Superior Court of Québec dismisses a class action on the merits of a purely injunctive nature

In a judgment handed down on July 3, 2020, the Superior Court of Québec dismissed a class action brought by the Association professionnelle des courtiers immobiliers du Québec (APCIQ) against DuProprio on behalf of a group of Québec real estate brokers.[1]

Through the means of this class action, the APCIQ did not seek damages for the members of the group. Rather, the APCIQ sought to order DuProprio, by way of conclusions of permanent injunctive nature, to stop using a significant part of its advertising material, which the APCIQ considered false, misleading, or derogatory toward real estate brokers.

The APCIQ opposed the use by DuProprio of an average commission rate of 5% to illustrate how much their clients are saving. The APCIQ pleaded that this average rate does not accurately represent the commission rates that are billed by brokers in the Québec real estate market. Furthermore, they alleged that DuProprio artificially inflates the savings their clients make by neglecting to include the cost of their services. Finally, the APCIQ pleaded that DuProprio denigrates real estate brokers in a defamatory manner in many of their ads, which affects their image.

The Court ruled in favor of DuProprio, determining that their advertisements were not false nor misleading. The Court also concluded that the APCIQ had failed to meet the burden of proof as to the existence of a fault, as to a clear right to the injunction that was brought, and even as to substantial or irreparable prejudice.

This case is of interest as it was the first time that the Superior Court authorized a class action whose conclusions were uniquely of an injunctive nature. The true objectives of the procedural choice remain however questionable, as an individual proceeding for injunctive relief by a sole member of the group could have attained the intended result more effectively and at a lower cost. It is true that in itself, the authorization of a class action often brings media coverage that can prove useful for the plaintiff, especially in a case where the parties evolve in a context of fierce competition, as real estate brokers and DuProprio do.

As for the merit of the conclusions in defamation, the trial judge had the opportunity to apply principles derived from the Supreme Court’s judgment in Bou Malhab with respect to her assessment of the fault and prejudice alleged by the members of the group. Following her analysis, the judge summarized her assessment of the evidence as follows: [240]     The fact that brokers wish to maintain their reputation and a positive perception of their profession and their services among their existent and potential client bases and that DuProprio’s marketing approach may, in this regard, displease or preoccupy them proves insufficient to justify the injunctions being sought with this class action. [Translated from French]

[1] This judgement is the brokers industry’s second legal recourse against DuProprio: in April 2020, the Superior Court agreed with DuProprio in the proceedings opposing the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) who pleaded, by way of an application for declaratory relief, that DuProprio should be subject to the Real Estate Brokerage Act. The Court rejected the OACIQ’s arguments, stating that at no time does DuProprio act as an intermediary in the real estate transactions of its clients.

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Erica Shadeed

About Erica Shadeed

Erica Shadeed is a member of Dentons’ Litigation and Dispute Resolution practice group. Erica has experience in various types of litigation, particularly class actions, consumer protection, regulatory matters, professional and product liability, construction and infrastructure as well as general commercial litigation matters.

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