COURT FILE NO.: CV-21-666255

DATE: 2022-12-14

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: COOL WORLD TECHNOLOGIES INC., and ETHEL KATHERINE DODDS, Applicants

AND:

TWITTER, INC. and TWITTER CANADA ULC, Respondents

BEFORE: F. L. Myers, J.

COUNSEL: Sujit Choudhry and Joel Bakan Counsel, for the Applicants

Matthew Diskin and Kristin AuCoin Counsel, for the Respondents

HEARD: December 13, 2022

ENDORSEMENT

Relief Requested

[1] Motion to strike the notice of application.

Disposition

[2] Dismissed. The applicants may deliver no more than three pages of costs submissions by December 23, 2022. The respondents may deliver no more than three pages of costs submissions by January 6, 2023. Both sides may deliver any offers to settle on which they rely and both shall deliver Costs Outlines. All materials are to be uploaded to CaseLines

Costs

[3] N/A

Brief Reasons

[4] The respondents move to strike the notice of application under Rule 21.01 (1)(b) of the Rules of Civil Procedure, RRO 1990, Reg 194, for stating no reasonable cause of action. Mr. Diskin and Ms. AuCoin, appearing for both Twitter respondents, challenge the sufficiency of the application as a matter of Ontario procedural and substantive law.

[5] Twitter relies on the well-established test that a claim will be struck when it is "plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action". McCreight v Canada (Attorney-General), 2013 ONCA 483 at para 39.

[6] No evidence is admissible on this motion. It is not a motion for summary judgment in which the court hears evidence and assesses the merit of the claim. Rather, at this very preliminary stage, the respondents ask to end the claim because the applicants have failed to plead facts that can possibly result in a judgment in their favour. That is, the respondents need to establish that even if absolutely everything said in the claim is proven true at the trial or merits hearing, the law does not grant the applicants a remedy. It is a daunting test designed to eliminate hopeless cases in the interests both of efficiency and ensuring correct results.

[7] In this case, the applicants have stated causes of action for breach of contract. They say that Twitter wrongfully refused to sell them advertising space on the Twitter social media platform.

[8] I am not to be taken to be opining at all on the strength or weakness of the claim. But the notice of application contains the requisite elements of a claim for breach of contract that I cannot say is hopeless or impossible perhaps with amendment down the road. It must always be borne in mind on a pleadings motion such as this one, that even if there are deficiencies in the pleading, the applicant will be allowed to amend “unless it is plain and obvious that no tenable cause of action is possible on the facts as alleged”. Conway v. The Law Society of Upper Canada, 2016 ONCA 72 at para. 16. More often than not therefore, defendants and respondents who bring pleadings motions simply teach the plaintiff/applicant how to plead a better claim.

[9] Here, there is no doubt that unconscionability and breach of the duty of good faith are proper claims to avoid contract terms. The main issues raised by Twitter are that (a) there is no contract pleaded; and (b) the applicants are asserting a cause of action for breach of Charter values. It is common ground that there is no right for one private party to sue another private party for breach of the Charter of Rights and Freedoms or for breach of analogous Charter values.

[10] Twitter submits that the Master Services Agreement applicable to promotional tweets (i.e. paid ads) gives Twitter an absolute and unfettered discretion to refuse any ad. The applicants’ request to buy ad space was just that. It was a request that Twitter declined. No contract was entered into whether bilateral or unilateral in nature.

[11] But the applicants plead expressly that the terms of the User Agreement that all Twitter users must and do accept to obtain their initial Twitter account is the governing contract. Mr. Bakan took me through the rather convoluted series of “clicks” necessary to trace from the User Agreement through to the Master Services Agreement and the various policies that the applicants claim were breached by Twitter. It is at least arguable that, as Mr. Bakan submits, all Twitter users have a contractual right under their User Agreements to apply to place ads and then to be dealt with under the various policies and sub-agreements that are incorporated by reference into their User Agreement.

