Ontario v. Ivan’s Electric Ltd

CITATION: Ontario (Min. of Gov. and Con. Services) v. Ivan’s Electric Limited, 2017 ONCJ 227

DATE: April 4, 2017

(amended after judgment had been released)

I

N THE MATTER OF

the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A.

and

Ontario Regulation 17/05

Between

Her Majesty The Queen In Right Of Ontario

As Represented By

The Ministry of Government And Consumer Services

prosecutor

and

Ivan’s Electric Limited,<

Ivan Valovic,

Insight Electric Inc.,

and Peter Valovic

defendants

Ontario Court of Justice

Brampton, Ontario

Quon J.P.

Reasons for Judgment

Trial held:

Oct. 9, 15, 16, 17, 29, 30 and 31, 2014;

Nov. 12, 13, 19, and 20, 2014

April 9, 22, and 23, 2015;

May 13, 14, and 27, 2015;

March 17, 23, and 24, 2016;

Oct. 27 and Nov. 2, 2016.

Judgment released: April 4, 2017.

Counsel:

G. Ludlow and J. Chiang, counsel for the Ministry of Government and Consumer

Services.

T. Hein and J. Noonan, counsel for the defendants.

Charges:

(1) failing to deliver to a consumer a direct agreement containing the information

required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the CPA 2002,

thereby committing an offence under s. 116(2) of CPA 2002 (13 counts totaling

36 charges);

(2) failing to take reasonable care, as a director of the corporation, in preventing the

corporation from failing to deliver to a consumer a direct agreement containing

the information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the

CPA 2002, and thereby committed an offence under s. 116(3) of CPA 2002 (8

counts totaling 8 charges).

(3) failing to refund to a consumer within 15 days after the date the said consumer

gave notice of cancellation, contrary to s. 96(1)(a) of CPA 2002, thereby

committing an offence under s. 116(1)(b)(viii) of CPA 2002 (8 counts totaling 26

charges);

(4) failing to take reasonable care, as a director of the corporation, in preventing the

corporation from failing to refund to a consumer within 15 days after the date the

said consumer gave notice of cancellation, contrary to s. 96(1)(a) of the CPA

2002, and thereby committed an offence under s. 116(3) of CPA 2002 (6 counts

totaling 6 charges);

(5) engaging in an unfair practice by making a false, misleading or deceptive

representation to a consumer, contrary to s. 17(1) CPA 2002, thereby committing

offence under s. 116(1)(b)(ii) of CPA 2002 (7 counts totaling 23 charges); and

(6) failing to take reasonable care, as a director of the corporation, in preventing the

corporation from engaging in an unfair practice by making a false, misleading or

deceptive representation to a consumer, contrary s. 17(1) of the CPA 2002,

thereby committing offence under s. 116(3) of CPA 2002 (4 counts totaling 4

charges);

Cases Considered or Referred To:

Blue Mountain Resorts Ltd. v. Bok, [2013] O.J. No. 520 (O.C.A.), per MacPherson, Armstrong

and Blair JJ.A.

Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727

(S.C.C.).

Country Cottage Living Inc. v. Heath, [2009] O.J. No. 4994 (QL) (S.C.J.O.), per Mulligan J.

Fazari v. Simpson, [2011] O.J. No. 4573 (Ont. Div. Ct.), per Eberhard J.

Matoni v. C.B.S. Interactive Multimedia Inc. (c.o.b. Canadian Business College), [2008] O.J.

No. 197 (S.C.J.O.), per Hoy J.

Memorial Gardens Ontario Ltd. v. Ontario, [1992] O.J. No. 98 (O.C.A.), per Brooke, Tarnopolsky,

and Doherty JJ.A.

Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031 (S.C.C.).

i

Ontario (Ministry of Labour) v. Enbridge Gas Distribution Inc., 2010 ONSC 2013 (S.C.J.O.), per

Bellamy J.

Ontario (Ministry of Labour) v. Enbridge Gas Distribution Inc., 2011 ONCA 13 (O.C.A.), per Watt

J.A.

Ontario (Ministry of Labour) v. Hamilton (City) (2002), 58 O.R. (3d) 37 (O.C.A.), per Sharpe J.A.

Ontario (Ministry of Consumer Services) v. K-Tech Building Systems Inc., [2012] O.J. No. 1764

(O.C.J.), per Quon J.P.

R. v. Briscoe, [2010] 1 SCR 411 (S.C.C.).

R. v. Castro, 2010 ONCA 718 (O.C.A.), per Weiler, MacPherson and Armstrong JJ.A.

R. v. Cotton Felts Ltd. (1982), 2 C.C.C. (3d) 287 (O.C.A.), per Martin, Zuber and Blair JJ.A.

R. v. Devgan, [1999] O.J. No. 1825 (O.C.A.), per Labrosse, Charron and Feldman JJ.A.

R. v. Elm Tree Nursing Home Inc., [1987] O.J. No. 491 (O.C.A.), per Goodman, Cory and

Finlayson JJ.A.

R. v. Hundal, [1993] S.C.J. No. 29 (S.C.C.).

R. v. Hutchinson, [2014] 1 S.C.R. 346 (S.C.C.).

R. v. Isaac, [1984] 1 S.C.R. 74 (S.C.C.).

R. v. Jordan, 2016 SCC 27 (S.C.C.).

R. v. Kienapple, [1975] 1 S.C.R. 729 (S.C.C.).

R. v. Logeman (1978), 5 C.R. (3d) 219 (B.C.C.A.).

R. v. McCague, 2006 ONCJ 208 (O.C.J.), per Trotter J.

R. v. Prince, [1986] 2 S.C.R. 480, [1986] S.C.J. No. 63 (S.C.C.).

R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299, 40 C.C.C. (2d) 353 (S.C.C.).

R. v. Thatcher, [1987] 1 S.C.R. 652 (S.C.C.).

R. v. Valovic, [2009] O.J. No. 6494 (S.C.J.O.), per Belleghem J.

R. v. Vu, [2012] S.C.J. No. 40 (S.C.C.).

R. v. Wigglesworth, [1987] S.C.J. No. 71 (S.C.C.).

Ramdath v. George Brown College of Applied Arts and Technology, [2013] O.J. No. 3151

(O.C.A.), per MacPherson, Cronk and Rouleau JJ.A., affirming [2012] O.J. No. 5389

(S.C.J.O.), per Belobaba J.

Richard v. Time Inc., [2012] S.C.J. No. 8 (S.C.C.).

Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27 (S.C.C.).

ii

Tamarack North Holdings Ltd. (c.o.b. Tamarack North Ltd.) v. Hallisey, [2007] O.J. No. 66

(S.C.J.O), per Wood J.

Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] S.C.J. No. 64

(S.C.C.).

Weller v. Reliance Home Comfort Limited Partnership, [2012] O.J. No. 2415 (O.C.A.), per

Rosenberg, Juriansz, and Rouleau JJ.A.

Cases on amending an information:

Deaville v. Boegeman, [1984] O.J. No. 3403 (O.C.A.), per Mackinnon A.C.J.O., Zuber, and

Tarnopolsky JJ.A.

Ontario (Ministry of Labour) v. Ivaco Inc., [2001] O.J. No. 1329 (S.C.J.O), per Heeney J.

Ontario (Ministry of Labour) v. NMC Canada Inc., [1995] O.J. No. 2545 (O.C.A.), per Finlayson,

Abella and Laskin JJ.A.

Ontario (Ministry of Labour) v. Rahnmet Inc., [2009] O.J. No. 5418 (O.C.J.), per Bubba J.P.

R. v. J.F. Brennan & Associates Inc. (1981), 61 C.C.C. (2d) 1 (O.H.C.), per Osler J.

R. v. Cote (1977), 33 C.C.C. (2d) 353 (S.C.C.).

R. v. Doukas, [1996] O.J. No. 1705 (O.C.J. (Prov. Div.), per August J.

R. v. Gunn, [1982] S.C.J. No. 23 (S.C.C.).

R. v. Irwin, [1998] O.J. No. 627 (O.C.A.), per Catzman, Doherty and Austin JJ.A.

R. v. Kimberly-Clark Canada Inc. (August 21, 1995) (Ont. Prov. Div.), per Bice J.

R. v. Larizza, [2006] O.J. No. 5335 (O.C.J.), per Pelletier J.

R. v. Lorenzo, [2002] O.J. No. 4850 (O.C.J.), per Quon J.P.

R. v. McConnell, [2005] O.J. No. 1613 (O.C.A.), per Laskin, Rosenberg, and LaForme JJ.A.

R. v. Paul Magder Furs Ltd., [1989] O.J. No. 531 (O.C.A.), per Lacourciere, Houlden and Morden

JJ.A.

R. v. Petrecca, [2013] O.J. No. 6160 (O.C.J.), per D.A. Harris J.

R. v. Preston Sand & Gravel Co., [2009] O.J. No. 6399 (O.C.J.), per Frazer J.

R. v. Roberts, [2001] O.J. No. 4645 (O.C.J.), per Jackson J.

R. v. Salim; R. v. Escobar; R. v. Chung; R. v. Ferlisi, [2000] O.J. No. 507 (S.C.J.O), per

MacKinnon J.

R. v. Seenanan, [2004] O.J. No. 1121 (O.C.A.), per Abella, Goudge, and Gillese JJ.A.

R. v. Silverstrone, [2007] O.J. No. 4855 (S.C.J.O.), per Whitten J.

R. v. Thomas Fuller Construction Co., [2008] O.J. No. 4004 (O.C.J.), per Wake J.

iii

Thermoset Thermoplastic Custom Moulder Ltd. v. Ontario (A.G.), [1992] O.J. No. 2455 (Ont. Ct.

(Gen. Div.)) per Caswell J.

York (Regional Municipality) v. Talabe, [2011] O.J. No. 654 (S.C.J.O.), per Healey J.

York (Regional Municipality) v. Winlow (2009), 99 O.R. (3d) 337 (O.C.A.), per Laskin, Gillese, and

Rouleau JJ.A.

Cases on obligation to cross-examine witness on point of contradiction before

arguing witness is not credible

R. v. Palmer, [1979] S.C.J. No. 126 (S.C.C.).

R. v. Verney, [1993] O.J. No. 2632 (O.C.A.), per Finlayson, McKinlay and Abella JJ.A.

R. v. G.P. (1996), 112 C.C.C. (3d) 263 (O.C.A.), per Laskin, Rosenberg and Moldaver JJ.A.

Rule in Browne v. Dunn (1893) 6 R. 67 (H.L.).

Cases on mistake of law as a defence

La Souveraine, Compagnie d'assurance générale v. Autorité des marchés financiers, [2013]

S.C.J. No. 63 (S.C.C.).

R. v. Jorgensen, [1995] 4 S.C.R. 55 (S.C.C.).

Statutes, Regulations, and Bills Cited:

Bill 59, Putting Consumers First Act (Consumer Protection Statute Law Amendment) (An Act to

enact a new Act with respect to home inspections and to amend various Acts with respect to

financial services and consumer protection), 2017, 2nd Sess., 41st Leg., Ontario, 2017 (as of

March 7, 2017, ordered for Third Reading), clause 16.

Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A., ss. 1, 14, 14(1), 14(2), 14(2)(10),

14(2)(13),14(2)(14), 14(2)(15), 14(2)(16), 15, 15(1), 15(2), 15(2)(b), 15(2)(g), 16, 17(1), 17(2),

18(1), 18(3), 18(14), 20(1), 42, 43, 43(1), 43.1(1), 43(2), 88, 89(1), 91, 92, 92(1), 92(2), 92(3), 94,

94(2), 95, 96(1), 96(1)(a), 98, 98(1), 99(1), 99(2), 116(1)(a), 116(1)(b)(ii), 116(1)(b)(vii),

116(1)(b)(viii), 116(2), and 116(3).

Electrical Safety Authority Regulation (Electricity Act, 1998), O. Reg. 89/99, s. 1.

Electricity Act, 1998, S.O. 1998, C. 15, Sched. A.

Evidence Act, R.S.O. 1990, C. E.23, ss. 20 and 21.

General Regulation (Consumer Protection Act, 2002), O. Reg. 17/05, ss. 17, 34, 35, 35(1),

35(1)(4), 35(1)(4)(i), 35(1)(6), 35(1)(9), 35(1)(11), 35(1)(13), 35(2), 79(1), 80(1), 83, 83(1),

83(1)(a), 83(2), 83(2)(a), 83(4), and 84.

General Regulation (Safety And Consumer Statutes Administration Act, 1996), O. Reg. 187/09, s.

2.

Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, s. 64.

iv

Provincial Offences Act, R.S.O. 1990, c. P.33, ss. 34, 34(1), 34(2), 34(4), 34(4)(c), 34(4)(d),

77(1), and 81.

Safety and Consumer Statutes Administration Act, 1996, S.O. 1996, c. 19.

Authorities Considered or Referred To:

Black's Law Dictionary, 4th ed. (St. Paul, Minn.: West Publishing, 1968), p. 17, “abet”.

Business Guide To Consumer Protection, online: Ministry of Government and Consumer Services

website <<http://www.sse.gov.on.ca/mcs/en/Pages/business_guide.aspx>>, “direct agreements”.

Drinkwalter, W.D. and Ewart, J.D. Ontario Provincial Offences Procedure (Toronto, Canada: The

Carswell Company Limited, 1980).

Halsbury’s Laws of Canada, First edition (Markham, Ont.: Lexis Nexis Canada, 2011) at p.

HCP 5.

McNaughton, E. L. and Sabet, P. A Guide to the Ontario Consumer Protection Act, 2008 edition

(Markham, Ont: LexisNexis, 2007).

Sullivan, R. Statutory Interpretation (Toronto, Ontario: Irwin Law Inc., 1997).

Waddams, S.M. The Law of Contracts, Fourth Edition (Toronto: Canada Law Book Inc., 1999).

Exhibits Entered: 37 exhibits were entered.

v

Table of Contents

Page No.

1. INTRODUCTION

(A) Position Of The Parties.

2. THE CHARGES

(A) Categories Of Charges.

3. BACKGROUND

(A) Summary of the proceedings.

(B) The Defendants.

(1) The defendant Ivan Valovic,

(2) The corporate defendant Ivan’s Electric Ltd.

(3) The defendant Peter Valovic.

(4) The corporate defendant Insight Electric Inc.

(C) The Consumers Who Filed Complaints Against The Defendants.

(D) The Nature Of The Consumers’ Complaints To The Ministry Of Government

And Consumer Services.

(E) How Are The Defendants’ Fees or Prices For Their Electrical Services

Determined?

(F) Fees That The Electrical Safety Authority Charges For Electrical Inspections

Are Passed Onto The Consumer.

(G) Ivan Valovic’s Master Electrician’s Licence Had Lapsed On June 18, 2010,

And Would Not Be Renewed By The ESA Unless He Rewrote and Passed

The Master Electrician Examination.

(H) Ivan’s Electric Ltd. Could Not Operate As An Electrical Contractor Without A

Licenced Master Electrician.

(I) After ESA Informs Ivan Valovic On April 16, 2012, That Ivan's Electric Ltd.

Had To Immediately Stop Operating, Ivan Valovic Goes To Work For His

Son’s Company, Insight Electric Ltd.

(J) Ivan Valovic And Ivan’s Electric Ltd. Began Passing On Jobs To Insight

Electric Ltd. After The ESA Informed Ivan Valovic That Ivan's Electric Ltd. Had

To Immediately Stop Operating.

(K) Which of the 11 Consumers Had Entered Into Agreements With The

Defendants After April 16, 2012, The Date When Ivan Valovic Had Been

Informed By The ESA That Ivan's Electric Ltd. Had to Immediately Stop

Operating?

(L) Ivan Valovic Continued To Use The Ivan's Electric Ltd. Red Van At

Consumers’ Homes After ESA Had Told Ivan Valovic on April 16, 2012, To

Immediately Stop Operating Ivan's Electric Ltd.

(M) The ESA Revokes Ivan's Electric Ltd.’s Electrical Contractor’s Licence On

March 14, 2013, Due To Safety Concerns.

4. ANALYSIS AND DECISION

vi

(A) SHOULD THE CROWN’S APPLICATION UNDER S. 34 OF THE P.O.A.

TO AMEND THE STATUTORY PROVISION FOR THE OFFENCE FROM

116(1)(b)(vii) to 116(1)(b)(ii) ON 6 PARTICULAR COUNTS (TOTALLING

20 CHARGES) BE GRANTED?

(1) Can the amendments be made to the 6 counts set out in two of the three

informations during the defendants’ closing arguments stage of the trial?

(2) Discussion of the s. 34(4) factors.

(a) Has Any Evidence Been Adduced At Trial?

(b) What Are The Circumstances In This Case?

(c) Has The Variance, Error, Or Omission Misled Or Prejudiced The

Defendants?

(i) Is there “presumed prejudice” to the defendants just because

the application for the proposed amendment had been

brought by the prosecution at the closing arguments stage of

the trial?

(ii) Would allowing the proposed amendment of substituting one

statutory provision for another statutory provision actually

change the offence in those 6 counts to a different offence for

the defendant to defend and to make full answer and

defence?

(d) Having Regard To The Merits Of The Case, Can The Proposed

Amendments Be Done Without Injustice To The Defendants?

(3) Conclusion

(B) WERE

THE

AGREEMENTS

NEGOTIATED

BETWEEN

THE

DEFENDANTS AND THE 11 CONSUMERS “DIRECT AGREEMENTS”

WITHIN THE MEANING OF THE CONSUMER PROTECTION ACT, 2002?

(a) The definition of a “direct agreement” in the CPA 2002.

(b) Public welfare legislation is to be generously interpreted in a

manner that is in keeping with the purposes and objectives of the

legislative scheme

(i) What is the legislative goal of the CPA 2002?

(ii) There has been a paradigm shift in the merchant-consumer

relationship brought about by consumer protection legislation

that changes the relationship that had been based on the

maxim “caveat emptor” -- let the buyer be aware, to a

relationship now based on the maxim “caveat venditor” -- let

the supplier be aware.

(iii) Should direct agreements only be interpreted narrowly so as

to apply to only door-to-door sales and not to situations where

a consumer calls an electrician to attend at the consumer’s

residence for a service call?

(c)

Academic writers in defining a direct agreement have only

provided examples of “direct agreements” which include

transactions related to door-to-door sales.

(d) Bill 59 makes reference to the “direct agreement” provisions in the

Consumer Protection Act, 2002, applying to situations or

transactions where the consumer calls the supplier to attend at the

consumer’s residence.

(e) The agreements between the defendants and the 11 consumers

are “direct agreements” within the meaning of the CPA 2002.

vii

(C) IN RESPECT TO THE RULE IN BROWNE AND DUNN, DID THE

DEFENDANTS HAVE TO PUT ANY PROPOSED CONTRADICTION TO

THE CROWN WITNESSES IN CROSS-EXAMINATION BEFORE THE

DEFENDANTS COULD SUGGEST THAT THE CROWN WITNESSES HAD

NOT BEEN CREDIBLE IN THEIR CLOSING ARGUMENTS?

(1) Is the Rule In Browne And Dunn a legal principle or a rule of fairness in

Canada?

(2) Have the testimony of the consumers been credible?

(3) Have the testimony of the defendants been credible?

(D) HAS THE PROSECUTION PROVEN BEYOND A REASONABLE DOUBT

THAT THE DEFENDANTS HAVE COMMITTED THE ACTUS REUS OF

THE OFFENCES THEY HAVE BEEN RESPECTIVELY CHARGED WITH?

(1) Were Ivan Valovic and Peter Valovic party to an offence committed

by Ivan's Electric Ltd. and Insight Electric Inc.?

(2) The “Improper Contract” Charges.

(a) The Nature Or Contents Of The Defendants’ Written Direct

Agreements That Were Provided To The Consumers.

(i) Did the defendants’ agreements given to the 11 consumers

comply with the CPA 2002 and its regulations in respect to the

information that is required to be provided to consumers?

(A) What information is required to be contained in a direct

agreement?

(ii) Did the agreements or forms used by other electricians in the

industry comply with the requirements of the CPA 2002?

(iii) Did the prosecution prove the actus reus of the offence of

“failing to provide a proper agreement to a consumer” beyond a

reasonable doubt?

(3) The “Fail To Refund” Charges

(a) When Are The Defendants Obligated To Make A Refund To A

Consumer?

(i) Are the defendants legally entitled to ask a consumer for a 30%

deposit or to include a 30% cancellation fee term or condition in

the direct agreement?

(ii) If the defendants are required to make a refund to a consumer,

what is “reasonable compensation” that the defendants can

deduct from the refund amount that would have to be refunded

to the consumer?

(b) Under What Situations May

Agreement?

A

Consumer Cancel A Direct

(i) Cancelling the direct agreement during the 10-day cooling off

period.

(ii) Cancelling the direct agreement if the supplier fails to provide a

direct agreement containing the required information prescribed

under s. 42.

(iii) Cancelling the direct agreement when the supplier has engaged

in an unfair practice.

(c) Was Proper Notice By The Consumers Requesting A Refund Given

To The Defendants?

(d) Did the prosecution prove beyond a reasonable doubt the actus reus

of the offence of failing to provide a refund to a consumer within 15

days of receiving notification?

viii

(4) The “Unfair Practice” Charges

(a) What is an unfair practice within the meaning of the CPA 2002?

(b) What were the false, misleading or deceptive representations made

by the defendants to the consumers?

(c) The prosecution does not have to prove that the consumers had

relied on the defendants’ false, misleading or deceptive

representations before entering into the agreement with the

defendants in order to establish that there has been an unfair

practice.

(d) Did the prosecution prove the actus reus of the offence beyond a

reasonable doubt that the defendants respectively engaged in an

unfair practice by making false, misleading or deceptive

representations to the consumers?

(i)

Is there evidence that the defendants have grossly over-

charged the consumers so as to make it an unfair practice?

(A) Prices of what Nigel Avery, a master electrician, would

charge for his services.

(B) Opinion of Joe Peragine, an ESA inspector, on how

much an electrical job should cost.

(ii) By analogy, is the omission of informing the consumers that

they are buying a $10 hamburger instead of a $3 hamburger

an unfair practice?

(iii) Is the 30% cancellation fee imposed on the consumers in the

agreement an unfair practice?

(A) Is the 30% cancellation fee legally permitted to be a

condition in a direct agreement under the CPA 2002?

(iv)

When a consumer calls Ivan's Electric Ltd.’s telephone

number to hire an electrician and the defendants omit to

inform the consumer that Ivan's Electric Ltd. is no longer

operating and then Insight Electric Inc. arrives at the

consumer’s residence to do the job be an unfair practice?

(A) Was there anything improper about Ivan Valovic and

Ivan’s Electric Ltd. passing on jobs to Insight Electric

Inc.?

(B) Is the failure to disclose that Ivan's Electric Ltd. is no

longer operating and that Ivan's Electric Ltd. or Ivan

Valovic had passed the job to Insight Electric Inc., who

then arrives at the consumer’s residence to do the job,

a material fact that has to be disclosed to the consumer

during the initial telephone call made by the consumer

to Ivan's Electric Ltd. or Ivan Valovic to provide the

consumer a service?

(C)

Were the consumers confused about who they had

called to be their electricians when Insight Electric Inc.

appeared at the consumer’s residence instead of Ivan's

Electric Ltd. who had been called by the consumers to

provide the service?

(v) Is omitting to inform the consumer during the initial telephone

call what the defendants’ rates are for emergency service

calls or that they will charge the consumer a service charge

for attending at the consumer’s residence an unfair practice?

(vi)

Did the defendants commit an unfair practice by not

providing a detailed breakdown of the work involved and the

cost of the labour and parts in their agreements with the

ix

consumers?

(E) HAVE THE DEFENDANTS RESPECTIVELY ESTABLISHED THE

DEFENCE OF DUE DILIGENCE ON A BALANCE OF PROBABILITIES?

(1) Does having a reasonable mistake of law establish a due diligence

defence for a strict liability offence?

(2) Due diligence for the improper contract charges.

(3) Due diligence for the fail to refund charges.

(4) Due diligence for the unfair practice charges.

(5)

Due diligence for the charges against Ivan Valovic and Peter

Valovic in their capacity as directors of their respective

corporations.

(6)

Can the defendants rely on the ESA’s missteps or confusion

caused by the ESA in dealing with the renewal of Ivan Valovic’s

Master Electrician’s Licence or Ivan's Electric Ltd. electrical

contractor’s licence as a due diligence defence?

(F) DEFENDANTS’ CHARGES IN RESPECT TO EACH OF THE 11

CONSUMERS

(i) Denise Herold

(ii) Gladys Canadas

(iii) Catherine Telford

(iv) Peter Christensen

(v) Terry Bardeau

(vi) Boris Wolchak

(vii) Eva Patterson

(viii) Nigel Lundie

(ix) Sandra Castator

(x) Marjorie Riley

(xi) Zaven Tahtadjian

5. DISPOSITION

x

1.

INTRODUCTION

[1]

During the great ice storm that struck southern Ontario in late December of 2013,

hundreds of thousands of homes were left without power and electricity for many

days.¹The inclement weather had caused many downed power lines, and for the

people whose homes were without heat, the temperatures outside were frigidly cold

and below freezing. During this crisis, some politicians even publicly pleaded for

suppliers of goods and services not to gouge or take advantage of people who were

vulnerable and severely affected by the ice storm.²However, not all heeded that

request. For likely reasons of greed and profit, some did take advantage of the

misfortune of others and from the chaos caused by the ice storm to gouge their

customers and to line their pockets.

[2]

At this time, there are no “price gouging” laws in Ontario to protect consumers

during times of declared emergencies. As such, suppliers of goods and services

are not prohibited from charging any amount they wish during a natural disaster or

other emergency. However, supporters of price gouging laws argue that taking

advantage of people during a disaster or crisis by increasing prices excessively or

exorbitantly is morally wrong and that those guilty of the practice should face

criminal or quasi-criminal charges, while those opposing such laws maintain that in

circumstances when consumers are willing to pay the price asked for certain goods

or services, then the supplier cannot be blamed.

1

The Canadian Press,National PostStaff and Jake Edmiston,“'Catastrophic ice storm' slams into Toronto, strands

travellers across the province”, National Post (December 22, 2013/Last Updated: Jan 25 6:32 AM ET),

nationalpost.com website, online: <<http://news.nationalpost.com/news/canada/canada-ice-storm-travel-chaos-

power-outages-as-massive-storm-hits-ontario-quebec-and-maritimes>>:

At the peak of the storm’s impact Sunday, hundreds of thousands of households were without power —

approximately300,000 in Toronto alone. Bylate Sunday night, Toronto Hydro was still working to restore power to

254,000 customers. Southern Ontario, Quebec and the Maritimes saw as much as 30 mm of ice blanket roads

and trees, sending broken branches into power lines.

“It truly is a catastrophic ice storm that we have had here, probably one of the worst we’ve ever had,” Toronto

Hydro CEO Anthony Haines said Sunday. The worst hit parts of Toronto are the neighbourhoods near the 401,

stretching the city from Etobicoke to Scarbourough.

…

Kuhn said because temperatures were expected to remain below freezing in the wake of the storm, there would

be little melting of the ice caked on tree branches. Coupled with briskwinds the chances of branches following on

to powerlines was likely to continue.

2

Joe Warmington, “Councillor Doug Ford Accuses Tree Removal Companies Of Gouging”, Toronto Sun

(Wednesday,January 01, 2014 02:56 Pm Est/Updated: Wednesday, January 01, 2014 03:29 Pm Est), Toronto Sun

Website,

Online:

<<Http://Www.Torontosun.Com/2014/01/01/Councillor-Doug-Ford-Takes-Chainsaw-To-

Constituents-Fallen-Tree>>:

A ruthless storm sometimes churns up despicable profiteering.

Concerned that some diving into the newly-needed tree removal business are “gouging people,”

Councillor Doug Ford is urging caution.

And the councillor for Etobicoke North (Ward 2) is also strongly discouraging enterprising entrepreneurs from

taking advantage of vulnerable people.

“There are some great tree removal companies for sure but I think some of these tree guys are gouging people,”

said Ford. “After everything these people have already been through, it’s just not right.”

1

[3]

On the other hand, even during times when a declared public state of emergency or

disaster does not exist, suppliers of services and goods in Ontario may potentially

face prosecution in lesser circumstances of public crisis under the Consumer

Protection Act, 2002, S.O. 2002, c. 30, Sched. A (“CPA 2002”), for committing an

“unfair practice” under s. 15(2)(b) when they make an unconscionable

representation in which the price for goods or services would “grossly exceed” the

price at which similar goods or services are readily available to like consumers.

This is what many consumers in this regulatory prosecution contend had occurred

to them when they hired the defendants, Ivan's Electric Ltd., Ivan Valovic, Insight

Electric Inc., and Peter Valovic, as electrical contractors and electricians to attend

their residences to find and fix their electrical problems. For the most part, these

consumers had complained to the Ministry of Government and Consumer Services

that the defendants had excessively overcharged them when compared to what

other electricians would have charged them.

