Bérubé v. Rational Entertainment Limited
CITATION: Bérubé v. Rational Entertainment Limited, 2010 ONSC 5545
DIVISIONAL COURT FILE NO.: 09-DV-1559
DATE: 2010-10-07
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
VALIN, FERRIER AND RADY JJ.
BETWEEN:
CLOTILDE BÉRUBÉ Appellant
– and –
RATIONAL ENTERTAINMENT LIMITED Respondent
Self-represented
J.E. Plener / S.V. Lewis, for the Respondent
HEARD in Ottawa: October 5, 2010
ENDORSEMENT
[1] The respondent Rational Entertainment Limited is owned, operated, and physically situated in the Isle of Man. It has no physical presence as a legal entity in Ontario or in Canada.
[2] The respondent is licensed by and operates online poker gaming services pursuant to the laws of the Isle of Man.
[3] The respondent operates a network poker gaming service known one as “PokerStars”. To play on PokerStars, a participant must first register with an account on the respondent’s website. Once a participant opens an account, he/she can then participate in real money poker games against other users.
[4] The appellant created an account with PokerStars on July 24, 2009. In order to create the account, she was required to provide personal information and to acknowledge that she had read and understood the terms of the end user licence agreement. Section 13 of that agreement states as follows:
- The Agreement and any matters relating hereto shall be governed by, and construed in accordance with, the laws of the Isle of Man. Each party irrevocably agrees that the relevant courts of the Isle of Man shall have exclusive jurisdiction in relation to any claim, dispute or difference concerning the Agreement and any matter arising therefrom and irrevocably waives any right that it may have to object to an action being brought in those courts, or to claim that the action has been brought in an inconvenient forum, or that those courts do not have jurisdiction.
[5] Between July 29, 2009 and August 2, 2009, the appellant made seven deposits to her account from her MasterCard credit card in the total amount of $983.45 (USD). Between July 29 and August 3, 2009, all the credits within the account purchased with those deposits were unsuccessfully wagered in poker games with other users.
[6] On August 20, 2009, the appellant issued a Plaintiff’s Claim against the respondent in Small Claims Court. In that pleading, the appellant claimed payment of the sum of $1,200 (CAD) for money invested in PokerStars, the sum of $1,000 for time spent investigating her claim, and the sum of $5,000 for punitive and aggravated damages. The respondent filed a Defence to Plaintiff’s Claim.
[7] Counsel for the respondent brought a motion for an order dismissing the appellant’s claim. On October 16, 2009, Justice Tierney made an order dismissing the appellant’s claim for lack of jurisdiction.
[8] On November 17, 2009, 32 days after the date of that order, the appellant served Notice of Appeal. On December 18, 2009, the respondent brought a motion before Power J. sitting as a single judge of the Divisional Court, and requested an order that the appeal be quashed pursuant to section 134(3) of the Courts of Justice Act.
[9] On December 23, 2009, Power J. granted an order quashing the appellant’s appeal for being manifestly devoid of merit. His order also required the appellant to provide security for costs of the appeal fixed in the amount of $6,000 in the event the decision to quash the appeal was overturned.
[10] On February 9, 2010, Power J. ordered the appellant to pay to the respondent the costs of the motion which he fixed in the amount of $3,500.
[11] This is an appeal from the order of Power J. dated December 23, 2009, quashing the appeal from the decision of Justice Tierney. The appellant seeks an order setting aside the quashing of her appeal by Power J., and setting aside the security for costs ordered by Power J. She also requests costs in respect of her claim in the Small Claims Court, the motion before Power J. and the motion before this panel.
[12] The appellant argued that the end user licence agreement was a contract of adhesion in that it was a consumer standard form contract that was not the result of negotiation. She submitted this court has held that a contract of adhesion can be enforceable “unless the circumstances are such that it would be unconscionable, unfair, unreasonable or contrary to public policy”.[^1]
[13] We agree that a contract which is contrary to public policy or which is prohibited by statute can be rendered unenforceable by the courts. The appellant argued that the respondent was operating an online casino illegally because it was not licenced to do so in Canada. She submitted that this was contrary to the provisions of ss. 197(1) and 201(1) of the Criminal Code of Canada and urged us to conclude that the end user licence agreement was unenforceable against her in the circumstances.
[14] At first glance, that argument is attractive. However, s. 1.2 of the end user licence agreement reads as follows:
1.2 The Software is licensed to you by PokerStars for your private personal use. Please note that the Software is not for use by (i) individuals under 18 years of age, (ii) individuals under the legal age of majority in their jurisdiction and (iii) individuals connecting to the Site from jurisdictions from which it is illegal to do so. PokerStars is not able to verify the legality of the Service in each jurisdiction and it is the User’s responsibility to verify such matter.
