Court File and Parties

COURT FILE NOS.: CV-18-607805-00CL & CV-18-608664-00CL DATE: 20191112 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: BELL CANADA Applicant – and – CLOUDWIFI INC. and GARY KENNING Respondents

AND BETWEEN: CLOUDWIFI INC. and GARY KENNING Applicants – and – BELL CANADA Respondent

COUNSEL: Junior Sirivar and Leah Ostler, for the Applicant/Respondent, Bell Canada Rohit Kumar and Caleb Edwards, for the Respondents/Applicants Cloudwifi Inc. and Gary Kenning

HEARD: February 19 and July 26, 2019

L. A. PATTILLO J.:

Introduction

[1] This is an application by Bell Canada (“Bell”) for various declarations, an injunction and a mandatory order against the Respondents Cloudwifi Inc. (“Cloudwifi”) and Gary Kenning (“Kenning”) concerning Cloudwifi’s actions in allegedly wrongfully accessing and using Bell equipment without Bell’s knowledge or consent and in breach of a settlement agreement previously entered into by the parties (the “Application”).

[2] In response, Cloudwifi has brought a motion for an order dismissing the Application or, in the alternative, staying it until after the Canadian Radio-Television and Telecommunications Commission (“CRTC” or the “Commission”) renders a decision on Cloudwifi’s pending Application to the CRTC concerning the events in issue (the “Motion”).

[3] Cloudwifi also commenced an application against Bell seeking several declarations in relation to Bell’s conduct in respect of the events Bell complains about (the “Cross-Application”).

[4] For the reasons that follow, I dismiss each of the Application, the Motion and the Cross-Application.

The Parties

[5] Bell is a nationally known and widely-held Canadian Telecommunications provider providing telephone and internet and television broadcasting services to customers. Bell is registered with the CRTC as a telecommunications service provider (“TSP”) under the Telecommunications Act, S. C. 1993, c. 38 and is licensed by it as a Broadcast Distribution Undertaking (“BDU”) under the Broadcasting Act, S.C. 1991, c. 11 and the Broadcasting Distribution Regulations, SOR/97-555 (“BD Regs”).

[6] Cloudwifi is an internet service provider (“ISP”) for high-density residential and commercial properties. It began operating in about 2014. At the time of the events which precipitated these proceedings, Cloudwifi was registered with the CRTC as a TSP under the Telecommunications Act.

[7] Kenning is the Vice-President of Business Development for Cloudwifi and a co-founder of the company.

Background

1. The 2016 Action

[8] By Statement of Claim dated March 14, 2016, Bell commenced an action in the Superior Court of Ontario against Cloudwifi and Kenning (the “2016 Action”) claiming, among other things, damages for breach of Bell’s Telecommunication Service Agreement. Bell also sought both interim and permanent injunctive relief from using Bell’s telecommunication services in a manner not in accordance with Bell’s Terms of Service.

[9] The 2016 Action alleged that Kenning, on behalf of Cloudwifi, subscribed to residential internet service from Bell for two multi-residential properties and then unlawfully re-marketed and re-sold or otherwise transferred and shared the Bell internet service to multiple individual tenants at those properties.

[10] The parties subsequently agreed to settle the 2016 Action before a Statement of Defence was filed in accordance with Minutes of Settlement which were executed by Cloudwifi and Kenning on February 17, 2017. The Minutes of Settlement provided, among other things, that Cloudwifi and Kenning would provide an Affidavit and Undertaking (attached as Schedule “A”) which was affirmed by Kenning both on his own behalf and on behalf of Cloudwifi on February 17, 2017.

[11] In the Affidavit and Undertaking, Cloudwifi and Kenning undertook that they, “including their officers, directors, partners, agents, employees, affiliates, successors, transferees and assignees, will refrain from using Bell’s services unlawfully or in a manner contrary to Bell’s Terms of Service, provided appropriate advance notice of Bell’s governing Terms of Service has been given, in the future at the Properties or at any other location.”

