Court File and Parties

COURT FILE NO.: CV-08-00360837-0000 DATE: 20231103 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JASON CORLESS and BERNIE COX, Plaintiffs – and – BELL MOBILITY INC., Defendant

BEFORE: Justice E.M. Morgan

COUNSEL: Joel Rochon, Golnaz Nayerahmadi, and Sarah Fiddes, for the Plaintiffs Dana Peebles, Ljiljana Stanic, and Solomon McKenzie, for the Defendant

HEARD: October 30, 2023

Motion to Amend Class

[1] The Defendant seeks to amend the certified class definition either to exclude part of the class, or, alternatively, to compel the addition of a new sub-class.

[2] The claim was certified as a class action some 9 years ago by Order of Justice Conway dated November 25, 2014. As usual, the certification decision set out the causes of action, defined the class, identified the common issues, approved the representative Plaintiff, etc.: Wellman and Corless v. TELUS and Bell, 2014 ONSC 3318 (the “Certification Decision”). Leave to appeal the Certification Decision was sought by the Defendant and denied by Divisional Court: Corless v. Bell Mobility Inc., 2015 ONSC 7682.

[3] Discoveries are nearly complete, and the matter will shortly be set down for trial.

[4] Since certification in 2014, nothing has changed with respect to this claim – except, that is, for Defendant’s counsel. I do not say this as a criticism. But it is obvious that Defendant’s current counsel have come on board with new perspectives on the case, resulting in new arguments that are insightful but, for the reasons that follow, mistimed.

I. Background to the motion

[5] The claim seeks damages for customers of the Defendant who were billed for their cell phone use between 2006 and 2009 on a “per-minute” basis rather than on a “per second” basis. It alleges that class members did not understand this billing method or the ramifications of the “rounding up” feature for their phone bills.

[6] The certified class is defined as follows:

‘Class’ or ‘class members’ means all persons resident in Canada who, at any time during the Class Period (August 18, 2006, to October 1, 2009) were customers of the Services on either a Pre-Paid Plan or a Monthly Plan offered by Bell Mobility (a ‘Plan’), excluding any customers who were billed by the second during the entire Class Period.

The sub-classes are as follows:

Consumer Sub-Class: Consumers who, at any time during the Class Period, were customers of the Services pursuant to a Plan.

Grandfathered Sub-Class: Customers who were notified by Bell Mobility in 2002 about the change from per second billing to per minute billing, and who changed from a per second to a per minute Plan during the Class Period.

Certification Decision, at para 45.

[7] The Defendant now asks the Court to determine the appropriate scope of the class which will proceed to trial. Specifically, the motion raises the following questions:

(i) were business customers only added to the proposed Class definition in the 2014 Amended Claim?;

(ii) if so, are those Class members statute-barred from the certified action by section 4 of the Limitations Act?; and

(iii) in the alternative, if the business customers are properly members of the class, do they require their own representative plaintiff to protect their discrete interests by prosecuting (or negotiating) this action to a conclusion on their behalf?

[8] Defendant’s counsel came on the record in July 2020, replacing the law firm that had formerly represented the Defendant through certification. On October 13, 2020, Defendant’s new counsel wrote to Plaintiff’s counsel advising them that they were contemplating a motion to require appointment of a representative plaintiff for the “business sub-class”. Plaintiff’s counsel responded by pointing out that no business sub-class was certified and therefore no additional representative plaintiff was required.

[9] Two years later, on October 11, 2022, Defendant’s counsel again wrote to Plaintiff’s counsel, this time asserting that that the Supreme Court’s decision in TELUS Communications Inc. v. Wellman, 2019 SCC 19 had “eliminate[d]” the claims of business customers with arbitration clauses for the within action (previously heard together with, but now separated from, the TELUS action). Plaintiff’s counsel, predictably, asked to see copies of those business contracts in order to consider the nature of any arbitration agreements, in particular any standard arbitration clause that would, according to the Defendant’s counsel, eliminate the business customers en masse from the class.

[10] That production was never forthcoming. Eventually, in examination for discovery, the Defendant’s representative conceded that its business contracts do not include a standard arbitration agreement.

