Lexpert Magazine

July 2019

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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LEXPERT MAGAZINE | JULY 2019 11 Molson Canada 2005 was McCarthy Té- trault LLP, with a team including Paul Steep, Adam Ship, and Katherine Booth. Counsel for the intervener Attorney General of Ontario was Michael S. Dunn and Ravi Amarnath. DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS V. TELUS COMMUNICATIONS INC. AND DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS V. BELL CANADA DECISION DATE: APRIL 12, 2019 Two recent Court of Québec decisions found newly enacted provisions of the Québec Consumer Protection Act to be con- stitutionally inapplicable and inoperative for telecommunications services providers facing charges of penal offences. On June 30, 2010, An Act to amend the Consumer Protection Act and other legisla- tive provisions, S.Q. 2009, c. 51, added nu- merous new provisions to Québec's Con- sumer Protection Act ("CPA"). In the wake of these provisions coming into force, Qué- bec's Office de la protection du consomma- teur instituted hundreds of penal infrac- tions against Telus Communications Inc. and Bell Canada, claiming that their terms and conditions of service were contrary to several sections of the CPA. Any person who purportedly contravenes the CPA can be prosecuted under its penal provisions. Sections 11.2 and 11.3 of the CPA re- spectively prohibit certain contractual stipulations pertaining to the unilateral modification or cancellation of a contract, while s. 13 prohibits to impose charges, penalties or damages upon the non-per- formance of an obligation. Sections 214.1 to 214.11 dictate that a "contract involv- ing sequential performance for a service provided at a distance" must contain and establish various limitations in the perfor- mance of any such contract. e defendants, relying on ss. 91 and 92 of the Constitution Act, 1867 and Parliament's exclusive jurisdiction over telecommunica- tions, challenged the CPA provisions in dispute at trial as being ultra vires of the provincial legislature as intended to regulate telecommunications service providers. In the alternative, the defendants sought that the CPA provisions in dispute be declared inapplicable and inoperative through the application of the doctrines of interjurisdic- tional immunity and federal paramountcy. Given the importance of the issues in dispute and the specificities of these penal prosecutions, the court found that it would be inadvisable to interpret the provisions of the CPA at issue without first ensuring that they apply to the defendants from a consti- tutional standpoint. Under sections 92(10) (a) and 91(29) of the Constitution Act, 1867, Parliament has exclusive jurisdiction over telecommunications. e Telecommunica- tions Act offers the main legislative frame- work applicable to telecommunications undertakings, in addition to the broad regulatory and adjudicative jurisdictions it extends to the CRTC in relation, inter alia, to the conditions of the provision of telecommunications services. Conversely, the CPA seeks to restore contractual equilibrium between mer- chants and consumers by prohibiting certain commercial practices considered deceptive, and regulating certain aspects of their contractual relations. Historically, telecommunications contracts were specifi- cally excluded from the ambit of the CPA, as the Supreme Court of Canada ruled in Alberta Government Telephones v. Canada (C.R.T.C), [1989] 2 S.C.R. 225 and in Té- léphone Guèvrement v. Québec (Régie des télécommunications), [1994] 1 S.C.R. 878 that such contracts were outside a provin- cial legislature's purview. e court came to the conclusion that the CPA provisions in dispute, while broadly draed, were enacted for the in- tent and purpose of regulating the tele- communications industry, and dictate the conditions for the commercialization of telecommunications for Québec to enact its own contractual standards and require- ments for such services. As a result, the court found that the National Assembly was directly regulating the content of fed- eral jurisdiction over telecommunications with the CPA provisions in dispute. Unlike a Superior Court, the Court of Québec has only a subject-matter and no inherent jurisdiction; it thus lacks jurisdic- tion to declare that a legislative provision is invalid by virtue of section 52 of the Consti- tution Act, 1982. In that context, the Court of Québec considered it unnecessary to rule on the validity of the CPA provisions in dispute, having regard to their pith and substance to determine if they were ultra vires of the provincial legislature, and exercised judicial restraint in that regard. However, the court may rule on the constitutionality of a legis- lative provision in the course of exercising its jurisdiction over a penal matter. Applying the interjurisdictional immunity doctrine, the court found that the CPA provisions are intruding on the core of Parliament's jurisdiction over telecommunications, which includes the conditions for the commercialization of telecommunications services. e Court concluded that the CPA provisions were constitutionally inapplicable in relation to the offences. As for the federal paramount- cy doctrine, the Court found that the CPA provisions were frustrating the purpose of the federal legislative scheme and the na- tional telecommunications policy, notably by regulating rates, the provision of services and the conditions of commercialization of telecommunications services. As a result, the court concluded that the CPA provisions were constitutionally inoperative in relation to the offences, and it acquitted the defendants of all charges against them. On May 10, 2019, the Director of Crim- inal and Penal Prosecutions and the Attor- ney General of Québec filed an appeal of the judgments. Telus Communications Inc. was repre- sented by Yves Martineau and Marjorie Bouchard of Stikeman Elliott LLP, and Mathieu Quenneville and Samuel Bachand of Prévost Fortin D'Aoust LLP (on con- stitutional questions), with the assistance of in-house counsel Delbie Desharnais. Bell Canada was represented by Vin- cent de l'Étoile of Langlois Lawyers LLP, with the assistance of in-house counsel Mélissa Beaudry. e Director of Criminal and Penal Pros- ecutions was represented by Simon Lajoie. e Attorney General of Québec was represented by Charles Gravel of Bernard Roy (Justice Québec).

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