2. The Current Dispute

[12] The dispute between the parties concerns the right of Cloudwifi to use Bell’s telecommunications equipment which it has installed inside multi-unit residential buildings (“MDU”) without Bell’s consent. The buildings in question are located at 10 Northtown Way, North York, Ontario (the “10 Northtown”) and 270 Spadina Road East, Kitchener, Ontario (“270 Spadina”).

a) 10 Northtown

[13] In April 2018, Bell learned that Cloudwifi was using Bell’s equipment at 10 Northtown without its consent or knowledge.

[14] At 10 Northtown, Bell runs a fibre optic cable from its external communications network, underground into a fibre management frame (“FMF”) located in the building’s main telephone room (“MTR”) in the basement. The FMF contains equipment that splits Bell’s signal from the underground cable into individual fibre strands which run up the spine of the building to service the individual units.

[15] The fibre optic wire which runs from the MTR to the individual suites is an “inside wire” which is defined in s. 1 of the BD Regs, in part, as:

Inside wire means the wire that is used by a distribution undertaking for the distribution of programing services that is located inside a building or, in the case of an externally wired multi-unit building, outside the building, and that extends from the demarcation point to one or more terminal devices inside a subscriber’s residence or other premises.

[16] Cloudwifi installed a satellite dish on the roof of 10 Northtown which receives its broadband signal. In order to provide Internet service to its customers, Cloudwifi connected its dish to Bell’s equipment in the MTR, specifically its fiber optic network within the building, without Bell’s permission or consent.

[17] On July 20, 2018, Bell put Cloudwifi on notice that it did not have Bell’s consent to use Bell’s equipment and that it intended to disconnect Cloudwifi from its equipment on July 30, 2018 if Cloudwifi did not voluntarily disconnect it before that date.

[18] On July 30, 2018, in the absence of Cloudwifi disconnecting its equipment, Bell proceeded to disconnect Cloudwifi from its equipment. In response, on August 1, 2018, Cloudwifi re-connected to Bell’s equipment, again without Bell’s consent. Bell immediately proceeded to disconnect Cloudwifi for a second time and installed a padlock on the metal cabinet in the building’s MTR containing its equipment.

[19] On August 3, 2018, Bell discovered that the metal cabinet had been tampered with, its lock had been forcibly opened causing damage and Cloudwifi’s equipment was again connected to Bell’s. Cloudwifi admits the above actions but denies that it caused any damage to the metal cabinet or the padlock.

[20] On August 5, 2018, Cloudwifi made a formal request to Bell for access and use of Bell’s inside wire at 10 Northtown on behalf of its subscribers. Bell refused Cloudwifi’s request.

[21] On August 21 and 23, 2018, ATOP Broadbent Corporation, a registered BDU under the Broadcasting Act, made a request of Bell, on behalf of Cloudwifi, for access and use of its inside wire and equipment at 10 Northtown and 270 Spadina respectively. Bell refused ATOP’s request.

b) 270 Spadina

[22] On August 16, 2018, Bell discovered that Cloudwifi was also using its equipment without its consent at a MDU condominium located at 270 Spadina.

[23] During renovations to 270 Spadina, Bell began installing new in-building network facilities. Cloudwifi was also installing in-building network facilities at 270 Spadina.

[24] The in-building network facilities which Bell installed included P-3000 boxes which are telecommunications standard, self-contained wall mounted boxes. Bell installs them in individual units prior to occupancy. They are designed to hold equipment necessary for Bell to provide telecommunication services to individual units. The P-3000 boxes are the demarcation point for the fibre optic wiring, which a telecommunication service provider runs into individual units from the MTR in the building.

[25] Bell discovered that Cloudwifi was terminating its wire and data jacks inside its P-3000 boxes at 270 Spadina without its agreement or consent.

3. Cloudwifi’s subsequent actions

[26] As noted, at the time that the issues arose between Cloudwifi and Bell in late July, early August 2018 at 10 Northtown, Cloudwifi was an ISP and was registered by the CRTC under the Telecommunications Act as a TSP. A TSP provides basic telecommunication services to the public for a fee.

