St. Laurent Automotive Group Inc. v. Cheryl Britt, 2026 ONSC 1167

Court File and Parties

CITATION: St. Laurent Automotive Group Inc. v. Cheryl Britt 2026 ONSC 1167

DIVISIONAL COURT FILE NO.: DC-25-00003064-0000

SMALL CLAIMS COURT FILE NO.: SC-19-00153158-0000

DATE: 2026/02/25

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: St. Laurent Automotive Group Inc., Plaintiff (Respondent)

-and-

Cheryl G. Britt, Defendant (Appellant)

BEFORE: Justice A. Doyle

COUNSEL: Danesh Rama for the Defendant (Respondent in the appeal)

Rocco Scocco and Alycia Rose for the Defendant (Appellant in the appeal)

HEARD: January 14 and February 6, 2026 at Ottawa via teleconference

REASONS FOR DECISION

1Cheryl G. Britt, (Appellant) appeals from the judgment dated July 30, 2025 (“judgment”) of Deputy Judge T.G. Knutson of the Small Claims Court who awarded damages in the amount of $15,000 to St. Laurent Automotive Groups Inc. (Respondent) for the Appellant’s breach of non-export clause.

2In his judgment, the trial judge explained that Jaguar Land Rover (JLR) is a British-based automobile manufacturer that supplies vehicles to the Respondent. JLR has a strict policy of insisting that vehicles sold in Canada are not to be resold for export out of Canada within one year of the initial purchase, and if there is a failure to comply, then JLR reduces the allocation of two new cars to that dealer.

3The trial judge found that, on the balance of probabilities, the Appellant signed the agreement (Non-Export Acknowledgement “NEA”) which was part of the bill of sale for the purchase of a Land Rover and that the vehicle had been exported contrary to the NEA.

4The trial judge did not accept the Appellant’s evidence that she did not sign the contract nor that her signatures were forged.

5The court allows the appeal on the ground of the appeal that the trial judge made an error in law in not finding that the NEA was an unfair practice thereby breaching the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A.

6Accordingly, the court sets aside the trial decision and dismisses the Respondent’s action as against the Appellant.

Standard of Review

7In Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the Supreme Court of Canada stated that an appeal is not a re‑trial of a case. The court must consider the standard of review on pure questions of law which is one of correctness.

8The standard of review for findings of fact is such that they cannot be reversed unless the trial judge has made a “palpable and overriding error.”

9The role of appellate courts is not to allow the opportunity to reargue the case. As the trial judge makes findings of fact based on his or her understanding of the evidence presented at trial, the trial judge is therefore in a unique position of having heard the evidence and assessed the demeanour of the witnesses. For this reason, appellate courts have traditionally treated findings of fact made by trial judges with deference: see 1201059 Ontario Inc. v. Pizza Ltd., 2015 ONSC 1208, at paras. 5-6.

10For questions of mixed fact and law, the standard of review is palpable and overriding error, unless the court made an identifiable error of law or principle in applying the law to the facts: Housen, at para. 26.

11In Waxman v. Waxman (2004), 2004 39040 (ON CA), 186 O.A.C. 201 (C.A.), at para. 296, the Court of Appeal provided some examples of palpable error which include “absence of evidence”, conflict with accepted evidence, misapprehension of evidence and findings of facts based on speculation rather than inference.

12Further, the court stated that “[a] ‘palpable’ error is one that is obvious, plain to see or clear.”

Small Claims Court Statutory Framework

13Before turning to the grounds for appeal, the court will set out the statutory framework of the Small Claims Court. In Riddell v. Huyhn, 2021 ONSC 7112 (Div. Ct.), the court articulated the following:

Statutory Scheme

3In considering this judicial review application, context matters and access to justice matters. The Court of Appeal held in Maple Ridge Community Management Ltd. v. Peel Condominium Corporation No. 231, 2015 ONCA 520 at para. 35 that “[f]ailing to take the Small Claims Court context into account only serves to restrict access to justice by unnecessarily imparting formality and delay into a legal process that is designed to be informal and efficient.”

