Rogers 2015 Annual Report Download - page 139

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Operating leases are for office premises and retail outlets across
the country. The majority of the lease terms range from five to
ten years. Rent expense for 2015 was $219 million
(2014 – $210 million).
As at December 31, 2015, our contractual commitments were
$282 million for the acquisition of property, plant and equipment
and $156 million for the acquisition of intangible assets.
As at December 31, 2015, our contractual commitments related to
all of our associates and joint ventures were $459 million.
CONTINGENT LIABILITIES
We have the following contingent liabilities as at December 31,
2015:
System Access Fee – Saskatchewan
In 2004, a class action was commenced against providers of
wireless communications in Canada under the Class Actions Act
(Saskatchewan). The class action relates to the system access fee
wireless carriers charge to some of their customers. The plaintiffs
are seeking unspecified damages and punitive damages, which
would effectively be a reimbursement of all system access fees
collected.
In 2007, the Saskatchewan Court granted the plaintiffs’ application
to have the proceeding certified as a national, “opt-in” class action
where affected customers outside Saskatchewan must take specific
steps to participate in the proceeding. In 2008, our motion to stay
the proceeding based on the arbitration clause in our wireless
service agreements was granted. The Saskatchewan Court directed
that its order, in respect of the certification of the action, would
exclude customers who are bound by an arbitration clause from
the class of plaintiffs.
In 2009, counsel for the plaintiffs began a second proceeding
under the Class Actions Act (Saskatchewan) asserting the same
claims as the original proceeding. If successful, this second class
action would be an “opt-out” class proceeding. This second
proceeding was ordered conditionally stayed in 2009 on the basis
that it was an abuse of process.
In 2013, the plaintiffs applied for an order to be allowed to proceed
with the second system access fee class action. However, the court
denied this application and the second action remains
conditionally stayed.
At the time the Saskatchewan class action was commenced in
2004, corresponding claims were filed in multiple jurisdictions
across Canada, although no active steps were taken by the
plaintiffs. In 2014, the Nova Scotia Supreme Court declined to stay
or dismiss the corresponding claim brought by the plaintiffs in
Nova Scotia as an abuse of process. In April 2015, the Nova Scotia
Court of Appeal permanently stayed the Nova Scotia claim. The
plaintiffs are seeking leave to appeal to the Supreme Court of
Canada. The Manitoba Court of Queen’s Bench unconditionally
stayed the corresponding claim brought in Manitoba as an abuse
of process. A decision from the Manitoba Court of Appeal is
pending. A similar decision has been issued by the British
Columbia Court of Appeal. In 2015, the Court of Queen’s Bench of
Alberta declined to dismiss the corresponding claim in Alberta. In
October 2015, the Alberta Court of Appeal granted our appeal
and dismissed the claim in Alberta. We have not recognized a
liability for this contingency.
System Access Fee – British Columbia
In December 2011, a class action was launched in British Columbia
against providers of wireless communications in Canada in
response to the system access fee wireless carriers charge to some
of their customers. The class action related to allegations of
misrepresentations contrary to the Business Practices and
Consumer Protection Act (British Columbia), among other things.
The plaintiffs sought unspecified damages and restitution. In June
2014, the court denied the plaintiffs’ certification application,
concluding that there is nothing in the term “system access fee” to
suggest it is a fee to be remitted to the government. An appeal by
the plaintiffs was dismissed by the British Columbia Court of
Appeal in 2015, finding that the conclusion of the trial judge was
unassailable. The plaintiffs are seeking leave to appeal to the
Supreme Court of Canada. We have not recognized a liability for
this contingency.
911 Fee
In June 2008, a class action was launched in Saskatchewan against
providers of wireless communications services in Canada. It involves
allegations of breach of contract, misrepresentation, and false
advertising, among other things, in relation to the 911 fee that had
been charged by us and the other wireless telecommunication
providers in Canada. The plaintiffs are seeking unspecified
damages and restitution. The plaintiffs intend to seek an order
certifying the proceeding as a national class action in
Saskatchewan. We have not recognized a liability for this
contingency.
Cellular devices
In July 2013, a class action was launched in British Columbia against
providers of wireless communications in Canada and
manufacturers of wireless devices. The class action relates to the
alleged adverse health effects incurred by long-term users of
cellular devices. The plaintiffs are seeking unspecified damages
and punitive damages, effectively equal to the reimbursement of
the portion of revenue the defendants have received that can
reasonably be attributed to the sale of cellular phones in Canada.
We have not recognized a liability for this contingency.
Income taxes
We provide for income taxes based on all of the information that is
currently available and believe that we have adequately provided
these items. The calculation of applicable taxes in many cases,
however, requires significant judgment (see note 12) in interpreting
tax rules and regulations. Our tax filings are subject to audits, which
could materially change the amount of current and deferred
income tax assets and liabilities and provisions, and could, in
certain circumstances, result in the assessment of interest and
penalties.
Outcome of proceedings
The outcome of all the proceedings and claims against us,
including the matters described above, is subject to future
resolution that includes the uncertainties of litigation. It is not
2015 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 137