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Consumer - Unfair Representations. 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".
The court considered the 'unfair practices' provisions of the Consumer Protection Act, 2002, here as it relates to 'non-export acknowledgements' in auto sales:Did the trial judge fail to apply the Consumer Protection Act?
Decision
[129] First, NEAs have been found to be enforceable on the parties.
[130] In Eurotrend Fine Cars Ltd. v. Li, 2020 SKQB 108, at paras. 40-42, the court accepted that non-export agreements are permissible as part of the purchase agreement.
[131] In the unreported decision of St. Laurent v. Patenaude (Respondent’s compendium tab 31), the court upheld the terms of the non-export agreement.
[132] The NEA is not a stand-alone agreement but part of a bill of sale and therefore not one sided.
[133] The NEA does not limit the resale but rather limits the time frame when the vehicle can be exported: see Walthers Pontiac Buick GMC Ltd v. Smith,, 2002 BCPC 541. The terms in Walthers were similar to the NEA in the case at bar. The Court found that it was enforceable and not against public policy. See also Eurotrend Fine Cars Ltd. v. Li, 2020 SKQB 108 at para. 70.
[134] The court in Wolfe Chevrolet Oldsmobile Ltd. v. 552234 B.C. Ltd., 2004 BCPC 154, upheld a non-export clause as enforceable. The dealership was facing a loss of cars as a result of vehicles being exported. The court emphasised the right of parties to bargain and when a contract is freely agreed to, the court should not rescue a party from the bargain unless they show unconscionability: at para. 13.
[135] There was evidence in Wolfe that General Motors was prepared to impose financial penalties on franchises or dealers who were not vigorous in attempting to curtail exports.
[136] Also, in Automobiles Silver Star Montreal Inc. v. Shahab, 1999 CarswellQue 281, the court found that the non-export agreement was not illegal.
[137] The next issue is whether the Appellant’s waiver of her rights amounted to an unfair practice under the CPA.
[138] The CPA protects individuals in personal/household transactions, covering online shopping, door-to-door sales, and contracts by ensuring fair practices, clear disclosures, and rights to cancel within “cooling-off” periods.
[139] Section 14(2)13 of the CPA reads:14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.
(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:
13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive. [140] Section 15 is also relevant here:15 (1) It is an unfair practice to make an unconscionable representation.
(2) Without limiting the generality of what may be taken into account in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person’s employer or principal knows or ought to know,
(a) that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;
(b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;
(c) that the consumer is unable to receive a substantial benefit from the subject-matter of the representation;
(d) that there is no reasonable probability of payment of the obligation in full by the consumer;
(e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;
(f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;
(g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment; or
(h) that the consumer is being subjected to undue pressure to enter into a consumer transaction. [141] There is an ambiguity if the vehicle is stolen and then exported. Would the consumer be held liable under the NEA as it was exported without their intent? Section 11 provides:11 Any ambiguity that allows for more than one reasonable interpretation of a consumer agreement provided by the supplier to the consumer or of any information that must be disclosed under this Act shall be interpreted to the benefit of the consumer. [142] The notice provisions under Part IX which outlines procedures for consumer remedies sets out sections 91 and 92 do not apply to remedies claimed under unfair practices under Part III.
[143] The issue is whether there were misleading or unconscionable representations.
[144] According to the NEA, the Appellant would be responsible under all circumstances if the vehicle is resold for export within one year of purchase. The dealership is placing the risk of the export to the consumer regardless of whether the vehicle was exported by a purchaser of the vehicle or was stolen and then exported.
[145] Once it is exported, the dealer is denied inventory of two vehicles, and this clause requires the consumer to pay the loss that the dealer would face regardless of whether the customer had a hand in the export or not.
[146] When asked about whether the purchaser would be responsible if the vehicle was stolen, Mr. Scott said he would want to see the police report before he would commence proceedings.
[147] Here the consumer waived her rights, which would mean that she is responsible for all occurrences beyond her control and there was no evidence led that there would be exceptions to the NEA even if stolen.
[148] The consumer has taken on the allocation of risk that the manufacturer imposes on the dealer and there are no exceptions that would make it fair and just. In my view, this is an unfair practice within the meaning of the CPA.
[149] I am guided by the well-reasoned decision of Deputy Judge DiGregorio in an unreported decision of Downtown Porsche et al. v. Bensalmon et al. He found that the prohibition of exports in that case was enforceable and not a restraint of trade and the liquidated damages was a fair estimate of damages and not a penalty. It was not a restraint of trade as “[t]he purchaser would have the right to protect himself by getting an indemnity agreement from its purchaser…or he could just increase the price by $10,000.00 to get the money the (sic) back”.
[150] The defendants soon decided that the vehicle was too small for the family and sold it to a dealer in Quebec for a loss. It changed hands a few times and then the plaintiff alleges that the vehicle was exported within one year.
[151] The plaintiff accepted a report from the Gray Market report sent by Porsche Canada to the dealer which said that the vehicle had arrived in China. The defendant denied that she had arranged the export.
