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Consumer - Inequitable Exception [CPA 93(2)]. St. Laurent Automotive Group Inc. v. Cheryl Britt
In St. Laurent Automotive Group Inc. v. Cheryl Britt (Ont Div Ct, 2026) the Ontario Divisional Court allowed a Small Claims Court appeal, this brought against an order for "damages in the amount of $15,000 to St. Laurent Automotive Groups Inc. (Respondent) for the Appellant’s breach of non-export clause".
Here the court considers CPA, 2002 s.93(2) ['Court may order consumer bound']:[157] In addition, s. 93 sets out the remedy:93 (1) A consumer agreement is not binding on the consumer unless the agreement is made in accordance with this Act and the regulations.
(2) Despite subsection (1), a court may order that a consumer is bound by all or a portion or portions of a consumer agreement, even if the agreement has not been made in accordance with this Act or the regulations, if the court determines that it would be inequitable in the circumstances for the consumer not to be bound.
13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive. [158] In Connect Electric Inc. v. Pullen and Greensides, 2013 ONSC 1837, Justice Conlan stated:[55] But not every illegal contract that fails to comply with the CPA is unenforceable against the consumer. The Court may order that the consumer is bound by the agreement where it would be inequitable to hold otherwise: subsection 93(2).
[56] This is merely a recognition of the distinction between illegality as to contractual formation and illegality as to contractual performance: Beer v. Townsgate I Ltd., 1997 CarswellOnt 3753 (Court of Appeal for Ontario), at paragraph 12.
[57] In deciding whether to apply subsection 93(2) of the CPA, a Court ought to consider the serious consequences of invalidating the contract, the social utility of those consequences and the class of persons for whom the prohibition was enacted: Morrell v. Cserzy, 2002 CarswellOnt 658 (Ontario Superior Court of Justice, Templeton J.), at page 11, in turn citing High Court Justice Krever, as His Honour then was, in Royal Bank of Canada v. Grobman et al (1977), 1977 CanLII 1113 (ON SC), 18 O.R. (2d) 636 at pages 652-653.
[58] A Court may also consider whether the contract was bargained for at arm’s length, whether the consumer was unfairly taken advantage of, whether the agreement was wholly or substantially completed, the degree of benefit derived by the consumer and whether it would be inherently wrong or contrary to public policy to enforce the contract: Morrell, supra at page 14, in turn citing General Division Justice Sharpe, as His Honour then was, in Johnson v. Lazzarino (1998), 1998 CanLII 14835 (ON SC), 39 O.R. (3d) 724 at page 728. See also Agasi v. Wai, 2000 CarswellOnt 2903 (Ontario Superior Court of Justice, Boyko J.), at paragraphs 46 and 47. [159] It would be inherently wrong and contrary to public policy to enforce the NEA that transfers the risk of the export completely to the consumer even it is out of the control of the consumer.
[160] Therefore, the court finds that the trial judge erred in law in finding that the CPA did not apply to the NEA. . Manafa v. Tannous
In Manafa v. Tannous (Div Court, 2023) the Divisional Court considers a Consumer Protection Act (CPA) provision requiring written contracts [CPA 22 re future performance contracts], which it avoids by the general 'inequitable' exception of CPA 93(2):[62] There is one argument that requires further consideration. The Appellant seeks to have the amount owing set aside on the basis that the agreement was not in writing and, therefore, contrary to section 22 of the CPA. That section requires future performance agreements to be in writing.
[63] The Deputy Judge specifically turned his mind to this issue and indicated that the parties had a specific oral contract there “there wouldn’t be invoices, there wouldn’t be HST charged. As a result, the Deputy Judge determined that the Appellant could not take advantage of the CPA
[64] In my view, this conclusion was correct. Section 93 of the CPA states:Consumer agreements not binding
93(1) A consumer agreement is not binding on the consumer unless the agreement is made in accordance with this Act and the regulations. 2002, c. 30, Sched. A, s. 93.
Court may order consumer bound
(2) Despite subsection (1), a court may order that a consumer is bound by all or a portion or portions of a consumer agreement, even if the agreement has not been made in accordance with this Act or the regulations, if the court determines that it would be inequitable in the circumstances for the consumer not to be bound. 2004, c. 19, s. 7 (36). [65] The Deputy Judge did not misapply this section. He concluded that the parties had an oral agreement in part because the Appellant did not want to pay HST on the amounts that she was being charged. As a result, the Deputy Judge concluded that the Appellant should not be permitted to rely on the CPA to void the agreement when she herself wanted an oral agreement. That conclusion was open to the Deputy Judge on the evidence on the record before him, and I see no reason to interfere with it.
[66] For the foregoing reasons, the Appellant’s arguments on the CPA are dismissed.
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