCC 35 , [2019] 2 S.C.R. 831; Infineon Technologies AG v. Option consommateurs , 2013 SCC 59 , [2013] 3 S.C.R. 600; Vivendi Canada Inc. v. Dell’Aniello , 2014 SCC 1 , [2014] 1 S.C.R. 3; Bank

of Montreal v. Bail Ltée, (SCC), [1992] 2 S.C.R. 554; referred to: Bank of Montreal v. Marcotte, 2014 SCC 55, [2014]2 S.C.R. 725; Theratechnologies inc. v. 121851 Canada inc., 2015 SCC 18, [2015] 2 S.C.R. 106; Transport TFI 6 v. Espar inc., 2017QCCS 6311; Beauchamp v. Procureure générale du Québec, 2017 QCCS 5184; Bramante v. Restaurants McDonald’s du Canadalimitée, 2018 QCCS 4852; Imperial Tobacco Canada ltée v. Conseil québécois sur le tabac et la santé, 2019 QCCA 358, 55 C.C.L.T.(4th) 1; Laflamme v.

Prudentiel-Bache Commodities Canada Ltd., 2000 SCC 26, [2000] 1 S.C.R. 638; Souscripteurs du Lloyd’s v.Alimentation Denis & Mario Guillemette inc., 2012 QCCA 1376; Guilbert v. Vacances sans Frontières Ltée, (QCCA), [1991] R.D.J. 513; AIC Limited v. Fischer, 2013 SCC 69, [2013] 3 S.C.R. 949; Bisaillon v. Concordia University, 2006 SCC 19,[2006] 1 S.C.R. 666; Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158; Western Canadian Shopping Centers Inc. v. Dutton,2001 SCC 46, [2001] 2 S.C.R. 534; Fisher v. Richardson GMP Ltd., 2019 ABQB 450, 95 Alta. L.R. (6th) 172; Louisméus v.

Compagnied’assurance-vie Manufacturers (Financière Manuvie), 2017 QCCS 3614; Brunelle v. Banque Toronto Dominion, 2009 QCCS 4605;Paré v. Desjardins Sécurité financière, 2007 QCCS 4566; Farber v. N.N. Life Insurance Co. of Canada, [2002] AZ-50123096; Comitésyndical national de retraite Bâtirente inc. v. Société financière Manuvie, 2011 QCCS 3446; Chandler v. Volkswagen Aktiengesellschaft,2018 QCCS 2270; Dupuis v. Desjardins Sécurité financière, compagnie d’assurance-vie, 2015 QCCS 5828; London Life InsuranceCompany v. Long, 2016 QCCA 1434; ATB Financial v.

Metcalfe & Mansfield Alternative Investments II Corp. (2008), (ON SC), 43 C.B.R. (5th) 269, aff’d 2008 ONCA 587, 92 O.R. (3d) 513; Desjardins Sécurité financière, compagnied’assurance-vie v. Dupuis, 2018 QCCA 1136; Hy Bloom inc. v. Banque Nationale du Canada, 2010 QCCS 737, [2010] R.J.Q. 912. By Côté J. (dissenting in part) ATB Financial v. Metcalfe & Mansfield Alternative Investments II Corp. (2008), (ON SC), 43 C.B.R.(5th) 269, aff’d 2008 ONCA 587, 92 O.R. (3d) 513; Infineon Technologies AG v. Option consommateurs, 2013 SCC 59, [2013] 3S.C.R. 600; Vivendi Canada Inc. v.

Dell’Aniello, 2014 SCC 1, [2014] 1 S.C.R. 3; Theratechnologies inc. v. 121851 Canada inc., 2015SCC 18, [2015] 2 S.C.R. 106; L’Oratoire Saint-Joseph du Mont-Royal v. J.J., 2019 SCC 35, [2019] 2 S.C.R. 831; Hollick v. Toronto(City), 2001 SCC 68, [2001] 3 S.C.R. 158; Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534; Bankof Montreal v. Marcotte, 2014 SCC 55, [2014] 2 S.C.R. 725; Sibiga v. Fido Solutions inc., 2016 QCCA 1299; Charles v. Boiron Canadainc., 2016 QCCA 1716; Société québécoise de gestion collective des droits de reproduction (Copibec) v.

Université Laval, 2017QCCA 199; Whirlpool Canada v. Gaudette, 2018 QCCA 1206; Martin v. Société Telus Communications, 2010 QCCA 2376;Pharmascience Inc. v. Option Consommateurs, 2005 QCCA 437, [2005] R.J.Q. 1367; Union des consommateurs v. Bell Canada, 2012QCCA 1287, [2012] R.J.Q. 1243; Labelle v. Agence de développement des réseaux locaux de services de santé et de services sociaux —région de Montréal, 2011 QCCA 334; Toure v. Brault & Martineau inc., 2014 QCCA 1577; Harmegnies v. Toyota Canada inc., 2008QCCA 380; Regroupement des citoyens contre la pollution v.

Alex Couture inc., 2007 QCCA 565, [2007] R.J.Q. 859; Fortier v. MeublesLéon Ltée, 2014 QCCA 195; Option Consommateurs v. Bell Mobilité, 2008 QCCA 2201; Trudel v. Banque Toronto-Dominion, 2007QCCA 413; Groupe d’action d’investisseurs dans Biosyntech v. Tsang, 2016 QCCA 1923; Lambert v. Whirlpool Canada, l.p., 2015QCCA 433; Benabu v. Vidéotron, 2018 QCCS 2207, aff’d 2019 QCCA 2174; Seigneur v. Netflix International, 2018 QCCS 4629,aff’d 2019 QCCA 1671; Raleigh v. Maibec inc., 2016 QCCS 2533; McCracken v. Canadian National Railway Co., 2012 ONCA 445,111 O.R. (3d) 745; Federal Express Canada Corporation v.

