Consumer Agreements (not binding)

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Date Retrieved:	2025-04-03
CLNP Page ID:	2250
Page Categories:	[Consumer Protection]
Citation:	Consumer Agreements (not binding), CLNP 2250, <>, retrieved on 2025-04-03
Editor:	Rstojni
Last Updated:	2025/01/06

Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A

92 (1) If this Act requires a consumer to give notice to a supplier to request a remedy, the consumer may do so by giving notice in accordance with this section. 2002, c. 30, Sched. A, s. 92 (1).

(2) The notice may be expressed in any way, as long as it indicates the intention of the consumer to seek the remedy being requested and complies with any requirements that may be prescribed. 2002, c. 30, Sched. A, s. 92 (2).

(3) Unless the regulations require otherwise, the notice may be oral or in writing and may be given by any means. 2004, c. 19, s. 7 (35).

(4) If notice in writing is given other than by personal service, the notice shall be deemed to be given when sent. 2004, c. 19, s. 7 (35).

(5) The consumer may send or deliver the notice to the address set out in a consumer agreement or, if the consumer did not receive a written copy of a consumer agreement or the address was not set out in the written agreement, the consumer may send or deliver the notice,

(a) to any address of the supplier on record with the Government of Ontario or the Government of Canada; or

(b) to an address of the supplier known by the consumer. 2002, c. 30, Sched. A, s. 92 (5); 2013, c. 13, Sched. 2, s. 6.

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.

(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).

94 (1) If a consumer has a right to cancel a consumer agreement under this Act, the consumer may cancel the agreement by giving notice in accordance with section 92. 2002, c. 30, Sched. A, s. 94 (1).

(2) The cancellation takes effect when the consumer gives notice. 2002, c. 30, Sched. A, s. 94 (2).

95 The cancellation of a consumer agreement in accordance with this Act operates to cancel, as if they never existed,

(a) the consumer agreement;

(b) all related agreements;

(c) all guarantees given in respect of money payable under the consumer agreement;

(d) all security given by the consumer or a guarantor in respect of money payable under the consumer agreement; and

(e) all credit agreements, as defined in Part VII, and other payment instruments, including promissory notes,

(i) extended, arranged or facilitated by the person with whom the consumer reached the consumer agreement, or

(ii) otherwise related to the consumer agreement. 2002, c. 30, Sched. A, s. 95.

96 (1) If a consumer cancels a consumer agreement, the supplier shall, in accordance with the prescribed requirements,

(a) refund to the consumer any payment made under the agreement or any related agreement; and

(b) return to the consumer in a condition substantially similar to when they were delivered all goods delivered under a trade-in arrangement or refund to the consumer an amount equal to the trade-in allowance. 2002, c. 30, Sched. A, s. 96 (1).

(2) Upon cancelling a consumer agreement, the consumer, in accordance with the prescribed requirements and in the prescribed manner, shall permit the goods that came into the consumer’s possession under the agreement or a related agreement to be repossessed, shall return the goods or shall deal with them in such manner as may be prescribed. 2002, c. 30, Sched. A, s. 96 (2).

(3) If a consumer cancels a consumer agreement, the consumer shall take reasonable care of the goods that came into the possession of the consumer under the agreement or a related agreement for the prescribed period. 2004, c. 19, s. 7 (37).

(4) The consumer owes the obligation described in subsection (3) to the person entitled to possession of the goods at the time in question. 2002, c. 30, Sched. A, s. 96 (4).

(5) Compliance with this section discharges the consumer from all obligations relating to the goods and the consumer is under no other obligation, whether arising by contract or otherwise, to take care of the goods. 2002, c. 30, Sched. A, s. 96 (5).

(6) If a consumer has cancelled a consumer agreement and the supplier has not met the supplier’s obligations under subsection (1), the consumer may commence an action. 2002, c. 30, Sched. A, s. 96 (6).

(7) If a consumer has cancelled a consumer agreement and has not met the consumer’s obligations under this section, the supplier or the person to whom the obligation is owed may commence an action. 2004, c. 19, s. 7 (38).