[12] If there is an agreement, then the applicants are entitled to allege that the terms Twitter relied upon to give them grounds or a right to refuse their ads are unenforceable because they are unconscionable. Similarly, the applicants can and have alleged that Twitter’s decisions to refuse to sell them ads and its purported reliance on the three policies in issue, were not good faith exercises of Twitter’s contractual discretion. Twitter may answer by claiming that it did absolutely nothing wrong in exercising its unfettered discretion to refuse the applicants’ ad. But that is a matter for defence on the merits.

[13] The applicants advance a further claim. They submit that the contract terms that establish policies and discretion relied upon by Twitter, to allow it to refuse even high value political ads, violates public policy and are unenforceable. They say that Twitter has achieved an importance in the political firmament of Canada so that it is the equivalent of the “town hall” in which the populace engages their government. They submit that the public policy of Canada, informed by Charter values related to freedom of expression, preclude Twitter from enforcing contract terms to exclude high value, non-harmful speech from its self-proclaimed town hall.

[14] In Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, at paras. 115 and 116, the Supreme Court of Canada confirmed that there is a common law defence available to prevent enforcement of contractual terms that violate public policy. It may be an “unruly horse” and it may be a rare case when public policy will trump the societal value of freedom of contract, but it is a defence accepted and known to law. In Tercon, the issue was whether an exclusion clause violated public policy.

[15] In Uber Technologies Inc. v. Heller, 2020 SCC 16, the majority refused to enforce an arbitration clause in a contract due to the doctrine of unconscionability. Brown J. premised his finding of invalidity of the arbitration clause on public policy. Moreover, he held that public policy in that private contract case was informed by constitutional norms related to access to justice.

[16] Mr. Bakan referred to numerous cases in which the principles are said to have evolved so that the current mode of expression is that the common law is shaped by public policy as informed by Charter values. This effectively provides a defence to the enforcement of particular contract terms where the common law enforcement of freedom of contract is outweighed by applicable public policy informed by Charter values.

[17] Mr. Diskin says there is no common law rule at stake here. He submits that the applicants are simply trying to sue to enforce Charter values against a private party. I disagree. It is open to the applicants to claim that the policies adopted under the User Agreement and the absolute discretion in the Master Services Agreement should not be enforced because they violate public policy. That is just Tercon. The precise articulation of public policy whether informed by the Charter value of freedom of expression or other common law or statutory provisions, and whether the enforcement of any of the contractual clauses is outweighed by any applicable public policy, are for the judge who hears the merits.

[18] Were I able to hold that on the facts as pleaded it is not possible for a court to ever hold that freedom of expression can inform a public policy that can outweigh Twitter’s absolute discretion to refuse high value, non-harmful speech, I could strike that claim. But the applicants plead particulars to support their allegations that Twitter has attained a unique significance and that it acts discriminatorily and arbitrarily. I cannot say that it is not possible for a judge to find that Twitter has breached its User Agreement by exercising its discretion for an improper purpose (i.e. in bad faith); that some of its terms of service that are deeply buried clickwrap contracts of adhesion are unconscionable; or that public policy at common law may evolve to deal with the new world of online mass communication and social media. It is significant that no binding precedent was put before me to preclude any of these outcomes.

[19] In short, this is just a pleadings motion. The facts in the notice of application, if true, state causes of action to challenge Twitter’s decisions and the bases it asserted for those decisions. The doctrines of good faith, unconscionability, and public policy are all known to law and are all engaged and fairly pleaded with great particularity in the originating process. Whether the facts are ultimately proven to be true or a judge finds there to be a contract, or a breach of the duty of good faith on the facts as proven, or sufficient market power, vulnerability, and unfairness to amount to unconscionability, or any public policy applicable and of sufficient weight to meet Tercon and subsequent cases, is for another day.

[20] The motion is dismissed. Costs are reserved as set out in the “Disposition” block above.

“F. L. Myers”

F. L. Myers, J.

Date: December 14, 2022