Farias, 2019 QCCA 1954; Sofio v. Organisme canadien de réglementationdu commerce des valeurs mobilières (OCRCVM), 2015 QCCA 1820; Belmamoun v. Brossard (Ville), 2017 QCCA 102, 68 M.P.L.R.(5th) 46; Durand v. Attorney General of Quebec, 2018 QCCS 2817; Komolafe v. Canada (Citizenship and Immigration), 2013 FC 431,16 Imm. L.R. (4th) 267; A v. Frères du Sacré-Coeur, 2017 QCCS 5394; Bank of Montreal v. Bail Ltée, (SCC), [1992] 2S.C.R. 554; Laflamme v.

Prudential-Bache Commodities Canada Ltd., 2000 SCC 26, [2000] 1 S.C.R. 638; Richter & Associés inc. v.Merrill Lynch Canada inc., 2007 QCCA 124, [2007] R.J.Q. 238; Louisméus v. Compagnie d’assurance-vie Manufacturers (FinancièreManuvie), 2017 QCCS 3614; Brunelle v. Banque Toronto Dominion, 2009 QCCS 4605; Rosso v. Autorité des marchés financiers, 2006QCCS 5271, [2007] R.J.Q. 61; Paré v. Desjardins Sécurité financière, 2007 QCCS 4566; Farber v. N.N. Life Insurance Co. of Canada,[2002] AZ-50123096; Rozon v. Les Courageuses, 2020 QCCA 5; Rumley v. British Columbia, 2001 SCC 69, [2001] 3 S.C.R. 184;Lallier v.

Volkswagen Canada inc., 2007 QCCA 920, [2007] R.J.Q. 1490; TELUS Communications Inc. v. Wellman, 2019 SCC 19,[2019] 2 S.C.R. 144; Nortel Networks Corp., Re, 2010 ONSC 1708, 63 C.B.R. (5th) 44; Holley v. Northern Trust Co. Canada, 2014ONSC 889, 10 C.B.R. (6th) 1, aff’d on other grounds, 2014 ONCA 719, 18 C.B.R. (6th) 162; Sam Lévy & Associés Inc. v. Azco MiningInc., 2001 SCC 92, [2001] 3 S.C.R. 978; In re Mount Royal Lumber & Flooring Co. (1926), (QC CS), 8 C.B.R. 240;Canadian Red Cross Society (Re) (1998), (BC SC), 165 D.L.R. (4th) 365; Hy Bloom inc. v.

Banque Nationale duCanada, 2010 QCCS 737, [2010] R.J.Q. 912; Mull v. National Bank of Canada, 2011 ONCA 488. Statutes and Regulations Cited Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. Charter of Human Rights and Freedoms, CQLR, c. C-12, ss. 6, 49. Civil Code of Québec, arts. 6, 7, 1375, 1458, 2098, 2803. Code of Civil Procedure, CQLR, c. C-25, arts. 4.2, 999d), 1003. Code of Civil Procedure, CQLR, c. C-25.01, arts. 18, 575, 577, 578. Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, ss. 16, 17. Securities Act, CQLR, c. V-1.1. Authors Cited Baudouin, Jean-Louis, et Pierre-Gabriel Jobin.

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Cowansville, Que.: Yvon Blais, 2014. Boucher, Bernard. Faillite et insolvabilité: Une perspective québécoise de la jurisprudence canadienne , vol. II. Toronto: Thomson Reuters, 2019 (feuilles mobiles mises à jour décembre 2019, envoi n o 4). Carbonnier, Jean. Droit civil , vol. II. Paris: Quadrige/PUF, 2004. Carhart Jeffrey, and Jay Hoffman. “Canada’s Asset Backed Commercial Paper Restructuring: 2007-2009” (2010), 25 B.F.L.R. 35. Crête, Raymonde, et Cinthia Duclos. “Le portrait des prestataires de services de placement”, dans Raymonde Crête et autres, dir., Courtiers et conseillers financiers.

Encadrement des services de placement . Cowansville, Que.: Yvon Blais, 2011, 45. Crête, Raymonde, et Cinthia Duclos. “Les sanctions civiles en cas de manquements professionnels dans les services de placement”, dans Raymonde Crête et autres, dir., Courtiers et conseillers financiers. Encadrement des services de placement . Cowansville, Que.: Yvon Blais, 2011, 361. Fabre-Magnan, Muriel. De l’obligation d’information dans les contrats: Essai d’une théorie . Paris: Librairie Générale de Droit et de Jurisprudence, 1992. Grammond, Sébastien, Anne-Françoise Debruche and Yan Campagnolo. Quebec Contract Law , 2nd ed.

Montréal: Wilson & Lafleur, 2016. Lafond, Pierre-Claude. Le recours collectif, le rôle du juge et sa conception de la justice: impact et évolution . Cowansville, Que.: Yvon Blais, 2006. L’Heureux, Nicole, et Marc Lacoursière. Droit bancaire , 5 e éd. Montréal: Yvon Blais, 2017. Lluelles, Didier, et Benoît Moore. Droit des obligations , 3 e éd. Montréal: Thémis, 2018. Pearce, Lauren. “Catch and Release: Class Actions and Solvent Third Parties Under the CCAA ” (2016), 11 Can. Class Action Rev. 171. Piché, Catherine. L’action collective: ses succès et ses défis . Montréal: Thémis, 2019.