Utilebill Credit Corp. v O’Doherty, 2022 CanLII 139317 (ON SCSM)

Overview

[1]               The plaintiff, Utilebill Credit Corp. (“Plaintiff”), and Secure Home Services Inc. (“SHS”) entered into a business arrangement together.  According to its witness, the Plaintiff was assigned certain leases from SHS, through a Master Assignment Agreement (“MAA”), dated January 28, 2014^[1].

[2]              SHS assigned to the Plaintiff all right, title and interest in the lease which is the subject of this proceeding.  According to the Plaintiff’s witness, in exchange for payment of $10,260.84, plus HST, this included the right of the Plaintiff to receive all future payments on an HVAC Rental Agreement (“Agreement”) with the defendant, Terry O’Doherty (“O’Doherty), dated March 1, 2014, for the rental of a boiler.  Although the schedule for the MAA was not introduced into evidence, Nassar testified that the Agreement was part of the Schedule of leases assigned under the MAA. The Plaintiff claims that as of March 9, 2018, O’Doherty owed a total amount of $17,150.64.

[3]              O’Doherty denies any liability to the Plaintiff.  Rather, she countersued, and claimed $25,000 in her Defendant’s Claim, for fraudulent misrepresentation, breach of contract, and abuse of process, as well as punitive damages.  In particular, she claims that the assignment of the Agreement to the Plaintiff and the contract relied on by the Plaintiff in the main action are founded upon fraud.

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[6]              Having heard the submissions of the parties, and heard and reviewed the evidence, I have concluded, based on a balance of probabilities, that the Agreement breaches the provisions of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (“CPA”), and that it is just and agreeable to good conscience that both the Plaintiff’s Claim and the Defendant’s Claim be dismissed.  These are my reasons.

Issues

[7]              At issue were the following:

a.      Has the Agreement been rescinded or cancelled in accordance with provisions of the CPA?

b.      If the Agreement has been cancelled, what if anything is the Plaintiff owed for unjust enrichment?

c.      Has the Plaintiff engaged in fraudulent misrepresentation, breach of contract, and/or abuse of process, and if so, is O’Doherty entitled to damages?

Evidence

The Agreement

[8]            As noted above, Nassar testified about the relationship between SHS and the Plaintiff, and claimed that it was an “arm’s length relationship”, where the Plaintiff simply acted to finance the leases on behalf of its clients, and then were assigned the leases.  The value of his testimony was limited, given that he was not present during the critical period when the Agreement was entered into.

[9]              However, notwithstanding Nassar’s claims of being at arms’ length, the parties to the Agreement are actually both the Plaintiff and SHS, with O’Doherty.   Although there is an issue of what version of the Agreement, was provided to O’Doherty, on all iterations, the Agreement is between O’Doherty and both SHS and the Plaintiff.  It reads:

This Heating Ventilation and Air Conditioner (“HVAC”) Agreement is between you the Customer and Secure Home Services Inc. and Utilebill Credit Corporation (hereinafter together referred to as “SHS”) for the rental of your furnace and/or air conditioner unit as selected on this HVAC Rental Agreement Form (the “Agreement”).  This Agreement is made up of a HVAC Rental Agreement Form and terms and conditions (either on the reverse of this HVAC Rental Agreement Form, or in a separate brochure).

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[23]         Significantly, O’Doherty also testified that the Agreement was never properly explained to her, nor did she understand its content.  Rather, relying on Menon, she believed the following representations which induced her into entering into the Agreement:

a.      That her existing furnace was old, and could break down anytime;

b.      The monthly payment would not go up;

c.      The Agreement would save her money, be more efficient, less expensive, and that she would be able to cancel anytime and do a reasonable buyout within a few years, not out of line with the actual value of the boiler.  This is supported by statements that appear at the top of the bill, stating:  “Easy Payment Options – You Choose”, and “See the impact on your gas/hydro bills!”

d.     She specifically told him that she wanted to be able to buy out the lease within two to three years, and she did not want a long-term contract, and he assured her that would be the case under the Agreement.

