Rocois Construction Inc. v. Québec Ready Mix Inc., [1990] 2 S.C.R. 440
Rocois Construction Inc. Appellant
v.
Dominion Ready Mix Inc.,
Jean Desjardins and Marc Crépin Respondents
and
Québec Ready Mix Inc., Levis Ready Mix Inc.,
Pierre Viger, Verreault Frontenac Ready Mix Inc.,
Claude Ferland, Michel Bérubé, Pierre Legault,
Pilote Ready Mix Inc. and Gaston Pilote Mis en cause
and between
Rocois Construction Inc. Appellant
v.
Québec Ready Mix Inc., Levis Ready Mix Inc.,
Pierre Viger, Verreault Frontenac Ready Mix Inc.,
Claude Ferland, Michel Bérubé, Pierre Legault,
Pilote Ready Mix Inc. and Gaston Pilote Respondents
and
Dominion Ready Mix Inc.,
Jean Desjardins and Marc Crépin Mis en cause
indexed as: rocois construction inc. v. québec ready mix inc.
1990: March 21; 1990: August 16.
File No.: 19780.
Present: Lamer C.J.* and L'Heureux‑Dubé, Gonthier, Cory and McLachlin JJ.
on appeal from the court of appeal for quebec
Civil procedure ‑‑ Exceptions to dismiss action ‑‑ Lis pendens ‑‑ Action for damages for unfair trade practices based on federal combines legislation brought in Federal Court ‑‑ Action for damages for unfair trade practices based on Civil Code subsequently brought in Superior Court while action in Federal Court still pending ‑‑ Whether action in Superior Court should be dismissed on ground of lis pendens ‑‑ Code of Civil Procedure, R.S.Q., c. C‑25, art. 165 ‑‑ Civil Code of Lower Canada, art. 1053 ‑‑ Combines Investigation Act, R.S.C. 1970, c. C‑23, s. 31.1(1).
Both appeals concern a preliminary exception to dismiss on the ground of lis pendens under art. 165 C.C.P. Appellant brought an action for damages for unfair trade practices against respondents in the Superior Court. Respondents brought a motion to dismiss this action on the ground of lis pendens since an action for damages for unfair trade practices, based both on s. 31.1(1) of the Combines Investigation Act and on general civil liability, and involving the same parties, was pending in the Federal Court. The Superior Court dismissed the preliminary exception but the Court of Appeal reversed this decision and found that there was lis pendens. Since the Court of Appeal's judgment, the Supreme Court of Canada has denied the Federal Court any jurisdiction to decide an action based on art. 1053 C.C.L.C., and judgment on the merits of the case has still not been rendered by the Federal Court, Trial Division.
Held: The appeals should be dismissed.
The action brought in the Superior Court should be dismissed on the ground of lis pendens. First, although the jurisdiction of the Federal Court, based on s. 31.1(1) of the Combines Investigation Act, and that of the Superior Court, resulting from its general common law jurisdiction, are different, both courts are equally competent to hear the actions brought before them respectively. Second, the three substantive conditions for lis pendens within the meaning of art. 165 C.C.P. have been met. There is an identity of parties, object and cause between the two cases.
The identity of what is claimed in each of the actions does not have to be absolute for there to be identity of object. In the present case, full compensation for the damage, estimated at one million dollars, is the essential object of the two actions. The separate indemnities claimed by appellant in the Federal Court and in the Superior Court ‑‑ the additional amount for costs of investigation and proceedings under s. 31.1(1) of the Act and the additional indemnity under art. 1056c C.C.L.C. ‑‑ are purely incidental and do not affect the real object of the actions. The object of the two actions is thus the same.
The existence of two rules of law applicable to a factual situation in practice gives rise to a duality of causes in the majority of cases, because separate rules generally require different legal characterizations. However, it is not the fact that there are two applicable rules which is conclusive in itself: it is the duality of legal characterizations which may result from it. When the essence of the legal characterization of the facts alleged is identical under either rule, it must follow that there is identity of cause. Determining whether the characterizations are identical calls for a two‑stage analysis when two rules are apparently applicable to the same facts. The characterization that may result from a rule of law depends first on the legal principle the rule is based on. Two statutory provisions based on different legal principles cannot give rise to identical causes since the fact regarded as the source of liability will necessarily be different; the legal characterization of the factual situation will similarly be different. In cases where the two provisions are based on the same legal principle, it is then necessary to examine the potential result of applying these provisions to the facts under consideration. If with respect to a given set of facts the effect produced by applying the provision relied on in the second action corresponds to the effect produced by applying the provision relied on in the first, it should be concluded that there is an identity of causes. In the present case, the actions alleged against respondents are identical. They can be analyzed as fault causing damage under art. 1053 C.C.L.C. and as conduct giving rise to damage contrary to the provisions contained in the Act. It can be seen from considering the scheme of delictual civil liability under general civil law and the scheme created by the Act that we are dealing here with two schemes based on the same legal principle. Both cases involve a scheme of compensation for civil liability based on wrongful conduct. The minor differences regarding applicable forms of proof cannot affect this identity of legal principles. As to the potential effect of the schemes applied to the facts alleged, although the concept of civil fault is much more all‑encompassing than that of unfair competition under the Act, it is clear that the two concepts overlap. Since the facts alleged in the pleadings fall completely within the area where the two schemes overlap, the result is that the effect produced by each of the provisions on the parties' rights and obligations will be the same. There is thus an identity of legal characterizations and accordingly identity of cause, because the substance of each of the schemes produces by the same legal principle an identical effect on the rights and obligations of the parties. The minor differences regarding the applicable rules of prescription cannot affect the identity of the legal characterizations.