Piché, Catherine. “Tout ce qu’on ne vous a jamais dit sur l’étape d’autorisation dans l’action collective” (2018), 77 R. du B. 525. Private Law Dictionary and Bilingual Lexicons: Obligations . Cowansville, Que.: Yvon Blais, 2003, “obligation to advise”, “obligation to inform”. Québec. Ministère de la Justice. Commentaires de la ministre de la Justice: Code de procédure civile,

chapitre C-25.01 . Montréal: SOQUIJ, 2015. Rousseau, Stéphane. “L’obligation du courtier de connaître son client en droit canadien des valeurs mobilières” (2008), 2 R.D.B.F. 11. Terré, François, Philippe Simler et Yves Lequette. Droit civil: Les obligations , 11 e éd. Paris: Dalloz, 2013. APPEAL from a judgment of the Quebec Court of Appeal (Bich, St-Pierre and Gagnon JJ.A.), 2017 QCCA 1673 , [2017] AZ-51437750, [2017] J.Q. n o 14964 (QL), 2017 CarswellQue 9582 (WL Can.), setting aside a decision of Dallaire J., 2016 QCCS 839 , [2016] AZ-51437750, [2016] J.Q. n o 1632 (QL), 2016 CarswellQue 1552 (WL Can.).

Appeal allowed in part, Moldaver, Côté and Rowe JJ. dissenting in part. Mason Poplaw , Isabelle Vendette , Samuel Lepage and Gabriel Faure , for the appellants. Bruce W. Johnston , Mathieu Charest-Beaudry , Serge Létourneau , Audrey Létourneau , Julien Delisle , Guy Paquette and Christophe Perron-Martel , for the respondent.

English version of the judgment of Wagner C.J. and Abella, Karakatsanis, Brown, Martin and Kasirer JJ. delivered by [ 1 ] Kasirer J. — With the greatest respect for the contrary view, I agree with the Court of Appeal ’s decision to authorize the class action proposed by the respondent, both against Desjardins Financial Services Firm Inc. (“Firm”) and against Desjardins Global Asset Management Inc. (“Management”).

In my respectful opinion, the Superior Court judge erred in dismissing the Re-amended and particularized motion (2) for authorization to institute a class action and to obtain the status of representative, reproduced in A.R., vol. II, at pp. 104-62 (“motion”), against the appellants. Except for one matter, I agree with the better part of the Court of Appeal ’s analysis. [ 2 ] It is true, as the jurisprudence of this Court has made plain, that a judgment dismissing a class action is entitled to deference on appeal, particularly because of the discretionary nature of the decisions of authorization judges.

In this case, however — and this is conceded by the appellants in several respects — the Superior Court judge erred in analyzing certain aspects of the conditions set out in subparas. (

a) and (

b) of art. 1003 of the former Code of Civil Procedure , CQLR, c. C-25 (“former C.C.P. ”) (which correspond to subparas. (1) and (2) of art. 575 of the new Code of Civil Procedure , CQLR, c. C-25.01 (“new C.C.P. ”)).

Like the Court of Appeal, I am respectfully of the view that these errors in many respects undermine the deference that must ordinarily be shown by an appellate court. [ 3 ] I am also of the opinion that some of these errors, including that of disregarding the contractual relationship between Firm and the group’s members, are overriding because they strike at the very heart of the judge’s decision not to authorize the class action. As the Court of Appeal stated, the respondent’s position was not well circumscribed before the Superior Court. In fact, the action

against Firm is based on allegations that a common omission, made by all of its representatives, gave rise to liability for this appellantbecause of the duty to inform that was inherent in its contractual relationship with the respondent and the other members of the group.The alleged fault is therefore a systematic breach of the duty owed by Firm, acting through its employees or mandataries, to inform thegroup’s members of the risks associated with the investments at issue — an omission that was identical and generalized across the group.Having declined to find that there was a contract, the judge did not identify this omission by Firm, which, according to the motion, is asource of contractual liability for Firm under art. 1458 of the Civil Code of Québec (“C.C.Q.”). [4] First of all, the “direct” contractual liability alleged against Firm is based on its own fault.

It is argued that Firm is atfault for giving insufficient instructions to all of its representatives. It is also alleged that Firm’s representatives, having received false,misleading or incomplete information, failed in turn to provide adequate information to the respondent and the other members of thegroup, thereby causing them loss.

According to the position the respondent wishes to argue on the merits, this generalized omission gaverise to “indirect” contractual liability for Firm as a mandator or employer. [5] Despite various concessions made at the hearing in this Court, the appellants argue — incorrectly, in my view —that the action against Firm must be characterized as a [translation] “class action based on the representations made individually byhundreds of financial advisers” (A.F., at para. 17).

I disagree: the motion alleges that all of the representatives failed in the same way todischarge their contractual duty to inform each member of the group of the risks associated with the proposed investment, therebymaking the appellant Firm indirectly liable for an identical fault committed systematically by all its representatives. [6] Contrary to what the motion judge held, I am therefore of the view that the respondent has met the conditionsrelating to each of the legal bases for the proposed class action against Firm. [7] Moreover, because of errors made by the Superior Court in assessing the allegations against the appellantManagement — again largely conceded — this aspect of the class action must also be authorized, as the Court of Appeal held.

