Court File and Parties

COURT FILE NO.: CV-18-607805-00CL CV-18-608664-00CL

DATE: 2020-01-29

SUPERIOR COURT OF JUSTICE – ONTARIO COMMERCIAL LIST

RE: Bell Canada, Applicant/Responding Party AND: Cloudwifi Inc. and Gary Kenning, Respondents/Moving Parties

BEFORE: L.A. Pattillo J.

COUNSEL: Junior Sirivar, Jacqueline Cole and Leah Ostler, for Bell Canada Rohit R. Kumar, for Cloudwifi and Kenning

HEARD: In Writing

COSTS ENDORSEMENT

[1] On November 12, 2019, I released my decision in this matter (2019 ONSC 1557):

a) Dismissing Bell Canada’s (“Bell”) application for various declarations against, the Respondents, Cloudwifi Inc. (“Cloudwifi”) and Gary Kenning (“Kenning”) concerning Cloudwifi’s actions in allegedly wrongfully accessing and using Bell’s equipment without Bell’s knowledge or consent and in breach of a prior settlement agreement entered into by the parties;

b) Dismissing Cloudwifi’s motion for an order dismissing or, in the alternative, staying Bell’s application pending a decision by the Canadian Radio-Television and Telecommunications Commission (the “CRTC”); and finally,

c) Dismissing Cloudwifi’s cross-application which sought 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. Cloudwifi also sought interim, interlocutory and permanent injunctions restraining and enjoining Bell from engaging in the wrongful conduct and disconnecting any of Cloudwifi’s customers.

[2] At the conclusion of my reasons, I stated that in light of my dispositions, my then current inclination was to award no costs in respect of any of the proceedings. However, given that the parties had made no submissions on costs, I stated that if either or both parties wished to make brief cost submissions they could do so.

[3] Consistent with the nature of these proceedings, I received and reviewed Costs Submissions from both parties. Both parties submit that they are entitled to costs.

[4] Having reviewed the cost submissions, I have not changed my initial determination. In my view, neither side should be awarded costs.

[5] Bell seeks partial indemnity costs in the total amount of $122,572.78 based on Cloudwifi’s alleged “significant misconduct” and the fact that the matter, at its core, involved an unlawful use of Bell’s property. The only reason it involved a jurisdictional issue concerning the CRTC was because Cloudwifi, after the fact, applied to the CRTC to retroactively authorize its conduct.

[6] In dismissing Bell’s application, I concluded, based on Cloudwifi’s regulatory defences, that the dispute regarding Cloudwifi’s actions was within the CRTC’s jurisdiction. Further, and while I held that the issue of whether Cloudwifi and Kenning breached the Minutes of Settlement was exclusively within the jurisdiction of the Superior Court, I concluded the conduct complained of did not amount to a breach.

[7] Further, while I dismissed Cloudwifi’s motion to dismiss Bell’s application given Bell’s claim for breach of the Minutes of Settlement, I was initially inclined to stay Bell’s application pending the CRTC decision in Cloudwifi’s application. However, the CRTC’s decision was released while my decision was under reserve, rendering that relief moot.

[8] Finally, Cloudwifi’s application was stated to be brought if Cloudwifi’s stay/dismissal motion was dismissed. I interpreted Cloudwifi’s position to mean that it would not proceed with the cross-application in circumstances where its stay/dismissal motion was successful, enabling its CRTC application to be dealt with by the CRTC. That, in fact, occurred.

[9] The cross-application received very little attention both in writing and at the hearing and, in my view, involved very little costs.

[10] Based on the above, I am satisfied Bell is not entitled to its costs on any of the proceedings.

[11] Cloudwifi and Keening seek partial indemnity costs of $116,145.76 in total. They submit that they were successful in Bell’s application on the jurisdictional issue and the issue concerning the alleged breach of the previous Minutes of Settlement. Further, they submit that the court’s dismissal of both Cloudwifi’s motion and cross-application does not amount to divided success.

[12] Cloudwifi relies on Bazos v. Bell Media Inc., 2018 ONSC 6146, a case in which Bell was successful in arguing that the CRTC had jurisdiction over the issue. The court held that “absent exceptional circumstances” Bell was entitled to costs on a partial indemnity scale.

[13] In my view, there are exceptional circumstances here. The evidence clearly established that Cloudwifi unlawfully utilized Bell’s inside wire and equipment to deliver wifi to its customers. Further, when faced with Bell’s demand to remove its equipment, it not only refused but when Bell disconnected its equipment, Cloudwifi again broke into Bell’s equipment. I agree with Bell that Cloudwifi’s actions amounted to “significant misconduct” which was unlawful.

[14] Further, and in response to Bell’s application, Cloudwifi raised a regulatory entitlement to escape the consequences of its unlawful conduct which the CRTC subsequently held was not valid.

[15] As Bell has submitted, had Cloudwifi proceeded lawfully and asked Bell’s consent to use its equipment at the outset, the proceedings would have likely been avoided. In the circumstances, Cloudwifi’s conduct should not be rewarded with an award of costs.

[16] For the above reasons, there will be no order of costs in the proceedings.

L.A. Pattillo J.

Released: January 29, 2020