[27] The CRTC grants different types of status for ISPs, depending on fulfilling the specific requirements. Bell has the status of a Local Exchange Carrier (“LEC”) which is a telecommunications carrier that provides customers with local voice access (i.e., telephone) services. There are several different types of LECs. In most markets in Ontario, Bell is an “Incumbent LEC” (“ILEC”) (because it historically enjoyed a monopoly over the provision of voice services prior to deregulation).

[28] On August 8, 2018, Cloudwifi registered with the CRTC as a proposed Competitive LEC (“CLEC”). A proposed CLEC is an entity which has registered with the CRTC, stating its intention to become a LEC and provide voice services. Cloudwifi was advised by the Commission on August 15, 2018 that it had completed the requirements to become a proposed CLEC.

[29] In addition, on August 13, 2018, Cloudwifi applied to the CRTC to register as an exempt BDU (exempt from the CRTC’s licensing requirements) under the Broadcasting Act and BD Regs. On October 17, 2018, Cloudwifi was registered by the Commission to operate as an exempt BDU in Kitchener-Waterloo, Toronto and London, Ontario.

4. The Application

[30] On August 15, 2018, Bell commenced the Application, which has been subsequently amended twice. In addition to the declaration that Cloudwifi has no legal right to use its in-building wiring and P-3000 boxes, Bell also seeks declarations that the acts of Cloudwifi and Kenning at 10 Northtown and 270 Spadina are unlawful and that they have breached the February 17, 2017 Minutes of Settlement. Bell also seeks an injunction preventing the Respondents from connecting to Bell’s network facilities without Bell’s knowledge and consent; and for an order requiring Cloudwifi to disclose all multi-tenant buildings which Cloudwifi and its affiliates currently service.

5. Cloudwifi’s Cross-Application

[31] Cloudwifi commenced its Cross-Application on November 9, 2018. In it, Cloudwifi seeks several declarations, including that Bell has engaged in unlawful interference with Cloudwifi’s economic relations with its customers; breached the Settlement Agreement between the parties; unlawfully disconnected Cloudwifi’s customers; engaged in false, misleading, deceptive and/or unauthorized sales to Cloudwifi’s customers or potential customers; and is liable to pay Cloudwifi damages. Cloudwifi further seeks injunctions enjoining Bell from its alleged unlawful interference and from further disconnecting Cloudwifi’s customers.

6. The Motion

[32] Cloudwifi has also brought the Motion seeking to stay or dismiss the Application on the ground that the issues in the Application are within the sole jurisdiction of the CRTC and the court had no jurisdiction to hear it.

7. Cloudwifi’s CRTC Application

[33] On August 27, 2018, Cloudwifi made an application to the CRTC titled “Application by Cloudwifi to Prevent Bell Canada Interference with Customer Use of Bell Canada Inside Wire”, seeking:

a) An interim and final order stating that Bell Canada cannot interfere with a customer’s use of the inside wire at 10 Northtown and 270 Spadina; and

b) An interim and final order allowing facility-based ISPs access to the inside wire owned by carriers and BDUs.

[34] In support of its Application, Cloudwifi relied on s. 10 of the BD Regs to justify its right to use Bell’s inside wire and, in the alternative, on the notice by ATOP to Bell on August 21, 2018 on its behalf. It also relied on what it submits are the Telecommunications Act rules for access to Bell’s inside wire as set out in the CRTC decision Re: Eastlink/Norigen Part VII Applications – Access to In-building Wire, 5 June 2000.

[35] In addition, and in the event, it was unsuccessful with its main relief, Cloudwifi requested that the CRTC extend access to inside wires to facility-based ISP’s.

[36] On October 15, 2018, in response to Cloudwifi’s Application, Bell submitted a 44-page Intervention together with numerous attachments. Bell submitted that Cloudwifi had no legal, regulatory or other rights of use or access to Bell’s facilities at issue. In support, it relied on the applicable Commission laws, regulations and policies in place at the time that Cloudwifi accessed Bell-owned facilities without Bell’s consent. Bell also took issue with Cloudwifi’s request for a new Commission rule extending MDU wire connection privileges to ISPs.

