Court of Appeal for Ontario

Date: April 12, 2017

Docket: C60176

Judges: Strathy C.J.O., LaForme and Huscroft JJ.A.

Between

Celia Sankar Plaintiff (Appellant)

and

Bell Mobility Inc. Defendant (Respondent)

Proceeding under the Class Proceedings Act, 1992

Counsel

Paul J. Pape and Shantona Chaudhury, for the appellant

Steve T. Tenai and Guy White, for the respondent

Heard

January 20, 2017

On remand from the order of the Supreme Court of Canada, dated October 20, 2016.

By the Court

A. Background

[1] On April 4, 2016, this court dismissed the appellant's appeal from a summary judgment motion dismissing her class action. Our reasons are reported at 2016 ONCA 242, 348 O.A.C. 58.

[2] On June 2, 2016, the appellant brought an application for leave to appeal to the Supreme Court of Canada.

[3] On September 15, 2016, the Supreme Court released its decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23.

[4] On October 20, 2016, the Supreme Court neither granted nor denied leave to appeal, but directed that the case forming the basis of the application for leave to appeal be remanded to this court, pursuant to s. 43(1.1) of the Supreme Court Act, R.S.C. 1985, c. S-26 "for disposition in accordance with Ledcor". [1]

[5] Section 43(1.1) provides that the Supreme Court "may, in its discretion, remand the whole or any part of the case to the court appealed from or the court of original jurisdiction and order any further proceedings that would be just in the circumstances."

[6] Having received correspondence from counsel concerning the remand order, we requested written submissions on two issues: (a) the meaning and effect of the remand order; and (b) the appropriate disposition in light of Ledcor. We advised counsel that we would be prepared to entertain oral submissions, if requested. A hearing was held at counsel's request, at the conclusion of which we reserved judgment.

[7] These reasons will explain why we affirm our previous decision.

B. The Meaning and Effect of the Remand Order

[8] Counsel for the appellant argues that the remanded matter "should be heard as a fresh appeal", but that the court could "inform itself from its earlier reasons": referring to British Columbia (Ministry of Forests) v. Teal Cedar Products Ltd., 2015 BCCA 263, 70 B.C.L.R. (5th) 318, leave to appeal to S.C.C. granted, [2015] S.C.C.A. No. 363, appeal heard and reserved November 1, 2016, at para. 2; Canada (Procureur général) c. Syndicat canadien de la fonction publique, section locale 675, 2016 QCCA 163, D.T.E. 2016T-121, leave to appeal to S.C.C. refused, [2016] S.C.C.A. No. 117, at para. 3; and R. v. Polches, 2008 NBCA 1, 325 N.B.R. (2d) 262, leave to appeal to S.C.C. refused, 349 N.B.R. (2d) 399 (note), at para. 18.

[9] Disposition of the case "in accordance with Ledcor" does not mean revisiting questions that Ledcor does not touch upon: see Polches, at para. 20. What it does mean is that, as a matter of fairness to the parties and judicial economy, we should reconsider our original decision in light of the authoritative pronouncement of the Supreme Court on issues that may have affected our disposition of the appeal. As this court has stated in Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, at para. 14, "[i]f the application of Ledcor mandates a different disposition, this court should alter its earlier decision in light of the teachings of Ledcor. If it does not, this court should affirm its earlier decision."

[10] We turn to that question.

C. The Appropriate Disposition in Light of Ledcor

(1) The Teachings of Ledcor

[11] Ledcor's core instruction is that in cases involving the interpretation of standard form contracts, the standard of review is correctness because the factual matrix or surrounding circumstances generally have little impact on their interpretation: see Ledcor, at para. 32.

[12] In Ledcor, at para. 22, the Supreme Court referred to this court's decisions in MacDonald v. Chicago Title Insurance Company of Canada, 2015 ONCA 842, 127 O.R. (3d) 663, leave to appeal to S.C.C. refused, [2016] S.C.C.A. No. 39 and in the instant case as examples of the application of a correctness standard of review to the interpretation of a standard form contract.

