Court File and Parties

CITATION: Wright v. United Parcel Service Canada Ltd., 2014 ONSC 1008 DIVISIONAL COURT FILE NO.: 415/11 DATE: 20140416

SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT

RE: Ryan Wright and Julia Zislin, Plaintiffs/Respondents AND: United Parcel Service Canada Ltd., Defendant/Appellant

BEFORE: Wilton-Siegel J.

COUNSEL: John A. Campion and Antonio Di Domenico, for the Defendant/Appellant Michael A. Eizenga, C. Scott Ritchie, Daniel Bach and Emily Maxwell, for the Plaintiffs/Respondent

HEARD: November 25, 2013

ENDORSEMENT

[1] By notice of motion for leave to appeal dated May 17, 2012 (the “Notice of Motion”), the defendant United Parcel Services Canada Ltd. (“UPS” or the “defendant”) seeks leave to appeal the order dated August 26, 2011 of Horkins J. (the “Order”) certifying this action as a class proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the “CPA”). The Order is reported at 2011 ONSC 5044, [2011] O.J. No. 3936. In an endorsement dated June 14, 2012 (the “Endorsement”), the Court addressed the issue of “unsolicited goods or services” and, in particular, common issue #2(c) in the Order. The Endorsement is reported at 2012 ONSC 3287, [2012] O.J. No. 2705 (Div. Ct.). The remaining issues were not addressed in the Endorsement on the agreement of the parties in view of the timetable for the hearing of an appeal of a companion order of the motion judge before the Court of Appeal in respect of a summary judgment motion of the defendant.

[2] This supplementary endorsement addresses the defendant’s motion for leave to appeal the remaining common issues that were certified in the Order, apart from related common issues pertaining to the categories of damages claimed in the proceeding which are addressed in the conclusions at the end of this endorsement.

[3] The remaining common issues addressed in this endorsement are the following:

Common issue #3:

(a) Were the statements complained of in the Claim “false, misleading or deceptive representations”?

(b) If so, were those representations unconscionable?

Common issue #4:

Did UPS use its custody and control of goods owned by the Class Members to force them to pay the Fees and, if so, whether that violates the Act?

Common issue #6:

Are the contracts future performance agreements and, if so, whether the requirement for the same were met?

[4] In this supplementary endorsement, defined terms that are not defined herein have the meanings ascribed thereto in the Endorsement.

Test for Granting Leave to Appeal

[5] The test for leave to appeal to the Divisional Court is set out in r. 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:

(4) Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

The Common Issues

[6] The following is a brief statement of my understanding of each of the causes of action addressed in this supplementary endorsement, which are alternative claims if a court finds that the brokerage services are not “unsolicited services” for the purposes of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A (the “Act”).

Common Issue #3 - False, Misleading or Deceptive Representations or Unconscionable Representations

[7] The plaintiffs allege that, if there is an agreement to provide brokerage services and to charge the additional fee, such agreement was made as a result of deceptive conduct by UPS that constitutes an “unfair practice” under the Act and as such is unenforceable. Specifically, the plaintiffs allege that the terms of the waybill or the IPSO contained a “false, misleading or deceptive representation” (herein a “misrepresentation”) that constitutes an unfair practice for the purposes of s. 14(1) of the Act, and an “unconscionable representation” that constitutes an unfair practice under s. 15(1) of the Act, in each case being the failure to state that an additional fee for brokerage services would be charged.

Common Issue #4 – Renegotiation of the Contract

[8] Section 16 of the Act provides that it is an “unfair practice” for a person to use its custody or control of a consumer’s goods to pressure the consumer into renegotiating the terms of a consumer transaction.

[9] UPS will not release a package to a consignee unless the additional fee for brokerage services is paid. The plaintiffs allege that this practice amounts to the use of the defendant’s control and custody of the goods to pressure the consumer into renegotiating the terms of the transaction.

[10] The plaintiffs’ claim assumes that there is no enforceable agreement for the payment of brokerage services. This could arise in circumstances in which the contract did not include such a term and the consignee did not consent, and is not deemed to have consented, to the payment of brokerage services, in which event the plaintiffs would also have a claim for unsolicited services. Alternatively, this could arise in the circumstances in which a contract that included such a term is held to be unenforceable as a non-compliant future performance agreement.