[37] On June 21, 2019, while this matter was still under reserve, the CRTC released its decision in Cloudwifi’s Application (Telecom and Broadcasting Decision CRTC 2019-218). The Commission denied Cloudwifi’s request for an order providing that Bell cannot interfere with customers’ use of its inside wire (which it held, based on the record before it and the definition of “inside wire” in the BD Regs included its P-3000 boxes) at both 10 Northtown and 270 Spadina. It stated, however, that once Cloudwifi becomes registered as a CLEC, it may connect with Bell’s inside wire upon request and agreement on a just and reasonable fee.

[38] In reaching this conclusion, the Commission stated at paras. 35 to 37 of the decision:

Section 10 of the Regulations requires a licensed BDU to permit the use of its inside wire only when a request for its use is made by a subscriber, another licensed BDU, or an exempt BDU.

In this instance, Bell Canada operates as a BDU in relevant markets and is subject to section 10 of the Regulations. However, the Commission considers that Cloudwifi’s reliance on section 10 of the Regulations to justify its use of Bell Canada’s inside wire is unfounded. In this regard, Cloudwifi was neither a licensed nor an exempt BDU at the time it used Bell Canada’s inside wire. Further, with regard to Cloudwifi’s reliance upon the term “subscriber” under section 10 of the Regulations, the Commission’s inside wire access policies and regulations enacted under the Broadcasting Act are geared to ensuring end-users are able to use inside wire to access programming services by way of the service provider of their choice.

In light of the above and having regard to the information available on the record of this proceeding, the Commission finds that Cloudwifi has not demonstrated that it can rely of section 10 of the Regulations to justify its or its customers’ use of Bell Canada’s inside wire at either the Northtown or Spadina MDU prior to or at the time its application was submitted. In addition, it is unclear from the record of the proceeding whether Cloudwifi was a reseller of Atop’s BDU services prior to or at the time it submitted its application.

[39] Further, after reviewing the Commission’s policies and regulations regarding access to in-building wire and MDUs for telecommunication services, as set out in several of its decisions, including Telecom Decision CRTC 2003-45, the Commission stated that the rules for access to a LEC’s in-building wire in an MDU do not apply to proposed CLECs. It accordingly concluded that Cloudwifi was not entitled to access Bell’s in-building wire under telecommunications regulations until it becomes a registered CLEC. It stated in paragraph 47 of the decision:

The Commission has not provided non-CLEC ISPs with general access rights to a LEC’s in-building wire. An ISP that wishes to connect to a LEC’s in-building wire in an MDU to provide telecommunications services pursuant to Telecom Decision 2003-45 must first become a registered CLEC. In the present case, Cloudwifi was not a registered CLEC at the time it connected with Bell Canada’s wire at the two MDUs in question.

[40] In respect of the second issue raised by Cloudwifi, allowing facility-based ISPs (“Carrier ISPs”) to access BDU’s inside wire in MDUs, the Commission professed the preliminary view that it considered it would be reasonable for Carrier ISPs to have access to MDUs as well as to LECs’ in-building wire in MDUs, without having to become registered CLECs. However, as Cloudwifi’s Application was only served on Bell, the Commission was not prepared to grant an order giving all Carrier ISPs access to in-building wire owned by telecommunications common carriers in the absence of notice.

[41] As a result, the Commission issued Telecom Notice of Consultation 2019-219z requiring parties to “show cause” why it should not make its preliminary view industry wide policy. At the same time, the Commission directed Bell, as a condition of providing telecommunications services in all MDUs in which it offers service, to provide access to its in-building wire to all Carrier ISPs, including Cloudwifi, at its existing in-building wire tariff provisions. Further, the Commission directed Bell to file proposed amended tariff pages to reflect Carrier ISP access to its in-building wire.

Position of the Parties

a) Bell

[42] Bell submits that as the owner of the equipment at issue, Cloudwifi’s use of it in the absence of Bell’s consent is unlawful. Cloudwifi interfered with Bell’s inherent common law rights as the owner of the property.

[43] In the Application, Bell submits that Cloudwifi had no regulatory right of access to its equipment under the BD Regs and the Telecommunications Act. Neither s. 10(1) of the BD Regs or the “MDU Access Condition” adopted by the CRTC in Telecom Decision CRTC 2003-45, which were relied upon by Cloudwifi, justified its use of Bell’s equipment.

