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Difference between revisions of "Consumer Protection from Deceptive and Unconscionable Acts (11:IV)"

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Consumer Protection from Deceptive and Unconscionable Acts (11:IV) (view source)

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{{REVIEWED LSLAP | date= August 5, 2021}}
{{REVIEWED LSLAP | date= August 1, 2023}}
{{LSLAP Manual TOC|expanded = consumer}}
{{LSLAP Manual TOC|expanded = consumer}}


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A consumer transaction is a dealing that:
A consumer transaction is a dealing that:
* a) Involves a supply of goods, services, or real property by a supplier to a consumer for primarily personal, family or household purposes, '''or'''
:(a) Involves a supply of goods, services, or real property by a supplier to a consumer for primarily personal, family or household purposes, '''or'''
* b) Is a solicitation, offer, advertisement or promotion by a supplier with respect to the above-mentioned types of transactions.  
:(b) Is a solicitation, offer, advertisement or promotion by a supplier with respect to the above-mentioned types of transactions.  


Except in Parts 4 and 5 of the ''BPCPA'', a consumer transaction includes a solicitation of a consumer by a supplier for a contribution of money or other property by the consumer.
Except in Parts 4 and 5 of the ''BPCPA'', a consumer transaction includes a solicitation of a consumer by a supplier for a contribution of money or other property by the consumer.
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A supplier means a person, whether in BC or not, who <u>in the course of business</u> participates in a consumer transaction by:  
A supplier means a person, whether in BC or not, who <u>in the course of business</u> participates in a consumer transaction by:  
* a) Supplying goods, services, or real property to a consumer; '''or'''  
:(a) Supplying goods, services, or real property to a consumer; '''or'''  
* b) Soliciting, offering, advertising, or promoting with respect to a transaction referred to in paragraph (a) of the definition of “consumer transaction”.  
:(b) Soliciting, offering, advertising, or promoting with respect to a transaction referred to in paragraph (a) of the definition of “consumer transaction”.  


A supplier also includes the successor to, or assignee of, any rights or obligations of the supplier and, except in Parts 3 to 5 of the ''BPCPA'', includes a person who solicits a consumer for a contribution of money or other property.
A supplier also includes the successor to, or assignee of, any rights or obligations of the supplier and, except in Parts 3 to 5 of the ''BPCPA'', includes a person who solicits a consumer for a contribution of money or other property.
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A plaintiff consumer relying on the supplier’s deceptive practice for an action should show:
A plaintiff consumer relying on the supplier’s deceptive practice for an action should show:
* a) That they were actually deceived by the deceptive practice;
:(a) That they were actually deceived by the deceptive practice;
 
:(b) That they relied on the deception to the extent that an error of judgment resulted from the deception; and
* b) That they relied on the deception to the extent that an error of judgment resulted from the deception; and
:(c) That the error of judgment caused loss.
 
* c) That the error of judgment caused loss.


To enforce the ''BPCPA'' against a supplier, the Director need only show that a deceptive practice would tend to cause consumers to make an error in judgment but does not need to show that any consumer made an error in judgment.
To enforce the ''BPCPA'' against a supplier, the Director need only show that a deceptive practice would tend to cause consumers to make an error in judgment but does not need to show that any consumer made an error in judgment.
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The court may draw the conclusion that a practice is deceptive on the basis of vague contractual language in circumstances where that language allowed the supplier to claim that additional work was not part of the original contract: see [https://www.canlii.org/en/bc/bcsc/doc/1999/1999canlii6663/1999canlii6663.html?autocompleteStr=British%20Columbia%20(Director%20of%20Trade%20Practices)%20v%20Van%20City%20Construction%20Ltd&autocompletePos=2 ''British  Columbia (Director of Trade Practices) v Van City Construction Ltd'', [1999<nowiki>]</nowiki> BCJ No 2033 (SC) (QL)].
The court may draw the conclusion that a practice is deceptive on the basis of vague contractual language in circumstances where that language allowed the supplier to claim that additional work was not part of the original contract: see [https://www.canlii.org/en/bc/bcsc/doc/1999/1999canlii6663/1999canlii6663.html?autocompleteStr=British%20Columbia%20(Director%20of%20Trade%20Practices)%20v%20Van%20City%20Construction%20Ltd&autocompletePos=2 ''British  Columbia (Director of Trade Practices) v Van City Construction Ltd'', [1999<nowiki>]</nowiki> BCJ No 2033 (SC) (QL)].
For a list of statutorily defined deceptive acts and practices, see the following link: http://www.bclaws.ca/civix/document/id/complete/statreg/04002_02#section4


