ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: DV-883-11
DATE: 20120426

BETWEEN:

MICHAEL S. O’NEILL Respondent/(Plaintiff) – and – BELL MOBILITY INC. Appellant/(Defendant)

Personally

Lisa M. Filgiano, for the Appellant/(Defendant)

HEARD: April 23, 2012

ELLIES, J.

REASONS FOR DECISION ON APPEAL

INTRODUCTION

[1] This is an appeal by Bell Mobility Inc. (“Bell”) from the decision of Deputy Judge B. Pritchard, in which he found Bell twenty-five percent responsible for damages suffered by Mr. O’Neill resulting from the failure of a Blackberry device (a “Blackberry”) to function while he was in New Zealand for a period of five and one-half weeks. Bell argues that the deputy judge made a number of errors, as follows:

1. He erred in interpreting a limitation of liability clause (“clause 25”) of Bell Mobility’s Wireless Terms of Service by finding that the exception of gross negligence was applicable to the respondent’s claim for business loss;

2. He erred in concluding that Bell was grossly negligent; and

3. He erred in failing to consider the plaintiff’s duty to mitigate and his failure to do so.

[2] The respondent agrees that the deputy judge misinterpreted clause 25. However, Mr. O’Neill argues that, based on the analytical process set out by the Supreme Court of Canada in Tercon Contractor’s Ltd. v. British Columbia (Transportation and Highways) ( 2010 SCC 4 , [2010] 1 S.C.R. 69):

1. Clause 25 does not apply to the facts in this case;

2. In the alternative:

(a) clause 25 is ambiguous and should be interpreted against Bell;

(b) the clause is unconscionable and ought not to be enforced; and

(c) the clause is contrary to public policy and, for that reason, ought not to be enforced.

FACTUAL BACKGROUND

[3] The factual background of this matter is relatively straightforward. Mr. O’Neill is a lawyer who practices in Sault Ste. Marie. He intended to travel to New Zealand from June 29, 2009 to August 6, 2009. Because he was concerned that being away from his law practice during that period of time would affect his ability to fulfill his obligations to his clients and to ensure that his office operated smoothly, he attended at a Bell Mobility store in Sault Ste. Marie to acquire a Blackberry which would allow him to send and receive emails while he was away.

[4] Mr. O’Neill was attended upon by Christopher Weir, a Bell Mobility sales representative. He advised Mr. O’Neill that he required a Blackberry “World Edition” phone, which he assured Mr. O’Neill would work both in Canada and New Zealand and would allow him to send and receive emails while he was away.

[5] Based upon Mr. Weir’s advice, Mr. O’Neill purchased the Blackberry. In order to do so, he was required to enter into a new contract with Bell. Unlike the contract that he had prior to the purchase, this contract contained an exclusion clause. Because that clause is at the heart of this appeal, I will set out the relevant portions of the clause in full:

25. Limits on our liability.

Except for non-compliance with applicable warranties or conditions (in which case our entire responsibility is set out in section 10 (“warranty”), physical injuries or death, damage to property caused by our gross negligence, or our breach of section 4 (“protection of your privacy”), we are not liable to you or anyone using your device or the services or any third parties including for the following:

(I) Defects, failures or interruptions in service, including transmission;

(II) Any damages, loss of profits, loss of property, loss of earnings, loss of business opportunities, misappropriation of personal information stored on device or SIM card or any other loss, however caused, including from use of the services or your device;

(IV) Any violation by you of the agreement, your negligence, or acts or omissions in connection with the services, or your device;

[6] Clause 25 makes reference to another clause in the terms of service (clause 10), the relevant portions which are set out in appendix “A” to these reasons.

[7] Mr. O’Neill acknowledged at trial that he read these provisions at the time that he entered into the agreement, that he understood them and that he accepted them. He also indicated at trial that he received and understood the Mobility Service Agreement which incorporated the Terms of Service by reference.