[24]         O’Doherty discovered that the representations were actually untrue.  O’Doherty states that her old furnace was not on the verge of breaking down; the monthly payments did go up; she saw no savings in her gas or hydro bills, and in fact they went up; and the buy-out terms were onerous, and the Plaintiff insisted on payment of the full length of the lease, 120 months less amounts paid, or more than $16,000. Further, she discovered that the Plaintiff had put a lien on her property, without prior notice to her.

[25]         None of these terms were actually explained to her, nor did she understand its content, as she trusted Menon at the time.  Apart from the representations noted, Menon did not discuss any other part of the Agreement.  Specifically, Menon did not advise her about the following:

a.      Any cooling off periods and the right to cancel;

b.      Any of her consumer rights;

c.      Any possibility of a lien being taken out against her property.

[26]   O’Doherty was adamant that had Menon informed her of the onerous terms, she would never have signed the Agreement.  She was also in particular disturbed when she learned that a lien had been taken out against her house, as she had no idea that this could possibly happen.

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[29]         O’Doherty wrote to SHS on July 2, 2017, stating that she was exercising her right to cancel the Agreement “as a result of non-disclosure and unfair business practices”, including a representation that “the contract could be terminated at any point and that the term of the contract would not represent a long-term financial cost beyond the market value of the equipment being rented and associated installation”.  She ends the letter by stating that she has already more than covered the cost of the unit through her payments to date, and that she wishes to cancel all further agreements.^[7]

[30]         This letter was followed up by calls to SHS, requesting a refund of monies that O’Doherty and her husband believed that they overpaid.

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[33]         The testimony of Declan O’Doherty is that by fall or early winter of 2017, he had a call with a representative of the Plaintiff, and asked that the boiler be removed.  The representative refused “point blank” to remove the boiler, and insisted that the Agreement be continued, or O’Doherty pay the full 10 years of payments less amounts already paid and not reimbursed, an amount in excess of $16,000.

[34]         The Plaintiff ultimately delivered an invoice on March 9, 2018, claiming a total of $16,981.44, plus an administration fee of $169.50, for a total of $17,150.64, HST included.^[9]  According to Nassar, this represented the balance of payments owing to the end of the 120-month (10 year) term of the Agreement, which is the subject of the Plaintiff’s Claim.

[35]         Declan O’Doherty also gave evidence that the boiler that had a maximum value of $3,000.  Declan O’Doherty testified as well to the various repairs they have had to make to the boiler, and its failure to ever work properly, and its effect on his wife, O’Doherty.

[36]         According to the Plaintiff, the market value of the boiler, purchased new, is $6,499., discounted from an original price of $8,999.  This valuation is based on a website link to https://hvactrust.ca/product/navien-ncb240110hv, accessed on March 3, 2022.^[10]  Nassar did not know if the pricing was in Canadian or American dollars, though he suspected it was in US dollars. However, given that Nassar did not know, and it is a website that ends with “.ca”, usually only used by businesses based in Canada marketing to Canadian consumers, I find that the pricing is in Canadian dollars.  I note that the Plaintiff did its internet research on the market value of this unit in March 2022 (noted in top left of the document), but objected to O’Doherty producing an exhibit listing the results of her husband’s internet research in 2017, with varying costs for the same items:  US$2,344, US$2,239, Can$2,493, US$2,279, and US$2,419.^[11]  

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Findings

[37]         I make the following findings:

Has the Agreement been cancelled in accordance with the provisions of the CPA?

[38]         There is no dispute that the CPA applies to the Agreement.  

[39]         O’Doherty gave notice on July 2, 2017 of cancelling the Agreement.  While this notice was not in compliance with the CPA, I have discretion to waive that compliance if it is in the interest of justice to do so.  In light of the circumstances, such waiver is appropriate.  The CPA does not stipulate a limitation period, and the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, bars any proceeding from being commenced after a basic limitation period of two years.  With respect to the Plaintiff’s Claim, O’Doherty points to her cancellation due to breaches of the CPA as a defence to the Plaintiff’s claim, not as part of a proceeding she has commenced.