[44] In addition, Bell submits that Cloudwifi’s conduct in using its equipment is even more egregious given that it was a breach of the Minutes of Settlement. Bell submits that Cloudwifi’s conduct is a breach by both Cloudwifi and Kenning of the Undertaking in s. 8 of the Minutes of Settlement in that Cloudwifi has been using and continues to use Bell’s “services” unlawfully.

[45] In response to the Motion, Bell submits that the essence of the Application is a private property dispute, not a regulatory matter. The only reason the Application requires this court to consider telecommunications and broadcasting regulations is because Cloudwifi has advanced an untenable defence based on those regulations.

[46] Bell submits that the court has jurisdiction to deal with the Application as a private property dispute and at the very least has concurrent jurisdiction with the CRTC. Further, it submits the court has sole jurisdiction to deal with the issue of breach of the Minutes of Settlement.

[47] With the release of the CRTC’s decision in Cloudwifi’s Application (CRTC 2019-218), Bell concedes that the Commission’s order directing Bell to provide Carrier ISPs, including Cloudwifi, access to Bell’s equipment in MDUs renders its request for a permanent injunction “unnecessary”. Given it is seeking a review of the CRTC decision, however, it reserves the right to bring back on its injunction request if necessary.

[48] Bell further submits that the Commission’s findings and conclusions about Cloudwifi’s conduct in accessing Bell’s equipment are conclusive of the fact that Cloudwifi’s conduct was unlawful and without colour of right should therefore give rise to the declarations sought by Bell in the Application.

b) Cloudwifi

[49] In response to the Application, Cloudwifi submits that it had legal rights of access to Bell’s property in issue pursuant to telecommunications and broadcasting law, policy, CRTC rules, regulations, decisions and orders. It submits that Bell’s common law property rights have been subordinated by CRTC Regulations.

[50] Cloudwifi further denies that it breached the Minutes of Settlement and submits that they have no application to the current dispute.

[51] In response to its position on the Application, Cloudwifi commenced the Motion based on what it submits is the CRTC’s exclusive jurisdiction over the issues raised by Bell in the Application. It submits that the essential character of the Application falls squarely within the CRTC’s broad jurisdiction over telecommunications and broadcasting services.

[52] Further, Cloudwifi commenced the Cross-Application seeking numerous declarations, including for damages, as well as injunctions against Bell. The Cross-Application mainly concerns Bell’s alleged unlawful interference with Cloudwifi’s customers.

The Motion

[53] As noted, the Motion seeks to stay or dismiss the Application on the basis that the CRTC has exclusive jurisdiction over the issues.

[54] The requested stay of the Application is until the CRTC renders a decision on Cloudwifi’s CRTC Application, brought by it after the events complained about by Bell. As the CRTC issued its decision in Cloudwifi’s Application on June 21, 2019, its request for a stay of the Application is therefore moot.

[55] Further, Bell’s Application is based on two different claims. The first is Bell’s claim that Cloudwifi’s actions in using its equipment without its consent was unlawful. The second is its claim that Cloudwifi’s actions were in breach of the Minutes of Settlement.

[56] In respect of the first claim, Cloudwifi’s defence relies on an interpretation of the telecommunications and broadcasting regulations and policies which are regulated by the CRTC and which therefore raise the question of whether it is this court or the CRTC which has jurisdiction to hear the issues raised by the Application.

[57] As set out by the Supreme Court of Canada in Weber v. Ontario Hydro, [1995] 2 S.C.R. 929, and followed in Allarco Entertainment 2008 Inc. v. Rogers Communications Inc., [2009] O.J. No. 5252, concerning a jurisdictional dispute between the court and the CRTC, the analytical framework for determining whether a tribunal has jurisdiction over the subject matter of the issue before the court requires that the court first determine the substance of the tribunal’s jurisdiction. Next, the essential character of the dispute should be examined to see if it is within the tribunal’s exclusive jurisdiction. Even if it is not, the court should determine whether reason exists for the tribunal to determine the dispute nonetheless.

[58] As noted, both Bell and Cloudwifi are regulated by the CRTC pursuant to the provisions of the Telecommunications Act, the Broadcasting Act and the BD Regs.