[8] Before Mr. O’Neill left the Bell Mobility store with his Blackberry, Mr. Weir activated the device’s SIM card. However, he did not put it into the Blackberry. Instead, he put it into the box in which the Blackberry came. His reason for doing so was to prevent Mr. O’Neill from incurring roaming charges while still in North America.

[9] Mr. O’Neill left Canada with the Blackberry, but without the SIM card. As a result, the Blackberry was unable to send and receive emails while in New Zealand. After he discovered the problem, Mr. O’Neill contacted Bell by telephone. However, Bell’s international service provider failed or refused to advise Mr. O’Neill to purchase an alternative telephone or alternative email service while in New Zealand because of a policy by virtue of which it did not refer customers to third party service providers.

[10] As a result of the difficulties he had while in New Zealand, Mr. O’Neill brought an action in the Small Claims Court for loss of profits.

Decision Appealed From

[11] Deputy Judge Pritchard found that Mr. Weir was grossly negligent and that Bell was responsible for Mr. Weir’s negligence. In the course of doing so he wrote:

I understand why Mr. Weir did what he did in not installing the SIM card; however, his duty was not to save the plaintiff roaming charges so much as it was to provide him with a Blackberry device that would receive emails in New Zealand. This he failed to do. His conduct was not wanton but, relying on the definitions of “gross negligence” set out above, I conclude that the negligence was of a high degree especially when contemplating the fact that when the plaintiff was trying to find a solution to his problems in New Zealand, the defendant’s understood policy (if not stated policy) was to provide no solutions that would involve the customer not relying on products or services he would purchase or receive from Bell Mobility. Mr. Weir’s evidence, where it conflicts with that of the plaintiff has weakness to it because he has no recall of the specific details of his conversations or dealings with Mr. O’Neill. Accepting this, I must find that the defendant did not install the SIM card and failed to advise the plaintiff that the card had to be installed. In the circumstances, this is negligence to such a degree as to constitute “gross negligence”.

[12] Despite clause 25, the deputy judge found Bell responsible for Mr. O’Neill’s loss of profits which it was agreed were in the amount of $15,000. However, he also found Mr. O’Neill contributorily negligent. Essentially, the contributory negligence consisted of Mr. O’Neill’s failure to either install the SIM card himself or have the information technologists employed by his law firm do the same. As a result, Deputy Judge Pritchard reduced the plaintiff’s damages by 75%.

ISSUES

[13] As argued by the parties, this appeal gives rise to the following issues:

1. Did the trial judge err in disregarding the evidence of Mr. Weir with respect to whether he told Mr. O’Neill about the SIM card?

2. Did the trial judge err in finding gross negligence on the part of Mr. Weir?

3. Did the trial judge err in finding liability for gross negligence?

4. Does clause 25 apply to exclude liability altogether in this case?

5. Is clause 25 ambiguous such that it should be construed against Bell?

6. Is clause 25 unconscionable?

7. Is clause 25 against public policy?

8. Did the trial judge fail to consider the plaintiff’s failure to mitigate?

Issue 1: Disregarding the evidence of Mr. Weir

[14] In the course of his reasons, the trial judge wrote (at p. 26):

The defendant urges that the evidence provided by Mr. Weir is also reliable. I would agree with this to a certain extent but the fact that Mr. Weir has no specific recall of the events surrounding the purchase and activation of the Blackberry, other than the standard procedure that he would have used in any other case, affects the reliability of his evidence and hence its ultimate credibility. Mr. Weir gave his evidence in a forthright manner and I accept what he did for the reasons stated... I also accept Mr. Weir’s evidence as to activation of the SIM card...

[15] Bell argues that the trial judge committed an error by preferring Mr. O’Neill’s evidence to that of Mr. Weir’s, on the basis that Mr. Weir had no specific recollection of the details of his conversations or dealings with Mr. O’Neill.

