Stephanie Graham v. Imperial Parking Canada Corporation, 2011 ONSC 991

Court File No.: CV-09-00379652-00CP

Divisional Court File No.: 570/10

Date: 2011-04-27

Superior Court of Justice – Ontario

Divisional Court

Re: Stephanie Graham and Angela Miceli, Applicants/Plaintiffs

And:

Imperial Parking Canada Corporation, carrying on business as Impark, Respondents/Defendants

Before: H.J. Wilton-Siegel J.

Counsel: Paul Bates, David Thompson and Matthew Moloci, for the Plaintiffs Paul Martin and Laura Cooper, for the Defendants

Heard: February 11, 2011

Endorsement

[1] The plaintiffs Stephanie Graham (“Graham”) and Angela Miceli (“Miceli’) seek leave to appeal to the Divisional Court from the order of Perell J. dated September 16, 2010 (the “Order”) respecting the plaintiffs’ motion for certification of this action as a class action proceeding under the Class Proceedings Act, 1992, S.O. 1992, c.6. Perell J. conditionally certified the class action but with much narrower parameters than the class action proposed by the plaintiffs, as set out in the reasons for decision dated September 16, 2010 of Perell J. (the “Decision”).

Factual Background

[2] The issues in the action arise out of parking agreements that are entered into between Imperial Parking Canada Corporation (“Impark”) and its customers when a customer parks a vehicle on a parking lot operated or managed by Impark.

[3] The contract between the parties is evidenced by signage on the parking lots and the ticket for parking, the text of which is set out in the Decision.

[4] Some Impark parking lots are staffed by attendants. Others are unstaffed. At staffed parking lots, motorists purchase a ticket or a parking pass from the attendant. At unstaffed parking lots, motorists purchase a parking ticket or parking pass from a mechanical dispenser. In either case, motorists are required to display the parking ticket or parking pass on the dashboard of their vehicles. Also, in either case, the ticket does not refer to a violation fee in the event the vehicle overstays the time purchased. Impark relies on the existence of signage at each parking lot that describes the violation fee.

[5] When Impark staff who patrol the parking lots on a random basis find a vehicle that has overstayed the time purchased or failed to display any ticket on the dashboard, the staff person will issue a notice and place it on the vehicle’s windshield. The notice, among other things, demands payment of $39.96 if paid within seven days or $69.55 if not ─ the violation fee.

[6] Impark has its own dispute resolution system for motorists who respond to notices or demands for payment. In some instances, after considering the information provided by a motorist, Impark will cancel the violation fee. In other instances, Impark will reduce the amount owing if payment is made within seven days. In other instances, Impark will refuse to cancel or reduce the violation fee. Unless Impark agrees to cancel the violation fee, it sends the motorist a demand letter.

[7] Further, if Impark does not receive payment within five weeks of placing the notice on the vehicle, Impark mails a demand letter to the registered owner of the vehicle, who may or may not be the person who parked the vehicle.

[8] If no payment is received after a further five weeks, Impark directs a collection agency that it owns to seek payment, and a further demand letter is sent to the registered owner of the vehicle. If the collection agency fails to recover the violation fee after three or more notices are sent to the customer, Impark hires a third party collection agency to pursue payment. If that agency’s activities are not successful, Impark closes its file after six months.

[9] For cost reasons, it is not Impark’s policy to bring actions in Small Claims Court to enforce payment. Impark does, however, retain a record of registered vehicle owners with multiple unpaid payment notices. The registered owner, who may not be the person who actually parked the vehicle on the parking lot, is warned that his or her vehicle may be towed if the vehicle returns to any facilities managed by Impark.

Standard of Review

[10] The standard of review on a motion for leave to appeal the Order is set out in Rule 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 as follows:

(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.

Issues for the Court

[11] The plaintiffs seek leave to appeal the Order of Perell J. with respect to all seven causes of action asserted in their statement of claim dated May 28, 2009 (the “Statement of Claim”), as well as his determinations regarding the operation of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4-5, the appropriateness of punitive damages as a common issue, and the disqualification of Miceli as a representative plaintiff. I will address each of these issues in that order.

