Executive Summary: Key Legal and Evidentiary Issues

• Central issue whether FedEx’s brokerage and clearance fees constituted “unsolicited services” and “unfair practices” under ss. 13, 14 and 15 of Ontario’s Consumer Protection Act, 2002.
• Focus on whether the statement of claim, assuming all facts pleaded are true, disclosed a reasonable cause of action at the certification stage under s. 5(1)(a) of the Class Proceedings Act, 1992.
• Dispute over the existence of common issues centred on FedEx’s standardized invoicing practices and whether liability questions could be resolved on a class-wide basis.
• Contested conflict-of-laws question as to whether Ontario’s Consumer Protection Act applies where the carriage contract was formed in the United States between FedEx and the U.S. vendor.
• Challenge to the temporal and geographic scope of the class definition, including inclusion of claims apparently outside the basic two-year limitation period and of residents of other provinces, particularly Quebec.
• Evidentiary constraint that at the s. 5(1)(a) stage no evidence may be considered, so FedEx’s reliance on extrinsic contractual documents and foreign law had to be deferred to a later merits or summary judgment stage.

Background and facts

Karen Robson ordered knitting supplies online from Ganxxet, a United States-based yarn retailer, on June 29, 2020. The goods were priced at US$174.80, and Ganxxet’s website advertised free shipping. However, the website warned that shipments to destinations outside the United States “may be subject to taxes, custom duties and fees by the destination country”. A few days later, Ms. Robson received notice that Ganxxet had shipped her parcel using FedEx. On the same day, FedEx contacted her by telephone to advise that her shipment “may require the payment of clearance entry fees, duties and taxes”. When the package arrived in Ontario on July 7, 2020, it included an invoice from Ganxxet on a standard FedEx form. The invoice identified Ms. Robson as the consignee, set out the value and contents of the shipment, and stated that the consignee was responsible for paying “duties and taxes”. Approximately one month after delivery, on August 6, 2020, Ms. Robson received a separate invoice from Federal Express Canada Corporation. The invoice summary listed the following Canadian-dollar charges: an “Advancement Fee” of $10.00, “HST on ADV/Ancillary Service Fees” of $5.07, “Clearance Entry Fee” of $29.00, and “Canada HST” of $20.16, totalling $64.23 payable “upon receipt”. Immediately beneath the line-item charges, the invoice stated: “FedEx Express has arranged clearance and submitted payment to the customs agency in the destination country on your behalf. For information about importing fees by country, please visit fedex.ca/ancillary.” Ms. Robson paid the invoice online on August 15, 2020. She later asserted that she believed all of the charges were government taxes and duties and did not understand that any portion of the fees would be retained by FedEx as compensation for its own services. In fact, the “Advancement Fee” and “Clearance Entry Fee” were proprietary FedEx brokerage charges, and the “HST on ADV/Ancillary Service Fees” was harmonized sales tax applied to those fees. Only the line “Canada HST” represented tax on the goods themselves.

The proposed class action and pleaded legal theories

On January 7, 2022, Ms. Robson commenced a proposed class proceeding against Federal Express Canada Corporation, FedEx Ground Package System, Inc. and FedEx Ground Package System, Ltd. (collectively, FedEx). The class she proposed comprised non-commercial consumers across Canada, from 2016 onward, who placed personal, family or household orders and then paid at least one of FedEx’s “Clearance Entry Fee”, “Disbursement Fee”, or “Advancement Fee” on a Canadian invoice. The statement of claim alleged that most goods FedEx imports into Canada for consumers are subject to sales tax and sometimes duties, which FedEx typically advances to the Crown before invoicing the consumer. It further alleged that, in addition to legitimate government charges, FedEx systematically layered on its own brokerage-related fees, and presented them in a way that misled consumers into believing they were government-mandated customs or tax payments. These extra amounts were described as “Unsolicited Service Fees”.

The core statutory framework was Ontario’s Consumer Protection Act, 2002. That statute defines a “consumer” as an individual acting for personal, family or household purposes, a “supplier” as a person in the business of supplying goods or services (including its agents), and a “consumer transaction” as any act of conducting business or other dealings with a consumer. Section 2(1) provides that the Act “applies in respect of all consumer transactions if the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place”.

