2018 QCCA 2089, 2018 QCCA 2089

Apple Canada Inc. c. Charbonneau 2018 QCCA 2089 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027932-185 (500-06-000722-146) MINUTES OF THE HEARING DATE : December 6, 2018 THE HONOURABLE STEPHEN W. HAMILTON, J.A. PETITIONER COUNSEL APPLE CANADA INC. APPLE INC. Mtre Kristian Brabander M tre SIMON V. POTTER, Ad.

E. (McCarthy Tétrault s.e.n.c.r.l., s.r.l.) (Absents) RESPONDENT COUNSEL RENÉ CHARBONNEAU Mtre DAVID ASSOR (Lex Group Inc.) (Absent) DESCRIPTION: Application for leave to appeal from a judgment rendered in the course of the proceedings on October 5, 2018, by the Honourable Mark G. Peacock of the Superior Court, District of Montreal. Application for stay of the proceedings before the Superior Court. (Art. 31 and 578 C.c.p. ) Clerk: Lory Beauregard Courtroom: RC-18

HEARING 9 h 30 Following the hearing of December 4, 2018 and the announcement that the judgment will be delivered today on the minutes: BY THE JUDGE : Judgment – see page 3. (

s) Lory Beauregard, clerk

BY THE JUDGE JUDGMENT [ 1 ] The Petitioners seek leave to appeal from the judgment of the Honourable Mark Peacock of the Superior Court for the District of Montreal on October 5, 2018, which revised his earlier judgment authorizing a class action by the Respondent against the Petitioners with respect to the definition of the class and the damages claimed. * * * [ 2 ] The appeal arises in the following context. [ 3 ] The Respondent alleges a design defect in the 2011 MacBook Pro laptop computer manufactured and sold by the Petitioners, which, he alleges, can manifest itself through certain functionality issues (referred to in the judgments and the proceedings as “Graphics Defects”).

He filed a motion for authorization to institute a class action against the Petitioners. Mr. Justice Peacock was designated as case management judge. [ 4 ] In his motion for authorization, the Respondent defined the class as all Canadian purchasers or owners of the computer and identified the conclusions sought as compensatory damages (including the reimbursement of the purchase price and repair costs) and punitive damages.

The case management judge authorized the class action on November 24, 2016, but limited the class to Quebec purchasers or owners of a computer which had suffered a Graphics Defect. [1] [ 5 ] At the request of the parties, the authorization judgment was rectified on December 22, 2016.

The Respondent asked the case management judge to remove the limitation to computers which had suffered a Graphics Defect, but the only rectification allowed by the case management judge was to extend the class to Quebec purchasers or owners of a computer which had suffered or suffers from a Graphics Defect. [ 6 ] The Respondent sought to amend his authorization motion on March 22, 2017 to include all purchasers on the basis that all 2011 MacBook pro Laptops are defective and that the Graphic Defect is only a manifestation of the problem, and to include other damages such as stress and inconvenience, loss of work product, loss of time, loss of income, loss of resale value and cost of replacement laptop.

Those amendments were refused on the basis that the class action had already been authorized. [2] [ 7 ] When the Respondent filed its originating class action application on May 14, 2018, he included the broader class definition and damages, even though they had never been authorized by the case management judge. [ 8 ] The Petitioners made an application to strike those allegations. In the context of that application, the case management judge concluded that he had made a mistake when he narrowed the class and the damages.

He decided to revise the class definition and he invited the Respondent to make a verbal motion to amend the authorization judgment. The case management judge then issued a revised rectified authorization judgment in which he included the broader class and damages. [ 9 ] The Petitioners seek leave to appeal from that judgment. * * * [ 10 ] The first issue is to determine the rules applicable to the motion for leave to appeal and whether the Petitioners meet the relevant conditions. [ 11 ] In the title on class actions,

Article 578 C.C.P. provides a specific rule on appeals from the judgment authorizing or denying authorization of a class action. That rule applies in this case to the judgment rendered on November 24, 2016, which authorized the class action, but not to any of the subsequent judgments.

It is worth observing, however, that if the case management judge had authorized a class action with the disputed class definition, it would have been very difficult for the Petitioners to get leave to appeal. [3] [ 12 ] There are also specific rules on final judgments in Articles 602 to 604 C.C.P ., which do not apply at this stage of the case. [ 13 ] The judgment in appeal is properly characterized as a judgment in the course of the class action proceeding, and as such the appeal is governed by

Article 31 C.C.P . [4] Because of the impact of the judgment, it is not appropriate to treat it as a case management measure subject to the more difficult standard for an appeal in

Article 32 C.C.P. [ 14 ] Under

Article 31 C.C.P ., the judgment may be appealed only if “it determines part of the dispute or causes irremediable injury to a party, including if it allows an objection to evidence.” Moreover, if I have jurisdiction to grant leave to appeal, Articles 9 and 18 C.C.P . require me to consider the proper administration of justice, which involves various factors such as the principle of

proportionality and the chance of success on appeal. [5] [ 15 ] I am not satisfied that the first test is met. [ 16 ] In their application for leave to appeal, the Petitioners allege the following irremediable injury:

a) The class definition now extends to people who did not suffer any actual damage;

b) They now face new and imprecise questions on discovery;

c) They face additional claims of damages; and

d) The Judgment significantly, though indeterminately, broadens the scope of the class action and the damages claimed, just before proceeding to discovery. [ 17 ] None of these qualify as irremediable injuries. It is well established that the fact of being sued, including the scope of the class in a class action, is not irremediable injury because the action can be dismissed on the merits.

