Consumer Protection Act, 2002, S.O. 2002, c. 30 in force July 30, 2005

On July 20, 2005, the Consumer Protection Act, 2002 was proclaimed in force. With limited exceptions, the Act applies to all consumer transactions if the consumer or the person engaging in the transaction with the consumer is located in Ontario at the time the transaction takes place.

A “consumer” is defined as an individual acting for personal, family or household purposes and does not include a person acting for business purposes. A “consumer transaction” is defined as any act or instance of conducting business or other dealings with a consumer.

There are a number of exceptions to the application of the Act. In the context of construction law, the relevant exceptions are professional services regulated under a statute of Ontario, i.e. transactions with professional architects and engineers, and consumer transactions for the purchase, sale or lease of real property (except time share agreements).

It would appear that the Act applies to agreements for the renovation of real property.

A supplier, defined as “a person who is in the business of selling, leasing or trading in goods or services or is otherwise in the business of supplying goods or services, and includes an agent of the supplier and a person who holds themselves out to be a supplier or an agent of the supplier”, is deemed to warrant that the services supplied under a consumer agreement are of a reasonably acceptable quality.

If a consumer agreement includes an estimate, the supplier shall not charge the consumer an amount that exceeds the estimate by more than 10%. If the supplier charges more, the consumer may require that the supplier provide the goods or services at the estimated price. “Estimate” is not a defined term, so that it is as of yet unclear whether a construction budget, for example, would be covered by the term. Until there is some precedent on point, however, it would be prudent to assume that the Act would apply.

The Act constitutes the making of false, misleading or deceptive representations an “unfair practice” and allows the consumer to rescind, where possible, any agreement entered into based on an unfair practice and may pursue any remedy available in law, including damages. Where rescission is not possible because the goods or services cannot be returned or because a third party would be deprived of a right acquired in good faith, a consumer is entitled to recover the amount by which the consumer’s payment under the agreement exceeds the value of the goods or services provided and/or damages. The Act provides examples of false, misleading or deceptive representations, most notably a representation that goods or services provided are of a particular standard, quality, grade, style or model if they are not and a representation that goods or services will be available or can be delivered or performed by a specified time when the person making the representation knows or ought to know that it the service or goods will not be available or cannot be performed by that time.

Aside from false, misleading or deceptive representations, the Act also stipulates that the making of an unconscionable representation is an unfair practice. Such representations include statements made in the knowledge that the price charged grossly exceeds the price at which similar goods or services are readily available.

Section 109 provides that the Director designated under the Act may order a person making false, misleading or deceptive representations to cease making the representation and/or order the person to retract the representation or publish a correction. Although, as seen, consumer transactions for the purchase, sale or lease of real property are generally exempt from the Act, section 109(2) of the Act stipulates that section 109 applies to any representation involving real property.