On July 9, 2013, the Court of Appeal for Ontario unanimously
affirmed that consumers do not have to establish reliance on a
false, misleading or deceptive representation when claiming a
breach of Part III of the Consumer Protection Act (the
CPA) which prohibits "unfair practices" in the course of
consumer transactions. We can expect to see more consumer
protection class actions as a result of this decision.
In Ramdath v. George Brown College,
students who had enrolled in George Brown College's
International Business Management program commenced a class action
against the college for representations it made in its course
calendar. The course calendar described the International Business
Management program as providing "students with the opportunity
to complete three industry designations/certifications." The
student class members claimed that they would not have enrolled in
the program but for the college's representation that, upon
successful completion, students would obtain the three industry
designations or certifications. They claimed against George Brown
as "consumers," defined in the CPA as individuals
"acting for personal, family or household purposes," and
not including persons "acting for business purposes." The
student class members claimed for, among other things, breach of
Part III of the CPA, which creates civil liability for unfair
practices, being "a false, misleading or deceptive
representation" in a consumer transaction. George Brown
maintained that the students were not "consumers" under
the CPA, that there was nothing inaccurate in the program
description, and that no reasonable student could have concluded
from this description that the program alone would yield the
necessary designations, without having to write industry
examinations or pay additional fees.
The class action proceeded to a common issues trial. Justice
Belobaba of the Superior Court found for the plaintiffs, holding
that, among other things, George Brown made inaccurate or
misleading representations in its course calendar that it would
provide students with the opportunity to complete the industry
designations. Further, the court held that students taking
post-graduate business courses are "consumers" under the
CPA, as they are taking such programs for personal educational
reasons and not "for business purposes." Finally, the
court held that George Brown was in breach of the CPA prohibition
on "unfair practices."
George Brown College appealed. With respect to the finding that
it breached the CPA, the college argued that students were not
"consumers" as defined in the CPA, and that each
individual student would have to prove reliance on the
college's misrepresentation before being entitled to a remedy
under the CPA. Rejecting these arguments, the Court of Appeal
upheld the lower court's finding and agreed that students were
"consumers" for the purposes of the CPA. The
Court of Appeal also held thatthe CPA does not require each student
to prove reliance in order to establish that there has been an
unfair practice, such that they are entitled to a remedy.
Companies that do not have direct relationships with consumers
need not be concerned with consumer protection class actions.
However, to the extent a company has direct consumer relationships,
a key implication of this decision is that class actions under the
CPA may become less onerous for potential litigants, as there is no
need for evidence that a consumer actually relied on a
representation, let alone that the consumer's reliance was
reasonable. Plaintiffs will simply have to prove that a false,
misleading or deceptive representation was made in order to
establish a breach of the CPA prohibition on unfair practices
before proceeding to individual hearings to determine potential
entitlement to damages. Both the trial judge and the Court of
Appeal were careful to note that damages would be assessed based on
each student's individual circumstances. Arguably, individual
issues of reliance could be raised at this phase. In this sense,
the decision stops short of foreclosing a defendant from disproving
reliance, in an individual case.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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