Kaleido (Universitas) acted illegally

Even if it is a cliché, the formula stands out: David won against Goliath. After seven years of proceedings, penalized parents managed to convince the courts that Kaleido illegally changed the way of calculating the amount paid to young people who undertake university studies. Compensation will be paid, but its extent is unknown at the moment.

As the case was decided by the Small Claims Court, in the interest of efficiency of justice, the arguments were presented to the judge by Dominic Demers, a father of four daughters who owns a factory manufacturing reusable bags. His case served as an “illustration” for 85 other young beneficiaries of a collective RESP (registered education savings plan) from Kaleido, called Universitas at the time of the events.

“My knowledge of law ends with a course I took at CEGEP. It was a big learning curve, but I can say mission accomplished. It’s a great victory, knowing that they had lawyers,” the Longueuil resident told me.

In his voice, I could hear the excitement and pride of someone who has reached the end of a long, improbable battle. He wanted to thank the other parents for supporting him in developing the evidence and providing moral support. All those who lead struggles against large organizations will be able to cling to this fine example of mutual aid and determination.

As one can imagine, the fight was exhausting. “It was a lot of ups and downs, it was hours and hours, and stress. » It must be said that it was a particularly complex file. You had to understand the fine print and jargon of contracts and prospectuses, documents that had the particularity of changing over the years.

In 2017, Kaleido caused a scandal by organizing a vote to retroactively change the rules of the game. Until then, the further a young person went in their studies, the more they obtained a large number of educational assistance payments (EAP). Basically, those who stopped at CEGEP left money in the kitty for those who registered at university.

This principle called “attrition” was at the heart of Kaleido’s argument for selling its RESPs, because young people who began higher education were rewarded. The vote ended the attrition. All young people are now entitled to their share of the pie. Judging that the information provided to parents had not allowed them to make an informed choice, the Financial Markets Authority forced a second vote to be held. The result was the same. Compensation was then paid to certain penalized parents.

Others have undertaken a crusade to have this procedure declared illegal.

Judge Jacques Tremblay agreed with them across the board, declaring that the individual membership contracts concluded with Kaleido could not be modified without the agreement of the parties under article 1439 of the Civil Code of Quebec.

The RESP provider argued that he had acted democratically.

However, nothing could lead parents to believe that a meeting of parents could modify the amounts to which their children would be entitled, adds the magistrate who handed down four judgments, one for each daughter of Dominic Demers. Thus, “the Court is of the opinion that the meeting of subscribers [les parents] could not be used to allow the relaxation of eligibility conditions for scholarships.

“We are surprised by certain elements, especially since the process which led to the relaxation of the eligibility criteria for educational aid payments was carried out in concert and with the approval of the regulatory authorities concerned,” m ‘wrote Kaleido’s vice-president of marketing and customer experience, Julie Cyr, in reaction to the judgments she had received a few hours earlier, Friday.

The parents’ agreement could have been obtained at a general meeting, but this way of doing things would have had to be “specifically presented and accepted from the start”, writes the magistrate. Had the parents consented to this process by signing? And in case of doubt, the contract is interpreted in favor of the member or consumer.

The judge confirms the vision of parents outraged by the new rules. “Mr. Demers is right to assert that the University plan has been distorted. »

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The question of compensation to be paid was not obvious, because it is impossible to be certain that a child will attend university.

Judge Tremblay, however, recalls that “the loss of chance” of obtaining something in the future is “recognized by the Supreme Court” and gives entitlement to an amount.

Two of the entrepreneur’s daughters thus obtained $6,900 and $6,300. Her oldest will receive the full amount due under the terms of the contract agreed in 2005, while her youngest’s request is rejected, because her parents could have jumped ship during the changes.

What happens next is currently unknown, as the judgments are too recent. But it will be interesting to see what the total amount will have to be paid to all the disgruntled parents. Kaleido specifies that its legal costs will be paid from its operating budget, and not from client funds.

“We weren’t that crazy!” A big organization tried to force change down our throats,” concludes Dominic Demers, with a lighter heart.