[4]

[5]

Coincidentally, two of the consumers who had filed complaints against the

defendants had indeed lost power to their homes as a result of that ice storm that

had occurred in late December of 2013. These two consumers had also been

adamant that they had been taken advantage of by the defendants in the

circumstances and had believed that they had excessively overpaid the defendants

to fix and restore electrical service to their homes.

For this regulatory prosecution, 12 consumers had filed complaints about the

defendants with the Ministry after the defendants had completed electrical work at

the consumers’ residences for which the defendants had been called in to do, or in

two instances when consumers had paid substantial deposits to the defendants for

future electrical work to be done by the defendants, but then subsequently cancelled

the jobs and had asked for a return of their deposits. However, these two

consumers did not receive a full refund from the defendants after they had cancelled

the jobs, which then led to them complaining to the Ministry. As well, some of the

consumers who had their electrical work completed by the defendants had also

demanded a refund after realizing or believing that they had grossly overpaid the

defendants for the work that they had hired the defendants to do. The consumers

had also complained to the Ministry about having other concerns about the

defendants, including that Ivan's Electric Ltd. or Ivan Valovic not being properly

licensed to do electrical work; that the defendants had charged them for new parts

and materials but had instead provided them with used parts or materials; that the

defendants had charged them for electrical inspections by the Electrical Safety

Authority (“ESA”) that were never carried out; that payment had been taken upfront

by the defendants and charged to their credit cards before the work had even

commenced; and that the defendants had misled the consumers about the

seriousness of the consequences or danger of the electrical problem at their

residences in order to get the job or about the availability of parts or materials.

These events and transactions between the consumers and the defendants had

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occurred during a period covering about 32 months between May 27, 2011 and

January 15, 2014.

[6]

After investigating these consumer complaints, the Ministry of Government and

Consumer Services then charged Ivan Valovic, who had been licensed as a master

electrician; Ivan Valovic’s company named “Ivan's Electric Ltd.”; Ivan Valovic’s son,

Peter Valovic, who also is a licenced master electrician; and Peter Valovic’s

company named “Insight Electric Inc.”, with committing 103 offences respectively

under the CPA 2002. In addition, Ivan Valovic, is the President and director of

Ivan's Electric Ltd. while Peter Valovic is the President and director of Insight

Electric Inc.

[7]

The 103 charges laid against the four defendants are set out in 46 counts that are

contained in three separate informations, which were sworn respectively on

February 25, 2013 (#5731), on November 4, 2013 (#8091), and on March 6, 2014

(#5740). Furthermore, these 103 charges can be grouped into the following types

of offences:

(1) there are 13 separate counts (totaling 36 charges) for the offence of

failing to deliver to a consumer a direct agreement containing the

information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42

of the CPA 2002, and, thereby committing an offence under s. 116(2) of

the CPA 2002;

(2) there are 8 separate counts (totaling 8 charges) for the offence of failing

to take reasonable care, as a director of the corporation, in preventing

the corporation from failing to deliver to a consumer a direct agreement

containing the information required by s. 35(1) of the O. Reg. 17/05,

contrary to s. 42 of the CPA 2002, and thereby committed an offence

under s. 116(3) of the CPA 2002;

(3) there are 8 separate counts (totaling 26 charges) for the offence of

failing to provide a refund to a consumer within 15 days after the date

the said consumer gave notice of cancellation, contrary to s. 96(1)(a) of

CPA 2002, thereby committing an offence under s. 116(1)(b)(viii) of

CPA 2002;

(4) there are 6 separate counts (totaling 6 charges) for the offence of failing

to take reasonable care, as a director of the corporation, in preventing

the corporation from failing to provide a refund to a consumer within 15

days after the date the said consumer gave notice of cancellation,

contrary to s. 96(1)(a) of the CPA 2002, and thereby, committed an

offence under s. 116(3) of CPA 2002;

(5) there are 7 separate counts (totaling 23 charges) for the offence of

engaging in an unfair practice by making a false, misleading or

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deceptive representation to a consumer, contrary to s. 17(1) of the CPA

2002, thereby committing an offence under s. 116(1)(b)(vii) [or

116(1)(b)(ii) if the proposed amendment is granted] of the CPA

2002; and

(6) there are 4 separate counts (totaling 4 charges) for the offence of failing

to take reasonable care to prevent the corporation, as a director of the

corporation, from engaging in an unfair practice by making a false,

misleading or deceptive representation to a consumer, contrary to s.

17(1) of the CPA 2002, thereby committing an offence under s. 116(3)

of the CPA 2002.

[8]

And, of the 12 consumers who had filed complaints against the defendants that led

to the 103 charges at bar, only 11 of the 12 consumers had appeared at trial to

provide testimony. Also, during the prosecution’s part of the trial and after it was

evident that some of the consumers had not provided any evidence in respect to

particular charges, the prosecution had asked that 14 of the 103 charges laid

against the defendants be dismissed, since there had been no evidence adduced

that the defendants had committed those specific offences. Therefore, in respect to

Information #5731, counts #5, #6, and #10 totaling 6 charges were dismissed; in

respect to Information #8091, counts #3 and #4 totaling 4 charges were dismissed;

and in respect to Information #5740, count #3 totaling 4 charges was dismissed.

[9]

As a result, only 89 charges in 40 separate counts of the original 103 charges in 46

counts remain for consideration.

(A) The Position of The Parties

[10] The prosecution contends that for the remaining 89 charges they have met their

burden in proving beyond a reasonable doubt that all the defendants have

committed their respective charges of the 89 charges and that the defendants

have failed to prove on a balance of probabilities a defence of due diligence, which

would prevent them from being convicted of committing those 89 offences.

Accordingly, the prosecution submits that for the 89 charges the defendants have

been respectively charged with committing, that they should have convictions

entered against them respectively for committing those offences.

[11] However, for the “engaging in an unfair practice” charges the prosecution is not

relying on the consumers’ complaints and testimony that the defendants had

“excessively overcharged” for their work and services as the basis for committing

that offence, but contends that the defendants had still engaged in unfair practices

in other ways towards the consumers. The prosecution submits that the defendants

had engaged in the following false, misleading, or deceptive representations in

respect to the 11 consumers:

(1) by including a 30% cancellation fee term in the written agreements with

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the consumers, which the prosecution submits is not legally

permissible in a “direct agreement” under the CPA 2002;

(2) by also taking a 30% deposit from a consumer and then when the

consumer cancels the direct agreement to refuse to provide a refund

and keep the deposit as the 30% cancellation fee;

(3) by also promising to give the consumers a one-year warranty on parts

and labour, but then did not include that promised guarantee in the

written agreements entered into with the consumers;

(4) by also not informing particular consumers who called Ivan's Electric

Ltd. or Ivan Valovic for service that Ivan's Electric Ltd. was no longer

operating and that Insight Electric Inc. would be attending to do the

work;

(5) by also informing the consumer, who had originally called Ivan's

Electric Ltd. to do the job, that Insight Electric Inc. was doing the work

when the defendants arrived at the consumer’s residence, but that the

defendants’ van that would appear at the consumer’s residence would

have the business name, the logo, and the telephone numbers of

Ivan's Electric Ltd;

(6) by also informing the consumer, who had originally called Ivan's

Electric Ltd. to do the job, that Insight Electric Inc. was doing the work

when the defendants arrived at the consumer’s residence, but then the

consumer would be given direct agreements, proposals, or written

agreements, business cards, and stickers that would contain the name,

logo, telephone numbers, and electrical contractor’s licence number for

Ivan's Electric Ltd.;

(7) by also informing the consumer, who had originally called Ivan's

Electric Ltd. to do the job, that that Insight Electric Inc. was doing the

work when the defendants arrived at the consumer’s residence, but

then charging the consumer’s credit card to Ivan's Electric Ltd.’s

account;

(8) by also not telling the consumer who had called Ivan's Electric Ltd. for

service that the consumers would be charged a $180 service call

charge or a $360 emergency service call charge just for the

defendants to drive to the consumer’s home, or to inform the consumer

that their emergency, after-hours, holidays, and week-end rates are

double the regular rate of $180 an hour for each electrician that

attends the consumer’s house; and

(9) by also displaying or providing the electrical contractor’s licence

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number for Ivan's Electric Ltd. to the consumer when the electrical

contractor’s licence for Ivan's Electric Ltd. had been revoked by the

ESA.

[12] Now, in defending against these remaining 89 charges in the 40 separate counts,

the defendants have made three distinct arguments for why they should not be

found guilty beyond a reasonable doubt or be convicted of committing the remaining

89 charges.

[13] First of all, the defendants submit that for 20 of the remaining 89 charges set out in

6 separate counts that pertain to the offences in respect of “engaging in an unfair

practice by making a false, misleading or deceptive representation to a consumer”,

the defendants contend that the prosecution has not adduced any evidence in

respect to committing the offence set out in s. 116(1)(b)(vii) in respect to matters of

“leasing” prescribed under ss. 88 and 89(1) of Part VIII of the CPA 2002. However,

when this argument was made by the defendants during their closing argument, the

prosecution immediately brought an application under s. 34 of the Provincial

Offences Act, R.S.O. 1990, c. P.33 (“P.O.A.”), seeking an order to amend the

statutory provision from “section 116(1)(b)(vii)” that is stated in those 6 counts

pertaining to those 20 charges (which refers to matters of “leasing” in respect to ss.

88 and 89(1) of Part VIII of the CPA 2002), to the statutory provision of “section

116(1)(b)(ii)”, which the prosecution submits properly describes offences in respect

to “unfair practices” mentioned under s. 17(1) of Part III of the CPA 2002, so as to

coincide with the evidence adduced at trial in respect to offences committed by the

defendants related to “engaging in unfair practices by making false, misleading, or

deceptive representations”. The defendants objected to the application to amend

the statutory provision for those 6 counts, arguing that it would prejudice the

defendants since the proposed amendment would create a new offence and it

would be unjust to grant the amendment since the limitation period for laying the

charge has already expired.

[14] Ergo, if the prosecution’s application under s. 34 of the P.O.A. is not granted to

amend those 6 counts pertaining to those 20 charges from “section 116(1)(b)(vii)” to

“section 116(1)(b)(ii)”, then acquittals will have to be necessarily entered for the

defendants on those 6 specific counts, since there has been no evidence adduced

by the prosecution in the trial about matters of “leasing” in respect to ss. 88 and

89(1) of Part VIII of the CPA 2002 in respect to any of the consumers.

[15] For their second argument, the defendants submit that in deciding whether 62 of the

remaining 89 charges that are set out in 29 separate counts have been respectively

committed by the defendants beyond a reasonable doubt, it will necessarily be

contingent on whether the agreements entered into between the 11 consumers and

the defendants are “direct agreements” within the meaning of the CPA 2002. Those

62 charges are for the offences in respect to the 42 charges associated with the

offences of “failing to deliver to a consumer a direct agreement containing the

information required by s. 35(1)” of the O. Reg. 17/05, which is contrary to s. 42 of

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the CPA 2002 and for the 20 charges associated with the offences of “failing to

provide a refund to a consumer within 15 days after the date the said consumer

gave notice of cancellation” which is contrary to s. 96(1)(a) of the CPA 2002.

[16] For their argument that the agreements with the 11 consumers are not “direct

agreements”, the defendants contend that the “direct agreement” provisions of the

CPA 2002, such as the 10-day cooling-off period to cancel an agreement, are not

meant to apply to situations, such as here, where a consumer calls an electrician or

a plumber, for example, to attend at the consumer’s house for a service call.

Instead, the defendants contend that the “direct agreement” provisions of the CPA

2002 are only meant to apply to door-to-door salespersons who arrive at a

consumer’s house unexpectedly, and then solicits, pressures, or convinces the

consumer to enter into a contract to purchase a good or a service such as a water

heater or a vacuum cleaner or lawn-cutting service. Moreover, the defendants also

contend that they themselves had reasonably believed that their agreements with

consumers were not direct agreements for the purposes of the CPA 2002 based on

their lawyer having had advised them that their agreements with consumers for

electrical work were not “direct agreements”, since the defendants had not solicited

the consumer as door-to-door salespeople, but had been instead solicited by the

consumer to attend the consumer’s house to provide goods and services.

Furthermore, the defendants also contend that the Review Panel of the Electrical

Safety Authority (“the ESA”), the governing body of electrical contractors and master

electricians in Ontario, had in a hearing involving the defendants had found logic in

their lawyer’s argument that direct agreements do not apply to situations in which a

consumer calls an electrician to attend at the consumer’s house to provide their

services.

[17] On the other hand, the prosecution refutes the defendant’s argument that the

defendants’ agreements with consumers are not direct agreements and submits that

the definition of a “direct agreement” under s. 20(1) of the CPA 2002, which defines

a direct agreement as “a consumer agreement that is negotiated or concluded in

person at a place other than, at the supplier’s place of business, or at a market

place, an auction, trade fair, agricultural fair or exhibition”, is to be interpreted

broadly so that it would include the situation where a consumer calls a supplier to

attend at the consumer’s house to provide goods and services, and therefore, would

make the defendants’ agreements direct agreements, since the agreements

between the defendants and the consumers in this proceeding had not been signed

at the supplier’s place of business or at a trade show.

[18] Consequently, if the agreements between the consumers and the defendants are

not found to be “direct agreements” within the meaning of the CPA 2002, then the

provisions in the CPA 2002 and its regulations governing direct agreements, such

as the requirement to provide specific information in the agreement that is provided

to the consumer; the 10-day cooling off period which permits a consumer to cancel

the agreement for any reason during that 10-day period or the consumer’s right to

cancel the agreement within one year of signing the agreement if the agreement

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does not contain the required information; and the obligation of the supplier to

provide a refund to the consumer any payment made under the agreement within 15

days of being notified the agreement has been cancelled, would not apply to those

particular agreements with the 11 consumers, and acquittals will also necessarily

have to be entered for the respective defendants for those particular 62 charges

associated with the offences of “failing to provide a proper agreement to a

consumer” and the offences of “failing to provide a refund to a consumer within 15

days of being notified of the cancellation”.

[19] And, for their third argument for the dismissal of the remaining 89 charges, the

defendants argue in the alternative, that if the prosecution’s application to amend

the statutory provision in those 6 counts pertaining to those 20 charges from

“section 116(1)(b)(vii)” to “section 116(1)(b)(ii)” is granted and if the agreements

entered into between the 11 consumers and the defendants are found to be “direct

agreements” within the meaning of the of the CPA 2002 in respect to the 29 counts

containing 62 charges, and the prosecution has proven beyond a reasonable doubt

the actus reus of the offences for the remaining 89 charges, then the defendants

contend that they have nevertheless proven on a balance of probabilities that they

had acted with due diligence and had taken all reasonable care or steps in

preventing or avoiding committing those remaining 89 charges.

[20] Furthermore, the trial of the 103 charges had commenced on October 9, 2014, and

finally concluded on November 2, 2016. The trial had taken 22 separate trial days

to complete and had involved the testimony of 15 witnesses. Thirteen of the 15

witnesses had testified for the prosecution, while two witnesses, the defendants,

Ivan Valovic and Peter Valovic, had testified for the defence.

[21] After closing arguments and submissions were heard on October 27 and November

2, 2016, judgment was reserved and adjourned to April 4, 2017, for judgment.

These therefore are the written reasons for judgment:

2.

THE CHARGES

[22] The defendants, Ivan Valovic, Ivan's Electric Ltd., Peter Valovic, and Insight Electric

Inc., have been jointly or individually charged with committing 103 offences set out

in 46 counts in three separate informations under the CPA 2002 or under its

regulations.

(A) Categories Of Charges

[23] The 103 charges that were laid respectively against the defendants can be

categorized into three general categories. They may referred to as:

(1) the “improper contract” offences ;

(2) the “fail to provide a refund” offences; and

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(3) the “unfair practices” offences.

[24] But more particularly, the four defendants, Ivan Valovic, Ivan's Electric Ltd., Peter

Valovic, and Insight Electric Inc., have been charged respectively with committing

these three categories of offences in respect to particular consumers, which are the

following:

(1) failing to deliver to a consumer a direct agreement containing the

information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42

of the CPA 2002, and thereby committing an offence under s. 116(2) of

the CPA 2002.

(2) failing to provide a refund to a consumer within 15 days after the date

the said consumer gave notice of cancellation, contrary to s. 96(1)(a)

of the CPA 2002, and thereby committing an offence under s.

116(1)(b)(viii) of the CPA 2002.

(3) engaging in an unfair practice by making a false, misleading or

deceptive representation to a consumer, contrary to s. 17(1) of the

CPA 2002, and thereby committing offence under s. 116(1)(b)(ii) of the

CPA 2002.

[25] However, for the “engaging in an unfair practice by making a false, misleading or

deceptive representation” charges, there had been 7 counts of these charges set

out in the 3 informations, in which the prosecution has brought an application to

amend the statutory provision of the offence set out in 6 of the 7 counts from the

statutory provision of “section 116(1)(b)(vii)” to the statutory provision of “section

116(1)(b)(ii)”. For the 7^thcount, the prosecution did not seek it to be amended,

since the statutory provision already states “section 116(1)(b)(ii)”.

[26] In addition, the defendants, Ivan Valovic and Peter Valovic, were charged in their

roles or capacity as directors of their respective corporations for failing to prevent

the corporate defendants, Ivan's Electric Ltd. and Insight Electric Inc., from

committing two particular categories of offence in relation to particular consumers.

Ivan Valovic was charged as a director of Ivan's Electric Ltd. and Peter Valovic was

charged as a director of Insight Electric Inc., for failing to prevent their respective

corporate defendants from committing the offences of:

(1) failing to take reasonable care to prevent the corporation from failing to

deliver to a consumer a direct agreement containing the information

required by s. 35(1) of O. Reg. 17/05, contrary to s. 42 of the CPA

2002, and thereby committed an offence under s. 116(3) of the CPA

2002;

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(2) failing to take reasonable care to prevent the corporation from failing to

refund a consumer within 15 days after the date the said consumer

gave notice of cancellation, contrary to s. 96(1)(a) of the CPA 2002,

and thereby, committed an offence under s. 116(3) of the CPA 2002.

[27] Additionally, the defendant, Peter Valovic, has been charged in his role or capacity

as a director of Insight Electric Inc. for committing a third type of offence, namely:

(3) failing to take reasonable care to prevent the corporation from

engaging in an unfair practice by making a false, misleading or

deceptive representation to a consumer, contrary to s. 17(1) of the

CPA 2002, and thereby, committed an offence contrary to s. 116(3) of

the CPA 2002.

3.

BACKGROUND

[28] Ivan Valovic and Peter Valovic are licenced journeyman electricians. Ivan Valovic is

the father of Peter Valovic. Before becoming a licenced electrician, Peter Valovic

apprenticed with his father and then worked for his father’s company as an

electrician until he decided to start his own company. Both were also licensed by

the Electrical Safety Authority (“ESA”) as master electricians. However, Ivan

Valovic’s master electrician’s licence lapsed on June 18, 2010, and would not be

renewed by the ESA unless Ivan Valovic rewrote and passed the master electrician

examination. Peter Valovic is still licenced as a master electrician by the ESA.

They both had run their businesses as electricians through corporate entities. Ivan

Valovic ran his electrician business through Ivan’s Electric Ltd. and is the

owner/principal shareholder and one of the two directors of that corporation. Peter

Valovic started his own company on February 24, 2010, and runs his electrician

business through Insight Electric Inc. where he is the owner/principal shareholder

and sole director of the corporation. Both are companies incorporated in Ontario.

Both corporations are still active, although Ivan's Electric Ltd. had its residential

electrical contractor’s licence revoked by the ESA on March 14, 2013. Insight

Electric Inc. still has its residential electrical contractor’s licence.

[29] The defendants provide electrical installation and repair services to mainly

residential customers and do not generally bid for electrical work for commercial

projects. The defendants also provide emergency after-hours services, but charge

a much higher hourly rate or premium for their services, usually double their regular

rate of $180 an hour. In addition, the defendants charge consumers a service call

charge of $180 just to appear at the consumer’s house and a minimum of one hour

labour at $180 for working in the consumer’s house, such as troubleshooting the

electrical problem at the consumer’s residence. In other words, the defendants

hourly rate for after hours, statutory holidays, weekends, or for emergency work is

charged to the consumer at the rate of $360 per electrician for making the service

call and an additional $360 for trouble-shooting the electrical problem before any

repairs or electrical work or installation is commenced.

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[30] To legally operate as an electrical contractor in Ontario, an electrical contractor’s

licence has to be issued to that electrical contracting business by the ESA. And, in

order to obtain that electrical contractor’s licence, the electrical contracting business

must have a designated licenced master electrician to supervise and be responsible

for the electrical work. Furthermore, all licensed electricians who wish to obtain a

master electrician’s licence for carrying out electrical work on behalf of an electrical

contractor are also governed by the ESA, a body authorized by the Ontario

Government to regulate, licence, and govern master electricians and electrical

contractors in Ontario. The ESA was granted administrative authority under the

Safety and Consumer Statutes Administration Act, 1996, S.O. 1996, c. 19 and the

Electricity Act, 1998, S.O. 1998, c. 15, Sched. A, and by s. 1 of the Electrical Safety

Authority Regulation, O. Reg. 89/99 (Electricity Act, 1998), after the ESA entered

into an agreement dated March 11, 1999 with the Ontario government. The ESA

commenced its mandate on April 1, 1999. Its present authority is also governed by

provisions set out the General Regulation enacted under the Safety and Consumer

Statutes Administration Act, 1996, O. Reg. 187/09.

[31] When the trial commenced on October 9, 2014, there were 48 individual counts in

the three separate informations, containing 103 charges altogether. Initially, the

defendants were charged individually with committing the following number of

offences under the CPA 2002 or its regulations:

(1) Ivan Valovic was charged with committing 30 offences,

(2) Ivan's Electric Ltd. was charged with committing 30 offences,

(3) Peter Valovic was charged with committing 21 offences, and

(4) Insight Electric Inc. was charged with committing 22 offences.

(A) Summary Of The Proceedings

[32] Information #5731 which contained 15 counts (27 charges) was sworn on

February 25, 2013. Information #8091 which contained 28 counts (56 charges)

was sworn on November 4, 2013. And, Information #5740 which contained 5

counts (20 charges) was sworn on March 6, 2014.

[33] The trial of the 103 charges commenced on October 9, 2014, and after 22

separate trial dates concluded on November 2, 2016. Before arraignment, the

prosecution sought to have amendments made to the three informations. The

defendants consented to those amendments being made on the informations.

Moreover, additional amendments on consent were also subsequently made to the

informations. Altogether, about 15 amendments had been made and consented to

by the defendants.

[34] There had been 15 witnesses who had testified in the trial. Thirteen of the 15

witnesses were called by the prosecution. Eleven of the 13 prosecution witnesses

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were the consumers who had entered into agreements with the defendants for

electrical work at the consumers’ residences. The prosecution had also called one

witness who was an electrician and who had provided a cost estimate for electrical

work to be done for the consumer where the defendants had already completed

the electrical work. In addition, the prosecution also called an inspector with the

ESA who had informed one of the consumers that the electrical work completed by

the defendants could have been done at a much lower price. In addition, both the

defendants, Ivan Valovic and Peter Valovic, had testified at the trial in their own

defence.

[35] At the commencement of the trial there had been 12 consumers who had made

complaints to the Ministry of Government and Consumer Services and who had

either had worked done by the defendants or who had entered into an agreement

to have future electrical work done by the defendants. However, only 11 of the

complainants appeared and testified at the trial.

[36] In addition, during the prosecution’s case, the prosecution had invited the dismissal

of 14 of the 103 charges, as there had been no evidence adduced during the

prosecution’s case in respect to those 14 charges. As such, those 14 charges

contained in 6 separate counts were then dismissed and recorded as acquittals.

(B) The Defendants

(1) The defendant Ivan Valovic

[37] The defendant, Ivan Valovic, had been 64 to 66 years old during the period that

covers the 11 consumers’ dealings with the defendants between May 27, 2011

and January 15, 2014. He had emigrated to Canada in 1968 after escaping from

Czechoslovakia. In Czechoslovakia, he had trained to be an electrical mechanic

and received his licence in 1965. In Canada, he was able to pass his electrician’s

exams in 1975. He then obtained a master electrician’s licence in 1978. To obtain

a master electrician’s licence, he said he took courses and passed exams. He

then opened his Ivan's Electric company first as a sole proprietorship and then

incorporated the company as Ivan's Electric Limited in 1979. He also took

advance estimating courses from George Brown College.

[38] Ivan Valovic had initially worked as an electrician for the Etobicoke General

Hospital, but eventually opened a sole proprietorship business in 1975 and

eventually incorporated that business in 1979. His company took on both

commercial and industrial jobs. His company also employed 12 to 14 electricians

on some projects during the 1980s, until a recession occurred at the end of the

1980s and the business climate changed in Canada when he had to downsize his

business and lay off his employees. He also indicated that the North American

Free Trade Agreement had caused this change in his business, as many

manufacturing companies had moved their businesses south of the border. He

then decided to switch his company’s focus and decided that it would specialize in

12

residential electrical work and in providing 24-hour emergency services where he

would be available at all times of the day, as well as being available on weekends

and on holidays. To obtain work and customers, he bought large ads in the Yellow

Pages advertising that his company provided 24-hour emergency services. Ivan's

Electric Ltd. became one of the largest advertisers of electrical services in the

Yellow Pages. In addition, Ivan's Electric Ltd. through his daughter’s urging and

assistance, also began an internet advertising campaign with the Yellow Pages.

[39] Ivan Valovic further contends that many of the consumer complaints had been the

result of misinformation that the consumers had received about him not being a

licenced electrician. Ivan Valovic testified that at all material times and when he

had dealt with and done electrical work for the 11 consumers he had always been

a licensed electrician. However, since Ivan Valovic’s master electrician’s licence

had lapsed or expired on June 18, 2010, the ESA would not renew Ivan Valovic’s

master electrician’s licence until he rewrote and passed the master electrician

examination. Even though his master electrician’s licence had expired, Ivan

Valovic could still do work as a licenced electrician.

[40] Subsequently, consumers started to complain to the ESA about their dealings with

him and his company, Ivan's Electric Ltd. Ivan Valovic also testified that in his 30

some years as an electrician he had only received 3 or 4 complaints.

[41] Ivan Valovic also testified that he is not computer literate and does not use a

computer in his business and generally writes out everything that he provides to

his customers.

(2) The corporate defendant, Ivan’s Electric Ltd.

[42] The corporate defendant, Ivan’s Electric Limited was incorporated as an Ontario

corporation on June 18, 1979. Its registered office address is 44 Pearson Road in

Brampton, Ontario. It is also the corporation’s principal place of business. Ivan

Valovic said he is a shareholder in Ivan’s Electric Ltd. and has 55% of the

corporation’s shares while his wife has 45% of the corporation’s shares. He is also

listed as one of its two directors and its President and Secretary, since its

inception.

[43] In addition, Ivan’s Electric Limited had been licensed by the ESA as a residential

electrical contractor until it’s electrical contractor’s licence had been revoked by

the ESA on March 14, 2013, due to it not having a licenced master electrician,

since Ivan Valovic’s master electrician’s licence had lapsed on June 18, 2010.

[44] In addition, Ivan Valovic testified that Ivan's Electric Ltd. still exists but is now

dormant since the ESA had revoked its residential electrical contractor’s licence.

(3) The defendant Peter Valovic

13

[45] The defendant, Peter Valovic, was 30 to 32 years old during the period that covers

the 11 consumers’ dealings with the defendants between May 27, 2011 and

January 15, 2014. He is the son of Ivan Valovic and had apprenticed as an

electrician under his father. To become a licenced electrician in Ontario, he

started his apprenticeship with his father’s company, Ivan's Electric Ltd. After

completing his five-year apprenticeship and writing the licensing exams, Peter

Valovic received his electrician’s licence in 2005. He then took further courses for

a master electrician’s licence, wrote the requisite licensing exams, and received

his master electrician’s licence in 2008. He also said he had received some

instruction in his master electrician course on the Consumer Protection Act, 2002.

[46] After becoming a licenced electrician in 2005, Peter Valovic had continued working

for his father’s company until he started his own electrical contractor’s business,

named Insight Electric Inc., on February 24, 2010. However, after Ivan Valovic’s

master electrician’s licence had elapsed and after Ivan Valovic had been informed

by someone from the ESA that Ivan's Electric Ltd. had to immediately stop

operating on April 16, 2012, Ivan Valovic and Ivan's Electric Ltd. began passing

jobs to Peter Valovic’s company, Insight Electric Inc. and Ivan Valovic went to work

for Insight Electric Inc. sometime after April 16, 2012.