[11] The plaintiffs’ claim under s. 16 of the Act is, therefore, essentially a secondary claim that follows from a determination that one of these other causes of action exists. The plaintiffs acknowledge that this claim has been added to buttress a claim for punitive damages in the event that it is successful in one of these other claims.

[12] I note that there is also a suggestion in the affidavit evidence that UPS drivers not only require payment of the fees at issue on the doorstep but also misrepresent the consequences of failure to pay. To be clear, however, the plaintiffs’ claim, as set out in the pleadings, is limited to the use of custody and control of the shipment to renegotiate the terms of the contract between the customer and UPS to require payment of the brokerage fees. It assumes a standard practice of UPS that does not entail any misrepresentation of the consequences of a failure to pay. I have proceeded on this basis in this supplementary endorsement.

Common Issue #6 – Future Performance Contracts

[13] A “future performance agreement” is defined under the Act to be a consumer agreement in respect of which delivery, performance or payment in full is not made when the parties enter the agreement. Sections 22-26 of the Act impose certain requirements regarding future performance agreements if the consumer’s total potential payment obligation under the agreement, excluding the cost of borrowing, exceeds $50.

[14] The plaintiffs argue that the contracts for the shipment of goods with the defendant constitute future performance agreements inasmuch as the performance of the brokerage service and payment for this service is not made when a consignor, as the consignee’s agent, enters into an agreement to ship goods to a consignee in Ontario. They further argue that the terms of the contract, specifically the waybill and the IPSO, do not comply with certain requirements under s. 24 of O. Reg. 17/05 – in particular, items 4-7 – insofar as there is no description of the brokerage service and there is no itemized list of the three components of the additional fee.

The Test for Certification

[15] The test for certification of a class proceeding is set out in s. 5 of the CPA, [this should be defined somewhere] the relevant provisions of which are as follows:

5. (1) The court shall certify a class proceeding on a motion under section 2, 3 or 4 if,

(a) the pleadings or the notice of application discloses a cause of action; …

(c) the claims or defences of the class members raise common issues;

(d) a class proceeding would be the preferable procedure for the resolution of the common issues; …

Causes of Action

[16] The test under s. 5(1)(a) of the CPA is identical to the test on a motion to strike a pleading as disclosing no cause of action under [ss?] rr. 21.01(1)(a) and (b) of the Rules of Civil Procedure. It must be “plain and obvious” that the claim cannot succeed: see Fulawka v. Bank of Nova Scotia, 2010 ONSC 1148, 101 O.R. (3d) 93, per Strathy J. (as he then was), aff’d 2011 ONSC 530, 337 D.L.R. (4th) 319 (Div. Ct.), varied on other grounds, 2012 ONCA 443, 111 O.R. (3d) 346, at para. 70, which also sets out the applicable principles for such a motion.

[17] The motion judge concluded that it was not “plain and obvious” that these causes of action cannot succeed. I am not persuaded that the motion judge erred in reaching that conclusion. I will consider each cause of action in turn.

Common Issue #6 – Future Performance Contracts

[18] There is no question that the agreements made between a consignor and UPS for the shipment of goods fall within the definition of “future performance contracts” under the Act. The issue of whether a consignor, or the consignee, had knowledge of UPS’s intention to perform brokerage services for which it would charge brokerage fees, and any agreement or acquiescence thereto, is irrelevant for this cause of action. As the motion judge notes, there is evidence of performance of the brokerage service and payment for this service after the agreement is formed, regardless of the state of the consumer’s knowledge.

[19] The decisions in Livent Inc. (Re) (1999), 1999 3800 (ON CA), 46 O.R. (3d) 458 (C.A.), and Graham v. Imperial Parking Canada Corp. (c.o.b. Impark), 2010 ONSC 4982, 74 B.L.R. (4th) 172, leave to appeal denied, 2011 ONSC 991, 279 O.A.C. 342 (Div. Ct.), deal with very different situations. In the present case, unlike the circumstances in Livent and Graham, it is not plain and obvious that the provisions of the Act cannot apply to the contracts with UPS. Accordingly, it is not plain and obvious that an inference should be drawn that the Act was not intended to apply to such contracts.

