Quebec Superior Court Dismisses HBC Class Action

On October 19, 2004, Justice Julien Lanctôt of the Quebec Superior Court dismissed a class action targeting Hudson’s Bay Co.’s credit card interest rates. The decision flows from a trial that spanned from March to April 2004. The case is one of the first large class actions ever to go to trial in Quebec. Total claims were estimated by the plaintiff at around $100 million, representing partial reimbursement of interest charged at a rate of 28.8 per cent per annum since 1994 to members of the class in Quebec. It was argued that this rate was excessive and abusive in light of today’s cost of funds. The Court held that HBC credit card interest charges compare favourably with the rates applicable to financial institution credit cards, when one takes into account the different methods of calculating interest, HBC’s interest-free periods and the non-retroactivity of HBC’s interest charges. After dismissing HBC’s constitutional challenge and ruling that it had jurisdiction to hear the plaintiff’s action, the Court found that the profit margin on HBC’s credit activities was not excessive or unreasonable, and that there was nothing to justify the plaintiff’s request that the Court use its statutory powers under the Quebec Civil Code and the Consumer Protection Act to reduce HBC’s credit card interest rates.

HBC was represented by a team from Ogilvy Renault in Montreal that consisted of Christine Carron and William Hesler, Q.C., at trial, and Sylvie Rodrigue and Sophie Perreault in the pre-trial stages. The plaintiff was represented by André Bélanger of Bélanger, Garceau. The Attorney General of Quebec was represented by Jean-François Boulais of Bernard, Roy & Associates.