2016 QCCA 1497, 2016 QCCA 1497

Rogers Communications, s.e.n.c. (Rogers Sans-fil, s.e.n.c.) c. Brière 2016 QCCA 1497 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-024972-150 (500-06-000557-112) DATE: SEPTEMBER 20, 2016 CORAM: THE HONOURABLE PAUL VÉZINA J.A. NICHOLAS KASIRER, J.A. DOMINIQUE BÉLANGER, J.A. ROGERS COMMUNICATIONS PARTNERSHIP also carrying on business as ROGERS WIRELESS PARTNERSHIP APPELLANT – defendant v.

MARIO BRIÈRE RESPONDENT – plaintiff (representative) JUDGMENT [ 1 ] The appellant appeals from a judgment of the Superior Court, District of Montreal (the Honourable Pierre Nollet), rendered on December 5, 2014, that allowed the respondent’s class action in part and ordered Rogers Communications Partnership to pay the members a total of $16,829,016 in damages. [ 2 ] For the reasons of Bélanger, J.A., with which Kasirer, J.A. agrees, and for the reasons of Vézina, J.A., the COURT : [ 3 ] DISMISSES the appeal of Rogers Communications Partnership, also carrying on business as Rogers Wireless Partnership, with legal costs.

PAUL VÉZINA, J.A. NICHOLAS KASIRER, J.A. DOMINIQUE BÉLANGER, J.A. Mtre Nicholas Rodrigo Mtre Mouna Aber Davies Ward Phillips &Vineberg For the appellant Mtre David Bourgoin Mtre Benoît Gamache BGA Avocats For the respondent Date of hearing: April 19, 2016

REASONS OF VÉZINA, J.A. [ 4 ] This class action against Rogers Communications is similar to that against Bell (500-09-024748-147, C.A.), and the two appeals were heard together. My reasons here are supplemental to those given in Bell . [ 5 ] Up until 2010, Rogers, like Bell, provided wireless telephone services to the class members represented by the respondent Brière.

Afterwards, Brière instituted a class action against Rogers seeking reimbursement of the cancellation fees paid by members who ended their contracts before the end of the term by exercising their right to resiliate. [ 6 ] The trial judge allowed the action in part and ordered Rogers to reimburse $16.8 million. [1] He refused, however, to award punitive damages. [ 7 ] Rogers appeals and asks for the class action to be dismissed.

The representative does not appeal. [ 8 ] The relevant facts are not disputed. [ 9 ] As in the class action against Bell, the class members share the following: - they entered into a fixed-term contract with Rogers; - they then received a discount on the purchase price of a mobile telephone; - they resiliated their contracts before the contract expired; and - they therefore paid the amounts stipulated in the [ translation ] “Cancellation Fees” clause. [ 10 ] Rogers offers open-ended contracts or fixed-term contracts of 12, 24 or 36 months.

Only the latter entail the right to a discount on the price of a mobile phone purchased upon adhesion to a fixed-term contract. [ 11 ] Rogers collected cancellation fees from the class members amounting to $35.5 million. [ 12 ] This is the resiliation clause from the contract with Rogers: Early Cancellation Fees (applies only to customers with fixed-term contracts): An Early Cancellation Fee (ECF) applies if, for any reason, your service is terminated prior to the end of the service agreement.

The ECF is the greater of: (i) $100 or (ii) $20 per month remaining in the service agreement, to a maximum of $400, and applies to each line in the plan that is terminated. … Additional Data Early Cancellation Fee: … [The Data Early Cancellation Fee] is the greater of: (i) $25 or (ii) $5 per month remaining in the Data Term, to a maximum of $100, and applies in addition to the ECF and applies in addition to the ECF for termination of your service agreement. ... … [ 13 ] On appeal, Rogers repeats the arguments it submitted at trial. [ 14 ] First, Rogers, like Bell, maintains that the members waived the right to resiliate set out in articles 2125 and 2129 C.C.Q. , or in the alternative, that they at least waived the limitation of the injury that may be claimed by the provider of services under

article 2129. The judge wrote: [ translation ] [24] Rogers argues that the judgment authorizing the action, which set aside the waiver as an issue to be dealt with collectively, determined that the petitioner had waived the application of articles 2125 and 2129 C.C.Q. It also argues that there was an implied unequivocal waiver of the right to early cancellation and that, consequently,

