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Direct Sellers Act

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St. John's, Newfoundland and Labrador, Canada

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RSNL1990 CHAPTER D-24

DIRECT SELLERS ACT

Amended:

1996 cR-10.1 s.23; 1996 c35; 1997 c7

CHAPTER D-24

AN ACT RESPECTING THE DIRECT SALE OF GOODS AND SERVICES IN THE PROVINCE

Analysis


       
1.   Short title

       
2.   Definitions

       
3.   Registrar and deputy

       
4.   Persons carrying on business

       
5.   Exceptions to licensing

       
6.   Licensing vendors and salespersons

       
7.   Application for licence

       
8.   Address for service

       
9.   Notice of change

     
10.   Rep. by 1996 c35 s22

     
11.   Rep. by 1996 c35 s22

     
12.   Rep. by 1996 c35 s22

     
13.   Rep. by 1996 c35 s22

     
14.   Registrar's discretion

     
15.   Terms, conditions and restrictions

     
16.   Rep. by 1996 c35 s22

     
17.   Suspension or cancellation

     
18.   Further information

     
19.   Bonds

     
20.   Appeals

     
21.   Notice of hearing

     
22.   Cancellation of contract

     
23.   Certain referral contracts not binding

     
24.   Investigation by registrar

     
25.   Production of documents, etc.

     
26.   Content of contract

   
26.1   Cancellation rights

     
27.   Restriction on enforcement of contract

     
28.   Rep. by 1996 c35 s22

     
29.   Production of licence

     
30.   Certificate of registrar

     
31.   Agreements waiving provisions of Act

     
32.   Regulations

   
32.1   Fees and forms

   
32.2   Registration effective

     
33.   Offence

     
34.   Evidence of carrying on business

     
35.   Limitation

     
36.   Act to prevail


 

Short title

        1. This Act may be cited as the Direct Sellers Act.

RSN1970 c96 s1

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Definitions

        2. In this Act

             (a)  "direct sale" means a sale by a direct seller acting in the course of his or her business as a direct seller;

             (b)  "direct sales contract" means an agreement, either oral or in writing, for the direct sale of goods or services, whether for cash or on credit;

             (c)  "direct seller" means a person who

                      (i)  goes from house to house,

                     (ii)  contacts occupants of houses by telephone, or

                    (iii)  through advertising or otherwise carried out by or for him or her or by or for the relevant vendor requests occupants of houses to contact the direct seller by telephone or present themselves at a hotel room or other non-business premises

for the purpose of

                    (iv)  selling or offering for sale goods or services to them,

                     (v)  soliciting orders for the future delivery to them of goods or services;

             (d)  "goods" includes articles, commodities, substances or things and an agreement that entitles the holder to purchase or obtain goods;

             (e)  "house" includes

                      (i)  a building or part of a building in which the occupant resides either permanently or temporarily and premises connected or associated with that building, and

                     (ii)  a building on a farm and land connected or associated with that farm;

              (f)  "licence" means a licence issued under this Act to a vendor;

             (g)  "licensee" means a person to whom a licence is issued under this Act;

             (h)  "minister" means the Minister of Justice;

              (i)  "purchaser" means the purchaser under a direct sales contract;

              (j)  "registrar" means the Registrar of Direct Sellers referred to in section 3;

             (k)  "salesperson" means a person who

                      (i)  goes from house to house,

                     (ii)  contacts occupants of houses by telephone, or

                    (iii)  through advertising or otherwise carried out by or for the salesperson or by or for the relevant vendor requests occupants of houses to contact him or her by telephone or present themselves at a hotel room or other non-business premises

for the purpose of

                    (iv)  selling or offering for sale goods or services to them, or

                     (v)  soliciting orders for the future delivery to them of goods or services

for or on behalf of a vendor;

              (l)  "services" includes an agreement

                      (i)  to install or apply goods, whether or not the goods become part of real property,

                     (ii)  to perform work, labour or service of any kind, or

                    (iii)  that entitles the holder of that agreement to purchase or obtain services; and

            (m)  "vendor" means the vendor under a direct sales contract.

