Quebec consumer law: Superior Court confirms no punitive damages can be claimed for actions based on unconscionability

On January 17, Justice Clément Samson of the Superior Court of Quebec dismissed a class action instituted against Telus Mobility and Telus Communications Company (TELUS).¹ The class action, authorized in July 2012, primarily alleged that TELUS charged its customers abusive and unconscionable cancellation fees to terminate their wireless or wireline service agreements.

The judgment on the merits in Masson c Telus Mobilité (Société Telus Communications) is highly relevant for a number of reasons. We will look at two.

Test to determine whether a rate is abusive or unconscionable

A court’s analysis to determine whether a rate is abusive or unconscionable cannot take place in a vacuum. In finding that TELUS’ termination charges were not abusive, Justice Samson weighed the consideration received by the class members who felt aggrieved (e.g. the cost of the telephone supplied to the consumer under the wireless services agreement) and the costs borne by the defendants to implement the relevant clause. TELUS had submitted substantial expert evidence demonstrating that the cancellation fees it charged were not abusive or unconscionable considering the costs that had to be borne by TELUS.

Claims for punitive damages under the Consumer Protection Act (CPA)

According to Justice Samson, a consumer bringing an action based on Section 8 CPA (unconscionability) is not entitled to punitive damages because Section 8 sets out a specific regime separate from the recourse for punishing a failure to fulfill an obligation imposed by the CPA, which includes the possibility of claiming punitive damages (s. 272 CPA). This interpretation is, moreover, consistent with the Court of Appeal’s finding in Household Finance to the effect that the recourse under Section 272 CPA cannot be combined with other recourses specifically provided by other provisions of the CPA.

Footnote

¹ Masson c Telus Mobilité, 200-06-000126-105 (SC).