However,I would acknowledge the respondent’s concession that he is not seeking, on his own behalf or on behalf of the group, punitive damagesin relation to the “Affected ABCP” (asset-backed commercial paper) — a definition not disputed by the parties — that is subject to arestructuring process and a related sanction order made by an Ontario court under the Companies’ Creditors Arrangement Act, R.S.C.1985, c. C-36 (“CCAA”). [8] Finally, I am of the opinion that, in performing her screening function, the motion judge trenched upon the work ofthe trial judge, both with regard to Firm and with regard to Management.

As the Court of Appeal correctly pointed out, this too is an errorthat, under the established standards, provides a basis for appellate review of the judge’s decision. [9] In fairness to the motion judge, I note that the parties did not make life easy for her. The respondent’s motion —amended thoroughly along the way, including with respect to the initial position put forward — is not the most elegant of its kind. Thejudge’s task was also complicated by the procedural initiatives of all kinds undertaken by the appellants — examinations, production ofdocuments, motions for particulars.

The Court of Appeal rightly noted that the steps taken by the appellants seemed [translation] “at firstglance to be inconsistent with the idea of a

summary proceeding” (2017 QCCA 1673, at para. 36 ). The increasing complexityof the proceedings and the excessive volume of evidence may have prompted the authorization judge to take on, perhaps reluctantly, butno less inappropriately, the role of ultimate arbiter of the facts rather than limiting herself to analyzing the proposed legal syllogism. I. Preliminary Remarks [10] Once it found that there were grounds to intervene, the Court of Appeal thought it appropriate to review — and it wasright to do so — the procedural and factual background of the case.

I adopt its account as my own, subject to a few additional pointsraised by the parties’ arguments. Before going any further, I also wish to make a few remarks concerning the debate between the parties. [11] First preliminary remark: The standard for authorizing a class action is not in dispute in this appeal.

This is so despitethe fact that, in the factum they filed with this Court, the appellants criticize the Court of Appeal’s judgment harshly as being[translation] “a new milestone in calling into question the work of the Superior Court’s authorization judges” (A.F., at para. 11), anddespite the fact that, in their application for leave to appeal, they asked in part that this Court [translation] “clarify the application of thetest developed in [Vivendi Canada Inc. v. Dell’Aniello, 2014 SCC 1, [2014] 1 S.C.R. 3] in the context of market intermediaries’ liabilityfor the actions of financial advis[e]rs” (para. 16).

Focusing more specifically on the expression [translation] “read between the lines”used by the Court of Appeal (at para. 33), the appellants state the following in their factum: [translation] By establishing that authorization judges must now “read between the lines” to identify arguable cases in allegationsthat are “not perfect”, the Court of Appeal is giving perilous guidance that is contrary to the principles laid down by this Court withrespect to the burden on applicants to articulate their syllogism in a clear and sufficient manner.

That guidance alone warrants theintervention of this Court . . . . [Footnote omitted; para. 34.] In support of this assertion, the appellants cite the reasons of the judges who dissented or dissented in

part in L’Oratoire Saint-Joseph duMont-Royal v. J.J., 2019 SCC 35, [2019] 2 S.C.R. 831, thus inviting the Court to reconsider a decision it rendered in 2019. [12] This position is surprising and contrasts with the grounds raised by the appellants at the hearing, during which theydid not even mention the expression “read between the lines”. In answer to questions from the members of the panel, counsel for theappellants conceded that the purpose of their appeal was not to challenge the principles established by this Court in InfineonTechnologies AG v.

Option consommateurs, 2013 SCC 59, [2013] 3 S.C.R. 600, and Vivendi or — despite what is stated in theappellants’ factum — to move away from the majority opinion in Oratoire. [13] Because my colleague deals at length with the expression “read between the lines”, which she believes reflects amethodological error made by the Court of Appeal, I think it will be helpful to explain why, in my view, this expression should not beunderstood as a departure from the applicable law. [14] To dispel any confusion on this point, I will quote the Court of Appeal’s words in their context:

[ translation] Stated otherwise, on the basis of the facts alleged in the application for authorization — facts that, in addition, must in principle be assumed to be true — “[t]he applicant’s burden at this stage is to establish an arguable case”, according to the Supreme Court in Infineon , and nothing more. Of course, the Supreme Court added immediately, referring to Harmegnies v. Toyota Canada inc. , these factual allegations must, however, not be vague, general or imprecise and must “be accompanied by some evidence to form an arguable case”. What does this mean?

On the one hand, while it is true that one must not be satisfied with vagueness, generalities and imprecision, it would be wrong to close one’s eyes to allegations that are perhaps not perfect, but whose true meaning is nonetheless clear. One must therefore be able to read between the lines. To do otherwise would be to adopt an unduly literal or rigid approach and to give what the Supreme Court stated in this regard a meaning that it does not have.

On the other hand, it must be understood that generic allegations will not suffice, as the facts raised must, in light of the applicable law, be specific enough to make it possible to comprehend the gist of the proposed narrative and to verify on that basis that the conditions of art. 575 C.C.P . are met, that is, that the legal syllogism is arguable and that the issues of fact and law underlying it are sufficiently common that their resolution will advance the case for the benefit of each of the members of an otherwise appropriate class, whose interests will be assured by a person capable of properly representing them; these conditions must be interpreted and applied in a manner that “favours easier access to the class action”.

There is therefore no requirement that the person seeking authorization to institute a class action specify in minute detail all the allegations being made or the evidence that the person intends to adduce in support of those allegations at the trial on the merits, an approach rejected in Infineon by the Supreme Court, which noted that “the applicable standard is that of showing an arguable case, not the more onerous one of proof on a balance of probabilities”. [Footnotes omitted; paras. 32-34.] [ 15 ] Contrary to what the appellants argue in their factum, I do not think that the expression “read between the lines” reflects any error by the Court of Appeal .