[15] We find that this clause is a complete answer to the appellant’s submissions concerning the enforceability of an illegal contract or one that is prohibited by statute. The provisions of s. 1.2 of the end user licence agreement are abundantly clear. Until the appellant verified the legality of PokerStars in this jurisdiction, the end user licence agreement obligated her not to participate in poker games on PokerStars.
[16] Justice Tierney is a provincial court judge who presides in Small Claims Court. The provisions of ss. 31 and 21 of the Courts of Justice Act make it abundantly clear that Power J. had jurisdiction to hear the respondent’s motion on December 18, 2009, sitting as a single judge in the Divisional Court.
[17] In an appeal to this court, the standard of review on a question of law is one of correctness. The standard of review for findings of fact is that such findings are not to be disturbed unless it can be established that the trial judge made a “palpable and overriding error”.
[18] We find that Power J. did not make any reversible error under either standard of review. Section 134(3) of the Courts of Justice Act provides that a court to which an appeal is taken may, in a proper case, quash the appeal. The test for whether an appeal should be quashed pursuant to that section is whether the appeal is manifestly devoid of merit. The decision of Power J. reveals that he was fully alive to and aware of the proper test. His decision in that regard was correct.
[19] In his decision, Power J. concluded that the appeal was manifestly devoid of merit. In support of that conclusion, he relied on the following facts:
- The respondent is located in and operates out of the jurisdiction of the Isle of Man.
- The appellant acknowledged that she had read and understood the terms of the end user licence agreement prior to using any of the respondent's services.
- Paragraph 13 of the end user licence agreement applies to the appellant’s claim which requires that the relevant courts of the Isle of Man shall have exclusive jurisdiction in relation to any claim, dispute or difference concerning the agreement and any matter arising therefrom.
- The appellant did not provide any evidence that suggests the decision of Justice Tierney was not correct.
[20] Based on the evidence before him, we conclude that Power J. did not make any palpable and overriding error in finding those facts.
[21] Power J. ordered the appellant to pay $6,000 as security for costs in the event the appellant was successful in her appeal of his decision.
[22] Rule 61.06 of the Rules of Civil Procedure gives authority to a judge of an appellate court to make an order for security for costs of the proceeding and of the appeal where it appears that there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. Rule 56.01(e) contains a similar test for making an order for security for costs in relation to the prosecution of an action.
[23] At paragraph 30 of his decision, Power J. stated:
Not only is there a good reason to believe that the appeal is frivolous and vexatious, there is sufficient evidence before the Court upon which to find that Ms. Bérubé has insufficient assets in Ontario to pay the costs of the appeal. In addition, an order should be made for the same reasons, under rule 56.01(e) of the Rules of Civil Procedure.
[24] In applying this test to reach the conclusion to order the appellant to pay $6,000 as security for costs, Power J. relied on the following facts:
- The appeal is frivolous and vexatious because the appellant presented no facts or law to support her suggestion that the decision of Justice Tierney was not a proper one and that she had conducted herself in a manner which is inconsistent with the Rules of Civil Procedure.
- The appellant does not own any real property within the city of Ottawa where, according to the Plaintiff’s Claim, she currently resides.
- Since May 13, 2003, the Bank of Montréal has maintained the registration of a writ of seizure and sale against the appellant for an amount in excess of the sum of $25,000.
- During argument of the motion before Power J., the appellant admitted that she had insufficient assets in Ontario.
[25] We conclude that Power J. did not make any palpable and overriding error in finding any of these facts. Accordingly, there is no reason to reverse the order he made with respect to security for costs of the appeal.
[26] The appeal is therefore dismissed. The respondent is entitled to its costs of this appeal which are hereby fixed in the amount of $3,000, inclusive of disbursements and HST.
Mr. Justice G. Valin
Mr. Justice L. Ferrier
Madam Justice H. Rady
Released: October 7, 2010
CITATION: Bérubé v. Rational Entertainment Limited, 2010 ONSC 5545
DIVISIONAL COURT FILE NO.: 09-DV-1559
DATE: 2010-10-07
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
VALIN, FERRIER AND RADY JJ.
BETWEEN:
CLOTILDE BÉRUBÉ Appellant
– and –
RATIONAL ENTERTAINMENT LIMITED Respondent
ENDORSEMENT
Released: October 7, 2010
[^1]: See Celebre v. 1082909 Ontario Limited, 2007 65609 (ON S.C.D.C.) at par. 17.