Executive Summary: Key Legal and Evidentiary Issues

• Legality of mandatory online delivery fees under Quebec consumer protection law and federal competition law, given that the $3.99 charge was not fully disclosed at the front end of the ordering process.
• Characterisation of undisclosed or late-disclosed delivery fees and pricing as “partial prices” and potentially misleading representations under article 224(c) L.p.c. and section 52(1.3) of the Competition Act.
• Alleged misrepresentation of promotional discounts on medium pizzas by inflating a reference price by $10, engaging articles 225(a), (b) and (c) L.p.c. regarding false or deceptive impressions of advantageous pricing.
• Assessment of whether a “coupon/credit” class settlement structure (automatic $2.30 credits, no claims process) is fair and reasonable in light of the small individual loss and the likelihood members will actually use the credits.
• Impact of evolving appellate case law (notably Union des consommateurs c. Air Canada) on the recoverability of compensatory and punitive damages where the main harm is a price differential on disclosed fees.
• Reasonableness of class counsel’s reduced fee (below the 30% contingency) and the Fonds d’aide’s unsuccessful attempt to reclassify the settlement as a collective recovery to trigger regulatory reporting and potential levies.

Factual background

Paul Manguian filed a proposed class action in November 2024 against Les Franchises Salvatoré G.A. Inc. (Salvatoré), a franchisor operating more than a hundred pizza restaurants, mostly in Quebec with some outlets in neighbouring provinces. The action focused on the way Salvatoré disclosed prices and delivery charges in its online ordering systems, namely its mobile apps and website. For delivered pizza orders placed online, Salvatoré allegedly added a fixed, mandatory delivery fee of $3.99 to the initial advertised price. According to the plaintiff, this fee was not properly disclosed at the first point where prices were displayed, making the advertised prices incomplete, fragmented and effectively unattainable unless customers accepted the additional fee at checkout. The claim asserted that this practice breached article 224(c) of the Quebec Consumer Protection Act (Loi sur la protection du consommateur, L.p.c.), which prohibits advertising a price that does not include all obligatory charges, and section 52(1.3) of the federal Competition Act, which targets partial prices and misleading price representations in the marketplace. A second prong of the claim targeted Salvatoré’s promotions on medium-format pizzas. The plaintiff alleged Salvatoré displayed an inflated “regular” or reference price, then advertised a $10 reduction on medium pizzas, thereby creating the false impression of a substantial discount. This conduct was pleaded as a violation of article 225(a), (b) and (c) L.p.c., dealing with misrepresentation of current price, false reference pricing and misleading claims that a price is “advantageous.”

Salvatoré disputed these allegations on both factual and legal grounds. It maintained that delivery was a distinct service whose fee was in fact disclosed before any transaction was finalized, and that its promotional pricing was truthful and supported by real reference prices. Salvatoré also asserted that the $3.99 charge corresponded to its actual cost of third-party delivery and did not generate profit on that component, a fact it relied on to resist any award of punitive damages and to argue that the financial impact on consumers was limited. The proposed class was national in scope, covering all consumers in Canada, within the meaning of the Consumer Protection Act, who, since 8 November 2021, had ordered delivered meals via the Pizza Salvatoré apps or website and paid more than the initially announced price because of added mandatory fees. A subgroup captured those who had ordered at least one medium pizza in a delivery order during the same period. The class period ran from 8 November 2021 until 17 June 2025, the date Salvatoré changed its disclosures.

Procedural history and settlement

After the original filing, the plaintiff amended the authorization application in May 2025 to include the allegations on inflated medium pizza promotions. The parties then entered into extended settlement discussions. On 1 December 2025, before the case reached a contested authorization hearing, they concluded a comprehensive settlement agreement to resolve the litigation in its entirety on a class-wide basis. On 9 December 2025, the Superior Court authorized the action for settlement purposes only, approved the dissemination of settlement notices and scheduled the approval hearing for April 2026. Notice was effected primarily by text message and email, reaching approximately 99% of the 651,538 identified class members, indicating a robust and targeted notification process. Only five individuals opted out of the settlement, an immaterial proportion in relation to the class size, and no objections to the deal or the requested fees were filed.