Ms. Robson pleaded three main statutory theories. First, under s. 13 (unsolicited goods and services), she alleged that the customs brokerage and clearance services associated with the Advancement and Clearance Entry Fees were never requested or solicited by consumers. Her pleading asserted that the customs-related work could have been performed by consumers themselves at little or no cost, and that FedEx’s practices contravened prohibitions on demanding payment for unsolicited services, even where the consumer may have derived some incidental benefit. Second, under s. 14, she alleged that FedEx engaged in false, misleading or deceptive representations — in particular by ambiguously labelling the Advancement and Clearance Entry Fees, by grouping them on invoices with “Canada HST” and customs-related language, and by reinforcing the impression that all listed amounts were taxes or customs fees “submitted [by FedEx] to the customs agency in the destination country on your behalf.” The pleading relied on s. 14(2)(16), which identifies as an unfair practice any “representation that misrepresents the purpose of any charge or proposed charge”, and on s. 14(2)(14), which targets the use of ambiguity or the failure to state a material fact where it tends to deceive. Third, under s. 15, she alleged that the charges were unconscionable representations because, among other reasons, the price of the brokerage services “grossly exceeds the price at which similar goods or services are readily available to like consumers” and the transaction was excessively one-sided.

In addition to these statutory causes of action, the claim pleaded unjust enrichment, asserting that FedEx was enriched by retaining the Unsolicited Service Fees, that consumers such as Ms. Robson suffered a corresponding deprivation, and that there was no juristic reason for FedEx’s enrichment given the alleged misrepresentation and lack of informed consent. The relief sought included declarations that FedEx had engaged in unfair practices under the Consumer Protection Act and equivalent legislation elsewhere in Canada, disgorgement of the Unsolicited Service Fees paid by the class, and $50 million in exemplary or punitive damages, as well as injunctive relief restraining FedEx from continuing to charge the impugned fees.

The certification decision in the Superior Court

The certification motion came before Justice Edward M. Morgan of the Ontario Superior Court of Justice. He held that the proposed class proceeding met all five requirements under s. 5(1) of the Class Proceedings Act, 1992. On the first criterion, he concluded that the statement of claim disclosed reasonable causes of action under ss. 13, 14 and 15 of the Consumer Protection Act and in unjust enrichment, applying the Rule 21–style “plain and obvious” test that assumes pleaded facts to be true and does not admit evidence at this stage. He rejected FedEx’s argument that there could be no misrepresentation because information allegedly clarifying the fees’ nature existed somewhere on FedEx’s website; what mattered at the pleadings stage was how the fees and accompanying statements were presented on the invoices themselves.

FedEx also argued that Ontario’s Consumer Protection Act did not apply because, in its submission, the principal contract of carriage was made outside Ontario between FedEx and the seller Ganxxet in the United States, and any dispute was therefore governed by foreign law. Relying on ss. 1 and 2(1) of the Consumer Protection Act, the motion judge found that FedEx’s billed delivery services to Ms. Robson, as evidenced by the Ontario invoice, constituted a “consumer transaction” with a consumer in Ontario, and that FedEx, as a supplier located and operating in Ontario, was within the statute’s reach even if the upstream vendor–carrier contract was governed by U.S. law. Importantly, he noted that the carriage contract between FedEx and Ganxxet was not in the evidentiary record; FedEx could not rely on unproduced contractual terms to displace Ontario consumer law at the certification stage.

On the second and third certification requirements—an identifiable class and common issues—the motion judge accepted Ms. Robson’s proposed class definition spanning 2016 to the present and including residents across Canada, including Quebec. He declined to narrow the class based on Ontario’s two-year basic limitation period on the basis that limitation and discoverability questions are better addressed after certification, particularly where the alleged wrongdoing is systemic and potentially concealed, and where discoverability may vary among class members. He also held that residents of other provinces, including Quebec, could be included, as Ontario’s statute contemplates transactions where either the consumer or the supplier is located in Ontario.

As to common issues, he certified questions focused on whether FedEx’s conduct breached s. 13 (unsolicited services), whether FedEx’s invoicing and descriptions of fees amounted to unfair practices under ss. 14 and 15, whether unjust enrichment was established, and whether the class was entitled to injunctive or punitive remedies. He found that there was a uniform cross-border service procedure and standard-form invoice used by FedEx, which gave rise to a common evidentiary foundation for all class members. Consumer knowledge or reliance, he held, was not an element of liability under ss. 14 and 15, although it might become relevant to remedies. Finally, he concluded that a class proceeding was the preferable procedure and approved Ms. Robson’s litigation plan. Accordingly, he certified the action as a class proceeding.