Cases Cited
Referred to: Québec Ready Mix Inc. v. Rocois Construction Inc., 1989 CanLII 80 (SCC), [1989] 1 S.C.R. 695; Cargill Grain Co. v. Foundation Co. of Canada Ltd., 1965 CanLII 64 (SCC), [1965] S.C.R. 594; Cloutier v. Traders Finance Corp., [1958] Que. Q.B. 274n; General Motors of Canada Ltd. v. City National Leasing, 1989 CanLII 133 (SCC), [1989] 1 S.C.R. 641; Travelers Insurance Co. of Canada v. Corriveau, 1982 CanLII 222 (SCC), [1982] 2 S.C.R. 866; Pontiac Lumber Co. v. Gentil (1922), 25 Que. P.R. 118.
Statutes and Regulations Cited
Charter of Human Rights and Freedoms, R.S.Q., c. C‑12, ss. 4, 49.
Civil Code of Lower Canada, arts. 1053, 1056c [am. 1971, c. 85, s. 10], 1241 [am. 1978, c. 8, s. 47].
Code of Civil Procedure, R.S.Q., c. C‑25, art. 165.
Combines Investigation Act, R.S.C. 1970, c. C‑23, ss. 31.1 [ad. 1974‑75‑76, c. 76, s. 12], 32(1) [am. idem, s. 14].
Authors Cited
Allard, Christophe. De l'autorité de la chose jugée en matière civile. Rouen: Imprimerie de E. Cagniard, 1875.
Baudouin, Jean‑Louis. La responsabilité civile délictuelle. Cowansville: Yvon Blais Inc., 1985.
Bonnet, Paul. Des éléments constitutifs de la chose jugée en matière civile dans le droit romain et dans le droit français. Paris: Imprimerie de E. Donnaud, 1862.
Chauveau, Charles‑Auguste. De l'autorité de la chose jugée en matière civile. Québec: Dussault & Proulx, 1903.
Encyclopédie juridique Dalloz: Répertoire de procédure civile, t. II, 2e éd., "Litispendance", par Pierre Julien.
Garsonnet, Eugène. Traité théorique et pratique de procédure, t. I,Paris: Larose et Forcel, 1882.
Gilli, Jean‑Paul. La cause juridique de la demande en justice. Paris: L.G.D.J., 1962.
Lacoste, Paul. De la chose jugée en matière civile, criminelle, disciplinaire et administrative. 3e éd. Par Ph. Bonnecarrère. Paris: Librairie de la Société du Recueil Sirey, 1914.
Langelier, François. De la preuve en matière civile et commerciale. Québec: Darveau, 1894.
Lorimier, Charles C. de. La bibliothèque du Code civil de la province de Québec, vol. IX. Montréal: Eusèbe Sénécal & Fils, 1883.
Martin, Raymond. "Les contradictions de la chose jugée", J.C.P. 1979.I.2938.
Martin, Raymond. "Sur la notion de moyen", J.C.P. 1976.I.2768.
Mignault, Pierre Basile. Le droit civil canadien, t. 6. Montréal: Théorêt, 1902.
Motulsky, Henri. "Pour une délimitation plus précise de l'autorité de la chose jugée en matière civile", D. 1968. Chron., p. 1.
Nadeau, André and Richard Nadeau. Traité pratique de la responsabilité civile délictuelle. Montréal: Wilson & Lafleur, 1971.
Nadeau, André. "L'autorité de la chose jugée" (1963), 9 McGill L.J. 102.
Royer, Jean‑Claude. La preuve civile. Cowansville: Yvon Blais Inc., 1987.
Savatier, René. Note. D.P. 1928.1.153.
Solus, Henry and Roger Perrot. Droit judiciaire privé, t. II. Paris: Sirey, 1973.
Tomasin, Daniel. Essai sur l'autorité de la chose jugée en matière civile. Paris: L.G.D.J., 1975.
Traité de Droit civil du Québec, t. 9 par André Nadeau et Léo Ducharme. Montréal: Wilson & Lafleur, 1965.
Viatte, Jean. "À propos de la litispendance", Gaz. Pal. 1976.1. Doct. 354.
APPEALS from a judgment of the Quebec Court of Appeal, 1985 CanLII 3029 (QC CA), [1986] R.D.J. 45, reversing a judgment of the Superior Court**. Appeals dismissed.
Pierre Gaudreau, for the appellant.
Gérald Tremblay, Q.C., for Dominion Ready Mix Inc. et al.
Henri‑Louis Fortin, for Québec Ready Mix Inc. et al.
//Gonthier J.//
English version of the judgment of the Court delivered by
GONTHIER J. -- These two appeals concern a preliminary exception to dismiss on a single ground of lis pendens raised by the respondents against an action for damages for unfair trade practices and abuse of rights brought by the appellant in the Superior Court. The appellant had earlier brought an action for damages in the Federal Court as a result of the same conduct of the respondents, relying on a federal statute and civil law. The Federal Court has still not rendered judgment on the merits. The issue here is whether the action in the Superior Court should be dismissed at this preliminary stage in view of the matter pending in the Federal Court.