[11] Since there is no standard arbitration agreement, the Defendant dropped that allegation. It is now proceeding with a motion that argues that the Defendant’s business customers’ claims have been statute barred since 2011, or, in the alternative, that the class definition should be amended to create a “business customers’ sub-class” and that an additional representative plaintiff is necessary for this new sub-class. In support of this position, the Defendant relies on the Plaintiff’s original Statement of Claim issued August 18, 2008, which in much of its language distinguished between “customers” and “consumer customers” and which, according to Defendant’s counsel, included in the class only retail consumers rather than all customers of the Defendant.

[12] This use of language was cleaned up by the Plaintiff in the Fresh As Amended Statement of Claim, served in draft form on the Defendant in March 2013 and formally issued in 2014. Defendant argues that the revised class definition, which embraced all customers of the Defendant, represented a distinct change from the previous definition in that it for the first time included business customers. The definition of the class found in the Fresh As Amended Statement of Claim was the definition that was in the certification record when that motion was argued in October 2014 and that was ultimately adopted in the Certification Decision.

II. Are there new considerations?

[13] At this stage of the action, an amendment of the certified class definition would be theoretically possible, but difficult. Justice Perell explained in Vester v. Boston Scientific Ltd., 2020 ONSC 1308, at para. 8, that “[a] certification order can be amended, including by redefinition of the certified class, to respond to a change in circumstances.” In order to accomplish this, the courts have held that “if a party wishes to vary the terms of a certification order he or she would have to show that new issues of fact or law had arisen since certification”: Ducharme v. Solarium de Paris Inc., 2013 ONSC 2540, at para 17.

[14] Defendant’s counsel submit that the case at bar presents a somewhat unusual circumstance in that the Certification Decision specifically invited future reconsideration like that proposed here. As discussed below, at the heart of the Defendant’s position about the distinction between retail and business customers is an argument that the business customers, having been omitted from the original Statement of Claim, are now subject to a different limitation period than the retail customers.

[15] In arguing that the limitation defense can (and should) be raised at this stage of the proceeding, Defendant’s counsel rely heavily on footnote 16 – the final footnote – in the Certification Decision. That footnote states:

16 While Mr. Wellman and Mr. Corless first entered into their per minute Plans before the start of the class period, they entered into new Plans during the class period. Their breach of contract claims refreshed on a monthly basis during the class period. I am not prepared to find that their claims are statute barred at this point. The defendants may raise any limitation period issues as a defence: Barker v. Barker, 2013 ONSC 7381, [2013] O.J. No. 5625.

[16] It is Defendant’s counsel’s submission that this footnote indicates that it is open to the Defendant to return to the limitation question at any time. Their view is that the footnote imposes no restriction on when the question can be raised, and so applies regardless of whether there are any new factual or legal developments.

[17] Plaintiff’s counsel’s takes issue with this interpretation of the Certification Decision. They view footnote 16 as suggesting precisely the opposite of what Defendant’s counsel take from it – i.e. that the court was not in a position to decide the limitation question on the basis of the factual record or state of the law before it, but that the matter can be revisited if the facts or law change in the future.

III. The limitation argument

[18] As indicated above, the class as defined in the Certification Decision includes retail and business customers. That decision indicates, at para 45, that there are roughly 5 million customers in the class, so defined. Plaintiff’s counsel estimates that about one-third of those are business customers.

[19] Accordingly, the amendment proposed by the Defendant is more than just a wording change. Limiting the class to retail customers may effectively eliminate somewhere in the vicinity of 2 million claimants from the class. In fact, since the Defendant’s argument is based on eliminating the business customers on the basis that the limitation period has expired for them, it will eliminate them from bringing any claim at all.

[20] Defendant’s counsel says that the 2014 Fresh As Amended Statement of Claim expanded the class definition to include, for the first time, business customers of the Defendant’s. Up until then, as the Defendant reads the original Statement of Claim, the proposed class was composed of individual retail consumers, not business customers.

