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November 28, 2012

In an interesting Ontario class action decision issued on November 16th, the Ontario Superior Court of Justice found George Brown College liable, among other things, for violating the Ontario Consumer Protection Act (“CPA”) in relation to representations in a college course calendar about a graduate business program (George Brown’s International Business Management Program).

The student plaintiffs in this case alleged that George Brown failed to deliver what was promised for their program: the ability to obtain three particular industry designations in addition to the college’s certificate.  The program stated that students could “complete three industrial designations/certifications in addition to the George Brown College Graduate Certificate” which were in fact not available without additional courses and fees.

George Brown took the position that students received what promised – a George Brown graduate certificate and opportunity to complete the industry accreditations in the future – insisting “there was nothing inaccurate” in its program description and denied liability.  The school’s view was also that reasonable students that diligently researched industry websites would have understood that George Brown was only offering a preparatory platform for the future completion of the three listed designations.

The plaintiff students initially filed a complaint to their program advisor after which, when unsuccessful, they commenced a class action founded on negligent misrepresentation, breach of contract and violations of the CPA.

In assessing the students’ claim, the Court found that the students’ interpretation of the course description was reasonable, and that they were right to assume that they would graduate not only with the George Brown graduate certificate but also the three stated industry designations/certifications (or on a more nuanced interpretation, at least the required courses for the designations).

The Court held that on a plain reading of the description, the reasonable interpretation was that students could complete courses to obtain the designations, not merely an “opportunity to advance to complete”.  The Court also found that if qualifications were necessary, such as the fact that the program only provided “preparation” for future accreditations, it could easily have said so.

On the evidence, the Court adopted its more nuanced interpretation – namely that on completion of the program, students would be eligible to obtain the designations on completion of final exams.

With respect to the CPA, the Court found that the students were consumers (of post-graduate business courses), entitled to protection under the CPA (relying on first principles, statutory history of the CPA, case authority and legislative intention) and that George Brown had breached Part III of the CPA.  The Court awarded damages in the amount exceeding the value of the advertised program.

Part III of the CPA prohibits unfair practices in connection with consumer transactions, including false, misleading or deceptive representations (section 14(1)).  Section 14(2) sets out a number of examples of false or misleading representations, including a false representation of sponsorship, approval, status or affiliation (under section 14(2)).

The Court found that George Brown had engaged in an unfair practice in at least two ways: first, the program representation was false and misleading; and second, by violating section 14(2) (false accreditations).  More specifically, the Court found that George Brown had no agreements in place that would have allowed it to award the advertised designations (or credits toward those designations) and that it had represented an “approval … affiliation or connection” with designation awarding industry associations when that was not the case.

This recent case is interesting for a number of reasons, including for being one of only a relative handful of class actions to be decided on the merits since Ontario introduced class legislation, discussing key aspects of Ontario’s consumer protection legislation in some detail and consistent with a recent trend of Canadian courts to adopt a practical and plain reading approach to interpreting advertising.

The case is also a reminder that in addition to the Competition Act, which is Canada’s principal legislation governing misleading advertising, companies need to be aware of provincial consumer protection legislation and sector-specific rules.

As a practical matter, this recent decision may also pave the way for more advertising law related class actions in Canada and mean that companies need to take a little more care in reviewing key advertising and marketing.

For a copy of the decision see: Ramdath v. George Brown College.

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