Consumer Agreements (not binding)

🥷 Caselaw.Ninja, Riverview Group Publishing 2025 ©
Date Retrieved:	2025-04-01
CLNP Page ID:	2250
Page Categories:	[Consumer Protection]
Citation:	Consumer Agreements (not binding), CLNP 2250, <>, retrieved on 2025-04-01
Editor:	Rstojni
Last Updated:	2025/01/06

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

...

Unsolicited goods or services: relief from legal obligations

13 (1) Except as provided in this section, a recipient of unsolicited goods or services has no legal obligation in respect of their use or disposal.  2002, c. 30, Sched. A, s. 13 (1).

No payment for unsolicited goods or services

(2) No supplier shall demand payment or make any representation that suggests that a consumer is required to make payment in respect of any unsolicited goods or services despite their use, receipt, misuse, loss, damage or theft.  2002, c. 30, Sched. A, s. 13 (2).

...

False, misleading or deceptive representation

14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.  2002, c. 30, Sched. A, s. 14 (1).

Examples of false, misleading or deceptive representations

(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:

1.  A representation that the goods or services have sponsorship, approval, performance characteristics, accessories, uses, ingredients, benefits or qualities they do not have.

2.  A representation that the person who is to supply the goods or services has sponsorship, approval, status, affiliation or connection the person does not have.

3.  A representation that the goods or services are of a particular standard, quality, grade, style or model, if they are not.

4.  A representation that the goods are new, or unused, if they are not or are reconditioned or reclaimed, but the reasonable use of goods to enable the person to service, prepare, test and deliver the goods does not result in the goods being deemed to be used for the purposes of this paragraph.

5.  A representation that the goods have been used to an extent that is materially different from the fact.

6.  A representation that the goods or services are available for a reason that does not exist.

7.  A representation that the goods or services have been supplied in accordance with a previous representation, if they have not.

8.  A representation that the goods or services or any part of them are available or can be delivered or performed when the person making the representation knows or ought to know they are not available or cannot be delivered or performed.

9.  A representation that the goods or services or any part of them will be available or can be delivered or performed by a specified time when the person making the representation knows or ought to know they will not be available or cannot be delivered or performed by the specified time.

10.  A representation that a service, part, replacement or repair is needed or advisable, if it is not.

11.  A representation that a specific price advantage exists, if it does not.

12.  A representation that misrepresents the authority of a salesperson, representative, employee or agent to negotiate the final terms of the agreement.

13.  A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive.

14.  A representation using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if such use or failure deceives or tends to deceive.

15.  A representation that misrepresents the purpose or intent of any solicitation of or any communication with a consumer.

16.  A representation that misrepresents the purpose of any charge or proposed charge.

17.  A representation that misrepresents or exaggerates the benefits that are likely to flow to a consumer if the consumer helps a person obtain new or potential customers.  2002, c. 30, Sched. A, s. 14 (2).

Unconscionable representation

15 (1) It is an unfair practice to make an unconscionable representation.  2002, c. 30, Sched. A, s. 15 (1).

Same

(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.  2002, c. 30, Sched. A, s. 15 (2).

Renegotiation of price

16 It is an unfair practice for a person to use his, her or its custody or control of a consumer’s goods to pressure the consumer into renegotiating the terms of a consumer transaction.  2002, c. 30, Sched. A, s. 16.

Unfair practices prohibited

17 (1) No person shall engage in an unfair practice.  2002, c. 30, Sched. A, s. 17 (1).

One act deemed practice

(2) A person who performs one act referred to in section 14, 15 or 16 shall be deemed to be engaging in an unfair practice.  2002, c. 30, Sched. A, s. 17 (2).

Advertising excepted

(3) It is not an unfair practice for a person, on behalf of another person, to print, publish, distribute, broadcast or telecast a representation that the person accepted in good faith for printing, publishing, distributing, broadcasting or telecasting in the ordinary course of business.  2002, c. 30, Sched. A, s. 17 (3).

Rescinding agreement

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.  2002, c. 30, Sched. A, s. 18 (1).

Remedy if rescission not possible

(2) 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.  2002, c. 30, Sched. A, s. 18 (2); 2004, c. 19, s. 7 (6).

Notice

(3) A consumer must give notice within one year after entering into the agreement if,

(a)  the consumer seeks to rescind an agreement under subsection (1); or (b)  the consumer seeks recovery under subsection (2), if rescission is not possible.  2002, c. 30, Sched. A, s. 18 (3).

Form of notice

(4) The consumer may express notice in any way as long as it indicates the intention of the consumer to rescind the agreement or to seek recovery where rescission is not possible and the reasons for so doing and the notice meets any requirements that may be prescribed.  2002, c. 30, Sched. A, s. 18 (4).