article 2129 C.C.Q. limiting the injury that may be claimed does not apply. According to Rogers, the general rule is therefore the right to claim any injury, including lost profits, through what it characterizes as a penal clause. [ 15 ] In addition, Rogers, again like Bell, maintains that the [ translation ] “Cancellation Fees” clause is not abusive. The judge wrote: [ translation ] [25] According to Rogers, the amount paid by Brière is not abusive and the evidence does not support the right to punitive damages. [ 16 ] I will begin with a consideration of Rogers’ grounds before reviewing the calculation of the overpayment to be reimbursed. A- Rogers’ grounds (

a) First ground: waiver of the right to resiliate

[ 17 ] The judge considered Rogers’ first ground: [ translation ] [36] According to Rogers, the inclusion of the [cancellation fees] clause means that the customer implicitly waives his or her right to … resiliation under

article 2125 C.C.Q. He analyzed it: [ translation ] [37] The Court finds that the existence of a clause providing for the payment of ECFs to end the subscription contract does not ground an inference that the right to early resiliation has been waived. [38] The wording of the … resiliation clause tends to prove the opposite, in fact.

This clause provides for fees due upon early resiliation… And concluded: [ translation ] [39] Because the right to resiliate is subject to certain conditions, it should be found that this right is preserved rather than implicitly waived. [40] For this same reason, the Court cannot find that the mere existence of cancellation fees violates the petitioner's right to unilaterally resiliate a contract.

The Court finds that the option to cancel the contract that is given to customers upon payment enshrines their right to early resiliation. [ 18 ] I share the judge’s opinion. (See my reasons in Bell at paras. [38] to [43].) (

b) In the alternative: waiver of the injury under

article 2129 C.C.Q. [ 19 ] According to the judge, whether the Cancellation Fees clause is a penal clause under

article 1622 C.C.Q. must be decided in order to determine whether

article 2129 has been waived: [ translation ] [46] … if the [cancellation fees] clause is a penal clause, a point we will revisit, computing the injury that may be claimed from customers prematurely ending their subscription contract may include loss of future profits. If the [cancellation fees] clause is not a penal clause, then the computation of the injury cannot exceed what is provided under

article 2129 C.C.Q. [ 20 ] He concluded that this is not the case: [ translation ] [49] If the purpose of the penal clause is to punish a failure to perform, clearly that is not the purpose of the … resiliation clause at issue here. Indeed, the contract itself gives [the Representative] the right to resiliate his contract before the end of the term.

Doing so is not a fault. [ 21 ] He rightly pointed out a corollary to the right to resiliate: [ translation ] [52] Additionally, and unlike a penal clause, if the customer decides to put an end to the term contract, Rogers does not have the option of demanding that the principal obligation be performed (the payment of the contract until the end of the term). [ 22 ] Therefore, he concluded, Rogers’ injury and the corresponding indemnity must be assessed under

article 2129: [ translation ] [55] It was established earlier that compensation for resiliation does not carry the assumption that a right has been waived. The evidence has not shown that there was a waiver of the right to early resiliation or to compliance with

article 2129 C.C.Q. with regard to computing the injury. We must therefore consider whether the ECFs correspond to the injury sustained by Rogers [ 23 ] On this point, I find myself in closer agreement with Rogers’ argument than with that of the judge. Whether or not the Cancellation Fees are a penal clause is not determinative (see Bell at paras. [62] to [67]) because

article 2129 is not a provision of public order and the contracting parties may therefore agree in advance on the amount of the indemnity to be paid for “any other injury that the other party may have suffered”. (See Bell at paras. [52] to [55].) [ 24 ] It remains, however, that such a clause in a contract of adhesion must be validly stipulated, which will not be the case if the clause is abusive. (See Bell at para. [56].) (

c) The cancellation fees are abusive

[25] The judge rightly found that the indemnity should exclude future, post-resiliation profits. He wrote: [translation] [57] When applying

article 2129 C.C.Q., it is well established that the injury does not include the profit of which the provider hasbeen deprived or its future profits.* ____________ * G.I.E. Environnement Inc. v.

