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