[59] The Telecommunications Act gives the CRTC broad jurisdiction over telecommunications services in Canada. The policy objectives of the Act, as set out in s. 7, include facilitating the orderly development throughout Canada of a telecom system; rendering reliable and affordable telecommunication services of high quality to Canadians in both urban and rural areas; enhancing the efficiency and competitiveness of Canadian telecommunications; and promoting the use of Canadian transmission facilities for telecommunications, within and outside of Canada.

[60] Specifically, s. 32(g) provides that the CRTC may “determine any matter and make any order relating to the rates, tariffs or telecommunication services of Canadian carriers.”

[61] Under the Broadcasting Act, the CRTC is mandated to regulate and supervise all aspects of the Canadian Broadcasting System in accordance with the policy set out in the Act, including that the Canadian broadcasting system should serve the needs and interests of all Canadians. The Act together with the BD Regs. gives the CRTC broad powers to regulate and supervise including the power to inquire into, hear and determine matters and to issue mandatory orders.

[62] It is clear in my view, based on the provisions of both the Telecommunications Act and the Broadcasting Act and BD Regs, that the CRTC has exclusive jurisdiction to determine a dispute between two regulated companies concerning the provision of telecommunication services.

[63] Bell submits that its Application concerns a violation of its property rights, including damage to property and accordingly is within this court’s jurisdiction. While there is no question that Cloudwifi used (and perhaps damaged) Bell’s inside wire and equipment without Bell’s consent, based on Cloudwifi’s defence, the essence of the dispute centers on whether Cloudwifi is entitled to use Bell’s inside wire and equipment pursuant to existing broadcasting and telecommunications regulations and policy.

[64] As a result, the issue of whether Cloudwifi was/is entitled to access Bell’s inside wire and equipment in 10 Northtown and/or 270 Spadina is clearly one that must be decided based on the provisions of the Telecommunications Act, the Broadcasting Act and the BD Regs together with CRTC policies. In my view, the CRTC has exclusive jurisdiction to determine that issue. Even if it can be said that the court has concurrent jurisdiction to determine the issue, given that the issue requires a determination of existing broadcasting and telecommunications regulations and policy, I would decline to exercise such jurisdiction.

[65] Bell submits that the only reason its Application requires consideration of the Telecommunications and Broadcasting Acts and regulations is because of what it submits is Cloudwifi’s “untenable” defence. The determination of whether Cloudwifi’s defence is untenable, however, involves consideration of the Telecommunications and Broadcasting Acts and regulations. As noted, in my view, that determination falls within the exclusive jurisdiction of the CRTC.

[66] Turning to Bell’s second claim, I have no hesitation in finding that the issue of whether Cloudwifi has breached the Minutes of Settlement is one that is within the exclusive jurisdiction of this court. The Minutes of Settlement resolved an action in this court and in the event of a subsequent breach of the settlement, it is this court that must enforce the Settlement, not the CRTC. While both the Telecommunications Act and the Broadcasting Act give the CRTC the power to enforce its orders and directions, it has no power to enforce Settlements reached in this court.

[67] Accordingly, and notwithstanding that I have concluded that the CRTC has exclusive jurisdiction over Bell’s claim that Cloudwifi’s unauthorized use of its equipment was illegal, such is not the case for its claim that Cloudwifi has breached the Minutes of Settlement. The Motion to dismiss the Application on the basis that the CRTC has exclusive jurisdiction is therefore dismissed.

The Application

[68] Having found that the CRTC has exclusive jurisdiction over Bell’s claims against Cloudwifi concerning its access to Bell’s equipment at 10 Northtown and 270 Spadina, it follows that the Application should be dismissed in respect of that issue.

[69] While Bell concedes that as a result of the CRTC ruling (CRTC 2019-218) granting Cloudwifi access to its inside-wire and P-3000 boxes, its claims for an injunction and requiring Cloudwifi to disclose all MDU’s which Cloudwifi and its affiliates currently service are no longer viable, it submits that the court can and should issue declarations that Cloudwifi had no legal right to use its inside wire and equipment and that its conduct in doing so was unlawful.

