Consumer Law: the Court of Appeal reviews the validity of unilateral amendment stipulations in consumer law

On May 8, 2017, a unanimous decision by the Court of Appeal of Quebec allowed in part the appeal and cross-appeal of a Quebec Superior Court decision in a class action suit filed against Videotron. This class action essentially accused Videotron of having unilaterally changed, in August 2007, the conditions of one of its Internet packages by reducing the initially unlimited bandwidth access to 100 GB per month (additional GB being billed at a price of $1.50/GB).

This Court of Appeal decision in the case Vidéotron v. Union des consommateurs proves relevant for several reasons, including the following:

On the validity of a unilateral amendment stipulation in a consumer contract

Although this matter has been debated before the Superior Court, particularly in the cases Laflamme c. Bell Mobilité and Martin c. Telus, no recent judgment by the Court of Appeal has yet focused on it.

In favour of the validity of its amendment, Videotron argued that the contract expressly provided a stipulation (section 3.9 of the contract) granting it this faculty. Immediately providing that this was inconsistent with section 11.2 of the Consumer Protection Act (the Act) (stipulations of unilateral amendment are prohibited, subject to certain conditions), Videotron maintained that the amendment at issue occurred in 2007, before the adoption of section 11.2, which occurred in 2009, and that nothing in the Act therefore prohibited such a stipulation.

The Court of Appeal emphasizes that before section 11.2 of the Act was adopted, unilateral amendment clauses also had to comply with section 1373 of the Civil Code of Québec (CcQ), which provides that any obligation must be determinate or determinable. According to the Court, this requirement ensures that any unilateral amendment stipulation must "identify sufficiently specific circumstances and set criteria to anticipate potential amendments." [translation]

Even if this conclusion concerns primarily the unilateral amendment stipulations inserted into consumer contracts concluded before section 11.2 came into effect, the introduction of this section does not prevent an argument based on section 1373 CcQ from being formulated in unilateral amendment stipulations.

The Court also concludes that Videotron’s unilateral amendment stipulation could not be alleged against the consumers because it waived their rights conferred by sections 12 of the Act (the contract must specify all ongoing fees payable) and 40 of the Act (the services provided must conform to the description made of them in the contract).

On the punitive damage claims under the Consumer Protection Act

According to the Court of Appeal, the trial judge was also justified in granting punitive damages to the members who subscribed to the plan or who renewed their contract after June 28, 2007 because on that date, although the technical feasibility had not yet been confirmed, Videotron had made the decision to change the conditions of the Internet package. Videotron should have therefore, after that date, informed the clients who were subscribing to the service or who were renewing their contract of the likelihood of a change underway in the contract.

The authors wish to thank law student Charles-Étienne Borduas for his help in preparing this legal update.