OTTAWA — A class-action suit over personal investments can proceed against a Montreal-based financial services firm, the Supreme Court of Canada has ruled.
Between 2005 and 2007, Ronald Asselin purchased principal-protected term deposits from a Desjardins Group caisse populaire that were not redeemable before maturity.
In March 2009, shortly after the major financial crisis that struck the global economy, Asselin was told the investments would not yield any return and would still continue to be uncashable until the end of their terms.
In 2011, Asselin filed an application to pursue a class action against Desjardins Financial Services Firm Inc., alleging it had failed to adequately inform him and other customers of the risk involved with the investments.
He also included Desjardins Global Asset Management Inc. in the action on the basis it purportedly made risky transactions that exposed the investments to market fluctuations.
A judge dismissed Asselin’s application for the class action, but the decision was overturned by Quebec’s Court of Appeal, prompting Desjardins to take its case to the Supreme Court.
In its decision Friday, a majority of the Supreme Court said the Court of Appeal was correct to authorize the class action, though the top court also clarified the scope of the claim for punitive damages.
“As we know, the threshold for authorizing a class action in Quebec is a low one,” Justice Nicholas Kasirer wrote on behalf of the majority.
Once the relevant conditions set out in the province’s Code of Civil Procedure are met, the judge must authorize the action and “has no residual discretion to deny authorization on the pretext that a class action is not the most appropriate vehicle,” he wrote.
The burden of establishing an arguable case in light of the facts and the applicable law is met in this case, Kasirer said.
“Mr. Asselin’s proposed cause of action is neither frivolous nor clearly unfounded.”
This report by The Canadian Press was first published Oct. 30, 2020.
Jim Bronskill, The Canadian Press
