Québec – courts vigilant regarding merchants’ reliance on arbitration clauses in consumer contracts – #066

A pair of recent cases in Court of Québec demonstrate merchants’ persistence in inserting mandatory arbitration clauses into their contracts with consumers and the court’s corresponding vigilance in guarding against violation of Québec’s public order consumer legislation regarding mandatory arbitration.  Despite defendants’ reliance on those arbitration clauses as part of their defenses in court, Mr. Justice Daniel Bourgeois in Poirier v. RSH Travel Ltd.(CheapOair.ca), 2018 QCCQ 2753 and Mr. Justice Jean Hudon in Gauthier v. Détection thermique JD Québec inc., 2018 QCCQ 2198 demonstrated how the courts make brief work of defendants’ reliance on mandatory arbitration clauses in consumer contracts.

RSH Travel involved claims arising from double bookings of air travel from Québec to the U.S. Détection thermique involved claims arising from alleged contractual breaches of committed during a home inspection.

In both cases, defendants tried unsuccessfully to raise a mandatory arbitration clause to contest the Court of Québec’s jurisdiction.  In RSH Travel, CheapOair expressly raised the arbitration clause as its first defense, asserting that the Court of Québec had no jurisdiction.  The reasons in Détection thermique do not present the arbitration clause as an argument expressly raised by Defendant but Hudon J. dealt with it as the first of only two issues in dispute.

In addition to imposing mandatory arbitration in consumer contracts, each arbitration clause added its own further requirements:

RSH Travel – the arbitration clause stipulated that the law of Ontario applied but, in contrast, the French text of the contract’s rules stipulated that the laws of New York applied; and,

Détection thermique – the arbitration clause provided that the client ‘agreed’ that the client would bear the costs of the arbitration.

Neither clause withstood scrutiny by the court.  Hudon J. and Bourgeois J. each turned to article 11.1 of the Consumer Protection Act, CQLR c P-40.1:

11.1. Any stipulation that obliges the consumer to refer a dispute to arbitration, that restricts the consumer’s right to go before a court, in particular by prohibiting the consumer from bringing a class action, or that deprives the consumer of the right to be a member of a group bringing a class action is prohibited.

If a dispute arises after a contract has been entered into, the consumer may then agree to refer the dispute to arbitration.

In RSH Travel, Bourgeois J. added that article 19 also pre-empted any reliance on the law of another jurisdiction in consumer contracts.

19. Any stipulation in a contract that such contract is wholly or partly governed by a law other than an Act of the Parliament of Canada or of the Parliament of Québec is prohibited.

Bourgeois J. in RSH Travel specifically dismissed CheapOair’s reliance on the arbitration clause as ‘defense’ and proceeded to the merits of Plaintiff’s claim.  Hudon J. in Détection thermique declared that the court had jurisdiction because the Consumer Protection Act was of public order and imposing arbitration on Plaintiffs would be to deprive them of their right to go before the courts.  Article 11.1 was introduced in 2006.

In both cases, Plaintiffs’ claims on the merits were dismissed.  In RSH Travel, Bourgeois J. relied on articles 1398, 1399 and 1400 of the Civil Code of Québec, CQLR c CCQ-1991 (“C.C.Q.”) to hold the consumer to the bargain he had made for the purchase of the travel.

Article 1398  Consent may be given only by a person who, at the time of manifesting such consent, either expressly or tacitly, is capable of binding himself.

 Article 1399  Consent must be free and enlightened.

It may be vitiated by error, fear or lesion.

 Article 1400  Error vitiates the consent of the parties or of one of them where the error relates to the nature of the contract, to the object of the prestation or to any essential element that determined the consent.

 An inexcusable error does not constitute a defect of consent.

Though Consumer Protection Act allowed Plaintiff as a consumer to avoid the application of certain terms in a contract, the C.C.Q. prevented Plaintiff from avoiding the consequences of having consented to purchase the travel.

In Détection thermique, Hudon J. held that Plaintiffs had failed to meet their burden of proof under articles 2803 and 2804 C.C.Q. to prove a fault by Defendant and referred to criteria set out by Lorraine Talbot, Isabelle Viens and Natale Screnci, in their text La Responsabilité de l’inspecteur préachat (Cowansville, Éd. Yvon Blais, 2012) at pp. 42-43.

Article 2803  A person seeking to assert a right shall prove the facts on which his claim is based.

A person who claims that a right is null, has been modified or is extinguished shall prove the facts on which he bases his claim.

 Article 2804  Evidence is sufficient if it renders the existence of a fact more probable than its non-existence, unless the law requires more convincing proof.

While a consumer’s access to the court is protected by section 11.1 of the Consumer Protection Act, certain basic rules of evidence remain constant for all litigants once they do get to court.