Several trends in appellate jurisprudence emerged in 2017 that will continue to be relevant to in-house counsel in 2018, including those relating to privacy rights, class proceedings and our daily use of technology.
Sign up for an online service and you’ll see a box to check agreeing to terms and conditions. But do those terms and conditions, many of which involve choice of law and forum, bind consumers? The Supreme Court of Canada suggests not.
In Douez v. Facebook, the court refused to enforce foreign forum selection and choice of law clauses in an online consumer agreement. Instead, the court certified a class proceeding involving the alleged breach of provincial privacy legislation and allowed the action to proceed in British Columbia.
The case raises doubt about the enforceability of these types of clauses in consumer agreements, particularly those in the “click-wrap” contracts used by most businesses to sell goods or provide services online. By inference, there is now some doubt about the enforceability of other standard form contract clauses that limit remedies available to consumers, particularly those relating to indemnity, disclaimer and limitation of liability.
At minimum, Douez suggests in-house counsel may want to re-examine the enforceability of forum selection and choice of law clauses in consumer agreements, particularly those concluded online. Those provisions may no longer protect commercial enterprises from multi-jurisdictional litigation the way we once thought.
The approach to consumer agreements contrasts with the interpretation of agreements negotiated freely between sophisticated parties, including releases that purport to settle litigation. The Ontario Court of Appeal’s decision in Biancaniello v. DMCT is an example.
Biancaniello involved the scope of a mutual release intended to settle ongoing litigation relating to the payment of fees. The court held that the mutual release barred later litigation arising from the subject matter related to the release. Although the parties could not have known about the particular cause of action when they executed the release — the fees in dispute were related to the work subsequently found to be negligent — the language and the context of the release precluded additional litigation.
Privacy rights: It’s a brave new world online
For years, we have been told to think emails are about as private as the messages on the back of a postcard. But what about text messaging? In addition to affirming that privacy is a quasi-constitutional right in Douez, the SCC also weighed in on whether texts attract privacy rights in R. v. Marakah and R. v. Jones.
In this pair of criminal cases, the court said individuals can reasonably expect their texts to remain private even after they have been sent to and received by another person or stored by a telecommunications provider. This expectation of privacy may exist despite a lack of control over the personal information and without a contractual obligation on the part of the telecommunications provider to keep the information confidential.
The cases suggest that employers make sure that policies exist to ensure a mutual understanding about the scope of employee privacy rights.
Canadian jurisdiction over foreign claimants and law: It’s a global village
Appellate courts continue to take an expansive approach to jurisdiction over disputes involving foreign claims or entities, whether the imposition of a global injunction to enforce intellectual property rights in Google Inc. v. Equustek Solutions Inc., the rejection of forum selection and choice of law clauses in Douez or foreign plaintiffs seeking remedies in Canada.
In Google, the SCC allowed an injunction against a non-party on the same grounds as a party within the context of Google’s global operations. The court recognized the internet’s world-wide reach and acknowledged that an injunction limited to Canada would not prevent harm when customers are located around the world. The need to prevent irreparable harm to IP rights holders “far outweighed” any damage to freedom of expression.
In Douez, the SCC certified a class proceeding alleging Facebook breached B.C. privacy legislation, despite the existence of a forum selection and choice of law clause favouring California.
In B.C., the Court of Appeal in Garcia v. Tahoe Resources Inc. allowed Guatemalan plaintiffs to pursue claims against a Canadian parent company of a foreign subsidiary for actions taken against security personnel at a Guatemalan mine. In Ontario, the Court of Appeal certified Airia Brands v. Air Canada, an action involving foreign claimants who alleged that foreign carriers engaged in price fixing of freight services to and from Canada. The court applied the real and substantial connection test to foreign class members just as it would to Canadian class members.
Class actions: Get on with it . . . but persistence can pay off for defendants
Although appellate courts continued to certify class actions in 2017, they were also willing to determine the merits of those actions in summary judgment proceedings. The long-running case of Keatley Surveying v. Teranet is a prime example.
In 2007, Keatley Surveying Ltd. filed a class action on behalf of all land surveyors in Ontario who registered plans of survey in the provincial land registry offices. The complaint alleged that Teranet Inc., which runs the province’s electronic registry system, breached copyright. Originally, certification was refused. On appeal, the Divisional Court allowed the plaintiffs to reconceptualize their claim and the common issues, and it certified the action. The Court of Appeal concurred. Both parties then sought summary judgment where the motion judge considered — and the parties agreed — the case turned on one common issue. The issue was decided in favour of the defendants and upheld on appeal.
Although the action has been best known for the court’s willingness to allow plaintiffs to re-shape their claims on appeal, the Ontario Court of Appeal’s decision in 2017 illustrates the importance of pursuing class proceedings to merits-based assessments.
Patricia McMahon is a research lawyer and a member of Torys’ Appellate Practice. She has extensive experience in class action proceedings, tax disputes, constitutional law and administrative law, having appeared before all levels of court.