Causes of Action

Breach of Future Performance Agreement Provisions of the Consumer Protection Act, 2002

[12] Impark does not disagree that parking agreements are consumer agreements, to the extent that they are made with a consumer, that satisfy the literal definition of a “future performance agreement” under the Consumer Protection Act, 2002, c. 30 Sch. A (the “CPA”). Perell J. found, however, that Impark’s parking agreements are not “future performance agreements” for the purposes of the CPA.

[13] Perell J. reached this conclusion by making two determinations. First, he concluded that, as a matter of law based on the statement of Catzman J.A. in Livent Inc. Re (1999), 1999 3800 (ON CA), 46 O.R. (3d) 458 (C.A.), a class of consumer contracts exists that does not fall within the definition of “future performance agreements” for the purposes of the CPA even if the contracts satisfy the literal meaning of the definition. Perell J. understood this category of contract to relate to transactions which, by their nature, the Legislature could not reasonably have intended to be “future performance agreements” given that the requirements of the CPA and the regulations thereunder cannot realistically apply to them. Second, Perell J. concluded that Impark’s parking contracts fell within such class of contracts.

[14] On the basis of these determinations, Perell J. concluded that it was plain and obvious from the facts pleaded in the Statement of Claim that the Impark parking agreements were not “future performance agreements” under the CPA. Put another way, the facts pleaded in the Statement of Claim regarding the Impark parking agreements described contracts that lay outside the definition of “future performance agreements” notwithstanding the broad language of the definition thereof.

[15] The plaintiffs characterize Perell J’s decision as a decision on the merits. However, the process that he followed is consistent with the requirement in Hunt v. Carey, 1990 90 (SCC), [1990] 2 S.C.R. 959 (S.C.C.) that the motions judge limit himself or herself to a consideration of whether the facts as pleaded disclose a reasonable cause of action.

[16] The plaintiffs also take issue with the two determinations of Perell J. upon which he based his conclusion.

[17] In respect of the second conclusion, the plaintiffs suggest that the factual matrix is sufficiently different in the present case to distinguish the Impark parking agreements from the class of excluded contracts contemplated by the principle in Livent, which considered theatre tickets. However, apart from their submission that a violation fee for overstaying on the parking lot is not a feature present in the theatre tickets, the plaintiffs are unable to express a rational principle for the distinction they urge on the Court.

[18] In respect of the first determination, the plaintiffs make three submissions regarding the correctness of the law applied. First, they say the statement of Catzman J. was obiter dicta. Second, they say that Catzman J.’s interpretation of the CPA was inconsistent with section 64 of the Legislation Act, 2006, S.O. 2006, c. 21 Sch. F. Third, they suggest that a contrary legislative intention should be inferred from the Legislature’s redrafting of the provision in 2002, which re-named “executory contracts” as “future performance agreements” but made no substantive changes to the language of the relevant definition. The plaintiffs say Perell J. made a value judgment in reaching his conclusion that the principle in Livent was applicable.

[19] Each of these arguments was also considered by Perell J. I am not persuaded that there is good reason to conclude that Perell J. erred in applying the same purposive approach to the exercise of statutory construction as was previously articulated and applied by Catzman J. on behalf of the Court of Appeal in reaching his conclusion in Livent. In interpreting the definition of “future performance agreements” under the CPA, the statute and the regulations thereunder must be read together as comprising a single scheme. Doing so in this case, the Legislative intention is made manifest by the nature of the disclosure mandated by the Act and the regulations thereunder. I therefore do not think that the decision of Perell J. can be characterized as involving a value judgment rather than a valid exercise of statutory interpretation in the context of a determination as to whether the Statement of Claim disclosed a reasonable cause of action.

[20] Accordingly, the plaintiffs have failed to establish that there is good reason to doubt the correctness of the conclusion of Perell J. that the Statement of Claim failed to disclose a cause of action for non-compliance with the future performance agreement provisions of the CPA.

Breach of the Unfair Practice Provisions of the Consumer Protection Act, 2002

[21] The plaintiffs proposed a cause of action based on certain Impark representations regarding the parking agreements being false, deceptive or unconscionable representations and thereby constituting breaches of the unfair practice provisions of the CPA giving rise to remedies to compensate the class members.

