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Place of Payment Can Ground a Class Action

Published in the March 2010 issue of Transportation Notes - View Article

Option Consommateurs (“Option”) and Mr. Girard (“Girard”) brought a motion for certification of a class action in Quebec. The proposed class was “persons who had purchased tickets from British Airways plc (“BA”) and Virgin Atlantic Airways Ltd (“Virgin”) in Quebec for regular long-haul flights between August 2004 and February 2006”. Girard was the proposed representative plaintiff. Option submitted that BA and Virgin had conspired to raise prices and unduly restrict competition by charging a “fuel surtax” that they kept for their own accounts.

BA and Virgin brought a preliminary motion to challenge the Court’s jurisdiction to hear the certification motion, arguing that the motion did not meet the jurisdictional criteria set out in s. 3148 and 3149 of the Quebec Civil Code (“the Code”). Virgin relied on this argument and added the Code would not apply to it, as it did not contract with Girard.

The Court dealt first with the standard of proof on the challenge and decided that, at this stage, the facts alleged in the motion must be taken as proven, and should permit a prima facie conclusion that the Court had jurisdiction to hear the motion.

The fact that the respondents were based in the United Kingdom supported England as the proper venue for the litigation. The Court held that it must apply the rules of international law codified in the Code to determine if a real and substantial connection existed between Quebec and the litigation. However, the plaintiffs need only establish one of the factors set out in the Code to prove such a connection.

The moving parties set out the following grounds establishing jurisdiction, in accordance with s. 3148 and 3149 of the Code:

Girard experienced a loss or prejudice in Quebec;
the responding parties committed a wrong in Quebec;
the action was founded on a consumer contract;
BA has a place of business in Quebec and the subject matter of the action was with regard to its activities in Quebec.

The Court dealt only with the ground of prejudice and stated that this was the important question in this case. Option argued that the contract for the tickets was concluded in Quebec, and thus the prejudice was suffered here as well. According to the facts set out in the motion, Girard lived in Quebec and bought his tickets from BA in Quebec. BA had offices in Quebec, the tickets were purchased from “British Airways, Canada” and the BA address printed on them was in Quebec. BA argued that this address appeared on the tickets only to be in compliance with the Warsaw Convention. The Court held that placing the Quebec address on the ticket could also have jurisdictional consequences.

The Court found that it was possible to conclude that the contract was concluded in Quebec, as it was concluded between a person residing in Quebec and BA, who had offices in Quebec and indicated on the contract that its office was in Quebec. That was sufficient to decide that, prima facie, and in the absence of proof to the contrary, the moving parties had discharged their burden of demonstrating the existence of a contract concluded in Quebec.

However, Option still needed to show that the prejudice was suffered in Quebec as well. As Girard alleged that he had paid an inflated price for his tickets because of the plot between BA and Virgin, his damages crystallized at the moment of the execution of his contractual obligation, the payment. Section 1566 of the Code states that the payment is made at the place designated by the parties, with the default place of payment being the place of the debtor. Here, while the ticket did not state the place of payment, the payment was effected by credit card over the Internet, in Quebec, as alleged in the motion materials. Thus the location of payment, one of the obligations flowing from the contract, was in Quebec and prejudice was suffered because of it. As the contract was concluded in Quebec and the prejudice was also suffered there, the Court held that the moving parties had established one of the grounds set out in the Code, and the Court had jurisdiction to hear the certification motion. The Court did not rule on the other proposed grounds.

Virgin, though not a party to the contract between BA and Girard, was alleged to be part of the plot that caused Girard’s prejudice. The fruition of this plot occurred at the moment and location of the purchase of and payment for the tickets. Because the prejudice resulting in this motion appears to have been suffered in Quebec, it follows that the Quebec courts have competence to hear the motion against Virgin. The Court dismissed the jurisdictional challenges submitted by BA and Virgin, with costs against them.

Option Consommateurs v. British Airways, p.l.c. et al. 2010 QCCS 140