A careful reading of the passage shows that this figurative expression was used simply to caution against being overly literal in analyzing a motion for authorization to institute a class action, and not to signal a change in the law.

When the Court of Appeal’s reasons are read as a whole and the justifications it gave for intervening are considered in context, one plainly understands that “ read between the lines” is not an invitation to search in a vacuum — on the blank page — for allegations that are missing from the motion. [ 16 ] A few paragraphs earlier, the Court of Appeal explained that an overly strict approach at the authorization stage, however laudable the intention behind it may be, is not consistent with the approach proposed by this Court in Infineon , Vivendi , Bank of Montreal v.

Marcotte , 2014 SCC 55 , [2014] 2 S.C.R. 725, and Theratechnologies inc. v. 121851 Canada inc. , 2015 SCC 18 , [2015] 2 S.C.R. 106, i.e. a flexible, liberal and generous approach to the authorization conditions that “favours easier access to the class action as a vehicle for achieving the twin goals of deterrence and victim compensation” (C.A. reasons, at para. 29, quoting Infineon , at para. 60).

I would add that the Court of Appeal properly relied on Infineon , in which, as we know, this Court explained that inferences can be drawn, not from an absence of words, but from the allegations themselves (see Infineon , at para. 89). It is true, as my colleague states, that inferences may not be drawn in the complete absence of allegations. In my view, however, the Court of Appeal adhered perfectly to the principles laid down in Infineon : through its approach, those principles were implemented.

The Court of Appeal relied precisely on the allegations at paras. 107 et seq. of the motion to identify the breach committed by Ms. Blanchette, the financial adviser, that is, failing to inform the respondent of the risks associated with the investment (see, e.g., para. 77).

The Court of Appeal ’s approach also allowed it to overlook the fact that the motion was poorly worded in some respects, for example, by not dwelling on an ill-chosen word in the motion but instead reading the entire paragraph, even the entire motion, in order to understand the [ translation] “true meaning” of the allegations (see, e.g., para. 95). [ 17 ] The same approach has been adopted in this Court’s decisions — including Oratoire , rendered after the Court of Appeal ’s judgment.

My colleague Brown J., writing for the majority in that case, accepted J.J.’s argument, which was not explained in detail in the allegations, that the combination of several pieces of evidence “supports an argument, at the authorization stage, that it might be possible at the trial on the merits to draw from them an inference that the Congregation knew or could not have been unaware that some of its members were assaulting children” (para. 24 (emphasis in original); see also para. 69).

Brown J. added that authorization judges must “pay particular attention not only to the alleged facts but also to any inferences or presumptions of fact or law that may stem from them and can serve to establish the existence of an ‘arguable case’” (para. 24; see also para. 60). It can be seen from the majority’s r easons in Oratoire that the applicant must present facts that are specific enough to allow the legal syllogism to be considered but that it is not necessary to provide step-by-step details of the legal argument to be made in the submissions on the merits of the case.

In this regard, the Court of Appeal was not changing or reshaping the law by not requiring that the entire legal argument be laid out in minute detail. [ 18 ] In using the expression “read between the lines”, the Court of Appeal also intended to denounce the rigidity and literalism that, in its view, were reflected in the motion judge’s decision.

It found that this ill-advised rigidity was the source of the judge’s reviewable error in [ translation ] “stepping into the realm of the evidence and the merits and imposing on the applicant a burden going well beyond the requirements set by art. 575 C.C.P. (art. 1003 of the former C.C.P. )” (para. 35).

I agree with my colleague that the judge made this error, including by concluding that the 2008 financial crisis, not Management’s fault, was the cause of the loss suffered. [ 19 ] There is therefore no question of inventing wording that is not in the motion or of relieving the applicant of its burden of demonstration. As the Court of Appeal explained, [ translation] “[f]orm is, of course, important, but it must not prevail over substance, even in a class action” (para. 95). Rigour is called for in reading the motion as a whole, but, as the Court of Appeal stated, a rigid or literal approach is risky.

In 2006, in a book published prior to the decisions in Infineon , Vivendi and Oratoire , Professor Pierre-Claude Lafond pointed out the flaws in an overly rigid approach, noting that [ translation ] “[t]he liberal judicial

interpretation, which is now the prevailing one, ensures that the class action does not become inaccessible for essentially technical reasons, depriving litigants of a powerful instrument of access to justice” ( Le recours collectif, le rôle du juge et sa conception de la justice: impact et évolution (2006), at p. 272; see also pp. 7, 81-88 and 280). This Court took note, relying on the writings of Professor Lafond and other sources to endorse this liberal approach in Oratoire (see paras. 42, 56 and 79). [ 20 ] In short, contrary to what the appellants suggest, the Court of Appeal did not invent wording or a cause of action by

using this expression. To “read between the lines” is to take the wording as a starting point from which to discover the full message itconveys, including the necessarily implied message. Paradoxically, the appellants take the expression literally by insisting that “readbetween the lines” means to read into the blank spaces something not written there.

They seem to forget the meaning of the metaphorchosen by the Court of Appeal, lapsing into precisely the same literalism that the expression is intended to denounce. [21] Indeed, the appellants have not cited any decision in which the expression “read between the lines” has causedconfusion or has been interpreted as an invitation to rewrite a cause of action.