4The Court held at para. 34 that:

The Small Claims Court plays a vital role in the administration of justice in the province by ensuring meaningful and cost effective access to justice for cases involving relatively modest claims for damages. In order to meet its mandate, the Small Claims Court’s process and procedures are designed to ensure that it can handle a large volume of cases in an efficient and economical manner.

5The emphasis on accessible, affordable justice is reflected in special provisions that govern Small Claims Court hearings. Section 25 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) provides that the court shall proceed by summary hearings:

The Small Claims Court shall hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience.

6There are special rules of evidence set out in section 27 of the CJA. A Small Claims Court deputy judge has discretion to admit as evidence relevant documents and oral testimony, “whether or not the evidence is given or proven under oath or affirmation or admissible in evidence in any other court.”

14Therefore, in dealing with each ground of appeal below, the court has considered the role of the Small Claims Court which is a high-volume court that is meant to provide a meaningful and cost-effective access to justice. The court is also mindful of s. 27 of Courts of Justice Act, R.S.O. 1990, c. C.43, which provides a flexible approach to the admissibility of evidence.

Did the trial judge breach procedural fairness during the Appellant’s request for an adjournment?

Appellant’s position

15The Appellant submits that the trial judge denied the Appellant procedural fairness and failed to follow the principles of natural justice.

16On the morning of the trial, counsel for the Appellant requested an adjournment of 60 days to permit time to obtain new evidence regarding the fact that the Appellant did not sign the agreement and further, to amend the defence to plead that the Appellant never signed the bill of sale and NEA.

17In his submissions, counsel for the Appellant said the Appellant was willing to pay costs to the Respondent to obtain the adjournment.

18The Appellant submits that the trial judge stated that an adjournment would only be permitted if the Appellant would pay $5000 in costs in five days, failing which the court would strike the defence and grant judgment for the full amount of the claim without an assessment.

19The Appellant submits that the amount was grossly disproportionate and burdensome as pursuant to s. 29 of the Courts of Justice Act, costs in the Small Claims Court are limited to 15% of the amount claimed or the value of the property sought to be recovered.

20The Appellant withdrew its request for an adjournment and proceeded with the trial.

Respondent’s position

21The Respondent submits that during the Appellant’s last-minute request for an adjournment, the trial judge articulated his concerns of costs to the public and court resources. In addition, the Appellant was vague regarding the nature of her new evidence and that he was not inclined to grant an adjournment.

22The trial judge did not impose terms for an adjournment but rather that he would only grant an adjournment if the parties could agree to terms.

23Since the Appellant declined the $5000 offer from the Respondent to consent to the adjournment and the Respondent declined the Appellant’s offer of $3500 in costs, there was no actual court ruling as the Appellant decided to proceed with the trial.

Decision

24The court has considered that this claim was commenced in 2019 and due to a number of scheduling issues and the pandemic, the matter only came before the court in July 2025.

25In her defence filed, the Appellant admitted that she signed the bill of sale and that she had purchased the Land Rover.

26The trial judge was concerned with the delay and what “new evidence” the Appellant’s counsel would be putting forward that she did not sign the bill of sale.

27The trial judge was mindful of the need to reduce court delays, not waste court resources and avoid the unnecessary expense and inconvenience to the public that adjournments cause – especially those requested late in the process.

28In addition, the upper limit of costs in s. 29 of the Courts of Justice Act applies to limit costs awards. It does not relate to costs on an adjournment where r.17.02 of the Rules of Small Claims Court O.Reg. 258/98 under the CJA provide that “[t]he Court may adjourn a trial on such terms as are just, including the payment by one party to another of an amount as compensation for inconvenience and expense.”

29As stated in Holtzman v. Suite Collections Canada Inc., 2013 ONSC 4240, 310 O.A.C. 243 (Div. Ct.), at para. 38, the analysis is fact specific.

30The Appellant’s counsel said that she was prepared to pay costs to obtain an adjournment.

31The trial judge reiterated and repeated for the record for clarification purposes the Respondent’s position, that is: the Respondent would consent to an adjournment on the condition of a payment of $5000 of costs within five days failing which the defence would be struck and default judgment would issue with costs.