[22] Perell J. identified four specific representations alleged to constitute misrepresentations. The first two ─ set out in paragraphs 36(a) and (c) of the Statement of Claim and relating respectively to a failure to warn of the risk of a violation fee for overstaying and to the representation that legal action will be taken despite Impark’s policy of not pursuing Small Claims Court actions ─ were dismissed by Perell J. as being without foundation on the facts as pleaded. The plaintiffs did not raise these findings on the hearing of this motion for leave to appeal. In any event, I see no basis for doubting the correctness of these conclusions of Perell J.

[23] The third representation, which appeared on the notice placed on the windshield of an improperly parked vehicle, reads as follows: “The legal authority to claim the above amount and/or have your improperly parked vehicle towed arises under the law of contract and the law of trespass”. Perell J. concluded this was not a misrepresentation by, in effect, taking judicial notice that the applicable law pertaining to parking agreements on private property will, depending upon the particular circumstances, be the law of contract, the law of trespass or the law of bailment. On this basis, he concluded that it was plain and obvious that the pleading of a cause of action based on this alleged misrepresentation failed to disclose a cause of action.

[24] The plaintiffs argue that: (1) in Imperial Parking Ltd. v. Canada, [2000] F.C.J. NO. 1011 (F.C.A.), the Federal Court of Appeal rejected Impark’s argument that the law of trespass applied in respect of Impark’s operations; and (2) in Imperial Parking Canada Corp. v. Toronto (City), 2007 ONCA 649, [2007] O.J. No. 3578 (C.A.) at para. 50, the Ontario Court of Appeal left open the question of whether Impark had the legal authority in contract to collect violation fees.

[25] The plaintiffs’ submissions mischaracterize both the statement in Impark’s notice and the ambit of the decisions upon which they rely. The representation in the notice merely states that, in any given instance, the law of contract, trespass, or bailment will be applicable. It did not specify which of the three areas of law would be applied. It did not refer to the Federal Court of Appeal decision. Further, the Federal Court of Appeal concluded that GST was exigible in respect of violation fees because such fees were owing in contract pursuant to the Impark parking agreement. It did not address the possibility that, in certain circumstances, Impark may not be able to establish the existence of a contract, in which case the law of trespass would apply. In the Court of Appeal decision, Simmons J.A. merely observed, as obiter dicta, that in any particular case, a motorist may have defences under the law of contract, in which the law of trespass would apply. The issue in that decision was whether Impark consented to parking where proper advance payment is not made, which does not involve the law of contract at all.

[26] On this basis, I agree with Perell J. that the notice did not contain a misrepresentation.

[27] The second contested representation, which is contained in the letters sent to the motorist or the registered owner of an improperly parked vehicle, reads as follows:

The legal authority to claim the amount due and/or have improperly parked vehicle towed arises under the law of contract. Our right to claim this amount from owners of vehicles improperly parked on facilities managed by us has been confirmed by a Canadian Federal Court of Appeal decision.

[28] Perell J. held that it was not plain and obvious that this statement was true in regard to a registered owner who did not personally park the vehicle on an Impark parking lot. However, Perell J. also concluded that, while it was unseemly for Impark to seek to use the Federal Court of Appeal decision in the demand letter in the manner it did, the statement did not constitute a misrepresentation in respect of motorists who improperly parked a car on an Impark parking lot.

[29] Based on the analysis of the Federal Court of Appeal and Ontario Court of Appeal decisions set out above, I see no reason to doubt the correctness of this conclusion of Perell J. The decision of the Federal Court of Appeal supports the contractual theory of liability. The obiter dicta of Simmons J.A. merely leaves open the possibility that a motorist may have defences under the law of contract. This is a long way from the submission urged upon this Court by the plaintiffs that, reading these two cases together, there is reason to doubt that the violation fees can be collected either in contrast or in trespass.

[30] Accordingly, the plaintiffs have failed to demonstrate a good reason to doubt the correctness of the decision of Perell J. in respect of the causes of action alleging a breach of the unfair practices provisions of the CPA. They have also failed to demonstrate the existence of a conflicting decision pertaining to such causes of action.

