The recent unanimous Quebec Court of Appeal’s decision in Salko c. Financière Banque Nationale inc.[1] is the first appellate court decision addressing the scope of the exemptions from the application of the CPA set out at section 6a) of the CPA itself.

Case Background

Nicolas Salko (Salko) opened a direct brokerage account with National Bank Financial (NBF) in March 2020. In August 2020, after having executed several trades on shares of an American-listed issuer in U.S. dollars from his NBF Canadian dollar denominated account, he noticed that foreign exchange conversion fees were applied to his trades. He believed that these fees, totaling approximately $35,000, were charged and collected in breach of the Consumer Protection Act (CPA) and of the Civil Code of Québec (CCQ).

In 2022, Salko filed an application with the Quebec Superior Court for authorization to institute a class action against eleven (11) brokers, some offering direct or discount brokerage accounts, others offering advisory and/or managed accounts (the Defendants), alleging among other things that the Defendants would have failed to disclose the amount of fees charged in breach of s. 12 CPA, would have made false or misleading representations to consumers in breach of s. 219 CPA, would have charged a price higher than the announced one in breach of s. 224 c) CPA or would have failed to mention an important fact in breach of s. 228 CPA.

The Defendants argued that s. 6 a) of the CPA – which exempts from the application of the CPA “business practices and contracts regarding transactions governed by the Derivatives Act or the Securities Act” – applied to brokerage accounts (direct, advisory and /or managed), such that the causes of action based on breaches of the CPA put forward by Salko should not be authorized as the facts alleged did not appear to justify the conclusions sought (s. 575(2) of the Code of Civil Procedure).

The Superior Court authorization judge held that contracts between an investor and his/her broker pursuant to which transactions in securities are executed are indeed exempt from the application of the CPA and therefore authorized the class action[2], but only for the cause of action based on the CCQ.

The Court of Appeal’s Unanimous Decision

Salko appealed the Superior Court’s decision not to authorize the causes of action based on the CPA, arguing that his proposed class action only targeted the illegal charging of foreign currency conversion fees, and not the underlying and distinct transactions in securities.

The Court of Appeal dismissed the appeal, finding that the foreign currency conversion operations at issue were an integral part of securities transactions and could not be looked at in isolation from one another as if they were two distinct transactions. As securities transactions are governed by the Securities Act, they –and any related foreign currency conversion fees – are exempted from the application of the CPA.

The Court of Appeal also took the opportunity to:

  • confirm that the authorization judge must only authorize the cause(s) of action that individually meet(s) the criteria set out at s. 575 of the Code of Civil Procedure,
  • dismiss the argument made by Salko that as soon as an authorization judge finds that one of many causes of action meets the criteria, all causes of action must be authorized, and
  • dismiss the argument that an authorization judge is only entitled to decide a pure question of law if it puts an end to a proposed class action in its entirety, which would result in a waste of judicial resources.

Salko did not seek leave to appeal to the Supreme Court of Canada.

Key Takeaways

The courts gave full effect to the scope of the exemption from the application of the CPA set out at section 6a) of the CPA. Going forward, class actions relating to contracts regarding trading in securities or derivatives will not be authorized if they are premised on breaches of the CPA.

The author wishes to thank student Thomas Le Breton Paquin for his assistance in authoring this publication.

[1] Salko c. Financière Banque Nationale inc., 2025 QCCA 74.

[2] Salko c. Financière Banque Nationale inc., 2022 QCCS 3361.