=== 2. Unconscionable Acts ===
=== 2. Unconscionable Acts ===


Clear prohibitions are now set out under ss 7 – 9 of the ''BPCPA''. Unconscionable acts involve high-pressure tactics or demanding consideration far in excess of the market value, and may occur before, during or after the consumer transaction. Under s 10(1), if an unconscionable act or practice occurred in respect of a consumer transaction, that consumer transaction is not binding on the consumer or guarantor. The court will look at the particular vulnerabilities of the consumer, such as mental infirmity, ignorance, illiteracy, age or inability to understand the character, nature or language of the consumer transaction, which will trigger the reviewability of that transaction in the consumer’s mind. Both the common law and statutes hold the supplier to a stringent standard, demanding that they not act unreasonably in order to protect their own interests.
Section 8 of the BPCPA “largely codifies the common law of unconscionability” (''Connor Financial Services International Inc. v. Laughlin'', 2015 BCSC 587 at 27). There are circumstances listed in s 8(3) that the courts must consider when assessing unconscionability, but the essential elements of BPCPA unconscionability and common law unconscionability are the same (''Loychuk v. Cougar Mountain Adventures Ltd.'', 2012 BCCA 122 at para 54). The test for unconscionability is whether there is an “inequality of bargaining power and a resulting improvident bargain” (''Uber Technologies Inc. v. Heller'', 2020 SCC 16 at para 65). Both essential elements are contextual, and the circumstances listed in s 8(3) can aid the court in their assessment. For example, in ''A Speedy Solutions Oil Tank Removal Inc.'', 2021 BCCA 220, common industry practice and what terms competitors would have agreed to were both relevant in determining if the bargain was improvident. Furthermore, as per s 8(3)(b), the court will look at the particular vulnerabilities of the consumer to assess the inequality of bargaining power, such as mental infirmity, ignorance, illiteracy, age or inability to understand the character, nature or language of the consumer transaction, which will trigger the reviewability of that transaction in the consumer’s mind.


Under s 9(2), if it is alleged that a supplier committed or engaged in an unconscionable act or practice, the burden of proof is on the supplier to show that the unconscionable act or practice was '''not''' committed.
One difference between common law and BPCPA unconscionability is the onus. Under s 9(2), if it is alleged that a supplier committed or engaged in an unconscionable act or practice, the burden of proof is on the supplier to show that the unconscionable act or practice was '''not''' committed. Another potential key difference between common law unconscionability and BPCPA unconscionability is timing. In ''Uber v Heller'' at para 74, the court states that “Improvidence is measured at the time the contract is formed; unconscionability does not assist parties trying to "escape from a contract when their circumstances are such that the agreement now works a hardship upon them"”. However, s 8(1) states that “an unconscionable act or practice by a supplier may occur before, during or after the consumer transaction”. This difference between common law unconscionability and BPCPA unconscionability is noted in ''Gomel v. Live Nation Entertainment'', Inc., 2021 BCSC 699 at para 71


:'''NOTE:''' As above, s 8(3) sets out a list of circumstances that the court must consider when determining whether a practice is unconscionable. Again, this list is not comprehensive, as the court must consider all of the surrounding circumstances of which the supplier knew or ought to have known at the time of the contract.
:'''NOTE:''' As noted above, s 8(3) sets out a list of circumstances that the court must consider when determining whether a practice is unconscionable. Again, this list is not comprehensive, as the court must consider all of the surrounding circumstances of which the supplier knew or ought to have known at the time of the contract. Ultimately, the essential elements of common law unconscionability need to be met.
 