32In response, the counsel for the Respondent said “yeah.”

33The Appellant was not prepared to pay the amount of costs suggested and decided to proceed with the trial.

34Given the delay to reach the trial, the Appellant’s nebulous reference to “new evidence” and the fact that in her pleadings, the Appellant admitted she was the party to the contract, the trial judge was entitled to refuse an adjournment unless the parties could agree on terms.

35Once the Appellant stated that she wanted to proceed with the trial, the trial judge permitted the amendment of the Appellant’s defence based on an oral motion. The trial judge allowed the Appellant to lead evidence that she never signed the bill of sale.

36It would have been preferable if the trial judge had made a firm ruling of whether the adjournment was granted. The granting of an adjournment is discretionary and is entitled to deference. I do not find any procedural unfairness.

37This ground of appeal fails as I do not find that the court denied procedural fairness to the Appellant when dealing with her adjournment request.

Did the trial judge demonstrate a reasonable apprehension of bias?

Appellant’s position

38First, the Appellant submits that throughout the trial, the trial judge expressed impatience, annoyance, and sarcasm during the submissions of Appellant’s counsel. For example, with the exchange at the commencement of the trial, he showed impatience as to the whereabouts of Ms. Rose, counsel of record. When he was explaining the reasons for the adjournment request, he stated “[o]kay. I’ve heard you. Your main defence is $15,000.”

39The Appellant points to various sections of the transcript where she alleges the trial judge showed impatience and annoyance with him.

40For example, the Respondent’s witness, Andrew Scott, described the Used Car Dealership Association (UCDA) document which purportedly confirmed information from the Canadian Border Services Agent (CBSA) that the vehicle had been exported.

41In response to a question from counsel during the cross-examination of Mr. Scott, the trial judge suggested to Mr. Scott that he must have known about this relay of information from his training or from someone from his company. This question had not been put to Mr. Scott by either counsel.

42Also, again during cross-examination, Mr. Scott conceded he did not know whether Mr. Dave Duchesne (witness to the signing of the bill of sale and the NEA) followed procedure during the purchase of the vehicle to confirm the identity of the Appellant. Rather than permitting the cross-examination to continue, the trial judge intervened and suggested that the Respondent had a level of professionalism and quality control and that “you have no reason to believe that Dave Duchesne didn’t do his job.”

43The trial judge was aware of the notion of “straw buyer” (someone who buys something on behalf of another person and thereby pretending to purchase it for themselves) and hence had a pre-conceived bias.

44He took judicial notice of the Respondent’s industry practices and standards and the Respondent’s reputation and integrity but later in the proceeding, upon the Appellant’s objections, agreed to not rely on judicial notice.

45In conclusion, the Appellant argues that, viewed cumulatively, the trial judge’s interventions show an apprehension of bias as he presented a pattern of aiding the Respondent’s factual narrative and expressing conclusions about the industry practice and reliability of the Respondent and appeared impatient with the Appellant’s counsel.

Respondent’s position

46The Respondent disputes that the trial judge showed any apprehension of bias and in fact, dismissed the Appellant’s motion for the trial judge to recuse himself.

47The court has a duty to control its own process.

Legal Framework

48There is also a strong presumption that judges will not only be impartial but will also appear to be impartial.

49The onus of demonstrating perceived judicial bias lies on the person who alleges its existence. The threshold for a successful allegation of apprehension of bias is a high one because it questions the personal integrity of the judge in question and the administration of justice.

50Actual bias need not be shown. Rather, there must be a likelihood, or a probability of bias shown, not just a suspicion of judicial bias.

51Further, the apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information. In other words, what would an informed person perceive, viewing the matter realistically and practically and having thought the matter through. R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 S.C.R. 484, at para. 31.

52Under the test, the informed person must have knowledge of all relevant circumstances, including the background and the importance of judicial integrity and impartiality, and understand that impartiality is one of the duties a judge must uphold.

53The issue also reflects what impression the judge would give to other people.

54The principle of apprehension of bias is a principle of fairness. It relates to the eyes of a reasonable observer and whether the accused is able to receive a fair trial in light of such conduct: R. v. M.M., 2022 ONCA 63, at para. 17.

