Last week, the British Columbia Supreme Court dismissed five class action certification applications in Unlu v. Air Canada (Unlu), which were brought against airlines regarding the manner in which fuel surcharges are displayed on a passenger’s ticket receipt. The plaintiffs alleged that the airlines’ display of fuel surcharges constituted a deceptive act or practice contrary to B.C.’s Business Practices and Consumer Protection Act (BPCPA) capable of misleading a consumer as to the true price of an airline’s air transportation services. Justice Adair dismissed the certification applications on the basis that they failed to identify a sufficiently narrow, identifiable class or raise common issues, all of which are required to certify a class action. The chambers judge also found that the plaintiffs failed to adequately plead a basis for class-wide damages or other remedy. In doing so, she followed a series of recent B.C. decisions dismissing consumer protection certification applications, including Ileman v. Rogers Communications Inc. (Ileman) (see our June 2015 Blakes Bulletin: B.C. Court of Appeal Confirms No Cause of Action for Cellular “System Access Fees” Claim) and Clark v. Energy Brands Inc. (Clark) (see our October 2014 Blakes Bulletin: Another Refreshing Decision: Certification Denied in B.C. vitaminwater® Class Action) continuing the recent trend in B.C. and further limiting the scope for class-wide remedies pursuant to the BPCPA.
The plaintiffs asserted in Unlu that the airlines’ pricing practices were deceptive contrary to the BPCPA on the basis that the airlines engaged in a practice of pricing that excluded and separated amounts charged pursuant to a ticketing code from the price of the air travel services. The plaintiffs asserted that by means of the code, the airlines classified the amounts payable pursuant to those codes as “taxes” payable to a third party, but in fact collected those amounts and retained them without paying them to any third parties. The plaintiffs sought damages and a restoration order under the BPCPA and other remedies on the basis that the airlines had been unjustly enriched. The airlines argued, among other things, that the process of purchasing and ticketing air travel is diverse and not uniform. The form and content of ticket receipts reflects practices at the travel agent level, over which the airlines have no control. Notably, none of the plaintiffs in these five cases had purchased air travel services directly from any of the airlines and none of the plaintiffs’ ticket receipts that were alleged to contain deceptive statements were airline documents.
Justice Adair of the B.C. Supreme Court dismissed the applications under the BPCPA on the basis that the plaintiffs failed to meet the required elements of section 4(1) of the Class Proceedings Act (CPA). In particular, the court held that the plaintiffs had failed to meet their burden to show some basis in fact that there was an identifiable class and that the claims of the class members raised common issues.
With respect to the consumer protection claims, Justice Adair essentially followed the B.C. Supreme Court and Court of Appeal decisions in Ileman to find that the plaintiffs had not adequately pleaded a claim for damages pursuant to section 171 or a restoration remedy under section 172(3)(a). She also followed the lower court decision in Ileman to find that the plaintiffs had not adequately pleaded a claim for unjust enrichment; an alleged breach of the BPCPA cannot provide the basis for such a claim.
On the question of whether there was an identifiable class, Justice Adair agreed with the airlines that the plaintiffs’ proposed class definition was impermissibly overbroad as it included individuals that had purchased air transportation for commercial or other non-“consumer” purposes and accordingly, had no claim under the BPCPA against any airline. A “deceptive act or practice” under the BPCPA can only arise where there is a “consumer transaction” which requires that the purchase was made by an individual “for purposes that are primarily personal, household or family”. Indeed, each of the proposed representative plaintiffs had pleaded that he or she had purchased air travel for “personal use” and included similar statements in their affidavits in support of certification. Justice Adair found that as a result, the proposed class definition was unacceptably broad.
Although the conclusion that there was not a properly defined class was sufficient to dismiss the application for certification, Justice Adair observed that most of the plaintiffs’ proposed common issues were individual and not suitable for certification. The few proposed common issues that could satisfy the requirements were not seriously in dispute and certification of such issues would do little to move the litigation forward. The plaintiffs’ claims for injunctive and declaratory relief pursuant to section 172(1) of the BPCPA were the only claims sufficiently pleaded that could be pursued on a common basis (if there were an identifiable class). However, again, Justice Adair followed the previous decisions in Ileman (and Clark) that held that consumer protection claims seeking only a declaration or injunction do not warrant certification because those remedies can be pursued and would be binding upon the defendants regardless of whether or not the proceeding was a class action or individual claim; indeed, a class proceeding in such circumstances is unnecessary and wasteful.
The decision in Unlu continues the recent trend in B.C. dismissing certification of consumer protection class actions where the plaintiffs have not suffered any real damage or loss. Further, where a product or service can be purchased for different purposes, both “consumer” and commercial or other purposes, it will be difficult for plaintiffs to craft an appropriately narrow and objectively identifiable class of “consumers” to be able to pursue class-wide remedies without individual enquiries.