Court File and Parties

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

DATE: 20200922

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AVRAHAM WELLMAN, Plaintiff

– and –

TELUS COMMUNICATIONS COMPANY, TELE-MOBILE COMPANY AND TELUS COMMUNICATIONS INC., Defendants

BEFORE: E.M. Morgan J.

COUNSEL: Joel Rochon, Peter Jervis, Golnaz Nayerahmadi, and Eli Karp, for the Plaintiff

Andrew Borrell and Zohaib Maladwala, for the Defendants

HEARD: September 9, 2020

COSTS AWARDED BY SUPREME COURT OF CANADA

I. Interpreting a misstatement

[1] The Defendants in this consumer class action, the TELUS group of companies (“TELUS”), bring this motion to enforce the payment of costs ordered by the Supreme Court of Canada in its judgment of April 2019: TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019] 2 SCR 144, at para 105 (“Wellman (SCC)”). The Plaintiff does not oppose enforcement of the Supreme Court’s order, but has a very different interpretation of what it means.

[2] Counsel for the Plaintiff submit that the Supreme Court of Canada ruling was the logical result of the erroneous way in which the Court described the procedural history of the case. Counsel for TELUS concede that there may technically have been a misdescription made by the Court, but that both the majority and the dissenting judges were aware of what they were doing and meant to say exactly what they said.

[3] This unusual circumstance has led to two different possibilities for interpreting the ruling on costs which came at the conclusion of the Supreme Court of Canada’s judgment. In the main, that judgment addressed the question of a stay of proceedings with respect to TELUS’ business customers, whose contracts contained an arbitration clause barring litigation in the courts that the contracts for non-business customers did not contain. The costs ruling was contained in a single paragraph of the majority judgment, the meaning of which turns on how one views the majority judgment overall.

[4] The Court’s misdescription of the procedural history, and the ramifications of that for the costs award, was never the subject of a re-hearing application at the Supreme Court of Canada. That route was potentially available to either party under subrule 81(1) of the Supreme Court Rules, but the divergent possibilities for interpreting the costs ruling was never brought to the highest court’s attention. Sitting in Motions Court, I am therefore compelled to consider what to make of the misdescription found in the Supreme Court’s reasons, and to interpret a costs ruling based on what appears to be a misstatement of the procedural history of the case.

[5] Needless to say, I cannot vary the ruling with which I am presented, but rather must implement and enforce it once I determine what it means.

II. The certification motion and appeals

[6] Counsel for TELUS explained at the hearing before me that at the very outset of this case there was some discussion among counsel as to whether TELUS would be bringing a stay of proceedings motion prior to the Plaintiff’s certification motion. TELUS’ position with respect to a stay was that its business customers, as opposed to its consumer customers, had a different contract which made any dispute subject to arbitration.

[7] TELUS’ counsel was of the view that while consumers could litigate their claims and TELUS could both resist certification as a class action and defend against those claims on the merits, the business customers could not litigate their claims at all and were compelled to seek any remedy against TELUS through arbitral proceedings. The controversy was succinctly described by Moldaver J., writing for the majority in the Supreme Court of Canada in Wellman (SCC), at paras 1-2:

[1] This appeal requires the Court to decide what happens when a series of arbitration agreements, the Ontario Arbitration Act, 1991, S.O. 1991, c. 17 (‘Arbitration Act’), the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A (‘Consumer Protection Act’), and a consumer/non-consumer class action collide.

[2] This collision occurred when the respondent, Avraham Wellman, filed a proposed class action in Ontario against the appellant, TELUS Communications Inc. (‘TELUS’), on behalf of about two million Ontario residents who entered into mobile phone service contracts with the company during a specified timeframe. The class consists of both consumers and non-consumers, the latter being business customers. The action centres on the allegation that TELUS engaged in an undisclosed practice of ‘rounding up’ calls to the next minute such that customers were overcharged and were not provided the number of minutes to which they were entitled.

[8] As it turned out, TELUS opted against bringing a stay of proceedings motion prior to certification. Instead, they advanced their argument with respect to the business customers as part of the response to the Plaintiff’s certification motion. It was TELUS’ position that the fact that the business customers were subject to an arbitration clause, and the consumer customers were not subject to an arbitration clause, made a class proceeding so cumbersome that the claim could not meet the preferable procedure requirement for certification in section 5(1)(d) of the Class Proceedings Act, 1992, S.O. 1992, c. 6.