[20] The defendant argues that there is no cause of action because there is no remedy under the Act. It says the principal remedy under the Act is a consumer’s right to cancel the agreement prior to performance under s. 93(1) of the Act and that the plaintiffs do not allege that they or the other class members sought to cancel the contracts. However, it is not plain and obvious that consumers cannot obtain remedies in respect of this cause of action even after performance of the contracts, whether pursuant to a cancellation of their contracts under the Act, in the form of punitive damages, or on a quantum meruit basis.

Common Issue #3 - False, Misleading or Deceptive Representations or Unconscionable Representations

[21] The plaintiffs say that the failure to state in the waybills or the IPSO that there are brokerage services for which there is a price to be paid gives rise to a cause of action under ss. 14 or 15 of the Act.

[22] The motion judge held that “[t]he price of a service, which was not specified by UPS, is material. Accordingly, the s 14 claims disclose a cause of action. It is not 'plain and obvious' that the claims will fail.” The motion judge also concluded the “[w]hile no Ontario Court has considered the meaning of “unconscionable representations” under the Act in depth, I am satisfied that the unconscionable representation claim discloses a cause of action and it is not plain and obvious that such a claim is certain to fail.”

[23] A failure to state a material fact can constitute a misrepresentation or an unconscionable representation under the Act. Whether the failure to state a material fact tends to deceive is an issue to be determined objectively by reference to what would be conveyed to a reasonable person: Matoni v. C.B.S. Interactive Multimedia Inc. (Canadian Business College), 2008 1539 (Ont. S.C.J.), Hoy J. (as she then was), at para. 143.

[24] The defendant argues that, in certain circumstances, it may have a defence to any such cause of action in the form of knowledge and either acquiescence or agreement on the part of the consignor or the consignee which would negate the misrepresentation or unconscionable representation. UPS says that, in such circumstances, it can demonstrate either an absence of a misrepresentation or an unconscionable representation or an absence of reliance on the part of the consignor.

[25] I do not agree. As the motion judge noted, a demonstration of reliance on the part of the consignor or the consignee is not a requirement for a finding of non-compliance with ss. 14 or 15. More significantly, while consumer knowledge can negate reliance on a misrepresentation, it cannot rectify a misrepresentation. In this regard, I see no difference between a misrepresentation based on a representation which is false and a misrepresentation arising on a failure to state a material fact. If a misrepresentation or an unconscionable representation exists, it exists independently of any consumer knowledge as a separate element in any claim for misrepresentation at common law or under the Act or for an unconscionable representation under the Act.

[26] Accordingly, to the extent that it is determined in respect of common issue #1 that the standard form waybill or the IPSO does not include a term providing for the payment of brokerage services, it is open to a court to find that the statements in these documents constitute a misrepresentation or an unconscionable representation. Consumer knowledge would not exclude a finding of a breach of ss. 14 or 15 of the Act based on any such misrepresentation or unconscionable representation, respectively, although it may be relevant for the issue of damages or other appropriate remedy. Further, s. 18(2) of the Act may provide a remedy for an unfair business practice based on the language of the standard form waybill or the IPSO if rescission under s. 18(1) of the Act is not possible.

[27] The defendant also relies on the Blackman and MacFarlane decisions discussed below, which it says stand for the proposition that there is an implied term for the payment of brokerage services in contracts for the shipment of goods in the present circumstances. As discussed below, I do not think that the cases are as definitive as the defendant suggests. Even if such principle were the law in Ontario, however, it is not plain and obvious that a failure to disclose the actual fees payable in respect of any such implied term could not ground a cause of action under s. 14 or s.15, in particular s. 15(2)(b), of the Act.

Renegotiation - Common Issue #4

[28] As mentioned, the absence of an enforceable agreement for the payment of brokerage services is a pre-condition to the plaintiffs’ cause of action under s. 16 of the Act. In the event that this condition is satisfied after determination of the causes of action asserted under ss. 13 and 22 of the Act, there remains a separate issue of whether the practice of UPS on the doorstep of a consignee gives rise to an independent cause of action based on a contravention of s. 16 of the Act.