I - The Facts
On August 22, 1979 the appellant Rocois Construction Inc. brought an action for damages in the Federal Court based both on general civil liability and on s. 31.1(1) of the Combines Investigation Act, R.S.C. 1970, c. C-23 (the Act), arising out of conduct by the respondents which deprived it of the supply of mixed concrete necessary for the operation of its business, thereby allegedly causing it to suffer damage. In a preliminary exception the respondents asked the Federal Court to rule on the constitutionality of s. 31.1(1)(a) and (3) of the Act and on the Federal Court's jurisdiction to hear an action based on both federal and provincial legislation. On December 4, 1979 the Federal Court, Trial Division rendered judgment on the preliminary exceptions, declaring the action for damages provided for in the federal legislation to be unconstitutional and ruling that it had no jurisdiction to decide the case on the merits: 1979 CanLII 4144 (FC), [1980] 1 F.C. 184. The matter was appealed first to the Federal Court of Appeal, 1985 CanLII 5523 (FCA), [1985] 2 F.C. 40, and then to the Supreme Court. This Court rendered judgment in the matter on April 20, 1989, affirming the constitutionality of the federal legislation and the Federal Court's jurisdiction to rule on the action for damages provided for therein, but denying it any jurisdiction to rule on any part of the action based on art. 1053 of the Civil Code of Lower Canada: Québec Ready Mix Inc. v. Rocois Construction Inc., 1989 CanLII 80 (SCC), [1989] 1 S.C.R. 695.
In the meantime, on November 21, 1980, the appellant sued the respondents jointly and severally for damages in the Superior Court for the damage suffered by its business and caused by respondents' actions. The respondents brought a motion to dismiss this action in the Superior Court on the ground of lis pendens. The Superior Court dismissed this preliminary exception. The matter was taken to the Court of Appeal, which reversed the Superior Court's decision and found that there was lis pendens: 1985 CanLII 3029 (QC CA), [1986] R.D.J. 45.
II - The Courts Below
Superior Court
After reviewing the case law, Hamel J. stated that in his opinion the preliminary exception of lis pendens could not be allowed. The primary basis for his conclusion was that the Federal Court lacked jurisdiction.
He noted that one of the conditions required for a finding of lis pendens is that the action brought be pending before another equally competent court. I note that the Federal Court, Trial Division found that it lacked jurisdiction to hear the case, following argument in which the Attorney General of Canada and the Attorney General of Quebec intervened. At the time the trial judge made his ruling, it was the Attorney General of Canada who had appealed this decision of the Federal Court and Rocois Construction Inc. only participated in the subsequent argument as mis en cause. In the opinion of Hamel J., the fact that Rocois Construction Inc. was not a full party to the appeal on the question of jurisdiction necessarily leads to the conclusion that the trial judgment rendered by the Federal Court on this matter has the force of res judicata with respect to it. The Federal Court thus could not make any further ruling on the merits of the case without disregarding the authority of res judicata, whatever the conclusion by this Court following the subsequent argument. Hamel J. accordingly concluded that the case was no longer pending in the Federal Court and so refused the motion to dismiss. He also expressed certain doubts as to the identity of cause and object, but did not elaborate.
Before going any further I should point out that Rocois Construction Inc. was the respondent in this Court and not a mis en cause in the matter dealing with the preliminary questions disposed of by this Court; the present respondents were the appellants. In any event, the joinder of parties procedure (also referred to in Quebec as "forced intervention") responds to the need for a comprehensive settlement of disputes so as to avoid needless and costly repetition of the same arguments. This objective can only be achieved if a judgment rendered following argument and counter-argument is binding on all the parties represented, whether or not they were forced to appear. In my opinion, the judgment rendered by this Court on the Federal Court's jurisdiction is completely binding on all the parties involved, as there was a final resolution of the argument on the preliminary questions with respect to them.
Court of Appeal
McCarthy J.A., for the court, first pointed out that the eventual outcome of the argument on the preliminary questions would be binding on Rocois Construction Inc. I agree, and there is no need to deal any further with this point. The matter was then still before the Federal Court, pending the final decision on the preliminary questions, and it remains there, in view of the content of the final judgment subsequently rendered by this Court.
McCarthy J.A. then referred to the three criteria for lis pendens, namely identity of parties, object and cause: Cargill Grain Co. v. Foundation Co. of Canada Ltd., 1965 CanLII 64 (SCC), [1965] S.C.R. 594, at pp. 596‑97. He was of the view that the three identities were present in this case.
On the question of the identity of parties, the judge simply noted that this was obvious. On the identity of object, he observed that an additional amount was claimed in the statement of claim filed in the Federal Court, corresponding to the costs of the investigation and proceedings brought to assert the rights conferred by the Act. This amount can be claimed under a specific provision of the federal Act. Relying on Cargill Grain Co., supra, McCarthy J.A. held that a difference between the amounts claimed in the two actions did not preclude a finding of identity of object. The sum of one million dollars is claimed in both actions for damage sustained and is the object of each action; the rest is merely incidental. On identity of cause, the learned judge concluded that it existed for a reason he stated as follows, at p. 50:
[TRANSLATION] However, in both actions the same legal facts are the basis in law of the benefit which is the object of the action.
Accordingly, noting that the triple identity of parties, object and cause was present, McCarthy J.A. allowed the appeals and dismissed the action for damages on grounds of lis pendens.
III - Analysis
It has long been recognized that the preliminary exception of lis pendens is governed by the same principles as those that apply to the exception of res judicata: Cloutier v. Traders Finance Corp., [1958] Que. Q.B. 274n; Cargill Grain Co., supra. Both exceptions serve similar mediate purposes, being designed essentially to avoid a multiplicity of court proceedings and the possibility of contradictory judgments. Their ultimate purpose is one of public interest which is to protect the security and stability of social relationships. At the level of private interest, res judicata protects acquired rights for the benefit of the parties, and lis pendens shields the defendant from the hardships that would result from multiple proceedings (see André Nadeau, "L'autorité de la chose jugée" (1963), 9 McGill L.J. 102).
The three conditions required for there to be lis pendens within the meaning of para. 1 of art. 165 of the Code of Civil Procedure, R.S.Q., c. C‑25, correspond to the requirements of art. 1241 C.C.L.C., which deals with res judicata: there must be identity of parties, object (or thing) and cause (see this Court's judgment in Cargill Grain Co., supra). The appellant admitted in this Court that the condition regarding identity of the parties was met in this case. However, it challenged the Court of Appeal's judgment regarding the identity of object and cause. It also put forward a preliminary argument that the action brought in the Superior Court is not pending in an equally competent court, a prerequisite for a finding of lis pendens. I propose first to dispose of this preliminary argument, and then to analyze the identities.