[9] The certification motion was heard in the Superior Court of Justice by Conway J., who granted certification of all claims put forward by the Plaintiff: Wellman v. TELUS Communications Company, 2014 ONSC 3318. Relying on the Court of Appeal judgment in Griffin v. Dell Canada Inc., 2010 ONCA 29, Justice Conway found, at para 90, that there is no reason to separate the two types of customers:

In this case, as in Griffin, the consumer claims against TELUS that will be litigated in the class proceeding represent 70% of the total number of claims. The liability and damage issues for both consumer and non-consumers will be the same. There is no group arbitration permitted for the non-consumer claims. As in Griffin, separating the two proceedings could lead to inefficiency, risk inconsistent results and create a multiplicity of proceedings.

[10] Following this ruling, the two sets of counsel consented as to the form and content of the draft Order which they presented to the Court. The Order, dated November 25, 2014, was signed by Conway J. as presented. As is typical, the Order contained a preamble which correctly described the nature of the proceeding and the relief sought by the moving party:

THIS MOTION made by the Plaintiff for an order certifying this action as a class proceeding was heard on October 27-31, 2014 at Osgoode Hall, 130 Queen Street West, Toronto, Ontario.

[11] In its first operative paragraph, the Order provides that the action is certified as a class proceeding pursuant to section 5 of the Class Proceedings Act. It then goes on to provide for a number of related measures, including that any limitation period applicable to claims brought on behalf of non-Ontario residents that had been suspended now resumes running, that the Plaintiff is to be the representative Plaintiff, that the notice to the class members is to be approved by the Court, and that the common issues are as identified in the Order. It also orders TELUS to pay the Plaintiff an agreed-upon amount of $200,000 in costs, inclusive of all fees, disbursements, and HST.

[12] In addition, paragraph 4 of the Order of November 25, 2015 states:

4. THIS COURT ORDERS that a stay of the claims of the non-consumer Class Members pursuant to the arbitration provisions of the TELUS Standard Terms and Conditions and the Arbitration Act, 1991, S.O. 1991, Chapter 17 is denied;

[13] This paragraph, of course, was contrary to the preambular paragraph of the Order, which identified the certification motion as having been the only motion before the court. It is paragraph 4 that set the ball rolling on a dual procedural course.

[14] TELUS sought leave to appeal the certification judgment to the Divisional Court, but leave was denied. That was the end of the road in terms of any appeal of the certification Order issued by Justice Conway.

[15] However, TELUS also appealed paragraph 4 of the Order to the Court of Appeal, characterizing the proceeding as an appeal of Justice Conway’s denial of their stay of proceedings motion. The first paragraph of the Court of Appeal’s judgment, Wellman v. TELUS Communications Company, 2017 ONCA 433, makes this clear:

[1] This is an appeal from an order denying a partial stay of proceedings in favour of arbitration, in the context of a class proceeding.

[16] While this introductory sentence correctly described the genesis of the appeal, it did not address the fact that the appeal was from an Order (or one paragraph in an Order) that did not flow from any underlying motion. The Court of Appeal assumed, understandably, that an appeal from an Order issued by the Superior Court of Justice was the result of the appellant having been unsuccessful in a motion which it had brought in the court below. That, however, was not the case, since a stay of proceedings motion had never actually been brought.

[17] On the merits of the appeal, the Court of Appeal agreed with Justice Conway’s reasoning that there was no reason to exclude the business customers from the class action. In the result, the Court concluded that it was reasonable for her as a motions judge to have refused to bifurcate the case and to certify the entire class represented by the Plaintiff. Since the Plaintiff was successful in resisting the appeal, the Court of Appeal ordered costs of the appeal to the Plaintiff, at para 99:

[99] I would therefore dismiss the appeal. I would award costs to the respondents fixed at $30,000, the amount agreed between the parties, inclusive of HST and disbursements.

[18] Following the Court of Appeal’s judgment, TELUS paid the Plaintiff $230,000 in respect of the costs awarded by the Court of Appeal and the Superior Court of Justice. It then sought, and was granted, leave to appeal to the Supreme Court of Canada.

III. The Supreme Court of Canada ruling

[19] The Supreme Court of Canada started out with the same assumption as had the Court of Appeal – i.e. that the case had initially involved two self-standing motions. This would be the natural assumption since the Supreme Court recited the history of proceedings in the courts below and noted that it had gone from Superior Court to the Court of Appeal and then to the Supreme Court, without any mention of having been to Divisional Court along the way. Procedurally, had they thought they were considering a matter that arose from a certification motion, the first court of appeal after the judgment on the initial motion would have been to Divisional Court.

