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Revised Statutes of Newfoundland 1990

CHAPTER T-7

AN ACT RESPECTING UNFAIR AND UNCONSCIONABLE TRADE PRACTICES

Analysis

5. Unfair trade practices

6. Unconscionable acts

7. Prohibition

8. Powers of director

9. Investigations

10. Proof of documents

11. Freezing orders

12. Receiving order

13. Compliance

14. Remedies of consumers

15. Director's actions

16. Actions on behalf of consumer

17. Interim injunction

18. Publication of decision

19. Oral evidence

20. Offences

21. Regulations

Short title

1. This Act may be cited as the Trade Practices Act.

1978 c10 s1

2. In this Act

(a) "consumer" means a natural person engaged in a consumer transaction but does not include a natural person acting in the course of carrying on a business;

(b) "consumer transaction" means

(i) a sale, lease or other disposition of goods for a consideration whether or not such a disposition of goods includes a contract under which services are provided,

(ii) a contract for the provision of services for a consideration, or

(iii) an award by chance of goods or services;

(d) "goods" means personal chattels or a right or interest in personal chattels that are to be used by a consumer for himself or herself, his or her family or household, including personal chattels that become fixtures subsequent to a consumer transaction, but does not include securities as defined in the Securities Act;

(e) "judge" means a judge of the Trial Division;

(f) "services" means services provided to a consumer for himself or herself, his or her family or household that are

(i) provided for the maintenance or repair of goods or real property owned by a consumer,

(ii) provided in conjunction with the use of social, recreational or physical fitness facilities,

(iii) provided in respect of the movement, transport or storing of goods, or

(iv) provided for educational purposes; and

(g) "supplier" means a person who in the course of his or her business offers or advertises the sale of goods or services to a consumer or who engages in a consumer transaction with a consumer and includes the assignee of the rights and obligations of a supplier.

1978 c10 s2; 1986 c42 Sch B

3. This Act applies notwithstanding an agreement or waiver to the contrary.

1978 c10 s3

4. (1) The Lieutenant-Governor in Council may appoint a Director of Trade Practices.

(2) The Lieutenant-Governor in Council may appoint an Assistant Director of Trade Practices who, in the absence or incapacity of the director, shall perform the functions and exercise the powers of the director.

1978 c10 s4

5. (1) In this Act, an unfair trade practice is a representation, conduct or failure to disclose material facts that has the effect, or might reasonably have the effect, of deceiving or misleading a consumer, and includes

(a) a representation that the goods or services have sponsorship, approval, performance characteristics, accessories, ingredients, quantities, components, uses or benefits that they do not have;

(b) a representation that the supplier has sponsorship, approval, status, affiliation or connection that he or she does not have;

(d) a representation that the goods are of a particular style, model or origin where they are not;

(e) a representation that the goods have been used to an extent that is different from their actual use;

(f) a representation that the goods are new or unused where they are not or where they are reconditioned, reclaimed, altered or deteriorated;

(g) a representation that the goods have a particular prior history or use where they have not;

(h) a representation that the goods or services have been made available in accordance with a previous representation where they have not;

(i) a representation that the goods or services are available, or are available at a reduced price, for a reason that is different from the fact;

(j) a representation that the goods or services have been supplied in accordance with a previous representation, where they have not;

(k) a representation that the goods or services are available when the supplier knows or ought to know that they are not or has no intention of supplying them;

(l) a representation that a specific price advantage exists where it does not;

(m) a representation that a part, replacement, repair or adjustment is needed where it is not;

(n) a representation that repairs have been made or parts installed where that is not the case;

(o) a representation that the supplier is soliciting or communicating with consumers with a certain interest or purpose where he or she is not;

(p) a representation that a consumer transaction involves or does not involve rights, remedies or obligations where that representation is deceptive or misleading;

(q) a representation such that a consumer might reasonably conclude that the goods are available in greater quantities than are in fact available from the supplier;