A. Are the Courts Concerned Equally Competent?
The appellant suggests that the jurisdiction of the Federal Court, based on s. 31.1 of the Act, and that of the Superior Court, resulting from its general common law jurisdiction, are different. For this reason, the appellant submits, it cannot be said that the case is before two equally competent courts.
In support of its proposition, the appellant refers to Garsonnet's Traité théorique et pratique de procédure, vol. I, 1882, which states the following at p. 754:
[TRANSLATION] As its name indicates, lis pendens occurs when the action brought in one court is pending in another equally competent court, so that if it proceeds separately in these two courts it will result either in two identical judgments, an unnecessary and costly complication, or in two contradictory judgments, a result that will bring the administration of justice into disrepute and will create an inextricable situation, as to which of the two judgments will be given effect? [Emphasis added.]
The appellant notes that in Rocois, supra, this Court held that the Federal Court of Canada had jurisdiction to hear an action based on s. 31.1(1)(a) of the Act but was not competent with respect to any part of the action based on art. 1053 C.C.L.C. As the Chief Justice noted in the parallel case of General Motors of Canada Ltd. v. City National Leasing, 1989 CanLII 133 (SCC), [1989] 1 S.C.R. 641, at p. 684, s. 31.1(1)(a) (now s. 36(1)(a)) allows a civil remedy only to the extent the conduct complained of infringes a provision of Part V of the Act (now Part VI, R.S.C., 1985, c. C‑34, ss. 45 et seq.). The section 31.1(1)(a) remedy in the Act is a specific remedy, limited to conduct prohibited by the Act; it does not create a right of action at large. On the other hand, the remedy based on art. 1053 C.C.L.C. is a general remedy, wider than that conferred by the Act. The appellant also notes that different rules on evidence and prescription apply to the two remedies.
The differences in jurisdiction between the two courts concerned are manifest and unquestionable in the present case, but I do not think that this is relevant. By emphasizing the words "equally competent" used by certain writers discussing lis pendens, the appellant is trying to raise the equivalence of jurisdiction between the two courts concerned to the level of a substantive condition for this preliminary exception, which in my opinion is wrong. Though the writers do say that the courts must be "equally competent", this means that they must have jurisdiction to deal with the actions which are brought before them respectively; the courts must [TRANSLATION] "each have jurisdiction": Encyclopédie juridique Dalloz: Répertoire de procédure civile, 2nd ed., vol. II (1989 update), under the heading "Litispendance", by Pierre Julien. In Droit judiciaire privé, vol. II, 1973, at pp. 842‑43, No. 814, Solus and Perrot deal with the condition regarding jurisdiction as follows:
[TRANSLATION] To the extent that the dismissal is intended to avoid identical or related actions being before two different courts and resulting in contradictory decisions, it is only justified if the courts each have jurisdiction to hear the actions brought before them respectively. [Emphasis added.]
In my opinion, this wording adequately indicates why there can be no lis pendens if one of the courts does not have jurisdiction. Even before examining the substantive conditions required for lis pendens to apply, it is necessary to determine whether the two courts concerned have jurisdiction to hear the cases before them. If this preliminary condition is not met, there will be no need to consider lis pendens since one of the courts cannot really be "hearing" a matter which it has no jurisdiction to hear. Lack of jurisdiction in one of the two courts will mean that contradictory rulings cannot result. For example, if a party decides to claim the sum of $20,000 for contractual fault both in the Superior Court and in the Small Claims Court, there will be no basis for invoking lis pendens since the Small Claims Court does not have the necessary jurisdiction to render a judgment in such a matter. As Solus and Perrot, op. cit., mention, at p. 843, No. 814:
[TRANSLATION] . . . if one of the courts concerned lacks jurisdiction, the question must be resolved by an exception as to jurisdiction, not by a declinatory exception of lis pendens or connexity. [References omitted.]
In the present case this Court confirmed in the final instance that the Federal Court has jurisdiction to dispose of the remedy under the Act.
I am thus of the view that the two courts concerned both have jurisdiction over the actions brought before them respectively. Of course the considerations relating to differences of substance between the two actions brought necessarily affect the jurisdiction of the courts concerned, but these considerations clearly fall within the analysis of identity of cause, which the appellant has confused with an alleged additional substantive condition of "equivalence of jurisdiction".
B. Is There Identity of Object?
The appellant submits that there is no identity of object between the two actions brought in the Federal Court and the Superior Court. Though in both cases it is claiming one million dollars in compensation for the same damage, the appellant notes that in the Federal Court it is seeking an additional amount for costs of investigation and proceedings. This additional claim, allowed by s. 31.1(1) of the Act -- which has no equivalent in Quebec law -- is in the appellant's submission a bar to a finding of identity of object. The appellant further notes that in the Superior Court it is claiming compensation under art. 1056c C.C.L.C., a claim which is impossible in the Federal Court. Let us first see what the writers have to say on the question of object.
In Traité de droit civil du Québec, vol. 9, 1965, at pp. 478‑79, Nadeau and Ducharme define the "object" of an action at law as follows:
[TRANSLATION] In an action the object is the right which the plaintiff is exercising; it is the immediate legal benefit he seeks to have recognized by the court.
It is thus not necessary for the two actions to have identical conclusions; it will suffice if the object of the second action is implicitly included in the object of the first . . . . [References omitted.]