[70] As I have determined that the CRTC has exclusive jurisdiction with respect to the issue of Cloudwifi’s entitlement to use Bell’s equipment without its consent, I have no jurisdiction to issue the requested declarations.

[71] Further, even if I had jurisdiction, I would decline to issue the declarations. Section 97 of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that the court has the discretion to make binding declarations of right. The factors that guide the exercise of that discretion are the utility of the remedy, if granted and whether, if granted, it will settle the questions at issue between the parties: Solosky v. R., [1980] 1 S.C.R. 821 at para. 16.

[72] In the present case, the issue of whether Cloudwifi was entitled to access Bell’s inside wire and P-3000 boxes when they did has been determined by the CRTC. In such circumstances, as the issue has already been decided, it would not be appropriate for a declaration to be issued concerning it.

[73] I also do not agree that Bell can reserve its rights to renew its claim for an injunction in the event its review of the CRTC decision is successful.

[74] As the CRTC points out in its decision (paragraph 58), under existing telecommunications regulations, once Cloudwifi becomes a registered CLEC it may connect to Bell’s inside wire and Cloudwifi is only required to notify Bell before connecting and follow the appropriate guidelines. In such circumstances, an injunction would not be appropriate.

The Minutes of Settlement

[75] Bell seeks a declaration that Cloudwifi and Kenning, by the unauthorized use of its equipment at 10 Northtown and 270 Spadina, have breached the Minutes of Settlement entered into by Bell and, among others, Cloudwifi and Kenning.

[76] As provided by the Minutes of Settlement, Kenning, on behalf of himself and Cloudwifi, affirmed an affidavit wherein they acknowledged and admitted that they used Bell’s internet services in a manner contrary to Bell’s Terms of Service at two properties in Waterloo and Kitchener respectively. Paragraph 8 of the affidavit provides:

I and Cloudwifi undertake that we, including our officers, directors, partners, agents, employees, affiliates, successors, transferees and assigns, will refrain from using Bell’s services unlawfully or in a manner contrary to Bell’s Terms of Service, provided appropriate advance notice of the governing Bell’s Terms of Service has been given, in the future at the Properties or at any other location.

[77] Bell submits that contrary to that Undertaking, by using Bell’s equipment, Cloudwifi was using Bell’s services unlawfully. It submits that the conduct which the Undertaking prohibits is not limited to use which is contrary to Bell’s Terms of Service but rather encompasses all unlawful use of Bell’s services.

[78] In that regard, Bell submits that the term “Bell’s services” in the Undertaking must be interpreted as encompassing the equipment which Bell owns and operates to provide its services. In support of such interpretation, Bell relies on the dictionary definition of “service”; the context of the 2016 Action; Cloudwifi’s own description of its services which refers to equipment; and s. 2(1) of the Telecommunications Act which defines “telecommunication service” as including “any related equipment”.

[79] In interpreting the meaning of contractual terms, the court is to determine the intent of the parties by giving words their ordinary and grammatical meaning consistent with the surrounding circumstances at the time of the formation of the contract. Further, commercial contracts are to be construed having regard to sound commercial principals and good business sense: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 47.

[80] The 2016 Action arose because Kenning subscribed to Bell’s residential internet service at the two properties and either he or Cloudwifi subsequently remarketed and resold Bell’s internet to other residents at the properties either directly or indirectly through another corporation. The conduct in issue was limited to the improper use of Bell’s provision of the internet. Not its equipment. The acts complained of were contrary to Bell’s Terms of Service concerning provision of the internet which Kenning agreed to accept and adhere to at the time he subscribed to the service. Unfortunately, the Terms of Service are not before the court to assist in considering the meaning of the Undertaking.

[81] The ordinary grammatical meaning of “services” differs depending on the context in which it is used. Bell relies on one of the meanings of “services” in the Merriam-Webster’s Collegiate Dictionary, 2018 – “a facility supplying some public demand” such as a telephone service or bus service. The fact that equipment may be necessary and incidental to the provision of services, however, does not mean that the equipment is in and of itself a service.

