Consumer protection — Prohibited business practices — False or misleading representations — Court of Appeal for Quebec finding that merchant’s representations would not mislead consumer “with average level of intelligence, scepticism and curiosity” — Test for determining whether general impression given by representation constitutes prohibited practice
In his mail, R received an “Official Sweepstakes Notification” (the “Document”) in the form of a letter supposedly signed by the manager responsible for the sweepstakes. Along the edge of the letter were boxes printed in colour, some of which, because they referred to Time magazine, could lead the recipient to infer that it was from T and TCM. In the Document, which was written in English only, several exclamatory sentences in bold uppercase letters, whose purpose was to catch the reader’s attention by suggesting that he or she had won a cash prize of US$833,337, were combined with conditional clauses in smaller print, some of which began with the words “If you have and return the Grand Prize winning entry in time”. In addition, the back side of the letter informed R that he would qualify for a $100,000 bonus prize if he validated his entry within five days. The mailing also contained a reply coupon and a return envelope on which the official rules of the sweepstakes appeared in small print. The reply coupon also offered R the possibility of subscribing to Time magazine. As well, the rules stated that a winning number had been pre‑selected by computer and that the holder of that number could receive the grand prize only if the reply coupon was returned by the deadline. If the holder of the pre‑selected winning number did not return the reply coupon, the rules explained, the grand prize winner would be selected by random drawing among all eligible entries, that is, everyone who had returned the reply coupon, and each participant’s odds of winning would then be 1:120 million. Convinced that he was about to receive the promised amount, R immediately returned the reply coupon that was in the envelope. In doing so, he also subscribed to Time magazine. R began regularly receiving issues of the magazine a short time later, but the cheque he was expecting was a long time coming. He contacted T and TCM, which informed him that he would not be receiving a cheque, because the Document had not contained the winning entry for the draw and was merely an invitation to participate in a sweepstakes. They also informed him that the manager who had signed the letter did not exist; the name was merely a “pen name”.
R filed a motion to institute proceedings in which he asked the Quebec Superior Court to declare him to be the winner of the cash prize mentioned in the Document and to order T and TCM to pay compensatory and punitive damages corresponding to the value of the grand prize. The Superior Court allowed the action in part. It held that the Document contravened Title II of the C.P.A. on prohibited business practices and that the civil sanctions provided for in s. 272 C.P.A. were accordingly available. The judge set the value of the moral injuries suffered by R at $1,000 and fixed the quantum of punitive damages that were also awarded to him at $100,000.
The Court of Appeal allowed the appeal of T and TCM and concluded that they had not violated the C.P.A. First, T and TCM had not violated s. 228 C.P.A. by failing to indicate clearly in the Document that R might not be the grand prize winner. Moreover, using the name of a fictitious person as the signer of the Document did not contravene s. 238(c) C.P.A., since it did not have the potential to mislead consumers about the merchant’s identity. Finally, there were no false or misleading representations in the Document, as it would not mislead a consumer “with an average level of intelligence, scepticism and curiosity”. The Court of Appeal set aside the award of compensatory and punitive damages.
Held: The appeal should be allowed in part.
Richard v. Time Inc., 2012 SCC 8