Pétrolière Impériale, 2009 QCCA 2299; Pelouse Agrostis Turf Inc. v Club de Golf Balmoral, (QC CA), J.E. 2003-2078. [58] In [Bell], Nantel, J. excluded the notion of future profits from the definition of injury. [26] Nevertheless, I remain of the view that the contracting parties could include post-resiliation profits in the indemnity to be paid.For example, a small construction company that builds one home a year could demand the full contract price to protect against not beingable to perform any another contract if the resiliation takes place mid-season; if the client agrees, this will constitute the law of theparties who will have negotiated on equal ground. [27] In the case of a contract of adhesion, like Rogers’, it must be determined whether this large company took advantage of a smallcustomer (art. 1437 C.C.Q.). [28] In this case, Rogers took advantage by drafting a clause that, on the one hand, recognizes the customer’s right to resiliate thecontract, yet on the other, denies the customer this right by requiring an indemnity including damages, as though there had beenresolution of the contract due to the customer’s failure to perform an obligation.

This way of doing things distorts the right to resiliate, tothe customer’s detriment. (See Bell at paras. [69] to [82].) [29] In short, the clause is abusive and the Cancellation Fees should be reduced. B- Computation of overpayment [30] The injury Rogers sustained should be assessed according to the cost of the investment to acquire the customer, which of courseincludes the discount on the mobile phone.

It is this initial investment by Rogers, rendered non-productive by the resiliation of thecontract, that forms the basis of the injury Rogers sustained and which will vary in severity depending on when the contract is resiliated. [31] The trial judge did not approach the issue this way. Like the judge in Bell, he found that the injury Rogers suffered did notdecrease over time but remained constant, regardless of when the resiliation took place. He wrote: [translation] [70] Moreover, the uncontradicted evidence offered by Rogers grounds a conclusion that the discount is not amortized over the termof the contract.

It is the cost of acquiring a customer and is recorded as an expense. It is obviously an accounting treatment that does notnecessarily have any legal repercussions, but [the Representative] has not established that amortization over the whole term of thecontract should be preferred [71] The Court finds that the discount is offered in exchange for the term stated in the contract.

It appears fair that consumers oradhering parties wishing to put an early end to the subscription may have to return the discount or advantage received, regardless of themoment of resiliation. [72] The purpose of the [cancellation fees] is to extinguish the principal obligation; it must therefore be equal to Rogers' injury.

Thus,it is the entire discount offered to the customer, regardless of where the parties are in the performance of the principal obligation. [32] I agree with the judge that the [translation] “accounting treatment [of the cost of acquiring a customer] does not necessarily haveany legal repercussions”. (See Bell at para. [104].) [33] It is also true that the [translation] “the discount is offered in exchange for the term stated in the contract”.

The goal of theinvestment is predictable and stable revenue. (See Bell at para. [91].) [34] The statement that [translation] “the purpose of [compensation through cancellation fees] is to extinguish the principalobligation” is not accurate, however, because the indemnity is paid subsequently and not prior to resiliation and is not a precondition tothe extinction of the principal obligation, but rather a possible consequence of such extinction if, and only if, the resiliation causes injury. [35] I also do not agree with the judge that the representative did not establish that [translation] “amortization over the whole term ofthe contract should be preferred”.

This is an unjustifiable reversal of the burden of proof. It is up to Rogers, who is claiming theindemnity, to prove the value of the injury sustained as a result of the resiliation. [36] Here, the Cancellation Fees clause is a recognition by the customer that a potential resiliation would cause Rogers injury, whichis obvious.

