Nault v. Canadian Consumer Co. Ltd., [1981] 1 SCR 553

Supreme Court of Canada

Nault v. Canadian Consumer Co. Ltd., [1981] 1 S.C.R. 553

Date: 1981-05-11

Robert Nault Appellant;

and

Canadian Consumer Company Limited Respondent.

1981: February 18; 1981: May 11.

Present: Martland, Dickson, Beetz, McIntyre and Chouinard JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Civil procedure—Authorization to bring a class action—“Adequate representation” of group members—Conclusion unenforceable—Certain and determinate thing—Oral amendment in Supreme Court—Interest and putting in default—Code of Civil Procedure, arts. 469, 1003, 1005—Civil Code, arts. 1025, 1026, 1065, 1067, 1070.

Appellant accepted an offer appearing in a newspaper to sell cutlery and paid the amount specified. Respondent, the seller, failed to deliver the said cutlery and appellant, acting as representative of the group of buyers, sought authorization to bring a class action, with the ultimate aim of having the Court order respondent to deliver the merchandise and pay damages, consisting of interest at the legal rate on the purchase price from the expiry of one month after the date of payment.

The Superior Court allowed the motion, but the Court of Appeal reversed this judgment on the ground that appellant is not in a position to provide adequate representation for the members of the group described in the motion, as required by art. 1003(d) of the Code of Civil Procedure.

Held: The appeal should be dismissed.

In an action on a contract it is often going to be difficult to establish an entirely homogeneous group because of the choice of remedies offered by art. 1065 C.C., and it suffices for the conclusion sought to be capable of providing an appropriate remedy for all the members of the group, leaving those who prefer some other remedy to disassociate themselves from the group. In any case, the motion for authorization should be dismissed for a reason that was not mentioned in the lower courts, namely that the conclusion sought is, contrary to art. 469 C.C.P., unenforceable. Cutlery is not a certain and determinate thing that could be the subject of compulsory execution by seizure.

With regard to the contention of appellant that the judge is entitled to revise the proposed conclusion to

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make it admissible, the judge could not, in the case at bar, have amended the conclusion sought by attaching a claim for reimbursement, since in his pleadings appellant expressly rejected any reimbursement.

With regard to the oral motion for leave to amend, submitted at the hearing, to add an alternative claim for damages, it cannot be granted at this stage, not only because it would add a conclusion which is in conflict with appellant’s initial intent, but also because it would impose on respondent costs which would have been avoided if appellant had accepted the payment he is now demanding.

Finally, with regard to the claim for interest allegedly due on the expiry of one month after payment, it does not appear that, if there has been no putting in default, it can be allowed.

Cohen v. Bonnier and Dame Stone (1923), 36 K.B. 1; Melançon v. Commissaires d’écoles de Grand’Mère (1934), 58 K.B. 498; Quebec County Railway Company v. Montcalm Land Company Limited (1928), 46 K.B. 262, referred to.

APPEAL from a judgment of the Court of Appeal of Quebec[1], reversing a judgment of the Superior Court. Appeal dismissed.

Pierre Sylvestre and Mario Bouchard, for the appellant.

George R. Hendy and William Brock, for the respondent.

English version of the judgment of the Court delivered by

CHOUINARD J.—Appellant was given leave to bring a class action by a judgment of the Superior Court on May 9, 1979, and this judgment was reversed by the Court of Appeal on January 14, 1980, hence his appeal.

In his reasons concurred in by Turgeon J.A., Lamer J.A., as he then was, summarized the issue as follows:

[TRANSLATION] On November 19, 1978 Robert Nault, the respondent in this appeal and applicant in the Superior Court, read advertising in the newspaper Dimanche-Matin by which Canadian Consumer Company Limited, the appellant, was offering cutlery for $16.88. Mr. Nault completed the order form for two sets

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of cutlery, indicating on the detachable coupon his Chargex account number, for the sum of $39.97, representing the cost of two sets of cutlery plus sales tax and shipping costs. The amount of $39.97 was in fact received by Canadian Consumer a few days later, on November 24, 1978. When the company delayed in sending him his merchandise, Nault contacted them several times and filed complaints with the federal Consumer Affairs Bureau of the Department of Consumer and Corporate Affairs. On March 8, 1979 he received a cheque, dated March 2, 1979, refunding the amount paid by him. He chose not to cash it and filed in the Superior Court a motion to bring a class action. The substantive conclusions which he intends eventually to seek for himself and all others in the “group” which he wishes to represent are as follows:

To order delivery of the cutlery bought by members;

To order respondent to pay members of the group damages on account of the delay in delivery, consisting of interest at the legal rate on the purchase price, from the expiry of one month after the date of payment;

The group he wishes to represent, and of which he says he is a member, is described as follows:

Any person who has accepted one of the public offers made in the form of advertising in a newspaper of the Province of Quebec, by which the respondent offered to sell “six place settings” of Old Colony cutlery, who has made payment, and who has not received the cutlery bought within one month of payment;

Article 1003 C.C.P. lists the conditions on which the prior authorization necessary to bring a class action may be given:

1003. The Court authorizes the bringing of the class action and ascribes the status of representative to the member it designates if of opinion that:

(a) the recourses of the members raise identical, similar or related questions of law or fact;

(b) the facts alleged seem to justify the conclusions sought;

(c) the composition of the group makes the application of article 59 or 67 difficult or impracticable; and

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(d) the member to whom the Court intends to ascribe the status of representative is in a position to represent the members adequately.

In accordance with para. (d) of this article, Lamer J.A. concluded that the motion for authorization should be dismissed because appellant is not in a position to provide adequate representation for the members of the group described in the motion. This is because the conclusion sought is too limited to give effect to the rights of members of the group. Apart from interest at the legal rate on the amount paid of $39.97, from one month after payment until delivery, which I shall deal with in greater detail below, the only conclusion sought is “delivery of the cutlery bought by members”. This single conclusion could not enable appellant to adequately represent the members of the group, in which as Lamer J.A. pointed out, [TRANSLATION] “the personal interests varied as follows:

1. those who, like himself, did not wish to be repaid, whether an offer had been made to them or not, and who continued to want only the cutlery and/or damages;

2. those who accepted the refund and who wanted to have damages;

3. those who in fact obtained the cutlery, but later than one month after making payment, and who wanted interest on the amount paid for the period elapsed beyond the month;

4. those who had no cutlery, received no refund and wanted their money and interest;

5. finally, those who only wanted the cutlery or a refund.”

Lamer J.A. then raised the question of whether, in view of the provision of art. 1005 C.C.P. that “the judgment granting the motion describes the group whose members will be bound by any judgment”, the judge could have limited the group so as to make appellant an adequate representative. In the circumstances of the case at bar, he felt that in the absence of an amended motion the judge could not impose on appellant a duty to represent a group other than the one he was seeking to represent, even if it constituted a sub-group. The motion accordingly had to be dismissed, as we have seen,

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for the reason that appellant is not in a position to provide adequate representation for members of the group described in the motion.

It would appear to me that in an action on a contract it is often going to be difficult to establish an entirely homogeneous group because of the choice of remedies offered by art. 1065 C.C., in the event of a default by the debtor:

1065. Every obligation renders the debtor liable in damages in case of a breach of it on his part. The creditor may, in cases which admit of it, demand also a specific performance of the obligation, and that he be authorized to execute it at the debtor’s expense, or that the contract from which the obligation arises be set aside; subject to the special provisions contained in this code, and without prejudice, in either case, to his claim for damages.

For my part, I would hesitate to adopt an interpretation as a result of which a class action could not be brought on a contract, and in my opinion it suffices for the conclusion sought to be capable of providing an appropriate remedy for all the members of the group, leaving those who prefer some other remedy to disassociate themselves from the group.

I do not propose to discuss this point any further, because in my view there is in any case another compelling reason why the motion for authorization should have been dismissed.

This reason was not considered either in the Superior Court or in the Court of Appeal, but was argued in this Court at the latter’s request.

It is that the conclusion sought, by itself, apart from the interest asked for (which I shall discuss below) could not have been allowed because it is, contrary to art. 469 C.C.P., unenforceable.

The fact is that cutlery is not a certain and determinate thing, and if respondent does not voluntarily carry out the judgment ordering him to make delivery, that judgment cannot be made the subject of compulsory execution by seizure.