[21] If it is the case that business customers were left out of the class as defined in the original Statement of Claim, the limitation period for the business customers would not have tolled when it was issued in 2008: Fanshaw College v. A.U. Optronics, 2016 ONCA 621, at para 61. The Defendant goes on to say that since no limitation arguments were addressed in the Certification Decision, the question of the limitation period applicable to business customers is still an open question now.

[22] The original Statement of Claim contained three causes of action: Consumer Protection Act, Competition Act, and unjust enrichment. The first one is by definition limited to retail consumers only, but the other two claims could be made by any of the Defendant’s customers. While Defendant’s counsel concedes that the Competition Act and unjust enrichment claims could encompass business customers, they submit that the original Statement of Claim read in its entirety is not so all-inclusive.

[23] For example, Defendant’s counsel point out that paragraph 3 of the original Statement of Claim alleges that the Defendant acted “in order to induce consumers”, not customers at large. As Defendant’s counsel correctly states, the word “consumer” is a defined term in section 1 of the Consumer Protection Act and is a legal term of art meaning retail customer. The statutory definition of the term expressly “does not include a person who is acting for business purposes”.

[24] That said, the rest of paragraph 3 of the original Statement of Claim, and a good deal of the balance of the original Statement of Claim, refers to “customer”, not “consumer”. Other parts of the paragraph refer, even more confusingly, to “customer consumer”.

[25] Defendant’s counsel also point out that paragraph 3 of the original Statement of Claim goes on to say: “Plaintiff pleads that if a Services’ customer talks for one minute and two seconds he/she is billed for two full minutes…” It is Defendants’ counsel’s view that the phrase “he/she” means an individual, not a corporate entity, and so it must refer to retail customers only rather than a combination of retail and business customers.

[26] On the other hand, Plaintiff’s counsel points out that the record contains evidence of individuals being on business plans with the Defendant; in fact, one individual business customer was originally proposed as a representative Plaintiff, although ultimately the case was certified without his participation in that capacity. Plaintiff’s counsel submit that the existence of that class member demonstrates that identifying a customer as “he/she” does not itself convey whether they are a retail or business customer.

[27] The class definition in the original Statement of Claim uses the phrase “consumer customer”. Defendant’s counsel says the two words that make up this phrase are interchangeable, and that they mean “consumer” within the meaning of the Consumer Protection Act. The Defendant views the identification of the customers as “consumers” as being a “limiting term” – i.e. one that excludes business customers as non-consumers.

[28] In addition, Defendant’s counsel observes that the unjust enrichment claim in paragraph 27 of the original Statement of Claim is described in a way that appears to limit it to retail customers (even though the cause of action could theoretically apply to business customers as well): “Bell has been unjustly enriched by charges that residential consumers overpaid and to which it is not entitled.”

[29] On the other hand, the original March 2009 Notice of Motion for certification says the class encompasses “all persons resident in Canada who…were customers of the Defendant…” Plaintiff’s counsel submit that, for certification purposes, the Notice, with its far more inclusive language, is the equivalent to an an amended pleading. Indeed, Justice Perell in Heller v. Uber Technologies Inc., 2023 ONSC 1942, at para 75, observed that “serving a notice of motion seeking to amend a pleading is the equivalent to issuing the original process to commence any new claim or cause of action, and the bringing of the motion crystallizes the limitations issues.”

[30] Plaintiff’s counsel says that the word “person” in law can describe a corporation, and that the 2009 Notice of Motion therefore refers to either an individual or corporate entity and so includes business customers. They submit that this terminology in the Notice of Motion clarifies the class definition as what they call an “interpretive guide” to the original Statement of Claim.

[31] A Notice of Motion typically shapes the certification analysis, sets out the common issues and, perhaps, finely tunes the causes of action and class definition. According to Plaintiff’s counsel, one can read the 2009 Notice of Motion confirming that the business customers were part of the “consumer customers” as the phrase was used in the original Statement of Claim. Accordingly, it is the Plaintiff’s position that the 2008 pleading “crystallizes” – i.e. tolls – the limitation period for the business customers in the same way that it did for retail consumers.