[20] Interestingly, although there was significant difference of opinion among the Supreme Court of Canada judges as to whether a stay of proceedings should have been imposed under the circumstances, they did not differ in their respective recitations of the history of proceedings. Justice Moldaver, for the majority, set out his understanding in the clearest possible language at Wellman (SCC), para 15:

Mr. Wellman brought a motion to have the action certified as a class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (‘Class Proceedings Act’). In response, TELUS brought a motion to have the proceeding stayed with respect to the non-consumer claims, relying on the arbitration clause contained in its standard terms and conditions.

[21] Justice Abella, for the dissent, set out her understanding in equally clear language, at para 126:

In the case before us, TELUS brought a similar motion to stay the proceedings with respect to the business customer claims.

[22] It was the majority’s view that both Conway J. and the Court of Appeal had erred and that a stay of proceedings should have issued in respect of the business users of TELUS who are subject to an arbitration agreement. The Supreme Court of Canada judgment therefore reversed the ruling in the two previous courts. Justice Moldaver, at para 105, pronounced both the substantive result of the appeal and the ramifications of that result with regard to costs:

[105] In the result, I would allow the appeal and stay the business customer claims. Given this result, TELUS is entitled to its costs in this Court and in the Court of Appeal. However, since TELUS’s motion for a stay was heard together with Mr. Wellman’s successful application for certification, it would not in my view be appropriate to grant TELUS costs in the Superior Court. I would therefore set aside the costs award made by the Superior Court and order that the parties bear their own costs in that court.

[23] In the context of Justice Moldaver’s reasons for judgment, which, as noted above, commence with a description of two separate motions having been brought at first instance but only one going up on appeal, this paragraph makes eminent sense. In the first place, TELUS is said to be entitled to its costs in the Supreme Court of Canada, where it won, and in the Court of Appeal, which the Supreme Court has now reversed. Counsel for the Plaintiff do not contest the costs ruling up to that point, and have now paid and reimbursed TELUS the costs of both appeals.

[24] The controversial part of the Supreme Court of Canada’s ruling is with respect to the meaning of the last two sentences in para 105 – i.e. what happens to the costs of the motion in Superior Court? Moldaver J. states that “the parties bear their own costs in that court”. But which costs was he referring to?

[25] Plaintiff’s counsel says the answer is self-evident: the Court obviously meant the costs of the stay motion, the appeal of which they had just heard (and that they thought had originally been brought by TELUS). TELUS’ counsel likewise says the answer is self-evident: the Court obviously meant the costs of the certification motion, whose appeal they had never heard (although it had TELUS’ stay argument folded within it).

IV. Interpreting the ruling

[26] In her dissent in Wellman (SCC), at para 107, Abella J. aptly states that “interpretation is the art of inferring what words mean.” Speaking of statutory interpretation, she goes on in the same paragraph to explain that, “Sometimes the meaning is obvious, either because of the clarity of the language or of its relationship to the legislative context. But sometimes interpreting words literally in isolation, undermines the policy objectives of the statutory scheme.”

[27] The same can be said of interpreting a judicial ruling. Both parties to this motion urge me to enforce para 105 of the Supreme Court of Canada’s judgment as written; my task is to engage in “the art of inferring” what the words in that paragraph mean. To do that, Justice Abella instructs: “[T]he words of the [paragraph] are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the [judgment], the object of the Act, and the intention of [the Court]”: Ibid., quoting Elmer Driedger, Construction of Statutes (2nd ed. 1983), at p. 87, cited in Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 SCR 27, at para. 21. To put it another way, “the language of an order, the surrounding circumstances and the pleadings must be considered in its interpretation”: Kakavelakis v. Boutsakis, 2017 BCCA 396, at para. 62.

[28] Reading para 105 of Wellman (SCC) in its entire context, the scheme of the judgment is to award costs of the two appeals, since TELUS is the successful party on appeal; and, at the same time, to have each party bear their own costs of the case at first instance in the Superior Court of Justice because it viewed that as composed of two motions, one dealing with the stay in which the result has been reversed and TELUS is now successful and the other dealing with certification which remains unchanged in the result as it was not under appeal. In other words, what was being overturned was Justice Conway’s award of costs to the Plaintiff for the stay of proceedings part of the motion that was before her. What was not being overturned was Justice Conway’s award of costs to the Plaintiff for the certification part of the motion that was before her.