On the contrary, it seems to me that the judges of theSuperior Court have no particular difficulty understanding these words, as they have found, for example, that [translation] “theallegations in an application for authorization need not specify in minute detail the evidence that an applicant intends to adduce on themerits, and that the allegations may be imperfect but their true meaning may nonetheless be clear” (Transport TFI 6 v. Espar inc.,2017 QCCS 6311, at para. 23 , citing Asselin (C.A.) and Infineon; see also Beauchamp v. Procureure générale du Québec,2017 QCCS 5184, at paras. 18 and 73 ; Bramante v.

Restaurants McDonald’s du Canada limitée, 2018 QCCS 4852, at para. 10). The concerns about a slippery slope that will transform the state of the law in Quebec if the Court of Appeal’s decision isupheld are therefore, in my view, unfounded. [22] Second preliminary remark: The appellants’ categorical assertion that it is impossible to bring a class action against abrokerage firm based on wrongdoing by investment advisers must be rejected.

In urging the dismissal of the action against Firm, counselfor the appellants argued at the hearing that any action based on faults committed by representatives, like the one proposed in this case,is necessarily an individual action because the relationship between an adviser and a client is inevitably personalized around the client’srisk tolerance and the advice relating to it. This statement is lacking in nuance, as my colleague acknowledges.

As we will see, not onlydo the appellants paint an inaccurate picture of the case law, but the categorical position they put forward to defeat the class actionagainst Firm is also inconsistent with the Quebec authorization judge’s task of verifying whether there is an identical, similar or relatedquestion that will advance the case, a condition more flexible than the one that exists in the rest of the country.

Although my colleaguestates that she would not close the door to the possibility of a class action in similar circumstances, her reasons, if accepted by this Court,would in my respectful view reflect, in their practical effects, the appellants’ assertion. [23] Third preliminary remark: The case is shaped to a large extent by the appellants’ concessions that the motion judgemade several errors. As I have already noted, they concede that the judge erred in denying the existence of a contractual relationshipbetween Firm and the group’s members, a relationship on which Mr.

Asselin relies to argue that this appellant is contractually liable. Theappellants also concede that the motion judge erred in excluding the possibility of a cause of action against Management as the designerof the investments at issue. Moreover, they admit that she rejected a class action against Management pursuant to art. 1003(

a) of theformer C.C.P. without having analyzed this appellant’s situation, as she confined herself to examining Firm’s situation alone. In thisCourt, the appellants do not dispute the fact that there are what are called “common” questions relating to Management.

They alsoconcede that their argument concerning the release related to ABCP would prevent only the claim for punitive damages from beingauthorized, not the aspect of the proposed action that deals with compensatory damages. [24] Not only do all of these concessions clarify the debate that remains to be resolved by this Court, but they also confirmthat the Court of Appeal was correct to intervene despite the deference generally owed to authorization judges.

With respect, in light ofthese conceded errors — most of which were relevant to the motion judge’s decision to deny authorization — I think that it is particularlydifficult to argue that the Court of Appeal intervened in this case without any grounds or by “rewriting” Mr.

Asselin’s cause of action. [25] Fourth preliminary remark: Although my colleague Côté J. writes that “[t]he flexible and liberal approach toauthorization established by this Court’s decisions in Infineon, Vivendi and subsequent cases is not being called into question here”(para. 199), I am, with respect, of the view that this would in fact be the unavoidable consequence of what she proposes in her reasons.Her analysis might be thought to deviate from what this Court has said about the approach to be taken at the authorization stage on atleast two points.

First, she suggests that a court’s role is not simply to screen out frivolous applications, thereby contradicting theprinciples laid down by this Court in Infineon and Oratoire. Second, by disregarding the common question raised by this case andemphasizing that “[t]he individualized analysis required by the action precludes the possibility of proceeding on a collective basis”(reasons of Côté J., at para. 247), she seems to add a requirement, in the analysis of the condition set out in art. 1003(

a) of the formerC.C.P., that the common questions predominate over the individual ones. However, Quebec law requires only that there be a commonquestion that can advance the action in a not insignificant manner. In my respectful view, these assertions seem to have the effect ofundermining the generous and flexible approach adopted by this Court in Infineon, Vivendi and Oratoire. [26] I note that the parties have not asked the Court to reconsider its decisions.

Indeed, the appellants conceded at thehearing that the appeal to this Court is not meant to change the law; it is an appeal in which this Court’s role is simply to “correct errors”allegedly made by the Court of Appeal.

I agree with the appellants on this point, and I would even go further: not only does this caseprovide no basis for changing the law, but the Court of Appeal adhered perfectly to the analytical framework established in Infineon andVivendi, and even though Oratoire was decided after the Court of Appeal rendered its judgment, its reasoning was also consistent withthe main principles enunciated by this Court in that case, which, until further notice, states the law. [27] I therefore propose to confine myself to the law as it stands following Infineon, Vivendi and Oratoire.

As we know,the threshold for authorizing a class action in Quebec is a low one. Once the four conditions set out in art. 1003 of the former C.C.P.(now art. 575 of the new C.C.P.) are met, the authorization judge must authorize the class action; the judge has no residual discretion todeny authorization on the pretext that, despite the fact that the four conditions are met, a class action is not “the most appropriate”vehicle (see Vivendi, at para. 67).

Questions of law may be resolved by an authorization judge if the outcome of the proposed actiondepends on the judge’s doing so, but this choice is generally a discretionary one (see Oratoire, at para. 55). This reflects the purpose ofthe authorization stage of the class action: the judge’s role is to filter out frivolous claims, and nothing more (see Oratoire, at para. 56,citing, among other things, Infineon, at paras. 61, 125 and 150). Finally, there is no requirement in Quebec that the common questionspredominate over the individual ones (see Vivendi, at paras. 56-57).