55Therefore, the inquiry is inherently contextual and fact-specific and as stated earlier, the presumption of impartiality is not easily displaced and imposes a high burden on the party alleging bias: M.M., at para. 19.

56In Chippewas of Mnjikaning First Nation v. Chiefs of Ontario, 2010 ONCA 47, 265 O.A.C. 247, the Court of Appeal confirmed that the question is whether a reasonable observer after reviewing the total record and evaluating the cumulative interventions conclude that the judge displayed partiality or “adopted a position on the facts, issues or credibility”: at paras. 230 and 238.

Decision

57This ground of appeal turns on whether a reasonable observer believes that the trial judge’s interventions did not resemble neutral case management or whether his interventions amount to an adoption of the Respondent’s position.

58A court has a duty to case manage the matter before it. This is especially true in cases in Small Claims Court which is a high-volume court.

59I do not find that the record shows the trial judge being impatient or that a reasonable observer would believe he was biased.

60In fact, the trial judge apologized to Appellant’s counsel when the trial judge misspoke but then confirmed that he could continue to cross-examine.

61He may have interjected during examinations but it was for the purpose to confirm evidence, obtain clarification, and ensure the proper evidence was before the court.

62I do not find that the mere fact that the trial judge was aware of what a “straw buyer” was, that he had prejudged the matter.

63For these reasons, this ground of appeal fails.

Did the trial judge commit a palpable and overriding error in finding that the Appellant had signed the bill of sale and NEA?

Appellant’s Position

64The Appellant submits that there was uncontroverted evidence that the Appellant did not sign the bill of sale and the NEA. She testified regarding this.

65Dave Duchesne, who was the Respondent’s witness to the contract, was not called at trial.

66Andrew Scott was not employed at the time of the contract and hence could not provide direct evidence that she signed the bill of sale and NEA.

67The trial judge inferred privity to the contract based on speculation and on the assumption that the Respondent was professional, and maintained quality control, and there was no reason to believe Mr. Duchesne did not follow proper procedure.

Respondent’s position

68Despite the fact the Appellant had admitted that she signed the bill of sale and NEA in her statement of defence, the court permitted the Appellant to amend her defence at trial to withdraw her admissions and to lead evidence on this issue.

69The court received evidence of the Appellant’s cheque used to pay for the vehicle and she confirmed that the Respondent’s name on the cheque was written by her friend. The Appellant’s identification documents are in the Respondent’s file as required before a vehicle is picked up.

70The Appellant confirmed that her friend gave her the money but she was not able to recall how her friend gave her the money. The Appellant wrote the certified cheque from her own account. This friend is now deceased.

Decision

71The trial judge did not make an palpable and overriding error as on the balance of probabilities, there was evidence that she signed the bill of sale and DEA. The trial judge properly relied on the Appellant’s testimony that she wrote the cheque and admitted that she went to the bank to get it certified.

72The court heard the evidence of Mr. Scott when he spoke of the procedure at their office when a client picks up a vehicle, that is: if it is in person, the identity of the client is verified.

73In addition, the court considered that the Respondent had the Appellant’s identification documents including her passport and driver’s licence on file.

74This ground of appeal fails.

Did the trial judge err in law by treating the NEA as part of the Bill of Sale?

Appellant’s Position

75The Appellant submits that the trial judge failed to address the legal requirement of consideration, and that no consideration flowed from the Respondent to the Appellant for the NEA.

76Since there was no consideration, the Appellant submits that the NEA is invalid and unenforceable. The trial judge failed to provide sufficient reasons.

Respondent’s Position

77The Respondent submits that the bill of sale specifically includes and refers to other statements attached to the bill of sale forming part of the contract. The NEA was attached to the bill of sale.

Decision

78The court finds that the NEA formed part of the bill of sale.

79The bill of sale indicates at the signature page that:

“Sales Final: Please review the entire contract, including all attached statements, before signing.”

80The acknowledgement was signed on the same day, was part of the bill of sale, and was referred to in the bill of sale.