But the burden of proving the value of the injury and, in this particular case, that the amount of the indemnity it unilaterallystipulated does not exceed this value and is not abusive, is borne by Rogers. [37] There is nothing in the evidence to indicate that Rogers’ injury decreases in stages corresponding to the reduction inCancellation Fees, that is, a maximum level with no reduction for the first 15 months and a second level for the last six months. (See Bell

at para. [110].) [ 38 ] With respect, it seems obvious to me that if the objective sought is 100% achieved, there is no injury; if it is 50% achieved, the injury is reduced by 50%; and if the objective is only 10% achieved, then the injury is equal to 90%. (See Bell at paras. [107] to [114].) [ 39 ] In short, as in Bell , Rogers’ injury decreased from one month to the next in equal proportion, and this is the basis on which the overpayment must be computed, starting with Rogers’ initial investment to acquire the customer. [ 40 ] In Bell , in addition to the discount itself, the trial judge also accepted as [ translation ] “discount-related costs” (Investment to Acquire Customer) the costs described by Bell as [ translation ] “the commissions paid ... to its representatives upon the sale of devices and the marketing fees incurred for the sale of devices to customers”, representing an overall average of $236. [ 41 ] For Rogers, this investment is $246. [ 42 ] The judge accepted only the discount and excluded the other components of Rogers’ investment.

He wrote: [ translation ] [60] Rogers offered a discount on subscription contracts. The discount is consideration for the term and constitutes Rogers' injury should the client fail to reach the end of the term.

The Court excludes the commissions paid by Rogers to the retailer for entering into the contract from its computation of the injury since the customer has no control over them, they are not disclosed to the customer, they may vary, and they are not an injury foreseeable to the customer. [ 43 ] I share the view of the trial judge in Bell , who includes all of Bell’s expenses when computing its investment. [ 44 ] The payment of a commission to a vendor who signs a contract with a new customer is in no way unforeseeable.

Whether the object purchased is a car, refrigerator, or computer, we can be quite certain that the loquaciousness of the salesperson who persuades us to buy is a correlative of the commission, bonus, or premium he or she will receive if the sale is made.

We may not control or be aware of the amount, and this amount may vary, but it is already foreseeable that if we resiliate the contract, the commission will become a loss for the company. [ 45 ] To conclude, the judge should have calculated the overpayment to Rogers after excluding post-resiliation profits, while taking into account [ translation ] “discount-related costs” on the one hand – that is, the $246 investment – and a month-to-month reduction in the value of the injury on the other.

Thus, the computation should have been like that performed in Bell . [ 46 ] In Bell , the computation of the overpayment based on the accepted parameters results in $10 million of the $21.3 million received, or 47%. [ 47 ] Applying this percentage to the $35.5 million in Cancellation Fees collected by Rogers, the overpayment is $16.7 million, an amount very close to the $16.8 determined by the trial judge. Because the amount is based on averages and estimates, there is no reason to intervene.

C- Other points [ 48 ] As in Bell , there is no reason to modify the definition of the class, since the members are already limited to those [ translation ] “who have paid” cancellation fees. (See Bell at para. [26]). [ 49 ] There is no reason to award punitive damages. (See Bell at paras. [132] to [134].) * * * [ 50 ] Ultimately, I would dismiss Rogers’ appeal, with costs PAUL VÉZINA, J.A.

REASONS OF BÉLANGER, J.A. [ 51 ] Like my colleague Vézina, J.A., but for different reasons, I would dismiss Rogers’ appeal. [ 52 ] This class action concerns a claim for reimbursement of early cancellation fees imposed on Rogers members when they unilaterally resiliated their wireless telephone contracts with terms of 12, 24 or 36 months. [ 53 ] The service contracts contemplated in the class action were entered into before June 30, 2010, the date the Consumer Protection Act [2] was amended to prohibit contracts of successive performance from excluding the right of consumers to avail themselves of articles 2125 and 2129 C.C.Q. ***

[ 54 ] On January 29, 2009, Mario Brière signed a new contract with Rogers, committing to use its mobile phone network for a term of 36 months. He obtained a $50 discount on the purchase of a new mobile phone. He paid $250 for the phone, while Rogers had paid $300. In addition to the $50 discount on the device, he received a $50 credit on his bill. Therefore, because he committed to use Rogers’ mobile network for three years, he received a benefit worth $100. In November 2010, with 13 months left on the 36-month term, Brière informed Rogers that he was terminating his contract.