In Le droit civil canadien, vol. 6, 1902, discussing the conditions necessary for res judicata, Mignault writes the following comment on the object of an action, at p. 105:
[TRANSLATION] It is of course the immediate legal benefit which is being sought in bringing it, namely the right the party is seeking to assert . . . .
. . . but it is important to complete the rule by saying that it is not necessary for the two actions to have exactly the same conclusion: res judicata will exist when the object of the second action is implicitly included in the object of the first.
In the present case the appellant is seeking in both actions, as an immediate legal benefit, full compensation for its damage, which it sets at one million dollars. The only difference lies in the fact that the appellant is also claiming an additional amount under s. 31.1(1) of the Act in the Federal Court, while in the Superior Court it is claiming the indemnity under art. 1056c C.C.L.C. Is this difference sufficient to distinguish the two actions with respect to object? I do not think so.
The writers agree that the identity of what is claimed in each of the actions does not have to be absolute for there to be identity of object. It is readily admitted that when the claim is for a sum of money, complete identity of the amounts sought is not necessary; this was recognized by this Court in Cargill Grain Co., supra. Taschereau C.J. said, at p. 597:
The mere fact that the amounts claimed in the two litigations may differ does not alter the nature of the object.
It is true that the present case does not involve a greater or additional amount claimed under the same rule of law, but in my view the separate indemnities claimed by the appellant in the two proceedings do not affect the true object of the actions, which in either case is compensation for a single instance of damage, set at one million dollars. The indemnities which differ between the actions are added onto the main head of damages, and are in my opinion only incidental. It is hard to see how these indemnities could be claimed in a separate action; they depend on the main action and have no independent existence. The incidental nature of the additional indemnity under art. 1056c C.C.L.C. has been recognized by this Court: Travelers Insurance Co. of Canada v. Corriveau, 1982 CanLII 222 (SCC), [1982] 2 S.C.R. 866, at p. 876. In my view, the same is true for the compensation ordered for investigation costs incurred in order to assert rights under the Act.
Full compensation for the damage, estimated at one million dollars, is thus the essential object of the two actions; the further indemnities claimed are purely incidental and cannot affect the identity of object in the present case.
C. Is There Identity of Cause?
Finally, the appellant suggests that the Court of Appeal erred in concluding that identity of cause existed solely on the basis of identity of facts. As mentioned earlier, McCarthy J.A. emphasized the similarity of facts in his analysis of the identity of cause, at p. 50:
[TRANSLATION] However, in both actions the same legal facts are the basis in law of the benefit which is the object of the action.
I am of the view that in this regard the judgment a quo may in fact disclose some confusion that requires clarification. It is true that the acts alleged against the respondents appear to be the same in both actions, but I do not think that this is sufficient for a conclusion of identity of cause. This concept is extremely difficult to define: the lack of certainty among writers regarding the definition of its elements provides ample evidence of this.
Nadeau and Ducharme, op. cit., describe cause as follows in their text, at p. 482:
[TRANSLATION] The cause is the legal source of the obligation. It is the legal fact which serves as a basis for the right claimed, such as a contract, quasi‑contract, delict or quasi‑delict, or the substantive argument put forward by the defence: novation, prescription and so on . . . in order to have the action dismissed. [Emphasis added.]
Using the language of Mourlon, Chauveau gives the following definition of cause in De l'autorité de la chose jugée en matière civile (1903), No. 119, at p. 108:
[TRANSLATION] Let us define cause in actions: it is, Mourlon says, the principle giving rise to the right or benefit which was the object of the action; in other words, the legal fact which gave rise to the right claimed -- what must be established in order to win the case. [Emphasis added.]
In La bibliothèque du Code civil de la Province de Québec, vol. IX, 1883, at p. 603, note 1, de Lorimier states:
[TRANSLATION] By cause is meant here the origin of or principle giving rise to the right claimed, what must be established in order to win the case . . . . [Emphasis added.]
In De la preuve en matière civile et commerciale (1894), Langelier writes at p. 84, No. 200:
[TRANSLATION] The cause of action is thus the legal fact giving rise to the right of the plaintiff, and the fact which is an infringement of this right by the defendant. [Emphasis added.]
In La preuve civile (1987), Royer states at p. 292, No. 791:
[TRANSLATION] Cause is the principal act or fact which is the direct or immediate basis for the creation, alteration or extinction of an obligation. [Emphasis added.]
(On the notion of cause in this context, see also Christophe Allard, De l'autorité de la chose jugée en matière civile (1875), at pp. 91 et seq.; Paul Bonnet, Des éléments constitutifs de la chose jugée en matière civile dans le droit romain et dans le droit français (1862), at pp. 113 et seq.; Paul Lacoste, De la chose jugée en matière civile, criminelle, disciplinaire et administrative (3rd ed. 1914), at pp. 145 et seq.; Raymond Martin, "Les contradictions de la chose jugée", J.C.P. 1979.I.2938; Henri Motulsky, "Pour une délimitation plus précise de l'autorité de la chose jugée en matière civile" D. 1968. Chron., p. 1; Jean Viatte, "À propos de la litispendance", Gaz. Pal. 1976.1. Doct. 354.).
The definitions of "cause" proposed by the various authors fall along a spectrum ranging from the raw facts to the potentially applicable abstract rule of law. The phrases "principal . . . fact which is the direct . . . basis" for the right, "legal fact which gave rise to the right claimed", "origin of or principle giving rise to the right claimed" or "legal source of the obligation" are attempts to capture in words the elusive idea of "cause", on the bridge linking the body of facts to the legal rule in legal reasoning.