Delivery of notice

(5) Notice may be delivered by any means.  2002, c. 30, Sched. A, s. 18 (5).

When notice given

(6) If notice is delivered other than by personal service, the notice shall be deemed to have been given when sent.  2002, c. 30, Sched. A, s. 18 (6).

Address

(7) The consumer may send or deliver the notice to the person with whom the consumer contracted at the address set out in the agreement or, if the consumer did not receive a written copy of the agreement or the address of the person was not set out in the agreement, the consumer may send or deliver the notice,

(a)  to any address of the person on record with the Government of Ontario or the Government of Canada; or (b)  to an address of the person known by the consumer.  2002, c. 30, Sched. A, s. 18 (7).

...

41 (1) Sections 42 and 43 apply to direct agreements if the consumer’s total potential payment obligations under the agreement, excluding the cost of borrowing, exceeds a prescribed amount.  2002, c. 30, Sched. A, s. 41 (1).

Transition

(2) Sections 42 and 43 apply to direct agreements entered into on or after the day this section is proclaimed in force.  2002, c. 30, Sched. A, s. 41 (2).

Same

(3) The Consumer Protection Act, as it existed immediately before its repeal by the Consumer Protection Statute Law Amendment Act, 2002, continues to apply to direct sales contracts entered into before its repeal.  2002, c. 30, Sched. A, s. 41 (3).

Requirements for direct agreements

42 (1) Every direct agreement shall be in writing, shall be delivered to the consumer and shall be made in accordance with the prescribed requirements.  2002, c. 30, Sched. A, s. 42.

Minister’s regulations

(2) In addition to the power of the Lieutenant Governor in Council to make regulations under section 123, the Minister may make regulations,

(a)  governing contents of direct agreements and requirements for making, renewing, amending or extending direct agreements; (b)  requiring a supplier under a direct agreement to disclose to the consumer the information specified in the regulation, governing the content of the disclosure and requiring the supplier to take the other measures specified in the regulation to ensure that the consumer has received the disclosure. 2013, c. 13, Sched. 2, s. 3.

Cancellation: cooling-off period

43 (1) A consumer may, without any reason, cancel a direct agreement at any time from the date of entering into the agreement until 10 days after the consumer has received the written copy of the agreement. 2017, c. 5, Sched. 2, s. 15.

Transition

(1.1) Despite subsection (1), that subsection, as it read immediately before the day section 15 of Schedule 2 to the Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017 comes into force, continues to apply to a direct agreement that requires the supplier to supply to the consumer a water heater or other goods or services that are prescribed if the parties entered into the agreement before that day. 2017, c. 5, Sched. 2, s. 15.

Cancellation: failure to meet requirements

(2) In addition to the right under subsection (1), a consumer may cancel a direct agreement within one year after the date of entering into the agreement if the consumer does not receive a copy of the agreement that meets the requirements under section 42.  2002, c. 30, Sched. A, s. 43 (2).

Restriction on entering into certain direct agreements

43.1 (1) No supplier shall, while at a consumer’s dwelling or at any other prescribed place, solicit the consumer to enter into a direct agreement for the supply of prescribed goods or services or enter into such an agreement unless the consumer has initiated contact with the supplier and has specifically requested that the supplier attend at the consumer’s dwelling or the other prescribed place for the purpose of entering into such an agreement. 2017, c. 5, Sched. 2, s. 16.

Same

(2) The following activities do not constitute solicitation for the purpose of subsection (1):

1.  Leaving marketing materials at a consumer’s dwelling or any other place prescribed for the purpose of that subsection without attempting to contact the consumer with respect to any prescribed direct agreement.

2.  Such other activities that are prescribed. 2017, c. 5, Sched. 2, s. 16.

Agreement void

(3) A direct agreement that the parties enter into in contravention of subsection (1) is void. 2017, c. 5, Sched. 2, s. 16.

Related agreements void

(4) Any agreement, including the following, that is related to the consumer’s obligations under the direct agreement is void:

1.  A guarantee or security given by a guarantor for the purpose of securing the performance of those obligations.

2.  An agreement under which the consumer gives security for the purpose of securing the performance of those obligations.

3.  A credit agreement within the meaning of Part VII that the consumer enters into as a borrower in respect of money that the consumer is required to pay under the direct agreement and any other payment instrument that the consumer enters into in that respect. 2017, c. 5, Sched. 2, s. 16.