Accordingly, Rogers invoiced him $200 in early cancellation fees (“ECFs”), as stipulated in the contract. Brière attempted to dispute the fees but was unsuccessful. He therefore paid the fees. It is agreed that, for the 13 months remaining on his contract, the average bill would have been $36.59 a month. [ 55 ] Arguing that the ECF clause is excessive and abusive within the meaning of

article 1437 C.C.Q. , Mario Brière was authorized to bring a class action and designated as representative of the following class: [ translation ] Any and all natural and legal persons (with no more than 50 employees in the 12-month period preceding the action), who reside or resided in Quebec and used the Rogers mobile telephone or data transmission service, were invoiced by Rogers and who, after February 21, 2008, paid cancellation fees pursuant to a written agreement entered into (

i) prior to February 1, 2007, containing a resiliation clause for cancellation fees in the amount of $20 per month remaining in the contract, up to $200 or (ii) after February 1, 2007, but before June 30, 2010, containing a resiliation clause for cancellation fees of the greater of either $100 or $20 per month remaining in the contract, up to $400, or in the case of data transmission, the greater of $25 or $5 per month remaining in the contract, up to $100; [ 56 ] Brière sought full reimbursement of the $200 he paid in cancellation fees as well as punitive damages.

The judgment [ 57 ] This is how the judge summarized the class action: [ translation ] [2] Between 2007 and 2013, Rogers invoiced early cancellation fees (ECFs) in the amount of $69,135,228 to consumers and $4,145,078 to small and medium-sized enterprises (SMEs) as authorized by the subscription contract for services. [3] The petitioner was invoiced $200 in ECFs, which he paid.

He seeks their reimbursement and punitive damages. [4] For the reasons set out below, the Court orders Rogers to compensate the members of the group for the difference between the ECFs collected by Rogers and the benefit received by the members when they entered into the subscription contract, that is, the discount offered on the price of their telephone. [Verbatim reproduction.] [ 58 ] The judge first decided that the ECF clause was not a penal clause. Consequently,

article 2129 C.C.Q. applies, subject to an agreement between the parties stating otherwise.

The judge then determined that the ECF clause was abusive and should be reduced so that members would be reimbursed any amount exceeding the discount they received when they entered into the contract. [ 59 ] For reasons we will revisit, the judge created sub-categories and ordered reimbursement of a portion of the ECFs collected: [ translation ] [94] According to the evidence, it is appropriate to divide the members of the group into the following sub-categories: • Natural persons who, during the period of time at issue in this action, had a consumer account for a mobile telephone plan (Consumer voice plan); • Natural persons who, during the period of time at issue in this action, had a consumer account for a data transfer plan (Consumer data transmission plan); • Natural or legal persons not included in the above sub-categories who, during the period of time at issue in this action, received mobile telephone services (SME voice plan); • Natural or legal persons not included in the two first sub-categories who, during the period of time at issue in this action, received data transmission services (SME data transmission plan). [95] The compensation due to each of these sub-categories is established as follows: Sub-category ECF [3] Discount [4] Difference Compensation Consumer voice plan $177.14 ($81.35) $95.79 $95.79 Consumer data transfer plan $97.34 ($118.48) [5] ($21.14) None SME voice plan $384.16 ($97.07) $287.09 $287.09 SME data transfer plan $124.28 ($86.80) $37.48 $37.48 [96] In light of the averages used, the evidence shows that the ECFs received for the data transfer portion of consumer clients does not

exceed the discount received. In this particular case, the injury sustained by Rogers is greater than the discount [6] received by the members. They will not be entitled to compensation. [97] Rogers must therefore pay the following damages to each sub-category: Sub-category Number of accounts [7] Compensation Total due Consumer voice plan 157,800 $95.79 $15,115,662 Consumer data transmission plan 50,744 None $0 SME voice plan 5,524 $287.09 $1,585,885 SME data transmission plan 3,401 $37.48 $127,469 Issues on Appeal [ 60 ] The appellant raises several issues on appeal:

(1) Did the judge err in ruling that, following the authorization judgment, there was res judicata on the issue as to whether the members had waived the right to unilateral resiliation set out in articles 2125 and 2129 C.C.Q .?

(2) Did the judge err in ruling that the members had not waived their right to unilateral resiliation set out in articles 2125 and 2129 C.C.Q. ?

(3) Did the judge err in ruling that the ECFs paid by the members exceeded the amount of the injury that Rogers actually suffered in accordance with

article 2129 C.C.Q. ?