As Dorion J. observed in Cohen v. Bonnier and

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Dame Stone[2] at p. 8: [TRANSLATION] “Everyone is agreed on the meaning of the words ‘certain and determinate thing’: it is a thing the identity of which is known.”

The case at bar involves cutlery of the kind described in the advertisement but not identified, not individualized.

This is not a case in which performance of the obligation in kind can be obtained under art. 1065 C.C

Applying the rules of art. 1065 C.C. to obligations to give, Mignault observed in Le droit civil canadien, vol. 5, at p. 405:

[TRANSLATION] 3. Obligation to give a thing which is not individually specified, as for example, A horse.—There is no direct means of forcing the debtor to carry out his obligation; for if he does not wish to buy a horse and give it to his creditor, the law obviously cannot compel him to do so. The creditor then has only one recourse, a judgment for damages.

In the Traité de Droit civil du Québec, vol. 7-bis, at p. 233, No. 339, Faribault wrote:

[TRANSLATION] When the object of the obligation to give is not a specific thing, it cannot be performed in kind. The creditor’s only recourse then is a claim for damages.

In “L’exécution spécifique des contrats en droit québécois”, (1958-59), 5 McGill L.J. 108, Jean-Louis Baudoin writes, at p. 111:

[TRANSLATION] In the contract of sale, specific performance depends solely on the nature of the item sold. When this is an indefinite or unascertained thing, as in a sale by number, weight or measure, the right of ownership does not pass to the buyer before the counting, weighing or measuring have taken place; specific performance is impossible because the subject-matter of the contract is insufficiently identified. On the other hand, if the subject-matter is a definite item, whether movable or immovable, performance in kind is always granted by the courts. As the buyer of movable property becomes the owner even before delivery, he can claim it from the seller or from any third party. In the event of a refusal by the latter to give up the property in question, the creditor may by seizure in revendication obtain physical and legal possession of it.

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For the time when ownership passes to the buyer, as mentioned in the preceding passage, reference may be made to arts. 1025 and 1026 C.C.

The same author further states, at p. 127:

[TRANSLATION] The choice given to the creditor by our law may become a dangerous weapon against him. This risk is twofold. First, the creditor’s claim must be so presented that the judgment allowing it can be enforced. Accordingly, if he words his conclusions badly, he risks losing any remedy he may have against his debtor. Second, the courts cannot decide ultra petita (art. 113 C.C.P.): the judge cannot supply an alternative conclusion which has been omitted, as under our law he is required to consider only the actual claim of the creditor. If, therefore, the latter opts for specific performance, when in the court’s opinion this is essentially impossible, he cannot be awarded any monetary compensation. This rule is followed to the point that any judgment ordering a type of performance not recognized by the law is invariably reversed by the appellate courts. To avoid this problem of form, the creditor nowadays generally submits a principal conclusion asking for specific performance and an alternative conclusion asking for damages.

In Melançon v. Commissaires d’écoles de Grand’Mère[3], which concerned an action for repayment of part of the price paid for bricks, due to a failure to deliver the entire quantity, Rivard J. observed, at pp. 502-3:

[TRANSLATION] Finally, it should be noted that the general rule of art. 1065 is that failure to perform the obligation makes the debtor liable for damages. The creditor may also ask for specific performance of the contract or that it be set aside “in cases which admit of it”.

Can the commissioners ask for specific performance in the case at bar? One should not lose sight of the fact that delivery cannot be made without the vendor’s cooperation, that no one can make it but him, and he does not wish to do so. In any event, the commissioners asked Melançon to perform his obligation, they gave him notice to deliver: and he refused. Even after this first refusal, he could certainly, in response to the action, have offered to perform, as performance of an obligation is always admissible up to the time of judgment. He did not wish to do so, he maintained the position he had

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taken, he persisted and continues to persist in refusing delivery. How can he then complain that the commissioners have not called on him to do what they asked, which he refused and still refuses to do?

As Tancelin observed, Théorie du droit des obligations, 1975, at p. 367, dealing with obligations to give a generic thing, as in the case at bar, [TRANSLATION] “…His [the debtor’s] refusal to perform may then prevent performance in kind and the creditor must accept damages”.

See also on the obligation to perform, Quebec County Railway Company v. Montcalm Land Company Limited[4].