[47] Peter Valovic also testified that he participates in chat rooms for electricians and

discusses issues that arise in the industry. He also testified that he had adopted to

use the same forms in running his business that had been used by his father,

since he said that his father’s forms were the best of the forms from what forms

that he had observed that other electricians would use in their electrician

businesses.

(4) The corporate defendant Insight Electric Inc.

[48] The corporate defendant, Insight Electric Inc., was incorporated as an Ontario

corporation on February 24, 2010. Its registered corporate address is 44 Pearson

Road, in Brampton, Ontario. However, its principal place of business is presently

at 22 Mercer Drive in Brampton, Ontario.

Peter Valovic is the principal

shareholder of Insight Electric Inc. He is also listed as its sole director and its

President and Secretary since the corporation’s inception on February 24, 2010.

(C) The Consumers Who Filed Complaints Against The Defendants

[49] Eleven of the twelve consumers who had made complaints against the defendants

testified at the trial about their respective dealings with the defendants. The 11

consumers who testified in the trial are the following, with the date or the range of

the dates covering the period of when the alleged offences had occurred in respect

to that consumer:

(1) Denise Herold, from June 12, 2011 to June 29, 2011.

14

(2) Gladys Canadas, from September 19, 2011 to October 12, 2011.

(3) Catherine Telford, from December 8, 2011 to January 6, 2012.

(4) Peter Christensen, from June 1, 2012 to October 14, 2012.

(5) Terry Bardeau, on or about December 16, 2012.

(6) Boris Wolchak, from December 21, 2012 to February 8, 2013.

(7) Sandra Castator, from January 14, 2013 to February 15, 2013.

(8) Marjorie Riley, from January 31, 2013 to February 26, 2013.

(9) Zaven Tahtadjian, from April 16, 2013 to May 3, 2013.

(10) Eva Patterson, from December 26, 2013 to January 15, 2014 (as a

result of the ice storm).

(11) Nigel Lundie, on or about December 27, 2013 (as a result of the ice

storm).

[50] A 12^thcomplainant, Anthony Collin, did not appear in court to testify and the 4

charges in respect to that consumer set out in counts #5 and #6 in Information

#5731 were then dismissed.

[51] Ergo, the dealings and transactions between the 11 consumers and the

defendants and the alleged offences had occurred between June 12, 2011 and

January 15, 2014.

[52] Furthermore, Ivan Valovic’s master electrician’s licence had expired on June 18,

2010, while Ivan's Electric Ltd. electrical contractor’s licence had been revoked by

the ESA as of March 14, 2013.

[53] Moreover, the electrical work contracted to be done between the 11 consumers

and the defendants had been completed for 9 of the 11 consumers, while for two

of the consumers, Denise Herold and Boris Wolchak, they had entered into an

agreement for electrical work to be done in the future, but had not been completed

since the two consumers had notified the defendants that they were cancelling the

contracted work with the defendants and had demanded the return of the deposits

that they had paid to the defendants. As part of their agreements with the

defendants, Herold and Wolchak had paid deposits to the defendants of

approximately 30% of the value of the contracted electrical work to be done by the

defendants, but did not receive any refund of their deposits from the defendants for

a long period of time after the consumers had asked the defendants for a refund of

15

their deposits.

Eventually, the defendants provided refunds to those two

consumers, but not for the full amount that the two consumers had paid to the

defendants.

(D)

The Nature Of The Consumers’ Complaints to the Ministry of

Government and Consumer Services

[54] For these 11 consumers, they had filed complaints with the Ministry of

Government and Consumer Services because they had for the most part believed

that the defendants had excessively overcharged them as compared to what other

electricians would have charged and that some of them had demanded that the

defendants return back part of the consumer’s payment that had been paid to the

defendants. As well, some of the other complaints about the defendants that were

made to the Ministry included the belief that Ivan Valovic was not a licenced

electrician; that the defendants had failed to refund to some of the consumers the

deposits that had been paid to the defendants for agreed upon electrical work after

the work had been cancelled by the consumers and a request had been made to

the defendants for the return of their deposits; that the defendants had installed

used parts or materials when the defendants had charged the consumers for new

parts or materials; and that the defendants had exaggerated the seriousness of the

electrical problem and the consequences of the hazard and danger to the

consumer so that the defendants would be hired to do the work.

(E) How Are The Defendants’ Fees Or Prices For Their Electrical Services

Determined?

[55] Ivan Valovic testified that in order to survive competitively as an electrical

contractor, the fees or prices he would charge consumers would have to take into

account his advertising costs, his insurance, his costs to run his van, and the

expenses associated with running his electrical contractor’s business, otherwise

his business would not survive. He also said that his prices could not be too high

or he would not get any jobs.

[56] Furthermore, he said he calculates into his proposals his travel time to and back

for the job, the number of persons and hours required to do the job, the cost of

minor parts, the cost of ESA inspections, and the cost of wiring and other supplies

in his proposal. He also said he charges the consumers a flat fee and does not

charge more if it takes longer to do the job or if the ESA inspection fee is more

than he had estimated.

[57] Ivan Valovic also said that he does not list every screw or small part on his

proposals because it would take too long to write up and that he would then have

to charge that extra time to the consumer to prepare a full parts list on his proposal

provided to the consumer.

16

[58] However, for unforeseen problems that arise and require additional work and

materials that the original agreement did not account for, then Ivan Valovic said

that he would inform the consumer about the need to do this additional work, or to

get additional parts or materials, and then prepare a second or even a third

proposal and present it to the consumer to accept or reject.

[59] The defendants also contend that their pricing scheme is not unlike the pricing

scheme utilized by the ESA and the fees that the ESA charges for electrical

inspections. In particular, the ESA charges more for inspections conducted during

holidays, weekends, and for after hours, as well as for same day and for

emergency service, that is not unlike how the defendants would charge higher

rates for work that is required to be done outside the normal working hours from

Monday to Friday. And, for after hours, statutory holidays, weekends, or for

emergency work, the defendants said they would charge double their normal

hourly rate. In addition, when a consumer informs the defendants that it is

emergency work that requires the defendants to attend right away, then the

emergency rate would apply even if it occurs during regular or normal working

hours from Monday to Friday, since the defendants would have to drop everything

to accommodate the consumer’s emergency. Moreover, the defendants would

charge a consumer the emergency rate if the consumer says it is an emergency or

when the work is required to be done after hours, or on holidays, or on weekends.

[60] For example, the defendants would charge double their normal rates of $180 an

hour for each electrician for emergency work and for work to be done on holidays,

after hours, and on weekends. So for emergency work, the defendants would

charge the consumer $360 per hour.

[61] In addition, the defendants charge the consumer a service call charge of $180 just

for the defendants to appear at the consumer’s house, which the defendants

explain covers the time and gas to drive to a consumer’s house, since the

defendants service the Greater Toronto Area and it could take an hour in rush hour

traffic to get to the consumer’s house as well as the time to get back home, which

also includes using a tank of gas to go there and back. Then after arriving at the

consumer’s dwelling, the defendants said that they would charge the consumer a

minimum of 1 hour to do any type of work at the consumer’s house. Hence, to just

troubleshoot and prepare a “proposal” for the projected work to be provided to the

consumer, the defendants would charge the consumer $360, which would

comprise $180 for the service call charge and another $180 for troubleshooting the

problem.

(F)

Fees That The Electrical Safety Authority Charges For Electrical

Inspections Are Passed Onto The Consumer.

[62] The defendants contend that the fees for ESA inspections are not unlike what the

defendants would charge a consumer for an emergency or for working after-hours,

or on holidays and weekends. In addition, all electricians when preparing quotes

17

or estimates have to include these ESA inspections fees in calculating what it

would cost the consumer to do the job. For example, from the ESA Fee Schedule

located at pp. 76 to 106 in the Joint Book of Documents, s. 2.11 of the Fee

Schedule indicates that the ESA charge for a “scheduled” inspection that would

have to be done outside the normal working hours from Monday to Friday, would

be a fee of $199 per hour or fraction thereof (at a minimum of 2 hours) up to a

maximum of $597 (for the first 4 hours) plus $149 per hour or fraction thereof in

addition to the fee payable for the inspection service.

However, for an

“unscheduled” inspection outside normal working hours, the ESA charges $597 for

the first 4 hours plus $149 per hour or fraction thereof in addition to the fee

payable for the inspection service.

Therefore, if an emergency inspection

(unscheduled) is required after-hours, then the ESA inspection fee would be $597

(not including HST) in addition to the fee payable for the inspection service, even if

the inspection only took 10 to 15 minutes.

[63] An example of that $597 fee that had been charged for an emergency

unscheduled ESA inspection can be seen in what the ESA had actually charged

Insight Electric Inc. in respect to electrical work done for the consumer, Zaven

Tahtadjian, where the electrical inspection had been conducted by ESA inspector

Joe Peragine in the evening of April 16, 2013, at about 9:30 p.m. which had only

lasted about 15 to 20 minutes (see p. 144 of the Joint Book of Documents).

(G) Ivan Valovic’s Master Electrician’s Licence Had Lapsed On June 18,

2010, And Would Not Be Renewed By The ESA Unless He Rewrote And

Passed The Master Electrician Examination.

[64] To renew his master electrician’s licence, Ivan Valovic said he had been informed

by the ESA to submit a completed form and the annual fees to the ESA. However,

Ivan Valovic said that he could only submit the renewal form if the ESA actually

sent him the renewal form. However, Ivan Valovic contends that the ESA had

failed to send him the renewal forms prior to his master electrician’s licence

expiring, despite his many telephone calls and efforts to obtain the renewal forms

or to have the ESA sent him the renewal forms.

[65] Furthermore, Ivan Valovic said that his master electrician’s licence had been due

to expire on June 18, 2010. He also said that the master electrician’s licence

could be renewed every two years or renewed annually. He also said that usually

the ESA would send out the renewal application forms in April or May, two months

prior to his master electrician’s licence expiring. However, he said that since he

had not received the application forms for renewing his master electrician’s

licence, he had called the ESA licensing department on June 16 or 17, 2010, and

left a message inquiring about obtaining the application forms for renewing his

master electrician’s licence. He also said that a female person from the ESA

called him on June 17 and told him that they had sent the application forms by fax

to him, but he explicitly stated that he did not actually get the forms. He then said

18

that he had called the ESA again at the end of June in 2010 requesting the

renewal forms, but again he did not receive the renewal forms from the ESA.

[66] Then Ivan Valovic testified that he had received a letter dated July 22, 2010, from

the ESA (see Exhibit #34), in which the ESA notified him that his master

electrician’s licence had expired, but that he could still renew his licence if he did

so within one year with a late fee if the licence had been expired for more than 14

days, but that if he did not renew his licence within the one year, then any

application submitted after one year would be treated by the ESA as a new

application. He also said that he had noticed a contradiction in the letter, which

had stated that the date of expiry of his master electrician’s licence was on June

18, 2011, that would have been still nearly a year away. However, Ivan Valovic

said that the ESA had referred to that contradiction as an error caused by a

computer glitch.

[67] In addition, Ivan Valovic said that he had been aware that he had a grace period of

one year to renew his master electrician’s licence, and that normally, he would

have had to simply just pay a penalty to renew his licence after it had expired.

[68] Moreover, Ivan Valovic said he had continued to call the ESA about obtaining the

renewal forms for his master electrician’s licence, and it was not until March of

2012 that a woman from the ESA licencing department had informed him over the

telephone that because his master electrician’s licence had lapsed in 2010, that he

would only be issued a master electrician’s licence if he rewrote the exams

required for obtaining a master electrician’s licence, even though he had been a

licenced master electrician for 35 years.

[69] On the other hand, Ivan Valovic said that he did get renewal forms from the ESA in

the mail, but that they had been for renewing Ivan's Electric Ltd.’s electrical

contractor’s licence.

(H) Ivan’s Electric Ltd. Could Not Operate As An Electrical Contractor

Without A Licenced Master Electrician.

[70] The ESA had issued an electrical contractor’s licence to Ivan's Electric Ltd. to carry

on business in Ontario as a “licenced electrical contractor” from July 1, 2006 to June

18, 2012 (see Ex. #24). But once Ivan Valovic’s master electrician’s licence had

lapsed on June 18, 2010, then Ivan's Electric Ltd. would be without a master

electrician.

[71] But more importantly, Ivan Valovic said that if he could not renew his master

electrician’s licence, then his company Ivan's Electric Ltd. would not be allowed to

operate as a licenced residential electrical contractor in Ontario without employing

or having a licenced master electrician. However, when he submitted the renewal

forms and the renewal fees for Ivan's Electric Ltd.’s electrical contractor’s licence on

or about August 5, 2010, he said that the ESA had renewed the licence even though

19

it did not have a master electrician. Moreover, a Notice of Expired Licence sent to

Ivan's Electric Ltd. dated May 15, 2015, indicates that Ivan's Electric Ltd.’s electrical

contractor’s licence had expired on May 14, 2015 (see Exhibit #35).

[72] However, Ivan Valovic said the ESA had informed him that the renewal of Ivan's

Electric Ltd.’s electrical contractor’s licence had been done in error.

[73] In addition, the defendants submit that the ESA had continued to inspect the

electrical work of Ivan's Electric Ltd. and still continued to issue permits in Ivan's

Electric Ltd.’s name in 2010, 2011, and 2012, even after Ivan Valovic’s master

electrician’s licence had expired on June 18, 2010, and Ivan's Electric Ltd. had been

without a licenced master electrician.

(I) After ESA Informs Ivan Valovic On April 16, 2012, That Ivan's Electric Ltd.

Had To Immediately Stop Operating, Ivan Valovic Goes To Work For His

Son’s Company, Insight Electric Ltd.

[74] On April 2, 2012, Angela Jackson, the Statutory Director of the ESA, issued a

Notice of Proposal to Revoke Ivan's Electric Ltd.’s electrical contractor’s licence for

safety concerns since it did not have a licenced master electrician (see Exhibit

#26), but the revocation of the licence would be automatically stayed if an appeal

was filed within 15 days of receipt of the Notice of the Proposal. However, Ivan

Valovic said that Patience Cathcart from the ESA had called him and informed him

on April 16, 2012, that his company, Ivan's Electric Ltd., had to immediately stop

operating as an electrical contractor in Ontario. Although Ivan Valovic testified that

Ivan's Electric Ltd. did not have to stop operating since there would be an

automatic stay of the revocation of the licence while the Director’s Proposal to

revoke the electrical contractor’s licence was winding its way through the appeal

process, including a further appeal to the Ontario Divisional Court. However,

because Patience Cathcart from the ESA had told him that Ivan's Electric Ltd.

could no longer operate as of April 16, 2012, Ivan Valovic said he was forced to go

to work for his son’s company, Insight Electric Inc. shortly after that

pronouncement. In addition, Ivan Valovic said that he had asked Patience

Cathcart to send him the specific legislation which would require Ivan's Electric

Ltd. to stop operating immediately even before the appeal of the Notice of

Proposal to Revoke the electrical contractor’s licence had been heard and

decided. However, Ivan Valovic said he did not receive such information from the

ESA. He also went to the Ombudsperson, but said that the Ombudsperson was

too busy to help.

[75] Furthermore, Ivan Valovic said that the ESA did not inform him that his son, Peter

Valovic, who is a licenced master electrician, could have been the licenced master

electrician for two separate companies at the same time for a maximum period of

one year. This, he said, would have allowed Ivan's Electric Ltd. to continue

operating for another year without having to immediately cease operations.

20

(J) Ivan Valovic And Ivan’s Electric Ltd. Began Passing On Jobs To Insight

Electric Ltd. After The ESA Informed Ivan Valovic That Ivan's Electric Ltd.

Had To Immediately Stop Operating.

[76] As a result of being told that Ivan's Electric Ltd. had to stop operating, Ivan Valovic

said that after April 16, 2012, he would pass jobs he had received on the

telephone for Ivan's Electric Ltd. to Insight Electric Inc. However, this information

that the job was being passed from Ivan's Electric Ltd. to Insight Electric Inc. would

not be initially provided to the consumer on the initial telephone call and the

consumer would only be informed when the defendants arrived at the consumer’s

house.

[77] When Ivan's Electric Ltd. was operating, the shirt worn by Ivan Valovic while doing

work for Ivan's Electric Ltd. was red in colour while the shirt he would eventually

wear while working for Insight Electric Inc. would be blue in colour. Moreover,

Insight Electric Inc. had a different designed logo, a different telephone number,

and a different ESA contractor’s licence number from that of Ivan's Electric Ltd.

[78] But, even though Ivan's Electric Ltd. had a different corporate logo than the one

used by Ivan's Electric Ltd., the prosecution contends that despite the different

company names, different corporate logos and colours, ostensibly the defendants

were in conjunction really only operating as the “Valovic’s electrical company” with

Ivan Valovic running the show and without Peter Valovic really having any say or

control over Ivan Valovic’ activities with the consumers.

[79] Ivan Valovic also testified that he would not tell the consumer their prices or fees

on the telephone unless the consumer had asked for them.

[80] In addition, Ivan Valovic said he would not tell the consumer that Ivan Electric Ltd.

was not operating, nor that the job was being passed to Insight Electric Inc. on the

telephone, and only tell the consumer that Insight Electric was doing the job at the

consumer’s house after Ivan Valovic and Peter Valovic arrived at the consumer’s

house.

(K) Which of the 11 Consumers Had Entered Into Agreements With The

Defendants After April 16, 2012, The Date When Ivan Valovic Had Been

Informed By The ESA That Ivan's Electric Ltd. Had to Immediately Stop

Operating?

[81] Three of the 11 consumers had entered into direct agreements with the

defendants before April 16, 2012:

(1) Denise Herold, from June 12, 2011 to June 29, 2011.

(2) Gladys Canadas, from September 19, 2011 to October 12, 2011.

21

(3) Catherine Telford, from December 8, 2011 to January 6, 2012.

[82] The other 8 consumers had entered into direct agreements with the defendants

after April 16, 2012:

(4) Peter Christensen, from June 1, 2012 to October 14, 2012.

(5) Terry Bardeau, on or about December 16, 2012.

(6) Boris Wolchak, from December 21, 2012 to February 8, 2013.

(7) Sandra Castator, from January 14, 2013 to February 15, 2013.

(8) Marjorie Riley, from January 31, 2013 to February 26, 2013.

(9) Zaven Tahtadjian, from April 16, 2013 to May 3, 2013.

(10) Eva Patterson, from December 26, 2013 to January 15, 2014 (as a

result of the ice storm).

(11) Nigel Lundie, on or about December 27, 2013 (as a result of the ice

storm).

[83] In addition, only 3 consumers, Zaven Tahtadjian, Nigel Lundie, and Eva

Patterson, had dealings with the defendants after March 14, 2013, when the

Review Panel of the ESA released its decision to uphold the Director’s Notice of

Proposal to revoke the electrical contractor’s licence of Ivan's Electric Ltd. and to

lift the stay of that revocation order.

(L) Ivan Valovic Continued To Use The Ivan's Electric Ltd. Red Van At

Consumers’ Homes After The ESA Had Told Ivan Valovic on April 16, 2012,

To Immediately Stop Operating Ivan's Electric Ltd.

[84] The prosecution contends that the defendants had made a false, misleading, or

deceptive representation to the consumers in several ways, including Ivan Valovic

appearing at the consumer’s house in his red van which still had the name, logo,

and telephone numbers for Ivan's Electric Ltd., as well as the electrical contractor’s

licence number for Ivan's Electric Ltd. displayed on the side of the van even

though the defendants had told the consumers once they arrived that they were

Insight Electric Inc. and that Insight Electric Inc. was doing the job, and even

though the consumer had originally called Ivan's Electric Ltd. to attend the

consumer’s house.

[85] However, Ivan Valovic did not immediately change the wording on his red van

which had indicated the electrical contractor’s business name of “Ivan's Electric

22

Ltd.” and the electrical contractor’s licence number for Ivan's Electric Ltd. Ivan

Valovic testified that he did not want to spend the money to repaint his red van or

to have the name of the electrical contactor’s business name on his red van and

electrical contractor’s licence number changed due to the cost involved and due to

his outstanding appeals.

[86] Then sometime after doing the job at the consumer Zaven Tahtadjian’s house on

April 16, 2013, or sometime before, Ivan Valovic said he had decided to remove

the ESA electrical contractor’s licence number for Ivan's Electric Ltd. and put the

ESA electrical contractor’s licence number for Insight Electric Inc. onto his van.

He also said that he did repaint his van to remove the Ivan's Electric Ltd.’s name,

logo, and telephone numbers in January 2014, which is a time after his dealing

with the 11 consumers in this matter.

(M) The ESA Revokes Ivan's Electric Ltd.’s Electrical Contractor’s Licence

On March 14, 2013, Due To Safety Concerns.

[87] Ivan's Electric Ltd. appealed the ESA Director’s Notice of Proposal of April 2,

2012, to revoke the electrical contractor’s licence of Ivan's Electric Ltd. for safety

concerns, on the basis that Ivan's Electric Ltd. no longer had a designated

licenced master electrician.

[88] Normally, after the Notice of Proposal is issued, the revocation of the licence

would be automatically stayed if Ivan's Electric Ltd. appealed the Notice of

Proposal. However, the ESA had directed Ivan's Electric Ltd. to stop operating as

a licenced electrical contractor immediately on April 16, 2012, since it did not have

a licenced master electrician.

[89] Consequently, on March 14, 2013, the three-member Review Panel of the ESA

released its decision on the appeal and upheld the Director’s decision to revoke

the electrical contractor’s licence for Ivan's Electric Ltd., as well as to lift the

automatic stay of the revocation of Ivan's Electric Ltd.’s electrical contractor’s

licence.

[90] But more importantly, Ivan Valovic has filed an appeal with the Divisional Court of

Ontario to challenge the ESA’s decision not to renew his master electrician’s

licence and to also challenge the Review Panel’s decision of March 14, 2013, to

uphold the revocation of Ivan's Electric Ltd.’s electrical contractor’s licence and to

lift the stay.

[91] Therefore, after the ESA Review Panel’s decision had been released on March 14,

2013, Ivan's Electric Ltd. could no longer operate as an electrical contractor in

Ontario.

4.

ANALYSIS AND DECISION

23

[92] In order to decide this case, it will first have to be decided if the prosecution’s

application should be granted under s. 34 of the P.O.A. to amend the 6 counts on

two of the three informations, in relation to 6 of the 7 unfair practices charges. If

the amendments are not granted then the prosecution concedes that the charges

contained in those 6 counts will not be made out by the prosecution and those 6

counts will have to be dismissed.

[93] After the prosecution’s application to amend those 6 counts is decided, then it will

have to be determined if the agreements governing the transaction between the 11

consumers and the defendants are “direct agreements” within the meaning of the

CPA 2002. This determination is crucial as it affects the determination of whether

the prosecution has proven the actus reus of the offences in respect to both the

“improper contract” charges and the “fail to provide a refund” charges, since the

obligations to provide agreements to the consumers containing the required

information set out in s. 35(1) of O. Reg. 17/05 for direct agreements as prescribed

under s. 42 of the CPA 2002 is contingent on whether the agreements in question

are governed by the direct agreement provisions of the CPA 2002.

[94] Moreover, if the agreements in question are governed by the direct agreement

provisions, then the consumers who entered into those agreements with the

defendants can rightfully cancel their respective agreements with the defendants

without reason within 10 days of entering the agreement with the defendants (the

10-day cooling off period) under s. 43(1) of the CPA 2002; or cancel the

agreement within one year after entering the agreement under s. 43(2) of the CPA

2002, if the defendants have failed to provide a proper contract to the consumers

containing the information required to be contained in a direct agreement set out in

s. 35(1) of O. Reg. 17/05, as prescribed under s. 42 of the CPA 2002; or cancel

the agreement within one year after entering the agreement under s. 18(3) of the

CPA 2002, where the defendants had engaged in an unfair practice towards the

consumers. And, if the consumers had cancelled their direct agreements as

permitted under the CPA 2002, and notified the defendants of their cancellation of

the agreement, the defendants are then legally obligated under the CPA 2002 to

provide a refund of any payment made by the consumer under the direct

agreement to the consumer within 15 days after the defendants are notified of the

cancellation of the agreement by the consumer or a request for a refund is made

to the defendants, according to s. 96(1)(a) of the CPA 2002.

[95] On the other hand, if it is decided that the transactions between the 11 consumers

and the defendants are not governed by the direct agreement provisions of the

CPA 2002, then those charges related to the “improper contract” charges and the

“fail to provide a refund” charges will necessarily have to be dismissed and

acquittals will be entered on behalf of the respective defendants who had been

charged with those particular charges. However, if it is determined that the direct

agreement provisions do apply to the transactions between the 11 consumers and

the defendants, then because the charges in this regulatory prosecution are strict

liability offences, it will have to be first determined whether the prosecution has

24

proven beyond a reasonable doubt that the respective defendants have committed

the actus reus of those offences set out in the “improper contract” charges, the “fail

to provide a refund” charges, the “engaging in an unfair practice” charges, and the

charges in respect to the defendants in their capacity as a director of the

corporations for failing to prevent their respective corporations from committing

those acts or omissions prohibited under the CPA 2002. And, if the prosecution

has met their burden in proving the actus reus of the offences beyond a

reasonable doubt, then it will have to be determined if the defendants have made

out the defence of due diligence on a balance of probabilities in order that they not

to be convicted of their respective charges. Therefore, if the defendants are able

to prove that they took all reasonable care in the circumstances to prevent or avoid

committing the offences in their respective charges then they would be acquitted

of those offences: R. v. Sault Ste. Marie, [1978] 2 S.C.R. 1299, 40 C.C.C. (2d) 353

(S.C.C.).

(A) SHOULD THE CROWN’S APPLICATION UNDER S. 34 OF THE P.O.A.

TO AMEND THE STATUTORY PROVISION FOR THE OFFENCE FROM

116(1)(b)(vii) to 116(1)(b)(ii) ON 6 PARTICULAR COUNTS (TOTALLING 20

CHARGES) BE GRANTED?

[96] Although during the first few days of the trial approximately 15 separate

amendments of the 3 informations had been sought by the prosecution and

agreed upon and consented to by the defendants, the defendants do not consent

to the application brought by the prosecution under s. 34 of the P.O.A. during the

final arguments or submissions stage of the trial to the proposed amendments to 6

separate counts on 2 of the informations. The 6 separate counts are for charges

related to “engaging in unfair practices”. Specifically, the prosecution seeks to

have the statutory provision describing the offence set out in counts #7, #11, #17,

and #23 on Information #8091 and in counts #1 and #4 on Information #5740

amended from “section 116(1)(b)(vii)” to “section 116(1)(b)(ii)”, so as to conform to

the evidence given at trial in respect to the offence of “engaging in an unfair

practice by making false, misleading, or deceptive representations”. Subsection

34(2) of the P.O.A. permits the court to amend the information during the trial as

may be necessary “if the matters to be alleged in the proposed amendment are

disclosed by the evidence taken at the trial”.

[97] In total, there were 7 counts in the three informations that had charged the

defendants with committing the same “engaging in an unfair practice” offence.

The seventh count in respect to “engaging in an unfair practice” is contained in

Count #11 on Information #5731. However, that statutory provision for count #11

had stated the statutory provision for the “engaging in an unfair practice” offence

as section “116(1)(b)(ii)”, which is the same proposed amendment that the

prosecution is now seeking to be made to the other 6 counts in question:

Count #11 on Information #5731:

25

Ivan's Electric Ltd. and Ivan Valovic and Insight Electric Inc. between the 1st day of

June 2012 and the 14^thday of October 2012 at the Town of Oakville in the Central

West Region and elsewhere in the Province of Ontario did commit the offence of

engage in an unfair practice by making false, misleading or deceptive

representation in relation to Peter Christiansen, a consumer, respecting electrical

work, contrary to section 17(1) of the CONSUMER PROTECTIONACT, 2002, S.O.

2002, Chapter 30, Schedule A, as amended, and, thereby, committed an offence

under section 116(1)(b)(ii) of the said Act;

[98] However, the 6 counts in which the prosecution seeks to have the statutory

provision amended presently state the following:

(1) Count #7 on Information #8091:

AND FURTHER THAT

Insight Electric Inc. and Ivan's Electric Ltd. and Ivan Valovic on or about 16^thday of

December 2012 at the City of Brampton in the Central West Region and

elsewhere in the Province of Ontario did commit the offence of engage in an unfair

practice by making false, misleading or deceptive representation in relation to Terry

Bardeau, a consumer, contrary to section 17(1) of the Consumer Protection Act,

2002, S.O. 2002, Chapter 30, Schedule A, as amended, and, thereby, committed

an offence under section 116(1)(b)(vii) of the said Act;

(2) Count #11 on Information #8091:

AND FURTHER THAT

Insight Electric Inc. and Ivan's Electric Ltd. and Ivan Valovic on or about 31st day

of January 2013 at the City of Toronto in the Toronto Region and elsewhere in the

Province of Ontario did commit the offence of engage in an unfair practice by

making false, misleading or deceptive representation in relation to Marjorie Riley, a

consumer, contrary to section 17(1) of the Consumer Protection Act, 2002, S.O.

