COURT FILE AND PARTIES

COURT FILE NO.: CV-08-00360838-CP00
CV-08-00360837-CP00

DATE: 20141125

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Avraham Wellman, Plaintiff

AND:

TELUS Communications Company, Tele-Mobile Company, TELUS Communications Inc., Defendants (collectively, “TELUS”)

AND RE: Jason Corless, Plaintiff

AND:

Bell Mobility Inc., Defendant (“Bell”)

BEFORE: Conway J.

COUNSEL: Joel Rochon, Suzanne Chiodo and Eli Karp, for the Plaintiffs

Paul Martin and Andrew Borrell, for TELUS

Tim Buckley, Cheryl Woodin, David Elman and Lisa Alleyne, for Bell

HEARD: October 27-31, 2014

Proceedings under the Class Proceedings Act, 1992

REASONS FOR DECISION

(re: Certification Motions)

Conway J.

[1] Cell phone “minutes”, “per minute billing” and “rounding up” are at the heart of these proposed class actions.

[2] The plaintiffs claim that during the proposed class period, TELUS and Bell engaged in the undisclosed billing practice of “rounding up” calls to the next minute. With rounding up, for example, a call lasting one minute and one second is billed as a two minute call.

[3] Mr. Wellman seeks to certify his action as a class proceeding against TELUS. Mr. Corless seeks to certify his action as a class proceeding against Bell. The parties agreed that given the similar factual and legal issues in both actions, the two certification motions would be heard together.

[4] For the reasons that follow, I certify these actions as class proceedings.

Background

[5] Mobile services were introduced in Canada in 1985. Until the mid-90s, the major telecommunications companies – Rogers, Bell and TELUS – billed for voice services on a per minute basis. In 1996, with the introduction of digital cell phone networks, new service providers entered the market and started billing on a “per second” basis, in which calls are billed by the second.

[6] From the mid-90s until 2002, TELUS and Bell also offered per second billing.[^1] In the summer of 2002, TELUS and Bell returned to per minute billing for all new plans.

[7] Wireless services can be purchased through a variety of channels – at a Bell/TELUS store, an independent third party retailer, online, or as part of a business account or employee plan.

[8] The customer can select from a wide variety of monthly plans (“Plans”). The Plans include a combination of hardware, access to a wireless network, voice services, data services, text messaging, and other features. The Plans can be pre-paid or billed on a monthly basis.

[9] The monthly Plans offered during the proposed class period included a fixed number of minutes for a set fee, with additional charges for minutes used in excess of the fixed number (“per minute Plans”).

[10] For example, a customer could purchase a Bell Über Plan that included 100 local minutes for a set fee of $25, with a charge of 35ȼ for each additional local minute. TELUS offered the Talk & Spark 30 Plan that included 50 plus 50 bonus local minutes for $30, with a charge of 30ȼ for each additional local minute.

[11] The billing method for per minute Plans is known as “per minute billing”. This method of billing involves “rounding up” to the next minute, as described above.

[12] Once the customer selected a particular monthly Plan, he entered into a written agreement for the wireless services that incorporated the terms of the Plan and certain standard terms and conditions of service.[^2] The plaintiffs’ evidence is that during the class period, the written documents made no reference to the rounding up practice.

[13] In November 2009, Bell amended its terms and conditions to state “airtime and long distance usage are rounded up to the nearest minute”. In July 2010, TELUS amended its terms and conditions to state “The airtime for each voice call is rounded up to the nearest minute, unless your rate plan or feature states otherwise”. The end dates of the proposed class periods coincide with those notice dates.

[14] Mr. Corless has been a Bell subscriber since 2001. Mr. Wellman has been a TELUS subscriber since 2006. Each of the plaintiffs was on a per minute Plan during the class period and each renewed and changed his Plan several times during that period.

[15] Each of the plaintiffs states that Bell/TELUS never disclosed the rounding up practice to him in its written documents or promotional materials. Each started his action in 2008 shortly after he became aware of this practice.

The Allegations

[16] The plaintiffs allege that TELUS and Bell, in billing on a per minute basis, rounded up calls to the next minute without disclosing this practice to customers. The plaintiffs allege that the rounding up had a dual effect: (i) it accelerated the depletion of the fixed number of minutes they had purchased; and (ii) it subjected them prematurely to charges for minutes used in excess of the fixed number.

[17] The plaintiffs assert four causes of action – breach of contract, breach of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Schedule A (the “CPA”), breach of the Competition Act, R.S.C. 1985, c. C-34, and unjust enrichment. They are no longer seeking to certify the Competition Act claim. Each of the plaintiffs seeks, on behalf of the proposed class, $500 million in damages and $20 million in punitive damages.

Certification Test

[18] Section 5(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the “Act”) states that the court shall certify an action as a class proceeding if:

(a) the pleadings or the notice of application discloses a cause of action;

(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant;

(c) the claims or defences of the class members raise common issues;

(d) a class proceeding would be the preferable procedure for the resolution of the common issues; and

(e) there is a representative plaintiff or defendant who,

(i) would fairly and adequately represent the interests of the class,

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members.

[19] The certification motion is procedural and not merits-based. The question is not whether the plaintiff’s claims are likely to succeed on the merits but whether the claims can appropriately be prosecuted as a class proceeding: Hollick v. Toronto (City), 2001 SCC 68 at para. 16; Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 at para. 102.

[20] The test for certification is to be applied in a purposive and generous manner, to give effect to the important goals of class actions: Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46 at paras. 26-29; Hollick at paras. 15-16.

[21] The evidentiary threshold on a certification motion is low. The plaintiff must only show “some basis in fact for each of the certification requirements”, other than the requirement in s. 5(1)(a) that the claim discloses a cause of action: Hollick at para. 25. The basis in fact requirement does not apply to proof of the claim itself but rather to whether the individual certification requirements have been met: Pro-Sys at para. 100.

(continues exactly as in the decision…)

[97] The plaintiffs’ actions are certified as class proceedings in accordance with these reasons.

[98] If the parties require assistance in settling the form of the certification orders, I may be spoken to.

[99] If the parties are unable to agree on costs, they may make submissions to me, with the plaintiffs’ submissions to be delivered within 30 days and the defendants within 20 days thereafter. Cost submissions shall not exceed three pages, double spaced, exclusive of bill of costs. The defendants are to coordinate their submissions to the greatest extent possible.

Conway J.

Date: November 25, 2014

(CORRECTION NOTICE and Appendices reproduced verbatim)