Unjust Enrichment Based on Unconscionability

[31] Perell J. held that it was plain and obvious that the facts pleaded in the Statement of Claim did not and could not establish a grossly improvident or unfair transaction and there was nothing to suggest that Impark took unfair advantage of its customers. He concluded by saying:

The plaintiffs simply plead that the parking agreements are contracts of adhesion and class members have no bargaining power, which factors by themselves, however, are insufficient to establish unconscionability. In my opinion, it is plain and obvious that there is no high degree of unfairness and that there has been no abuse of bargaining.

[32] The plaintiffs submit that these statements constitute a finding on the merits that the violation fees charged by Impark were not unconscionable. They say that, having regard to the pleadings paragraphs in 12 – 20 of the Statement of Claim, Perell J. could not have found that there was no possibility of a finding of unconscionability. They also rely on the comments of Simmons J.A. at para. 30 of Imperial Parking Canada Corp. v. Toronto (City,) cited above in support of their position that it is questionable whether violation fees can be charged at all under the Impark parking agreement. For the reasons set out above, I think this is a misreading of the comments of Simmons J.A. which are, in any event, obiter dicta.

[33] I think the plaintiffs have misconstrued the comments of Perell J.

[34] The four elements that are necessary for a pleading of unconscionability have recently been confirmed as follows by the Court of Appeal in Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573, [2007] O.J. No. 3148 at para. 38 (C.A.), citing Côté J.A. in Cain v. Clarica Life Insurance Co. (2005), 2005 ABCA 437, 263 D.L.R. (4th) 368 (Alta. C.A.):

In a recent case dealing with the doctrine of unconscionability in a wrongful dismissal context, Cain v. Clarica Life Insurance Co., supra, Côté J.A. reviewed the leading cases and academic commentary and concluded, at para. 32:

Those authorities discuss four elements which appear to be necessary for unconscionability …

1. a grossly unfair and improvident transaction; and

2. victim’s lack of independent legal advice or other suitable advice; and

3. overwhelming imbalance in bargaining power caused by victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

4. other party’s knowingly taking advantage of this vulnerability.

[35] Perell J. states in paragraph 123 of the Decision that the plaintiffs have failed to plead facts that establish that Impark took unfair advantage of its customers to extract a grossly unfair and improvident transaction. I agree. While the Statement of Claim pleads an inequality of bargaining power, it fails to plead facts establishing an abuse of Impark’s bargaining power.

[36] Based on the foregoing, the plaintiffs have failed to demonstrate a good reason to doubt the correctness of the conclusion of Perell J. that it is plain and obvious that the facts pleaded do not satisfy the requirements of a claim for unjust enrichment based on unconscionability.

Unjust Enrichment Based on Relief from a Penalty or Based on Relief from Forfeiture

[37] The plaintiffs asserted separate causes of action for (1) unjust enrichment based on relief from a penalty; and (2) unjust enrichment based on relief from forfeiture under section 98 of the Courts of Justice Act, R.S.O. 1990, c. C-43, as amended. Perell J. dealt with both causes of action together, applying the reasoning of Sharpe J.A. in Peachtree II Associates – Dallas L.P. v. 857486 Ontario Ltd.(2005), 2005 23216 (ON CA), 76 O.R. (3d) 362 (C.A.) and allowing unconscionability to govern the enforceability of penalty claims. Having found that the plaintiff had failed to plead the necessary elements of a cause of action for unconscionability in respect of the cause of action addressed in the previous section, Perell J. concluded that it was also plain and obvious that the violation fee could not be found to be unconscionable, whether as a penalty or a forfeiture clause.

[38] The plaintiffs indicated in the hearing on the motion for leave to appeal that they did not dispute that the analysis of penalty clauses and forfeiture clauses was to be subsumed in the analysis of unconscionability. I concur that this represents the state of the law in this area today.

