The Court of Appeal held in Wellman v. TELUS Communications Company that the motion judge, Justice Belobaba, was correct in holding that an arbitration clause in cellphone contracts did not entitle TELUS to a partial stay of proceedings in a class action in which cellphone customers claimed that TELUS improperly rounded-up usage to the next minute for the purposes of billing without disclosing the practice. The relevant cellphone contracts contained arbitration clauses. TELUS conceded that the claims by consumers could proceed in court pursuant to section 7(2) of the Consumer Protection Act, 2002. However, TELUS argued that the claims by non-consumers should be stayed so that they could be resolved in arbitration, pursuant to section 7(5) of the Arbitration Act. Justice Belobaba held that the Court of Appeal's decision in Griffin v. Dell Canada Inc. was determinative, and he refused to stay the non-consumer claims. In Griffin, a five-judge panel of the Court of Appeal held that since section 7(5) of the Arbitration Act gave the judge discretion to separate arbitral claims from non-arbitral claims, it was inappropriate for the court to do so in the circumstances.
TELUS argued that Griffin had been overtaken by the Supreme Court of Canada's decision in Seidel v. TELUS Communications. In Seidel, the Supreme Court held that claims covered by the British Columbia consumer protection legislation could proceed in court, but the common law claims should be stayed and proceed to arbitration. The Court of Appeal in Wellman distinguished Seidel, pointing to the Supreme Court's holding that the case turned on the specific statutory regime in B.C. Noting differences between the B.C. and Ontario statutes, the Court of Appeal held that Justice Belobaba was correct in finding that Griffin was not overtaken by Seidel.
This decision is notable for any businesses who use standard form contracts with consumers and non-consumers. In respect of class actions brought by mixed classes of consumers and non-consumers, Ontario courts will not send any claims to arbitration, which increases defendants' exposure in class actions that can be connected to consumers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