2002, Chapter 30, Schedule A, as amended, and, thereby, committed an offence

under section 116(1)(b)(vii) of the said Act;

(3) Count #17 on Information #8091:

AND FURTHER THAT

Insight Electric Inc. and Ivan's Electric Ltd. and Ivan Valovic on or about 16th day

of April 2013 at the City of Toronto in the Toronto Region and elsewhere in the

Province of Ontario did commit the offence of engage in an unfair practice by

making false, misleading or deceptive representation in relation to Zaven

Tahtadjian, a consumer, contrary to section 17(1) of the Consumer Protection Act,

2002, S.O. 2002, Chapter 30, Schedule A, as amended, and, thereby, committed

an offence under section 116(1)(b)(vii) of the said Act;

(4) Count #23 on Information #8091:

AND FURTHER THAT

26

Insight Electric Inc. and Ivan's Electric Ltd. and Ivan Valovic on or about 21st day

of December 2012 at the City of Brampton in the Central West Region and

elsewhere in the Province of Ontario did commit the offence of engage in an unfair

practice by making false, misleading or deceptive representation in relation to Boris

Wolchak, a consumer, contrary to section 17(1) of the Consumer Protection Act,

2002, S.O. 2002, Chapter 30, Schedule A, as amended, and, thereby, committed

an offence under section 116(1)(b)(vii) of the said Act;

(5) Count #1 on Information #5740:

Ivan's Electric Ltd. and Ivan Valovic and Insight Electric Inc. and Peter Valovic

28 Malvern Court, Brampton, Ontario L6W 1H1

on or about 26^thday of December 2013 at the City of Mississauga in the Central

West Region and elsewhere in the Province of Ontario did commit the offence of

engage in an unfair practice by making false, misleading or deceptive

representation in relation to Eva Patterson, a consumer, contrary to section 17(1)

of the Consumer Protection Act, 2002, S.O. 2002, Chapter 30, Schedule A, as

amended, and, thereby, committed an offence under section 116(1)(b)(vii) of the

said Act;

(6) Count #4 on Information #5740:

AND FURTHER THAT

Ivan's Electric Ltd. and Ivan Valovic and Insight Electric Inc. and Peter Valovic

on or about 27^thday of December 2013 at the City of Brampton in the Central West

Region and elsewhere in the Province of Ontario did commit the offence of engage

in an unfair practice by making false, misleading or deceptive representation in

relation to Nigel Lundie, a consumer, contrary to section 17(1) of the Consumer

Protection Act, 2002, S.O. 2002, Chapter 30, Schedule A, as amended, and,

thereby, committed an offence under section 116(1)(b)(vii) of the said Act;

[99] To reiterate, the statutory power to make amendments to an information is set out

in s. 34 of the Provincial Offences Act, R.S.O. 1990, c. P33. (P.O.A.), which is the

procedural statute that governs regulatory proceedings in Ontario. Section 34

provides that the court may at any stage of the proceeding amend the information

as may be necessary, if it appears that the information fails to state or states

defectively anything that is requisite to charge the offence, is in any way defective

in substance or in form, or if the matters to be alleged in the proposed amendment

are disclosed by the evidence taken at the trial. However, in considering whether

or not an amendment should be made, consideration of the evidence taken on the

trial, the circumstances of the case, whether the defendant has been misled or

prejudiced in the defendant’s defence by a variance, error or omission, and

whether, having regard to the merits of the case, the proposed amendment can be

made without injustice being done [emphasis is mine below]:

Amendment of information or certificate

27

34(1) The court may, at any stage of the proceeding, amend the information or

certificate as may be necessary if it appears that the information or

certificate,

(a) fails to state or states defectively anything that is requisite to charge

the offence;

(b) does not negative an exception that should be negatived; or

(c) is in any way defective in substance or in form.

Idem

(2) The court may, during the trial, amend the information or certificate as may

be necessary if the matters to be alleged in the proposed amendment are

disclosed by the evidence taken at the trial.

Variances between charge and evidence

(3) A variance between the information or certificate and the evidence taken

on the trial is not material with respect to,

(a) the time when the offence is alleged to have been committed, if it is

proved that the information was laid or certificate issued within the

prescribed period of limitation; or

(b) the place where the subject-matter of the proceeding is alleged to

have arisen, except in an issue as to the jurisdiction of the court.

Considerations on amendment

(4) The court shall, in considering whether or not an amendment should be

made, consider,

(a) the evidence taken on the trial, if any;

(b) the circumstances of the case;

(c) whether the defendant has been misled or prejudiced in the

defendant’s defence by a variance, error or omission; and

(d) whether, having regard to the merits of the case, the proposed

amendment can be made without injustice being done.

Amendment, question of law

(5) The question whether an order to amend an information or certificate

should be granted or refused is a question of law.

Endorsement of order to amend

28

(6) An order to amend an information or certificate shall be endorsed on the

information or certificate as part of the record and the trial shall proceed as

if the information or certificate had been originally laid as amended.

[100] In their argument for making the proposed amendments, the prosecution submits

that substituting the statutory provision for the offence of “section 116(1)(b)(ii)” for

the present stated provision in those 6 counts of “section 116(1)(b)(vii)” can be

made in regards to the merits of the case without injustice being done, since the

evidence disclosed at trial coincides with the offence related to ”engaging in an

unfair practice by making false, misleading or deceptive representations”; that the

charges are serious and relate to the protection of consumers; and that the

defendants have not been misled or prejudiced by the error or variance, since the

defendants ability to make full answer and defence had not been thwarted or

undermined, and that the defendants throughout the trial had been putting up a

defence to and treating the offences in those 6 counts as the offence of “engaging

in an unfair practice”, and had not be treating those 6 counts as offences

whatsoever related to matters of “leasing” with the consumers in respect to ss. 88

and 89(1) of the CPA 2002.

[101] However, in their response to the prosecution’s application to amend the 6 counts

in question, the defendants submit that it is now too late in the proceeding to make

those proposed amendments without prejudice and injustice to the defendants, as

there is a “presumption of prejudice” the later in the proceeding that an

amendment under s. 34 of the P.O.A. is sought. The defendants submit that at

paras. 27 to 30 in Ontario (Ministry of Labour) v. Rahnmet Inc., [2009] O.J. No.

5418 (O.C.J.), Bubba J.P. had recognized and adopted the principle of a

presumption of prejudice to an accused the later in the proceeding in which an

application to amend the information is brought [emphasis is mine below]:

With respect to the issue of prejudice, it is established that the expiry of the

limitation period creates a presumption, however slight in some cases, of

prejudice to the Defendant. It may be that the mere recitation of the facts and

history of the case make it clear that there is no prejudice to the Defendant and it

can be inferred that he knew, within the limitation period, of the case, and the

nature of the claim now being made against him.

Alternatively, the Defendant may file material which establishes prejudice. If

matters are left in balance, the usual rules apply and the Applicant upon whom

the burden lies, has not discharged the burden.

Deaville v. Boegeman (1984), 48 O.R. (2d) 725, @ 729-730

In summary, in every instance of a proposed amendment, in addition to the

existence of special circumstances, the Plaintiff also bears the onus of

establishing that amending a pleading to add a claim or to change the name of a

party outside of an applicable limitation period will not result in irreparable

29

prejudice to the Defendant. While the question of prejudice and the presence of

special circumstances will frequently overlap, our courts have been clear that the

Plaintiff must establish the presence of both elements in order to obtain the relief

setting aside the limitation period and being permitted to amend the claim.

Golic v. ING Insurance Co. Of Canada (2009), 94 O.R. (3d) 446 @ 452

(Superior Court)

Justice Arbour, speaking for the Ontario Court of Appeal in Swain has further

affirmed the onus upon the moving party in stating that where there are special

circumstances and a lack of prejudice established, the court has a general

discretion to add Defendants to an existing action after the expiry of a limitation

period, however, no single factor, neither the lack of real prejudice, nor any one

of the special circumstances would have, in itself displaced the Defendant's

entitlement to rely on the Limitation Period.

Swain Estate et al [1992] O.J. No. 1358

(1) Can the amendments be made to the 6 counts set out in two of

the three informations during the defendants’ closing

arguments stage of the trial?

[102] First, it should be noted that s. 34(1) of the P.O.A. permits the court to amend the

information or certificate “at any stage of the proceeding”.

[103] In R. v. Larizza, [2006] O.J. No. 5335 (O.C.J.), Pelletier J. held that an amendment

can be at any time by virtue of the P.O.A., even after the prosecution has closed

its case [emphasis is mine below]:

Following the close of The Crown's case, Justice Beck made a finding that The

Crown's evidence had not proved the location of the offences as identified on the

certificates of offence; that is, Highway 11-17, and dismissed the charges. The

Crown attempted to amend the certificates of offence and Justice Beck refused

that order on the basis that The Crown's case was closed. The issue on appeal is

whether the Justice of the Peace erred in failing to grant an order amending the

certificates.

Section 34(1) of the Provincial Offences Act governs the amendments of

information or a certificate. It states, "The court may at any stage of the

proceeding amend the information or certificate as may be necessary, if it

appears that the information or certificate fails to state or states defectively

anything that is requisite to charge the offence" or (c) "is in anyway defective in

substance or form." Further, s. 34 states that court shall in considering whether

or not an amendment should be made consider (a) the evidence taken on the

trial if any, (b) the circumstances of the case, (c) whether the defendant has been

misled or prejudiced in the defendant's defence by a variance, error or omission

and (d) whether having regard to the merits of the case, the proposed

amendment can be made without injustice being done. Pursuant to s. 34(1) the

court has discretion at any stage of the proceedings to amend the information or

30

certificate. The scope of the remedial amending provision is quite broad. The

general rule concerning amendments of certificates and informations is that there

is a bias in favour of amending.

There is plenty of jurisprudence on this issue stating that the overall philosophy

of the Provincial Offences Act is to ensure that technical objectives do not

impede the arrival of a verdict on the merits. Further, the jurisprudence states

that an information or certificate must identify the offence charge and must give

the defendants reasonable information with respect to the act and transaction.

R. v. Doukas, [1996] O.J. No. 1705, [1996 CarswellOnt 1790 (Ont. Prov. Div.)]

provides some assistance to the court. It is an appeal of a Justice of Peace's

decision to quash three certificates of offence on the basis that the times were

not properly set out on the certificates. The Ontario Court of Justice set aside the

quashing and stated, "It is therefore clear that defects in language do not make

information and certificates void. The only basis for quashing an information or

certificate is a failure to relate to an offence known to law or amendment that

would cause prejudice to the defendant that cannot be removed whether by

adjournment or other means." Referring to the defect Doukas states, "If it relates

to an offence but simply mis-describes it or leaves out one or more essential

elements or is duplicitous an information, certificate is defective, but is not a

nullity. It can and must be amended".

In reviewing the factors under subsection 34(2) the circumstances of the case

must be considered. The Crown's evidence is that the accused knewthe location

of the offences. Inspector Houlder gave the evidence that he directed Mr. Larizza

pursuant to s. 82 to drive the commercial motor vehicle from Garden Avenue to

the south scales at Highway 11-17 where the inspection was carried out.

According to The Crown's evidence Mr. Larizza attended at Highway 11-17 in

accordance with the direction. It was at this location that Mr. Larizza was charged

with sections 110(7) and 64(7) of the Highway Traffic Act. This is not a situation

where Mr. Larizza did not know of the location, never attended the location or

had an alibi that he was not at that location on that date.

In light of these circumstances it cannot be said that an amendment would

mislead or prejudice Mr. Larizza's defence. For these reason I would allow the

appeal, grant on order to amend the certificate and order a new trial.

[104] On the other hand, in R. v. Roberts, [2001] O.J. No. 4645 (O.C.J.), in which the

prosecution did not bring a motion to amend the Informations during the trial to

reflect the correct description of the property, although it had been clear from the

evidence that the prosecution were aware of the error, they had instead requested

an amendment in their written submissions.

In denying the prosecution’s

application to amend the Informations, Jackson J. held, at paras. 19 and 20, that

even though s. 34 of the Provincial Offences Act gives the court jurisdiction at any

stage of the proceeding to amend the Information, the prosecution’s motion is

denied by reason of the fact that “it was not made in a timely fashion” and it will not

cure the many deficiencies in the prosecution's case [emphasis is mine below]:

31

The charges before the court are regulatory in nature and therefore strict liability

offences. The prosecution must prove the essential elements of the charges

beyond a reasonable doubt. One of the essential elements is the location of the

alleged offence. The prosecution did not bring a motion to amend the

Informations during the trial to reflect the correct description of the property,

although it was clear from the evidence that they were aware of the error.

Instead, they requested an amendment in their written submissions. Although

section 34 of the Provincial Offences Act gives the court jurisdiction at any stage

of the proceeding to amend the Information, the motion is denied by reason of

the fact that it was not made in a timely fashion and it will not cure the many

deficiencies in the prosecution's case.

The purpose of the Provincial Offences Act is to provide a procedure for the

prosecution of provincial offences which reflects the distinction between such

offences and criminal offences. Mr. Watson has asked the court not to get caught

up in technicalities but to deal with the matter on its merits. However, the rules of

evidence do apply and the prosecution must prove their case beyond a

reasonable doubt. Notwithstanding that there is some evidence of infractions,

when and where they were committed has not been proven, nor has the actual

basal area of the woodlands been proven. There is also some doubt concerning

some of the measurements taken. The prosecution has asked the court to make

too many assumptions in this case and therefore the charges must be dismissed.

[105] Furthermore, in R. v. Seenanan, [2004] O.J. No. 1121 (O.C.A.), the prosecution

had brought an application for an amendment under s. 34 of the P.O.A. on appeal

to the Court of Appeal for Ontario, which shows that applications to amend an

information could even be brought as late as the appeal stage. In the appeal,

Gillese J.A. had held, at paras. 22 to 33, that the application to amend could not

be granted because the defendant would be denied a meaningful opportunity to

respond; and that the prejudice that would result could not be remedied, even if an

amendment were to be granted at that stage of the proceeding; and that to permit

the amendment at that time would expose the accused to a different charge than

that which he had faced in the courts below, which would be a clear injustice

[emphasis is mine below]:

In my view, despite able arguments from counsel for the City, a consideration of

the factors set out in s. 34(4) militates against making the amendment.

Section 34(4)(a) - The Evidence Taken on Trial

Section 34(4)(a) requires the court to consider the evidence taken on trial. There

is no such evidence because there was no trial. The record before this court

consists of Mr. Seenanan's submissions to the Justice of the Peace, the

submissions of both parties to the summary conviction appeal justice and those

legislative provisions upon which the City wishes to rely. …

Section 34(4)(b) - The Circumstances of the Case

Section 34(4)(b) requires a consideration of "the circumstances of the case". In

my view, three aspects of the circumstances of this case are significant. The first

32

relates to the record, which is far from complete. As already noted, there is

virtually no evidence. Moreover, as discussed below, the record does not appear

to contain all relevant legislative provisions. In the face of a seriously incomplete

record, this court is asked to determine the validity of s. 5(6) of the Act. It is

tantamount to being asked to rule on a hypothetical case, something this court

has repeatedly declined to do and for good reason. See, for example, Gonyou v.

Nova Chemicals [2001] O.J. No. 2093 (C.A.).

The second aspect relates to the proposed amendment itself. At its core, the

proposed amendment is flawed because it does not make clear the provisions

that Mr. Seenanan is said to be breaching. Based on both the wording of the

offence on the Certificate of Offence and the City's factum, the City appears to

accept that Mr. Seenanan is a licensed taxicab driver. The offence must,

therefore, relate to the taxicab that Mr. Seenanan was driving on the night in

question. The existing Certificate of Offence does not set out the provisions that

relate to the licensing of a taxicab. We were referred to s. 6(1) of By-lawL6-2000

but that section stipulates that a person requires a license to carry on certain

trades in Ottawa; no issue is taken with the fact that Mr. Seenanan is a licensed

taxicab driver. Other provisions must be relied upon to create the offence of

driving an unlicensed cab. We have not been advised as to what those

provisions are and they do not form part of the motion for amendment. I must

confess that I cannot see why this court would permit an amendment, at this late

stage in the proceedings, for the stated purpose of bringing it into conformity with

the nomenclature on the Certificate of Offence. If an amendment is to be granted

at this stage of the proceeding, subject to considerations of prejudice, surely it

would be to make the charge conform to the evidence or to clarify the precise

provisions that the respondent is said to be contravening.

For example, in R. v. Lorenzo, [2002] O.J. No. 4850 (Ont. C.J.), the prosecution

successfully sought an amendment at the close of its case in order to bring the

offence as charged into conformity with the evidence. The amendment changed

the offence provision from s. 140(1)(a) of the Highway Traffic Act, R.S.O. 1990,

c. H.8 to s. 144(7) of that Act. Several factors led to the conclusion that an

amendment was warranted: the defence still had the opportunity to respond to

the charge, as amended; there was a finding that the defendant had not been

misled; and, any prejudice suffered could be easily remedied by an adjournment.

In the case before this court, as discussed below, the respondent would be

denied a meaningful opportunity to respond and the prejudice that would be

occasioned cannot be remedied.

…

Section 34(4)(c) - Misled or Prejudiced

Section 34(4)(c) directs the court to consider whether Mr. Seenanan was misled

or prejudiced in his defence by the errors or omissions. In my view, he was both

misled and prejudiced. The respondent was misled because his defence in the

court below was conducted on the basis that he was accused of having violated

s. 42(2) of By-law 2001-515. In the face of a conflict between the wording of the

offence on the Certificate of Offence and the legislative provisions referred to, Mr.

Seenanan based his arguments before Justice Fontana on the inequity that

33

arose from requiring him to comply with the licensing regime imposed by the new

City while preventing him from taking the benefit of such compliance. Justice

Fontana disposed of the matter on that basis.

In addition, counsel for Mr. Seenanan raised a new issue before this court that

calls into question the validity of the City's licensing regime. He notes that By-law

2001-515 exempts licensed taxicab drivers from the former municipality of Vanier

from the application of the former City of Ottawa's licensing by-laws with the

result that former Vanier drivers are free to pick up fares in the former City of

Ottawa while former Gloucester drivers are not. Relying on the cases of R. v.

Sharma, [1993] 1 S.C.R. 650, [1993] S.C.J. No. 18 and Montreal (City of) v.

Arcade Amusements Inc., [1985] 1 S.C.R. 368, [1985] S.C.J. No. 16, he argues

that the effect of the City's newlicensing regime is discriminatory and that the by-

law is, therefore, invalid. The discrimination, he says, arises either from 1) the

unequal treatment of the two groups of taxicab drivers, or 2) the fact that all

Ottawa taxicab drivers are required to conform to standardized requirements but

separate classes of work opportunities are maintained with reference to

boundaries of now dissolved municipalities. As the Certificate of Offence did not

make clear the legislative provisions upon which the City intended to rely, Mr.

Seenanan was prejudiced in being unable to advance such an argument in the

earlier stages of this proceeding.

Section 34(4)(d) - Injustice

Section 34(4)(d) directs the court to consider any injustice that would be done by

the making of the amendment. In the circumstances of this case, to permit the

amendment at this time would be to expose Mr. Seenanan to a different charge

than that which he faced in the courts below, a clear injustice. In addition, the

City submits that specific procedures and limitations apply when municipal by-

laws are challenged. It follows that this court might be precluded from

entertaining Mr. Seenanan's challenge to the validity of the City's licensing

regime in the context of this appeal. To permit the City to amend so that it could

rely on different legislative provisions in the face of the clear possibility that the

respondent would be unable to challenge the validity of such legislation would

also be an injustice.

Accordingly, I would dismiss the motion to amend the Certificate of Offence.

[106] Ergo, the prosecution’s application to amend the 6 counts in the two informations

can be brought at the closing arguments stage of the trial, since amendments to

an information may be made by the court “at any stage of the proceeding”.

(2) Discussion of the s. 34(4) factors.

[107] To decide whether the prosecution’s application should be granted to amend the

statutory provision of the offence set out in counts #7, #11, #17, and #23 on

Information #8091 and in counts #1 and #4 on Information #5740, the four factors

set out in s. 34(4) of the P.O.A. have to be considered, namely:

34

(1) the evidence taken on the trial, if any;

(2) the circumstances of the case;

(3) whether the defendant has been misled or prejudiced in the

defendant’s defence by a variance, error or omission; and

(4) whether, having regard to the merits of the case, the proposed

amendment can be made without injustice being done.

[108] It is also important while considering the four factors enumerated in s. 34(4) to

take into account the overall philosophy of the Provincial Offences Act, which is to

ensure that technical objections do not impede the arrival of a verdict on the merits

and that the Act itself has provided a broad curative power to amend informations

or certificates at any time during the proceeding.

(a) Has Any Evidence Been Adduced At Trial?

[109] First of all, a trial was held and evidence has been adduced at trial. In regards to

the defendants acts or omissions that could be found to be unfair practices by

making a false, misleading or deceptive representation, there was evidence in

respect to the “unfair practice” charges, but no evidence had been led in respect to

matters of “leasing” between the defendants and the consumers referred to in ss.

88 and 89(1) of the CPA 2002. Ergo, because there is evidence that has been

adduced at trial in respect to the defendants engaging in unfair practices by

making false, misleading, or deceptive representations, then an amendment could

be granted so that the charge would conform to the evidence at trial, unless the

defendants would be misled or prejudiced by the amendment, or that based on the

merits of the case it would cause injustice.

(b) What Are The Circumstances In This Case?

[110] For the circumstances of the case at bar, there is not a fatality at a workplace or

from a motor vehicle accident, but it does involve serious charges under consumer

protection legislation, where many consumers were affected financially by the acts

or omissions of the defendants.

(c) Has The Variance, Error, Or Omission Misled Or Prejudiced

The Defendants?

[111] In respect to whether the defendants at bar would be prejudiced by the proposed

amendment, the burden of proof lies upon the moving party to show the absence

of prejudice, as well as an absence of injustice: Deaville v. Boegeman, [1984] O.J.

No. 3403, (O.C.A.), at para. 20 [emphasis is mine below]:

Some courts have suggested that in applications of the nature of the one in the

instant case, limitation periods can be ignored. Limitation periods, however, were

35

not enacted to be ignored. It has also been suggested that the mere bringing of

such an application as in the instant case immediately shifts the burden of

establishing prejudice to the defendant. I do not agree. In my view, the expiry of

the limitation period creates a presumption, however slight in some cases, of

prejudice to the defendant. It may be that the mere recitation of the facts and

history of the case makes it clear there is no prejudice to the defendant and it can

be inferred that he knew, within the limitation period, of the case and the nature

of the claims now being made against him. Alternatively the defendant may file

material which establishes prejudice. If matters are left in balance, the usual rules

apply and the applicant upon whom the burden lies has not discharged that

burden. The facts of the case and the claims and the history of the dealings with

the defendant are within the knowledge of the plaintiff and there is no unfairness

in placing upon the plaintiff the burden of establishing those facts.

[112] But more importantly, prejudice within the meaning of s. 34(4) of the P.O.A. refers

to whether the proposed amendment would undermine or adversely or negatively

affect the defendant’s opportunity and ability to mount a full defence, to meet the

charge, or to have a fair trial, and whether the defence would have been

conducted differently (see R. v. Irwin, [1998] O.J. No. 627 (O.C.A.) and R. v.

McConnell, [2005] O.J. No. 1613 (O.C.A.)). This view of prejudice within the

meaning of s. 34(4) of the P.O.A. was also confirmed by Healey J. at para. 21 in

York (Municipality) v. Talabe, [2011] O.J. No. 654 (S.C.J.O.) [emphasis is mine

below]:

The Court of Appeal has dealt with the question of what constitutes prejudice

sufficient that it cannot be cured by an amendment to an indictment or

information. In R. v. McConnell [2005] O.J. No. 1613 (Ont.C.A.), Rosenberg J.A.

delivering the judgment of the Court wrote:

As this court said in R. v. Irwin (1998), 123 C.C.C. (3d) 316 at para. 38, prejudice "speaks to

the effect of the amendmenton an accused's ability and opportunity to meetthe charge". Thus,

in deciding whether an amendment should be allowed, the court will consider whether the

accused will have a full opportunity to meet all issues raised by the charge and whether the

defence would have been conducted differently. The respondent was aware of the essential

elements of the charge and was aware of the transaction being alleged against him by the

Crown disclosure.There would have been no prejudice in this case and defence counsel in his

submissions to the trial judge did not point to any relevant prejudice. ...

[113] In the case at bar, the defendants have not been cross-examining the particular

consumer witnesses in respect to those 6 counts on any aspect of leasing

between the defendants and the consumers, but had been cross-examining the

consumers on the actions, omissions, and representations of the defendants made

to the consumers in respect to the electrical work, telephone conversations, and

prices for the electrical work. Furthermore, the defendants themselves had been

testifying in respect to a due diligence defence in respect to the offences of

engaging in unfair practices and not to any offence related to matters of leasing

between the defendants and the consumers.

36

[114] In addition, ss. 88 and 89(1) of the CPA 2002 respectively refer to representations

made about the cost of a lease or the obligation of a lessor to deliver a disclosure

statement for a lease to the lessee [emphasis is mine below]:

Representations

88. Any person who makes representations or causes representations to be

made about the cost of a lease, whether orally, in writing or in any other

form, shall do so in accordance with the prescribed requirements.

Disclosure statement

89(1) Every lessor shall deliver a disclosure statement for a lease to the lessee

before the earlier of,

(a) the time that the lessee enters into the lease; and

(b) the time that the lessee makes any payment in connection with the

lease.

[115] Moreover, no evidence had been adduced in the trial related to representations

between the defendants and the consumers about the cost of a lease or that a

disclosure statement for a lease had been provided or not been provided by the

defendants, as a lessor, to the consumers, as lessees, in respect to ss. 88 and

89(1) of the CPA 2002. But more important, there had been no questions asked of

any of the witnesses, or had there been evidence from any witnesses at trial, that

had been related to leasing or the cost of a lease between the defendants and the

11 consumers in question.

[116] Accordingly, the defendants have not been misled by the impugned error or

omission in respect to the statutory provision in those 6 counts that expressly

states “section 116(1)(b)(vii)” which refers to an offence touching on “leasing”.

(i) Is there “presumed prejudice” to the defendants just

because the application for the proposed amendment

had been brought by the prosecution at the closing

arguments stage of the trial?

[117] Now, with the greatest of respect to Bubba J.P.’s decision in Ontario (Ministry of

Labour) v. Rahnmet Inc., [2009] O.J. No. 5418 (O.C.J.), which referred to a

“presumption of prejudice” to the accused the later in the proceeding when an

application to amend an information is brought under s. 34 of the P.O.A., it is

questionable whether there is such a presumption of prejudice set out in s. 34 of

the P.O.A, considering that this presumptive prejudice would seem to contradict

the legislative intent of s. 34, which provides that an amendment can be made at

any stage of the proceeding. Accordingly, an amendment may be made at any

stage of the proceedings, including during the late stages of the proceeding, as

37

long as the factors under s. 34(4) have been considered, which involves

considering the evidence taken on the trial, if any; the circumstances of the case;

whether the accused has been misled or prejudiced in their defence by the

variance, error, or omission; and having regard to the merits of the case, whether

the proposed amendment could be made without injustice being done.

Furthermore, it appears that Bubba J.P. had based his conclusion on this notion of

the existence of presumed prejudice after the expiry of a limitation period based on

decisions rendered in civil proceedings where the plaintiffs were seeking to have

other persons added to the statement of claim as defendants or to have

amendments made to the pleadings in a statement of claim. Civil proceedings

involving claims for damages and civil remedies do not necessarily have the same

public welfare interest objective that is central to a regulatory prosecution (see R.

v. Thomas Fuller Construction Co., [2008] O.J. No. 4004 (O.C.J.), at para. 31).

[118] However, unlike in a civil proceeding where there may be a presumption of

prejudice to a party in a civil proceeding in granting an amendment to a statement

of claim the later in time that the amendment is sought to be made in that

proceeding, especially where a limitation period has expired, this notion that there

is a presumption of prejudice for the purpose of determining an application under

s. 34 of the P.O.A. for an amendment to an information based on when the

application to amend is brought should not automatically exist or be relied upon,

since the statutory provisions contained in s. 34 provide that an amendment to the

information can be made at any time during the regulatory proceeding, as long as

the court has properly considered the s. 34(4) factors, especially whether the

accused in a regulatory proceeding would be misled or prejudiced by the variance,

error, or omission in making full answer and defence, or based on the merits of the

case, whether there would be injustice.

