Case information

Consumer protection — Pre-contractual obligation to honour advertised price as required by Consumer Protection Act — Class action — Claim for compensatory damages — Claim for punitive damages — Doctrine of federal paramountcy — Whether s. 224(c) creates contractual obligation for merchants to honour advertised price when consumer decides to enter into contract — To obtain reduction of obligation of s. 272(c) in case of offence under s. 224(c), whether consumer must provide evidence other than evidence of commission of offence — Whether restrictive interpretation of ss. 224(c) and 272(c) by lower courts undermined effectiveness of Act and legislature’s intention to eliminate drip pricing practices and other unlawful practices — Consumer Protection Act, CQLR, c. P-40.1, ss. 224 and 272.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

At the end of June 2010, an amendment to s. 224 of the Consumer Protection Act, CQLR, c. P-40.1 (“CPA”), came into force; it aimed to eliminate the business practice that consisted in advertising a good or service at a price that did not include the full amount that the consumer had to pay at the time of payment. Two weeks after that amendment, the applicant Michael Silas, represented by the Consumers’ Union (“Union”) and a person designated for the purposes of the class action, consulted Air Canada’s Internet site to acquire a ticket. Mr. Silas had to go through three navigation steps. Between the first and last step, the ticket price increased by $124.46, that is, by the addition of taxes, fees, charges and other surcharges. The applicants sought a reduction in the price paid and an award of punitive damages. Air Canada, for its part, argued that the doctrines of interjurisdictional immunity and federal paramountcy rendered that provision of the CPA constitutionally inapplicable. Alternatively, it argued that it did not breach the Act.

The Superior Court excluded the application of the doctrines of interjurisdictional immunity and federal paramountcy. It refused to impose a reduction in price because the presumption of prejudice did not apply and because the prohibited practice was not capable of influencing the consumer’s behaviour. It also refused to award punitive damages against the respondent, because the evidence showed that it was not necessary in order to prevent a repetition of the conduct. The Court of Appeal confirmed the Superior Court’s analysis regarding the application of the doctrine of federal paramountcy. It concluded, however, that the trial judge committed a reviewable error concerning the presumption of prejudice but did not impose a reduction in price on the respondent because there was no basis on which to quantify the reduction of the obligation to which the consumers were entitled. It, however, awarded punitive damages because, in its view, the respondent demonstrated carelessness and serious negligence with respect to consumers.