[40]         The crux of the defence is that the Agreement cannot be enforced against O’Doherty, given the misrepresentations made by Menon that induced her into signing the Agreement, his failure to provide her with disclosure of onerous terms, as well as his failure to provide a copy of the Agreement with the full General Terms and Conditions.

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[43]         I also accept O’Doherty’s evidence of what happened during this fourth meeting with Menon.  Her testimony was credible.  She testified that she would not have entered into this contract but for the misrepresentations, which were likely deliberate and therefore fraudulent. Certainly, they qualify as unfair practices under the CPA.  She testified that she only received the Agreement, and possibly on the back of it, one page of the General Terms and Conditions. She also testified that she relied on Menon, who had worked hard to gain her trust, to tell her what was in the Agreement. As noted above, he failed to tell her about any onerous terms, and deliberately assured her with misrepresentations and telling her that she was getting what she wanted.

...

[47]         Consumers have a right to be informed of onerous terms, and it is hard on the evidence before me to see how O’Doherty freely consented to terms that she was not informed about.  As she stated, these were pre-printed forms, with tiny print, and she was entitled to rely on the representations of Menon.

[48]         Finally, even if, notwithstanding the pre-printed form with both SHS and the Plaintiff’s name on it, Nassar is right that the Plaintiff had an arms’ length relationship with SHS, then the assignment of the lease under the MAA is only as good as the lease itself.

[49]         Pursuant to the MAA, the Plaintiff has its remedy against SHS.  Sections 6(iv) (the leases are enforceable) and 6(x) (that SHS has conducted its business in compliance with all applicable laws, including all applicable consumer protection laws) of the MAA contains SHS’ warranty with respect to the validity of the Agreement.  The Plaintiff has recourse against SHS for breach of any covenant or obligation under the Agreement, including any misrepresentation or breach of warranty.

[50]         In the circumstances, I find that the Agreement breaches the CPA, and is not enforceable against O’Doherty. Since there was no strict compliance with the CPA, O’Doherty has shown on a balance of probabilities that she was entitled to have cancelled the Agreement, as if it has never existed.^[13]

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If the Agreement has been cancelled, what if anything is the Plaintiff owed for unjust enrichment?

[51]           According to Nassar, the Defendant obtained the underlying Agreement from SHS, including assignment of the equipment, for consideration paid of $10,260.84, plus HST, paid to SHS.

[52]         However, as I noted above, the Defendant was a party to the Agreement.  While SHS may well have assigned its rights to the payments and equipment under the Agreement to the Plaintiff, as a party to the Agreement, the Plaintiff had as good an Agreement as SHS was able to assign.  Further, as a party to the Agreement, the Defendant is not a third-party purchaser in good faith.

[53]         The Plaintiff referenced section 93(2) of the CPA, as a statutory unjust enrichment scheme.  Section 93(1) provides a discretion on this court to order that O’Doherty be bound by all or a portion of a consumer agreement that is otherwise not binding, if I determine that it would be inequitable in the circumstances for her not to be bound.  The Plaintiff also referenced Garland v. Consumers’ Gas Co., [2004] 1 S.C.R. 629, 2004 SCC 25 (“Garland”), for the common law test for unjust enrichment.   

[54]         I found that the Agreement is not enforceable, and was only entered into by O’Doherty based on unfair practices and misrepresentations.  The Plaintiff retains $1,976.26 in payments under the Agreement.  O’Doherty asked the Plaintiff to take back the equipment in the fall or early winter 2017, but the Plaintiff refused to do so.  In the circumstances, I decline to exercise my discretion pursuant to section 93(1) of the CPA.  I also find that the Plaintiff fails to meet the third element of the Garland test, as there is a juristic reason for this situation.