RSN1970 c96 s2; 1972 No10 s2; 1973 No39 Sch C; 1975-76 No58 s4; 1981 c4 Sch C; 1984 c41 Sch C; 1989 c19 1996 c35 s17

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Registrar and deputy

        3. (1) The Registrar and Deputy Registrar of Consumer Protection are the registrar and deputy

             (2)  In the absence or incapacity of the registrar, the deputy registrar shall perform the functions and exercise the powers of the registrar.

1977 c2 s1

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Persons carrying on business

        4. A person who

             (a)  acts as a direct seller; or

             (b)  acts as a vendor under a direct sales contract

shall be considered to be carrying on the business of direct selling and shall be subject to and shall comply with this Act.

RSN1970 c96 s5

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Exceptions to licensing

        5. (1) A person shall not carry on the business of direct selling in the province unless he or she is the holder of a licence under this Act, or is authorized by the vendor

          (1.1)  The acts of any individual either in the vendor's employ, or acting on behalf of or under the authority of the vendor, are considered to be not only the individual's acts but also the acts of the vendor.

             (2)  A person is considered not to be carrying on the business of direct selling and is not required to be licensed under this Act where he or she is

             (a)  a person selling newspapers;

          (a.1)  a person who is registered as a student at an educational institution who sells goods valued at less than $150 for no more than 3 days in a year;

             (b)  a person selling dairy or bakery products, firewood or coal, where that person or his or her employer resides or has a place of business in the province;

             (c)  a person selling motor vehicles, farm implements, feed grain, feed supplements, fertilizer or weed spray, where he or she resides or has a place of business in the province;

             (d)  a person selling farm products, fish or meat;

             (e)  [Rep. by 1997 c7 s1]

              (f)  [Rep. by 1997 c7 s1]

             (g)  a person holding written authority from the Canadian National Institute for the Blind to sell goods or services;

             (h)  a person selling goods or services on behalf of an organization or corporation having objects of a benevolent, religious, charitable, philanthropic, educational, agricultural, scientific, artistic, social, political, professional, fraternal, sororal, sporting, athletic or other useful nature and not formed for gain;

              (i)  a person in respect of business for the carrying on of which he or she is required to be licensed under the Securities Act, the Life and Accident Insurance Agents Licensing Act, the Investment Contracts Act, the Insurance Companies Act or the Real Estate Trading Act; or

              (j)  a person or one of a class of persons exempted from the application of this Act by the regulations.

             (3)  [Rep. by 1997 c7 s1]

RSN1970 c96 s6; 1996 cR-10.1 s23; 1996 c35 s18; 1997 c7 s1

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Licensing vendors and salespersons

        6. (1) The registrar may issue licences under this Act to vendors, and a licence issued to a vendor

             (2)  [Rep. by 1996 c35 s19]

             (3)  [Rep. by 1996 c35 s19]

             (4)  The licence issued to a vendor shall specify the sort or class of goods or services which it covers, and a vendor shall not, in the course of the business of direct selling, sell or offer for sale, or solicit orders for the future delivery of, goods or services of a sort or class other than those specified in his or her licence.

             (5)  A corporation or partnership which applies for a licence as a vendor shall designate 1 individual to act as its representative, and the licence shall be in the name of the corporation or partnership and there shall be designated on the licence the name of the individual who is authorized to act as the holder of the vendor's licence on behalf of the corporation or partnership.

             (6)  The acts of the individual designated under subsection (5) are considered to be not only his or her own acts but also the acts of the corporation or of each and every partner in the partnership.

RSN1970 c96 s7; 1996 c35 s19

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Application for licence

        7. (1) A vendor shall apply for a licence to the registrar upon a form provided by the registrar and shall send along with the application form the fee set by the

             (2)  A vendor may be required by the registrar to verify by affidavit the statements made in the application form.

             (3)  Where a licence has been refused, a further application for it may be made upon new or other material facts or where it is clear that material circumstances have changed.

RSN1970 c96 s8; 1996 cR-10.1 s23; 1996 c35 s20

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Address for service

        8. (1) An applicant for a licence shall state in the application an address for service in the province and a notice given under this Act or the regulations shall for all purposes be considered to be sufficiently served if delivered or sent by registered mail to the licensee at the address for service stated in his or her application for a licence, unless the licensee has notified the registrar in writing of a change of address for service under section 9, in which case that notice shall be sufficiently served if delivered or sent by registered mail to the licensee at the latest address for service of which the

             (2)  Where a notice referred to in subsection (1) is sent by registered mail, it is considered to be served on the day it is deposited in the post office by the sender of the notice.