[39] Accordingly, I conclude that the plaintiffs have also failed to plead the necessary elements of a claim for unjust enrichment based on the unconscionability of the violation fee as a penalty clause or a forfeiture clause. Merely pleading that a violation fee of $69.55 is charged does not satisfy this requirement. I therefore find no reason to doubt the correctness of Perell J.’s conclusion that it is plain and obvious that the plaintiffs’ causes of action based on the violation fee being a penalty or a forfeiture clause do not satisfy section 5(1) of the Class Proceedings Act, 1992.

Unjust Enrichment Based on the Parking Agreements Being Contracts of Adhesion

[40] The plaintiffs’ last cause of action is an assertion that the Impark parking agreements are contracts of adhesion and that class members have no bargaining power to negotiate or alter the terms of the parking agreements. Perell J. recognized that the theory of this cause of action, which is grounded in the principles in Tilden Rent-A-Car Co. v. Clendenning (1978), 1978 1446 (ON CA), 18 O.R. (2d) 601 (C.A.), is that Impark failed to take reasonable steps to draw the violation fee to the attention of motorists using its parking lots and therefore cannot enforce the violation fee.

[41] Perell J. held that the pleadings failed to disclose a cause of action for two reasons.

[42] First, he pointed out that the plaintiffs actually plead that the violation fee is pointed out in Impark’s signage and that there is no allegation that such signage does not constitute reasonable measures to draw the violation fee to the attention of motorists using the parking lots. On this basis, the Statement of Claim fails to set out all the elements of a claim based on the principles in Tilden.

[43] Second, Perell J. concluded that the violation fee is not a provision that needed to be drawn to the attention of a motorist parking a car on an Impark parking lot because it would not be contrary to his or her reasonable expectations.

[44] The plaintiffs characterize Perell J.’s ruling on this cause of action as deciding the cause of action on the merits. At best, this can only apply to the second of his reasons for his conclusion. The first reason clearly goes to the insufficiency of the pleadings. It is sufficient on its own to dispose of the plaintiffs’ appeal in respect of this cause of action. The second reason is equally supportable. On a motion under section 5(1) of the Class Proceedings Act, 1992, a court must take the pleadings as fact except in respect of pleadings that are manifestly incapable of proof. This is the case with the plaintiffs’ pleading regarding this cause of action, insofar as it pleads that a motorist parking his or her car on an Impark parking lot would not expect a violation fee to be included in his or her contract unless it were drawn to the motorist’s attention.

[45] Accordingly, I conclude that there is no reason to doubt the correctness of Perell J.’s determinations that there is no viable unjust enrichment claim based on the Impark parking agreement being a contract of adhesion.

Identifiable Class/Limitation Period

[46] Based on his determinations regarding the plaintiffs’ causes of action, Perell J. revised the class definition set out in the Statement of Claim to be as follows:

The class is comprised of a registered owner of a vehicle:

(a) whose vehicle was parked at an Impark parking lot in Ontario between May 29, 2007 and September 1, 2010 (the date of the certification motion);

(b) who was not the driver or a passenger in the vehicle that was parked on the Impark parking lot;

(c) who received from Impark a written demand for payment of a violation fee that stated: “Our right to claim this amount from owners of vehicles improperly parked on facilities managed by us has been confirmed by a Canadian Federal Court of Appeal decision”; and

(d) who paid the violation fee in whole or in part.

[47] Perell J. imposed the limitation period implicit in the requirement in (a) that a class member’s car shall have been parked between May 29, 2007 and September 1, 2010 based on his understanding of the Limitations Act, 2002, in the circumstances of this action.

[48] The Limitations Act, 2002 precludes the commencement of claims after the second anniversary of the date on which a claim is discovered. Perell J. considered that, in this case, a class member would have discovered all the facts supporting his or her claim for relief as of the date that he or she received the demand for payment that asserted that Impark’s right to claim the violation fee from owners of vehicles improperly parked on facilities managed by it had been confirmed by a Canadian Federal Court of Appeal decision. Given that receipt of such notice would necessarily have occurred prior to payment of the violation fee, all claims by Ontario residents who made such payment prior to or on May 29, 2007 would necessarily be statute-barred.