[152] The court in that case found that the clause was ambiguous in that the clause “[w]ill not be exported implies some form of control which a reasonable thinking individual might read it to mean I cannot export it, not a third party that I sell it to. It would have been easy to state will not be exported by myself as purchaser or any third party I may sell the vehicle to. That puts the purchase on notice that he or she has to take steps”.
[153] Later, the court stated: “If the vehicle had not been sold by the defendant but had been stolen instead during the one-year period and then the thief exported the vehicle to China according to the plaintiffs’ interpretation of the clause this purchaser would have to pay $10,000 because it was exported. Surely that cannot be the meaning of the clause. That is not just. That is not fair. But yet, that would be a logical consequence if the agreement were interpreted [in] the manner that the plaintiff is asking me to interpret it.
[154] The court found that the contra profentum rule came into play and was used against the maker. There was other conflicting evidence of whether the vehicle had been indeed exported. Ultimately, the court dismissed the action. He found the clause was a restraint of trade.
[155] These principles apply here.
[156] Section 18 of the CPA provides:18 (1) Any agreement, whether written, oral or implied, entered into by a consumer after or while a person has engaged in an unfair practice may be rescinded by the consumer and the consumer is entitled to any remedy that is available in law, including damages. [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. . Palmer v. Teva Canada Limited
In Palmer v. Teva Canada Limited (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a lower court dismissal of a class action certification motion.
In a class action for contaminated drugs, the court considered rescission (and other) remedies under the Consumer Protection Act 'false, misleading, deceptive, or unconscionable representations' provisions:(4) Claim under the Consumer Protection Act
[83] The appellants also claim that the respondents breached ss. 14 and 15 of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (CPA), by making false, misleading, deceptive, or unconscionable representations that their product was of high quality, free of defects, and fit for human consumption when the respondents knew, or ought to have known, that because of the presence of NDMA and NDEA, the contaminated valsartan was not safe and could cause or materially increase the risk of contracting cancer, liver disease, and other health conditions. The appellants plead that they are entitled to damages under s. 18 of the CPA.[2]
[84] The motion judge ruled that the consumer protection causes of action were not certifiable. He found it was plain and obvious that the damages sought were either not available or would be so de minimis as to not satisfy the preferable procedure criterion.
[85] The appellants state that the motion judge made three errors: first, by requiring intention and misinterpreting the pleadings to say intention was not pleaded; second, by finding damages were not available; and third, by requiring privity as a component of s. 18 of the CPA.
[86] It is not necessary to address the issue of intention. On a generous interpretation of the pleadings, the defendants are alleged to have known of the contamination. Nor is it necessary to consider the question of privity, which only applies to consumer protection legislation in some provinces and not others so would not be dispositive in this case.
[87] Rather, I rest my conclusion, as did the motion judge primarily, on the interpretation of s. 18 of the CPA and the issue of damages. Subsections 18(1) and (2) provide:Any agreement, whether written, oral or implied, entered into by a consumer after or while a person has engaged in an unfair practice may be rescinded by the consumer and the consumer is entitled to any remedy that is available in law, including damages.
A consumer is entitled to recover the amount by which the consumer’s payment under the agreement exceeds the value that the goods or services have to the consumer or to recover damages, or both, if rescission of the agreement under subsection (1) is not possible,
(a) because the return or restitution of the goods or services is no longer possible; or
(b) because rescission would deprive a third party of a right in the subject-matter of the agreement that the third party has acquired in good faith and for value. [88] The appellants do not seek rescission. Nor would such a remedy be available since it is no longer possible to return the contaminated valsartan. Instead, they claim damages in the amount by which their payment for the drugs exceeded the value of the drugs, as well as damages for mental distress, anxiety, and costs of medical screening/monitoring.
[89] As stated above, I agree with the motion judge that the claim for damages for mental distress, anxiety, and costs of medical screening/monitoring are fatally flawed on the same basis as in the negligence cause of action: damages for an increase of a risk of harm and damages for mental injury that do not meet the required threshold of severity are not compensable in law.
[90] A claim brought under the CPA against a person who has allegedly engaged in an unfair practice is a statutory action. The primary method of righting the wrong is rescission, but s. 18 also provides that “the consumer is entitled to any remedy that is available in law, including damages” (emphasis added). This means that a court may award damages that “would be appropriate at common law”: Ramdath v. George Brown College of Applied Arts and Technology, 2015 ONCA 921, 392 D.L.R. (4th) 490, at para. 94 citing Steven M. Waddams, The Law of Damages, 2nd ed. (Toronto: Canada Law Book, 1991) (loose-leaf updated 2015), at paras. 5.690 to 5.700.
[91] There is no error in the motion judge’s reasoning that the statutory remedies sought by the plaintiffs – damages for payment for the drugs in excess of value, damages for diminished benefit of the bargain under s. 18 of the CPA, and restoration of profits received under s. 172 of the British Columbia Business Practices and Consumer Protection Act, SBC 2004, c. 2 – are not available to the plaintiffs. There is simply no allegation or material facts to support an allegation that the drugs at issue were unfit for their intended purpose of treating hypertension or that the contaminated valsartan was a useless or ineffective drug for the purpose of treating hypertension. As already noted, notices from Health Canada advised putative class members to continue taking the drugs despite the contamination, unless a physician advised to the contrary.