[32] In addition, a 2009 affidavit of the Plaintiff’s original solicitor states, in paragraph 38, that “if the Plaintiff and Class Members succeed in proving their theories of liability and the Defendant was unjustly enriched, as well as succeed in proving that Defendants violated the Competition Act and Consumer Protection Act that would result in liability for [the Defendant], then all members of the Class would potentially be entitled to monetary relief.” This suggests that for all class members to be included, all three heads of liability would have to be made out, not just Consumer Protection Act.

[33] The ambiguity about inclusion in the class is repeated in the 2009 proposed Notice of Certification to be sent to class members. On one hand, it is addressed to “All Subscribers of Bell Mobility Services”. On the other hand, it describes the claim as directed to “consumer customers”. The proposed Opt-Out form refers to “Resident Class Members”, which only creates even more ambiguity.

[34] The Certification Decision indicates that the class period ends October 1, 2009. That is the date that the Defendant changed its terms of service to make explicit that call charges would be rounded up. Defendant’s counsel argues that as of that date, all customers had constructive knowledge that they have a cause of action. In that case, if their limitation was not tolled with the issuance of the first Statement of Claim, this is when their limitation started to run. It would therefore expire two years later – Oct 1, 2011 – for all of their causes of action.

[35] The Fresh As Amended Statement of Claim that had been sent to Defendants in draft in March 2013 was issued on January 15, 2014. This version of the Plaintiff’s pleading removed the word “consumer” from the class definition. It now refers to “customers”, not “consumer customers”. The Plaintiffs also issued a Further Amended Fresh As Amended Statement of Claim dated October 24, 2014. This version of the pleading reproduced the class definition found in its immediate predecessor, and, in addition, created a sub-class of “consumers”, indicating that in the class as a whole there are business customers. The certification judge did not appoint a new representative Plaintiff for the business customers although, as indicated, Plaintiff’s counsel had proposed one if needed.

[36] Plaintiff’s counsel says that the limitation issue cannot now be put in question, as it was decided with finality when the class was defined in the Certification Decision and is subject to issue estoppel. With respect, however, that submission is contradicted by footnote 16 of the Certification Decision which, as discussed above, clearly invites future consideration of the limitation arguments. Arguments based on the limitation period cannot be both invited by the court and estopped by the same court’s decision.

[37] Moreover, in order to qualify for issue estoppel, the limitation issue has to have been finally decided: Danyluk v. Ainsworth Technologies, 2001 SCC 44, at para 24. That is, it has to have actually been argued and decided, and will not be estopped if it has to be inferred from the earlier judgment.

[38] The Plaintiff’s other argument is not that the limitation point has been brought on too late by the Defendant, but that it has been brought too early. Plaintiff’s counsel submit that the limitation point should be argued after the common issues trial, when individual class members are in a position to bring forth their specific claims. Plaintiff’s counsel state that the reason it was not decided at the certification stage is that the limitation analysis will turn on discoverability, and discoverability is an inherently individual issue and must come after the common issues trial is completed.

[39] Defendant’s counsel responds to this by saying that the business customers have constructive knowledge of their claim as of October 1, 2009, and that is the only date one needs in terms of “discoverability”. That is the date that the ‘rounding up’ billing policy was made explicit to all the Defendant’s customers, and so that is the final date any customer, retail or business, can claim to have been misled.

[40] Defendant’s counsel submit that the constructive knowledge conveyed by that announcement dispenses with the need for any individualized discoverability analysis in applying the limitation period: Grant Thornton v. New Brunswick, 2021 SCC 31, at paras. 40-45. They note that this is also the essence of the Divisional Court’s ruling in Graham v. Imperial Parking, 2011 ONSC 991, at para 55, where a demand or notice of money owing issued by the defendant marked the moment when the claim was “presumed to have been discovered” by the entire class: Ibid., at para 55.

[41] Plaintiff’s counsel take no issue with that analysis as a general matter of law, but say that there is an insufficient factual record here for concluding that the class had “constructive notice” of anything. They point out that there is no evidence that business customers received any notice from the Defendant. According to Plaintiff’s counsel, that question itself is an individual issue that will have to wait until after the common issues trial for the court to address.