The appeal to the Court of Appeal for Ontario

FedEx appealed to the Court of Appeal for Ontario, raising three primary grounds: that the statement of claim did not disclose a cause of action; that the claims did not raise common issues suitable for class-wide determination; and that the class definition was overly broad in both time and geography. The appeal was heard by a panel of Favreau, Huscroft and George JJ.A.

On the cause-of-action issue, the Court of Appeal confirmed that the s. 5(1)(a) test under the Class Proceedings Act is identical to the test under Rule 21.01(1)(b) of the Rules of Civil Procedure and to the approach set out in Supreme Court of Canada decisions such as Imperial Tobacco and Atlantic Lottery: a claim will only be struck where it is plain and obvious that no reasonable cause of action is disclosed, and novel but arguable claims should be allowed to proceed. The court emphasized that no evidence is admissible on this branch of the test and that the correctness standard of review applies.

Applying these principles, the Court of Appeal held that the pleadings, read generously, supported reasonable causes of action under ss. 13, 14 and 15 of the Consumer Protection Act. For s. 13, the allegations that class members did not request or solicit FedEx’s brokerage services, combined with the assertion that those services were proactively performed and then billed as quasi-governmental charges, fit within the statutory concept of “unsolicited services” supplied without a consumer request. For ss. 14 and 15, the pleaded descriptions of the invoice language—particularly the juxtaposition of proprietary fees with customs and HST amounts and the statement that FedEx had “submitted payment to the customs agency in the destination country on your behalf”—were sufficient to found claims of false, misleading or deceptive representations and unconscionable representations. The court noted that a similar class proceeding involving undisclosed brokerage fees had previously been certified in Wright v. United Parcel Service Canada Ltd., and regarded that decision as persuasive confirmation that such claims are at least arguable under Ontario consumer law.

FedEx’s principal legal attack was that Ontario’s Consumer Protection Act should not apply because the operative contract of carriage was between FedEx and Ganxxet in Florida, and that any obligations or fee authorizations in that contract bound the consignee, Ms. Robson, as if she were a party. FedEx relied heavily on Quebec decisions, particularly Leblanc and Perry-Fagant, where Quebec courts had refused to authorize or certify similar class proceedings on the basis that Quebec consumer law did not govern contracts formed in the United States between shippers and carriers. The Court of Appeal declined to treat those Quebec authorities as determinative. It highlighted a key legislative distinction: Ontario’s Consumer Protection Act explicitly extends to consumer transactions where either the consumer or the person dealing with the consumer is located in Ontario, and defines “consumer transaction” broadly to include “any act or instance of conducting business or other dealings with a consumer.” On that statutory footing, the court found it at least arguable that FedEx’s issuance of invoices and demands for payment to Ms. Robson in Ontario constituted a consumer transaction governed by Ontario law, regardless of where the upstream vendor–carrier contract was formed or which law governed it.

The Court of Appeal did, however, temper the motion judge’s more categorical statements that the relationship between FedEx and Ms. Robson was definitively an “Ontario legal relationship” falling within the Consumer Protection Act’s ambit. It held that such definitive characterizations of the contract and its situs were unnecessary and premature at the s. 5(1)(a) stage. The correct approach was simply to ask whether, on the pleaded facts and the wording of the statute, it was plain and obvious that no Consumer Protection Act claim could succeed. Because FedEx’s contractual defences and choice-of-law arguments depended on factual matters and documents not properly before the court on a pleadings-only motion, the Court of Appeal concluded that they should instead be addressed on a full evidentiary record at summary judgment or trial.

Common issues analysis

On the second ground of appeal, FedEx argued that the motion judge erred in finding common issues under both s. 13 and ss. 14–15 of the Consumer Protection Act. It contended that whether services were “unsolicited” depended on individualized communications between each consumer and their vendor or FedEx, and that any misrepresentation analysis must take into account the “totality of the transaction” for each class member, including potentially differing pre-shipment disclosures by vendors, phone calls, or website interactions.

