A five-year contract with Aliant Telecom gave Rogers access to
thousands of poles that carried its cables to homes across Canada.
Aliant didn't own the poles; it only acted as an agent for a power
company. When the power company decided to take control of the
poles itself and raise the rates, Aliant gave 12-months' notice to
Rogers that its deal would be terminated one year before the expiry
of the five-year term.
Early termination would force Rogers to start paying the power
company at the higher rates, costing Rogers an extra CAN$1 million
over that final year. But Rogers could avoid this expense if Aliant
had no right to terminate early.
Aliant's right turned on a single clause:
"[…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."
Aliant interpreted this as a right to terminate at any time upon
one year's notice to Rogers. But Rogers read it as a right to
terminate only at the end of the current or a renewed five-year
term.
The dispute came before Canada's Radio, Television and
Telecommunications Commission.
Aliant argued that, based on grammatical rules of punctuation,
since the comma closed the clause "and thereafter for successive
five (5) year terms", the subsequent qualifier "unless and until
terminated by one year prior notice in writing by either party"
qualified all of the preceding section.
Aliant added that, had the intention been to limit the right to
terminate to the end of the five-year term, there would have been
no comma placed before the word "unless" and clear wording would
have been included specifying by what date the notice was
required.
Not so, argued Rogers. If Aliant could terminate at any time
upon one year's notice, the express agreement by the parties to a
five-year term was effectively meaningless. Why bother with the
words "…for a period of five (5) years from the date it is made,
and thereafter for successive five (5) year terms," it asked?
The Commission sided with Aliant, describing the clause as
"clear and unambiguous." Had the intention been to limit the right
to terminate at the end of the current and any renewal term, clear
wording would have been included specifying by what date the notice
was required, it said.
That ruling was issued in July. This month, Globe and Mail
reported that Rogers is appealing. In doing so, Rogers will rely on
Canada's second official language. The Toronto daily said that
Rogers spent two months finding a French version of the same
contract. The punctuation is different in the French version and
Rogers says it supports its interpretation of the English version.
According to The New York Times, Rogers has also commissioned a
69-page affidavit from an authority on contract language.
Aliant is said to be preparing its response.
Interpretation in the UK
In the UK, as in many other jurisdictions, when faced with a
contractual ambiguity, courts examine evidence of the parties'
intentions. They consider the contract as a whole, not just the
specific clause and adopt the ordinary meaning of words.
In 1998, Lord Hoffman ruled in the House of Lords: “The meaning
of words is a matter of dictionaries and grammars; the meaning of
the documents is what the parties using those words against the
relevant background would reasonable have been understood to
mean. The background may not merely enable the reasonable man
to choose between the possible meanings of the words which are
ambiguous but even (as occasionally happens in ordinary life) to
conclude that the parties must, for whatever reason, have used the
wrong words or syntax.”