On the contrary, a single common question is enough if it advancesthe litigation in a not insignificant manner. It is not necessary that the common question be determinative of the outcome of the case (seeVivendi, at para. 58; Oratoire, at para. 15). [28] With respect, I am therefore of the view that my colleague and I do not disagree on mere questions “of application” of

well-established principles (reasons of Côté J., at para. 200). II. Background and Parties’ Arguments [29] The respondent submits that the appellant Firm incurred contractual liability to him and the other members of thegroup by reason of its own conduct as well as through its representatives. This liability is based on what the Court of Appeal referred toas a [translation] “dual fault”: (

i) Firm’s own systematic failure to give all of its representatives sufficient instructions concerning the factthat there were risks associated with the investments issued by the Desjardins caisses populaires (Firm’s “direct” fault), and (ii) asystematic failure by all of Firm’s representatives to disclose those risks to the group’s members (Firm’s “indirect” fault). The partiesagree that Firm can be liable for the faults of its financial advisers (including Mr. Asselin’s adviser, Ms.

Blanchette) because they wereacting as its employees or mandataries. [30] The respondent also argues in his motion that the appellant Management is extracontractually liable to him and theother members of the group. This liability is twofold as well: (

i) Management allegedly committed an extracontractual fault in the designof the capital-guaranteed deposits and is therefore liable as the [translation] “designer” of the investments; and (ii) Management allegedlymanaged the invested funds incompetently, thereby incurring extracontractual liability as the “manager” of the investments. [31] According to the main allegations in the motion, the basis for the appellants’ liability is that Firm [translation]“breached its informational obligations and duties and is liable for the damage sustained by the Group’s members” (A.R., vol.

II, atp. 44, para. 105), while Management “breached its obligations and duties of competence with regard to design and management and isliable for the damage sustained by the Group’s members” (p. 44, para. 106 (emphasis deleted)). [32] The appellants dispute the existence of common questions in the proposed action against Firm pursuant to art. 1003(a)of the former C.C.P. They also challenge the sufficiency of the allegations in the proposed action against Firm and Management in lightof the conditions established under art. 1003(

b) of the former C.C.P. Furthermore, they take issue with the Court of Appeal for notapplying the judicial release with respect to ABCP, which would have led that court to deny the claim for punitive damages againstManagement at this preliminary stage. [33] I propose to discuss the grounds of appeal in detail, in relation to each appellant, in the same order as the motionjudge: first from the perspective of art. 1003(

b) of the former C.C.P. and then by reference to the “common” questions under art. 1003(a)of the former C.C.P. III. Firm A.

Article 1003(

b) of the Former C.C.P.: “Arguable Case” Against Firm [34] The appellants allege that there is no arguable case against Firm. On this point, the motion judge found that there wasno good colour of right for a potential contractual claim against Firm because of the lack of a contractual relationship between Firm andMr. Asselin. The judge noted the absence of any wrongful breach of the deposit agreements, which were contracts that were not bindingon Firm, and also found that Firm could not be alleged to have committed a particularized contractual fault (2016 QCCS 839, at paras. 70and 82 ).

Absent a signed contract or a mandate, Firm was not contractually liable to the respondent or the other members of thegroup, which, in the judge’s view, defeated the position advanced by the respondent in his motion (para. 136). [35] We know that the Court of Appeal viewed this as an error. In its opinion, the contractual claim against Firm was notbased on the deposit agreements. The motion and the evidence adduced in support of the allegations confirmed that Ms. Blanchette,Firm’s planner who had advised the respondent, Mr.

Asselin, was an employee or mandatary of Firm, just like the individuals who hadadvised the other members of the group (para. 51, note 63, and para. 52, note 66). Those representatives linked Firm to the group’smembers through a contract for investment advice, a contract that existed independently of the deposit agreements entered into with thecaisses populaires (paras. 49-82). [36] At the hearing in this Court, the appellants rightly conceded that the motion judge had erred on this point and thatthere was a contract between Firm and the group’s members. Counsel thus admitted that Ms.

Blanchette and the other financial adviserswere representatives of Firm — its employees or mandataries — and that, as such, their faults could give rise to contractual liability forFirm (transcript, at pp. 10 and 19). The contractual basis for Firm’s liability is therefore no longer in issue. [37] The existence of this contractual relationship between Firm and the group’s members is a fundamental element of theproposed legal syllogism, which makes it possible to argue that Firm is contractually liable.

This being the case, I cannot agree with theview that the Court of Appeal intervened with respect to this conclusion in the absence of a palpable and overriding error or an error oflaw by the motion judge. With respect, it seems equally difficult to argue that the Court of Appeal rewrote or “reorient[ed]” therespondent’s cause of action (A.F., at para. 28; reasons of Côté J., at para. 236). To my mind, the appellants’ concession that the judgeerred in refusing to recognize the contractual relationship between Firm and the group’s members is fundamental.

This error shows thatthe motion judge simply did not understand the proposed legal syllogism, and the error is more than sufficient to justify the Court ofAppeal’s intervention with respect to this condition in the proposed action against Firm. [38] Despite their concession, the appellants submit that the allegations of the motion are, for the purposes of theassessment required by art. 1003(

b) of the former C.C.P., insufficient for the class action to be authorized. They argue that therespondent makes only [translation] “vague, general and imprecise allegations” with respect to Firm’s faults. In the circumstances, theysay, such allegations should be supported by some evidence, but that evidence is absent in this case. [39] Specifically, the appellants argue that all of the documents filed by the respondent that allegedly containmisrepresentations came not from Firm, but from the caisses populaires that were the issuers of the capital-guaranteed deposits.

