Following recent rulings in prominent cases such as Union des consommateurs v. Air Canada (Air Canada), Fortin v. Mazda Canada Inc. (Mazda) and Martel v. Kia Canada Inc., the Superior Court of Quebec (QSC) dismissed yet another class action based on alleged violations of Quebec's Consumer Protection Act (QPCA), thus underscoring a growing trend.
In Lussier v. Expedia Inc. (Expedia), the QSC dismissed a class action against Expedia Inc. and other online hotel booking platforms (Defendants), adding to the trend of authorized class actions being dismissed on the merits, absent an infringement by the defendants or evidence of prejudice suffered by consumers.
In Expedia, the plaintiff alleged that after booking a hotel reservation using the Defendants' online platform, the hotel charged hidden fees, commonly referred to as "hotel fees" or "resort fees" (Hotel Fees), once the plaintiff arrived on-site. The plaintiff claimed that the Defendants failed to disclose the Hotel Fees when the reservation was booked online. The plaintiff alleged that by not disclosing such fees, the Defendants had breached subsection 224(c) of the QPCA, which prohibits merchants from charging a higher price for goods or services than that advertised. The plaintiff claimed reimbursement of the Hotel Fees and punitive damages totalling C$15 million on behalf of the class members. The QSC dismissed the plaintiff's claims in their entirety on the following grounds.
First, the QSC noted that, early in the reservation process, the Defendants clearly and repeatedly stated on their reservation platform that Hotel Fees would be added to the base rate and were to be paid on-site. The QSC determined that these warnings were sufficient to alert consumers of the existence of Hotel Fees. The QSC added that consumers had a responsibility, in turn, to make an effort to understand their obligations, and in this case, the plaintiff had admitted to not having read the hotel reservation contract. The QSC stated it is unable to support consumers who do not read their contractual obligations and held that no prohibited practice under the QPCA had occurred.
Second, the QSC was of the view that even if it had found there to be a prohibited practice, the plaintiff had failed to prove that he had suffered any prejudice. Echoing the teachings of the Quebec Court of Appeal in Mazda, the QSC stated that the mere fact that a prohibited practice had taken place does not exempt the plaintiff from quantifying the prejudice he suffered if he seeks any of the remedies provided for in section 272 of the QPCA. Furthermore, the granting of such a remedy is at the discretion of the court. The QSC determined that the plaintiff had suffered no prejudice, on the grounds that the Defendants had repeatedly warned consumers of the existence of the Hotel Fees and had made no financial gain from such fees, and that the plaintiff had fully benefited from the hotel services he had purchased. These grounds parallel those of the decision rendered in Air Canada, the very first class action based on subsection 224(c) of the QCPA to be decided on the merits. For more information, please see our November 2022 Blakes Bulletin: Higher-Than-Advertised Prices: Where's the Injury?
Third, the QSC refused to award punitive damages to class members. Since the practice of charging Hotel Fees had been developed by hotels without the Defendants' knowledge, one could not conclude that the Defendants had been lax, passive, or ignorant. On the contrary, given that the Defendants had ensured that consumers were fully informed of the existence of Hotel Fees, the QSC found that the Defendants' conduct had been satisfactory and proactive.
While Expedia will likely not prevent other class actions from being launched pursuant to subsection 224(c) of the QCPA, it does highlight the difficulties faced by consumers who undertake such actions. So far, the courts hearing these cases have not been convinced of the existence of a prohibited practice or prejudice suffered by the plaintiffs, particularly where price warnings have been issued to consumers and where consumers benefited from goods or services purchased from the merchant.
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