RSN1970 c96 s9; 1996 c35 s21

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Notice of change

        9. A licensed vendor shall notify the

             (a)  a change in his or her address for service; and

             (b)  a change in partners, in the case of a partnership.

RSN1970 c96 s10

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Rep. by 1996 c35 s22

     10. [Rep. by 1996 c35 s22]

1996 c35 s22

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Rep. by 1996 c35 s22

     11. [Rep. by 1996 c35 s22]

1996 c35 s22

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Rep. by 1996 c35 s22

     12. [Rep. by 1996 c35 s22]

1996 c35 s22

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Rep. by 1996 c35 s22

     13. [Rep. by 1996 c35 s22]

1996 c35 s22

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Registrar's discretion

     14. The registrar may

             (a)  issue a licence; or

             (b)  without stating a reason for his or her refusal, refuse to issue a licence

to a person who applies for a licence under section 7.

RSN1970 c96 s15; 1996 c35 s23

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Terms, conditions and restrictions

     15. (1) A licence is issued subject to those terms, conditions and restrictions that the registrar considers necessary and those terms, conditions and restrictions

             (2)  A licensee shall comply with the terms, conditions and restrictions to which his or her licence is subject.

RSN1970 c96 s16; 1996 c35 s24

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Rep. by 1996 c35 s22

     16. [Rep. by 1996 c35 s25]

1996 c35 s25

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Suspension or cancellation

     17. (1) The registrar may suspend or cancel a licence where in his or her opinion the action is in the public interest, and the registrar may suspend or cancel a licence

             (a)  has violated this Act or the regulations or has failed to comply with 1 or more of the terms, conditions or restrictions to which his or her licence is subject;

             (b)  has made a material misstatement in the application for his or her licence or in the information or material submitted by the licensee to the registrar under section 18;

             (c)  has been guilty of misrepresentation, fraud or dishonesty; or

             (d)  has demonstrated his or her incompetency or untrustworthiness to carry on the business in respect of which his or her licence was issued.

             (2)  [Rep. by 1996 c35 s26]

             (3)  When a licence has been suspended or cancelled under this Act, the holder of the licence shall immediately return the licence to the registrar.

             (4)  The registrar may reinstate a suspended or cancelled licence for a reason that appears to him or her to be adequate.

RSN1970 c96 s18; 1996 c35 s26

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Further information

     18. The registrar may at any time require that further information or material be submitted within a specified time by an applicant for a licence or a licensee, and he or she may require verification by affidavit or otherwise of

RSN1970 c96 s19

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Bonds

     19. (1) The registrar may require an applicant for a licence to deliver to him or her within a specified time a bond to the Crown in the form and amount that he or she may

             (2)  The registrar may require a vendor to deliver to the registrar within a specified time

             (a)  a bond to the Crown in the form and amount that he or she may prescribe; or

             (b)  a certificate of a surety company that a surety bond previously filed on behalf of the applicant is in force.

             (3)  A bond given under this Act shall be forfeited and the amount shall be recoverable from the person bound by the bond as a debt due the Crown, where

             (a)  a conviction of an offence under this Act or the regulations or of an offence involving fraud, theft or conspiracy to commit an offence involving fraud or theft under the Criminal Code has been made by a court;

             (b)  a judgment based on a finding of fraud has been given; or

             (c)  a winding-up or receiving order has been made under the Bankruptcy Act ( Canada ) or the Winding-up Act ( Canada ),

against the person in respect of whose conduct the bond was conditioned, or, where that person is a partnership, a partner of that partnership, and the conviction, judgment or order has become final.

             (4)  In respect of every act and omission occurring during the term of a licence, every bond shall continue in force for a period of 2 years after the licence to which it relates expires or is cancelled.

             (5)  The minister may, with the prior approval of the Lieutenant-Governor in Council and upon those terms and conditions that he or she may prescribe, assign a bond forfeited under this Act or may pay over money recovered under a bond to

             (a)  a person who may become, in respect of a claim arising out of a direct sales contract, a judgment creditor of the person bonded;

             (b)  the Registrar of the Supreme Court in trust for a person referred to in paragraph (a); or

             (c)  a trustee, custodian, interim receiver, receiver or liquidator of a person referred to in paragraph (a),

and every assignment of a bond or payment over of money made by the minister under this section shall be done in accordance with an order of the Lieutenant-Governor in Council relating to that assignment.