[13] A second instruction of Ledcor is that the circumstances of the negotiation of standard form contracts will generally play no role in their interpretation, because by their very nature there is usually no negotiation of such contracts (at para. 28). Some elements of the surrounding circumstances of standard form contracts, such as "the purpose of the contract, the nature of the relationship it creates, and the market or industry in which it operates", have a role in the interpretative process. However, this is only because they are the same for everyone who enters into the particular standard form contract, are not negotiated on a case-by-case basis and are not inherently fact-specific (at paras. 30, 31).

(2) The Submissions of the Parties

[14] The appellant acknowledges that this court applied the correctness standard of review expressed in Ledcor.

[15] She submits, however, that Ledcor went beyond this court's decision in Chicago Title by emphasizing that the surrounding circumstances of a standard form contract play no role in its interpretation unless they are "the same for everyone".

[16] The appellant asserts that the motion judge incorrectly used the "surrounding circumstances" or "factual matrix" in interpreting Bell's Terms of Service. He erred in considering parts of the factual matrix that were not common to all Bell subscribers and failed to consider provisions of Bell's Terms of Service that were common to all subscribers and failed to give them proper legal effect. She submits that this court made the same errors.

[17] The appellant says that the motion judge, and this court, failed to give proper legal effect to the "notice provisions" of Bell's standard form contract, which she says made Bell's notices to its customers, delivered after the contract was made, "part of [Bell's] contractual bargain". Thus, says the appellant, Bell's notices sent to its customers, after they had topped up their accounts, advising them of the "expiry date" of their contracts, were contractual terms common to all customers and should have been considered by the motion judge.

[18] The appellant also says that the motion judge erred in finding that the notices were simply "subsequent communications" and that this court erred in finding they were "post-contractual representations".

[19] The respondent acknowledges that the motion judge, who did not have the benefit of either Chicago Title or Ledcor, may have mischaracterized portions of Bell's contractual terms as parts of the "surrounding circumstances." However, it says, this court properly identified and relied on contractual terms which were ancillary to and contemplated by Bell's Terms of Service and came into existence every time a customer bought a new top-up.

(3) Discussion

[20] In view of the appellant's concession and the Supreme Court's acknowledgment that this court applied a correctness standard of review in this case, the real issue arising from Ledcor is whether we improperly used the surrounding circumstances to interpret Bell's Terms of Service applicable to wireless customers. The appellant says we did and that we erred in failing to consider the "expiry date" Bell assigned to each subscriber's contract, as reflected on the subscriber's account and the reminder messages sent to the subscriber.

[21] As a starting point, we observe that we noted at para. 26 of our reasons, after adopting a correctness standard of review, that in this case:

[T]he factual matrix applicable to the dealings between individual customers and Bell plays no role in the interpretation of the contract. Indeed, if that did play any role, the interpretation of the contract would not be a suitable common issue, [in the class proceeding] because the answer could vary depending on the underlying facts. [Emphasis added.]

[22] This was a class action and the motion judge was required to answer common issues that would apply to all class members. The issue was not the appellant's claim against Bell for breach of contract. It was the determination of a common issue of whether Bell breached the contracts of all class members. The common issues were expressed as follows:

A(1)(a) Do the terms of the contracts between the defendant and class members require the defendant to wait until after the expiry of the prepaid credits before the prepaid credits can be seized?

A(1)(b) Did the defendant breach the terms of the contract by seizing prepaid credits before it was entitled to?

[23] In order for the court to determine the common issues, the contract had to be the same for all class members and the answer had to be the same for all class members. A common issue cannot be answered by considering facts that vary from class member to class member.