[16] At trial, Mr. Weir admitted that he had no specific recollection of his conversation or dealings with Mr. O’Neill. However, he testified that it is invariably his practice to recommend to customers that they not put the SIM card in their Blackberry prior to travelling overseas, in order to avoid the roaming charges. Instead, it was his practice to put the SIM card in the box with a booklet and to invite the customer to contact Bell’s customer service people just prior to leaving in order to obtain their assistance with respect to inserting the SIM card in the device.

[17] Early in her submissions, counsel for the appellant argued that the trial judge’s failure to appreciate relevant evidence or complete disregard of relevant evidence constituted a question of law, the standard of review for which is correctness (: see Housen v. Nikolaisen, 2002 SCC 33 , [2002] 2 S.C.R. 235, at para. 8 ). She relied in support of that proposition upon the decision of the Supreme Court of Canada in Harper v. The Queen, ( 1982 11 (SCC) , [1982] 1 S.C.R. 2). However, during argument, she conceded that Harper does not expressly hold that such a failure on part the part of the trial judge constitutes an error of law. Instead, she agreed with a suggestion made by the court that it might constitute palpable and overriding error, which is the standard of review for factual findings ( Housen , at para. 10 ). A “palpable” error is one that can be plainly seen ( Housen , at paras. 5 and 6 ). The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge’s decision if there was some evidence upon which he or she could have relied to reach that conclusion ( Housen , at para. 1 ).

[18] Bell argues that the trial judge was wrong to discount Mr. Weir’s evidence as a result of his inability to recall specifics. Counsel for Bell submits that, were it not for the error made by the trial judge, it was obvious from his reasons that he would have preferred Mr. Weir’s evidence to that of Mr. O’Neill. With respect, I do not accept the submission that the trial judge made a palpable and overriding error in refusing to accept Mr. Weir’s evidence.

[19] There is no doubt that evidence of the type given by Mr. Weir can be reliable. Evidence of this type is essentially circumstantial evidence. The trier of fact is asked to infer from evidence of the witness’s usual practice that the witness did the same thing in the case at bar. However, the trial judge is not bound to make that inference nor to give this type of evidence the same or greater weight than direct evidence. Further, a trial judge is free to accept all, part or none of a witness’s evidence. In this case, it appears to me that the trial judge did exactly that with respect to Mr. Weir. He accepted Mr. Weir’s evidence as to why he did not install the SIM card and with respect to the conflict in the evidence as to whether the Blackberry device had been left with him for five or six days to set up. However, it is also clear that he rejected Mr. Weir’s evidence that he advised Mr. O’Neill that the card had to be installed.

[20] Further, I do not accept the submission that, even if the trial judge had given Mr. Weir’s evidence more weight, he would have preferred that evidence to Mr. O’Neill’s evidence in other areas of conflict. In referring to Mr. O’Neill’s evidence, the trial judge stated (at p. 16):

He gave this evidence is ( sic ) in a straightforward manner. Generally speaking, the evidence was consistent within itself and the evidence was reliable.

[21] I would not give effect to this ground of appeal.

Issue 2 and 3: Gross Negligence

[22] Given the concession made by the respondent that the trial judge erred in his interpretation of clause 25, I do not believe it is necessary for me to resolve these grounds of appeal. The parties agree that if clause 25 applies to the facts of this case, an issue I will address below, it precluded Bell from being liable for loss of profits, regardless of whether its negligence was gross or otherwise.

Issue 4 and 5: The Applicability of Clause 25/Ambiguity

[23] Mr. O’Neill argues that clause 25 applies only with respect to the provision of services by Bell, and not to the provision of goods. He argues that it assumes that the device is fit for service.

[24] With respect, I disagree. In my view, it is clear that the clause applies both to the services provided and to the device sold which utilizes those services. I say this for two reasons.

[25] Firstly, the operative part of clause 25 reads, “...we are not liable to you or anyone using your device or the services or any third parties, including for the following...”. In my view, this is an indication that the clause was intended to apply both to the device and to the services provided by Bell.