[119] Moreover, Pelletier J. had also held in R. v. Larizza, [2006] O.J. No. 5335

(O.C.J.), that in respect to the general rule concerning amendments of

certificates and informations, there is a bias in favour of amending which would

also contradict the notion that there is a presumption of prejudice [emphasis is

mine below]:

Section 34(1) of the Provincial Offences Act governs the amendments of

information or a certificate. … . Pursuant to s. 34(1) the court has discretion at

any stage of the proceedings to amend the information or certificate. The scope

of the remedial amending provision is quite broad. The general rule concerning

amendments of certificates and informations is that there is a bias in favour of

amending.

[120] But more importantly, in respect to applications brought to amend after a limitation

period has expired, it has been noted by Wake J. in R. v. Thomas Fuller

Construction Co., [2008] O.J. No. 4004 (O.C.J.), at paras. 20 and 28 to 30, that

courts have allowed an amendment even after the expiry of a limitation period,

where in complex corporate structures of a corporate holding company it would not

38

be unexpected that a minor error or mistake could occur in describing the correct

legal name of a corporate entity [emphasis is mine below]:

R. v. Kimberly-Clark Canada Inc. was considered by Heeney, J. in Her Majesty

the Queen in Right of Ontario (Ministry of Labour) v. Ivaco Inc. (2001), 53 O.R.

(3d) 675 (Ont. S.C.) another prosecution under the Occupational Health and

Safety Act. In that case the court allowed an amendment, notwithstanding the

expiry of the limitation period. Justice Heeney noted that in Kimberly-Clark

Canada Inc. there was evidence that a "considered decision" was made to

charge that company as opposed to the owner Kimberly-Clark Inc whereas in

Ivaco "there was no explanation as to how someone in the Ministry made the

decision to charge a corporation named "Sivaco Ontario Ltd." and therefore no

evidence of a "considered decision" having been made.

…

While there is no evidence that Mr. James considered any of this information in

his decision to lay charges against the Respondent there is ample room for a

mistake to have been made in correctly describing the corporate name of the

Contractor. Even the Compliance Order Response sets out the name of an entity

which does not conform with any of the entities set out in the corporate search. I

do not intend to suggest that the Respondent deliberately obfuscated its

response, only that the corporate structure of the Fuller Group is sufficiently

complex that error, even minor ones, are not to be unexpected when describing

the correct legal name of any of the corporate entities. This leads me to the

finding I have made that the name of the corporate entity was more likely the

product of a mistake rather than any considered decision.

The decision in Kimberly-Clark Canada Inc. must also be seen in light of the

subsequent decision of the Ontario Court of Appeal in Ontario (Ministry of

Labour) v. NMC Canada Inc. (1995), 25 O.R. (3d) 461. This case involved a

prosecution under the OHSA where, as in the case before me, a fatality had

occurred and an amendment was sought after the expiration of the limitation

period to name two corporate entities as the defendants since the Ministry had

incorrectly named a partnership, to which the two corporate entities belonged, as

the defendant and the partnership could not be convicted under the OHSA.

In considering the broad amending power under Section 34 of the POA, Laskin,

J.A. stated the following:

The circumstances of the case are serious as they concern a fatality. I do not

consider that either NMC or Stamford is prejudiced in its defence because the

ministry omitted to charge them in December 1990. Neither filed an affidavit

alleging it was prejudiced. I infer that both were aware of the charges within the

limitation period. Absent prejudice, the court has discretion in civil proceedings to

add a defendant to an existing action despite the expiry of a limitation period. The

court has a similar discretion in proceedings under the P.O.A.: Swain Estate v.

Lake of the Woods District Hospital (1992), 9 O.R. (3d) 74, 93 D.L.R. (4th) 440

(C.A.).

(ii) Would allowing the proposed amendment of substituting

one statutory provision for another statutory provision

39

actually change the offence in those 6 counts to a different

offence for the defendant to defend and to make full answer

and defence?

[121] In opposing the application to amend the 6 counts, the defendants claim that the

proposed amendment of substituting “section 116(1)(b)(vii)” with “section

116(1)(b)(ii)” would create a new offence for the defendants to meet and would

therefore prejudice the defendants.

[122] Moreover, the defendants contend that by granting the proposed amendment,

which would substitute “section 116(1)(b)(ii)” for “section 116(1)(b)(vii)”, the

amendment would change the reference from an offence in respect to “leasing” to

one that involves “engaging in unfair practice”, which would then prejudice the

defendants.

[123] In a situation that is not too unlike the case at bar, this court had to decide in R. v.

Lorenzo, [2002] O.J. No. 4850 (O.C.J.), at paras. 31 to 33, whether there would be

any prejudice to an accused’s ability to make full answer and defence if the

proposed amendment were granted of substituting one statutory provision for

another one. In the Lorenzo case, the particulars of the offence or the short form

wording used to describe the offence had made reference to an offence which

concerned the accused motorist’s failure to yield to a pedestrian. The prosecution

had sought an amendment of the statutory provision from s. 140(1)(a), which

would refer to failing to yield to a pedestrian at a pedestrian crossover in the

textual description of the offence; while the proposed amendment of the statutory

provision of s. 144(7) would refer to failing to yield to a pedestrian at a pedestrian

crosswalk, which is controlled by a traffic control signal, in the textual description

of the offence under that particular section. In considering whether to grant the

proposed amendment, the decision in Thermoset Thermoplastic Custom Moulder

Ltd. v. Ontario (A.G.), [1992] O.J. No. 2455 (Ont. Ct. (Gen. Div.)), was relied upon,

in which Caswell J. had held that the amendment to the statutory provision could

be done without prejudice to the defence, since the wording for the offence had

been sufficient to describe the offence in spite of the wrong section number being

stated for the offence that had been charged [emphasis is mine below]:

In Thermoset Thermoplastic Custom Moulder Ltd. v. Ontario (A.G.), [1992] O.J.

No. 2455 (Ont. Ct. (Gen. Div.)), the court found that the wrong section number for

the offence on the information had been a typographical error. Therefore, it was

held that the incorrect section number for the breached regulation could be

amended without prejudice to the defence. The court had held that the wording

for the offence had been sufficient to describe the offence in spite of the wrong

section number. Caswell J. in Thermoset stated that:

Counsel has also argued that the applicant is prejudiced because the information

sets out the wrong regulation. It is my view that this is not so since the particulars

on the information are set out in sufficient detail so that the accused is able to

make a full defence at trial. The information meets the test set out by de

Grandpre J. in R. v. Cote ....

40

The test for determining the sufficiency of an information is found in R. v. Cote,

(1977), 33 C.C.C. (2d) 353 (S.C.C.) at p. 357:

the golden rule is for the accused to be reasonably informed of the transaction

alleged against him, thus giving him the possibility of a full defence and a fair

trial. When, as in the present case, the information recites all the facts and

relates them to a definite offence identified by the relevant section of the Code, it

is impossible for the accused to be misled. To hold otherwise would be to revert

to the extreme technicality of the old procedure.

Furthermore, in the Stewart and Macey textbook, at pp. 78-79, the authors

discussed whether someone would in fact receive sufficient notice of the

substance of a charge when either the description of the offence or the section

number is incorrect or defective. They concluded that the section number and the

wording of an offence are both amendable, as long as the offence related to the

section number or description of the offence is known in law:

The offence must be stated on the information, and pursuant to s. 25(4) of the

Act, this may be done in plain language, in the words taken from the offence-

creating statute, or in "words sufficient to give the defendant notice of the offence

with which the defendant is charged". This should be considered in conjunction

with s. 25(3), which states that if the description of the offence is insufficient, it is

deemed to be sufficient if there is reference on the information to the breached

section of the statute. If either the description of the offence or the section

number is wrong, either can be amended to correct the defect. If both are wrong,

however, no offence in law is stated on the information, and the information

would be a nullity.

[124] Furthermore, in deciding that there would have been no prejudice if the proposed

amendment of substituting one statutory provision from “s. 185(1)” to “s. 185(2)” to

describe the offence, Fraser J. in R. v. Preston Sand & Gravel Co., [2009] O.J. No.

6399 (O.C.J.), had held at paras. 6, 8 to 9, and 11 to 15, that the overall

philosophy of the Provincial Offences Act is to ensure that technical objections do

not impede the arrival of a verdict on the merits. Moreover, Fraser J. concluded

that there should be no difficulty in amending an information which omits an

essential averment or otherwise misstates the offence. Furthermore, Fraser J.

allowed the amendment of the wrong subsection number, since it did not cause

any prejudice, since the trial transcript revealed an admission by the accused that

the offence was the requirement to guard and because the parties had conducted

themselves under the assumption that s. 185(2) was in issue. Moreover, Fraser J.

noted that both parties had examined and cross-examined on the issue of

guarding and that defence counsel had admitted that the defence had conducted

itself on the basis that the charge must have meant to read s. 185(2) based on the

evidence heard at the trial. Furthermore, it was also emphasized by the court that

the defendant had a full opportunity to meet all the issues raised and that the

defence would not have been conducted any differently had the amended charge

been before the court [emphasis is mine below]:

The overall philosophy of the Provincial Offences Act is to ensure that technical

objections do not impede the arrival of a verdict on the merits. Ontario (Ministry

41

of Labour) v. City of Hamilton, [2002] O.J. No. 283 at para. 21, and Ontario

(Ministry of Labour) v. Discovery Place Ltd., [1996] O.J. No. 690 (Gen. Div.) at

para. 18.

…

As was said in Drinkwalter and Ewart, Ontario Provincial Offences Procedure, p.

147:

"Certainly there should be no difficulty in amending an information which omits an

essential averment, or otherwise misstates the offence. As long as the defendant

knows the case he has to meet, or is given an adjournment if the amendment

results in a charge which takes him by surprise, there is no justification under the

Act for quashing instead of amending the information."

The only instance where an information cannot be amended is where it is so

badly drafted that it fails to give to the defendant reasonable information with

respect to the charge and to identify the transaction referred to therein thus

giving the defendant no possibility of full answer and defence at trial. Regina v.

Ryan, [1985] O.J. No. 232, (Ont. C.A.).

Section 185 of Ontario Regulation 854 is a section devoted exclusively to the act

of properly guarding exposed moving parts of a machine to protect the safety of a

worker. The count on the information listed the wrong subsection only and cited

the definition section in subsection (1) instead of the requirement to guard in

subsection (2).

On its face the information disclosed reasonable information with respect to the

charge and to identify the underlying transaction. The trial transcript reveals an

admission by the defendant that from the disclosure material and the evidence

called at the trial that the essence of the offence was the requirement to guard.

The evidence at the trial discloses that the parties conducted themselves under

the assumption that s. 185(2) was in issue. Evidence in-chief and cross-

examination was conducted on the basis of guarding. Both parties examined and

cross-examined clearly on the issue of guarding. Defence counsel candidly

admitted that the defendant conducted itself on the basis that the charge must

have meant to read s. 185(2) based on the evidence heard at the trial and

conducted itself accordingly.

In these circumstances the amendment sought would not have prejudiced the

defendant.

The defendant had full opportunity to meet all of the issues raised by the charge

and the defence would not have been conducted any differently had the

amended charge been before the trial court. In such a case there can be no

prejudice.

[125] For the present application under s. 34 of the P.O.A. to amend the statutory

provision on the 6 counts from “section 116(1)(b)(vii)” to the proposed amendment

of “section 116(1)(b)(ii), it had been only brought by the prosecution after the

defendants’ closing argument that those 6 counts should be dismissed due to the

42

prosecution’s failure to prove beyond a reasonable doubt that the defendants had

committed an offence related to “leasing” under s. 116(1)(b)(vii) of the CPA 2002.

It was evident at that moment that this issue on the 6 counts making a reference to

a “leasing” offence had been brought up with the prosecution for the first time.

Moreover, there had been no evidence that the defendants had ever requested

any disclosure on the issue of “leasing” pertaining to ss. 88 and 89(1) of the CPA

2002, at any judicial pre-trial conference, or that an offence related to “leasing” had

been raised at the end of the prosecution’s case by the defence bringing a motion

of no evidence that the prosecution had failed to adduce some evidence on an

essential element of the offence in respect of those 6 counts in question,

especially that there had been no evidence adduced by the prosecution in respect

to “leasing” under ss. 88 and 89(1) of the CPA 2002.

[126] Moreover, the prosecution proceeded during the trial on adducing evidence on

those 6 counts in question in respect to the offence of “engaging in an unfair

practice” and not as if the offence had been for committing an offence related to

“leasing” under ss. 88 and 89(1) of the CPA 2002. As well, the prosecution’s

closing arguments were in respect to the defendants “engaging in an unfair

practice” and not for committing an offence in respect to “leasing”.

[127] But more importantly, the defendants also proceeded in their cross-examination of

the consumers and in examination-in-chief of Ivan Valovic and Peter Valovic, as if

the charges in those 6 counts were for “engaging in an unfair practice” and had not

questioned any of the witnesses on any matter related to “leasing” between the

consumers and the defendants.

[128] Ergo, the defendants had not been misled by the minor typographical error made

in those 6 counts of stating the offence as falling under s. 116(1)(b)(vii) instead of

properly falling under 116(1)(b)(ii).

[129] Moreover, in the 4 counts that were laid against Peter Valovic, as a director of

Insight Electric Inc. for failing to prevent Insight Electric Inc. from “engaging in an

unfair practice by making false, misleading, or deceptive representations to a

consumer”, in conjunction with 4 of those 6 “unfair practice” counts sought to be

amended, those 4 counts laid against Peter Valovic stated the offence as being

“contrary to s. 17(1)” of the CPA 2002, which refers to engaging in an unfair

practice, as well as stating, “thereby committed an offence under s. 116(3) of the

CPA 2002”. More important, those particular 4 counts laid against Peter Valovic

also did not make a reference to anything to do with “leasing” in respect to s. 88 of

the CPA 2002 concerning “representations or causes representations to be made

about the cost of a lease” with a consumer, or in respect to s. 89(1) of the CPA

2002 concerning the requirement that a “lessor shall deliver a disclosure statement

for a lease to the lessee”, but instead had made a reference in those 4 counts to

contravening s. 17(1) of the CPA 2002 in reference to “engaging in an unfair

practice”.

43

(d) Having Regard To The Merits Of The Case, Can The

Proposed Amendments Be Done Without Injustice To The

Defendants?

[130] In York (Regional Municipality) v. Winlow, (2009), 99 O.R. (3d) 337, the Court of

Appeal for Ontario held at paras. 80 to 84, that in deciding whether an amendment

can be done without injustice as prescribed by s. 34(4)(d) of the P.O.A., an

amendment should not be granted if it would be unfair having regard to the merits

of the case, since the concept of injustice under that requirement in 34(4)(d) is of a

wide scope and would involve a general notion of unfairness [emphasis is mine

below]:

Even if the defendant would not be prejudiced by the amendment, the court

should still refuse to amend if doing so would cause an injustice. I take injustice

to capture the general notion of unfairness. Thus, under s. 34(4)(d) of the POA,

the court should not grant an amendment that would be unfair having regard to

the merits of the case.

Two decisions of this court show the application of s. 34(4)(d). In Ontario

(Ministry of Labour) v. NMC Canada Inc., the proposed amendment of the

information to substitute the two individual partners for the partnership caused no

injustice. The two partners carried on business using a distinctive firm name; the

accident happened at their firm's place of business; and in a practical, if not a

legal sense, the worker who died was their firm's employee.

In R. v. Seenanan, the majority of this court concluded that an amendment

would, indeed, cause injustice to the defendant. The defendant, a taxi driver, had

been charged with contravening a City of Ottawa licensing by-law. Although he

had pleaded guilty, on appeal in the Ontario Court of Justice his conviction was

set aside and he was found not guilty. By then, the City had recognized that it

had charged the defendant under the wrong licensing by-law. In this court, for the

first time, the City sought to amend the certificate of offence to charge the

defendant under a different city by-law.

Gillese J.A., writing for the majority, canvassed the requirements of s. 34(4) of

the POA and concluded that the amendment should be refused. On the

requirement of injustice, she noted that the amendment would expose the

defendant to a different charge from the charge he had faced in the courts below

and would, in practice, preclude him from challenging the validity of the City's

licensing regime. Thus, especially having regard to the merits of the case, the

proposed amendment would cause an injustice.

These two cases illustrate the wide scope of the fourth requirement of s. 34(4) of

the POA: whether the proposed amendment can be made without doing an

injustice. This requirement must be canvassed on any request to amend up a

certificate or when the court considers doing so on its own initiative.

[131] To reiterate, the defendants contend that granting the prosecution’s application to

amend the statutory provision from “section 116(1)(b)(vii”) to “section 116(1)(b)(ii)”

44

would expose the defendant to a different charge then the charge they had been

defending against during the trial.

(3) Conclusion

[132] First of all, the wording of the charges contained in the 6 counts in question

(counts #7, #11, #17, and #23 on Information # 8091, counts #1 and #4 on

Information #5740) specifically contain “three” particular references to or

descriptions of an offence. First, the offence is referred to by the descriptive words

“engage in an unfair practice by making a false, misleading or deceptive

representation in relation to [a name of a consumer]”. Second, the charges makes

reference to the act of “engaging in an unfair practice” being contrary to a

particular statutory provision under s. 17(1) of the CPA 2002. Third, there is an

additional qualification that the offence of “engaging in an unfair practice” which is

contrary to s. 17(1) is an offence committed under the statutory provision set out in

“s. 116(1)(b)(vii)”:

“did commit the offence of engage in an unfair practice by making a false,

misleading or deceptive representation in relation to [the name of a

consumer], a consumer, contrary to section 17(1) of the Consumer

Protection Act, 2002, S.O. 2002, Chapter 30, Schedule A, as amended,

and, thereby committed an offence under section 116(1)(b)(vii) of the said

Act;”

[133] Subsection 17(1) states that “No person shall engage in an unfair practice”. In

addition, “unfair practices” are prescribed under s. 14(1), which states that “It is an

unfair practice for a person “to make a false, misleading or deceptive

representation” with examples of unfair practices listed under s. 14(2):

Examples of false, misleading or deceptive representations

14(2) Without limiting the generality of what constitutes a false, misleading or

deceptive representation, the following are included as false, misleading or

deceptive representations:

1. A representation that the goods or services have sponsorship,

approval, performance characteristics, accessories, uses, ingredients,

benefits or qualities they do not have.

2. A representation that the person who is to supply the goods or

services has sponsorship, approval, status, affiliation or connection

the person does not have.

3. A representation that the goods or services are of a particular

standard, quality, grade, style or model, if they are not.

4. A representation that the goods are new, or unused, if they are not or

are reconditioned or reclaimed, but the reasonable use of goods to

45

enable the person to service, prepare, test and deliver the goods does

not result in the goods being deemed to be used for the purposes of

this paragraph.

5. A representation that the goods have been used to an extent that is

materially different from the fact.

6. A representation that the goods or services are available for a reason

that does not exist.

7. A representation that the goods or services have been supplied in

accordance with a previous representation, if they have not.

8. A representation that the goods or services or any part of them are

available or can be delivered or performed when the person making

the representation knows or ought to know they are not available or

cannot be delivered or performed.

9. A representation that the goods or services or any part of them will be

available or can be delivered or performed by a specified time when

the person making the representation knows or ought to know they

will not be available or cannot be delivered or performed by the

specified time.

10. A representation that a service, part, replacement or repair is needed

or advisable, if it is not.

11. A representation that a specific price advantage exists, if it does not.

12. A representation that misrepresents the authority of a salesperson,

representative, employee or agent to negotiate the final terms of the

agreement.

13. A representation that the transaction involves or does not involve

rights, remedies or obligations if the representation is false,

misleading or deceptive.

14. A representation using exaggeration, innuendo or ambiguity as to a

material fact or failing to state a material fact if such use or failure

deceives or tends to deceive.

15. A representation that misrepresents the purpose or intent of any

solicitation of or any communication with a consumer.

16. A representation that misrepresents the purpose of any charge or

proposed charge.

17. A representation that misrepresents or exaggerates the benefits that

are likely to flow to a consumer if the consumer helps a person obtain

new or potential customers.

46

[134] In addition, s. 15(1) also defines an unfair practices to mean:

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

[135] Section 15(2) then provides examples of an unconscionable representation listed

in 15(2):

15(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.

[136] More important, in sections 14 or 15 of the CPA 2002, which provide examples of

“unfair practices” there are no references to “leasing” as an unfair practice.

[137] On the other hand, s. 116(1) of the CPA 2002 sets out a list of what is an offence

in relation to specific parts of that statute and the penalties that a court could

impose on being convicted of committing a particular offence prescribed under the

CPA 2002. In respect to the proposed amendment, s. 116(1)(b)(ii) refers

specifically to “Part III, Unfair practice, subsection 17(1)”, while s. 116(1)(b)(vii)

47

refers specifically to “Part VIII, Leasing, section 88 and subsection 89(1)”

[emphasis is mine below]:

116(1) A person is guilty of an offence if the person,

(a) fails to comply with any order, direction or other requirement under this

Act; or

(b) contravenes or fails to comply with,

(i) in respect of Part II, Consumer Rights and Warranties, subsection

10(1), section 12, subsections 13(2) and (7) and subsections 13.1

(1) and (2),

(ii) in respect of Part III, Unfair Practices, subsection 17(1),

(iii) in respect of Part IV, Rights and Obligations Respecting Specific

Consumer Agreements, subsection 30(2), clauses 33(a) and

(b), subsections 34(1) and (2) and 36(1),

(iv) in respect of Part V, Sectors Where Advance Fee

Prohibited, section 49, subsection 50(1) and section 53,

(v) in respect of Part VI, Repairs to Motor Vehicles and Other

Goods, subsections 56(1), 57(1) and (3), 58(1) and (2), section

60, subsections 61(1) and (2) and sections 62 and 64,

(vi) in respect of Part VII, Credit Agreements, section 71, subsections

72

(2) and 76(2), section

77 and subsections

78(1) and (2), 79(1), 80

(1), (2), (3) and (5), 81(1), (3), (5), (6) and (7) and 82(1) and (2),

(vii) in respect of Part VIII, Leasing, section 88 and subsection 89 (1),

(viii) in

respect

of

Part

IX,

Procedures

for Consumer

Remedies, subsections 96(1), 98(2) and 99(5), and

(ix) in respect of Part XI, General, subsection 105.2 (11).

[138] However, s. 116(1)(b)(vii)’s reference to “Part VIII, Leasing, section 88 and

subsection 89(1)”, makes no specific reference to “unfair practices”.

[139] But more important, the charges related to Peter Valovic, the director of Insight

Electric Inc., specifically state in counts #8, #12, #18, and #24 of Information

#8091, that he, as the director of Insight Electric Inc., had failed to take reasonable

care in preventing the corporation from engaging in an unfair practice by making a

false, misleading or deceptive representation to a consumer, and that this

particular act or omission had also been contrary to s. 17(1) of the CPA 2002, and

thereby, committed an offence under s. 116(3).

48

[140] In addition, s. 116(3), states that “An officer or director of a corporation is guilty of

an offence if he or she fails to take reasonable care to prevent the corporation

from committing an offence mentioned in subsection (1) or (2).” Those counts

related to a director of Insight Electric Inc. failing to prevent the corporation from

engaging in an unfair practice had also specifically referred to the acts or

omissions being contrary to s. 17(1), which states that “No person shall engage in

an unfair practice”, but had not otherwise specifically referred to s. 116(1)(b)(vii)

that refers to “Part VIII, Leasing, section 88 and subsection 89(1)”.

[141] Furthermore, of the three particular references in the specific wording of the

charge in the 6 separate counts that the prosecution seeks an amendment on, two

of the three references are related to or refer to the subject matter of “unfair

practices” while only the statutory provision of s. 116(1)(b)(vii) makes reference to

the subject matter of “leasing”.

The proposed amendment in which the

prosecution seeks to change the specific statutory provision of s. 116(1)(b)(vii) to

s. 116(1)(b)(ii) would be in harmony with and coincide with the two other specific

references in the charge set out in those 6 counts on the subject matter of “unfair

practices”. Subsection 116(1)(b)(ii) specifically states that it is “in respect of Part

III, Unfair Practices, subsection 17(1)”. By amending the third reference to an

offence set out in the charge for those 6 counts, to specifically refer to s.

116(1)(b)(ii) would make all three references in the charge set out in those 6

counts internally consistent and harmonious in their reference to the offence of

“engaging in an unfair practice”.

[142] In addition, the 11 consumers did not testify or complain about signing any

agreements in respect to leases or some aspect of “leasing” with the defendants.

Moreover, the defendants had proceeded in their defence of those particular

charges set out in the 6 counts sought to be amended as offences related to

“engaging in an unfair practice”. In addition, the defendants cannot claim that they

had been surprised or caught unaware that the offences were in relation to

“engaging in an unfair practice”. Furthermore, the defendants did not provide any

evidence that the prosecution had failed to disclose any evidence to them prior to

trial in respect to the defendants committing an offence related to “leasing” as it

pertains to s. 116(1)(b)(vii) and in respect to Part VIII and ss. 88 and 89(1) of the

CPA 2002 in respect to the consumers, nor did they bring a motion of no evidence

at the end of the prosecution’s case that the prosecution had failed to adduce any

evidence in respect to committing an offence related to “leasing”. Instead the

defendants in their defence provided evidence in answer to the charge of

“engaging in an unfair practice”.

[143] Moreover, it is not unreasonable that in 3 informations containing 103 charges that

are set out in 48 separate counts that there would inevitably be typographical

errors. In addition, since the Ministry did not describe in the wording or description

of the offence or particularize the offence as a breach of the “leasing” offences

contrary to s. 88 or contrary to s. 89(1), but had described the offence as an “unfair

49

practice” contrary to 117, the statutory provision stating the offence is under

section 116(1)(b)(vii) instead of the proposed amendment of s. 116(1)(b)(ii)

appears to be a typographical error. Especially, when count #11 on Information

#5731, contains all three descriptors or reference to an offence in the count which

all coincide to an offence of committing an unfair practice contrary to s. 17(1), and

thereby committing an offence under section 116(1)(b)(ii), for which the

prosecution is now seeking an amendment.

[144] Accordingly, after considering the s. 34(4) factors of the P.O.A. the prosecution’s

application to amend counts #7, #11, #17, and #23 on Information # 8091 and

counts #1 and #4 on Information #5740 is granted. The statutory provision in

those 6 counts will be amended from “section 116(1)(b)(vii)” to now read section

“116(1)(b)(ii)”.

(B) WERE THE AGREEMENTS NEGOTIATED BETWEEN THE

DEFENDANTS AND THE 11 CONSUMERS “DIRECT AGREEMENTS”

WITHIN THE MEANING OF THE CONSUMER PROTECTION ACT, 2002?

[145] The defendants contend that the agreements or proposals that had been agreed

to between the 11 consumers and the defendants are not “direct agreements”, and

as such, do not apply to the 11 agreements at issue in this trial.

[146] Moreover, the defendants contend that the agreements that the 11 consumers had

with either Ivan's Electric Ltd. or Insight Electric Inc. were not “direct agreements”,

since it was the consumers who called or solicited the defendants to attend at the

consumer’s homes and that the defendants are not “door-to-door salespeople”,

“itinerant merchants”, or “travelling salespeople. In other words, the defendants

submit that direct agreements are those agreements that arise from door-to-door

sales and not in the circumstances when the consumer calls an electrician or a

plumber to attend at the consumer’s residence for an electrical or plumbing

problem. To support their argument, the defendants rely on academic writing or

legal textbooks that refer to “direct agreements” as ones associated with door-to-

door sales transactions, where an itinerant merchant or travelling salesperson will

just appear at the consumer’s residence unexpectedly and without being called by

the consumer to attend at their home.

In that situation, the door-to-door

salesperson would then approach the consumer at their residence to sell them a

service or good and the agreement would then be negotiated at or entered into at

the consumer’s residence.

[147] However, the prosecution disputes this narrow interpretation of what situations are

covered by a direct agreement and argues that the circumstances surrounding the

transaction between the 11 consumers and the defendants fall within the definition

of a “direct agreement” set out in s. 20(1) of the CPA 2002, even though the 11

consumers had solicited or called Ivan's Electric Ltd. to appear at their residence

for an electrical problem.

50

[148] Ergo, if the agreements between the 11 consumers and the defendant are found

not to be “direct agreements” within the meaning of the CPA 2002, then the

provisions related to direct agreements, such as the right provided under s. 43(1)

of the CPA 2002, for a consumer to cancel an agreement with a supplier during a

10-day cooling off period would not apply to those agreements, which would then

result in many of the charges laid against the defendants being dismissed.

(a) The definition of a “direct agreement” in the CPA 2002.