[24] That did not, however, preclude a finding that "the contracts" between the defendant and class members were found in documents, in addition to the Terms of Service, that were common to all class members, and that contained additional contractual terms. We noted this at paras. 22-23 and 25 of our reasons:

In my view, in addition to the initial agreements, the motion judge was entitled to rely on other documents that formed part of the contractual relationship between the parties - the PIN receipts and phone cards referred to earlier. These, taken together with the agreements made when they subscribed to the service, formed the contract between every customer and Bell. It was appropriate to answer the common issue based on these documents and indeed the answer would have been incomplete had they not been considered.

There is a difference between considering the factual matrix and considering the documents that make up the contract itself. It is not uncommon in modern contracts, including contracts made partly on "paper" and partly on the internet, for the contract terms to be found in several "documents". And it is well-settled that where parties enter into interrelated agreements, the court is required to look to all those agreements to determine their construction.

In this case, the agreements were not contemporaneous, but they were interrelated. The initial agreement contemplated that customers would top up their accounts through Bell's websites, through the purchase of phone cards and through the purchase of PIN receipts. These were not simply part of the factual matrix - they contained contractual terms themselves. The motion judge properly had regard to these documents in order to determine the contract terms. Because these terms were common to all class members (albeit in slightly different language depending on the manner of top-up), it was appropriate to address the issue as a common issue. [Emphasis added.]

[25] To summarize our reasons, Bell's Terms of Service contemplated that customers like the appellant, who bought pre-paid services, would replenish the funds in their accounts by "topping up" from time to time. If the funds were not topped up, the balance would expire "after a specified time period" or "after an expiry date", and any funds remaining in the account would be forfeited.

[26] Bell's Terms of Service did not define the "specified time period" or the "expiry date". Nor did they set out the cost of top-ups, the amount of time that could be purchased or the particulars of the expiry date applicable to any given top-up.

[27] These terms were left to be identified when a customer actually purchased a top-up. For example, one common way of topping up was by purchasing a phone card, or what the appellant described as a "gift card". The customer who had been using prepaid services (and was, therefore, operating under Bell's Terms of Service) would go into a store, choose a phone card, give it to the cashier and pay the appropriate amount of money depending on the number of days of service purchased. In return, the customer would receive a paper receipt containing a personal identification number, or PIN. The PIN receipt could then be used to "top up" in one of a number of ways, including on the customer's phone or through Bell's website.

[28] As explained in our reasons, at paras. 14 and 15, the information on the phone card and the receipt given to the customer, contained the details of the contract made by the customer at the time of top-up – the purchase of a specified amount of phone time on Bell's system at a specific price and with a specific expiry date.

[29] The appellant does not complain about the accuracy of the expiry date identified when customers purchased their top-ups. Her complaint relates to the date communicated to customers by text message at some point before their top-ups were to expire.

[30] The purchase of a prepaid card for valuable consideration was an individual contractual transaction that took place under the umbrella of the contractual relationship contained in the Terms of Service. This transaction was specifically contemplated by the Terms of Service and it was consistent with them. The appellant makes no assertion to the contrary. While customers could top up their accounts by other means, the methods, and the information conveyed at the time of purchase, were similar to what took place in a phone card transaction.

[31] To use the language of Ledcor, no matter what method the customer used to top up her account, the method of calculating the expiry date and the manner in which it was communicated to the customer was "the same for everyone". The expiry date so calculated and communicated was consistent with the Terms of Service.

[32] It was impossible for the motion judge to answer the breach of contract common issue without examining the terms of the top-up transaction. He could not find the answer solely in the Terms of Service and neither party suggests otherwise.

[33] The appellant's assertion is that instead of considering the documentation and communication that took place at the time of top-up, the motion judge should have considered the text messages sent to customers before the funds were about to expire. However, the text messages had no contractual effect. They were sent long after the top-up was made. If individual subscribers were confused by the language of the messages, as the appellant claims to have been, they may have a cause of action for misrepresentation, but it is unlikely that such a claim could be pursued in a class action.

[34] The same is true of the appellant's complaint about the expiry date that Bell assigned to the customer's account, after the top-up was made. The customer may or may not have looked at his or her account page where this date was posted, may or may not have been confused and may or may not have relied on the date to delay making a further top up. If so, the customer might have an action for misrepresentation, but not for breach of contract.