[49] The plaintiffs argue that there are conflicting decisions as to whether the limitation period is best considered following certification on a complete factual record. They rely on the decisions in Serhan Estate v. Johnson & Johnson, 2006 20322 (ON SCDC), [2006] O.J. No. 2421 (Div. Ct.) and 578115 Ontario Inc. v. Sears Canada Inc., 2010 ONSC 4571, [2010] O.J. No. 3921 (Sup. Ct. J.).

[50] This issue arises in the context of the requirement of section 5(1)(b) of the Class Proceedings Act, 1992 that there be an identifiable class for which purpose it is necessary that the definition of the class, including the operation of any limitation period imposed with respect thereto, be rationally connected to the cause of action and the common issues.

[51] The appropriate approach to any applicable limitation period will therefore be dependent upon the underlying facts and the nature of the causes of action asserted in any particular action. The circumstances in Serhan and Sears were materially different from the present case. In Serhan, the Court decided that determination of the limitation issue should be deferred until the nature of the cause of action for waiver in tort could be examined on the factual record. In Sears, causes of action were asserted, among other things, by way of breach of a statutory obligation of good faith as well as breach of contract; further, the motions judge considered that it was not at all clear that a limitation period issue would apply to every franchisee.

[52] Accordingly, I am not satisfied that there is a conflicting decision on the issue of the operation of limitation periods in respect of common issues that would warrant an order for leave to appeal. There are only decisions reaching different results on the basis of different facts.

[53] It is, however, also necessary to consider the operation of the second branch of the test for leave to appeal. In the present circumstances, the basis of the unjust enrichment claim is a representation of the legal authority of Impark to collect violation fees which may or may not prove to be an unlawful demand. The premise of the Decision is that class members “would or ought” to have discovered the facts of their unjust enrichment claim at the moment they received the demand for payment of the violation fee. In other words, Perell J. concluded that receipt of the notice is receipt of all necessary facts pertaining to the claims such that a recipient knew or ought to have known upon receipt that “a proceeding would be an appropriate means to seek a remedy”, using the language of section 5(1)(iv) of the Limitations Act, 2002.

[54] Apart from the Serhan and Sears cases, the plaintiffs provided no authority to contradict the proposition that, in respect of a representation as to legal rights or authority, the date of receipt of a notice of rights asserted by a party is the date by or upon which a recipient should be considered to have knowledge of his or her right to assert a claim against such party.

[55] I agree with Impark that the present circumstances are similar to those in Magill v. Expedia Canada Corp., 2010 ONSC 5247, [2010] O.J. No. 4051 (Sup. Ct. J.), in which Perell J. set out certain principles pertaining to the operation of the Limitations Act, 2002 that are also applicable in the present circumstances. In that decision, Perell J. concluded that the plaintiffs had all the material facts constituting the alleged causes of action at the time of making a hotel reservation, other than the legal advice of counsel that such facts could ground a claim. He applied the principle that error or ignorance of the law or of the legal consequences of the facts does not postpone the running of a limitation period. On that basis, Perell J. concluded in Magill that the class member’s claims were discoverable, and also presumed to have been discovered, as of the date the class member made the hotel reservation.

[56] Perell J. applied the same principle in the present case. This was based on the fact that a registered owner of a vehicle would necessarily have received a demand letter setting out the relevant representation prior to making payment of the violation fee. I see no basis for doubting the correctness of the conclusion of Perell J. on the limitation period issue.

[57] I note that the plaintiffs did not raise any issue regarding whether the five week period between parking a vehicle on an Impark parking lot and the mailing of a demand letter to the registered owner should be factored into the limitation period imposed by Perell J. in some manner and, accordingly, I have not addressed this issue.

Punitive Damages

[58] Perell J. concluded that this was not an appropriate case for making the entitlement to punitive damages, or the quantification of, punitive damages common issues. He expressed his reasons for this conclusion to be the reasons expressed in Robinson v. Medtronic Inc., 2009 56746 (ON SC), [2009] O.J. No. 4366 (Sup. Ct. J.), aff’d 2010 ONSC 1987, [2010] O.J. No. 1479 (Div. Ct.). In that decision, Perell J. concluded that the entitlement to and quantification of punitive damages were not appropriately common issues because they required a quantification of compensatory damages and an appreciation of the harm caused by the defendant’s misconduct, if proven. On this basis, he concluded in Medtronic that the pre-condition to determining liability for punitive damages will not be satisfied until after individual assessments of causation and damages.