If it is not, there will be a right of appeal from the final judgment. [6] [ 18 ] At the hearing, the Petitioners also argue that the new class definition will require them to send new notices, which will result in substantial costs and damage to the Petitioners’ reputation. These are matters which can be raised with the case management judge. In any event, they do not constitute irremediable injuries. [ 19 ] Finally, the Petitioners raise the risk that the judgment in appeal could constitute a dangerous precedent if it is not reversed by the Court of Appeal.

That is a consideration in relation to the proper administration of justice, but it is not a substitute for irremediable injury. [ 20 ] This is sufficient to dismiss the application for leave to appeal. * * * [ 21 ] But there is more. [ 22 ] The class action, as authorized on November 24, 2016 included a class definition that was somewhat problematic. To be part of the class, the person must have a computer which has suffered or suffers from certain problems.

This makes it difficult for a person to know at the outset whether or not they are included in the class – they must assess whether their computer’s issues meet the definition of Graphics Defect, and those issues may only appear over time. [7] It also gives rise to the possibility that a second class action might be required in relation to the same computers, which is not in the interest of the parties and is not consistent with the proper administration of justice. [ 23 ] If there had been an appeal from the judgment, the Court could have fixed the definition.

But no one appealed. [ 24 ] Rather, the Respondent tried to resolve the problem through rectification and amendment, but neither of those was appropriate – the problem was not in the nature of a clerical error that could be rectified and the Respondent cannot amend his authorization motion or the authorization judgment after judgment has been rendered. [ 25 ] The Respondent attempted to ignore the problem by filing an originating class action application that was not consistent with the rectified authorization judgment.

That was clearly not appropriate. [8] [ 26 ] At that point, the case management judge had no good options. He could not allow the class action to proceed in a form that had not been authorized. He could not allow the class action to proceed in accordance with the authorization because it included a problematic class definition. It would be too late to fix the class definition in the final judgment, because that would involve adding members without notifying them and giving them the option to opt out of the class. No one else had the power to intervene to fix the class definition.

The case management judge chose to exercise the power to revise the authorization to correct the class definition. [ 27 ] This appears to be consistent with the language of

Article 588, paragraph 2 of the C.C.P ., which provides:

588. The court may at any time, on the application of a party, revise or annul the authorization judgment if it considers that conditions relating to the issues of law or fact or to the composition of the class are no longer satisfied. If the court revises the authorization judgment, it may allow the representative plaintiff to amend the conclusions sought. In addition, if circumstances so require, the court may, even on its own initiative, modify or divide the class at any time.

If the court annuls the authorization judgment, the proceeding continues between the parties before the competent court according to the procedure set out in Book II. 588. Le tribunal peut, en tout temps, à la demande d’une partie, réviser ou annuler le jugement d’autorisation s’il considère que les conditions relatives aux questions de droit ou de fait ou à la composition du groupe ne sont plus remplies. S’il révise le jugement d’autorisation, il peut permettre au représentant de modifier les conclusions recherchées.

De plus, si les circonstances l’exigent, il peut, en tout temps et même d’office, modifier ou scinder le groupe. Si le tribunal annule le jugement d’autorisation, l’instance se poursuit entre les parties devant le tribunal compétent, suivant la procédure prévue au livre II. (Emphasis added) [ 28 ] Unlike the first paragraph, the second paragraph does not require that any of the conditions of

Article 575 C.C.P . no longer be satisfied. The test under the second paragraph is “if circumstances so require”. There is no requirement of a change in circumstances. [9] Here, the circumstances that required the case management judge to act were that there was a problem with the class definition and the parties had not appealed to give this Court jurisdiction to fix the problem. [ 29 ] In the exceptional circumstances of this case, it appears to have been an appropriate use of

Article 588, paragraph 2 of the C.C.P . [10] [ 30 ] Moreover, the outcome is that the class action can now proceed without the uncertainty that the original class definition would have created. FOR THESE REASONS, THE UNDERSIGNED: [ 31 ] DISMISSES the Application for Leave to Appeal and for Stay of Proceedings before the Superior Court, with judicial costs. STEPHEN W. HAMILTON , J.A.