(4) Did the judge err in ruling that the ECFs were [ translation ] “excessive and abusive” within the meaning of

article 1437 C.C.Q. ?

(5) Did the judge err in ruling that the amount to be reimbursed to the members totalled $16,829,016? Analysis 1- Res judicata [ 61 ] At the outset, the trial judge rejected Rogers’ argument that the judgment authorizing the class action had definitively decided the issue of whether early resiliation had been waived. [ 62 ] There is no res judicata on the issue of whether the legal regime under articles 2125 and 2129 C.C.Q. applies. The very nature of an authorization judgment is such that no right is decided other than the right to bring a class action and to define the parameters thereof.

The purpose of the authorization judgment cannot be to decide that the respondent has waived a right of any kind. That determination falls to the judge on the merits of the case, after the evidence is heard. In addition, the judge on the merits is not bound by the authorizing judge’s legal characterization. What is more, and as the trial judge stated, the authorizing judgment contained no ruling on whether or not the right to early resiliation had been waived.

Thus, the trial judge did not err on this issue, which was also well described in the proceedings. 2- Waiver of the right to unilaterally resiliate the contract [ 63 ] The judge found that there was no clear and unequivocal waiver of the members’ right to unilateral resiliation. This finding is based on the

interpretation of the ECF clause: [ translation ] [36] According to Rogers, the inclusion of the ECF clause means that the customer implicitly waives his or her right to early resiliation under

article 2125 C.C.Q. [37] The Court finds that the existence of a clause providing for the payment of ECFs to end the subscription contract does not ground an inference that the right to early resiliation has been waived. [38] The wording of the early resiliation clause tends to prove the opposite, in fact.

This clause provides for fees due upon early resiliation rather than a penalty should the customer fail to reach the end of the term of the contract. [39] Because the right to resiliate is subject to certain conditions, it should be found that this right is preserved rather than implicitly waived. [40] For this same reason, the Court cannot find that the mere existence of cancellation fees violates the petitioner's right to unilaterally resiliate a contract.

The Court finds that the option to cancel the contract that is given to customers upon payment enshrines their right to early resiliation. [ 64 ] Rogers maintains that subjecting the right to unilateral resiliation to terms that differ from those under

article 2129 C.C.Q. would set aside the application of articles 2125 and 2129 in their entirety. It adds that it is not necessary for the waiver of the right to resiliate the contract to be [ translation ] “spelled out” in the contract. [ 65 ] The issue of whether the legal regime under articles 2125 and 2129 C.C.Q. applies is considered in Bell , [8] also rendered today.

Because the ECF clause in the Rogers contract is similar to that in the Bell contract, the legal answer is the same. I therefore agree with both the trial judge and Vézina, J.A., on this issue. I will summarize the applicable principles. [ 66 ]

Article 2125 C.C.Q. recognizes that the customer has the right to unilaterally resiliate a service contract. This provision is not one of public order and the parties may derogate from it. Any waiver of the right to unilaterally resiliate a service contract, however, must be clear and unequivocal. [9] In The Mile End Milling Co. v.

Peterborough Cereal Co ., [10] the Supreme Court noted the importance of this principle: [ translation ] The actual legal rule is that rights are never supposed to be waived, and while acquiescence may be tacit, it must be unequivocal, or in other words, the intention to acquiesce or to waive must be demonstrated. [ 67 ] The choice to enter into a fixed-term contract is not a clear waiver of the right to unilaterally resiliate. In Centre régional de récupération C.S. Inc. v.

Service d’enlèvement de rebuts Laidlaw (Canada) Ltée ., [11] this Court clearly stated that [ translation ] “waiver of the right to resiliate must not be taken as a given simply because a term has been fixed” for the contract. [ 68 ] The fact that customers do not waive their right to resiliate the contract does not necessarily mean that

article 2129 C.C.Q. applies. The parties reserve the possibility of agreeing in advance to the compensation to be paid to the service provider. [ 69 ] However, the fact that they agree in advance on an indemnity due in the event of resiliation does not mean that it can be assumed that the customer has waived the right to unilaterally resiliate the contract. Rogers’ argument that any derogation from the regime of indemnification under

article 2129 C.C.Q. necessarily entails a waiver of the right to unilateral resiliation under