             (6)  Where the Crown becomes a creditor of a person under this Act, the debt may be recovered by action or other proceeding in a court as a debt due the Crown.

             (7)  When a bond has been forfeited under subsection (3) by reason of a conviction or judgment referred to in paragraph (3)(a) or (b) and 2 years have elapsed since

             (a)  that conviction or judgment; or

             (b)  the vendor or salesperson in respect of whom the bond was furnished ceased to carry on business,

and the minister has not received notice in writing of a claim against the proceeds of the bond or of a portion of the bond which remains in the possession of the minister, the Lieutenant-Governor in Council may direct the minister to pay to a person who, upon forfeiture of the bond, made payments under the bond, the proceeds, less the amount of expenses that have been incurred in connection with an investigation or otherwise relating to that vendor or salesperson.

RSN1970 c96 s20; 1996 c35 s27

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Appeals

     20. (1) Where a person is dissatisfied with a decision of the registrar respecting the issue, suspension, cancellation or reinstatement of a licence, he or she may appeal

             (2)  Where a person proposes to appeal under subsection (1), he or she shall, within 30 days after the decision of the registrar from whom he or she proposes to appeal, serve on the registrar a written notice of his or her intention to appeal.

             (3)  A notice of appeal served under subsection (2) shall be signed by the appellant or by his or her solicitor or agent, and, in the notice, the grounds of the appeal shall be set out, and the appellant shall file a copy of the notice in the office of the Registrar of the Supreme Court.

RSN1970 c96 s21; 1974 No57 Sch C; 1996 c35 s28

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Notice of hearing

     21. (1) The appellant shall, not less than 14 days before the hearing of the appeal, serve upon the registrar a written notice of the day appointed for the hearing.

             (2)  The judge shall hear the appeal and the evidence adduced before him or her by the appellant and the Crown in a summary manner and shall decide the matter of the appeal.

             (3)  The registrar shall produce before the judge on the hearing of the appeal all papers and documents in his or her possession affecting the matter of the appeal.

             (4)  The costs of the appeal are in the discretion of the judge and he or she may make an order respecting them in favour of or against the Crown and may fix the amount of the costs.

RSN1970 c96 s22; 1974 No57 Sch C

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Cancellation of contract

     22. (1) A direct sales contract may be

             (a)  within 10 days after a copy of the contract is received; or

             (b)  within one year from the date of entering the contract where

                      (i)  the direct seller does not comply with legislative or regulatory requirements regarding licensing or registration, including financial security requirements or conditions on his or her licence or registration at the time the contract was made, within 30 days of the date stated in the contract, or where the goods or services have not been received, unless delivery has been accepted after the 30 days have passed,

                     (ii)  the direct seller does not meet the requirements for the content of the contract as specified in subsection 26(1),

                    (iii)  within 30 days of the supply date specified in the contract, or the amended supply date agreed upon, the service has not started or the goods and services have not been received and delivery has not been accepted, after the 30 days have lapsed.

             (2)  Where a direct sales contract is cancelled, the direct seller shall, within 15 days of the cancellation, refund to the consumer all money and return to the consumer any trade-in or an amount equal to the value of the trade-in received under the contract.

             (3)  In the case of a contract respecting goods, the consumer shall, upon receiving the refund and return of the trade-in, or an amount equal to the value of the trade-in, return the goods to the direct seller.

             (4)  The value of the trade-in mentioned in subsection (1) shall be the greater of

             (a)  the market value of the goods when taken in trade; or

             (b)  the price or value of the goods as set out in the direct sales contract.

             (5)  Where the consideration for a contract does not exceed $200 and

             (a)  services specified in the contract have been rendered at the premises of the purchaser prior to the rescission of the contract; or

             (b)  perishable goods specified in the contract have been delivered and accepted by the purchaser,

the vendor shall be entitled to and may retain from money received under the contract an amount, not exceeding $50, that may be reasonably charged for the services rendered and for the goods which have deteriorated or been consumed.