81In addition, the court heard evidence that when the salesperson has concerns of the export of the vehicle, they must notify the client of their concern and that the sale would be subject to a non-export agreement upon delivery of the vehicle.

82The customer is told that if the vehicle is found to have been exported within one year of sale, then the customer would be responsible for the liquidated sum of $15,000 for the loss of future business. If the customer refuses to sign the NEA, then the Respondent will not sell the vehicle.

83The trial judge did not commit a palpable and overriding error in his finding that the NEA formed part of the bill of sale and was not a separate contract requiring consideration.

84Regarding the sufficiency of reasons, the court finds that, although the reasons are not lengthy, the trial judge’s reasons are adequate enough to show the trial judge’s reasoning process.

85Therefore, this ground of appeal fails.

Did the trial judge commit a palpable and overriding error in affording weight to a report from the Used Car Dealership Association (UCDA) as evidence of the alleged export of the vehicle?

Appellant’s position

86The Appellant submits that the trial judge erred by not requiring any corroboration from Canada Border Services Agency (CBSA) or testimony from an unbiased witness who could address the UCDA report’s methodology, accuracy, or chain of custody.

87The UCDA report showed that the vehicle was exported to China 18 days after the initial sale.

88The Appellant submits that the report was hearsay and biased as Mr. Scott confirmed that the UCDA is an organization which promotes the interests of car dealers.

89The Appellant argues that the trial judge erred in law in accepting this as evidence of the export of the vehicle when the author of the report was not called nor were the original CBSA documents produced.

90In addition, this report contradicts the CarFax report which the Appellant states says that the vehicle was registered in Canada the day after the UCDA report says the vehicle was exported.

91This contradiction was never explained.

Respondent’s position

92First, the Carfax report does not confirm the location of the vehicle but merely the registration. It is not proof that the vehicle is in Canada but merely when the paperwork is filed.

93The Carfax report also shows the history of the vehicle.

94Second, the UCDA report obtained its information from the source (CBSA) and hence was proof that the vehicle had been exported.

95The court heard evidence that the CBSA provides the VIN of any vehicle exported out of the country to the UCDA, which allows dealerships to access their database to see what cars have been exported overseas.

96From reviewing the UCDA report, the witness confirmed that the Land Rover had been exported on June 18, 2018, which is only19 days after the purchase of the vehicle on May 30, 2018 by the Appellant.

97The CarFax report confirms registration of the Land Rover was issued on June 19, 2018.

98Although the trial judge never made a ruling on the admissibility of this report, the UCDA report is a business record under s. 35(2) of the Evidence Act, R.S.O. 1990, c. E.23 and is an exception to hearsay. In accordance with the Supreme Court’s decision in Ares v. Venner, 1970 5 (SCC), [1970] S.C.R. 608, it was:

• Made contemporaneously with the thing recorded;

• In the routine of business;

• By a recorder with personal knowledge of the thing recorded as a result of having done or observed or formulated it;

• Had a duty to record; and

• And had no motive to misrepresent.

99It was reasonable for the trial judge to rely on the UCDA report as evidence.

Decision

100There was evidence that, although UCDA is an association for used car dealers, that they receive information from CBSA. Mr. Scott explained that the UCDA is interested in this public record of when goods are entering or exiting the country and hence UCDA received it from CBSA.

101When asked in cross-examination how he could say that the report is reliable, the court suggested that Mr. Scott had training but Mr. Scott was still uncertain regarding reliability.

102The form indicated that it is information contained for reference purposes only and it does not assume liability for errors and omission in the data made available through this report.

103With respect to the Carfax report, it was clarified that the registration on Carfax is the day that the person at the licence bureau prints an ownership of the vehicle.

104In the past two years, there was a new tool created by UCDA to track these exports.

105He did not have a copy of the CBSA report.

106It may have been preferable if the trial judge made a ruling on the admissibility of the UCDA report. Nevertheless, I do not find that it was an palpable and overriding error as it can inferred that the court accepted the evidence that the information was generated from the CBSA report as a regular part of business and it was reliable.

