May 11, 2018
Dufresne, Levesque, Healy
Appeal from a judgment of the Superior Court allowing in part a class action claiming damages and punitive damages. Allowed in part.
The respondent instituted a class action against Videotron for the amounts the company collected from its subscribers as contributions to the Local Program Improvement Fund (LPIF). He claimed that these fees, which were charged for on-demand rentals and cable television packages, were not disclosed and that they had been illegally charged or erroneously calculated, which constituted a prohibited business practice within the meaning of the Consumer Protection Act (CQLR, c. P-40.1). The trial judge ruled in his favour, in part. She found that the LPIF fees were duties payable under a federal statute within the meaning of s. 227.1 of the Act, concerning which Videotron had made false or misleading representations. She found that Videotron committed three faults. First, the notice on the bills did not reflect reality because the 1.5% fee was not calculated on the basis of the actual cost of cable services but on costs before any rebate was applied. Second, subscribers who entered into a contract with Videotron after June 30, 2010, were also charged fees based on before-rebate costs, although the general impression given by their customized contract suggested otherwise. Third, no contractual or external clause provided that these fees could be charged for on-demand rentals. Videotron was therefore condemned to pay compensatory damages of $3,267,581 for on-demand rentals and $3,152,042 for cable packages, and to pay $1,000,000 in punitive damages. The appeal concerns only the condemnation to reimburse the overpayment of fees for cable packages, the calculation of the interest awarded, and punitive damages.
The LPIF fees that the CRTC charged cable providers can clearly be considered duties payable under a federal statute, especially since s. 227.1 of the Act must be given a broad and liberal interpretation. The fact that the obligation on consumers arises from the contract binding them to Videotron and not from the statute itself changes nothing. Moreover, even though the judge relied on the burden of proof applicable in civil matters to determine Videotron’s contractual liability instead of on s. 272 of the Act, which was the basis of the respondent’s action, the Court’s intervention is not warranted. Even if she had applied the criteria in Richard v. Time Inc., (S.C. Can, 2012-02-28), 2012 SCC 8, SOQUIJ AZ-50834275, 2012EXP-836, J.E. 2012-469,  1 S.C.R. 265, she still would have condemned Videotron to reimburse the fees that its subscribers paid beyond the actual cost of their cable packages. The company committed a prohibited business practice by failing to clearly explain to its customers how it calculated these costs. When they entered into the contract or when it was subsequently amended, the customers never knew that the fees were not based on the price of the package they chose, but were instead calculated according to the basic price of the service and that the money Videotron collected from them was more than what it paid to the CRTC. These false representations were likely to influence the decision of customers to enter into a contract with Videotron. The condemnation for Videotron to reimburse the overpayments for cable services is therefore upheld. Only the calculation of the interest is modified to be performed annually instead of as of the service of the application for authorization. Finally, the amount awarded in punitive damages is excessive and disproportionate. Videotron’s breach is better characterized as an ill-advised decision than as a deliberate intention to overcharge its subscribers for a product without their knowledge. The compensatory damages have a punitive and deterrent effect. Therefore, the amount awarded in punitive damages is reduced to $200,000.
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