[55]         In any event, considering the cost estimates for the boiler that were provided by the Plaintiff as well as O’Doherty, even if I had decided to exercise my discretion, I would only have awarded the value of the boiler at the time of the cancellation, and found it just and agreeable to value the boiler at $3,500.  Reducing the value by the amount already paid, that would leave an amount of $1,523.74 payable to the Plaintiff, had I exercised my discretion in its favour.

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Has the Plaintiff engaged in fraudulent misrepresentation, breach of contract, and/or abuse of process, and if so, is O’Doherty entitled to damages?

[56]         The Plaintiff brought up a limitations defence during closing submissions.  I agree with respect to the Defendant’s Claim made by O’Doherty, as the claims are grounded in conduct and representations in April 2014, and the Defendant’s Claim was issued in July 2018, more than three years ago.

[57]         However, had a limitations defence not been raised to the Defendant’s Claim, then I would have awarded $5,000 to O’Doherty, on the basis of the consequences to O’Doherty arising from the misrepresentations, and the fraud perpetrated at the Defendant’s home by Menon.

[58]         As noted above, I find that the Plaintiff was a party to the Agreement. Section 18(13) of the CPA does not apply, as the Plaintiff is clearly listed as a party to the Agreement, and its name also appears alongside that of SHS in communications to O’Doherty. While there may have been some underlying business arrangement between SHS and the Plaintiff, the content of that agreement is not apparent from the terms in the Agreement.

[59]         While I found that the sales person for SHS engaged in misrepresentations that induced O’Doherty to enter into the Agreement and the Agreement was subsequently cancelled by O’Doherty, I am unable, based on the preponderance of evidence, to conclude that there is sufficient evidence to find a coordinated scam on the part of the Plaintiff and SHS.  There are certainly indicia that could point in that direction, but on the evidence before me, I am not prepared to make that finding.

Thompson v. Canadian Home Improvement Credit Corporation, 2023 ONSC 5159 (CanLII)

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Compensatory damages and the voiding of contracts and security on title

[13]           Based on Ms. Thompson’s evidence, OGS made false and misleading representations to her about its relationship with the Ontario government, her need for new HVAC equipment, the cost savings she would achieve by using the equipment it promoted, and her eligibility for energy rebates. It misled her about the terms of the rental and financing agreements it promoted and hid the real terms by giving Ms. Thompson only a partial copy of them.

[14]           After the agreements were signed, OGS misled Ms. Thompson about the services it would provide. It did not attend for a scheduled follow-up visit or cancel her existing leases for equipment. After this action was started, it registered a security interest on her property based on contract terms that had never been disclosed to her, the amount of which grossly exceeded the reasonable cost of her cancellation of the agreements.

[15]           I conclude that OGS made fraudulent misrepresentations to Ms. Thompson to induce her to sign agreements for the rental and financing of equipment that she did not actually need, and that Ms. Thompson relied on these misrepresentations. This entitles her to an order setting the contracts aside.  I further find that OGS’ misrepresentations to Ms. Thompson constituted an unfair practice under s. 14 of the Consumer Protection Act, 2002, SO 2002, c 30 Sched A. This finding again entitles her to rescission of the agreements, as well as setting aside of related security interests and damages under s. 18 of the Act.

[16]           The agreements that Ms. Thompson signed are therefore rescinded, and the notice of security registered by OGS on the title of Ms. Thompson’s property based on the agreements shall be discharged. Ms. Thompson is also entitled to damages from OGS equivalent to what she paid for the equipment and financing charges, which totaled $988.65.

[17]           Finally, given the OGS’ fraudulent conduct, I order that Ms. Thompson’s rights to enforce this judgment shall survive OGS’ bankruptcy, pursuant to s. 178(1)(d) and (e) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3.

Punitive damages

[18]            Under s. 18(11) of Act, a court may award exemplary or punitive damages to the victim of an unfair practice, in addition to any other remedy.  In this case, Ms. Thompson seeks $25,000 in punitive damages. She contends that a more modest amount would not serve to deter OGS from continuing to engage in its deceptive practices.