(r) a representation as to the authority of a salesperson, representative, employee or agent to negotiate the final terms of a consumer transaction where the representation is not accurate;

(s) the giving of an estimate or evaluation of the price of goods or services that is materially less than the price subsequently determined or demanded, where the supplier has proceeded with the performance of the consumer transaction without the express prior consent of the consumer;

(t) the giving of less prominence in an advertisement or display to the total price of goods or services than to the price of a part of the goods or services;

(u) the giving of less prominence in a representation, advertisement or display to the amount of an instalment to be paid for goods or services than to the total price of the goods or services;

(v) a representation that goods or services are free when that is not the case; and

(w) a representation using exaggeration, innuendo or ambiguity as to a material fact.

(2) An unfair trade practice may occur before, during or after a consumer transaction notwithstanding that the consumer transaction is not completed or a consumer has not suffered loss or damage.

(3) With the exception of paragraphs (1)(t) and (u), subsection (1) does not apply to a supplier who, on behalf of another supplier, broadcasts by radio or television, or prints, publishes or distributes an advertisement that he or she has accepted in good faith.

1978 c10 s5; 1988 c54 s23

6. (1) In determining whether an act or practice is unconscionable the court shall consider the circumstances that the supplier knew or ought to have known, including

(a) that at the time the consumer transaction was entered into there was no reasonable probability of full payment of the purchase price by the consumer;

(b) that the consumer was unable to receive a substantial benefit from the consumer transaction;

(c) that at the time the consumer transaction was entered into the price grossly exceeded the price at which similar goods or services were available to similar consumers;

(d) that the terms and conditions of the consumer transaction were so one-sided, harsh or adverse to the consumer as to be inequitable;

(e) that the supplier used trickery or undue pressure in order to induce the consumer to enter into the consumer transaction; or

(f) that the supplier took advantage of the extreme necessity or helplessness of the consumer or the inability of the consumer to protect his or her interests because of his or her physical or mental disability, his or her ignorance, illiteracy, age or emotional state, or his or her inability to understand the character, nature or language of the consumer transaction.

(2) An unconscionable act or practice may occur before, during or after a consumer transaction.

1978 c10 s6

7. A person shall not engage in an unfair trade practice or unconscionable act or practice.

1978 c10 s7

8. The director

(a) may receive and act on complaints respecting consumer transaction;

(b) may mediate disputes between a consumer and supplier;

(d) may inform consumers and suppliers of this Act.

1978 c10 s8

9. (1) The director or a person authorized by the director may, where it is reasonably necessary to determine compliance with this Act, enter a place and demand the production of and inspect the business books, documents, correspondence and records that the director or authorized person believes on reasonable grounds are in respect of the person about whom the investigation is being made.

(2) Where the director believes on reasonable grounds that a person has contravened this Act or regulations or where the director believes on reasonable grounds that a person has engaged in, is engaging in or is about to engage in an unfair trade practice or unconscionable act or practice, the director or person authorized by the director may with a warrant issued under subsection (3) at a reasonable time enter a place and may investigate, inquire into and examine the affairs in relation to the trade practice, act or practice in respect of which the investigation is being made and into books, documents, correspondence and records in relation to it.

(3) A Provincial Court judge or justice of the peace who is satisfied by information upon oath or affirmation that there are reasonable grounds for believing that there is in a place anything that there are reasonable grounds to believe will give evidence with respect to an unfair trade practice, unconscionable act or practice may issue a warrant authorizing the director or person authorized by the director named in the warrant to enter and search that place and to make those inquiries and copies of books, documents, correspondence and records that are necessary, subject to the conditions that may be specified in the warrant.

(4) The owner or person in charge of the place referred to in this section and a person found there shall give the director or person authorized by the director reasonable help to enable that person to carry out his or her duties and functions under this section and shall provide the information that that person may reasonably require.

1985 c11 s65

10. A copy made under section 9 and certified to be a true copy by the person making the investigation is admissible in evidence as proof of the original records.