article 2125 C.C.Q. cannot be retained. Each of these provisions must be considered separately. [12] 3- Rogers’ injury [ 70 ] The judge determined that Rogers’ injury was limited to the discounts given. He explained: [ translation ] (

a) The discount [82] Brière paid $200 for the device in exchange for entering into a thirty-six-month subscription contract. Without subscription, he would have paid $300. Rogers calculated the customer's purchase cost based on its own cost to purchase the device, not according to the advertised retail price. [83] The Court sets the discount Brière received for signing the subscription contract at $100. [84] This being so, does it not appear unreasonable to require that Brière pay $200 to put an end to his subscription? (

b) The injury [85] As discussed previously, it is the discount on Brière's device that constitutes Rogers' injury because, had Brière opted for one of the other two types of contracts (prepaid or monthly) Rogers would never have obtained Brière's commitment for thirty-six months, but would have received $100 more at the time of purchase of the device. [ 71 ] Rogers argues that the judge erred in his determination of the actual injury it suffered pursuant to

article 2129 C.C.Q. by limiting it solely to the [ translation ] “discount received” by the members, when it should have been entitled to all of its “actual costs and expenses”. [ 72 ] The evidence adduced by Rogers indicates that the ECFs were designed, at least in part, as a way to compensate for loss of future income. [ 73 ] In the context of a successive performance service agreement, the judge was right to exclude loss of future profits from the assessment of the injury Rogers sustained.

Rogers cannot claim to be entitled to obtain future profits when the customer retains the right to unilaterally resiliate the contract. [ 74 ] The judge also dismissed Brière’s argument that the assessment of the injury should correspond to no more than a fraction of the discount given, based on the amount of time elapsed in the contract when it was terminated. Brière suggested that the injury should be amortized over the time elapsed.

The judge rightly found that the evidence did not justify granting this request: [ translation ] [70] Moreover, the uncontradicted evidence offered by Rogers grounds a conclusion that the discount is not amortized over the term of the contract. It is the cost of acquiring a customer and is recorded as an expense. It is obviously an accounting treatment that does not necessarily have any legal repercussions, but Brière has not established that amortization over the whole term of the contract should be preferred. [71] The Court finds that the discount is offered in exchange for the term stated in the contract.

It appears fair that consumers or adhering parties wishing to put an early end to the subscription may have to return the discount or advantage received, regardless of the

moment of resiliation. [72] The purpose of the ECF is to extinguish the principal obligation; it must therefore be equal to Rogers' injury. Thus, it is the entire discount offered to the customer, regardless of where the parties are in the performance of the principal obligation. *** [ 75 ] Rogers maintains that the judge also erred in excluding the commissions paid to retailers upon signing the contracts from the assessment of its injury. These commissions, they submit, constitute “actual expenses” within the meaning of

article 2129 C.C.Q. [ 76 ] The judge excluded the commissions paid from the computation of the injury for the following reasons: [ translation ] [60] … The Court excludes the commissions paid by Rogers to the retailer for entering into the contract from its computation of the injury since the customer has no control over them, they are not disclosed to the customer, they may vary, and they are not an injury foreseeable to the customer. [ 77 ] In the appellant’s view, the fact that the commissions were not disclosed to the customer, that they were variable, or that the respondent had no control over them does not justify excluding them from the computation.

It contests the judge’s finding of fact that the commissions were not foreseeable. [ 78 ] Rogers pleads that its investment to “acquire” a customer was made to ensure a certain revenue over a certain period of time. Its analysis of the ECFs is therefore based on the loss of revenue if the customer resiliates the contract before the end of the term. [ 79 ] It seems reasonable to state that the injury Rogers sustained does not include all of the expenses it incurred to “acquire” a customer.

It is easy to see that Rogers cannot, for example, claim its advertising expenses, its rent, or even the expenses it incurs to attract a new clientele. The actual injury does not include current expenditures. Its injury must necessarily be related to the expenses incurred to convince customers to remain committed to its services for a certain period of time.