[149] A “direct agreement” is defined in s. 20(1) of the CPA 2002, and means a

consumer agreement that is negotiated or concluded in person at a place other

than, at the supplier’s place of business, or at a market place, an auction, trade

fair, agricultural fair or exhibition:

20(1) In this Part,

“direct agreement” means a consumer agreement that is

negotiated or concluded in person at a place other than,

(a) at the supplier’s place of business, or

(b) at a market place, an auction, trade fair, agricultural

fair or exhibition;

[150] However, despite the defendant’s argument that direct agreements should only

apply to agreements resulting from door-to-door sales, nowhere in s. 20(1) is there

any reference to “door-to-door sales” or that direct agreements only encompass

agreements resulting from a door-to-door sales transaction.

[151] In addition, the defendants submit another argument why s. 20(1) does not

encompass their agreements with the 11 consumers in this trial is that the

agreement had been signed at the defendant’s “place of business”, which the

defendants argue, would be at the consumer’s house, since this is where the

defendants do their work or ply their trade and since the defendants do not have

an actual “place of business” that consumers can come to.

[152] Therefore, before proceeding with whether the defendants have committed the 89

charges, it will first have to be determined whether the 11 agreements are indeed

“direct agreements” as defined within the meaning of s. 20(1) of the CPA 2002.

51

(b) Public welfare legislation is to be generously interpreted in

a manner that is in keeping with the purposes and

objectives of the legislative scheme.

[153] In Blue Mountain Resorts Ltd. v. Bok, [2013] O.J. No. 520, the Court of Appeal for

Ontario, at paras. 24 to 27, and 29, held that interpreting legislation broadly to

accord with the purpose of the legislation does not on the other hand call for a

limitless interpretation of their provisions, which could extend the reach of the

legislation far beyond what was intended by the legislature [emphasis is mine

below]:

Public welfare legislation is often drafted in very broad, general terms, precisely

because it is remedial and designed to promote public safety and to prevent

harm in a wide variety of circumstances. For that reason, such legislation is to be

interpreted liberally in a manner that will give effect to its broad purpose and

objective: R. v. Timminco Ltd. (2001), 54 O.R. (3d) 21 (C.A.), at para. 22.

[154] Furthermore, in Ontario (Ministry of Labour) v. Hamilton (City) (2002), 58 O.R. (3d)

37 (O.C.A.), at para. 16, Sharpe J.A. reinforced the notion that narrow or technical

interpretations that would interfere with or frustrate the attainment of the

legislature's public welfare objectives are to be avoided, but also that the generous

approach to the interpretation of public welfare statutes does not call for a limitless

interpretation of their provisions:

The OHSA is a remedial public welfare statute intended to guarantee a minimum

level of protection for the health and safety of workers. When interpreting

legislation of this kind, it is important to bear in mind certain guiding principles.

Protective legislation designed to promote public health and safety is to be

generously interpreted in a manner that is in keeping with the purpose and

objectives of the legislative scheme. Narrow or technical interpretations that

would interfere with or frustrate the attainment of the legislature's public welfare

objectives are to be avoided.

This generous approach to the interpretation of public welfare statutes does not

call for a limitless interpretation of their provisions, however.

One of the problems with what is otherwise an understandable approach to the

interpretation of public welfare legislation is that broad language, taken at face

value, can sometimes lead to the adoption of overly broad definitions. This can

extend the reach of the legislation far beyond what was intended by the

legislature and afford the regulating ministry a greatly expanded mandate far

beyond what is needed to give effect to the purposes of the legislation.

…

[155] Moreover, the notion that legislation containing broad language may be given a

restrictive interpretation in order to avoid absurdity in particular circumstances has

been recognized as a principle of statutory interpretation: Ontario v. Canadian

52

Pacific Ltd., [1995] 2 S.C.R. 1031, at pp. 1081-82; and Boma Manufacturing Ltd. v.

Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727, at para. 109, per

Iacobucci J.

[156] But more importantly, interpreting a statutory provision for a precise meaning does

not simply require looking at the plain meaning of each individual word within the

statutory provision in isolation. As the Supreme Court held in Rizzo & Rizzo

Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at pp. 40-41, courts should use the modern

principled approach instead of the plain meaning approach, when they are

required to interpret or construe the meaning of a particular statutory provision,

which requires that the words of an Act are to be read in their entire context and in

their grammatical and ordinary sense harmoniously with the scheme of the Act,

the object of the Act, and the intention of the legislators who enacted the statutory

provision [emphasis is mine below]:

Although much has been written about the interpretation of legislation (see, e.g.

Ruth Sullivan, Statutory Interpretation (1997); Ruth Sullivan, Driedger on the

Construction of Statutes (3rd ed. 1994) (hereinafter "Construction of Statutes");

Pierre-André Côté, The Interpretation of Legislation in Canada (2nd ed. 1991)),

Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates the

approach upon which I prefer to rely. He recognizes that statutory interpretation

cannot be founded on the wording of the legislation alone. At p. 87 he states:

Today there is only one principle or approach, namely, the words of an Act are to

be read in their entire context and in their grammatical and ordinary sense

harmoniously with the scheme of the Act, the object of the Act, and the intention

of Parliament.

[157] Furthermore, s. 64 of the Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, a

statute that governs the interpretation of statutes and regulations enacted by the

Ontario Legislature, states that a fair, large, and liberal interpretation of Ontario

statutes should be made to best ensure the attainment of the object of a statute

[emphasis is mine below]:

Rule of liberal interpretation

64(1) An Act shall be interpreted as being remedial and shall be given such

fair, large and liberal interpretation as best ensures the attainment of its

objects.

Same

(2) Subsection (1) also applies to a regulation, in the context of the Act

under which it is made and to the extent that the regulation is consistent

with that Act.

53

[158] Moreover, in her textbook, Statutory Interpretation (Toronto, Ontario: Irwin Law

Inc., 1997), at pp. 54, 134, and 137, Professor Ruth Sullivan emphasized that

interpreters of legislative text must identify and take into account the purpose of

legislation and by analyzing the words to be interpreted in context, and that

modern legislation is also written in a form that lends itself to purposive analysis

[emphasis is mine below]:

The meaning of a legislative text is determined by analysing the

words to be interpreted in context. Words are analysed in their

immediate context by focusing on the specific provision in which the

words appear and attempting to understand the reasons why the

legislature has chosen this combination of words, this structure, this

punctuation, and so on. Words are also analysed in larger contexts

by comparing the wording of the provision to be interpreted with the

wording of provisions elsewhere in the same or other Acts and by

considering the role of the provision in the scheme to which it

belongs.

…

To achieve a sound interpretation of a legislative text, interpreters

must identify and take into account the purpose of legislation. This

includes the purpose of the provision to be interpreted as well as

larger units - parts, divisions, and the Act as a whole. Once

identified, the purpose is relied on to help establish the meaning of

the text. It is used as a standard against which proposed

interpretations are tested: an interpretation that promotes the

purpose is preferred over one that does not, while interpretations

that would tend to defeat the purpose are avoided.

[159] The principles to follow in the proper interpretation or construction of public welfare

legislation, such as the CPA 2002, had been outlined by Sharpe J.A. for the Court

of Appeal in Ontario (Ministry of Labour) v. Hamilton (City), [2002] O.J. No. 283, at

paras. 16 to 20, which include generously interpreting protective legislation

designed to promote public health and safety in a manner that is in keeping with

the purposes and objectives of the legislative scheme; narrow or technical

interpretations that would interfere with or frustrate the attainment of the

legislature's public welfare objectives are to be avoided; to interpret a legislative

provision in its total context; to consider and take into account all relevant and

admissible indicators of legislative meaning; that the interpretation of the statutory

provision should comply with the legislative text, promote the legislative purpose,

reflect the legislature's intent, and produce a reasonable and just meaning; and

that penal legislation, even of the public welfare variety, must also be interpreted in

a manner consistent with the procedural rights of the accused [emphasis is mine

below]:

The OHSA is a remedial public welfare statute intended to guarantee a minimum

level of protection for the health and safety of workers. When interpreting

54

legislation of this kind, it is important to bear in mind certain guiding principles.

Protective legislation designed to promote public health and safety is to be

generously interpreted in a manner that is in keeping with the purposes and

objectives of the legislative scheme. Narrow or technical interpretations that

would interfere with or frustrate the attainment of the legislature's public welfare

objectives are to be avoided.

This principle has been recognized and applied in several recent decisions of this

court. In R. v. Timminco Ltd. (2001), 54 O.R. (3d) 21 (C.A.) at 27, Osborne

A.C.J.O. stated:

The Occupational Health and Safety Act is a public welfare statute. The broad

purpose of the statute is to maintain and promote a reasonable level of protection

for the health and safety of workers in and about their workplace. It should be

interpreted in a manner consistent with its broad purpose.

Laskin J.A. adopted the same principles when interpreting the Highway Traffic

Act, R.S.O. 1990, c. H.8, s. 84.1 dealing with the hazard of "flying truck wheels"

in Ontario (Minister of Transport) v. Ryder Truck Rental Canada Ltd. (2000), 47

O.R. (3d) 171 at 174:

The modern approach to statutory interpretation calls on the court to interpret a

legislative provision in its total context. The court should consider and take into

account all relevant and admissible indicators of legislative meaning. The court's

interpretation should comply with the legislative text, promote the legislative

purpose, reflect the legislature's intent, and produce a reasonable and just

meaning [Sullivan, Driedger on the Construction of Statutes, 3rd ed. (Toronto:

Butterworths, 1994), at p. 131.] The Supreme Court has repeatedly affirmed this

approach to statutory interpretation, most recently in R. v. Gladue, [1999] 1

S.C.R. 688 at p. 704, 171 D.L.R. (4th) 385, where Cory and Iacobucci JJ. wrote:

As this Court has frequently stated, the proper construction of a statutory

provision flows from reading the words of the provision in their grammatical and

ordinary sense and in their entire context, harmoniously with the scheme of the

statute as a whole, the purpose of the statute, and the intention of Parliament.

The purpose of the statute and the intention of Parliament, in particular, are to be

determined on the basis of intrinsic and admissible extrinsic sources regarding

the Act's legislative history and the context of its enactment ...

In Ontario (Workplace Safety and Insurance Board) v. Hamilton Health Sciences

Corp. (2000), 51 O.R. (3d) 83 at p. 87, Rosenberg J.A. adopted a similar

approach when interpreting the Workplace Safety and Insurance Act, 1997, S.O.

1997, c. 16, Sched. A:

The starting point for the interpretation of the statutory provisions involved in this

appeal is s. 10 of the Interpretation Act, R.S.O. 1990, c. I.11.

10. Every Act shall be deemed to be remedial, whether its immediate purport is

to direct the doing of anything that the Legislature deems to be for the public

good or to prevent or punish the doing of any thing that it deems to be

contrary to the public good, and shall accordingly receive such fair, large and

55

liberal construction and interpretation as will best ensure the attainment of

the object of the Act according to its true intent, meaning and spirit.

(Emphasis added)

By its terms, s. 10 applies to penal statutes. Iacobucci J. considered the

application of s. 10 in Re Rizzo & Rizzo Shoes Ltd., [1998] 1 S.C.R. 27, 154

D.L.R. (4th) 193. He held that s. 10 directs the court to not only consider the plain

meaning of the specific provisions in question, but the scheme of the Act as a

whole, its object and the intention of the legislature.

It remains true, of course, that penal legislation, even of the public welfare

variety, must also be interpreted in a manner consistent with the procedural

rights of the accused. The accused is entitled to have full and fair notice of the

charges and to make full answer and defense to those charges. In the end, a

balance must be struck to arrive at an interpretation that promotes the larger

objects of the legislation and at the same time respects the procedural rights of

the accused.

(i) What is the legislative goal of the CPA 2002?

[160] In Weller v. Reliance Home Comfort Limited Partnership, [2012] O.J. No. 2415,

Rosenberg J.A., for the Court of Appeal for Ontario held, at para. 15, that the main

objective of consumer protection legislation such as the Consumer Protection Act

is to protect consumers [emphasis is mine below]:

The main objective of consumer protection legislation such as the Consumer

Protection Act is to protect consumers: see Richard v. Time Inc., 2012 SCC 8, at

para. 50. Thus, while this particular litigation in reality pits two suppliers against

each other, the Act and Regulation must be interpreted in a manner that furthers

the consumer protection objective. The Act and Regulation contain special

protections for consumers who are bound by remote agreements. Among those

protections is the protection against unfair unilateral amendments of the

agreement set out in s. 42 of the Regulation. Central to this protection is s.

42(2)2, which requires the supplier to give the consumer the option to either

terminate the agreement or retain the existing agreement unchanged as

alternatives to accepting the proposed amendment. As indicated, this agreement

does not give the consumer the right to retain the existing agreement

unchanged. The issue is therefore whether the agreement allows the consumer

to terminate the agreement.

(ii) There has been a paradigm shift in the merchant-

consumer relationship brought about by consumer

protection legislation that changes the relationship that

had been based on the maxim “caveat emptor” -- let the

buyer be aware, to a relationship now based on the

maxim “caveat venditor” -- let the supplier be aware.

56

[161] The prosecution submits that consumer protection legislation which governs the

merchant-consumer relationship is now based on the maxim “caveat venditor”,

which means that the supplier has to be aware of their legal obligations and has to

ensure that the consumer is provided with proper and correct information or

representations about goods and services that they sell to the consumer, which

supplants the maxim of “caveat emptor” where the buyer had to be beware when

entering into agreements or purchasing goods or services from merchants or

suppliers.

[162] This change in describing the merchant-consumer relationship found in present

day consumer protection legislation, the prosecution submits, has been

recognized by the Supreme Court of Canada in Richard v. Time Inc., [2012] S.C.J.

No. 8, where the court in reviewing the consumer protection statute in Quebec had

held, at para. 43, that the measures to protect consumers from fraudulent

advertising practices are one expression of a legislative intent to move away from

the maxim caveat emptor, or "let the buyer beware", and that the maxim caveat

venditor, or “let the seller be aware”, is now far more appropriate to describe the

merchant-consumer relationship [emphasis is mine below]:

The measures to protect consumers from fraudulent advertising practices are

one expression of a legislative intent to move away from the maxim caveat

emptor, or "let the buyer beware". As a result of these measures, merchants,

manufacturers and advertisers are responsible for the veracity of information they

provide to consumers and may, should such information contain falsehoods,

incur the civil or penal consequences provided for in the legislation. As Judge

Matheson of the Ontario County Court explained in R. v. Colgate-Palmolive Ltd.,

[1970] 1 C.C.C. 100, a case involving federal law, the maxim caveat venditor is

now far more appropriate to describe the merchant-consumer relationship. In an

oft-cited judgment, he wrote the following:

This legislation is the expression of a social purpose, namely the establishment

of more ethical trade practices calculated to afford greater protection to the

consuming public. It represents the will of the people of Canada that the old

maxim caveat emptor, let the purchaser beware, yield somewhat to the more

enlightened view caveat venditor- let the seller beware. [p. 102]

(iii) Should direct agreements only be interpreted narrowly

so as to apply to only door-to-door sales and not to

situations where a consumer calls an electrician to

attend at the consumer’s residence for a service call?

[163] The defendants’ belief and argument that “direct agreements” only refer to

agreements resulting from door-to-door sales transactions and not to situations in

which a consumer calls or solicits the supplier to attend at the consumer’s

residence or dwelling is based on their lawyer Evan Moore’s opinion and also

derived from the ESA Review Panel’s off-the-cuff comments on August 26, 2011,

57

that the defendants’ lawyer’s argument had logical merit, as well as from various

textbooks that had referred to examples of direct agreements as ones that are

derived from door-to-door sales transactions.

[164] Moreover, the defendants suggest that s. 35(1)(4)(i) of O. Reg. 17/05, which is

part of the regulation establishing what information is required to be contained in a

direct agreement, requires the name of the person who “solicits” the consumer to

support the defendant’s argument that a direct agreement does not apply to the

situation when a consumer “solicits” the supplier [emphasis is mine below]:

35(1) For the purpose of section 42 of the Act, a direct agreement shall be

signed by the consumer and the supplier and shall set out the following

information:

…

4. The names of,

i. the person, if any, who solicited the consumer in connection

with the agreement,

ii. the person, if any, who negotiated the agreement with the

consumer, and

iii. the person who concluded the agreement with the consumer.

[165] However, the obligation of the supplier under s. 35(1)(4) of O. Reg. 17/05, is that

the supplier provide the name of the person acting for the supplier that either (1)

solicited the consumer in connection with the agreement, (2) negotiated the

agreement with the consumer, or (3) concluded the agreement with the consumer.

The requirement to place the name of the person acting or representing the

supplier who solicits the consumer is but a description of one circumstance in

which the direct agreement could have been imitated and would rightfully include

the situation of a door-to-door salesperson who initiates the contact and gets a

consumer to enter into a direct agreement. However, this particular provision does

not define or restrict direct agreements to only door-to-door sales. The remaining

circumstances under s. 35(1)(4) specify a person who “negotiates the agreement

with the consumer” and the person who “concluded the agreement with the

consumer” also covers other scenarios on how the agreement was initiated and is

broad enough to include the situation where a consumer calls a supplier to the

consumer’s home and then the person acting for or representing the supplier

“negotiates the agreement with the consumer” or “concluded the agreement with

the consumer”. Reading s. 35(1)(4)(i) in insolation without also considering the

other two specified conditions set out in s. 35(1)(4)(i) and (ii) would not be the

correct method to interpret whether a particular consumer agreement is a direct

agreement. When all three specified conditions in s. 35(1)(4) are taken into

consideration, then it is evident that a direct agreement is not based on how the

agreement between a supplier and a consumer was initiated or who contacted

58

who first, but that the agreement was entered into at the consumer’s residence or

dwelling as set out in the definition of a direct agreement in s. 20(1) of the CPA

2002.

[166] But more importantly, as it had been clearly expressed and prescribed under s.

83(1)(a) of O. Reg. 17/05, the legislators have already designated the situation in

which a “consumer had solicited the good or services from the supplier” to be a

direct agreement and not limited to just the situation where the door-to-door

salesperson or the itinerant merchant solicits the consumer to enter into the

agreement for goods or services [emphasis is mine below]:

Limitations on cancellation of direct agreement

83(1) This section applies upon the cancellation by a consumer of a direct

agreement under section 43 of the Act, if the consumer,

(a) solicited the goods or services from the supplier; and

(b) requested that, within 10 days after the day the direct agreement is

entered into, the supplier make delivery or commence performance

under the direct agreement.

(c) Academic writers in defining a direct agreement have only

provided examples of “direct agreements” which include

transactions related to door-to-door sales.

[167] The defendants also rely on academic writers to support their argument that a

direct agreement within the meaning of the CPA 2002 should be narrowly

interpreted, so as to only apply to agreements arising from door-to-door sales

situations.

[168] For example in Halsbury’s Laws of Canada, First edition (Markham, Ont.: Lexis

Nexis Canada, 2011) at p. HCP 5., the authors comment that there is a pervasive

need felt in every province to regulate “itinerant” or “travelling” merchants’ dealings

with consumers in the form of legislation concerning direct sales [emphasis is mine

below]:

HCP-5 Regulation. All of the provinces have legislation concerning direct sales

contracts. Clearly there is a pervasive need, felt in every province, to regulate

itinerant merchants’ dealings with consumers. In some provinces, direct sales

contracts are dealt with in their own statute – that is, separately from other kinds

of consumer agreements. …

[169] Also, in McNaughton, E. L. and Sabet, P.’s textbook, “A Guide to the Ontario

Consumer Protection Act, 2008 edition” (Markham, Ont: LexisNexis, 2007), the

authors describe a direct agreement as the following [emphasis is mine below]:

59

A direct agreement is a consumer agreement that is negotiated or concluded in

person at a place other than the supplier’s place of business or at a marketplace,

an auction, trade fair, agricultural fair, or exhibition. A purchase made through a

“door-to-door” sale is an example of a direct agreement. Sections 41 to 43 of the

CPA and sections 34 and 35 of the CPAR specifically discuss direct agreements.

[170] However, none of these sources state that a direct agreement is to apply to only

agreements that result from a door-to-door sales transaction, but that an

agreement arising from a door-to-door sales transaction or from a travelling

merchant is but an example of a “direct agreement”.

[171] Take for example, where a business selling goods or services has someone drop

off a flyer at a consumer’s house advertising a good or service such as a specific

vacuum cleaner or a water heater at a low price and the consumer then calls the

telephone number on that flyer to have a salesperson attend the consumer’s

house and the salesperson sells the consumer a different vacuum cleaner or water

heater using high pressure tactics at a much higher price, would not be unlike the

situation of a door-to-door sales person who approaches a consumer at their

residence unexpectedly trying to sell the same vacuum cleaner or water heater to

a consumer. Both of these two circumstances would still result in the same

consequence of an unequal relationship between the vendor and the consumer for

which the direct agreement provisions were meant to protect consumers and

which would provide the same protection regardless of how the agreement had

been initiated.

[172] Therefore, in interpreting legislation whose purpose is to protect a consumer in the

marketplace, it should not be critical in how the vendor or supplier arrives at the

consumer’s house, but that a consumer had entered into an agreement at their

dwelling where the consumer may have been unduly pressured into entering into

an unconscionable and unfair agreement or had entered into a consumer

agreement after an unfair tactic or a false, misleading, or deceptive representation

had been made by a supplier to the consumer. As such, a consumer who enters

into an agreement to pay a supplier a substantial amount of money for plumbing,

electrical, or renovation work may need that 10-day cooling off period to decide, to

do more research, or to talk it over with family or friends, before proceeding with

that expensive repair or installation.

[173] Ergo, agreements resulting from a door-to-door sales transaction are indeed direct

agreements, but direct agreements are not limited to only such transactions, as

agreements arising from door-to-door transactions are only a subcategory of

consumer agreements classified as a direct agreement. Direct agreements, as

defined under s. 20(1) of the CPA 2002, include agreements entered into at the

consumer’s residence, whether the transaction had been solicited by the

consumer or solicited by the supplier.

60

(d) Bill 59 makes reference to the “direct agreement”

provisions in the Consumer Protection Act, 2002, applying

to situations or transactions where the consumer calls the

supplier to attend at the consumer’s residence.

[174] Although Bill 59, which is legislation the Ministry of Government and Consumer

Services proposes for enactment in Ontario, had not been raised at trial, it is

helpful to consider it in respect to the argument that direct agreements only apply

to door-to-door sales transaction and not to circumstances where a consumer calls

or solicits a tradesperson to attend at the consumer’s residence for a service call.

Presently, as of March 7, 2017, Bill 59 has been ordered for Third Reading, and is

a bill that proposes legislation to be enacted with respect to home inspections and

to amend various Acts with respect to financial services and consumer protection.

In respect to consumer protection and to “direct agreements”, clause 16 of Bill 59

proposes to amend s. 43.1(1) of the CPA 2002, so as to prohibit suppliers while at

a consumer’s dwelling or at any other prescribed place, from soliciting the

consumer to enter into a “direct agreement” for the supply of prescribed goods or

services or enter into such an agreement ”unless the consumer has initiated

contact with the supplier and has specifically requested that the supplier attend at

the consumer’s dwelling or the other prescribed place for the purpose of entering

into such an agreement” [emphasis is mine below]:

Bill 59, Putting Consumers First Act (Consumer Protection Statute LawAmendment),

2016

An Act to enact a new Act with respect to home inspections and to amend various

Acts with respect to financial services and consumer protection

…

16 Section 43.1 of the Act is repealed and the following substituted:

Restriction on entering into certain direct agreements

43.1(1) No supplier shall, while at a consumer’s dwelling or at any other

prescribed place, solicit the consumer to enter into a direct

agreement for the supply of prescribed goods or services or enter

into such an agreement unless the consumer has initiated contact

with the supplier and has specifically requested that the supplier

attend at the consumer’s dwelling or the other prescribed place for

the purpose of entering into such an agreement.

Same

(2) The following activities do not constitute solicitation for the purpose

of subsection (1):

1. Leaving marketing materials at a consumer’s dwelling or any

other place prescribed for the purpose of that subsection

61

without attempting to contact the consumer with respect to any

prescribed direct agreement.

2. Such other activities that are prescribed.

[175] Therefore, as can been seen in the proposed amendment to s. 43.1(1) of the CPA

2002, by clause 16 of Bill 59, even where the legislators intend to prohibit

suppliers while attending at a consumer’s dwelling and from soliciting the

consumer to enter into a direct agreement for the supply of prescribed goods or

services or to enter into such a direct agreement, except where the consumer has

initiated contact with the supplier and has specifically requested that the supplier

attend at the consumer’s dwelling then the supplier is permitted to solicit or enter

into a “direct agreement” with the consumer at the consumer’s dwelling. As can

be seen in this proposed amendment to s. 43.1(1) of the CPA 2002, the

agreement which would result between the supplier and the consumer that had

been initiated by the consumer calling the supplier to the consumer’s house and

the contract had been entered into at the consumer’s residence would still be

viewed by the legislators as a “direct agreement”.

(e) The agreements between the defendants and the 11

consumers are “direct agreements” within the meaning of

the CPA 2002.

[176] Accordingly, the definition of a “direct agreement” under s. 20(1) of the CPA 2002,

which defines it as a consumer agreement that is negotiated or concluded in

person “at a place other than, at the supplier’s place of business, or at a market

place, an auction, trade fair, agricultural fair or exhibition” encompasses the

situation, such as here, where a consumer calls a supplier of goods and services

to attend at the consumer’s house, which would not be the supplier’s place of

business, and where the agreement is negotiated or concluded at the consumer’s

dwelling would coincide with the purpose of the CPA 2002 of protecting

consumers.

Therefore, the 11 consumer agreements which include the

documents entitled, “work orders, invoices, and proposals”, that had been entered

into by the 11 consumers with either Ivan's Electric Ltd. or with Insight Electric Inc.

are direct agreements within the meaning of s. 20(1) of the CPA 2002.

(C) IN RESPECT TO THE RULE IN BROWNE AND DUNN, DID THE

DEFENDANTS HAVE TO PUT ANY PROPOSED CONTRADICTION TO THE

CROWN WITNESSES IN CROSS-EXAMINATION BEFORE THE

DEFENDANTS COULD SUGGEST THAT THE CROWN WITNESSES HAD

NOT BEEN CREDIBLE IN THEIR CLOSING ARGUMENTS?

[177] The prosecution submitted that the defendants had run afoul of the Rule in Browne

and Dunn by not asking the consumers when they were in the witness stand to

comment on conversations that supposedly had occurred between the consumers

62

and the defendants or particular actions that the defendants had done in front of

the consumer while the defendants were troubleshooting the consumer’s house

and electrical system for problems, but then later in the defence part of the trial the

defendants testified as to what the consumers had stated to the defendants.

However, the defendants submit that they did not attack the credibility of the

consumers who testified at trial and if there is no issue with credibility then the

Rule in Browne and Dunn has not been breached.

(1) Is the Rule In Browne And Dunn a legal principle or a rule of

fairness in Canada?

[178] The Rule in Browne and Dunn was considered by the Supreme Court of Canada

in R. v. Palmer, [1979] S.C.J. No. 126, which accepted the British Columbia Court

of Appeal’s interpretation of the Rule in Browne and Dunn, that it is not necessary

in order to impeach a witnesses' credit, that one should take the witness through

the story which they have told, giving the witness notice by questions that you

impeached his credit. Moreover, the Supreme Court also accepted the British

Columbia Court of Appeal’s holding that the effect to be given to the absence or

brevity of cross-examination depends upon the circumstances of each case and

that there can be no general or absolute rule as it is a matter of weight to be

decided by the trier of fact [emphasis is mine below]:

The trial judge found that Palmer was not a credible witness and indicated that

he was not willing to accept his testimony on important matters. In dealing with

this question, he made reference to these incidents as well as much other

evidence. Counsel for Palmer objects to this on the basis that Palmer's version of

what occurred on these occasions stands uncontroverted and, particularly in view

of the Crown's failure to examine Ford upon these matters, it is argued that the

trial judge should have accepted Palmer's version of events and not drawn

inferences adverse to him. The point was summarized in the appellants' factum

in these words:

It is submitted that the Court of Appeal for British Columbia erred in concluding

that it was not necessary for the prosecution to have examined Ford in-chief with

respect to the three incidents and that it was not necessary to cross-examine the

Appellant Douglas Garnet Palmer when he testified with respect to the said three

incidents. Had the Court of Appeal for British Columbia found that the learned

trial Judge had erred in rejecting the testimony of Douglas Garnet Palmer with

respect to the said three incidents then the basis for the learned trial Judge's

acceptance of Ford's testimony would have disappeared and the Court of Appeal

would then have quashed the convictions against the Appellants.

In dealing with this argument in the Court of Appeal, McFarlane J.A. said for the

Court:

The second ground of appeal argued was that the trial Judge should have found

that the evidence of Douglas Palmer raised at least a reasonable doubt of his

guilt. With particular reference to the three occasions to which I have just

referred, it was said that Palmer's evidence was not shaken in cross-examination

and it is suggested he was not specifically questioned about one or two of them.