Unsolicited goods or services

(5) If a supplier supplies goods or services to a consumer under a direct agreement that is void, the goods or services are deemed to be unsolicited and subsections 13 (1), (2), (3), (6), (7) and (8) apply to them. 2017, c. 5, Sched. 2, s. 16.

Third party charges

(6) If a supplier supplies goods or services to a consumer under a direct agreement that is void and the consumer incurs charges from a third party that are related to the agreement, including, but not limited to, charges in respect of the removal or return of any goods that the consumer is liable to return to the third party, the supplier is liable to reimburse the consumer for the amount of all those charges. 2017, c. 5, Sched. 2, s. 16.

...

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.

...

[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).

...

[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.

...

[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.

...

[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]  

...

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.

...

[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]

...

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.

...

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)

...

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.

...

Skymark Finance Corporation v Toraman, 2020 CanLII 51091 (ON SCSM)

...

ISSUES and SUMMARY OF CONCLUSIONS

[4]           For the reasons articulated further below, the issues and my short conclusions, based on the evidence and applying the applicable law and the civil standard of proof (balance of probabilities), follow.

1. Did the salesman engage in unfair practices?

Yes.

2. Is Skymark a bona fide purchaser for value of the contract from Progressive and therefore an innocent party?

No.

3. What is the appropriate remedy?

Rescind the contract.

...

[48]        As explained below, I find that the salesman engaged in unfair practices. They are prohibited by subsection 17(1) of the CPA. Under subsection 17(2), a person who performs even just one act referred to in section 14, 15 or 16 is deemed to be engaging in an unfair practice.[4] In fact, while one act is enough, this case abounds with such practices.

[49]        The contract came about largely because of the persistence of a Progressive door-to-door salesman.  Unsolicited, he landed on the Toramans’ doorstep and convinced them to buy a water filter.[5] This elusive agent did not testify, and no explanation was given for this fact, thus supporting an adverse inference against the plaintiff.

[50]        In my view, the agent’s representations[6] to the Toramans were (i) false, misleading or deceptive and (ii) unconscionable, as elaborated below.

(i)            Section 14

[51]        Under the CPA, “PART III - UNFAIR PRACTICES”,^[7] subsection 14(1) says:

False, misleading or deceptive representation

14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.

[52]        Subsection 14(2) provides inclusive examples of such representations. Applying subsection 14(2) to the present case, I find that the agent made false, misleading or deceptive representations as follows (emphasis added).

[53]        2. A representation that the person who is to supply the goods or services has sponsorship, approval, status, affiliation or connection the person does not have.

Progressive’s agent represented that the filter was recommended by the City of Toronto. This is false.

[54]        10. A representation that a service, part, replacement or repair is needed or advisable, if it is not.

Progressive’s agent represented that the filter was needed because the City’s water was unsafe. This is false.

[55]        14. A representation using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if such use or failure deceives or tends to deceive.

Progressive’s agent implied that Mr. Toraman needed to buy the filter to safeguard his new baby. This representation deceived the Toramans.

[56]        Hence, Progressive’s agent, and therefore Progressive, breached section 14. Thus, Progressive engaged in an unfair practice, which subsection 17(1) prohibits.

(ii)         Section 15

[57]        Also under the CPA, “PART III - UNFAIR PRACTICES”, section 15(1) says:

Unconscionable representation

15 (1) It is an unfair practice to make an unconscionable representation.

[58]        Subsection 15(2) states that the court may take into account what the person making the representation knew or ought to have known. Applying subsection 15(2) to the instant case, and considering the context of the transaction, I find that the agent made an unconscionable representation as follows (emphasis added).

[59]        (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;

I accept Mr. Toraman’s testimony that he did not read English well and that he did not understand the terms of the contract. Also, as the parties have agreed, Mrs. Toraman did not speak or read English well. The salesman exploited the Toramans’ patent language and cultural disadvantages. The Toramans’ inability to understand the contract was compounded by its absurdly minuscule print, requiring the eyes of an eagle to be read.

[60]        (b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;

The price was exorbitant. It was multiple times the price of the same or a similar filter in retail stores like Home Depot or Costco (about $1,200) (Defendants’ Exhibit – Home Depot, Costco, Aquasana, and other price comparisons). [Ex. 5], even considering any added value of delivery, installation and repair services and a ten-year warranty offered by Skymark. Thus, the evidence establishes that the price at which the filter was offered exceeded the market price to the level of unconscionability. In this context, I find that the agent made an unconscionable representation.[8]  

[61]        (e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;

The transaction excessively favoured Progressive. It drafted the contract and profited from it. The beleaguered Toramans were saddled with an expensive piece of equipment they neither wanted nor needed.

