Executive Summary: Key Legal and Evidentiary Issues

• Scope and mechanics of a collective recovery under arts. 595–597 C.C.P., including how to deal with an unanticipated residual balance (reliquat) after two rounds of distribution.
• Competing distribution models for the residual amount: a more equitable but costlier third distribution to all already-compensated former and current subscribers versus a cheaper, more efficient credit limited to current subscribers.
• Evidentiary record from the claims administrator (Verita) detailing the number and value of cheques and Interac transfers issued, cashed, or left unclaimed, and the resulting residual of $2,252,580.01.
• Assessment of whether further individual distribution to class members is “impracticable, inappropriate or too onerous” before diverting the residual to a third party such as the Fonds d’aide aux actions collectives.
• Justification of a limited “discrimination” between members who have already come forward and those who have never claimed, in order to maximize effective distribution while controlling administrative burdens.
• Evaluation of whether any further preferential treatment of current Sirius XM subscribers over former subscribers is compatible with the statutory goal of serving the collective interest of all class members.

Background and facts of the class action

Union des consommateurs and an individual representative, Corey Mendelsohn, brought a class action in Québec against Sirius XM Canada Inc. in relation to its satellite and internet radio subscription services. The class was defined as all persons in Québec who entered into subscription contracts with Sirius XM for satellite or internet radio whose subscription fees were unilaterally increased, without sufficient prior notice, since 1 September 2013. The case was authorized as a class action in 2018, and it proceeded in the specialized class actions chamber of the Superior Court of Québec. The underlying complaint was consumer-focused and contract-based: subscribers alleged that Sirius XM increased the fees under ongoing subscription contracts without adequate notice, breaching consumer protection norms and contractual fairness. The Fonds d’aide aux actions collectives (FAAC) intervened as the public fund that supports and oversees class actions in Québec, including their administration and the handling of any residual balances.

Settlement and initial distribution of compensation

In September 2023, the parties entered into a settlement that was subsequently approved by the Superior Court in November 2023. Under this settlement, Sirius XM agreed to a global collective recovery of $22 million, to be distributed to class members without requiring them to file individual claim forms. Instead, compensation was to flow automatically: current subscribers would receive automatic credits applied to their ongoing Sirius XM bills, and former subscribers would receive reimbursement either by cheque or by Interac e-transfer. A professional administrator, RicePoint Administration Inc. (now operating as Verita Global), was appointed to manage the logistics of the distribution. The design of the settlement thus favored simplified, low-friction relief, consistent with collective recovery principles, but it also required close tracking of how many payments were successfully received or cashed. Over 40,000 cheques and more than 34,000 Interac transfers went out in March 2024, followed by nearly 58,000 additional cheques in December 2024 for those whose Interac transfers had not been accepted within 30 days.

The residual amount and competing proposals

Despite extensive efforts, a sizeable portion of the settlement fund remained unclaimed after two rounds of payments. A total of 41,811 cheques were issued in March 2024, of which 23,982 were cashed and 17,829, worth $1,066,650.93, remained uncashed after six months. In the same period, 34,753 Interac transfers were sent and accepted within 30 days by former subscribers. A second wave of 57,869 cheques was then sent in December 2024 under a court order, replacing unaccepted Interac transfers; of these, 35,946 were cashed and 21,923, worth $1,185,929.08, remained uncashed after six months. After these efforts, a residual amount of $2,252,580.01—about 10.24% of the $22 million settlement—remained undistributed. At this stage the parties disagreed sharply on how to handle this residual, and they brought the issue back before the Court. The plaintiffs, supported by the FAAC, proposed a third distribution to all class members—former and current subscribers—who had already accepted a first reimbursement (described as “eligible members”). This solution would entail further administrative costs estimated at about $467,000, leaving roughly $1.785 million to be redistributed to those eligible members. Sirius XM, by contrast, argued that any new distribution should be limited to current subscribers in the form of additional credits, emphasizing administrative efficiency, lower costs, and the likelihood that a restricted third distribution would still leave a substantial residual.