[35] In our view, the motion judge did not err in answering the breach of contract common issues as he did.

[36] We acknowledge that we, and the motion judge, may have erred in suggesting that the brochures available in stores, and Bell's website information, could be considered in determining the terms of the contract. Even assuming that such information might be admissible in an individual case, it could not possibly be common to all class members. That said, it is important to note that the information displayed in these locations was consistent with the information contained on the so-called "gift cards" and the PIN receipts and other methods of top-up. In other words, it only confirmed the contractual terms that were identified at the time of the top-up.

[37] The motion judge found that the appellant's complaint, like the complaints of many other class members, was based on Bell's reminder messages. These messages were sent to customers shortly before the expiry of their "active period" to remind class members who had not already done so to "top up" before expiry. He said, at para. 4 of his reasons:

Many of the class members' complaints were prompted in part by the defendant's reminder messages noting the "expiration date." If these expiration dates were one day longer than what was stated in the original top-up agreement, and class members reasonably relied on this additional day to their detriment, the appropriate remedy would be either a breach of contract claim arguing promissory estoppel or an action in misrepresentation – both of which would require proof of individual reliance and therefore not amenable to a class proceeding. This of course explains why neither remedy was alleged by the plaintiff or pursued herein. This class proceeding was certified as a straight-forward contractual and statutory interpretation case. I find that Bell prevails in both regards. [Emphasis added.]

[38] He continued, at para. 28:

If any class member misunderstood the follow-up "expiration date" messages as meaning that unused funds would expire on Day 31 and would be seized on Day 32, and she relied on said messages to her detriment (by not topping up in time and forfeiting the unused balance) and the defendant did not grant a courtesy extension, then her remedy, as already noted, was two-fold: either a claim in breach of contract arguing promissory estoppel or a claim in misrepresentation. But both of these remedies would require proof of individual reliance and neither would be amenable to a class proceeding. That is why, as I have already noted, neither promissory estoppel nor misrepresentation was alleged by the plaintiff or pursued herein.

[39] Referring to this observation, at para. 28, this court observed:

These communications [the expiration date messages] were not part of the factual matrix surrounding the formation of the contract. At their highest, they were post-contractual representations.

[40] To the extent this suggested that the messages might have been considered as if they were part of the factual matrix, it was a mis-statement.

[41] In any case, we continued, at para. 32:

As the motion judge noted, the appellant's real complaint, and the real complaint in this class action, is that Bell's subsequent communications to its customers – made after they had purchased their top-ups and as the top-up was about to expire – were misleading. That is because they may have created the impression that subscribers had an additional day after the end of the active period to "top up" before their funds expired. I agree with the motion judge that this was essentially a claim for misrepresentation or promissory estoppel, neither of which was before him, because neither was held to be amenable to resolution as a common issue in the class proceeding.

[42] In our view, the communications to which the appellant refers, be they in the form of reminder messages or expiry dates shown on the customers' account pages, were of no contractual effect and could not have been referred to, either in interpreting the contract or in answering the common issues.

D. Conclusion

[43] For these reasons, having reconsidered our decision in light of Ledcor, we affirm our decision.

[44] The parties may make written submissions as to costs. The respondent shall file its submissions within 15 days of the release of these reasons and the appellant shall have 10 days within which to reply. The submissions shall be limited to three pages, exclusive of costs outlines.

Released: April 12, 2017

"George R. Strathy C.J.O."

"H.S. LaForme J.A."

"Grant Huscroft J.A."

Footnote

[1] The remand order stated:

Pursuant to s. 43(1.1) of the Supreme Court Act, the case forming the basis of the application for leave to appeal from the judgment of the Court of Appeal for Ontario (Toronto), Number C60176, 2016 ONCA 242, dated April 4, 2016, is remanded to the Court of Appeal for Ontario for disposition in accordance with Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37.