Executive Summary: Key Legal and Evidentiary Issues

• Whether voluntary reimbursements made by a defendant after the filing of the application for authorization, but before the settlement, should be considered when assessing the benefits conferred on class members by a proposed settlement.
• Approval of a class action settlement under article 590 of the Code of Civil Procedure, requiring the court to find the agreement fair, equitable, and in the best interest of the members.
• Reasonableness of class counsel fees of $100,715.72 under article 593 C.p.c., including whether the agreed 30% contingency could be calculated on both the settlement funds and the amounts FedEx voluntarily reimbursed.
• Scope of the full and final release granted to FedEx, which the FAAC argued was given without any direct consideration to the members.
• Concerns raised by the FAAC that the settlement resembled a discontinuance and that the French translation of the agreement was posted online only after the objection deadline.
• Appropriateness of directing the settlement remainder ($14,785.28) as a cy-près payment to the Make-a-Wish Foundation of Canada, a charity with no link to the subject matter of the action.

Facts of the case

Emanuel Farias filed an application on December 8, 2017 to institute a class action against Federal Express Canada Corporation ("FedEx"), alleging that FedEx wrongly charged customs duties and processing fees on goods imported from the European Union or from countries benefiting from the Canada–EU Comprehensive Economic and Trade Agreement ("CETA"), when such fees were not exigible under that agreement. On December 20, 2018, Justice Chantal Tremblay authorized the class action on behalf of persons who had paid such duties or fees, covering both compensatory and punitive damages, and the Québec Court of Appeal upheld that authorization in 2019. FedEx had collected $23,946.76 for occasional shipments from the EU and a further $161,772.29 for commercial shipments, for a total of $185,719.05. Beginning in June 2018 — after the authorization application was served — FedEx took steps to reimburse the members, either directly or through the Canada Border Services Agency, and the reimbursements were completed in 2020 without any release being required from the members. Class counsel nonetheless continued the proceedings to verify FedEx's calculations and the completeness of the reimbursements, to confirm whether ancillary fees had been charged, and to pursue punitive damages. The trial on the merits was set for October 20, 2025, but the parties reached a settlement agreement signed on October 22 and 30, 2025, which Justice Martin F. Sheehan of the Superior Court of Québec was asked to approve, along with class counsel fees.

Settlement terms at issue

Under the settlement agreement, FedEx undertook to pay an additional sum of $150,000 (the "Gross Settlement Funds") and to cover the fees and costs of administering and implementing the settlement, including notice publication costs. From the Gross Settlement Funds, $100,715.72 would be paid to class counsel as fees, $34,499 would go to the Fonds d'aide aux actions collectives ("FAAC") pursuant to the applicable regulation, and the remainder of $14,785.28 would be paid to the Make-a-Wish Foundation of Canada (fondation Rêves d'enfants Canada). In exchange, FedEx would receive a full and final release from any claim relating to the customs duties irregularly collected, though the release excluded claims for other fees, including those at issue in the Ontario proceeding Robson v. Federal Express Canada Corp. The fee agreement between the plaintiff and class counsel entitled counsel to thirty percent of the total value of damages or benefits recovered from or on behalf of FedEx, whether by judgment or out-of-court settlement, plus applicable taxes; counsel proposed applying that percentage not only to the $150,000 settlement payment but also to the $185,719.05 voluntarily reimbursed.

The court's reasoning and analysis

The central question was whether, in weighing the benefits a settlement confers on members, the court should consider voluntary payments or remedial measures made by a defendant after the filing of the authorization application but before the settlement. Taken in isolation, the settlement conferred limited benefits on the members, since they had already been fully reimbursed by 2020; the fees benefited counsel, the remainder benefited the FAAC and a charity, and the release benefited FedEx. The court held, however, that such an interpretation would ignore the context and social objectives of the class action — facilitating access to justice, modifying harmful behaviour, and conserving judicial resources. It identified factors relevant to considering pre-settlement reimbursements, including the chronology of the payments, their significance relative to the relief claimed, the risk of strategic conduct, the effectiveness of the reimbursement, and the reasons the proceedings continued. Here, the filing of the authorization application had likely influenced FedEx's decision to reimburse, both the authorization judgment and the Court of Appeal had noted that verification of the reimbursements was warranted, and class counsel's considerable verification efforts allowed the parties to agree that all amounts unduly collected had been repaid. Members received full reimbursement without bearing any administration costs or fees, which FedEx paid in addition to the settlement funds. The court addressed the FAAC's objections: it found the members' right to object had not been infringed, since bilingual notices and the English version of the agreement had been online since February 2, 2026, the French version was added on April 7, 2026, no member opted out or objected, and the fully reimbursed members had suffered no real prejudice. Although the settlement differed from a discontinuance on only three elements — the counsel fees, the small remainder to the FAAC and a charity, and the release — the court found the release proportional to the damages voluntarily compensated and concluded the agreement did not bring the administration of justice into disrepute. It also accepted that no charity with a link to the illegal collection of customs duties was readily identifiable, making the choice of the Make-a-Wish Foundation acceptable. On fees, the court found the 30% percentage consistent with comparable cases, held that the voluntary reimbursements formed an essential component of the settlement and could ground the fee calculation, and noted the fees sought were less than the value of the hours actually devoted to the file.

Ruling and overall outcome

The court granted the application, approving the settlement agreement as fair, reasonable, and in the best interest of the class members, and declared it binding on all parties and members. The outcome favoured the plaintiff and the class: beyond the $185,719.05 already fully reimbursed to members between 2018 and 2020, FedEx was required to pay the additional $150,000 in settlement funds, from which the court approved class counsel fees of $100,715.72 (payable within 31 days of the notice of judgment, subject to appeal rights), $34,499 to the Fonds d'aide aux actions collectives, and the remaining balance — estimated at $14,785.28 — to the Make-a-Wish Foundation of Canada, with FedEx also bearing the administration and notice costs in addition to these amounts. The judgment declared that distributing a further amount to each member was impractical, inappropriate, or too costly, ordered FedEx to provide an administration report, required the parties to seek a closing judgment once administration is complete, and issued the whole without legal costs.