The discounts given undeniably constitute such an injury, as do the expenses directly related to these discounts. [ 80 ] The evidence indicates that Rogers does not have its own retail outlets, that it does not purchase or sell telephones, and that it pays a commission to retailers who sell its telephone service contracts. The commissions are therefore not paid for the sale of mobile telephones. [ 81 ] Rather, the evidence reveals that commissions are paid to the vendor for the activation of telephone lines.

It therefore cannot be said that the total cost of commissions results in a loss directly related to early resiliation, because the evidence does not lead to such a conclusion. [ 82 ] Moreover, very few details are provided about the calculation of commissions which, as the representative of Rogers himself states, may include more than actual commissions. [ 83 ] The judge’s finding that the commissions are variable is based on the evidence, including the testimony of Barry Choi, the appellant’s chief financial officer.

Absent a palpable and overriding error, this finding of fact is immune from intervention. [ 84 ] As an illustration of the highly variable nature of these commissions, let us consider Brière’s specific case, compared with the averages adduced by Rogers. According to the evidence, the commission paid to the retailer for Brière’s transaction in 2009 would have been $50. The average commission granted for the same type of plan, again according to the evidence, is around $167.07. This is more than three times the amount of the commission allegedly paid in Brière’s case.

The appellant provides no explanation for this disparity. This illustration therefore corroborates the judge’s finding of fact about the variability of commissions. [ 85 ] Therefore, the judge did not err in deciding that Rogers’ injury consists of the discount given to a customer when he or she agrees to commit for a fixed term.

Moreover, regardless of whether or not the customer chooses a fixed-term contract, Rogers pays similar operational and usage costs and secures an equivalent monthly profit margin, as the judge reports in paragraph 18 of his judgment. 4- Is the clause abusive within the meaning of 1437 C.C.Q.? [ 86 ] The judge concluded that the clause was excessive, explaining as follows: [ translation ] (

c) The excessive nature [86] In seeking to guarantee a revenue stream without taking the consideration offered into account, Rogers has forgotten the primary object of a mobile telephone contract, which is to provide a service in exchange for monthly payment.

Rogers has modified this object by seeking a guarantee that its clients will not end the contract or that, if they do and Rogers no longer has to offer the service, it will still make a profit. [87] Taking advantage of the fact that consumers or adhering parties are open to whatever costs the least at the outset, Rogers imposes ECFs that are not commensurate with the service it provides. [88] In the view of the Court, the ECFs are excessive and abusive in as much as they exceed Rogers' injury.

[ 87 ] The abusive or excessive nature of an agreement is assessed in light of the respective obligations of the parties [13] and the circumstances of the case. The balance between the parties and the disproportionate nature of the agreement must be evaluated by the judge. [14] [ 88 ] The analysis of the economic balance between the parties must include consideration of the nature of the contract (of adhesion or by mutual agreement) and the number of persons affected by the agreement. [ 89 ] Between 2007 and 2013, Rogers invoiced more than $73 million in ECFs to customers who resiliated their contracts early.

Of this amount, Rogers has collected approximately $35 million from some 217,000 individuals, the vast majority of whom are consumers. [ 90 ] Ultimately, the judge determined that the class consisted of 166,725 persons. The vast majority of these persons are consumers who did business with Rogers and unilaterally resiliated their contract for telephone services, as was their right. These members should not have to pay amounts that are actually intended to compensate Rogers for the loss of future income, even in part.

The only benefit given to the class members was the discount granted when they signed their contract. [ 91 ] In the circumstances, the resiliation fees that exceed the amount of the actual injury Rogers suffered due to early resiliation are abusive and the clause should be reduced. 5- The quantum of the $16,829,016 order [ 92 ] The appellant does not explain how the judge erred in his computation of the $16,829,016 reimbursement that must be paid.

There is no reason to say more about this. [ 93 ] To conclude, it is worth pointing out that there are reasons for the real difference between the orders in Bell and in this case. Beyond the fact that the evidence adduced in each of the files is very different, these differences can be explained in two additional ways. [ 94 ] In Bell , the average discount granted was $236, as opposed to an average discount of $95.79 for most of the members of the Rogers class (157,800 voice plan customers).

Moreover, the number of members concerned in this case is much higher than that in the class action against Bell. [ 95 ] I would therefore dismiss the appeal, with legal costs. DOMINIQUE BÉLANGER, J.A.