[42] If the Defendant’s viewpoint is correct, having dispensed with the need for a discoverability analysis by invoking the notion of constructive knowledge, the Certification Decision could easily have dealt with the limitation issue on the spot. However, the court deferred the issue and, as I read footnote 16, had no choice but to do so since the issue could not be resolved on a class-wide basis at the certification stage.

[43] Footnote 16 is expressed in a way which, in fact, indicates that a proper limitation analysis will come later because it will turn on an individualized analysis of the class members’ experiences. In that footnote, the Certification Decision not only declined to delve into the limitation issue and deferred it to a later time; it did so with specific reference to Barker v. Barker, 2013 ONSC 7381, [2013] O.J. No. 5625 – a case in which a class-wide analysis had been expressly rejected.

[44] As is well known from decisions long pre-dating the Certification Decision in the present action, the Barker plaintiffs were inmates held in a maximum-security facility who claimed to have been subjected to a form of torture. That claim started life as a proposed class action, but the Court dismissed its certification request precisely because it required individualized, factual analysis: Ibid., at paras. 42-48, citing Egglestone v. Barker, [2003] O.J. No. 3137 (SCJ), aff’d [2004] O.J. No. 5443 (Div. Ct.); see also Joanisse v. Barker.

[45] In fact, the Barker decision referenced in footnote 16 of the Certification Decision dealt with the case after it had been revamped as a multi-party claim with individual plaintiffs: Joanisse v. Barker, 2006 CarswellOnt 10233 (SCJ). The Court of Appeal subsequently confirmed that the limitation issues in that case, with their attendant discoverability questions, likewise “require factual determinations, on a proper record, on the nature and characterization of the appellants’ conduct and the relationship between the parties”: Barker v. Barker, 2018 ONCA 255, at para. 23; see also Barker v. Barker, 2022 ONCA 567, at paras. 3, 48.

[46] In other words, footnote 16, in referencing Barker as an interpretive guide, cannot be taken as embracing “constructive knowledge” or any other mechanism for dispensing with an individualized analysis. The Certification Decision’s statement that the court was “not prepared to find that their claims are statute barred at this point” was purposive: to ensure that the issue would be raised at a time when the individualized analysis of discoverability could take place. The Court of Appeal has been clear that the time for that kind of individual factual record is after the common issues trial, when the class members can each present their own individual facts: Fehr v. Sun Life Assurance Company of Canada, 2018 ONCA 718, at para. 211.

[47] Defendant’s counsel submits the constructive knowledge approach ensures that there is no complexity to the limitation analysis. It is evident, however, that the Certification Decision did not put it that way. The deferral of the limitation period was not to any random time in the future, and was not an invitation to the Defendant to re-visit a certification issue whenever the spirit moved them; it was an acknowledgment that the time is not right on the basis of a certification record alone. And as indicated earlier in these reasons, that evidentiary record has not changed.

IV. Is a new sub-class necessary?

[48] As an alternative, Defendant’s counsel submit that if the business customers are to remain in the class, they require their own sub-class and their own representative Plaintiff. It is the Defendant’s view that retail customers and the business customers are differently situated in respect of the limitation arguments, and that the current representative Plaintiffs cannot adequately represent business customers since neither of them are business customers.

[49] Defendant’s counsel point out that, at paragraph 43 of the Certification Decision, it is explained that one of the sub-classes of claimants – the so-called “grandfathered class” of older customers – received an early notice about the rounding-up and minute-based billing policy. Those customers, therefore, have a different discoverability issue and raise a different limitation question than the balance of the class, and for that reason they make up a sub-class of their own.

[50] As with all of the other class members, consideration of the limitation issue with respect to the “grandfathered class” was deferred in footnote 16 until a later time. Presumably, that time will come after a common issues trial, when a full factual record can be compiled for each class and sub-class member.

[51] The Certification Decision did not create a separate sub-class of business customers. They were obviously included in the overall class definition, but, apparently, no particular attention was paid to the merit of placing them, like the grandfathered class, into their own sub-class. And since no sub-class was created for the business customers, no separate representative Plaintiff was called for.