Legal framework on residual distributions

The Court’s analysis centered on the collective recovery provisions of the Quebec Code of Civil Procedure, specifically arts. 595, 596, and 597 C.C.P. Article 595 allows the Court to order collective recovery when the total amount of claims can be determined without having to identify each member individually or quantify each separate claim. Article 596 provides that a judgment ordering collective recovery must specify how the amounts are to be distributed or liquidated, and it grants the Court the power to direct the person responsible for the distribution and to give instructions. Critically, where a residual balance remains after distribution, art. 596 refers to the Court’s power to dispose of it “in the interest of the members,” which includes the possibility of allocating it to a third party in appropriate cases. Article 597 governs situations where individual liquidation or distribution is impracticable, inappropriate, or too onerous, and allows the Court to attribute a residual amount to a third party, after hearing from the parties, the FAAC, and any other useful interveners. The Court also relied on appellate guidance, particularly the Québec Court of Appeal’s decision in Option consommateurs c. Infineon Technologies, which confirms that the same core principles apply regardless of whether a residual is anticipated (in advance) or emerges unexpectedly (after distribution): before diverting a residual to a third party, the Court must consider corrective measures that might still allow further distribution to class members, such as additional notices or an increase in the amount paid to those who have already claimed. Academic commentary by Lauzon and Asselin, cited by the judge, reinforces that the overarching objective is to ensure that the maximum possible portion of the collective recovery reaches the largest practicable number of class members, at reasonable cost and within a reasonable time.

Court’s analysis of members’ interests

Applying these principles, the Court weighed the two proposals: a broader third distribution to all eligible members (those who had already accepted an earlier payment), or a narrower distribution limited to current Sirius XM subscribers. The Court acknowledged that the plaintiffs’ proposal already involved a degree of “discrimination” between members, because it would not benefit those who never claimed or accepted a first reimbursement. However, given the difficulties encountered in the earlier rounds and the need to avoid repeating processes for members who had not engaged at all, the judge considered this limitation reasonable and consistent with the case law that allows increasing the share of those who have already claimed. The FAAC, which would otherwise stand to receive any remaining residual as a third-party beneficiary, expressly supported the plaintiffs’ plan to send a third round of payments to eligible members—both current and former subscribers. The Court gave weight to the FAAC’s position, recognizing its statutory public-interest role in class actions and in the dissemination of related information. The Court was not prepared to go further by privileging current subscribers over former ones, as Sirius XM suggested. It noted that more than 5,400 class members had cancelled their Sirius subscriptions between the first residual-distribution motion and the time of this decision, and there was no principled basis to favor those who remained customers over those who had left. In light of the evidence that eligible members had already demonstrated an ability and willingness to receive payments, the judge also rejected Sirius XM’s concern that a large residual would still remain after a third distribution. The Court concluded that the plaintiffs’ solution—despite its higher administrative cost—was the fairest and most consistent with the statutory requirement to act in the members’ overall interest.

Ruling and overall outcome

The Superior Court granted the plaintiffs’ motion concerning the residual distribution and approved the distribution plan proposed by Union des consommateurs. It formally authorized a third round of distribution to eligible members, approved the draft notices to be sent, and approved Verita’s estimated professional fees and disbursements, ordering that these administrative costs be deducted from the residual before the balance is paid out. The Court ordered Verita to send notices to eligible members, to apply the form of reimbursement proposed by Sirius for those who are still subscribers, and to send cheques or equivalent payments to eligible members who are no longer subscribed, all within 30 days of the judgment. Verita was directed to report back to the Court after the expiry of the encashment period for this third distribution, and the parties were instructed to return for further directions if a subsequent residual remained and to seek a closing judgment once the process is complete. In substance, the successful party on this residual-distribution motion is Union des consommateurs and the class it represents, whose more equitable third-distribution model—supported by the FAAC—was adopted over the competing proposal by Sirius XM. Overall, the settlement provides a total monetary recovery of $22 million in favor of the class, and this judgment specifically orders that the remaining residual of $2,252,580.01 be used for a further distribution to eligible members (after an estimated $467,000 in administrative costs), although the exact final net amount ultimately received by members from this residual cannot yet be determined.