[26] Secondly, the subparagraph which excludes liability for loss of earnings includes the words “...including from use of the services or your device”.

[27] Therefore, it appears clear on the face of the provision that it is intended to apply both to services and to hardware. However, that does not end the matter. It remains to be determined whether the clause operates to exclude liability with respect to negligence resulting in the complete failure of the device to function for its intended purpose.

[28] Mr. O’Neill argues that exclusion clauses must be clear to be operative. He argues that the clause in question does not specify that it applies to the situation where, through negligence, the device sold is rendered completely useless for its intended purpose.

[29] I agree. Because clause 25 specifies in two places the particular situations in which Bell will not be liable, the clause should be interpreted as applying only to those situations. In my view, none of those situations covers the circumstances of the case at bar.

[30] Clause 25 includes two broad exclusions from liability. I have referred to the first one, in paragraph 25, above. The main part of the clause purports to exclude liability with certain exceptions, “including the following:”.

[31] The second broad exclusion is found in subparagraph “II”. This subparagraph lists various exclusions and then, like the main paragraph, goes on to say, “including (from the use of the services or your device”). I read this latter clause as meaning, “including from use of the services or use of your device”.

[32] Although I am aware that it is not always appropriate to apply principles of statutory interpretation to contracts, it is my view that the principle of interpretation referred to by the Latin maxim expression unius est exclusio alteris is an appropriate maxim to apply in this case. There is a parallel between legislation and the terms of a contract which are dictated by one party.

[33] The Ontario Court of Appeal has applied this maxim to the interpretation of contracts of guarantee, [1] the terms of which are also usually dictated by the party.

[34] The fact that Bell has chosen to include certain specific situations in which it will not be liable means that it will be liable in other situations. As I am about to point out, none of these situations include the one arising in this case.

[35] Subparagraph “I” refers to “defects, failure or interruption in service”. It makes no reference there or in any other part of clause 25 to failures or to damages resulting from the failure of the device.

[36] Subparagraph II specifies that Bell’s immunity from liability for loss of earnings or loss of business opportunities arises “from use of the services or (use of) your device”. In my view, this subparagraph contemplates damages arising from the use of the services or the device, not from its complete failure due to negligence on the part of Bell or anyone for whom it is responsible in law.

[37] In my opinion, reading the clause as a whole and in the context of the terms of service as a whole, the clause was intended to limit liability resulting from the use of the services or the device sold or provided by Bell, not relating to its failure to function as a device. Had Bell wanted to limit its liability in this situation, it would have been an easy matter to add to subparagraphs I and/or II the words “or the failure of your device”.

[38] I have also had regard to clause 10 as part of my review of the terms of service as a whole. Clause 25 appears designed to deal with liability of Bell for negligence. Clause 10 is directed at Bell’s liability for breach of contract. This appeal relates to a finding of negligence and was not argued on the basis of a breach of contract. However, on the assumption that the clause might apply to exclude liability for negligence, even clause 10 does not operate to exclude liability for negligence in the case at bar. The clause provides:

We do not warrant or guarantee that the device, equipment or services will operate error-free or without failure or interruption, or that any communications will be private or secure...

[39] This clause contemplates that the phone will at least operate in respect of its intended use. Otherwise, it would say, “will operate error-free or without failure or interruption, or at all ”.

[40] In any event, at best, the clauses in question are ambiguous. There is no dispute between the parties that, based upon the decision of the Supreme Court of Canada in Tercon ( supra, at para. 79), the clauses must be construed against Bell.

Issue 6 and 7: Unconscionability/Against Public Policy

[41] Given the result of my analysis with respect to the applicability of clause 25, it is not necessary to decide these issues.