[62]        (f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;

I find that the terms of the contract, including the grossly excessive price, to be so adverse to the Toramans as to be inequitable.

[63]        (g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment;

As addressed above regarding section 14, the Toramans were misled. They detrimentally relied on the agent’s misleading statements about their needing the filter, the potability/safety of the city’s water, the alleged recommendation by the City of Toronto and the risk to their baby’s health if they did not use a filter.

[64]        (h) that the consumer is being subjected to undue pressure to enter into a consumer transaction.

The Toramans never wanted a water filter. They never looked for one. They never asked for one. The never even thought about it. Why would they? “Back home we drink from the river” recalled Mr. Toraman. When a Progressive agent first popped up on the Toramans’ doorstep, they sent him away. He returned anyway. The Toramans ultimately catapulted to his high-pressure tactics.

[65]        Hence, Progressive’s agent, and therefore Progressive, breached section 15. Thus, Progressive engaged in an unfair practice, which subsection 17(1) prohibits.

...

[68]        At law, an assignee takes both the benefits and the liabilities of the contract. Here, an assignee’s rights to enforce the contract are subject to any remedies of the consumer. Whether at common law or under statute, the consumer’s remedies are not extinguished by an assignment. Specifically, subsection 7(1) of the CPA says:

No waiver of substantive and procedural rights

7 (1) The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary.

[69]        This means the Toramans’ substantive and procedural rights (and accompanying remedies) remain. These rights cannot be contracted out of or waived. Neither Progressive nor Skymark can unilaterally deprive the Toramans of their ability to escape an unfair bargain through a legal ruse based on the assignment of the contract. Skymark can have no greater rights than those of the assigning party (Progressive).

[70]        The plaintiff claims to be an arm’s length bona fide purchaser for value without notice.[9]  On the evidence I find that Skymark as the assignee either had actual “notice” of such possible liabilities or could have had “notice” of them with proper due diligence.

...

Notice of cancellation

[74]        Subsection 18(3) of the CPA reads:

Notice

(3) A consumer must give notice within one year after entering into the agreement if,

(a) the consumer seeks to rescind an agreement under subsection (1); or

(b) the consumer seeks recovery under subsection (2), if rescission is not possible.

[75]        On the evidence, I accept that the Toramans took steps to try to rescind the contract within one year of executing it. They tried to pay Skymark, but were struggling financially. The evidence, including the telephone conversations and the six NSF payments [Ex 1-3], demonstrates that Skymark was well aware of this fact.

...

[79]        In my view, the Toramans gave effective notice of cancellation under subsections (4) and (5), which provide:

Form of notice

(4) The consumer may express notice in any way as long as it indicates the intention of the consumer to rescind the agreement or to seek recovery where rescission is not possible and the reasons for so doing and the notice meets any requirements that may be prescribed.

Delivery of notice

(5) Notice may be delivered by any means.

[80]        Their notice to cancel was expressed orally. The evidence of their words and actions clearly shows that the Toramans could not afford the filter and that this fact grounded their desire to cancel the contract.

[81]        Even if this notice were not compliant with subsections (4) and (5), the following saving provision in subsection (15) is engaged:

Waiver of notice

(15) If a consumer is required to give notice under this Part in order to obtain a remedy, a court may disregard the requirement to give the notice or any requirement relating to the notice if it is in the interest of justice to do so. [Emphasis added.]

...

3. What is the appropriate remedy?

[85]        I hold that the appropriate remedy for Progressive’s engaging in unfair practices in this particular case is rescission.

[86]        Subsection 18(1) of the CPA reads:

Rescinding agreement

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.

[87]        The remedy under the CPA reflects that at common law.[14]

[88]        Skymark’s representative argues that the hurdle to set aside a contract for unfair practices and unconscionability is high.[15] Yet, it is elemental that the main objective of consumer protection legislation, such as the CPA, is to protect consumers.[16] Thus, however strict is the test to set aside a contract, in these particular circumstances I find that the evidence is sufficiently strong to meet that test.

[89]        Subsection 18(14) reads in pertinent part:

Effect of rescission

(14) When a consumer rescinds an agreement under subsection (1), such rescission operates to cancel, as if they never existed,

(a) the agreement;

(b) all related agreements;

…

(d) all security given by the consumer … in respect of money payable under the agreement; … .

[90]        Therefore, as applied to the present case, the contract and all related agreements, including the assignment agreement and any financing agreement,[17] and the registered security interest,[18] are cancelled.

[91]        In the result, the Toramans are entitled to be reimbursed for the money they paid to lease the filter. In return, Skymark, as assignee, is entitled to take possession of the filter.

...