First, it is clear that a body of facts cannot in itself constitute a cause of action. It is the legal characterization given to it which makes it, in certain cases, a source of obligations. A fact taken by itself apart from any notion of legal obligations has no meaning in itself and cannot be a cause; it only becomes a legal fact when it is characterized in accordance with some rule of law. The same body of facts may well be characterized in a number of ways and give rise to completely separate causes. For example, the same act may be characterized as murder in one case and as civil fault in another. In Essai sur l'autorité de la chose jugée en matière civile (1975), Daniel Tomasin expressed this very clearly. At page 201, he wrote:
[TRANSLATION] It may be that under one or more provisions certain facts can be characterized differently. If the characterization chosen to attain a result has been rejected in one judgment, can a party then seek to attain the same result in reliance on a different characterization? Judging from article 1351 C.C., the answer must be in the affirmative as there is an absence [of identity] of cause between the two actions.
As a general rule, the same body of facts can thus give rise to as many causes of action as there are legal characterizations on which a proceeding can be based.
It is equally clear that a rule of law removed from the factual situation cannot be a cause of action in itself. The rule of law gives rise to a cause of action when it is applied to a given factual situation; it is by the intellectual exercise of characterization, of the linking of the fact and the law, that the cause is revealed. It would certainly be an error to view a cause as a rule of law regardless of its application to the facts considered. Accordingly, the existence of two applicable rules of law as the basis of the plaintiff's rights does not lead directly to the conclusion that two causes exist.
Of course, the existence of two rules of law applicable to a factual situation in practice gives rise to a duality of causes in the vast majority of cases, because separate rules generally require different legal characterizations. However, it is not the fact that there are two applicable rules which is conclusive in itself: it is the duality of legal characterizations which may result therefrom. When the essence of the legal characterization of the facts alleged is identical under either rule, it must follow that there is identity of cause. This identity of treatment is not easy to determine and in my opinion calls for a two‑stage analysis when two rules are apparently applicable to the same facts.
The characterization that may result from a rule of law depends first on the legal principle the rule is based on: Jean-Paul Gilli, La cause juridique de la demande en justice (1962), at pp. 126 et seq. In matters of delictual liability, modern civil law systems have generally applied two separate principles, namely the liability attaching to wrongful acts on the one hand and the liability associated with the assumed risk on the other. Two statutory provisions based on different legal principles cannot give rise to identical causes since the fact regarded as the source of liability will necessarily be different; the legal characterization of the factual situation will similarly be different.
Pontiac Lumber Co. v. Gentil (1922), 25 Que. P.R. 118 (C.A.), provides an example of such a situation where, because of the separate principles on which they are based, two rules of law result in two separate causes with respect to the same set of facts. In that case the plaintiff had brought two actions as a result of the same accident: one under the general scheme of delictual liability and the other under the workmen's compensation legislation of the time. That legislation provided for the payment of compensation by the employer to a victim of an accident occurring "by reason of or in the course of . . . work". The Court of Appeal dismissed the exception of lis pendens put forward because the legal fact used as the basis of the right was different. Rivard J.A. explained it as follows, at p. 123:
[TRANSLATION] In the first action the cause, the basis of the right, is the employer's fault.
In the second, it is the liability which the legislation imposes on the employer, whether or not he is at fault.
The workmen's compensation legislation was based on a principle of liability associated with the risk assumed in carrying on a profitable activity. The employer assumes the risks inherent in the operation of his business regardless of his conduct. Unlike the case of liability at civil law, liability is imposed regardless of any wrongful conduct. Although the two schemes offer compensation for damage for similar equitable reasons, the legislation achieves this result by a different legal principle in which the defendant's conduct is not relevant. The legal characterization of the facts is essentially different and the result is a duality of causes, regardless of the identity of the set of facts alleged.
In cases where the two provisions are based on the same legal principle, it is then necessary to examine the potential result of applying these provisions to the facts under consideration. If with respect to a given set of facts the effect produced by applying the provision relied on in the second action corresponds to the effect produced by applying the provision relied on in the first, it should be concluded that there is an identity of causes.
Let us take the example of an act of defamation committed in Quebec the victim of which, in order to obtain compensation for his damage, relies first on ss. 4 and 49 of the Charter of Human Rights and Freedoms, R.S.Q., c. C-12 (the first providing for a right to the safeguard of dignity, honour and reputation and the other guaranteeing an action for damages in the event of infringement), and then on art. 1053 C.C.L.C. I assume that the two provisions are based on the same legal principle of liability associated with wrongful conduct. The next step therefore is to analyze the potential effects resulting from application of each of the rules on the rights and obligations of the parties. (I am deliberately leaving out of account here the possibility of obtaining exemplary damages under the second paragraph of s. 49 of the Charter in the event of a wilful unlawful infringement of the rights protected; I therefore refrain from making any comment on the question of whether this is an independent right which may be claimed in a separate action.)
It is apparent that the concept of fault under art. 1053 C.C.L.C. is much more comprehensive than the idea of an infringement of dignity, honour and reputation protected by s. 4 of the Charter, as it covers in the abstract a much wider range of conduct. In this sense, it can be said that the victim's right to compensation results ultimately from two separate rules of law which can produce different effects, although they are based on a single legal principle. However, the point at this stage is the effect potentially produced by the application of these rules to the facts which are alleged. If the facts relied on in a second action brought under art. 1053 C.C.L.C. contain nothing but what may be covered in the first action by s. 4 of the Charter, the effect produced by each of the provisions will be identical and it will follow that the separate legal origins of the right to compensation are merged into a single cause by their application to the facts. In such a situation, the essence of the characterization given to the facts under each provision is identical. The duality as to the legal origin of the cause must then be analyzed in terms of legal argument: it will be said that the victim has a single cause of action which he or she can pursue by two legal grounds (see Raymond Martin, "Sur la notion de moyen", J.C.P. 1976.I.2768).