1978 c10 s10

11. (1) Where the director has begun an investigation under section 9 and has reasonable grounds to believe that it is advisable for the protection of consumers dealing with a supplier the director may, in writing or by telegram

(a) direct a person who the director believes has or may have on deposit, under his or her control, or for safekeeping property of the supplier to hold that property in trust for a person appointed as an interim receiver, custodian, receiver or liquidator of the supplier;

(b) direct a person who the director believes is indebted to a person being investigated under section 9 to hold money that may be payable in satisfaction of the debt in trust for a person appointed as the interim receiver, custodian, receiver or liquidator of the supplier; and

(c) direct a supplier who is being investigated under section 9 to refrain from withdrawing property that he or she has or may have on deposit with a person

until the director makes a written revocation of the direction or consents in writing to the release of a particular item of property, or a judge directs a different disposition of the property.

(2) Subsection (1) does not apply where the supplier being investigated under section 9 files with the director a bond in a form and amount that is satisfactory to the director.

(3) A person who receives a direction under subsection (1) and is in doubt concerning the application of the direction may apply to a judge who may make an order concerning the disposition of the property subject to that direction.

(4) A supplier or another person in receipt of a direction under subsection (1) may apply to a judge for an order to cancel or vary the direction and the judge may make an order where the judge finds

(a) that the direction was not necessary either in whole or in part for the protection of consumers dealing with the supplier; or

(b) that the interests of other persons are unduly prejudiced by the direction.

1978 c10 s11

12. The director may apply to a judge for the appointment of an interim receiver, custodian, receiver or liquidator to take possession of and hold property of the supplier who is the subject of a direction under section 11 upon those terms and conditions that the judge may order.

1978 c10 s12

13. (1) Where the director has reason to believe that a supplier has engaged in an unfair trade practice or unconscionable act or practice and that those acts or practices have stopped, the director may enter into a written assurance of voluntary compliance with the supplier instead of entering into or continuing an investigation under section 9 or taking or continuing another proceeding under this Act.

(2) An assurance of voluntary compliance may be in a form and contain those terms that the director may determine and may include:

(a) an agreement that the supplier will refrain from engaging in certain acts or practices;

(b) an agreement to provide redress to customers who have suffered damage or loss as a result of the acts or practices;

(c) an agreement that future consumer transactions engaged in by the supplier will be carried on in accordance with the terms of the agreement;

(d) an agreement to provide a bond in a form and amount that may be set out in the agreement; and

(e) an agreement on the form and content of records, contracts, advertisements or other documents respecting consumer transactions engaged in by the supplier and the maintenance of trust accounts held by the supplier.

(3) An assurance of voluntary compliance may be varied or terminated by the director upon the request of the supplier.

(4) A supplier may apply to a judge after he or she enters into an assurance of voluntary compliance for an order

(a) terminating an assurance of voluntary compliance where the judge is satisfied that the act or practice the supplier agreed to refrain from doing was not unconscionable or unfair; and

(b) varying the assurance of voluntary compliance where the judge is satisfied that the variance is in the best interests of consumers.

(5) An assurance of voluntary compliance that is terminated or varied under this section does not invalidate anything done under that assurance of voluntary compliance before its termination or variance.

(6) The director shall maintain a public record of assurances of voluntary compliances that have been entered into.

1978 c10 s13

14. (1) Where a consumer has entered into a consumer transaction with a supplier and has suffered damages as a result of an unfair trade practice or unconscionable act or practice, he or she may start an action in a court against the supplier.

(2) In an action started under this section, or in another action concerning a supplier where it appears to the court that an unfair trade practice or unconscionable act or practice has occurred, the court may

(a) make an order declaring the act or practice to be an unfair trade practice or unconscionable act or practice;

(b) award damages for a loss suffered by the consumer including exemplary or punitive damages;

(d) grant an interim or permanent injunction restraining the supplier from continuing the unfair trade practice or unconscionable act or practice;

(e) reopen the consumer transaction and repay the amount paid to the supplier by the consumer or relieve the customer from the payment of an amount in excess of the amount judged by the court to be a fair price for the consumer transaction; and

(f) make other directions and grant other relief that the court considers appropriate.