63

Reference was made to Browne v. Dunn (1894) The Reports 67 and to Rex v.

Hart (1932) 23 C.A.R. 202. I respectfully agree with the observation of Lord

Morris in the former case at page 79:

I therefore wish it to be understood that I would not concur in ruling that it was

necessary in order to impeach a witnesses' credit, that you should take him

through the story which he had told, giving him notice by questions that you

impeached his credit.

In my opinion the effect to be given to the absence or brevity of cross-

examination depends upon the circumstances of each case. There can be no

general or absolute rule. It is a matter of weight to be decided by the tribunal of

fact, vide: Sam v. Canadian Pacific Limited (1976) 63 D.L.R. (3d) 294 and cases

cited there by Robertson, J.A. at 315-7. In the present case Douglas Palmer was

cross-examined extensively. It seems to me the circumstances are such that it

must have been foreseen his credit would be attacked if he testified to his

innocence. In any event, this was made plain when he was cross-examined. The

trial Judge gave a careful explanation for his acceptance of the story of Ford and

rejecting that of Douglas Palmer. I cannot give effect to this ground of appeal.

I am in full agreement with these words and I do not consider it necessary to add

to them save to emphasize that the finding against the credibility of Palmer was

made upon much more than the evidence of these three events. It was based

upon a consideration of the whole of the evidence including the full examination

and cross-examination of Palmer. I would dismiss the appeal.

[179] Also, in R. v. Verney, [1993] O.J. No. 2632, at paras. 25 to 29, the Court of Appeal

for Ontario considered the application of the Rule in Browne v. Dunn and

confirmed that it is a rule of fairness that prevents the "ambush" of a witness by

not giving the witness an opportunity to state their position with respect to later

evidence which would contradict the witness on an essential matter. Moreover,

the Court of Appeal emphasized that this rule of fairness is not an absolute rule

and that counsel must not feel obliged to slog through a witness's evidence-in-

chief putting him on notice of every detail that the defence does not accept

[emphasis is mine below]:

It is the position of the appellant that the learned trial judge erred in instructing the

jury that defence counsel should have put to Williams in cross-examination, all

aspects of any proposed defence evidence, where it would conflict with Williams'

evidence, and that counsel's failure to do so could be considered by them in

assessing the weight to be attached to the appellant's evidence.

It is apparent from the cross-examination by defence counsel that the appellant took

the position that Williams had fabricated the appellant's involvement in these

robberies because of incidents that occurred when the two of them were in prison.

These incidents caused the appellant to dislike Williams and, he believed, caused

Williams to seek revenge against him.

This issue arose initially when Crown counsel objected to portions of the

examination-in-chief of the appellant on the basis that certain of the evidence which

he was giving was inconsistent with the evidence of Williams, and yet had not been

put to Williams during cross-examination by defence counsel. Extensive submissions

64

followed, during the course of which defence counsel took the position that he had

put the essence of the defence position to Williams, who had denied it and would

inevitably continue to do so; that it would be a "totally ludicrous waste of time" for him

to put to Williams, the entire anticipated defence evidence; and that the suggestion

that he was required to do so was "novel" and "completely unfounded". The trial

judge ultimately permitted the evidence to be heard, and ruled that the failure to put

the defence evidence to Williams during cross-examination went to weight, not to

admissibility, and that he would deal with the issue during his charge.

This admonition, based on a civil case, Browne v. Dunn [1894] 6 The Reports 67,

was not warranted in this case. Browne v. Dunn is a rule of fairness that prevents the

"ambush" of a witness by not giving him an opportunity to state his position with

respect to later evidence which contradicts him on an essential matter. It is not,

however, an absolute rule and counsel must not feel obliged to slog through a

witness's evidence-in-chief putting him on notice of every detail that the defence

does not accept. Defence counsel must be free to use his own judgment about how

to cross-examine a hostile witness. Having the witness repeat in cross-examination,

everything he said in chief, is rarely the tactic of choice. For a fuller discussion on

this point, see Palmer v. The Queen, (1979) 50 C.C.C. (2d) 193 (S.C.C.) at pp. 209-

10.

I think that the trial judge was being overly technical in this case. This was the third

robbery trial and Williams had testified at all previous proceedings. There was no

suggestion of surprise in what the appellant was to say. He had always denied his

involvement in the crime spree and he had given details of his alibi to the police. I

cannot see how on the facts of this case there was anything unfair to Williams or the

Crown arising out of the way in which defence counsel cross-examined Williams. I

agree with appellant's counsel that the trial judge unfairly limited the effect of

legitimate defence evidence by his comments to the jury.

[180] As a result, if the defendants’ evidence contradicts or will contradict the evidence

of any of the 11 consumers who testified, but the proposed contradiction was not

put the particular witness during cross-examination, the evidence of the witness

will still be considered and the necessary or appropriate weight will be placed on

that evidence after all the evidence is considered.

(2) Have the testimony of the consumers been credible?

[181] The defendants submit there is no issue with the credibility of the consumers who

testified at trial, nor does the testimony of the 11 consumers who testified at trial

raise issues of credibility.

[182] Furthermore, the 11 consumers provided their testimony in a forthright and

credible manner.

(3) Have the testimony of the defendants been credible?

[183] The prosecution, on the other hand, contends the defendants, Ivan Valovic and

Peter Valovic were not credible and that they had changed their stories to

65

constantly to meet the issue that had been raised during their testimony.

However, counsel for the defendants submit that the defendants were forthright

and credible and any equivocating was only on exact times and hours, since it

related to being able to properly recall events that had occurred several years ago,

so that it is not reasonable to require exact times or hours or all details of events

that had occurred.

[184] In respect to Ivan Valovic’s and Peter Valovic’s testimony, the only parts of their

testimony that will be disregarded is the testimony of Ivan Valovic in which he

testified that many of the consumers “were happy” or that “the consumers did not

care about which company appeared to do the job”. This would be self-serving

evidence and testimony in respect to the consumer’s state of mind, which Ivan

Valovic may not necessarily be able to or reliably testify about.

[185] And, although some of Ivan Valovic’s and Peter Valovic’s testimony is self-serving,

ambiguous, and may not be frank, reliable or sincere, this testimony does not

make all of their respective testimony unworthy of acceptance.

(D) HAS THE PROSECUTION PROVEN BEYOND A REASONABLE

DOUBT THAT THE DEFENDANTS HAVE COMMITTED THE ACTUS REUS

OF THE OFFENCES THEY HAVE BEEN RESPECTIVELY CHARGED

WITH?

[186] In determining if the actus reus for the offence of the 89 charges have been

proven beyond a reasonable doubt a general discussion of the three categories of

offences and the offences in which Ivan Valovic and Peter Valovic were charged

as directors of the corporate defendants will be undertaken first, which will then be

followed by a discussion of the defendants’ due diligence defence. Finally, a more

specific discussion of the charges in respect to each consumer will then be

undertaken.

(1) WERE IVAN VALOVIC AND PETER VALOVIC PARTY TO AN

OFFENCE COMMITTED BY IVAN'S ELECTRIC LTD. AND

INSIGHT ELECTRIC INC.?

[187] Subsection 77(1) of the Provincial Offences Act, R.S.O. 1990, c. P.33 (“P.O.A.”),

sets out four circumstances in which an individual could be found to be a party to

and guilty of an offence, namely as: (1) a principal offender, (2) as an aider, (3) as

an abettor, and (4) as someone who had common intention to commit the offence

with the person who actually committed the offence:

Parties to offence

77(1) Every person is a party to an offence who,

(a) actually commits it;

66

(b) does or omits to do anything for the purpose of aiding any person to

commit it; or

(c) abets any person in committing it.

Common purpose

(2) Where two or more persons form an intention in common to carry out an

unlawful purpose and to assist each other therein and any one of them, in

carrying out the common purpose, commits an offence, each of them who

knew or ought to have known that the commission of the offence would be

a probable consequence of carrying out the common purpose is a party to

the offence.

[188] In addition, s. 116(3) of the CPA 2002 also makes a director or officer of an

corporation guilty of an offence it they fail to take reasonable care to prevent

the corporation from committing an offence mentioned in ss. 116(1) and (2)

of the Act:

116(3) An officer or director of a corporation is guilty of an offence if he or she

fails to take reasonable care to prevent the corporation from committing

an offence mentioned in subsection (1) or (2).

[189] Furthermore, to determine whether someone had been party to an offence in

respect to a criminal offence, the Supreme Court of Canada in R. v. Vu, [2012]

S.C.J. No. 40, at paras. 58 and 59, had held that an individual will bear the same

responsibility for the offence regardless of whether they are the principal, aider, or

abettor of the offence [emphasis is mine below]:

Under s. 21(1), a person is criminally liable, as a party to an offence, if that

person, having the requisite intent, plays one of the three enumerated roles in

the offence -- principal, aider or abettor. An individual will bear the same

responsibility for the offence regardless of which particular role he or she

played: R. v. Thatcher, [1987] 1 S.C.R. 652, at pp. 689-90. As this Court

recently explained in R. v. Briscoe, 2010 SCC 13, [2010] 1 S.C.R. 411, a

person becomes a party to an offence when that person -- armed with

knowledge of the principal's intention to commit the crime and with the

intention of assisting the principal in its commission -- does (or, in some

circumstances, omits to do) something that assists or encourages the principal

in the commission of the offence (paras. 14-18).

In my view, the well-established principles of s. 21(1) criminal liability apply

with equal force to continuing offences that have been completed in law but

not in fact. In particular, where an accused -- with knowledge of the principal's

intention to see a continuing offence through to its completion -- does (or omits

67

to do) something, with the intention of aiding or abetting the commission of the

ongoing offence, party liability is established.

[190] Also, the Supreme Court in R. v. Thatcher, [1987] 1 S.C.R. 652, at paras. 71 to 73,

had held that it is no longer necessary to specify in the charge the nature of an

accused's participation in the offence, whether as principal, aider, or abettor

[emphasis is mine below]:

I should perhaps note that the old common law authorities stand for the

proposition that an indictment may charge all who are present and abet the act

as principals in the first degree. As Fauteux J. states in Harder, at p. 492:

At common law, the actor or actual perpetrator of the fact and those who are,

actually or constructively, present at the commission of the offence and aid and

abet its commission, are distinguished as being respectively principal in the first

degree and principals in the second degree; yet, in all felonies in which the

punishment of the principal in the first degree and of the principals in the second

degree is the same, the indictment may charge all who are present and abet as

principals in the first degree.

Thus, the common law generally drew no distinction between a principal in the

first degree (someone who actually committed the offence) and a principal in

the second degree (someone who was actually or constructively present but

who only aided and abetted in the commission of the offence) for the purposes

of indictment. The upshot of this rule was stated in East, Pleas of the Crown

(1803), vol. 1, at p. 350: "the blow of one is, in law, the blow of all". The

common law did, however, draw a distinction between principals and

accessories. Accessories were those who conspired with the principal in the

first degree or who aided and abetted him but were neither actually nor

constructively present at the scene of the crime. See R. v. Smith (1876), 38

U.C.Q.B. 218, at pp. 227-28. Thus, if Thatcher aided and abetted, rather than

personally committed, I do not think it is contended that he was necessarily

physically present at the murder. Therefore, his case might well not fall within

the old common law rule permitting one charge but two different possible

modes of participation in the offence. But this is precisely the distinction that

disappeared when Parliament abolished the common law distinction between

principals and accessories. As Fauteux J. states in Harder, at p. 493, in

relation to s. 21's predecessor:

This Imperial statute [24 & 25 Vict. c. 94], later adopted into Canadian law

(R.S.C. 1886, c. 145) practically brought to an end the distinctions between

accessories before the fact and principals in the second degree.

By the enactment of section 61, the predecessor of section 69, these

distinctions in the substantive law entirely disappeared from our criminal laws

when codified in 1892. With them, of course, also disappeared, because being

made no longer necessary, the relevant adjective rules related to the framing

of the indictment of such persons who, not actually committing the offence

charged, were then made, by statute, principals and equally party to, guilty of

and punishable for the offence as if actually committed by them. It is

unthinkable that, getting rid of the difficulties arising out of these prior

68

distinctions, Parliament would, in the same breath, have created new ones by

refusing to the Crown the right to indict -- which right it had before, under

common and statutory law -- as principal simpliciter, either as a principal in the

second degree or an accessory before the fact, and this, under the regime of

this new law holding each and all particeps criminis as being nothing less than

principals.

Thus, s. 21 has been designed to alleviate the necessity for the Crown

choosing between two different forms of participation in a criminal offence.

The law stipulates that both forms of participation are not only equally

culpable, but should be treated as one single mode of incurring criminal

liability. The Crown is not under a duty to separate the different forms of

participation in a criminal offence into different counts. Obviously, if the charge

against Thatcher had been separated into different counts, he might well have

been acquitted on each count notwithstanding that each and every juror was

certain beyond a reasonable doubt either that Thatcher personally killed his

ex-wife or that he aided and abetted someone else who killed his ex-wife. This

is precisely what s. 21 is designed to prevent.

In sum, this Court has held that it is no longer necessary to specify in the

charge the nature of an accused's participation in the offence: Harder.

Moreover, if there is evidence before a jury that points to an accused either

committing a crime personally or, alternatively, aiding and abetting another to

commit the offence, provided the jury is satisfied beyond a reasonable doubt

that the accused did one or the other, it is "a matter of indifference" which

alternative actually occurred: Chow Bew. It follows, in my view, that s. 21

precludes a requirement of jury unanimity as to the particular nature of the

accused's participation in the offence. Why should the juror be compelled to

make a choice on a subject which is a matter of legal indifference?

[191] Furthermore, in R. v. Briscoe, [2010] 1 SCR 411, at paras. 13 to 18, the Supreme

Court noted that Canadian criminal law does not distinguish between the principal

offender and parties to an offence in determining criminal liability, but that the

actus reus and mens rea for aiding or abetting, however, are distinct from those of

the principal offence. In addition, the Supreme Court explained that the actus reus

of aiding or abetting is doing or omitting to do something that assists or

encourages the perpetrator to commit the offence. However, the Court also noted

that the concepts of aiding or abetting are distinct and that liability could flow from

either one. They further noted that the concept of aiding under the statutory

provision generally means to assist or help the actor who commits the offence,

while to abet includes encouraging, instigating, promoting, or procuring the crime

to be committed [emphasis is mine below]:

Canadian criminal law does not distinguish between the principal offender and

parties to an offence in determining criminal liability. Section 21(1) of the

Criminal Code makes perpetrators, aiders, and abettors equally liable:

21. (1) Every one is a party to an offence who

69

(a) actually commits it;

(b) does or omits to do anything for the purpose of aiding any

person to commit it; or

(c) abets any person in committing it.

The person who provides the gun, therefore, may be found guilty of the same

offence as the one who pulls the trigger. The actus reus and mens rea for

aiding or abetting, however, are distinct from those of the principal offence.

The actus reus of aiding or abetting is doing (or, in some circumstances,

omitting to do) something that assists or encourages the perpetrator to commit

the offence. While it is common to speak of aiding and abetting together, the

two concepts are distinct, and liability can flow from either one. Broadly

speaking, “[t]o aid under s. 21(1)(b) means to assist or help the actor. . . . To

abet within the meaning of s. 21(1)(c) includes encouraging, instigating,

promoting or procuring the crime to be committed”: R. v. Greyeyes, 1997

CanLII 313 (SCC), [1997] 2 S.C.R. 825, at para. 26. The actus reus is not at

issue in this appeal. As noted earlier, the Crown argued at trial that Mr.

Briscoe was both an aider and an abettor. The trial judge’s finding that Mr.

Briscoe performed the four acts of assistance described above is not disputed.

Of course, doing or omitting to do something that resulted in assisting another

in committing a crime is not sufficient to attract criminal liability. As the Court

of Appeal for Ontario wrote in R. v. F. W. Woolworth Co. (1974), 1974 CanLII

707 (ON CA), 3 O.R. (2d) 629, “one does not render himself liable by renting

or loaning a car for some legitimate business or recreational activity merely

because the person to whom it is loaned or rented chooses in the course of

his use to transport some stolen goods, or by renting a house for residential

purposes to a tenant who surreptitiously uses it to store drugs” (p. 640). The

aider or abettor must also have the requisite mental state or mens

rea. Specifically, in the words of s. 21(1)(b), the person must have rendered

the assistance for the purpose of aiding the principal offender to commit the

crime.

The mens rea requirement reflected in the word “purpose” under s. 21(1)(b)

has two components: intent and knowledge. For the intent component, it was

settled in R. v. Hibbert, 1995 CanLII 110 (SCC), [1995] 2 S.C.R. 973, that

“purpose” in s. 21(1)(b) should be understood as essentially synonymous with

“intention”. The Crown must prove that the accused intended to assist the

principal in the commission of the offence. The Court emphasized that

“purpose” should not be interpreted as incorporating the notion of “desire” into

the fault requirement for party liability. It is therefore not required that the

accused desired that the offence be successfully committed (Hibbert, at para.

35). The Court held, at para. 32, that the perverse consequences that would

flow from a “purpose equals desire” interpretation of s. 21(1)(b) were clearly

illustrated by the following hypothetical situation described by Mewett and

Manning:

70

If a man is approached by a friend who tells him that he is going to rob a bank

and would like to use his car as the getaway vehicle for which he will pay him

$100, when that person is . . . charged under s. 21 for doing something for the

purpose of aiding his friend to commit the offence, can he say “My purpose was

not to aid the robbery but to make $100”? His argument would be that while he

knew that he was helping the robbery, his desire was to obtain $100 and he did

not care one way or the other whether the robbery was successful or not.

(A. W. Mewett and M. Manning, Criminal Law (2nd ed. 1985), at p. 112)

The same rationale applies regardless of the principal offence in

question. Even in respect of murder, there is no “additional requirement that

an aider or abettor subjectively approve of or desire the victim’s death”

(Hibbert, at para. 37 (emphasis deleted)).

As for knowledge, in order to have the intention to assist in the commission of

an offence, the aider must know that the perpetrator intends to commit the

crime, although he or she need not know precisely how it will be

committed. That sufficient knowledge is a prerequisite for intention is simply a

matter of common sense. Doherty J.A. in R. v. Maciel, 2007 ONCA 196

(CanLII), 219 C.C.C. (3d) 516, provides the following useful explanation of the

knowledge requirement which is entirely apposite to this case (at paras. 88-

89):

. . . a person who is alleged to have aided in a murder must be shown to have

known that the perpetrator had the intent required for murder under

s. 229(a): R. v. Kirkness (1990), 1990 CanLII 57 (SCC), 60 C.C.C. (3d) 97

(S.C.C.) at 127.

The same analysis applies where it is alleged that the accused aided a

perpetrator in the commission of a first degree murder that was planned and

deliberate. The accused is liable as an aider only if the accused did

something to assist the perpetrator in the planned and deliberate murder and

if, when the aider rendered the assistance, he did so for the purpose of aiding

the perpetrator in the commission of a planned and deliberate murder. Before

the aider could be said to have the requisite purpose, the Crown must prove

that the aider knew the murder was planned and deliberate. Whether the

aider acquired that knowledge through actual involvement in the planning and

deliberation or through some other means, is irrelevant to his or her culpability

under s. 21(1).

It is important to note that Doherty J.A., in referring to this Court’s decision in

R. v. Kirkness, 1990 CanLII 57 (SCC), [1990] 3 S.C.R. 74, rightly states that

the aider to a murder must “have known that the perpetrator had the intent

required for murder”. While some of the language in Kirkness may be read as

requiring that the aider share the murderer’s intention to kill the victim, the

case must now be read in the light of the above-noted analysis in

Hibbert. The perpetrator’s intention to kill the victim must be known to the

aider or abettor; it need not be shared. Kirkness should not be interpreted as

requiring that the aider and abettor of a murder have the same mens rea as

the actual killer. It is sufficient that he or she, armed with knowledge of the

perpetrator’s intention to commit the crime, acts with the intention of assisting

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the perpetrator in its commission. It is only in this sense that it can be said

that the aider and abettor must intend that the principal offence be committed.

[192] Moreover, in R. v. Isaac, [1984] 1 S.C.R. 74, the Supreme Court, in deciding

whether someone is party to an offence, had held that where an accused is being

tried alone and there is evidence that more than one person was involved in the

commission of the offence, even though the identity of the other participant or

participants is unknown, and even though the precise part played by each

participant may be uncertain, the accused could still be considered to be a party to

the offence where there is evidence that an offence had been committed and that

the accused had participated in some way to the commission of that offence

[emphasis is mine below]:

It is perfectly clear that there was evidence upon which a jury could have

found that an offence was committed, an unlawful killing, which could have

been murder or manslaughter. There was as well evidence from which a jury

could have concluded that both the respondent and Barnaby participated in

the assault which caused the death and in doing so assisted each other,

Barnaby engaging Lloyd Arsenault while the respondent pummelled the

deceased and later joining the attack on the deceased while the respondent

"grabbed Lloyd". There was nothing, however, in the evidence of those who

participated in the fighting or in the medical evidence to enable the jury to say

whose blow or blows caused the death. The inescapable conclusion from the

medical evidence, however, would have been that the injuries received by the

deceased resulted in his death, all having been suffered before death. It

follows then that a properly instructed jury could have found on the evidence

that the respondent and Barnaby were parties to the unlawful killing and could

therefore have been convicted. It was in these circumstances a fatal error to

exclude consideration of s. 21(1) of the Code from the jury.

I do not overlook the fact that only the respondent was charged in the

indictment and that the record is silent as to charges that may have been

brought against the other participants. Nonetheless, where there is evidence

that more than one person participated in the commission of a crime, even

though only one is charged, a direction under s. 21 of the Criminal Code may

be necessary. I note the words of Martin J.A. in R. v. Sparrow (1979), 51

C.C.C. (2d) 443, at p. 458, where, speaking for the Ontario Court of Appeal

(Martin, Lacourcière and Thorson JJ.A.), he said:

I am of the view that it is also appropriate, where an accused is being tried

alone and there is evidence that more than one person was involved in the

commission of the offence, to direct the jury with respect to the provisions of

s. 21 of the Code, even though the identity of the other participant or

participants is unknown, and even though the precise part played by each

participant may be uncertain.

I adopt those words as a correct statement of the law.

[193] Furthermore, the word “abet” is defined at p. 17 in Black's Law Dictionary, 4th ed.

(St. Paul, Minn.: West Publishing, 1968), and includes the offender having

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“knowledge of the wrongful purpose of the perpetrator and counsel and

encouragement in the crime”; and it also includes “[t]o facilitate the commission of

a crime, promote its accomplishment, or help in advancing or bringing it about”.

As well, the authors emphasized that the words, “Aid" and "Abet" are nearly

synonymous terms as generally used; but, strictly speaking, the former term does

not imply guilty knowledge or felonious intent, whereas the word "abet" includes

knowledge of the wrongful purpose and counsel and encouragement in the

commission of the crime [emphasis is mine below]:

ABET. A French word combined of two words "a" and "beter"—to bait or excite

an animal. It includes knowledge of the wrongful purpose of the perpetrator

and counsel and encouragement in the crime. People v. Terman, 4

Cal.App.2d 345, 40 P.2d 915, 916.

To encourage, incite, or set another on to commit a crime. This word is always

applied to aiding the commission of a crime. To abet another to commit a

murder is to command, procure, or counsel him to commit it, Old Nat. Brev.

21; Co. Litt. 475; to command, procure, counsel, encourage, induce, or assist,

Short v. Commonwealth, 240 Ky. 477, 42 S.W.2d 696, 697; to encourage,

counsel, induce, or assist, State v. Watts, Nev., 296 P. 26.

To facilitate the commission of a crime, promote its accomplishment, or help in

advancing or bringing it about. State v. Lord, 42 N.M. 638, 84 P.2d 80, 86. It

includes knowledge of wrongful purpose of perpetrator. Daniels v. State, 58

Ga. App. 599, 199 S.E. 572, 577. State v. Kneedy, 232 Iowa 21, 3 N.W.2d

611, 615. People v. Stein, 55 Cal.App.2d 417, 130 P.2d 750, 751 (permitting

wife to remain in house of prostitution).

See Abettor; Aid and Abet.

"Aid" and "abet" are nearly synonymous terms as generally used; but, strictly

speaking, the former term does not imply guilty knowledge or felonious intent,

whereas the word "abet" includes knowledge of the wrongful purpose and

counsel and encouragement in the commission of the crime. Forgery, People

v. Dole, 122 Cal. 486, 55 P. 581, 68 Am. St. Rep. 50; Raiford v. State, 59 Ala.

106; Violation of law against free passes, State v. Ankrom, 86 W.Va. 570, 103

S.E. 925, 927; Crime against nature, State v. Start, 65 Or. 178, 132 P. 512,

513; Robbery, People v. Powers, 293 Ill. 600, 127 N.E. 681, 682.

Instigate synonymous (malicious prosecution) Hughes v. Van Bruggen, 44

N.M. 534, 105 P.2d 494, 499.

"Abet" smacks more of technical terminology than does the word "aid", but it is

almost synonymous with the word "aid".

[194] But more importantly, since a corporation by its very nature is an artificial entity

created by statute, and which can only act through a human person, then the

defendants, Ivan Valovic and Peter Valovic, who are respectively the directors of

the corporate defendants, Ivan's Electric Ltd. and Insight Electric Inc., then the

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actions or omissions of Ivan's Electric Ltd. and Insight Electric Inc. that are found

to contravene the CPA 2002, will have been the respective acts or omissions of

Ivan Valovic and Peter Valovic, and as such, would by necessary implication make

Ivan's Electric Ltd. and Peter Valovic, a party to the offence committed respectively

by Ivan's Electric Ltd. or by Insight Electric Inc.

[195] Now, in applying those principles to the case at bar, both the defendants, Ivan

Valovic and Peter Valovic, would be considered to be a party to an offence under

s. 77(1) of the P.O.A., if Ivan Valovic or Peter Valovic actually commit the offence

or does or omits to do anything for the purpose of abetting the corporate

defendants, Ivan's Electric Ltd. or Insight Electric Inc., or in respect to each other,

in committing the offences set out in the 89 charges in 40 counts that the

corporate defendants or any of the defendants have been charged with. And, if

the defendants Ivan Valovic or Peter Valovic did or omitted to do anything for the

purpose of abetting the corporate defendants, Ivan's Electric Ltd. or Insight

Electric Inc., in committing an offence, then both Ivan Valovic or Peter Valovic

could be held to be a party to the offence committed by their respective

corporation.

(2) THE “IMPROPER CONTRACT” CHARGES

“failing to deliver to a consumer a direct agreement containing the

information required by s. 35(1) of the O. Reg. 17/05, contrary to section 42 of

the CPA 2002, and, thereby committing an offence under s. 116(2) of the CPA

2002”

(a) The Nature Or Contents Of The Defendants’ Written Direct

Agreements That Were Provided To The Consumers.

[196] For the direct agreements (work orders, invoices, proposals, or agreements)

entered into by the defendants in these proceedings with the 11 consumers, they

had all been prepared by Ivan Valovic, except for the direct agreement for one

consumer. Peter Valovic had prepared the direct agreements with the consumer

Denise Herold.

[197] Ivan Valovic testified that the agreements with the consumers did not contain a list

or details of every part or material supplied or used or a description of every repair,

test, or installation they would do to fix or repair the problem they had been

contracted to do for the consumer, but that the job would be priced at a flat rate

and not by the actual hours that it would take to complete the repair or installation

and that they would supply the necessary cover plates, switches, receptacles,

screws, clamps, wiring and necessary labour to complete the job at that flat rate.

[198] During the period of the events surrounding the 89 charges, ss. 42 and 43 of the

CPA 2002, as it stood at the time, required direct agreements be in writing and be

74

delivered to the consumer and made in accordance with the prescribed

requirements set out in the CPA 2002 or under the General Regulation, O. Reg.

17/05, enacted under the CPA 2002 [emphasis is mine below]:

Requirements for direct agreements

42(1) Every direct agreement shall be in writing, shall be delivered to the

consumer and shall be made in accordance with the prescribed

requirements.

[199] But more importantly, the CPA 2002, provides consumers who have entered into a

direct agreement with a supplier, a 10-day cooling-off period under s. 43(1), which

is the right of a consumer to cancel the direct agreement for any reason within 10

days after receiving the written copy of the agreement. Also, under s. 43(2) of the

CPA 2002, the consumer has the right to cancel the direct agreement up to one

year after entering into the agreement if the consumer does not receive a copy of

the agreement that meets the requirements under s. 42 of the CPA 2002

[emphasis is mine below]:

Cancellation: cooling-off period

43(1) A consumer may, without any reason, cancel a direct agreement at any

time from the date of entering into the agreement until 10 days after

receiving the written copy of the agreement.