:Under s 10(1), if an unconscionable act or practice occurred in respect of a consumer transaction, that consumer transaction is not binding on the consumer or guarantor.


== C. Remedies and Sanctions ==
== C. Remedies and Sanctions ==
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Under s 10(1), where there is an unconscionable act or practice in a consumer transaction, that transaction is unenforceable by the supplier.  
Under s 10(1), where there is an unconscionable act or practice in a consumer transaction, that transaction is unenforceable by the supplier.  


=== 3. Injunction, Declaration and Class Action ===
=== 3. Injunctions, Declarations and Class Actions ===


Under s 172, any person, whether or not that person has a special interest in or is affected by a consumer transaction, may bring an action seeking declaratory or injunctive relief. This involves seeking to have the court declare an act to be deceptive or unconscionable and to have the court grant an injunction restraining the supplier from engaging further in such acts. Under s 172(2) the Director may bring an action on behalf of consumers generally or a designated class of consumers.
Under s 172, any person, whether or not that person has a special interest in or is affected by a consumer transaction, may bring an action seeking declaratory or injunctive relief. This involves seeking to have the court declare an act to be deceptive or unconscionable and to have the court grant an injunction restraining the supplier from engaging further in such acts. Under s 172(2) the Director may bring an action on behalf of consumers generally or a designated class of consumers.
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In any action for a permanent injunction under s 172(1)(b), the court may restore to any interested person any property or money acquired by deception or unconscionable acts or practices by the supplier (s 172(3)(a)) and may require the supplier to advertise to the public in a way that will assure prompt and reasonable communication to consumers (s 172(3)(c)).
In any action for a permanent injunction under s 172(1)(b), the court may restore to any interested person any property or money acquired by deception or unconscionable acts or practices by the supplier (s 172(3)(a)) and may require the supplier to advertise to the public in a way that will assure prompt and reasonable communication to consumers (s 172(3)(c)).


=== 4. Supplier Found Guilty of an Offence ===
=== 4. Supplier Found Guilty of an Offence Under the BPCPA ===