The settlement created a global resolution valued at $1,700,000. Of this, $1,500,000 was allocated to benefits for group members, to be delivered as store credits, and $200,000 (plus taxes) was designated as class counsel fees and disbursements, payable by Salvatoré. Under the agreement, each eligible class member would automatically receive a $2.30 credit in their customer account. The credit could be used for any future order, not only delivery charges, and would remain valid for 24 months. Members were not required to file claim forms, submit purchase proofs or take any affirmative step; the credits would be applied automatically to the next qualifying transaction, with reminder communications scheduled at the 12th and 22nd months to encourage use. Importantly, Salvatoré had already changed its pricing display and fee disclosure practices by 17 June 2025, before the settlement was signed, and it committed to maintain those improved disclosures on a permanent basis as part of the resolution. These commitments were positioned as a meaningful behavioural remedy, complementing the monetary component of the settlement.

Legal context and issues underlying the approval

When considering whether to approve the settlement, the Superior Court applied article 590 of the Code of Civil Procedure, which requires that a class action settlement be fair, reasonable and in the best interests of all class members. The court relied on established criteria for such approval: the terms and conditions of the agreement, the likelihood of success, the anticipated costs and duration of litigation, the extent and complexity of evidence required, the views and experience of counsel, the presence or absence of objections, and the good faith of the negotiations. A central legal backdrop was the Quebec Court of Appeal’s decision in Union des consommateurs c. Air Canada, which involved similar allegations about “partial prices” and late-disclosed fees. There, the Court of Appeal held that although there was a violation of the Consumer Protection Act, compensatory damages could not simply be measured by the difference between the announced and charged price; plaintiffs remained obliged to prove actual, quantifiable loss and could not rely solely on a mechanical “price differential” theory. That decision substantially weakened the plaintiff’s prospects of securing compensatory damages based purely on the $3.99 differential per transaction in the Salvatoré case, especially given that the delivery fee represented an actual cost and not a profit margin. On punitive damages, the court again viewed Air Canada as instructive. Punitive awards under the Consumer Protection Act depend heavily on proof of intentional, serious misconduct. In Salvatoré’s case, the defendant had aligned its practices with the law before settlement, had not profited on the delivery charge itself, and strenuously contested any suggestion of deliberate deception. These factors led the court to regard the chances of punitive damages as uncertain and highly fact-dependent, with a real possibility of no monetary recovery at trial.

In addition, the element relating to alleged misrepresentation of medium pizza discounts under article 225 L.p.c. had not been quantified in terms of compensatory loss, and there was no well-established jurisprudential method for calculating damages on that theory. This increased the litigation risk for the plaintiff’s side. To prove any significant class-wide harm for either branch of the case, the parties would likely have had to marshal complex expert evidence—on consumer behaviour and perception, on economic impacts and on any profits associated with the challenged practices—plus multiple fact witnesses, at considerable expense and delay. Against this legal and evidentiary backdrop, the judge concluded that the probabilities of success on the merits for substantial monetary damages were low enough to favour a negotiated resolution.

Assessment of the coupon-style settlement

Because the relief took the form of credits, the court examined whether this “coupon/credit” structure was fair in the specific context of the case. The individual harm per transaction was modest (a $3.99 fee), and issuing cheques or electronic payments for every class member would have been disproportionately costly and administratively inefficient. A $2.30 credit—slightly more than half the contested fee—was considered a reasonable compromise given the uncertainty of any recovery at trial. The court nonetheless evaluated several specific factors that commonly arise in coupon settlements: the value of the individual benefit, whether alternative forms of compensation or transferability were offered, how much a member has to spend to use the credit, the likelihood that credits will actually be redeemed, any restrictive conditions on use, whether the defendant has altered its business practices, whether there is a reporting obligation on implementation, and the defendant’s ability to fund the settlement. Some aspects were unfavourable, such as the requirement that a member place another order (which generates additional revenue for the defendant) and the non-transferable nature of the credit. However, these were counterbalanced by the automatic application of the credit, the absence of a claims process, the two-year validity, reminder notices to maximize usage, the broad usability on any items (not just delivery fees) and the fact that most class members had made multiple purchases historically, suggesting substantial likelihood of future use. The permanent change in Salvatoré’s disclosure practices also weighed heavily in favour of approval.