             (6)  Cancellation of a contract shall be by notice and

             (a)  a notice of cancellation is adequate if, however expressed, it indicates the intention of the consumer to cancel the contract;

             (b)  where a consumer cancels a direct sales contract, the consumer shall send or deliver the cancellation notice to the direct seller using a method where the consumer can provide evidence he or she cancelled the contract and the date on which this occurred, including but not limited to registered mail, fax or personal delivery; or

             (c)  where a method of sending or delivering the cancellation notice other than personal delivery is used, the cancellation is considered to be given when sent.

             (7)  A breach of an administrative requirement that does not affect a consumer's interests shall not result in extended cancellation rights.

             (8)  These provisions do not affect any other remedy or right the consumer may have at law.

1997 c7 s2

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Certain referral contracts not binding

     23. A direct sales contract is not binding on the purchaser where, with respect to that contract, the direct seller, vendor or salesperson gives, or offers to give, a rebate or discount or other value to the purchaser in consideration of his or her giving to the direct seller, vendor or salesperson the name of a prospective purchaser or the names of prospective purchasers, or otherwise aiding the direct seller, vendor or salesperson in making a sale to another person, where the earning of the rebate, discount or other value is contingent upon the occurrence of an event subsequent to the time the purchaser agrees

RSN1970 c96 s24

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Investigation by registrar

     24. The registrar, or a person authorized by the registrar in writing, may investigate and inquire into a matter the investigation of which he or she considers

RSN1970 c96 s25

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Production of documents, etc.

     25. The person making an investigation may at all reasonable times demand the production of and inspect all the books, documents, papers, correspondence and records of the person in respect of whom the investigation is being made and a person who has the custody, possession or control of those books, documents, papers, correspondence or records shall produce them and permit their inspection by the person making the investigation.

RSN1970 c96 s26

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Content of contract

     26. (1) A written contract shall

             (a)  the consumer's name and address;

             (b)  the direct seller's name, business address, telephone number and, where applicable, fax number;

             (c)  where applicable, the salesperson's name;

             (d)  the date and place of the contract;

             (e)  a description of the goods and services, sufficient to identify them;

              (f)  a statement of cancellation rights that conforms with the requirements of section 26.1;

             (g)  itemized prices of the goods or services, or both;

             (h)  the total amount of the contract;

              (i)  the terms of payment;

              (j)  in the case of a contract for the future delivery of goods, future provision of services or goods together with services, the delivery date for the goods or start date for the services or both;

             (k)  in the case of a contract for the future provision of services or goods together with services, the completion date for supplying the services or the goods together with services;

              (l)  subject to subsection (1.1), where credit is extended

                      (i)  a statement of any security taken for payment, and

                     (ii)  the cost of credit in accordance with provincial cost of credit disclosure legislation;

            (m)  where goods are taken in trade, a description of and the value of the trade-in; and

             (n)  the signatures of both parties.

          (1.1)  Where credit is extended or arranged by the direct seller and the credit contract is separate from or attached to the direct sales contract, the credit contract is conditional on the direct sales contract and where the direct sales contract is cancelled, that cancellation has the effect of cancelling the credit contract.

             (2)  For the purpose of section 22, upon entering into a direct sales contract with a purchaser

             (a)  a vendor shall furnish his or her address; and

             (b)  a salesperson of a vendor shall furnish that vendor's and his or her own address

in writing to that purchaser.

             (3)  A provision in a written direct sales contract to the effect that that contract contains the entire agreement entered into between the parties shall not prevail over oral representations made by the salesperson or vendor with the intent or effect of inducing the purchaser to enter into the contract.

             (4)  A vendor or salesperson shall, immediately upon receiving a payment under a direct sales contract, deliver to the purchaser a written receipt.

RSN1970 c96 s27; 1997 c7 s3

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Cancellation rights

   26.1 (1) A statement of cancellation

             (a)  contain the words specified in subsection 26(1);

             (b)  show the heading in not less than 12 point bold type;

             (c)  show the statement of 10 day cancellation rights in 12 point type; and

             (d)  show the remainder of the information in not less than 10 point type.

             (2)  Where the statement of cancellation rights is not on the face of the contract, there shall be a notice on the face of the contract, in not less than 12 point bold type, referring to the location of the statement of cancellation rights.

