Case information

Civil procedure — Class actions — Authorization to institute class action — Conditions for authorizing action — Sufficiency of alleged facts — Status of representative plaintiff — Whether courts below applied wrong burden of proof to legal syllogism proposed by applicant — Whether applicant’s failure to resiliate his insurance contract with his insurer after becoming aware of rebate agreements between insurers and networks of contractors is indicative of and consistent with free and informed choice of insured, and thus his capacity as representative plaintiff — Code of Civil Procedure, CQLR, c. C-25.01, art. 575.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant, Alain Tessier, applied for authorization to institute a class action against the respondents, insurance companies that offer property insurance, including home or business insurance. In his application, Mr. Tessier alleged that the respondents received rebates from the contractors that they recommended to their insured for the carrying out of necessary repairs after a loss. Mr. Tessier alleged, however, that the respondents did not at any time reveal the existence of these rebates, thus breaching the Consumer Protection Act, CQLR, c. P-40.1, the Competition Act, R.S.C. 1985, c. C-34, the Insurers Act, CQLR, c. A-32.1, and a number of provisions of the Civil Code of Québec, including the provisions relating to the duty of good faith and insurance contracts. He alleged that the respondents, in not disclosing the existence, nature and amount of the rebates, shirked their obligation to fully compensate their insured up to the amount of the insurance coverage, therefore imposed on their insured the payment of premiums that were too high for the coverage actually provided to them, and ensured that their insured paid or could end up paying more for the repairs than what they would have paid without the rebate. Mr. Tessier described three subclasses that he intended to represent, that is, all persons, natural or legal, insured under an insurance policy issued by one of the respondents that: (1) had the possibility, in the event of a covered loss, of being offered the option to choose a contractor bound by a financial rebate clause, (2) suffered a loss covered under the policy requiring repairs and was offered the option to choose a contractor bound by a financial rebate clause, or (3) suffered a loss covered under the policy requiring repairs and had the repairs carried out by a contractor bound by a financial rebate clause. Mr. Tessier sought, in particular, compensatory and punitive damages for the injury that resulted from the non-disclosure of rebates. The Superior Court dismissed the application for authorization to institute a class action. The Court of Appeal dismissed the appeal.