For the purposes of the present case it will suffice to note that where there is a single set of facts alleged to which two provisions are presumed to be applicable, there will be an identity of cause when the substance of each provision by the same legal principle produces an identical effect on the rights and obligations of the parties. This rule reflects the purpose of the preliminary lis pendens exception, which is to avoid contradictory judgments and an unnecessary and costly multiplicity of proceedings. Keeping these premises in mind, the question now must be whether the appellant in the present case is submitting to the Superior Court the case pending in the Federal Court.
The first thing to be noted is the exact correspondence between the facts alleged by the appellant in the Superior Court and those it is alleging in the Federal Court. Paragraphs 1 to 14 contain the statement of facts in both actions and are absolutely identical.
Additionally, although parties are not generally required to make legal arguments in their pleadings, there are nevertheless certain indications in both actions as to the legal characterization of the acts alleged. In this regard the wording of the two actions is quite comprehensive in nature. In its statement of claim in the Superior Court, the appellant described the respondents' conduct as follows:
[TRANSLATION]
15.Defendant companies and defendants by their concerted action have caused plaintiff damage which it is entitled to claim for;
16.This damage is due to the fault of defendants, thereby contravening art. 1053 C.C., in that, and without limiting the generality of the foregoing:
(a) defendants engaged in a concerted trade practice which they are continuing by attempting to lessen unduly the price of a product, namely concrete;
(b) by their agreements they were engaged in an unfair trade practice;
(c) they subjected plaintiff to unfair competition;
(d) they abused their rights;
In the Federal Court the appellant alleges in its action:
[TRANSLATION]
15.Defendant companies and defendants conspired between April 1978 and December 1978 to prevent or lessen unduly competition in the supply of a product, to wit concrete, in order to otherwise restrain or injure competition in the concrete business unduly, contrary to section 32(1) of the Combines Investigation Act;
16.Defendant companies and defendants also conspired, combined and agreed with each other to unduly limit the production of concrete and to unduly restrain or injure competition in the concrete business, thereby also infringing the provisions of section 32 of the Combines Investigation Act;
17.In addition to infringing the Combines Investigation Act, defendants committed fault in that, without limiting the generality of the foregoing,
(a) defendants engaged in a concerted trade practice which they are continuing by attempting to lessen unduly the price of a product, namely concrete;
(b) by their agreements they engaged in an unfair trade practice;
(c) they subjected plaintiff to unfair competition;
(d) they abused their rights;
The actions alleged against the respondents can accordingly be analyzed in turn, if we are to believe the appellant, as fault causing damage under art. 1053 C.C.L.C. and as conduct giving rise to damage contrary to the provisions of public order contained in the Act. We are thus faced with a single set of facts to which two rules of law are presumed to apply. The question then is to determine, first, whether the legal principle that underlies each of the schemes is identical, and if necessary, whether the effect produced by each one on the parties' rights and obligations is similar. It will in this regard be necessary to observe the mechanisms of each scheme, as the applicable rules of evidence may sometimes touch on substance and affect the legal principle. For example, the establishment of an irrebuttable presumption of fault in a scheme of liability for wrongful conduct might very well move it into the family of liability schemes associated with assumed risk: René Savatier, Note, D.P. 1928.1.153.
In considering the scheme of delictual civil liability under general civil law, reference must be made to the traditional rules derived from art. 1053 C.C.L.C. to determine whether the respondents' acts constitute civil fault resulting in liability for the damage caused. In their Traité pratique de la responsabilité civile délictuelle (1971), at pp. 221‑22, Nadeau and Nadeau describe the connection between unfair competition and the delictual civil liability provisions as follows:
[TRANSLATION] 204. -- (c) Civil Code. -- Unlawful or unfair competition causing unjust damage to another falls under the civil liability of art. 1053 C.C. Actions for damages for unfair competition are brought not only under the federal statute, but also under the general principles of delictual civil liability. [References omitted.]
- -- Forms of unfair competition. -- In general it can be said that competition is unfair if it is contrary to the "fair practice" in the industry or business. In that case it goes beyond the limits of fairness. Our courts require proof of bad faith or at least an intent to cause injury for there to be unfair competition. [References omitted.]
For the sake of accuracy, I would also mention that unfair competition could possibly give rise to civil liability in accordance with the theory of abuse of right, which the appellant relied on in its two actions. Overall, the general rules of evidence in civil matters are applicable in principle and the action is prescribed after two years, from the time a reasonably prudent victim could have suspected the connection between the damage and the fault: Baudouin, La responsabilité civile délictuelle (1985), p. 510, No. 1121.
As for the scheme created by the Act, reference must be made to the provisions. Section 31.1(1) states:
31.1. (1) Any person who has suffered loss or damage as a result of
(a) conduct that is contrary to any provision of Part V, or
(b) the failure of any person to comply with an order of the Commission or a court under this Act,
may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with the order an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section.
The first provision of Part V reads as follows:
- (1) Every one who conspires, combines, agrees or arranges with another person
(a) to limit unduly the facilities for transporting, producing, manufacturing, supplying, storing or dealing in any product,
(b) to prevent, limit or lessen, unduly, the manufacture or production of a product, or to enhance unreasonably the price thereof,
(c) to prevent, or lessen, unduly, competition in the production, manufacture, purchase, barter, sale, storage, rental, transportation or supply of a product, or in the price of insurance upon persons or property, or
(d)to otherwise restrain or injure competition unduly,
is guilty of an indictable offence and is liable to imprisonment for five years or a fine of one million dollars or to both.