Ultimately, the court held that the settlement—despite being structured as a credit rather than cash payout—provided a “certain” and pragmatic benefit to class members, avoided the risks and delays of a contested class action, and secured a durable modification of the impugned conduct. Given these factors and the near-total absence of opposition, the settlement was found to be just, reasonable and in the best interests of the class, and it was formally approved.

Class counsel fees and the Fonds d’aide’s intervention

The court then turned to class counsel’s requested fees under article 593 C.p.c. and the ethical criteria of article 102 of the Code of ethics of advocates. The fee agreement signed with the representative in October 2024 provided for a standard 30% contingency on any amount or benefit recovered, plus taxes, in addition to disbursements. Instead of seeking the full contractual share, counsel requested a lump sum of $200,000 plus applicable taxes, inclusive of all costs, filing fees and disbursements, to be paid by Salvatoré without reducing the $1,500,000 value of the credits. On a straightforward basis, this represented roughly 13% of the total credit pool, and about 21% if one looked only at the estimated proportion of credits expected to be used. Both ratios fell comfortably within the 15–33% range the courts generally consider acceptable in class actions. The court noted counsel’s substantial experience in consumer class actions, the genuine litigation risk in light of Air Canada and the significance of achieving both monetary and behavioural relief in a legally uncertain environment. No party, including the Fonds d’aide aux actions collectives, contested the reasonableness of the amount. The court therefore approved the requested $200,000 (plus taxes) as fair and proportionate to the result and the risk assumed.

Separately, the Fonds d’aide intervened to argue that the settlement should be judicially characterised as a “collective recovery” (recouvrement collectif), which would normally open the door to a potential residual balance (“reliquat”) and thus to the Fonds’ statutory percentage levy, and to seek an order requiring a detailed administrative report under article 59 of the Superior Court’s civil regulation. The court rejected these requests. Relying on prior decisions involving similar credit-based settlements, it held that where the defendant only pays credits actually used and there is no fixed global sum to be distributed to identified members, the structure is best understood as an individual recovery, not a collective one. Because unused credits would never be paid, there could be no residual amount, no levy in favour of the Fonds, and no room to apply the regulatory framework designed for collective recoveries and liquidated claims. However, the court did require Salvatoré to submit a report on the execution of the settlement when seeking the closing judgment, as already contemplated in the settlement agreement and consistent with the Superior Court’s practice directives, and it extended this reporting obligation by ordering that a copy of the report be provided to the Fonds. The request to reclassify the settlement itself as a collective recovery, and to invoke article 59, was refused as inconsistent with the prevailing case law.

Outcome and final orders

In its final orders, the Superior Court declared the settlement agreement valid, fair, reasonable and in the best interests of the settlement class, formally approved it under article 590 C.p.c. and incorporated its terms into the judgment so as to bind all class members who had not opted out. The defendant was ordered to implement the agreement according to its terms, including the automatic posting of $2.30 credits to eligible members’ accounts over a 24-month period and the maintenance of the revised delivery-fee disclosure practices. The court also confirmed that two identified individuals had validly opted out, approved class counsel’s fees of $200,000 plus taxes to be paid by Salvatoré, and directed the parties to apply for a closing judgment within 90 days of final execution of the settlement, supported by an administration report to be shared with the Fonds d’aide. No party was awarded costs, the judgment being rendered “without costs.”

Overall, the successful side in this approval judgment is the plaintiff class, represented by Paul Manguian, since the court endorsed the class-wide settlement and ordered its implementation, including both the benefits to members and the payment of counsel fees. The total monetary value ordered in favour of the class side consists of $1,500,000 in credits to class members plus $200,000 (excluding taxes) in approved class counsel fees payable by Salvatoré, for a settlement value of $1.7 million before taxes on fees; because the member benefits are delivered as credits redeemable over time, the exact amount ultimately realized by class members in cash-equivalent value cannot be determined with precision.