[59] The plaintiffs argue that, at a minimum, the entitlement to punitive damages should be a common issue. They correctly note that there are two lines of cases ─ those in which the entitlement to and quantification of punitive damages were determined to be common issues and those, including Medtronic, in which these issues were remitted for individual trials after the common issues of liability and compensatory damages had been completed. The plaintiffs argue that, in the present case, the Court has the means to determine compensatory damages so that individual trials are unnecessary. They say the circumstances are analogous to those in Chace v. Crane Canada Inc., 1997 4058 (BC CA), [1997] B.C.J. No. 2862 (B.C.C.A.) at para. 28 in which the British Columbia Court of Appeal confirmed certification of punitive damages as a common issue. In that case, the court considered that the defendant’s conduct and knowledge over 11 years was the “foundation” of the claim for both compensatory and punitive damages and that, after the common issues trial, the trial judge would have sufficient information to enable a determination on compensatory damages. The plaintiffs also say that, in the present circumstances, the conduct of the defendant will be the same in each case and, accordingly, the issue of quantum can be answered after the determination of the common issues trial.

[60] The issue of compensatory damages in this case presents a novel problem. Section 100(2) and (3) of the CPA set out the remedies that may be ordered in the event that the plaintiffs are successful in this proceeding:

(2) If a consumer is successful in an action, unless in the circumstances it would be inequitable to do so, the court shall order that the consumer recover,

(a) the full payment to which he or she is entitled under this Act; and

(b) all goods delivered under a trade-in arrangement or an amount equal to the trade-in allowance.

(3) In addition to an order under subsection (2), the court may order exemplary or punitive damages or such other relief as the court considers proper.

[61] In the present circumstances, a motorist who parked a car on the Impark parking lot has received the benefit of parking for a period of time additional to the period of time for which a ticket was purchased. Accordingly, even if the plaintiffs are successful in respect of their causes of action under the CPA, they will not be entitled to a simple reimbursement of the violation fees paid under clause 100(2)(a). Instead, it will be necessary to determine in individual trials what the appropriate amount of the repayment is for each plaintiff based upon the evidence regarding the period of time during which the motorist had parked in violation of his or her contract, any prior violation fees, and any reduction in the violation fee accepted by Impark.

[62] Given the foregoing, I agree with Perell J. that both entitlement to punitive damages and quantification of any punitive damages are matters that cannot properly be addressed until the issue of liability for compensatory damages is determined in individual trials.

[63] In any event, I am not persuaded that this issue involves a matter of such importance that leave to appeal should be granted on this issue. The significance of this issue is limited to the plaintiffs in this action. Moreover, there is no information as to the number of members in the class as certified by Perell J., except the obvious observation that, being restricted to owners of vehicles who did not park their vehicle on an Impark parking lot, it must be a significantly smaller number than the 70,000 notices per year in respect of which violation fees were paid in whole or in part.

Representative Plaintiff

[64] The class definition proposed by the plaintiffs in the Statement of Claim was: “all persons who parked a vehicle or whose vehicle was parked at a parking lot in Ontario owned and/or operated by Impark and who were charged and paid violation fees to Impark”. As certified, the class was narrowed to the revised definition set out above.

[65] The plaintiff Miceli did not qualify as a member of the class as proposed by the plaintiffs from the outset because she did not pay the violation fee after receiving a demand letter as a registered owner. As a result, she also does not qualify as a member of the class according to the revised definition.

[66] Perell J. concluded that Miceli did not qualify as a representative plaintiff because she is not a class member. He concluded that she had no cause of action upon which to base her claims for ancillary relief, including injunctive relief and declaratory relief.

[67] The plaintiffs say that the fact that Miceli failed to qualify as a member of the proposed class was a mistake. They point out, however, that they pleaded the relevant facts pertaining to Miceli’s circumstances, including the fact that she refused to pay the violation fee as set out in the demand letter she received from Impark. The implication is that the defendant was put on notice that the plaintiffs considered Miceli to qualify as a representative plaintiff notwithstanding the difference in her personal circumstances or proposed to expand the class definition to include persons such as Miceli who received notice of a violation fee but refused to pay the fee.