[29] UPS’s position is that no class member would have a claim under any circumstances under s. 16 of the Act because each consignee is deemed to have agreed to authorize and pay for brokerage services under the principle articulated in Blackman v. Fedex Trade Networks Transport & Brokerage (Canada), Inc., 2009 BCSC 201, 57 B.L.R. (4th) 270, and MacFarlane v. United Parcel Service Canada Ltd., 2009 BCSC 740, 57 B.L.R. (4th) 47, aff’d 2010 BCCA 171, 290 B.C.A.C. 45. Accordingly, it argues that there are conflicting decisions that support the granting of leave to appeal on the viability of this cause of action.

[30] It is not clear that there are conflicting decisions as UPS suggests. In the Endorsement, I expressed the view that the better reading of Blackman and MacFarlane was that the consignee was treated as having requested or authorized brokerage services for which it was obligated to pay the UPS charges. However, on re-reading these decisions, I note that the court in Blackman, upon which MacFarlane is based, appears to have relied on actual consumer knowledge of the payment obligation, being the consignor’s knowledge as an accountholder with Fedex, to support the court’s conclusion that the consignee had agreed to the payment, as well as the performance, of brokerage services. To the extent this is correct, there is no support in Blackman and MacFarlane for UPS’ position that such a term is implied in every contract for the shipment of goods. Although Blackman also addresses the implication of a term based on knowledge of the law as an alternative basis for the conclusion in that case, the court did not state expressly that such knowledge could support anything more than a term authorizing the performance of brokerage services. On this reading, the decision in Blackman is fact-specific and not in conflict with the decision of the motion judge. In addition, as UPS acknowledges, in LeBlanc v. United Parcel Service du Canada ltée, 2012 QCCS 4619, J.E. 2012-1997, Fraiberg J.S.C. concluded that the consignee was to be treated as having authorized only the performance of the brokerage services.

[31] In any event, even if the Blackman and MacFarlane decisions are treated as conflicting decisions, I am not persuaded that it is desirable that leave to appeal be granted on this issue for two reasons. First, because this claim is secondary to the unsolicited services and the future performance agreement claims, a decision on the viability of this claim will not materially affect the determination of the remaining claims in this action nor will it materially shorten or lessen the complexity of this action. Second, the issues raised in Blackman and MacFarlane will, in any event, be addressed on the appeal of the cause of action under s. 13 of the Act, for which leave to appeal was granted by the Endorsement. Accordingly, the determination of such issues in the context of the claim under s. 13 will be applicable to the plaintiffs’ claim under s. 16.

Additional Issues

[32] On this leave motion, the defendant also raised two more general issues that engage the viability of each of the foregoing causes of action.

[33] First, s. 2 of the Act provides that, subject to certain exceptions that are not relevant for this proceeding, the Act “applies in respect of all consumer transactions if the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place”. The defendant argues that there is serious reason to doubt the correctness of the decision of the motion judge that the Act applies to any of the contracts entered into between UPS and customers in the United States. It argues that the Act can only apply to contracts that are governed by the laws of Ontario and therefore cannot apply to these contracts, which it says are governed by the laws of the state of the United States in which the respective contracts were formed. UPS argues that s. 2 of the Act therefore constitutes an assertion of authority by the legislature that is without legal foundation. It also argues that the decision of the motion judge conflicts with the decision in LeBlanc.

[34] I do not agree with either submission. The transactions in question are the provision of brokerage services, which clearly occur in Ontario. All of the transactions involve a consumer in Ontario on whose behalf the American consignor has contracted. Insofar as it is relevant, delivery of the shipments also occurs in part in Ontario. Applying the test in s. 5(1)(a) of the CPA, it is not clear and obvious that s. 2 of the Act does not apply. Further, the Quebec Consumer Protection Act, RSQ, c. P-40.1, does not contain a provision similar to s. 2 of the Act and therefore does not purport to apply in the same manner as the Act. There is therefore no conflicting case law on this issue.