[82] Further, I do not consider that the definition of “telecommunications service” in s. 2(1) of the Telecommunications Act is of any assistance. The undertaking refers to only “services” and not “telecommunications services”.

[83] As noted, the Undertaking was contained in the Affidavit and Undertaking of Gary Kenning, Schedule “A” to the Minutes of Settlement of the 2016 Action.

[84] In my view, having regard to the issues raised in the 2016 Action, when the Undertaking is read both on its own and together with the entire affidavit, the term “services” set out in the Undertaking refers to Bell’s provision of the internet. In the absence of specific wording, I do not consider that “services” includes equipment such as Bell’s inside wire or the P-3000 boxes.

[85] As I have noted, there is no evidence before me of what Bell’s Terms of Service were at the time of the Undertaking, what they were at the time of Cloudwifi’s alleged breach or whether Bell gave Cloudwifi advance notice of its Terms of Service in respect of the events in issue as required in the Undertaking. Accordingly, there is also no basis for concluding that Cloudwifi’s actions breached Bell’s Terms of Service.

[86] Based on the above, therefore, I find that neither Cloudwifi nor Kenning were in breach of their Undertaking in the Minutes of Settlement as a result of their actions at 10 Northtown and 270 Spadina. Accordingly, I decline to issue the declaration requested.

[87] For the above reasons, therefore, the Application is dismissed.

The Cross-Application

[88] As noted at the outset, in response to Bell’s Application, Cloudwifi commenced the Cross-Application. The Cross-Application is based on the events that occurred at 10 Northtown and 270 Spadina and seeks multiple declarations including that Bell engaged in unlawful interference with Cloudwifi’s economic relations; unlawfully induced or attempted to induce breach of contract of Cloudwifi’s customers; breached the Minutes of Settlement; unlawfully disconnected Cloudwifi’s customers; engaged in “false, misleading, deceptive and/or unauthorized sales practices and is liable to pay Cloudwifi damages. In addition, Cloudwifi seeks interim, interlocutory and permanent injunctions restraining and enjoining Bell from engaging in the wrongful conduct and disconnecting any of Cloudwifi’s customers.

[89] The Notice of Application refers to the Application, Cloudwifi’s CRTC Application and its Motion to stay or dismiss the Application. At paragraph 2(g) of the Notice of Application, Cloudwifi states: “The within Application has been brought for the aforementioned relief in the event that the Stay/Dismissal Motion is dismissed”. During argument, counsel for Cloudwifi confirmed that the Cross-Application continued only if I dismiss the Motion.

[90] I interpret Cloudwifi’s above position to mean that it would not proceed with the Cross-Application in circumstances where the Motion is successful, permitting its CRTC Application to be dealt with by the CRTC. While the Motion was not successful, as the CRTC has now dealt with Cloudwifi’s Application in advance of the Motion being decided, the Cross-Application is therefore dismissed.

[91] There are other reasons why the Cross-Application should be dismissed. The claims being advanced involve claims of tortious conduct and breach of contract and seek damages. While couched in the form of declarations, such claims are more properly advanced in an action rather than an application. Further, it is clear that the facts relied upon by Cloudwifi are in dispute and therefore the claims are not appropriate for an application.

[92] The main relief Cloudwifi sought before the CRTC was an order that Bell cannot interfere with Cloudwifi’s customers use of the in-building wire at both 10 Northtown and 270 Spadina, which is similar to the relief sought on the Cross-Application. As Cloudwifi was quick to point out in response to the Application, it is the CRTC that has jurisdiction over that issue. Further, the CRTC has dealt with the issue and denied Cloudwifi’s request for such an order.

[93] The Cross-Application is therefore dismissed.

Conclusion

[94] For the above reasons therefore: Cloudwifi’s Motion is dismissed; Bell’s Application is dismissed; and the Cross-Application is also dismissed.

[95] Given the above results, my current inclination is to award no costs in respect of any of the Application, the Cross-Application and the Motion. If either or both of the parties wish to make submissions otherwise, they may do so within 20 days of this judgment by filing brief (three pages maximum) written submissions together with a Cost Outline.

L. A. Pattillo J.

Released: November 12, 2019

Reasons for Judgment