[68] With respect to the latter alternative, the plaintiffs say they argued before Perell J. that the class definition should be enlarged to include within it all registered owners who received a demand notice from Impark and refused to pay the violation fee. They say that they made this “submission” to Perell J. and that the absence of any mention of it in the Decision is an error of law.

[69] It is unclear from the record on what basis the plaintiffs’ submission on this issue proceeded before Perell J. It is clear, however, that they did not bring a formal motion seeking to amend the class definition in the Statement of Claim, which had been issued almost 16 months earlier. There is also no suggestion that Impark had been advised of this proposed amendment prior to the hearing before Perell J. or that a full hearing of the issue was conducted by Perell J. The plaintiffs’ factum for the motion before Perell J. addresses the class definition in the Statement of Claim without reference to a proposed amendment to the class definition.

[70] In these circumstances, I see no error of law in the absence of any reasons on this issue in the decision of Perell J.

[71] Given this determination, I have addressed the issue of Miceli as a representative plaintiff notwithstanding the difference in her personal circumstances in the context of the revised class definition accepted by Perell J.

[72] The plaintiffs rely on the statement of Karakatsanis J. (as she then was) at para. 58 of Canada (Attorney-General) v. Giacomelli, [2010] O.J. No. 844 (Div. Ct.) to the effect that the fact that no valid cause of action is asserted is not determinative of whether declaratory relief may be granted. They submit that, on the facts as pleaded pertaining to Miceli, she has an entitlement to (1) declaratory relief that the Impark parking agreements contravene the CPA as an unfair practice and that she is not bound to pay the amount demanded in the notice; (2) injunctive relief preventing Impark from taking any further action against her in contravention of the CPA; and (3) punitive damages, even though she has no claim to compensatory damages.

[73] Clauses 5(1)(a) and (b) of the Class Proceedings Act, 1992 provide that certification of a class proceeding requires demonstration that the pleadings disclose a cause of action and an identifiable class that would be represented by the representative plaintiff. A representative plaintiff must have a claim that is a “genuine representation of the claims of the members of the class to be represented” as contemplated by Attis v. Canada (Minister of Health), [2003] O.J. No. 344 (Sup. Ct. J.) at para. 40, aff’d [2003] O.J. No. 4708 (C.A.) and Drady v. Canada (Minister of Health), 2007 27970 (ON SC), [2007] O.J. No. 2812 (Sup Ct. J.) at paras. 36-45.

[74] As mentioned, Perell J. concluded that Miceli did not qualify as a representative plaintiff because she is not a class member and had no cause of action upon which to base her claims for ancillary relief, including injunctive relief and declaratory relief.

[75] While there is no doubt that Miceli is not a member of the class as defined by Perell J., the issue turns on whether Miceli has a claim that is a “genuine representation of the claims of the class members”. Perell J. concluded that Miceli did not have a cause of action and therefore did not satisfy this requirement. I agree with this conclusion for two inter-related reasons. First, as is clear from paragraphs 58 and 59 of Giacomelli, Miceli does not assert a cause of action per se, but rather a right to declaratory relief. A significant difference between a cause of action and declaratory or other equitable relief is the discretionary nature of the remedy, which is necessarily dependent upon the particular circumstances of the plaintiff. Second, the facts upon which Miceli seeks a declaration are different from those upon which the class members rely – in particular, the additional facts necessary to entitle Miceli to the exercise of the Court’s discretion in her favour.

[76] Accordingly, I am of the opinion that the plaintiffs have failed to establish that there is good reason to doubt the correctness of the conclusion of Perell J. that Miceli did not qualify as a representative plaintiff.

Conclusion

[77] Based on the foregoing, the plaintiffs’ motion for leave to appeal the order dated September 16, 2010 of Perell J. is dismissed in its entirety.

Costs

[78] Costs are awarded in the amount of $15,000 in favour of the defendant.

Wilton-Siegel J.

Date: April 27, 2011