[52] The Plaintiffs do not argue – or, perhaps more accurately, do not strenuously argue – that it would be bad for their claim to have a sub-class of business customers. In McKee’s Carpet Zone v. Sears Canada Inc., 2010 ONSC 5673, the Alberta class members in a franchise dispute had received a notice alerting them to their claim for rebates that the other, non-Alberta class members, did not get. Justice Strathy opined, at para 8, that fairness and the interests of both the Alberta members and the other class members required that the Alberta members form their own sub-class and have their own representative plaintiff to advance their interest.

[53] Given that it is the limitation period that distinguishes the business customers’ legal arguments – and, therefore, the calculus of their chances of success – from the retail consumers, any strategic thinking about the case or its settlement prospects may take on a different hue for the business customers than for retail customers. As the Court said in Kotai v. Queen of the North, 2007 BCSC 1056, at para 69, the class members who are in a different position “are entitled to have an informed decision [on litigation strategy] made by a representative plaintiff who is a member of the subclass, and not to have the decision made by [the sole representative Plaintiff] who has different interests.”

[54] All of which leads to the conclusion that the class might have benefitted had the Certification Decision implemented a business sub-class like that suggested by the Defendant. But it didn’t. And since there is nothing new in the record that would prompt me to re-visit the issue, I am not inclined to do so.

[55] The policy of judicial economy and the imperative of using scarce court resources efficiently have prompted courts to take a principled stance against what the Alberta Court of Appeal has labelled “litigation in installments”, Robertson v. Wasylyshen, 2003 ABCA 279, at para. 19, and the British Columbia Court of Appeal has dubbed “litigation by slices”: Mayer v. Mayer, 2012 BCCA 77, at para. 96. Regardless of what it is called, an approach to litigation that sees a party taking one approach at an early stage while saving other arguments and issues for a later day has been found to be unacceptable.

[56] Although the discretion of a motion judge is broad under the Class Proceedings Act, 1992, SO 1992, c. 6, s. 12, it is to be exercised with a view to the overall goals of class actions: access to justice, judicial economy, and behaviour modification: Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 SCR 534, at paras. 27-29. A piecemeal approach to certification fulfills none of these goals. It consumes judicial resources unnecessarily by cutting the action into pieces that may or may not be digestible as the case progresses.

[57] Plaintiff’s counsel states, correctly, that a certification motion is a complex procedure that inevitably consumes substantial resources. The courts expect parties to put their best foot forward, and not to split their case by holding back some of their powder for a future effort: Risorto v. State Farm Mutual Automobile Insurance Co., 2009 CarswellOnt 1247, at para 41 (Div Ct). I do not say that was the Defendant’s strategy here; new counsel has come on with new – one might say ‘fresh as amended’ – ideas. But that is the effect.

[58] Adding a business class with its own representative plaintiff might have been an efficient thing to do the first time around the certification block. But at this stage, with discoveries drawing to a close and trial on the horizon, it will only prolong the pre-trial maneuverings. Plaintiff’s counsel has expressed the concern that it will inevitably prompt further discovery of the new representative, which will, in turn, spawn new skirmishes over production, refusals and undertakings, etc. What the Defendants characterize as a proposal for increasing efficiency will, as a practical reality, just as likely be counter-productive and inefficient.

V. Conclusion

[59] The time for distinguishing between business and retail customers, and for testing the limitation defense with respect to any of the class members, is not now. It could have been done initially, but the Certification Decision declined to enter that terrain, and nothing has changed since that time. Consideration of the Defendant’s limitation defense has been put off to a time when the common issues have been answered and a record can be built in a fulsome way to address discoverability and other limitation issues.

VI. Disposition

[60] The Defendant’s motion is dismissed.

[61] The parties may make written submissions on costs. I would ask Plaintiffs’ counsel to send my assistant, by email, their brief submissions to my assistant within two weeks of today’s date, and for Defendant’s counsel to send to my assistant, by email, their equally brief submissions within two weeks thereafter.

Date: November 3, 2023 Morgan J.