[35] Second, UPS argues that the motion judge erred in accepting a blanket notice by the plaintiffs on behalf of all class members, rather than requiring each member of the class to give notice individually of his or her claims under ss. 14, 15 and 16. It argues that the legislature could have provided for blanket waivers by representative plaintiffs on behalf of all class members and, accordingly, the court should infer from its failure to do so that the legislature intended that class members would be required to give notice of their claims individually. UPS also suggests that the motion judge failed to give any analysis as to whether class-wide waivers are consistent with the objectives of the Act.

[36] I also do not agree with these submissions, which do not do justice to the decision of the motion judge. The motion judge canvassed a number of issues in determining to exercise her discretion under s. 101 of the Act to waive the notice and demand requirements for all class members in the interests of justice. She also noted that this decision was consistent with the decision reached in Graham. There is no reason to doubt the correctness of the decision of the motion judge to exercise such discretion in the circumstances of this proceeding. I would add that, while the motion judge refers only to s. 101, I think it is clear that she also exercised her discretion under s. 18(15) of the Act to the extent that it was necessary to do so to waive the notice requirements under Part III of the Act.

Commonality

[37] Section 1 of the CPA defines “common issues” as “(a) common but not necessarily identical issues of fact, or (b) common but not necessarily identical issues of law that arise from common but not necessarily identical facts”.

[38] There must be some basis in the evidence before the court to establish the existence of each of the common issues: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158, at para. 25. However, in certifying a common issue the court is not concluding that it will be answered in a manner favourable to one party or the other. The requirement that there must be an evidentiary basis for the existence of a common issue is a far cry from proof of the issue on a balance of probabilities: Fulawka, at para. 109, which was approved by the Court of Appeal, at paras. 78-79.

[39] In this latter decision, the Court of Appeal endorsed a number of legal principles concerning the common issues requirement in s. 5(1)(c) of the CPA. Among other matters, at para. 81, the Court of Appeal endorsed the principle that, with regard to common issues, “success for one member must mean success for all”. That is, the answer to a question raised by a common issue for the plaintiff must be capable of extrapolation, in the same manner, to each member of the class.

[40] In addition, the following comments of Strathy J. in Fulawka at para. 111 are relevant:

The common issue requirement is not a high hurdle -- it does not have to resolve a class member’s claim, but the answer must be necessary to the resolution of each member’s claim: [citations omitted]. The requirement that the answer must be necessary to the resolution of the claim means that it must be legally necessary as opposed to simply of passing interest. Put simply, if the answer to the common issue would leave the individual issues judge with the question “So what?”, it is not a proper common issue.

[41] Strathy J. also stated, at para. 112, that it is sufficient if the common issue is one of fact or law that moves the litigation forward and avoids duplication and that the common issue can make up a limited part of the liability question leaving many individual issues remaining after its resolution.

Preliminary Observations

[42] The defendant’s principal position on this motion is that each contract between UPS and a customer is so individualized that the test for commonality cannot be satisfied because, in each case, the customer’s knowledge, and any acquiescence or agreement, is relevant to a determination of the contract between them or the customer’s right to claim damages.

[43] The following three observations inform the conclusions reached in respect of the issue of commonality.

[44] First, UPS argues that the contracts between it and the consignees could include provisions for the payment of brokerage fees by virtue of: (1) incorporation by reference of a term for the payment for such services in the waybill or the IPSO as addressed in common issue #1; (2) consent based on the knowledge of the consignor or the consignee; (3) an implied term for the payment of brokerage services based on the general principles articulated in M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., 1999 677 (SCC), [1999] 1 S.C.R. 619; and (4) an implied term based on the principle articulated in Blackman and MacFarlane. It argues that, given this possibility, all contracts are individualized and commonality is not possible. On this basis, UPS argues that there is reason to doubt the correctness of the motion judge’s decision that the test in s. 5(1)(c) of the CPA has been satisfied in respect of the causes of action addressed in this endorsement.