[29] Accordingly, the intention of the Wellman (SCC) judgment was not to make the Plaintiff bear his own costs of the entire motion for certification, but rather to make the Plaintiff bear his own costs of the stay argument. I can think of no reason that Justice Moldaver and his colleagues in the majority judgment would have wanted the Plaintiff to disgorge the costs that he was awarded for the certification motion, since that was not before them. Their description of what was before them, and their entire analysis, was restricted to the stay of proceedings issue.

[30] Counsel for TELUS makes no argument as to why the Supreme Court would deprive the Plaintiff of the costs of the entire certification motion, as opposed to the costs of the stay portion of that motion, except to say that the words of para 105 are “clear”. However, in interpreting the order of another judge or court, including the Supreme Court of Canada, the court must consider not the literal interpretation but the “reasonable interpretation” of the order: Ben Plastering Ltd. v. Mollenhauer Residential Ltd., 1997 CanLII 1670 (Ont CA). The court ought not engage in literalism, since “court orders are not interpreted in a vacuum”: Sutherland v. Reeves, 2014 BCCA 222, at para. 31. As Justice Abella put it, “words matter, policy objectives matter, and consequences matter”: Wellman (SCC), at para 108.

[31] When viewed through the lens of policy objectives and consequences, it becomes evident that what the Supreme Court meant to do was to differentiate the costs of the stay of proceedings argument from the costs of the certification argument. After all, they had characterized these two arguments as being two distinct motions, one of which was before them and the other of which was not before them. While that characterization was technically inaccurate, their point was clear. I cannot read para 105 of Wellman (SCC) as changing in any way the costs awarded in a matter that was not appealed and that was not before the Supreme Court.

[32] Although in the Superior Court of Justice proceeding there was, in fact, only one motion containing two issues (certification and stay of proceedings), and thus only one omnibus costs award, the Supreme Court of Canada treated them as two motions with two distinct costs awards. Conway J. awarded the costs of the certification portion to the Plaintiff, and nothing in Justice Moldaver’s judgment changed that. Conway J. also awarded the costs of the stay portion to the Plaintiff, but Justice Moldaver’s judgment did change that.

IV. Disposition

[33] Although arising in the context of on all-encompassing motion, the Supreme Court of Canada’s approach is reminiscent of cases in which a successful motion and an unsuccessful one are heard together or sequentially, and the costs of one must be offset by the costs of the other: see Pollack v. Advanced Medical Optics, Inc., 2012 ONSC 1850, at para. 13; and 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corporation, 2008 CanLII 27822, at paras. 29-30, 43-46.

[34] Following this logic, the Plaintiff may keep the costs of the certification portion of the motion in the Superior Court of Justice but must repay TELUS the costs of the stay of proceedings portion of that motion.

[35] The Plaintiff has included in his Responding Motion Record evidence of the division of time and expense spent on the two portions of the Superior Court of Justice motion. This evidence is not countered by anything put forward by TELUS in its Motion Record. The Plaintiff’s evidence, in the form of its Bill of Costs dated January 7, 2015, shows that of the overall $250,445.57 that was claimed by the Plaintiff for the entire motion, $12,180 (inclusive of disbursements and HST) related to the “Arbitration” and “Timing of the Stay Motion” issue.

[36] The overall amount of costs was reduced to $200,000 by agreement of the parties and was submitted in that amount to Conway J. for the consent Order. At this point, however, it is impossible to extrapolate whether and how to reduce the stay portion of the Bill of Costs to be commensurate with the reduced overall costs ultimately reached and agreed upon by the parties. They did not apportion it for Justice Conway in the Consent Order, since it was in reality all part and parcel of one motion and one costs award.

[37] In fairness to TELUS, I will refrain from drawing any arbitrary line in that regard. Instead, I will consider the full amount attributed to the stay argument in the Plaintiff’s Bill of Costs to have been paid by TELUS in respect of the stay portion of the motion. That amount must now be reimbursed.

[38] The Plaintiff shall pay TELUS the all-inclusive amount of $12,180 in respect of the Superior Court of Justice costs awarded by the Supreme Court of Canada in para 105 of Wellman (SCC).

[39] There shall be no costs for or against either party in respect of the motion before me.

Morgan J.

Date: September 22, 2020