Telus goes to SCC over early cancellation fees

Telus Corp. is asking the Supreme Court of Canada to review a decision by the Quebec Court of Appeal that determined the early cancellation fees it charged its customers years ago were “abusive.” The June decision by Quebec’s highest court found, under the province’s consumer protection laws, a class of customers paid “excessive and unreasonable” fees when they terminated their wireless and wireline contracts with Telus before the company and the province severely limited cancellation fees. It ordered a lower court to determine how the class would be determined and how they would be reimbursed. The leave to appeal document, dated September 23, argues that the lower court’s decision goes against previously determined case law and a clause in Quebec civil law, section 1622, which together show penalties as stipulated in contracts may go beyond what the companies actually suffer as a result of the cancelled contract. Telus also takes issue with how the court could reimburse the class, with an imposition of average damages suffered instead of actual damage by each member. This sets up a situation, it argues, where it could be reimbursing the difference between actual fees paid by each member and the average damage suffered in the class. The case, if heard, could help clarify early termination fee laws in the context of a class suit for all companies that employ such penalties in their contracts by providing a methodology for the lower courts to use, Telus said. Between January 2008 and June 2010, the lower court found Telus’ wireless division charged Quebec customers 49 per cent more than the company lost in early termination fees, while its home phone (wireline) business brought in a surplus of 38 per cent over the amount it lost. Telus received only a portion of the amount it billed. It billed roughly 152,837 customers a total of $52 million in termination fees, but only recouped $11 million of that from 57,377 customers, the lower court found. Its wireline division billed about $7 million in cancellation fees to 25,258 customers, but only received about $2 million from 14,311 customers. The court established that termination fees in excess of what Telus suffered can be recovered by the class. The consumer protection laws allow consumers to claim a reduction in those obligations “where the disproportion between the respective performance of the parties is so great as to amount to exploitation,” the judges wrote. The appeal court ruled that it would partially allow the class action, order recovery claims, and asked the lower court to set the terms and conditions for reimbursement for those who paid penalties in excess of what Telus suffered.

Telus goes to SCC over early cancellation fees

Brief | October 4, 2019

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Telus goes to SCC over early cancellation fees

Brief | October 4, 2019

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