[45] However, incorporation of the terms of the Rate Guide into the contract formed on the basis of the language of the waybill or the IPSO would be common to all such contracts. Further, an implied term to give business efficacy to the waybill or the IPSO would be common to all contracts based on these documents. Similarly, any term implied on the basis of the principle of the decisions in Blackman and MacFarlane would be common to all contracts between UPS and its customers. Accordingly, the only basis for an examination of the terms of a contract on an individualized basis pertains to the possibility of consumer knowledge and consent.

[46] Second, it is necessary for present purposes to separate issues relating to liability from issues relating to the claim for damages. To the extent that the issues of consumer knowledge and consent are severable from the issue of liability and can be treated as applicable to the issue of damages, there is a viable basis for commonality in respect of the remaining issues. That is, there can be a common issue pertaining to liability based on identical issues of fact even if the issue of damages must be particularized, or more accurately in this case, categorized, given the absence of identical issues of fact in respect thereof.

[47] Third, as stated above, the test for commonality in respect of a particular common issue can be satisfied even if determination of the common issue does not decide the entire liability issue and leaves individual issues remaining. It is sufficient if determination of the common issue will move the litigation forward and avoids duplication.

[48] In the present case, as discussed further below, it is possible to identify a common issue that is relevant to the issue of liability in respect of each of the three common issues that are addressed in this endorsement based on the fact that the circumstances of individual consumer knowledge and consent pertain to the separate issue of damages. In each case, determination of the common issue pertaining to liability will move the litigation forward and avoid duplication. For these reasons, there is no reason to doubt the correctness of the determinations of the motion judge on the issue of commonality in respect of each of the three causes of action, which are addressed in turn below.

Common Issue #6 – Future Performance Contracts

[49] All of the contracts contain common provisions for the future performance of, and payment for, brokerage services. The fact that the appropriate remedy in any given case may require individualized treatment by virtue of the operation of s. 93(2) does not exclude commonality in respect of the issue as to whether the contracts constitute “future performance agreements” under the Act. On this basis, the motion judge did not err in finding that a common issue existed as to whether the contracts based on the standard form waybill or the IPSO constitute “future performance agreements”.

Common Issue #3 - False, Misleading or Deceptive Representations or Unconscionable Representations

[50] The motion judge held that “common issue #3 is a necessary and substantial part of every class member’s claim. It focuses on standard form contracts that do not reveal the additional fee and the UPS system of revealing the fee and billing the consumer at the point of delivery. It is therefore capable of being assessed in common.” On this basis, the motion judge accepted common issue #3 as a common issue.

[51] There is a basis in fact for a common issue of whether the terms of the contract, including any implied terms which by definition would be common to all contracts, constitute a misrepresentation or an unconscionable representation in the form of a failure to state that there are brokerage services for which there is a fee to be paid. That is a matter that is determined entirely on the language of the contract without regard to any consideration of consumer knowledge and acquiescence. It is an issue common to all contracts.

[52] The defendant argues that commonality cannot be established if it is possible that the contract could include provisions for the payment of brokerage fees by virtue of one or more of the considerations set out above. I do not agree.

[53] As mentioned, the only basis for individualized contracts is possible consumer knowledge and either agreement or acquiescence. The other circumstances would, if applicable, be common to all contracts between UPS and its customers. The fact that the plaintiffs may not succeed on the common issue because of the existence of an implied term of the nature suggested by UPS does not exclude a valid basis for a common issue.

[54] However, as addressed above, the issue of consumer knowledge and agreement or acquiescence does not pertain to the issue of whether UPS breached the provisions of ss. 14 and 15 of the Act i.e. the issue of whether the contracts contain a misrepresentation or an unconscionable representation. It pertains instead to the issue of damages or, more generally, to the issue of the appropriate remedy in any particular case, which is logically separate and distinct from the issue of non-compliance with ss. 14 and 15 of the Act. The fact that the defendant may be able to assert consumer knowledge and consent in individual cases in the consideration of the appropriate remedy does not exclude the existence of a common issue pertaining to the alleged breaches of ss. 14 and 15 of the Act.

