By Ahmad Hathout
Bell is battling an American firm in the Quebec court system after the telecom accused it of breaching confidentiality rules by getting landlords to reveal the lease terms on which the telecom puts its cell towers on their properties.
AP Wireless, a subsidiary of Radius Global Infrastructure, is an investment firm that gives landlords large lump sum payments in exchange for the collection of the rent telecoms pay the landlords to install cell towers on their ground. The California-based company entered the Canadian market in 2012, and, by May 2019, it had purchased 52 leases from landlords who have been collecting rent payments from Bell in Quebec, according to the court record.
In June 2018, Bell filed an application in a Quebec court accusing the company of making false and defamatory statements, harassing the landlords, and, critically, breaching the confidentiality clauses included in the leases by getting landlords to hand over their leases to determine whether they wanted to purchase them – without care for whether they included confidentiality provisions. The proper course of action, according to Bell, would have been to ask the landlords if there are confidentiality clauses and, if so, to ask Bell for permission to view them.
The Superior Court of Quebec, the lower court in this matter, agreed with Bell and ordered in May 2019 an interim ban on such activities based on those three issues. AP Wireless’s appeal was dismissed. The court then had to determine whether it should make the ban permanent.
By then, however, AP Wireless had consented to a permanent injunction on the false and defamatory statements, but challenged Bell’s claims of harassment and breach of confidentiality. The lower court threw out Bell’s claim on the former, saying there was insufficient and unreliable evidence to prove harassment.
However, the court granted the injunction on the grounds that AP Wireless breached the confidentiality clauses by asking for copies of the leases without regard for the possibility that they may be bound by said rules.
AP Wireless appealed the ruling on the confidentiality issue, and, on Tuesday, the Quebec Court of Appeal ruled in its favour, setting aside the lower court’s decision partially on the basis that the lower court judge erred by ruling broadly that the American firm should have known there were confidentiality clauses because some of the leases had them.
The appeal centres on one paragraph the appeal court ordered struck from the lower court’s decision: that AP Wireless “cease and refrain from asking landlords for any information concerning the contents of their lease or copy of their lease containing a confidentiality clause, without the prior consent of the plaintiff Bell Mobility Inc.”
The appeal court ruled, in part, that the lower court shouldn’t have issued an injunction based on a blanket interpretation that all leases have the same confidentiality provisions. It said the evidence shows that there are variants on the confidentiality clauses, some of which were not relevant to the issue at hand, such as leases that were outside the province.
While AP Wireless acknowledged that 225 out of the 365 leases it reviewed included confidentiality provisions, 101 had “absolutely no confidentiality clause whatsoever” and 39 had either a confidentiality clause or a non-disclosure of financial terms clause that didn’t apply to the complaint, according to the court record.
Crucially, some of those leases under contention were reviewed by AP Wireless before 2017. Bell contested all such documents after 2017 included confidentiality clauses. Bell said it would produce all 2,907 leases it currently has, but failed to do so, opting instead to bring forward the 136 it entered into or renewed in Quebec since 2017, according to the court record. Two of those leases were held by AP Wireless.
Furthermore, the high court ruled that some of Bell’s leases included heavy redactions, which – as is required by the court – didn’t allow the judge the opportunity to view them in their broader context. “For example, if there is a clause that allows the Landlord to transfer the lease to a third party without any approval by the Respondent, it is difficult to see why the Landlord would have to go to the Respondent to ask for permission to show the lease to a potential assignee,” the decision read.
And then there’s how upholding the injunction would impact the landlords. The high court ruled that upholding the injunction based on the confidentiality issue would create a situation where the landlords, who were not named as parties in the case, would now have to go to Bell to get permission to view the leases now held by APWireless.
In other words, the injunction cannot be upheld because the landlords do not have a say in a matter that impacts them directly.
“Finally, there is no proof that the Respondent [Bell] suffered any prejudice as a result of the limited breach of the confidentiality clauses in favour of the Appellant,” the high court ruled. “This could go to the issue of whether the injunction was an appropriate remedy in the circumstances.”