             (3)  Where the statement of cancellation rights is a separate document from the contract, the statement shall include the direct seller's name, business address, telephone number and, where applicable, fax number.

1997 c7 s4

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Restriction on enforcement of contract

     27. An action shall not be brought by a vendor against a purchaser for the enforcement of a direct sales contract unless the vendor was licensed, under this Act, at the time

RSN1970 c96 s28; 1996 c35 s30

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Rep. by 1996 c35 s22

     28. [Rep. by 1996 c35 s31]

1996 c35 s31

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Production of licence

     29. A person licensed under this Act shall produce his or her licence for inspection when requested to do

RSN1970 c96 s30

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Certificate of registrar

     30. A certificate signed by the

             (a)  a vendor or another person named in the certificate was or was not licensed under this Act;

             (b)  a licence was issued to a vendor; or

             (c)  the licence of a vendor was suspended, cancelled or reinstated,

is admissible in evidence as, in the absence of evidence to the contrary, proof of the facts stated in the certificate.

RSN1970 c96 s31; 1996 c35 s32

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Agreements waiving provisions of Act

     31. An agreement or bargain, verbal or written, express or implied, that a provision of this Act or the regulations shall not apply or that a benefit or remedy provided by those provisions shall not be available, or which limits or abrogates or in effect limits, modifies or abrogates that benefit or remedy, is void and of no effect, and money paid under or by reason

RSN1970 c96 s32

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Regulations

     32. The Lieutenant-Governor in Council

             (a)  prescribing the terms, conditions and restrictions to which licences and renewals of licences are to be subject;

             (b)  [Rep. 1996 cR-10.1 s23]

             (c)  [Rep. 1996 cR-10.1 s23]

             (d)  providing for the holding of inquiries into the operation of this Act and into a charge or complaint that a vendor, salesperson or other person who has contravened this Act or the regulations, or has made a false statement in a form, return, account or statement required to be completed or made under this Act or the regulations, or into another matter arising in the administration of this Act, and providing that the person holding that inquiry shall have all of the powers that are or may be conferred upon a commissioner under the Public Inquiries Act, including the power to take evidence under oath or affirmation;

             (e)  prescribing the returns and statements to be made by licensees and other persons, the information to be given in those returns and statements, and by whom and in what manner and at what times they shall be made;

              (f)  providing for the examination of applicants for licences;

             (g)  providing for the regulation of direct sales by vendors and salespersons;

             (h)  prescribing what books, accounts and records are to be kept and maintained by vendors and salespersons;

              (i)  exempting persons or classes of persons from the application of a provision of this Act; and

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

RSN1970 c96 s33; 1996 cR-10.1 s23; 1996 c35 s33

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Fees and forms

   32.1 The minister may

             (a)  set fees for the purpose of this Act; and

             (b)  approve forms for use in the administration of this Act.

1996 cR-10.1 s23

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Registration effective

   32.2 A registration remains in effect subject to the filing of annual reports and payment of an annual fee as prescribed by the minister until it is withdrawn by the registered person or is suspended or cancelled under the Act.

1996 c35 s34

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Offence

     33. A person who contravenes this Act or the regulations, or makes a false statement in an application, form, return, account, record, statement or other document completed or made under this Act or the regulations, is guilty of an offence and liable on summary conviction to a fine of not more than $1,000 for a 1st offence and not more than $2,000 for a subsequent offence, and, for either a 1st or subsequent offence, in default of payment of the fine or in addition to that fine, to imprisonment for a

RSN1970 c96 s34

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Evidence of carrying on business

     34. Where, in a prosecution under this Act, it is alleged that the accused carried on the business of direct selling without being the holder of a licence under this Act, evidence of 1 transaction is, in the absence of evidence to the contrary, evidence that the accused carried on that business.

RSN1970 c96 s35

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Limitation

     35. (1) A prosecution under this Act or the regulations shall be commenced within 2 years from the date

             (2)  A prosecution for an offence under this Act or the regulations shall not be commenced, except with the written consent of the Attorney General.

RSN1970 c96 s36

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Act to prevail

     36. Where the provisions of another Act or of regulations made under another Act conflict with the provisions of this Act or the regulations, the provisions of this

RSN1970 c96 s37