Accordingly, I am of the opinion that the motion for authorization should be dismissed on the ground that the conclusion sought by the class action in question, namely delivery of the cutlery, unaccompanied by an alternative conclusion, could not be allowed because it is unenforceable.

However, appellant argued that on a motion for authorization of a class action the judge should take an active part and revise the proposed conclusion to make it admissible. Appellant relied on various articles in the title regarding the conduct of the class action once authorization has been given and the action brought. He also relied on art. 1005 C.C.P.:

1005. The judgment granting the motion:

(a) describes the group whose members will be bound by any judgment;

(b) identifies the principal questions to be dealt with collectively and the related conclusions sought;

(c) orders the publication of a notice to the members.

The judgment also determines the date after which a

member can no longer request his exclusion from the group, the delay for exclusion cannot be less than thirty days nor more than six months after the date of the notice to the members. Such delay is peremptory; the court may nevertheless permit the exclusion of a member who shows that in fact it was impossible for him to act sooner.

It appears from this article that the judge should not simply allow or refuse the authorization, but in allowing it should make certain rulings. He must

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describe the group whose members will be bound by any judgment, identify the principal questions that are to be dealt with collectively and the related conclusions sought, and order publication of a notice to the members. He must also determine the date after which a member can no longer request his exclusion from the group.

The judge undoubtedly enjoys some discretion in this regard, and is not bound strictly by the claims presented by the applicant. However, there is little in the record of the case at bar to indicate what the judge could have done under this article. It is rather a case in which the judge could not correct the written pleadings. In my view, the judge could not have amended the conclusions sought by attaching an alternative conclusion conflicting with the express wish of appellant, who was not willing to accept any reimbursement. After alleging that on or about March 8, 1979 he received from respondent a cheque for $39.36 in repayment of the purchase price (this cheque is filed as Exhibit R-4), appellant alleged:

[TRANSLATION]Applicant never solicited this repayment, refuses it and therefore does not intend to cash the said cheque;

I do not see how the judge could add a conclusion which had been so categorically rejected by appellant himself.

There only remains to consider the possibility that appellant could amend his pleadings.

In his factum, appellant submitted the following claim:

[TRANSLATION]

ALLOW this appeal;

REVERSE the judgment of the Court of Appeal;

GRANT appellant authorization to bring a class action in accordance with the conclusions of the initial motion;

IDENTIFY any other alternative conclusion which the Court sees fit to award in the interests of members of the group.

At the hearing, appellant further submitted an oral motion for leave to amend, to add an alterna-

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tive claim for damages corresponding to the amount paid plus interest on that amount.

I do not think this motion can be granted at this stage. Apart from adding a conclusion which is in conflict with appellant’s initial intent, its only effect would be to allow him to obtain considerable costs.

Appellant admitted receiving a cheque, which he filed as an exhibit, given to him to repay the amount which his conclusion now seeks to claim. The result would be that, if delivery is not made within the time limit, appellant would obtain the payment he was offered on March 8, 1979, while at the same time subjecting respondent to costs which would have been avoided if appellant had accepted at that time what he is now demanding.

That leaves the claim for interest. Appellant asked that respondent be ordered to pay the members of the group damages on account of the delay in delivery, consisting of interest at the legal rate on the purchase price, commencing one month after payment.

Do the facts alleged appear to justify a finding that appellant is entitled to interest commencing one month after payment? Under art. 1070 C.C., damages are not due until the debtor is in default. Appellant did not allege that he had put respondent in default. The notice published by respondent indicated no deadline for delivery. According to art. 1067 C.C., commencing an action at law constitutes putting the debtor in default. In a class action what procedure constitutes commencing an action—a motion for authorization or the instituting of an action when authorization has been given? Do the facts alleged appear to justify a finding that appellant is entitled to interest after March 8, 1979, the date on which respondent offered to reimburse the sum paid by appellant? These are points which were not argued in this Court, but which I felt should be mentioned to illustrate more clearly why this motion for a class action cannot be allowed by this Court on the conclusion relating to interest alone.

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For these reasons, I would not allow the motion for leave to amend submitted by appellant at the hearing and I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Sylvestre, Brisson, Dupin, Charbonneau & Bourdeau, Montreal.

Solicitors for the respondent: Phillips & Vineberg, Montreal.