Issue 8: Duty to mitigate

[42] Bell argues that the deputy judge erred in failing to consider the respondent’s obligation to mitigate and in failing to reduce his damages, accordingly. It would appear from Bell’s factum that the appellant is referring to Mr. O’Neill’s failure to call the “Bell retention department”, (although he was advised to do so during a conversation he had from New Zealand with Bell after he discovered that his Blackberry would not receive emails), his failure to call the store in Sault Ste. Marie from which he purchased the device, and his failure to purchase another mobile device from a third party service provider in New Zealand.

[43] With respect, it appears to me that the deputy judge did, in fact, turn his mind to the issue of mitigation. At page 19 of his reasons, at paragraph number 8, he refers to the fact that Bell was “nonresponsive to the plaintiff’s needs expressed by him in New Zealand to the extent that the defendant would not advise the plaintiff of any solution to his problems in New Zealand that did not involve products or services the defendant could sell or provide to the plaintiff”. From this comment, I conclude that the trial judge was alive to the efforts that Mr. O’Neill made to mitigate his loss, once discovered. I also assume that the trial judge was of the view that it does not lie in the mouth of the appellant to say that the plaintiff should have turned to a third party for assistance even though Bell refused to refer him to one. At a minimum, it is clear that the trial judge was aware of the evidence that Mr. O’Neill attempted to mitigate his loss by contacting Bell while he was in New Zealand.

[44] Further, the transcript does contain an indication in the evidence of Mr. O’Neill that he did try another phone store on the suggestion of Bell. [2] In addition, the transcript indicates that, even if Mr. O’Neill had purchased another device it would not have been linked to his work email address, at least without considerable effort on his part and the part of others outside of New Zealand. [3]

[45] In the circumstances, in my view, it was open to the trial judge to conclude that Mr. O’Neill had taken reasonable steps to mitigate his loss. Therefore, I would not give effect to this ground of appeal.

ORDER

[46] In the result, the appeal will be dismissed.

[47] I fix costs of the appeal in the amount of $5,000, inclusive of G.S.T. and disbursements.

Ellies, J.

Released: 20120426

ONTARIO SUPERIOR COURT OF JUSTICE
MICHAEL S. O’NEILL – and – BELL MOBILITY INC.
REASONS FOR DECISION ON Appeal
Ellies, J.

Released: 20120426

10. Warranty.

The performance, quality, or suitability of your Device and any accessories or other equipment provided to you in connection with the Service are subject to the manufacturers’ warranties and the specifications of Bell for the Device and such equipment, and any extended warranty you may have purchased. Your remedy for failure of a Device to meet any applicable warranty is specified in the manufacturer’s warranty or extended warranty. Bell and/or the manufacturer may (but are not obligated to) perform out-of-warranty repair services. Bell may charge you if you use a “loaner” device in connection with any repair services. Charges for out-of-warranty repair services and “loaner” devices will be advised to you in advance. Your Device is also subject to the return policy set out in the service agreement to which these Terms of Service are attached.

WE DO NOT WARRANT OR GUARANTEE THAT THE DEVICE, EQUIPMENT OR SERVICES WILL OPERATE ERROR-FREE OR WITHOUT FAILURE OR INTERRUPTION, OR THAT ANY COMMUNICATIONS WILL BE PRIVATE OR SECURE... (emphasis in original)

Bell disclaims any other representations, warranties and conditions, express, implied or statutory, EXCEPT to the extent that THIS disclaimer is expressly prohibited by any law to which Bell is subject.

Your remedy for failure of a Service to meet any applicable warranty is a refund of charges related to any such failure of that Service lasting at least 24 hours to a maximum of $20, upon written request approved by us acting reasonably.

[1] Royal Bank v. Bruce Industrial Sales Ltd., (1998) 1998 3050 (ON CA) , 40 O.R. (3 rd ) 307; 473807 Ontario Ltd. v. T.D.L. Group Ltd., (2006) 2006 25404 (ON CA) , 47 R.P.R. (4 th ) 1

[2] Transcript, page 83, line 2.

[3] Transcript, page 127, line 24 et seq.