The Act thus creates a scheme of civil liability associated with the commission of certain wrongful acts also categorized as criminal, by creating a right of action which enables victims to be compensated for loss or damage which may result therefrom. In the rules of evidence the main difference from the general civil law provisions, essentially a minor one, is contained in s. 31.1(2), under which the record containing the conviction of a person for an offence under the Act suffices to establish under the civil liability scheme, in the absence of any evidence to the contrary, that the person was engaged in conduct contrary to the Act. At the same time, it is not stated that an acquittal under criminal law will have an exonerating effect in an action for damages. The limitation period is also two years, but under s. 31.1(4) it runs from the conduct alleged or the day on which any criminal proceedings were finally disposed of, whichever is the later.
Considering first the identity of the legal principles, it seems quite clear to me that we are dealing here with two schemes based on the same principle. Both cases involve a scheme of compensation for civil liability based on wrongful conduct. The area of wrongful actions covered by the Act is certainly narrower than under general civil law, but it is clearly based on the same principle. In this regard, I do not think it can seriously be argued that the provisions of the Act embody the theory of assumed commercial risk. The liability created by the Act is not in any way based on commercial activity, but on the wrongful conduct that one may have in that sector of activity. I also do not see how the minor differences regarding applicable forms of proof can affect this identity of legal principles.
As to the potential effect of the schemes applied to the facts alleged, I will agree, first, that the concept of civil fault is much more all‑encompassing than that of unfair competition under the Act: it covers a much wider range of factual situations. Accordingly, it has to be said that the ultimate legal origin of the appellant's right to compensation is two quite distinct rules of law. On the other hand, it is also clear that the two concepts overlap, as at first sight I cannot imagine any conduct which, falling under the Act, would not also constitute fault resulting in civil liability. In the present case it seems clear that none of the aspects of the set of facts alleged by the appellant goes beyond the area of overlap between the two concepts; this therefore is one of the rare cases in which the application of two separate rules gives rise to one and the same cause.
In its action in the Superior Court the appellant appears to make the civil fault depend on the unfair competition as defined in the Act. It is true that the idea of a certain agreement or conspiracy is a necessary component of the conduct prohibited by the Act, a component which may not be necessary for a conclusion that civil fault causing damage has been committed. In the present case, however, no fact apart from the conspiracy is alleged that could constitute civil fault causing damage. A simple refusal to sell or supply concrete, in the absence of special legislation or circumstances, which were not alleged, could not give rise to delictual civil liability apart from the conspiracy. Similarly, the concept of abuse of rights relied on by the appellant does not correspond to anything in the facts alleged that is not covered by the concept of unfair competition defined in the Act. The facts alleged in the pleadings, which I assume here to be true, therefore fall completely within the area where the two schemes overlap. The result is that the effect produced by each of the provisions will be the same: the essence of the legal characterization of the facts is identical.
With regard to differences in the applicable rules of prescription, it is true that they may in practice give rise to a different outcome in the application of the two schemes. However, I do not think they should be considered for the purposes of this analysis. Prescription is not in any way a part of the substance of the schemes. It is only an incidental condition for giving effect to them, which has nothing to do with the substance of the cause of action on which the court is required to rule and about which the question of lis pendens arises. The minor differences regarding prescription alleged in the present case therefore cannot affect the identity of the legal characterizations.
My conclusion in no way implies that there is in the abstract a direct correspondence between the conduct prohibited by the Act and the concept of civil fault causing damage, or that a judgment denying the existence of an act of unfair competition under the Act will in all cases be conclusive as to the existence of fault causing damage. In the present case the facts which the appellant associates with civil fault causing it damage are characterized as to each of their components, on the face of the pleadings, as acts of unfair competition within the meaning of the Act. In the first Rocois case, this Court excluded in general from the Federal Court's jurisdiction the aspects of the claim not falling under the Act; in the present case it can be seen from the pleadings that no aspect of the factual situation alleged falls outside this particular framework.
In the final analysis, it appears that the substance of each of the schemes produces by the same legal principle an identical effect on the rights and obligations of the parties. The essence of the legal characterization given to the facts under either of the schemes is thus identical: there is identity of cause in the present case. Returning to the ultimate purpose served by the preliminary exception of lis pendens, there is a risk of contradiction between the judgments to be rendered and a completely needless and in all respects costly duplication of proceedings. If the possibility of a second judgment were admitted, the latter would be one of two things: inconsistent with the first or devoid of any practical effect.
Having said this, I think one final comment should be made before I conclude my reasons. Though the criteria applicable to res judicata also govern lis pendens, it must be borne in mind that the basis of the analysis is essentially different in the latter case. When the question is whether there is res judicata, the court in question has at its disposal a judgment the language and scope of which it can assess, and this allows it to determine just how far the authority of res judicata should be attributed to it. In a case of lis pendens, the only guides available to the court are the pleadings submitted in both cases. The result is that determination of the case will rest on allegations that must be taken as proven for purposes of the analysis. The legal characterization given to the facts at this preliminary stage is accordingly a matter of hypothesis, and for this reason it is a delicate exercise requiring great caution, for the mistaken dismissal of an action on grounds of lis pendens means the final denial of a litigant's rights, without the case being considered on the merits. The serious consequences that flow from this mean that in case of doubt the preliminary exception should be dismissed, leaving the defendant with the option of later submitting an exception respecting res judicata. In the present case I have no doubt that the three identities exist.
IV - Conclusion
In conclusion I would dismiss both appeals without costs.
Appeals dismissed.
Solicitors for the appellant: Gaudreau & St‑Cyr, Québec.
Solicitors for the respondent and mis en cause Dominion Ready Mix Inc. et al.: McCarthy Tetrault, Montréal.
Solicitors for the mis en cause and respondents Québec Ready Mix Inc. et al.: Stein, Monast, Pratte & Marseille, Québec.
- Chief Justice at the time of judgment.
** Rocois Construction Inc. v. Québec Ready Mix Inc., S.C. Québec, No. 200-05-003775-801, September 11, 1981.