The Supreme Court has delivered the final word on what constitutes false and misleading advertising in the Quebec case Richard v. Time Inc. The court has emphasized that Canada’s consumer protection legislation is meant to protect the “credulous and inexperienced” (read: “gullible and naive”) from predatory schemers, whose modus operandi is to trick consumers into handing over their hard-earned cash for something less than what they thought they were getting.
In 1999, Jean-Marc Richards received a letter from Time magazine, just like those that many thousands of householders have received over the years and discarded as junk mail. But Richards’ attention was caught by the bold words stating “MR JEAN MARC RICHARD HAS WON A CASH PRIZE OF $833,337.00!” Reading this, Richard believed he had, indeed, won a Time-sponsored sweepstakes. When the anticipated giant cheque didn’t arrive, and he discovered he would not be paid the prize money, Richard sued.
His claim for breach of contract was dismissed, but a claim for damages for violation of arts. 219 and 238, Title II of Quebec’s Consumer Protection Act — making a false or misleading representation — was allowed. At trial, Richard received an award of $100,000 in punitive damages. The Court of Appeal overturned the trial judgment, suggesting that no average consumer could have been fooled by the document as the plaintiff says he was.
The Supreme Court disagreed with the appeal court’s analysis. Particularly, the Supreme Court took issue with the Court of Appeal’s dissection and reassembling of all the text employed in the document, both bold lettering and fine print, without distinction, and its application of a test that presumes an average level of consumer sophistication. The Supreme Court conducted an exhaustive review of the legislative and policy changes leading to the rise of consumer protection legislation since the mid-20th century, and emphasized the movement away from the traditional rules of “buyer beware.”
The court concluded that consumer protection legislation is meant to foster confidence in the marketplace, and to achieve this end, the legislation is meant to provide protection to the more unsophisticated and trusting among us, i.e. those who fall below the measure of the average consumer.
The main objective of consumer protection legislation is just that — to protect consumers, particularly those who are susceptible to the charms of the preverbal snake oil salesman. In undertaking an analysis of whether the impugned conduct is offside the legislation, the court is not to consider the actual effect that the representation had upon a particular individual, rather it must consider the advertisement objectively and in the abstract. Undertaking an individual-based analysis is contrary to the ameliorative intent of the legislation to prohibit and prevent harm to the consuming public at large. It is not aimed at protecting each individual consumer per se. The role of the court is to evaluate the content of the representation and its tendency to mislead, not to ascertain if any particular individual was, in fact, misled.
Here, the “reasonable man” does not prevail. This legislation aims to protect society’s most vulnerable, not the average or the skeptical or the reasonable among us. Defences based on “a subtle, technical or convoluted meaning of a word” or a “minute dissection of the text” will not prevail.
Art. 218 of the Quebec act sets out the analytical context within which the court is to determine if a representation is a prohibited practice:
“To determine whether or not a representation constitutes a prohibited practice, the general impression it gives, and, as the case may be, the literal meaning of the terms used therein must be taken into account.”
The language of this section is comparable to s. 52(4) of the Competition Act. The Ontario Consumer Protection Act does not include this interpretive provision, but it does convey a comparable intent through s. 11 that codifies the contra proferentem rule of interpretation in favour of the consumer, and through ss. 14 and 15, which provide examples of false, misleading, deceptive, and unconscionable representations “without limiting the generality” of the prohibited conduct.
The Supreme Court concluded that the “general impression” test established by art. 218 of the Quebec act was created to “take account of the techniques and methods that are used in commercial advertising to exert a significant influence on consumer behaviour.” Hence, the court is not meant to simply parse the language employed, but it is to consider the whole of the context within which the message is delivered to the consumer. The general impression left with the person after initial contact with the entire advertisement is what is to be examined. The general impression created by the advertisement is to be accurate and not misleading.
Most importantly, however, is the Supreme Court’s directive about whose general impression is at stake. It confirmed that for the purposes of all provincial consumer protection legislation, “the average consumer is not very sophisticated.” The court is not to take the perspective of the “careful and diligent consumer,” rather it is to apply the “credulous and inexperienced consumer” test to assess whether the advertising or business practice is misleading.
“The words ‘credulous and inexperienced’ therefore describe the average consumer for the purposes of the C.P.A. This description of the average consumer is consistent with the legislature’s intention to protect vulnerable persons from the dangers of certain advertising techniques. The word ‘credulous’ reflects the fact that the average consumer is prepared to trust merchants on the basis of the general impression conveyed to him or her by their advertisements. However, it does not suggest that the average consumer is incapable of understanding the literal meaning of the words used in an advertisement if the general layout of the advertisement does not render those words unintelligible,” states the ruling.
The decision should be taken by vendors as a warning that they can and will be held responsible for misleading and predatory acts and advertisements. The penal and remedial sanctions of the consumer protection acts will be enforced liberally in favour of the most vulnerable. Punitive damages will be awarded to ensure that the wrongdoer feels the effects of their misconduct when “compensatory damages would amount to nothing more than an expense paid to earn greater profits while flouting the law.”
We no longer live in a society that accepts caveat emptor as the status quo. We recognize that, as the Lowest of the Low would say, “sometimes you find your senses all disjointed by the lines and wires of salesmen, cheats and liars.” And when that happens, the “wicked, tricksy, and false” will pay.