107Section 27 of the CJA permits the Small Claims Court to be flexible with the rules of evidence.

108This ground of appeal fails.

Did the Plaintiff prove their damages?

Appellant’s position

109The Respondent did not produce evidence of the damages suffered as a result of the export of the vehicle.

110The Respondent’s witness, Wayne Kuiack, said it was regular practice to be exposed to a reduction of two vehicles from the dealer’s allotment, but there were no documents produced.

111There was no evidence that the dealership had been deprived of those vehicles from the dealership due to the export of the vehicle.

112The Respondent did not adduce any evidence that they had lost $15,000.

113At para. 24 of 869163 Ontario Ltd v. Torrey Springs II Association Ltd. Partnership (2005) 2005 23216 (ON CA), 76 O.R. (3d) 362 (C.A.), the Court of Appeal stated a clause will be struck as a penalty if it is “extravagant, extortionate, unconscionable or unreasonable”.

Respondent’s Position

114Mr. Scott confirmed that a policy was in place with the retailer at the time. This policy provided that customers were to sign an NEA due to the limited caused by vehicles being exported.

115The Respondent submits that the trial judge found on a balance of probabilities that the Land Rover was shipped overseas and the clause provided liquidated damages.

Decision

116I find that the payment of $15,000 in the event that the vehicle was exported within one year of sale is a reasonable estimate of damages and it is not a penalty clause.

117The Respondent does not need to show that it suffered $15,000 in damages and the trial judge accepted that this amount represented a reasonable amount of anticipated loss.

118The Court of Appeal in Ottawa Community Housing Corporation v. Foustanellas (Argos Carpets), 2015 ONCA 276, 125 O.R. (3d) 539, and relying on the Supreme Court of Canada’s decision in Canadian General Electric Co. v. Canadian Rubber Co. (1915), 1915 45 (SCC), 52 S.C.R. 349, at para. 33: “where liquidated damages are stipulated in a contract, the injured party may elect to take the sum stipulated without regard to his or her actual loss. Where, however, the stipulated sum is properly to be seen as a penalty, the injured party may only recover proven damages and the amount recoverable may not exceed the sum stipulated.

119The trial judge accepted that the $15,000 was a low amount compared to the real loss that the dealer would incur for the loss of two vehicles from the source (13% for two vehicles could lose up to $30,000 to $40,000).

120The trial judge did not make an explicit finding that the vehicle was resold for export out of Canada. However, he turned his mind to this issue as he summarized the position of the Respondent and their documents. He summarized the UCDA report that confirmed that the vehicle purchased by the Appellant was overseas. One could infer that the trial judge awarded damages because he accepted that the Land Rover had been resold for export.

121This ground of appeal fails.

Did the trial judge fail to apply the Consumer Protection Act?

Appellant’s position

122The Appellant submits that the trial judge failed to consider the issue of the Consumer Protection Act 2022, S.O. 2002, c. 30, Schedule A (CPA).

123The Appellant submits that the NEA falsely leads a consumer to believe that they have waived their rights to challenge the consumer contract as it says “I further waive my right to contest this agreement” which is a contrary to s. 7(1) of the CPA.

124The Appellant argues that this agreement binds the Appellant for occurrences beyond her control, for example, if the vehicle is stolen and then exported.

125The cases filed by the Respondent confirm that the NEA can be binding on the consumer, but none have a waiver of rights. This waiver passes the risk onto the consumer.

Respondent’s Position

126The courts have found that these NEAs are legal and binding on the consumer.

127The Respondent argues that the statement that the Appellant is waiving her right to contest this agreement means that she will not contest that the NEA is not part of the bill of sale and waives the right not to complain of the value.

128She can argue the enforceability of the clause, but this was only raised at trial at the last minute. She did not try to rescind the agreement.

Decision

129First, NEAs have been found to be enforceable on the parties.

130In Eurotrend Fine Cars Ltd. v. Li, 2020 SKQB 108, at paras. 40-42, the court accepted that non-export agreements are permissible as part of the purchase agreement.

131In the unreported decision of St. Laurent v. Patenaude (Respondent’s compendium tab 31), the court upheld the terms of the non-export agreement.

