Canada: Latest Developments In The Ongoing UPS Class Action

A recent decision of the Divisional Court, in which Bennett Jones and its co-counsel acted for the class, held that whether brokerage fees charged by UPS to customers receiving deliveries in Canada are unsolicited is an appropriate issue to be adjudicated by way of a class action.

United Parcel Service Canada Ltd. (UPS) provides international courier services. It is required by law to collect customs duties and HST on shipments entering Canada. The class members are customers of UPS with standard-form shipping contracts. The class members alleged that UPS unlawfully collected "brokerage fees" in addition to standard customs duties and HST.

Justice Horkins certified the case as a class action in the first instance. UPS sought leave to appeal. Leave was only granted with respect to one common issue: whether the brokerage fees were unsolicited. The appeal was dismissed and certification of the class action upheld.

The appeal turned on the fact that the contracts at issue were standard-form. UPS argued that the court could not determine whether the brokerage services were unsolicited on a common basis, since it would need to look at each transaction separately, and consider the knowledge of the consignor and consignee about the brokerage services on an individual basis. The Divisional Court disagreed. It held that the plaintiffs' argument centered on the standard-form contracts which, in all cases, were either "non-negotiable" or the "entire agreement" between the parties, and those contracts did not contain any terms relating to the provision of brokerage services or the associated cost. This had nothing to do with the consignors, and since UPS had not pointed to any ambiguity in the standard-form contracts, the rules of contract did not permit the court to admit evidence of subjective intention to interpret the contract. Thus, in determining the merits of the claim, the focus would not be on the knowledge of the consignor at the time of entering into the contract.

Further, to the extent that UPS was arguing that the focus should be on the conduct of the consignee in requesting the services, a request from the consignee would require knowledge of the services and consent by the consumer to pay for them – neither of which existed in this case.

Lastly, the representative plaintiffs had evidence to show that they did not ask UPS to perform the brokerage services, and UPS did not inform them that they would be receiving and paying for the services. The Divisional Court held that this provided some basis in fact for the proposition that the services were unsolicited by UPS's customers and that it was a question that could be determined across the class as a common issue.

This case involved several years of pre-certification litigation. It was a unique case procedurally since the certification motion was heard at the same time as the summary judgment motion on several of the issues. This was done on the consent of the parties.

In the first instance, the plaintiffs were successful on both motions. UPS sought to appeal both the certification order and the summary judgment order. The appeal of the motions, however, has been complex. Due to the differences in appeal routes, UPS had an absolute right to appeal the summary judgment decision to the Court of Appeal, but needed leave to appeal certification of the common issues decision to the Divisional Court. Due to scheduling issues, leave to appeal the certification decision alone required two separate hearings. Leave was only granted to appeal one of the certified common issues. As discussed above, UPS was unsuccessful on its appeal of the common issue at the Divisional Court. It is now seeking leave to appeal the Divisional Court's decision to the Court of Appeal, which as a result of Rule 61.03.1(1), will be heard in writing.

By direction of the Court of Appeal, the appeal of the summary judgment motion has been stayed pending the resolution of the common issue appeal.

In short, though steps were taken by counsel to try and streamline the litigation by hearing the certification motion and the summary judgment motion together, the appeal procedure has been time-consuming as a result of the differing appeal routes. The ongoing saga will continue with the upcoming motion in writing for leave to appeal the certification decision to the Court of Appeal.

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.

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