August 22, 2007

Ted Tjaden

Rogers Wins "Comma" Contract Dispute With Bell Aliant

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4 Comments on “Rogers Wins "Comma" Contract Dispute With Bell Aliant”

1. David Cheifetz says:

   August 22, 2007 at 9:55 am

   Now Rogers has to figure how to get its money back, since the CRTC also ruled it didn't have jurisdiction over power poles, so couldn't make any order against NB Power

   c. What is the status of the NB Power-owned poles?

   66. The Commission does consider it necessary to consider the arguments put forward by Bell Aliant regarding the nature of the NB Power-owned poles, as the Commission's conclusions on such arguments could have an impact on the Commission's authority to grant a remedy to Rogers.

   67. As noted above, the 2002 SSA and the NST under which the use of the model SSA was prescribed are regulatory. The Commission considers that these requirements cannot be interpreted as extending the Commission's authority to support structures that fall outside of the Commission's jurisdiction under the Act. It is clear, following the Barrie decision, that the Commission's jurisdiction does not extend to power poles.

   68. Given that the Commission does not have jurisdiction over granting access to power poles for communications purposes, it follows that the offering by a telephone company of access to power poles for which it has the authority to provide permits is done on a voluntary basis, and not as the result of a Commission requirement.

   69. In the Commission's view, if parties voluntarily elect to bind themselves with respect to poles that fall outside of the Commission's jurisdiction under the Act, the Commission cannot assume jurisdiction to resolve any issues relating to non-performance of those obligations.

   70. The Commission finds, in light of the above, that it does not have the jurisdiction to interpret or enforce any obligations between Bell Aliant and Rogers with respect to NB Power-owned poles.

   It's worth a snicker, while Roger's lawyers tell Ted R whether this means that Rogers could have gone to court over the entire issue, in the first place, and so avoid Rogers' paying them at least twice.

   And, if they do go to court, to what extent is the CRTC decision binding in the court case.

   Of course, the situation may not be over. I assume that Bell Aliant is entitled to seek judicial review.

   More work for needy litigators. Aint life grand?
2. Mark says:

   August 23, 2007 at 12:14 pm

   –
   That case should go in the Lynne Truss hall of fame. I guess Bell was not able to eat shoots and leaves.
3. David Cheifetz says:

   August 23, 2007 at 10:14 pm

   You must be thinking of koalas. Ma Bell (even a Canadian Baby Bell) eats its young. In the meantime, though, Bell hasn't paid and there's no form of order that Rogers can enforce to get its money back.
4. John Swan says:

   August 28, 2007 at 9:46 am

   I’d like to put the “comma” dispute into a substantive context. What the CRTC did can be regarded as an example of exactly the wrong way to interpret a contract.

   The clause in question provided:

   "Subject to the termination provisions of this Agreement, this Agreement shall be effective from the date it is made and shall continue in force for a period of five (5) years from the date it is made, and thereafter for successive five (5) year terms, unless and until terminated by one year prior notice in writing by either party."

   It is decision, the CRTC held that the comma after the phrase, “five year terms” made the whole phrase, “and thereafter for successive five (5) year terms”, a parenthetical phrase which, looking solely at the grammatical structure of the clause, entitled Aliant to terminate the agreement on one year’s notice, regardless of the fact that the initial five year term had not expired.

   The basis for the CRTC’s reversal of its original decision was that the commas were in their correct place in the French version of the agreement. The French version provided:

   "Sous réserve des dispositions relatives à la résiliation du présent contrat, ce dernier prend effet à la date de signature. Il demeure en vigueur pour une période de cinq (5) ans, à partir de la date de la signature et il est subséquemment renouvelé pour des périodes successives de cinq (5) années, à moins d'un préavis écrit de résiliation à l'autre partie un an avant l'expi-ration du contrat." [Emphasis added by the CRTC]

   The CRTC justified its change in its attitude to the dispute by saying:

   "61. The Commission considers that the wording of section 8.1 in the French language version of the model SSA [Structure Support Agreement] can be interpreted in only one way: termination of the model SSA can only occur upon notice one year prior to the end of the initial term or one year prior to the end of a renewed term. The wording of the French language version, therefore, clearly points to a result opposite to that arrived at in Telecom Decision 2006-45."

   The original decision of the CRTC was not inevitable and put (or should have put) fear into every solicitor who has ever drafted a contract. The argument that the English language clause did not make clear that which the French language one did, is not convincing. In each case, the crucial phrase is concluded with a comma. As a result, the fear that the first decision might have created has not been removed.

   If you read the English version of the clause, as one might read anything written in English, the second comma marks a natural place for the reader (or speaker) to pause. The placement of this comma should not be given a significance that would eviscerate an arrangement that each party clearly understood. I have no idea how many agreements there are with the kind of grammatical land mine that the CRTC found, but their number must be legion. All have as their standard feature the grant of a fixed term—for financing and other reasons—with a right to terminate after that term has expired.

   The only question relevant to the interpretation of the clause in the context of the dispute would have been to consider whether Aliant would be caught by unfair surprise by being held to an initial five-year term; I cannot imagine a senior officer of Aliant being prepared to say so in the witness box and I think that it is beyond doubt that Aliant would not have been so surprised. Grammatical games of the kind played by the CRTC make the enforcement of agreements to achieve results consonant with the expectations of the parties subject to a dangerous degree of randomness with consequent largely unmanageable risks for the solicitors involved.

   The issue before the CRTC was quite different from that before the trial judge in AMJ Campbell Inc. v. Kord Products Inc. (2003), 63 O.R. (3d) 375. In that case, the position of the comma did change the meaning of the phrase.

   The facts of that case were that the plaintiff, seller, agreed to sell part of its business to the defendant, buyer. The price to be paid depended in part on the value of the inventory. The crucial term was the definition of the "Agreed Selling Price". The initial definition proposed by the solicitor for the buyer was that the ASP was to be defined, in part, as "net of taxes, rebates and discounts". The buyer's solicitor amended the clause to say, "net of taxes, freight rebates and discounts". This clause was, again at the request of the buyer's solicitor, further amended to read, "net of taxes, freight, rebates and discounts". The added comma between the words “freight” and “rebates” was duly black-lined. The seller's officer signed the agreement without carefully reading the changes. When the seller realized the significance of the final change, i.e., the added comma, it sought rectification. (The effect of the comma was, apparently, to reduce the price paid by the buyer by $1 million.) The trial judge held that the change had been properly brought to the seller's attention; that it knew (through the knowledge of its solicitors) of the change, that the buyer had no reason to think that the seller did not know of the change and that the conditions for rectification had not been met.

   The statement that the buyer had no reason to think that the seller did not know of and had not consented to the change is both very important and the basis for distinguishing the case from that before the CRTC: in Kord Products the buyer would not have agreed with the seller on the method for calculating the ASP and its expectations would have been disappointed had its final change not been given effect. See