(3) Where a consumer begins an action under this section he or she shall serve the director with a copy of the statement of claim and upon the request of the director to the court the director shall be added as a party to the action.

(4) Nothing in this section limits a remedy a consumer may have with respect to a consumer transaction under the common law or another Act.

1978 c10 s14

15. (1) Where the director is of the opinion that a supplier

(a) has engaged in or is engaging in an unfair trade practice, or unconscionable act or practice; or

(b) has not complied with the terms of an assurance of voluntary compliance,

the director may begin and maintain an action against the supplier in a court.

(2) In an action brought under subsection (1) the court may make an order and grant the relief that it can make or grant under section 14 including relief for the class of consumers affected by the unfair trade practice or unconscionable act or practice.

1978 c10 s15

16. (1) Upon the written request of a consumer and where the director is of the opinion that it is in the public interest, the director may

(a) start and maintain an action on behalf of a consumer under section 14;

(b) maintain an action that has been started by a consumer under section 14, including an appeal of that action; and

(c) defend an action on behalf of a consumer where it appears to the director that an unfair trade practice or unconscionable act or practice has occurred as part of the consumer transaction.

(2) In an action taken under this section, the director shall begin and maintain the action in the name of and on behalf of the consumer and the director has the same right to control the course of the action as the consumer would have had in respect of the action, including the right to settle the action on behalf of the consumer.

(3) In an action taken under this section,

(a) money paid the director, excluding costs awarded, shall be paid by the director to the consumer;

(b) money awarded against the consumer is recoverable from the consumer and is not recoverable from the director or the province; and

1978 c10 s16

17. (1) Upon the starting of an action under sections 14, 15 and 16 the director or consumer may apply to the court for an interim injunction restraining the supplier from continuing an act or practice that is alleged to be unfair or unconscionable.

(2) The court may grant an injunction where it is satisfied that

(a) the continuation of the alleged act or practice may detrimentally affect consumers who deal with the supplier; and

(b) the applicant has established a presumptive case of the existence of an unfair trade practice or unconscionable act or practice.

1978 c10 s17

18. Where the court makes an order or grants relief under section 14, 15 or 16 it may make a further order requiring the supplier to advertise the particulars of the order or relief in the content and manner that it may order.

1978 c10 s18

19. In a proceeding taken under this Act, the rule of law relating to oral evidence, or a written agreement between a consumer and a supplier, does not apply so as to limit the admissibility of evidence relating to the understanding of the parties as to the nature of the consumer transaction.

1978 c10 s19

20. (1) A person who

(a) fails to comply with or otherwise contravenes this Act or regulations made under this Act;

(b) fails to comply with an order of the director; or

is guilty of an offence and liable on summary conviction to a fine of not more than $5,000 nor less than $200, or in default of or in addition to a fine, to imprisonment for a period not in excess of 1 year.

(2) Notwithstanding subsection (1), a corporation convicted of an offence under this section is liable to a fine of not more than $100,000 and not less than $1,000.

(3) A director or officer of a corporation who knowingly concurs in an offence committed by a corporation under this section is guilty of an offence and liable on summary conviction to a fine of not more than $5,000 nor less than $200 or in default of or in addition to a fine, to imprisonment for a period not in excess of 1 year.

(4) A prosecution under this section may be started within 3 years from the date on which the offence was alleged to have been committed.

1978 c10 s20

21. The Lieutenant-Governor in Council may make regulations

(a) prescribing forms for the purposes of this Act;

(b) requiring suppliers to make returns and provide information to the director;

(d) exempting a class of consumer transactions from the operation of this Act; and

(e) generally, to give effect to the purpose of this Act.

1978 c10 s21