132The NEA is not a stand-alone agreement but part of a bill of sale and therefore not one sided.

133The NEA does not limit the resale but rather limits the time frame when the vehicle can be exported: see Walthers Pontiac Buick GMC Ltd v. Smith, 2002 BCPC 541. The terms in Walthers were similar to the NEA in the case at bar. The Court found that it was enforceable and not against public policy. See also Eurotrend Fine Cars Ltd. v. Li, 2020 SKQB 108 at para. 70.

134The court in Wolfe Chevrolet Oldsmobile Ltd. v. 552234 B.C. Ltd., 2004 BCPC 154, upheld a non-export clause as enforceable. The dealership was facing a loss of cars as a result of vehicles being exported. The court emphasised the right of parties to bargain and when a contract is freely agreed to, the court should not rescue a party from the bargain unless they show unconscionability: at para. 13.

135There was evidence in Wolfe that General Motors was prepared to impose financial penalties on franchises or dealers who were not vigorous in attempting to curtail exports.

136Also, in Automobiles Silver Star Montreal Inc. v. Shahab, 1999 CarswellQue 281, the court found that the non-export agreement was not illegal.

137The next issue is whether the Appellant’s waiver of her rights amounted to an unfair practice under the CPA.

138The CPA protects individuals in personal/household transactions, covering online shopping, door-to-door sales, and contracts by ensuring fair practices, clear disclosures, and rights to cancel within “cooling-off” periods.

139Section 14(2)13 of the CPA reads:

14 (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.

(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:

13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive.

140Section 15 is also relevant here:

15 (1) It is an unfair practice to make an unconscionable representation.

(2) Without limiting the generality of what may be taken into account in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person’s employer or principal knows or ought to know,

(a) that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;

(b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;

(c) that the consumer is unable to receive a substantial benefit from the subject-matter of the representation;

(d) that there is no reasonable probability of payment of the obligation in full by the consumer;

(e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;

(f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;

(g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment; or

(h) that the consumer is being subjected to undue pressure to enter into a consumer transaction.

141There is an ambiguity if the vehicle is stolen and then exported. Would the consumer be held liable under the NEA as it was exported without their intent? Section 11 provides:

11 Any ambiguity that allows for more than one reasonable interpretation of a consumer agreement provided by the supplier to the consumer or of any information that must be disclosed under this Act shall be interpreted to the benefit of the consumer.

142The notice provisions under Part IX which outlines procedures for consumer remedies sets out sections 91and 92 do not apply to remedies claimed under unfair practices under Part III.

143The issue is whether there were misleading or unconscionable representations.

144According to the NEA, the Appellant would be responsible under all circumstances if the vehicle is resold for export within one year of purchase. The dealership is placing the risk of the export to the consumer regardless of whether the vehicle was exported by a purchaser of the vehicle or was stolen and then exported.

145Once it is exported, the dealer is denied inventory of two vehicles, and this clause requires the consumer to pay the loss that the dealer would face regardless of whether the customer had a hand in the export or not.

146When asked about whether the purchaser would be responsible if the vehicle was stolen, Mr. Scott said he would want to see the police report before he would commence proceedings.

147Here the consumer waived her rights, which would mean that she is responsible for all occurrences beyond her control and there was no evidence led that there would be exceptions to the NEA even if stolen.

148The consumer has taken on the allocation of risk that the manufacturer imposes on the dealer and there are no exceptions that would make it fair and just. In my view, this is an unfair practice within the meaning of the CPA.

149I am guided by the well-reasoned decision of Deputy Judge DiGregorio in an unreported decision of Downtown Porsche et al. v. Bensalmon et al. He found that the prohibition of exports in that case was enforceable and not a restraint of trade and the liquidated damages was a fair estimate of damages and not a penalty. It was not a restraint of trade as “[t]he purchaser would have the right to protect himself by getting an indemnity agreement from its purchaser…or he could just increase the price by $10,000.00 to get the money the (sic) back”.

150The defendants soon decided that the vehicle was too small for the family and sold it to a dealer in Quebec for a loss. It changed hands a few times and then the plaintiff alleges that the vehicle was exported within one year.