[92] This case is thus distinguishable from those class actions brought under consumer protection provisions for unfair practices, such as WN Pharmaceuticals Ltd. v. Krishnan, 2023 BCCA 72, leave to appeal refused, [2023] S.C.C.A. No. 152 and Drynan v. Bausch Health Companies Inc., 2021 ONSC 7423, leave to appeal to Div. Ct. refused 2022 ONSC 1586. In those cases, the plaintiffs established that what was advertised was not what they received; the elements that induced the plaintiffs to purchase the products were absent and the products were therefore valueless.
[93] This case is fundamentally different. Its essence is a negligence claim for a contaminated product, not a deceptive misrepresentation. It is not obvious, and need not be decided, whether consumer protection legislation applies to this set of facts at all. It does not easily fit together with the examples of false, misleading, deceptive, or unconscionable representations set out in ss. 14 and 15 of the CPA. For this case, it is sufficient to say that asserting statutory breaches without pleading the underlying material facts necessary to support them is insufficient to cross even the low hurdle present in s. 5(1)(a) of the Class Proceedings Act, 1992. . Rebuck v. Ford Motor Company
In Rebuck v. Ford Motor Company (Ont CA, 2023) the Court of Appeal heard a class action appeal (on substantive issues, it was already certified), involving the federal EnerGuide fuel consumption program. The issues were consumer protection 'misrepresentation' ones, from the federal Competition Act, the Ontario Consumer Protection Act (CPA) and similar other provincial statutes.
On the Ontario Consumer Protection Act (CPA) unfair representations issue the court concluded:[27] On the second common issue, the appellant states in its factum that it “repeats and relies on the arguments made in respect of the errors set out in Common Issue 1 in support for its position that [Ford’s] Representations were false, misleading and deceptive in breach of sections 14 and 17 of [Ontario’s] Consumer Protection Act” and the parallel provisions of the consumer protection legislation in six other provinces.
[28] Sections 14 and 17 of Ontario’s Consumer Protection Act provide:14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.
(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:
...
14. A representation…failing to state a material fact if such…failure deceives or tends to deceive.
...
17(1) No person shall engage in an unfair practice. [29] The motion judge found that the appellant “has not established on a balance of probabilities that any of the representations on the face of the EnerGuide Label or that the overall impression conveyed by the Label was false, misleading or deceptive, even under the most generous reading of the provincial ‘unfair practice’ provisions.” He rejected the appellant’s argument that, while Ford could not change the content of the EnerGuide label or use ratings other than those that it did, Ford failed to state material facts, and their failure to do so deceived or tended to deceive, by not providing supplemental disclosure to customers to the effect that: (1) the ratings on the label were provided for comparison purposes and not to predict actual fuel consumption; (2) the ratings, based on the 2-Cycle Test, and not the 5-Cycle Test, understated fuel consumption under real-world driving conditions by some 15%; and (3) the ratings on the label could only be achieved with fuel-efficient driving and not normal “real world” driving. The motion judge noted that the additional facts that the appellant argued should have been disclosed “simply restated what was already made clear in the FCG”.
[30] The appellant contends that the reference to the FCG on the EnerGuide label was not a disclaimer and served as a mere advisement to look elsewhere. The appellant argues that the court should not assume that consumers will follow this advice. Further, the onus ought to have been on Ford to demonstrate that the FCG was provided to all consumers. Even if the FCG fulfilled its disclosure obligations, Ford’s marketing materials were in breach of its duty to disclose because they did not refer to the FCG.
[31] We are not persuaded by this submission. In our view, there was no deceptive non-disclosure in breach of s. 14 of Ontario’s Consumer Protection Act or the parallel provisions of the consumer protection legislation in six other provinces. All of the appellant’s three “omissions” are variations on statements indicating that the ratings on the EnerGuide label do not represent the “actual” fuel consumption that will be achieved under “real-world driving conditions”. Given that the appellant failed to establish (or even advance the submission) that the overall impression conveyed by the label was that the represented mileage would be achieved by all drivers, the motion judge did not err in finding that the absence of additional disclosure would not deceive or tend to deceive the average car-buying consumer.
[32] As to the appellant’s assertion that the motion judge failed to address the marketing materials, which did not refer to the FCG, the motion judge characterized the appellant as focusing on the EnerGuide label and including little to no discussion of his allegation that Ford repeated the label’s fuel consumption data in their sales brochures and marketing materials. The motion judge noted that extending the focus to include the marketing materials “would have been problematic.” Such materials would appear to raise significant individual issues.
[33] In any event, while the marketing materials did not refer to the FCG, every consumer received the EnerGuide label, which did. There is no basis to interfere with the motion judge’s finding that car-buyers for whom fuel consumption was important would “likely” have consulted the FCG. The appellant’s argument that the references to the FCG on the EnerGuide label are not “disclaimers” is irrelevant. What is relevant is that the EnerGuide label prominently directed the customer to the FCG. The prospective customer was provided with accurate and valuable information about fuel consumption and told where they could look for additional information.
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