[19]           In Hoy v. Expedia Group Inc., Hoy v. Expedia Group Inc., 2022 ONSC 6650, Perell J. outlined the guiding principles for awarding punitive damages pursuant to section 18(11).  Under common law, punitive damages can be awarded, exceptionally, where a defendant’s conduct is in bad faith, malicious, or high handed. Perell J. concluded that punitive damages are more widely available under the Act, due to the general objectives of punitive damages and the Act’s objectives. These objectives include (a) the restoration of the balance in the contractual relationship between merchants and consumers (because consumers have less bargaining power and are at risk of informational vulnerability in their relationship with merchants); and (b) the elimination of unfair and misleading practices that may distort the information available to consumers and prevent them from making informed choices: Hoy, at para. 173.

[20]           Perell J. drew on the Supreme Court of Canada’s guidance in Richard v. Time Inc., 2012 SCC 8, [2012] 1 SCR 265. Although Richard addressed the criteria for punitive damages under Quebec’s Consumer Protection Act, the Ontario and Quebec statutes shared the same goals. In Richard, the Supreme Court directed that courts should consider evidence that the defendant’s conduct was intentional, malicious or vexatious, or that they displayed ignorance, carelessness or serious negligence with respect to their obligations and consumers' rights. The court must consider the whole of the defendant’s conduct at the time of and after the violation: Hoy, at para. 175, citing Richard at para. 180.

[21]           In Hoy, Perell J. concluded that the plaintiffs’ claim for punitive damages was not legally tenable based on the allegations pleaded, or rather not pleaded. The plaintiffs alleged facts that could lead a court to conclude that the defendant, Expedia, had engaged in unfair practices. They had not, however, alleged malicious or reprehensible conduct, ignorance, carelessness or serious negligence regarding the defendant’s obligations and consumers’ rights under the Act.  Justice Perell concluded that an award of punitive damages under the Act must be based on “something more” than a mere breach of the Act’s prohibition on unfair practices. As a result, the claim for punitive damages could not succeed and was struck:  Hoy, at paras. 176 to 180.

[22]           By contrast, in this case, I find that Ms. Thompson has proved “something more” than an unfair practice by OGS.

[23]           First, I find that OGS used the pretext of providing Ms. Thompson with information about energy rebates to gain access to her home for the purpose of selling her HVAC equipment. Unsolicited door-to-door sales of HVAC equipment have been prohibited in Ontario since 2018, pursuant to s. 43.1(1) of the Act and s. 35.1 of general regulation 17/05.  When Ms. Thompson responded to OGS’ Facebook advertisement, OGS’ representative misrepresented its link to the Ontario government and told Ms. Thompson that she would qualify for any energy rebates for which she was, in fact, ineligible.  There is no evidence that Ms. Thompson requested OGS’ visit so that she could sign a contract for HVAC equipment or that she was even aware that OGS might recommend that her equipment be replaced. OGS’ conduct appears to have been an attempt to circumvent the ban on door-to-door sales.

[24]           Second, OGS’ representative hid the terms of the contracts it had Ms. Thompson sign. It did not advise her of the grossly inflated amount she would have to pay to cancel the contracts, or that OGS and CHICC could register a lien or liens against her property to secure that amount.  The representative actively hid these terms by giving Ms. Thompson only a short excerpt of the agreements, which did not contain any of the fine print about the financing terms.

[25]           Third, when Ms. Thompson attempted to contact OGS and CHICC to cancel the contracts, no one returned her calls. She was ultimately forced to retain a lawyer and sue, even though OGS had clearly breached the Act.  This forced her to spend money on legal fees, with no guarantee of compensation.

[26]           As a whole, OGS’ conduct is reprehensible and shows contempt for the consumer protection provisions in the Act. I find that punitive damages are appropriate to discourage OGS, and other companies like it, from engaging in such predatory practices. The question is whether the amount sought by Ms. Thompson is appropriate.

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