Thosedocuments cannot make up for the insufficiency of the allegations of fault against Firm, nor can they ground Firm’s liability. Theappellants argue that the motion judge was right about this: the few exhibits that came from Firm, such as the respondent’s planningforms, contain no specific representations concerning the capital-guaranteed deposits.

[ 40 ] These arguments must be rejected. In my view, there is no absence of allegations in the case at bar. On the contrary, the allegations are sufficiently precise, in accordance with the applicable standard, and are also supported by “some evidence” within the meaning of Infineon and Oratoire .

(1) Allegations of the Motion [ 41 ] Once it is established — contrary to what the motion judge concluded from the record — that there was a contract, the factual allegations relating to the dual fault can be identified easily, and they must therefore be assumed to be true at the authorization stage. [ 42 ] The proposed legal syllogism, which is based on a breach by Firm of its duty to inform, bears closer examination. In his motion, Mr. Asselin explains right in the

summary that he is alleging that the appellants [ translation] “ breached and violated the obligations and duties of information , competence and management” (A.R., vol. II, at p. 105, para. 2 (emphasis added)). According to the motion, the appellants failed to “ adequately infor[m] the Group’s members” (p. 105, para. 5 (emphasis added)) of the risky transactions conducted using the amounts the members had entrusted to them. With regard to injury, Mr.

Asselin explains the loss of a return resulting from risky investment strategies (para. 8); with regard to causation, he states that he “would never have agreed to invest in the PP and ALT Investments if the respondents [here, the appellants] had adequately informed him of the risks associated with these investments” (p. 106, para. 10 (emphasis added)). This is the legal syllogism advanced by Mr.

Asselin for the proposed action against Firm. [ 43 ] The faults are described with sufficient precision, and the information missing for the entire group relates, among other things, to the level of risk involved in the investments, their volatility and the way they worked, including the leverage used. First, there are paras. 107 and 107.1 of the motion: Firm described the investments as being [ translation ] “safe and intended for a risk-averse investor”, and Firm failed to give its representatives sufficient instructions “regarding the characteristics and risks of the . . . Investments” (A.R., vol.

II, at p. 147). In both cases, Mr. Asselin makes direct allegations against Firm. Because it had a monopoly on information about the structure and characteristics of the investments, Firm had a duty to inform its representatives so that they in turn could inform their clients.

In the absence of adequate instruction concerning the investments, the representatives “were not therefore in a position to evaluate their advantages and disadvantages” (p. 147, para. 107.1). [ 44 ] A specific allegation of fault made against the representatives can be found at para. 107.2 of the motion: [ translation ] “The information provided by the representatives of Desjardins Financial Services to the Group’s members was therefore necessarily wrong or insufficient, if not false, deceptive or misleading” (A.R., vol. II, at p. 147).

Firm’s liability for those faults is also alleged, since the respondent explains that Firm was “responsible for the mutual fund representatives and financial planners working in the network of caisses populaires” (p. 110, para. 30) and, more specifically, that Firm was, “[i]n the context of this case . . . responsible for the representatives who offered PP and ALT Investments and solicited deposits from the Group’s members in the network of caisses populaires of the Desjardins Group” (p. 110, para. 32). [ 45 ] It can therefore be understood that the proposed action is based not on a breach of the deposit agreements, but rather on a generalized and systematic breach of the duty to inform.

Mr. Asselin alleges that Firm systematically breached its duty to inform by not adequately informing all of its representatives of the risks and characteristics of the investments (the “direct” fault). According to the facts alleged in the motion, the representatives, having received false, misleading or incomplete information, then failed to provide adequate information to the group’s members (the “indirect” fault). Firm’s alleged “ dual fault”, and the basis for the action, is a generalized and systematic breach of its general duty to inform.

Given that Firm dealt with the group’s members only through its representatives, this “dual fault” identified by the Court of Appeal refers, in other words, to two sides of the same coin: Firm’s breach of its duty to inform the group’s members directly itself, and to inform them indirectly through its representatives. [ 46 ] The motion states, at paras. 73.7 and 73.8, that the promotional documents used by the representatives with their clients emphasized that the investments at issue had potential returns that were higher, regular and not very volatile. [ translation] “However”, the motion reads, “these documents said nothing at all about the risks associated with these investments, apart from sometimes stating in a footnote that the returns might be nil” (A.R., vol.

II, at p. 124 (emphasis deleted)). [ 47 ] This is an allegation that there was a failure to disclose the risks, a failure that, according to the respondent, was generalized across the group and constituted an identical breach by Firm of its contractual duty to inform that was repeated systematically for each member of the group. The allegation against Firm must be analyzed in light of the very nature of the fault committed — an omission is, by definition, characterized by an absence of information.

Firm’s liability allegedly [ translation] “arises from [its] denial or failure to disclose”, to borrow a useful expression from another context (see Imperial Tobacco Canada ltée v. Conseil québécois sur le tabac et la santé , 2019 QCCA 358 , 55 C.C.L.T. (4th) 1, at para. 813 ). In my view, it is therefore not a matter of seeking some particularized fault committed by the representative, Ms.

Blanchette: the motion alleges faults of omission that were committed systematically by both Firm and its representatives. [ 48 ] At paras. 73.9 and 73.10, as well as paras. 73.26 to 73.30, the motion provides additional information concerning breaches

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