151The plaintiff accepted a report from the Gray Market report sent by Porsche Canada to the dealer which said that the vehicle had arrived in China. The defendant denied that she had arranged the export.

152The court in that case found that the clause was ambiguous in that the clause “[w]ill not be exported implies some form of control which a reasonable thinking individual might read it to mean I cannot export it, not a third party that I sell it to. It would have been easy to state will not be exported by myself as purchaser or any third party I may sell the vehicle to. That puts the purchase on notice that he or she has to take steps”.

153Later, the court stated: “If the vehicle had not been sold by the defendant but had been stolen instead during the one-year period and then the thief exported the vehicle to China according to the plaintiffs’ interpretation of the clause this purchaser would have to pay $10,000 because it was exported. Surely that cannot be the meaning of the clause. That is not just. That is not fair. But yet, that would be a logical consequence if the agreement were interpreted [in] the manner that the plaintiff is asking me to interpret it.

154The court found that the contra profentum rule came into play and was used against the maker. There was other conflicting evidence of whether the vehicle had been indeed exported. Ultimately, the court dismissed the action. He found the clause was a restraint of trade.

155These principles apply here.

156Section 18 of the CPA provides:

18 (1) Any agreement, whether written, oral or implied, entered into by a consumer after or while a person has engaged in an unfair practice may be rescinded by the consumer and the consumer is entitled to any remedy that is available in law, including damages.

157In addition, s. 93 sets out the remedy:

93 (1) A consumer agreement is not binding on the consumer unless the agreement is made in accordance with this Act and the regulations.

(2) Despite subsection (1), a court may order that a consumer is bound by all or a portion or portions of a consumer agreement, even if the agreement has not been made in accordance with this Act or the regulations, if the court determines that it would be inequitable in the circumstances for the consumer not to be bound.

13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive.

158In Connect Electric Inc. v. Pullen and Greensides, 2013 ONSC 1837, Justice Conlan stated:

55But not every illegal contract that fails to comply with the CPA is unenforceable against the consumer. The Court may order that the consumer is bound by the agreement where it would be inequitable to hold otherwise: subsection 93(2).

56This is merely a recognition of the distinction between illegality as to contractual formation and illegality as to contractual performance: Beer v. Townsgate I Ltd., 1997 CarswellOnt 3753 (Court of Appeal for Ontario), at paragraph 12.

57In deciding whether to apply subsection 93(2) of the CPA, a Court ought to consider the serious consequences of invalidating the contract, the social utility of those consequences and the class of persons for whom the prohibition was enacted: Morrell v. Cserzy, 2002 CarswellOnt 658 (Ontario Superior Court of Justice, Templeton J.), at page 11, in turn citing High Court Justice Krever, as His Honour then was, in Royal Bank of Canada v. Grobman et al (1977), 1977 1113 (ON SC), 18 O.R. (2d) 636 at pages 652-653.

58A Court may also consider whether the contract was bargained for at arm’s length, whether the consumer was unfairly taken advantage of, whether the agreement was wholly or substantially completed, the degree of benefit derived by the consumer and whether it would be inherently wrong or contrary to public policy to enforce the contract: Morrell, supra at page 14, in turn citing General Division Justice Sharpe, as His Honour then was, in Johnson v. Lazzarino (1998), 1998 14835 (ON SC), 39 O.R. (3d) 724 at page 728. See also Agasi v. Wai, 2000 CarswellOnt 2903 (Ontario Superior Court of Justice, Boyko J.), at paragraphs 46 and 47.

159It would be inherently wrong and contrary to public policy to enforce the NEA that transfers the risk of the export completely to the consumer even it is out of the control of the consumer.

160Therefore, the court finds that the trial judge erred in law in finding that the CPA did not apply to the NEA.

Summary

161Accordingly, the appeal is allowed, and judgment of D.J. Knutson is set aside. The court grants judgment in favour of the Appellant and dismisses the Respondent’s action against her.

162The court awards the agreed costs of $15,000 to the Appellant.

Justice A. Doyle