The Court of Appeal reiterated that the threshold for commonality is low: an issue is common if its resolution is necessary to the resolution of each class member’s claim, and it need not resolve the claim in its entirety. The court noted that its role was not to decide the merits but to determine whether there was “some basis in fact” that the issues could be addressed on a class-wide basis. It upheld the motion judge’s conclusion that the s. 13 “unsolicited services” claim raised common issues, largely because Ms. Robson’s theory turned on FedEx’s systemic practices and standard-form invoices, not on bespoke, consumer-specific negotiations. The existence of a uniform invoicing format and a standardized cross-border process provided the necessary factual anchor. The court rejected FedEx’s attempt to distinguish the earlier UPS case (Wright) on the basis that the precise contractual documentation in that case differed; at certification, the absence of FedEx’s own vendor contracts in the record weighed against FedEx, not the plaintiff.

On the misrepresentation and unconscionability claims under ss. 14 and 15, the court emphasized that, under Ontario law, consumer reliance is not an element of liability for unfair practices. Liability arises if the consumer entered into an agreement “after or while a person has engaged in an unfair practice”; causation in the sense of subjective reliance is not required. That feature of the statutory remedial regime distinguishes Ontario from British Columbia, where consumer protection legislation requires proof of a causal link between the deceptive practice and a pecuniary loss. As a result, the fact that some consumers may have had more complete information or different pre-contract communications did not undermine the commonality of the central question: whether FedEx’s standardized invoice and fee descriptions were, viewed objectively, false, misleading, deceptive or unconscionable. Any individual communications might be relevant at a later stage to the assessment of damages or other individualized remedies but did not preclude class-wide adjudication of the primary liability issues.

Class definition, limitation period and Quebec residents

On the third ground, FedEx argued that the class was defined too broadly in time, because it extended back to 2016—six years prior to the commencement of the action—thereby capturing claims presumptively outside Ontario’s two-year basic limitation period. It also contended that residents of Quebec, in light of the adverse Quebec authorities, should be excluded from the class at the outset.

The Court of Appeal upheld the temporal scope of the class. It accepted the motion judge’s reliance on authorities holding that certification is not usually the stage to resolve limitation defences where factual questions of discoverability are engaged. Given that the alleged wrongdoing involved hidden or ambiguous fee practices and potential misrepresentation, discoverability could not be assumed and might well vary among class members. The court acknowledged that including pre-January 2020 claims meant the class encompassed some members whose claims were presumptively time-barred but held that such concerns could be managed through the use of subclasses or by addressing limitation issues after common issues are determined. It rejected the notion that the class period should automatically be truncated to match the basic limitation period in every consumer class action, noting that the proper focus is whether the class definition bears a rational relationship to the common issues and avoids being unduly vague, over-inclusive or under-inclusive.

The Court of Appeal also declined to order that Quebec residents be carved out of the class at this stage. While acknowledging that FedEx may later have strong arguments based on Quebec’s consumer protection regime, earlier Quebec decisions, or even abuse-of-process principles, the court held that these were merits-based defences unsuitable for resolution on a certification appeal. It also noted that differences in the consumer protection legislation of various provinces, including Quebec and British Columbia, did not justify pre-emptively excluding residents of those provinces where the claims were pleaded under Ontario law and where the alleged unfair practices were linked to a supplier operating from Ontario. The possibility that some provincial-specific legal issues might arise could be addressed later through subclasses, choice-of-law analysis, or tailored relief.

Outcome and significance

In the result, the Court of Appeal for Ontario dismissed FedEx’s appeal in its entirety and affirmed the certification of Ms. Robson’s proposed class proceeding. The court held that the statement of claim disclosed reasonable causes of action in unsolicited services, unfair practices and unjust enrichment; that there was a sufficient basis in fact for the certified common issues relating to both unsolicited services and misrepresentation/unconscionability; and that the class definition, including its 2016 start date and inclusion of residents from across Canada, was appropriate at this procedural stage. The decision confirms that systemic fee and invoicing practices by large carriers can be scrutinized collectively under Ontario’s consumer protection legislation, and that defendants cannot use upstream foreign contracts or limitation arguments to defeat certification where those issues turn on evidence and factual nuance. As to monetary consequences in this particular appellate decision, there was no adjudication of damages on the underlying claims. The only quantified order was an award of costs on the appeal, with the successful party being Ms. Robson, who was granted $40,000 in all-inclusive costs against FedEx, while the amount of any eventual damages or class-wide monetary recovery remains undetermined pending the outcome of the class action on the merits.