Common Issue #4 – Renegotiation of the Contract

[55] As mentioned above, the essence of this claim is that the operating practice of UPS at the doorstep constitutes non-compliance with s. 16 of the Act. As asserted, this is a behavior or practice that is common in respect of all deliveries.

[56] Such behavior or practice is unrelated factually and legally to the facts underlying the applicant’s position that, in many circumstances, consumer knowledge and consent provides a defence, i.e. that the consumer has consented to pay for the brokerage services and, accordingly, there is effectively no renegotiation. This separation of issues satisfies the test for commonality. Determination of whether such practice on the doorstep constitutes a breach of s. 16 of the Act, in circumstances where the contract between the customer and UPS does not contain a provision for the payment of brokerage services, will materially advance the litigation.

[57] The fact that a term for the payment of brokerage services may be incorporated into the contract by reference to the Rate Guide or implied in the contract as a matter of law does not affect this conclusion; i.e., it does not render the contracts individualized such that the test for commonality cannot be satisfied in respect of the claim under s. 16 of the Act. Such determinations engage other common issues in this action. If a court were to find in favour of UPS on either issue, it would, of course, narrow the class of contracts that would support a cause of action under s. 16. However, a common issue of significance would still remain in respect of these contracts that is separate from any remaining issue of consumer knowledge and consent.

[58] UPS argues that the issue of consumer knowledge bears the same relationship to the plaintiffs’ claim for unsolicited goods and services under s. 13 of the Act as it does to the plaintiffs’ claim under s. 16 of the Act. As such, it says that the Court should grant leave to appeal in respect of this claim given its decision to grant leave to appeal in respect of the former claim. I do not agree. I think there is an important, if subtle, distinction between these two causes of action that has significance in particular for the issue of commonality, but also to a lesser degree in respect of the test under s. 5(1)(a), in respect of the claim under s. 16.

[59] In the case of the claim for unsolicited goods and services, the issue turns entirely on whether or not the contract of any particular plaintiff includes a provision for the payment of brokerage services or the plaintiff has otherwise consented to the payment of such services. If the answer is in the negative, it necessarily follows that UPS has provided unsolicited goods or services for which it seeks payment on the doorstep. The characterization of the actions of UPS, for the purposes of the Act, in providing such services and in seeking payment on the doorstep are not in dispute – merely the consequences of those actions given the particular contractual status of each plaintiff. In other words, it is the determination of the contractual status of the class member rather than the characterization of the actions of UPS on the doorstep that is determinative.

[60] In the case of a claim under s. 16, however, the absence of any contract for the payment of brokerage services, and of any consent thereto, is a pre-condition to the cause of action but it is not determinative. The absence of a contract for the payment of brokerage services, or of any consent thereto, does not necessarily imply that UPS’ actions on the doorstep constitute a breach of s. 16 of the Act. There remains the issue of the characterization of such actions for the purposes of s. 16 of the Act. That is, there remains an issue as to whether the actions of UPS in seeking payment for the brokerage services constitutes the use by UPS of its custody or control of the consignee’s goods to pressure the consignee into renegotiating the contract with UPS to include a term for the payment of the brokerage services provided by UPS. This is a distinct issue that pertains to UPS’s standard, or systemic, practice on the doorstep that is the proper subject of a common issue.

Preferability

[61] The defendants have not raised any grounds of appeal in respect of the motion judge’s determination under section 5(1)(d) of the Act other than the issues described above. To the extent that the issues raised by UPS also engage the issue of preferability, I consider that the conclusions set out above also support the conclusions of the motion judge in respect of the issue of preferability.

Conclusion

[62] Based on the foregoing, the motion for leave to appeal is dismissed in its entirety. UPS also sought leave to appeal the certification of common issues #7, #8 and #9 respecting the remedies to which class members may be entitled in the event leave to appeal were granted. In view of the denial of leave, it is my understanding that it is not necessary to address those remaining common issues.

Costs

[63] If the parties are unable to agree on costs of the motion, they shall have thirty days to submit costs submissions not exceeding five pages in length, together with a costs outline in accordance with the Rules of Civil Procedure to the extent that a party seeks costs in respect of the motion.

Wilton-Siegel J.

Date: April 16, 2014