Under s 189 is a list of offences punishable by both fines and imprisonment, which may be sought by the Crown against a party found in breach of the ''BPCPA''. Under s 190, an individual who commits an offence under the ''BPCPA'' is liable to a fine of not more than $10,000, or to imprisonment for not more than 12 months, or to both.
Under s 189 is a list of offences punishable by both fines and imprisonment, which may be sought by the Crown against a party found in breach of the ''BPCPA''. Under s 190, an individual who commits an offence under the ''BPCPA'' is liable to a fine of not more than $10,000, or to imprisonment for not more than 12 months, or to both.
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Consumer Protection BC [CPBC] is responsible for the administration and enforcement of the ''BPCPA'' and is also empowered by another piece of legislation: the ''Business Practices and Consumer Protection Authority Act'', SBC 2004, c 3. Part 10 of the ''BPCPA'' contains all inspecting and enforcement powers of CPBC, its inspectors, and the Director. The Director has the power to:
Consumer Protection BC [CPBC] is responsible for the administration and enforcement of the ''BPCPA'' and is also empowered by another piece of legislation: the ''Business Practices and Consumer Protection Authority Act'', SBC 2004, c 3. Part 10 of the ''BPCPA'' contains all inspecting and enforcement powers of CPBC, its inspectors, and the Director. The Director has the power to:
* a) Use the same powers that the Supreme Court has during trials of civil action for the purposes of an inspection, to summon and enforce the attendance of witnesses, compel witnesses to give evidence under oath or in any other manner, and to produce records;
:(a) Use the same powers that the Supreme Court has during trials of civil action for the purposes of an inspection, to summon and enforce the attendance of witnesses, compel witnesses to give evidence under oath or in any other manner, and to produce records;
* b) Institute proceedings or assume the conduct of proceedings on behalf of a consumer;
:(b) Institute proceedings or assume the conduct of proceedings on behalf of a consumer;
* c) Make an order (called a “freeze” order) against assets of a person who is being investigated (s 159). This order can also be attached to property being held in trust for a person under investigation. Thus, although CPBC is not empowered to actually seize money, it is able to freeze accounts, which can be a way to encourage supplies to transfer funds to consumers;
:(c) Make an order (called a “freeze” order) against assets of a person who is being investigated (s 159). This order can also be attached to property being held in trust for a person under investigation. Thus, although CPBC is not empowered to actually seize money, it is able to freeze accounts, which can be a way to encourage supplies to transfer funds to consumers;
* d) Refrain from bringing an action against a supplier and accept instead a written undertaking under s 154 of the ''BPCPA''. This undertaking usually takes the form of a formal agreement between the Director and supplier and may involve consumer redress. It is probably one of the most effective remedies under the BPCPA because it avoids both the time and expense of court proceedings;
:(d) Refrain from bringing an action against a supplier and accept instead a written undertaking under s 154 of the ''BPCPA''. This undertaking usually takes the form of a formal agreement between the Director and supplier and may involve consumer redress. It is probably one of the most effective remedies under the BPCPA because it avoids both the time and expense of court proceedings;
* e) Issue a compliance order under s 155 of the ''BPCPA'' where compliance is mandatory. The Director can order restitution and compensation to the consumer with this function (s 155(4)) without having to go through court proceedings. If a person fails to comply with a compliance order, they are committing an offence under s 189(5) and could face a fine of not more than $10,000, imprisonment for not more than 12 months, or both;
:(e) Issue a compliance order under s 155 of the ''BPCPA'' where compliance is mandatory. The Director can order restitution and compensation to the consumer with this function (s 155(4)) without having to go through court proceedings. If a person fails to comply with a compliance order, they are committing an offence under s 189(5) and could face a fine of not more than $10,000, imprisonment for not more than 12 months, or both;
* f) File an undertaking, compliance order, or a direct sales prohibition order with the Supreme Court. Doing so would mean that the undertaking or order is deemed to be a court order, and thus it will be enforceable as such (s 157). This can be useful in encouraging resolution amongst parties.
:(f) File an undertaking, compliance order, or a direct sales prohibition order with the Supreme Court. Doing so would mean that the undertaking or order is deemed to be a court order, and thus it will be enforceable as such (s 157). This can be useful in encouraging resolution amongst parties.
* g) Seek a declaration and/or injunctive relief on behalf of a consumer, or a class of consumers, and make their applications ''ex parte'' (s 172); and
:(g) Seek a declaration and/or injunctive relief on behalf of a consumer, or a class of consumers, and make their applications ''ex parte'' (s 172); and
* h) Impose an administrative penalty under s 164.
:(h) Impose an administrative penalty under s 164.


While there are a number of actions that CPBC is empowered to take, including pursuing civil and quasi-criminal enforcement, it is much more likely that CPBC will be involved in handling complaints and in investigations. Complaints can be initiated on Consumer Protection BC’s website: https://www.consumerprotectionbc.ca/consumer-help/start-a-complaint/.
While there are a number of actions that CPBC is empowered to take, including pursuing civil and quasi-criminal enforcement, it is much more likely that CPBC will be involved in handling complaints and in investigations. Complaints can be initiated on Consumer Protection BC’s website: https://www.consumerprotectionbc.ca/consumer-help/start-a-complaint/.
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* An example of puffery is “It’s a great little car.”               
* An example of puffery is “It’s a great little car.”               
* An example of a statement of fact is “It's a 1994 Dodge.”  
* An example of a statement of fact is “It's a 1994 Dodge.”  


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{{REVIEWED LSLAP | date= August 5, 2021}}
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