Cancellation: failure to meet requirements

(2) In addition to the right under subsection (1), a consumer may cancel a

direct agreement within one year after the date of entering into the

agreement if the consumer does not receive a copy of the agreement that

meets the requirements under section 42.

(i) Did the defendants’ agreements given to the 11

consumers comply with the CPA 2002 and its

regulations in respect to the information that is

required to be provided to consumers?

[200] Since the agreements entered into between the defendants and the 11 consumers

are direct agreements within the meaning of the CPA 2002, then specific

information had to be included or provided to the consumers in those direct

agreements provided to them as prescribed under s. 42 of the CPA 2002:

Requirements for direct agreements

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42. Every direct agreement shall be in writing, shall be delivered to the

consumer and shall be made in accordance with the prescribed

requirements.

(A) What information is required to be contained

in a direct agreement?

[201] Subsection 35(1) of O. Reg. 17/05 sets out what information or language that is

required to be included in a direct agreement [emphasis is mine below]:

Requirements for direct agreements

35(1) For the purpose of section 42 of the Act, a direct agreement shall be

signed by the consumer and the supplier and shall set out the following

information:

1. The name and address of the consumer.

2. The name of the supplier and, if different, the name under which the

supplier carries on business.

3. The telephone number of the supplier, the address of the premises

from which the supplier conducts business, and information

respecting other ways, if any, in which the supplier can be contacted

by the consumer, such as the fax number and e-mail address of the

supplier.

4. The names of,

i. the person, if any, who solicited the consumer in connection with

the agreement,

ii. the person, if any, who negotiated the agreement with the

consumer, and

iii. the person who concluded the agreement with the consumer.

5. The date on which and the place where the agreement is entered into.

6. A fair and accurate description of the goods and services to be

supplied to the consumer, including the technical requirements, if any,

related to the use of the goods or services.

7. The total amount payable by the consumer under the agreement or, if

the goods and services are to be supplied during an indefinite period,

the amount and frequency of periodic payments.

8. The terms of payment.

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9. An itemized list of the prices at which the goods and services are to

be supplied to the consumer, including taxes and shipping charges.

10. If the agreement includes a trade-in arrangement, a description of the

trade-in arrangement and the amount of the trade-in allowance.

11. A statement containing the text set out in subsection (2) and, if

applicable, the additional text set out in subsection (3),

i. which shall be in at least 10 point type, except for the heading

which shall be in at least 12 point bold type, and

ii. which shall appear on the first page of the agreement, unless

there is a notice on the first page of the agreement in at least 12

point bold type indicating where in the agreement the statement

appears.

12. As applicable, the date or dates on which delivery, commencement of

performance, ongoing performance and completion of performance

are to occur.

13. The rights, if any, that the supplier agrees the consumer will have in

addition to the rights under the Act and the obligations, if any, by

which the supplier agrees to be bound in addition to the obligations

under the Act, in relation to cancellations, returns, exchanges and

refunds.

14. The currency in which amounts are expressed, if it is not Canadian

currency.

15. Any other restrictions, limitations and conditions that are imposed by

the supplier.

(2) The statement mentioned in paragraph 11 of subsection (1) shall set out

the following:

Your Rights under the Consumer Protection Act, 2002

You may cancel this agreement at any time during the period that ends ten

(10) days after the day you receive a written copy of the agreement. You

do not need to give the supplier a reason for cancelling during this 10-day

period.

If the supplier does not make delivery within 30 days after the delivery date

specified in this agreement or if the supplier does not begin performance of

his, her or its obligations within 30 days after the commencement date

specified in this agreement, you may cancel this agreement at any time

before delivery or commencement of performance. You lose the right to

cancel if, after the 30-day period has expired, you agree to accept delivery

or authorize commencement of performance.

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If the delivery date or commencement date is not specified in this

agreement and the supplier does not deliver or commence performance

within 30 days after the date this agreement is entered into, you may

cancel this agreement at any time before delivery or commencement of

performance. You lose the right to cancel if, after the 30-day period has

expired, you agree to accept delivery or authorize commencement of

performance.

In addition, there are other grounds that allow you to cancel this

agreement.

You may also have other rights, duties and remedies at law. For more

information, you may contact the Ministry of Consumer and Business

Services.

To cancel this agreement, you must give notice of cancellation to the

supplier, at the address set out in the agreement, by any means that allows

you to prove the date on which you gave notice. If no address is set out in

the agreement, use any address of the supplier that is on record with the

Government of Ontario or the Government of Canada or is known by you.

If you cancel this agreement, the supplier has fifteen (15) days to refund

any payment you have made and return to you all goods delivered under a

trade-in arrangement (or refund an amount equal to the trade-in

allowance).

However, if you cancel this agreement after having solicited the goods or

services from the supplier and having requested that delivery be made or

performance be commenced within ten (10) days after the date this

agreement is entered into, the supplier is entitled to reasonable

compensation for the goods and services that you received before the

earlier of the 11th day after the date this agreement was entered into and

the date on which you gave notice of cancellation to the supplier, except

goods that can be repossessed by or returned to the supplier.

(ii) Did the agreements or forms used by other

electricians in the industry comply with the

requirements of the CPA 2002?

[202] Peter Valovic testified that in his master electrician course he had not be taught

what to include in his agreement with consumers. He also said that he had been

unable to find any electricians or other tradespeople who include the information

required by s. 35 of O. Reg. 17/05 in their agreements and that he had copied his

father’s agreements holus bolus because Peter Valovic opined that they were the

best that he had seen of agreements used by electricians. He further points out to

the contract between Catherine Telford and the company Langstaff and Sloan Inc.

(see p. 47 of the Joint Book of Documents), which also fails to contain any

information required by s. 35(1) of O. Reg. 17/05, as support for the argument that

other electricians do not consider their agreements to be direct agreements and

that information required to be in a direct agreement by virtue of s. 35(1) are not in

other electrician’s contracts.

78

[203] However, the Langstaff and Sloan Inc. contract with Catherine Telford is dated

December 14, 2011, which precedes 8 of the 11 contracts the defendants had

entered into with consumers. And, only the direct agreements with the consumers

Denise Herold, Gladys Canadas and Catherine Telford had preceded the

Langstaff and Sloan Inc. agreement. In addition, the defendants themselves

started adding information required under s. 35(1) to their agreements beginning

with the agreement with the consumer, Zaven Tahtadjian, on April 16, 2013.

(iii) Did the prosecution prove the actus reus of the

offence of “failing to provide a proper agreement to

a consumer” beyond a reasonable doubt?

[204] For the respective 11 direct agreements (work orders, proposals, invoices,

agreements or contracts) entered into by the 11 consumers with either Ivan's

Electric Ltd. or Insight Electric Inc., none of them contained the name of the

person who had negotiated or concluded the agreement or contract on behalf of

Ivan's Electric Ltd. or Insight Electric Inc. with the 11 consumers as required by s.

35(1)(4) of O. Reg. 17/05. Only illegible signatures or initials of the person who

had negotiated the agreement or contract with the consumer were on the

authorized signature line in these agreements.

[205] In addition, 8 of the 11 consumers, Denise Herold, Maria Canadas, Catherine

Telford, Peter Christensen, Sandra Castator, Terry Bardeau, Marjorie Riley, and

Boris Wolchak, did not receive direct agreements that had contained the “Your

Rights under the Consumer Protection Act, 2002” statement set out in s. 35(2)

of O. Reg. 17/05 that is required to be on the front of the document or a notice on

the front of the document indicating where that statement can be found in the

document and required to be in the direct agreement under s. 35(1)(11). Only

Eva Patterson’s and Nigel Lundie’s direct agreements had the required s. 35(2)

information on the back of their direct agreements with a note at the front that

stated, “See additional agreement statement on back – Direct Agreement Reg.

17/05, s.35(1)”, while in Zaven Tahtadjian’s direct agreement Ivan Valovic had

handwrote the statement set out in s. 35(2) onto the agreement.

[206] Furthermore, s. 35(1)(13) of O. Reg. 17/05 requires that, “The rights, if any, that

the supplier agrees the consumer will have in addition to the rights under the Act

and the obligations, if any, by which the supplier agrees to be bound in addition to

the obligations under the Act, in relation to cancellations, returns, exchanges and

refunds”, be included in a direct agreement. The defendants testified that they had

verbally provided the consumers after the job was completed a guarantee in

respect to the parts and labour for one year. However, this warranty or guarantee

was not stated in any of the 11 the direct agreements (work orders, proposals,

invoices, agreements or contracts) that had been provided to the 11 consumers.

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[207] Also, in the direct agreements for 9 of the 11 consumers, Catherine Telford, Peter

Christensen, Sandra Castator, Terry Bardeau, Zaven Tahtadjian, Marjorie Riley,

Boris Wolchak, Eva Patterson, and Nigel Lundie, they had contained the improper

term, ”We Charge a 30% Cancellation Fee”, which is not a term legally permitted

in direct agreements.

[208] In addition, s. 35(1)(6) of O. Reg. 17/05 requires, “A fair and accurate description

of the goods and services to be supplied to the consumer, including the technical

requirements, if any, related to the use of the goods or services”, while s. 35(1)(9)

requires, “An itemized list of the prices at which the goods and services are to be

supplied to the consumer, including taxes and shipping charges”. Five of the 11

consumers, Denise Herold, Peter Christensen, Zaven Tahtadjian, Eva Patterson,

and Nigel Lundie, did not receive a direct agreement setting out the $180 service

call charge or the $360 emergency service call charge just for the defendants to

attend at the consumer’s house, even though the consumers had been charged

that service charge by the defendants in the overall price charged for the work.

[209] Therefore, since all of the agreements or contracts provided to the 11 consumers

were missing information, namely the name of the person who negotiated or

concluded the direct agreement with the consumers as required under ss. 35(1)(4)

and the one-year warranty on parts and labour term required under s. 35(1)(13),

then the prosecution has proven beyond a reasonable doubt the actus reus of the

offence of failing to deliver to a consumer a direct agreement containing the

information required by s. 35(1) of O. Reg. 17/05, contrary to s. 42 of CPA 2002, in

respect to all 11 consumers.

(3) The “Fail To Refund” Charges

“failing to provide a refund to a consumer within 15 days after the date

the said consumer gave notice of cancellation, contrary to s. 96(1)(a) of

the CPA 2002, and thereby committing an offence under s. 116(1)(b)(viii)

of the CPA 2002”

[210] For 2 of the 11 consumers, Denise Herold and Boris Wolchak, they had entered

into agreements respectively with Ivan's Electric Ltd. and with Insight Electric Inc.

to do an electrical installation or repair that had been scheduled for a later date.

The two consumers then decided not to proceed and had notified the defendants

that they were cancelling the agreements, as well as demanding that their deposits

be refunded.

[211] In addition, 4 other consumers, Gladys Canadas, Peter Christensen, Marjorie

Riley, and Zaven Tahtadjian, who did have their jobs completed by the

defendants, but were unhappy that they had been overcharged for the work done

by the defendants had also formally requested from the defendants a refund of the

payments they respectively made to the defendants. It should also be noted that

80

Marjorie Riley had requested a refund from the defendants through a third party,

the Better Business Bureau, who had contacted the defendants on behalf of Riley

for a refund.

[212] But more importantly, the prosecution also contends that these 6 consumers were

entitled to cancel their direct agreements with the defendants for any reason and

to ask for a refund within the 10-day cooling off period under s. 43(1) of the CPA

2002; or to cancel the direct agreements at any time up to a year after the

agreements were entered into according to s. 18(3) of the CPA 2002, since the

defendants had engaged in an unfair practice by making false, misleading, or

deceptive representations to these 6 consumers; or to cancel the direct

agreements at any time up to a year after the agreements were entered into

according to s. 43(2) of the CPA 2002, since the defendant had failed to provide

these 6 consumers with a direct agreement containing the information required

under s. 35(1) of O. Reg. 17/05 contrary to s. 42 of the CPA 2002.

[213] In addition, under s. 96(1)(a) of the CPA 2002, once the consumers had cancelled

the direct agreement the defendants were required to refund any payment made

under the agreement.

[214] The prosecution also submits that after being notified of the cancellation of their

respective agreements by these particular 6 consumers and a request for a refund

had been made to them, the defendants had failed to make the refunds to these 6

consumers within 15 days as legally required under s. 96(1)(a) of the CPA 2002

for engaging in an unfair practice, as well as failing to make the refunds to these 6

consumers within 15 days as legally required under s. 79(1), of O. Reg. 17/05, for

failing to provide these 6 consumers with a direct agreement containing the

information required under s. 35(1) of O. Reg. 17/05.

[215] And, since the defendants had failed to provide refunds to these consumers within

15 days of being notified of the cancellation of the agreement, the defendants

were also charged for the offence of failing to provide a refund to a consumer

within 15 days of being notified of the cancellation.

[216] The defendants contend that they had wanted to provide a refund to the

consumers, Denise Herold and Boris Wolchak, but they did not know the amount

of the refund to me made to them, since they contend that they are entitled to

“reasonable compensation” for goods or services they had provided to both of

these consumers, which included the hours of preparation work in obtaining

materials and supplies and for making other arrangements and preparations and

then for returning the unused supplies, for the loss associated for booking two

electricians off for a day so the work would start as scheduled, and for the 2%

service charge that their credit card company charges them for the credit card

transaction with the two consumers who paid a deposit for the scheduled work,

which they contend had been benefits to the consumer, before the jobs had been

cancelled by the consumers. Moreover, the defendants contend that the amount

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of the refund was not determinable as they were still trying to negotiate with the

consumers for the amount of the refund, but that the consumer Denise Herold

would not return the defendants calls. In addition, the defendants submit that they

had provided a refund to Denise Herold, which took over 2 years to do and a

refund to Boris Wolchak, which took over 11 months to do.

[217] And, as for the other 4 consumers, Gladys Canadas, Peter Christensen, Marjorie

Riley, and Zaven Tahtadjian, who had demanded a refund, the defendants submit

that their work had been completed and were not entitled to a refund, just because

they feel that they could have gotten the price cheaper somewhere else, but that

they did not and had hired and contracted the defendants to do the job. And, for

Marjorie Riley’s situation, the defendants argue that the Riley is also not entitled to

a refund since the defendants did not receive proper notice under the

requirements set out in the CPA 2002, since the notice had come from third party,

the Better Business Bureau, and not from Riley.

(a) When Are The Defendants Obligated To Make A Refund

To A Consumer?

[218] To give proper notice to the defendants that the consumers are demanding or

requesting a refund from the defendants, the consumers, according to ss. 92(2)

and (3) of the CPA 2002, may express this request or demand in any way or

means, as long as it indicates to the supplier the intention of the consumer to

require a refund from the supplier and complies with any requirements prescribed

under the Act or the regulations [emphasis is mine below]:

Form of consumer notice

92(1) If this Act requires a consumer to give notice to a supplier to request a

remedy, the consumer may do so by giving notice in accordance with this

section.

Same

(2) The notice may be expressed in any way, as long as it indicates the

intention of the consumer to seek the remedy being requested and

complies with any requirements that may be prescribed.

Giving notice

(3) Unless the regulations require otherwise, the notice may be oral or in

writing and may be given by any means.

Notice given when sent

(4) If notice in writing is given other than by personal service, the notice shall

be deemed to be given when sent.

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Address

(5) The consumer may send or deliver the notice to the address set out in a

consumer agreement or, if the consumer did not receive a written copy of

a consumer agreement or the address was not set out in the written

agreement, the consumer may send or deliver the notice,

(a) to any address of the supplier on record with the Government of

Ontario or the Government of Canada; or

(b) to an address of the supplier known by the consumer.

[219] Moreover, when proper notice by the consumers are given to the defendants to

cancel the direct agreements that had been provided in accordance with the CPA

2002, then according to s. 95 of the CPA 2002, the cancellation of a consumer

agreement operates to cancel, as if the consumer agreement never existed

[emphasis is mine below]:

Effect of cancellation

95. The cancellation of a consumer agreement in accordance with this Act

operates to cancel, as if they never existed,

(a) the consumer agreement;

(b) all related agreements;

(c) all guarantees given in respect of money payable under the

consumer agreement;

(d) all security given by the consumer or a guarantor in respect of

money payable under the consumer agreement; and

(e) all credit agreements, as defined in Part VII, and other payment

instruments, including promissory notes,

(i) extended, arranged or facilitated by the person with whom the

consumer reached the consumer agreement, or

(ii) otherwise related to the consumer agreement.

[220] And, once the defendants are notified by the consumer of the cancellation of the

direct agreement, the defendant are required under. s. 96(1) of the CPA 2002 to

refund to the consumer any payment made under the agreement or any related

agreement in accordance with the prescribed requirements [emphasis is mine

below]:

Obligations on cancellation

83

96(1) If a consumer cancels a consumer agreement, the supplier shall, in

accordance with the prescribed requirements,

(a) refund to the consumer any payment made under the agreement or

any related agreement; and

(b) return to the consumer in a condition substantially similar to when

they were delivered all goods delivered under a trade-in

arrangement or refund to the consumer an amount equal to the

trade-in allowance.

[221] This would mean that the defendants were obligated under s. 96(1) of the CPA

2002 to refund any payment provided by the consumers to the defendants under

the direct agreements with the consumers, including the 30% deposit payment that

had been made by the consumers, Denise Herold and Boris Wolchak, to the

defendants. This obligation on the defendants is automatic and does not require a

former demand for the refund of the deposit made by either Denise Herold or Boris

Wolchak.

[222] Furthermore, once the defendants had been notified by the consumer that the

“direct agreement” has been cancelled, then the defendants are obligated under

ss. 79(1) and 80(1) of O. Reg. 17/05, to refund any payment made by the

consumer under the direct agreement to the consumer within 15 days after the day

the consumer had given notice to the defendants, whether the consumer had

actually requested a refund or not [emphasis is mine below]:

Supplier obligations on cancellation

79(1) A supplier who is required to comply with subsection 96 (1) of the Act shall

do so within 15 days after the day the consumer gives notice to the

supplier in accordance with section 92 of the Act that the consumer is

cancelling the consumer agreement.

(2) A supplier who is required to return goods to a consumer under clause 96

(1) (b) of the Act shall return the goods to the consumer’s address.

Consumer obligations on cancellation of certain agreements

80(1) This section applies with respect to subsection 96(2) of the Act, if the

consumer agreement that has been cancelled is one of the following:

1.

2.

3.

A direct agreement to which sections 42 and 43 of the Act apply.

A time share agreement.

A personal development services agreement to which sections 30 to

36 of the Act apply.

4.

A consumer agreement to which section 49 of the Act applies.

84

[223] Furthermore, if the defendants charge or require a consumer to pay a fee, make a

payment, or provide an amount to the supplier which contravenes the CPA 2002,

then by virtue of s. 98(1) of the Act, the consumer can demand a refund of that

fee, payment, amount or improper charge by giving notice in accordance with the

notice requirements set out in s. 92 within one year of paying the charge or making

the payment [emphasis is mine below]:

Illegal charges and payments

98(1) If a supplier has charged a fee or an amount in contravention of this Act or

received a payment in contravention of this Act, the consumer who paid

the charge or made the payment may demand a refund by giving notice in

accordance with section 92 within one year after paying the charge or

making the payment.

Supplier to provide refund

(2) A supplier who receives a notice demanding a refund under subsection (1)

shall provide the refund within the prescribed period of time.

[224] Ergo, since the 30% cancellation fee charged by the defendants is not permitted in

direct agreements, then this cancellation fee would contravene the CPA 2002.

And, since both the consumers, Denise Herold and Boris Wolchak, had paid the

defendants a 30% deposit, but their deposits were not returned when they both

cancelled the direct agreements with the defendants, as the defendants had

informed both Denise Herold and Boris Wolchak that the defendants were entitled

to the 30% cancellation fee in their respective agreements, which was to be

deducted from the 30% deposit made by both consumers. However, as the 30%

cancellation fee is not permitted condition in a direct agreement then the

defendants charging the 30% cancellation fee to Herold and Wolchak would

contravene the CPA 2002 and O. Reg. 17/05, and Herold and Wolchak are also

entitled to demand a refund of the amount taken by the defendants as a

cancellation fee. Therefore, both Herold and Wolchak were entitled under s. 98(1)

of the CPA 2002 to demand a refund of the cancellation fee taken by the

defendants by giving notice in accordance with s. 92 of the CPA 2002 within one

year after paying the 30% cancellation fee charge to the defendants.

[225] Moreover, the defendants are obligated under s. 84 of O. Reg. 17/05, to refund to

the consumers, Denise Herold and Boris Wolchak, within 15 days after they

demanded the refund of the amount the defendants would have charged and kept

as the 30% cancellation fee from the 30% deposit that the consumers, Denise

Herold and Boris Wolchak, had paid to the defendants under their respective direct

agreements [emphasis is mine below]:

Time for refund of illegal payment

85

84. For the purposes of subsections 98 (2) and (4) of the Act, the refund shall be

provided within 15 days after the day the consumer demands it under

subsection 98 (1) of the Act.

[226] In addition, when a supplier is obligated to provide a refund to a consumer after a

consumer cancels a consumer agreement, or in the situation where the supplier

received a payment or a fee or an amount that was charged in contravention of the

CPA 2002, then according to ss. 99(1) and (2), the consumer who had charged

the payment to a credit card account may also request the credit card issuer to

cancel or reverse the credit card charge and any associated interest or other

charges [emphasis is mine below]:

Consumer’s recourse re: credit card charges

99(1) A consumer who has charged to a credit card account all or any part of a

payment described in subsection (2) may request the credit card issuer to

cancel or reverse the credit card charge and any associated interest or

other charges.

Types of payment

(2) Subsection (1) applies to,

(a) a payment in respect of a consumer agreement that has been

cancelled under this Act or in respect of any related agreement;

(b) a payment that was received in contravention of this Act;

(c) a payment in respect of a fee or an amount that was charged in

contravention of this Act; and

(d) a payment that was collected in respect of unsolicited goods or

services for which payment is not required under section 13.

Timing of request

(3) A consumer may make a request under subsection (1) if the consumer has

cancelled a consumer agreement or demanded a refund in accordance

with this Act, and the supplier has not refunded all of the payment within

the required period.

Request

(4) A request under subsection (1) shall be in writing, shall comply with the

requirements, if any, that are prescribed under subsection 92 (2), and shall

be given to the credit card issuer, in the prescribed period, in accordance

with section 92.

86

(i) Are the defendants legally entitled to ask a

consumer for a 30% deposit or to include a 30%

cancellation fee term or condition in the direct

agreement?

[227] Two of the 11 consumers, Denise Herold and Boris Wolchak had paid the

defendants a 30% deposit for future work and the acknowledgment of this

payment had been set out in their respective direct agreements. As for the

amount of a deposit that a supplier can ask a consumer to provide to the supplier,

the CPA 2002 is silent on that subject matter, which means that it is not illegal or

prohibited under the Act for a supplier to require or ask for a deposit from the

consumer as a term of the direct agreement.

[228] Conveniently or coincidentally, the 30% deposit paid by these two consumers is

equal to the 30% cancellation fee that the defendants would charge a consumer if

the direct agreement is cancelled and which is a term set out in the direct

agreements provided to the consumers by the defendants called “Proposals”, but

not a term in the direct agreements that are called “Work Orders”. As such, 10 of

the 11 consumers received direct agreements called a “Proposal” from the

defendants that contained the 30% cancellation fee term. Only, the consumer

Gladys Canadas had received a direct agreement from the defendants called a

“Work Order” that did not contain the 30% cancellation fee term.

[229] The defendants also contend that if the agreements between the defendants and

the 11 consumers are not found to be direct agreements, then it would not be

illegal to include the 30% cancellation fee condition in the agreement, since

suppliers and consumers can enter into an agreement containing any condition

that is not illegal or prohibited by the CPA 2002.

[230] However, ss. 35(1) and 35(2) of O. Reg. 17/05 which prescribes what should be

contained in a direct agreement does not legally permit the 30% cancellation fee

term to be included in a direct agreement provided to a consumer, since

consumers are given a 10-day cooling-off period under s. 43(1) the CPA 2002, as

well as the right to cancel the direct agreement within the 10 days for any reason

and to receive a refund of any payment or deposit made by the consumer under

the direct agreement within 15 days of the cancellation, according to s. 96(1)(a) of

the CPA 2002 and ss. 79(1) and 80(1) of O. Reg. 17/05, minus any reasonable

compensation for goods or services provided by the supplier under the agreement

to the consumer at the consumer’s residence before the notice of cancellation is

received by the supplier.

[231] Furthermore, the requirement for a supplier to provide a refund minus the

reasonable compensation deduction within 15 days, also applies equally to the

situation where the consumer is entitled to cancel the direct agreement for up to

one year after receiving a copy of the direct agreement when a proper direct

agreement is not provided by the supplier according to s. 43(2) of the CPA 2002;

87

or by virtue of ss. 18(1) to 18(3) of the CPA 2002, to rescind the direct agreement

up to one year after receiving a copy of the direct agreement when the supplier

has engaged in an unfair practice to the consumer, as well as seeking a refund

from the supplier as a remedy.

(ii) If the defendants are required to make a refund to a

consumer, what is “reasonable compensation” that

the defendants can deduct from the refund amount

that would have to be refunded to the consumer?

[232] After the two consumers, Denise Herold and Boris Wolchak, cancelled their direct

agreements, the defendants did not provide a full refund within 15 days of the

notice of cancellation. In both cases, the defendants deducted what they termed

“reasonable compensation” they contend that they are entitled to under s. 83(2) of

O. Reg. 17/05. In both Herold’s and Wolchak’s cases, the defendants deducted

from their deposits an amount for the time charged at $180 per hour for picking up

and returning parts and materials and making other arrangements, for the loss of a

day’s work for 2 men at 8 hours at $180 per hour per man, and for the 2% credit

card service charge the defendants had been charged for taking the credit card

payments from the two consumers. The defendants contend that these are

benefits or services provided to the consumers to ensure that the electricians can

start work on the scheduled day and as a convenience to the consumers for the

method of payment.

Limitations on cancellation of direct agreement

83(1) This section applies upon the cancellation by a consumer of a direct

agreement under section 43 of the Act, if the consumer,

(a) solicited the goods or services from the supplier; and

(b) requested that, within 10 days after the day the direct agreement is

entered into, the supplier make delivery or commence performance

under the direct agreement.

(2) In the circumstances described in subsection (1), the supplier is entitled to

reasonable compensation for,

(a) goods,

(i) that were received by the consumer under the direct

agreement before the earlier of,

(A) the 11th day after the day the direct agreement was

entered into, and

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(B) the time the consumer gives notice to the supplier in

accordance with section 92 of the Act that the consumer

is cancelling the direct agreement, and

(ii) that cannot be repossessed by or returned to the supplier

because they,

(A) have been used up,

(B) have perished, or

(C) have become such an integral part of other property that it

would be impractical to remove them from the other

property; and

(b) services that were received by the consumer under the direct

agreement before the earlier of,

(i) the 11th day after the day the direct agreement was entered

into, and

(ii) the time the consumer gives notice to the supplier in

accordance with section 92 of the Act that the consumer is

cancelling the direct agreement.

(3) If a supplier is entitled to reasonable compensation under this section with

respect to goods described in sub-subclause (2) (a) (ii) (C) or with respect

to services, the obligations owed to the consumer by any person with

respect to those goods or services, under the direct agreement, under a

related agreement or at law, continue despite the cancellation of the direct

agreement and the related agreement.

(4) A supplier who is entitled to reasonable compensation under this section

may,

(a) deduct the amount of the reasonable compensation to which the

supplier is entitled from the refund, if any, that the supplier is required

to give the consumer under clause 96 (1) (a) of the Act;

(b) recover the amount of the reasonable compensation to which the

supplier is entitled from the consumer; or

(c) deduct part of the amount of the reasonable compensation to which

the supplier is entitled from the refund, if any, that the supplier is

required to give the consumer under clause 96 (1) (a) of the Act and

recover the balance from the consumer.

(5) This section applies pursuant to subsection 20 (2) of the Act.

89

[233] However, the defendants interpretation of “reasonable compensation” under s.

83(2) of O. Reg. 17/05 is not correct. The defendants can only deduct from the

refund they have to provide to the Herold or Wolchak “reasonable compensation”

for “goods that were received by the consumer under the direct agreement” or

“services that were received by the consumer under the direct agreement” before

the earlier of the 11^thday after the agreement is entered or the time the consumer

had notified the defendant that the direct agreement is cancelled. This means the

goods or services agreed to by the consumer and the defendants to be provided to

the consumer at the consumer’s dwelling under the terms of the direct agreement.

[234] In the direct agreements with Herold and Wolchak, there are no terms or

conditions contained in the direct agreements that the defendants are charging

either consumer, as goods or services, the 2% credit card service fee for the

convenience of paying the deposit with a credit card, nor is there a good or service

listed in the direct agreement that the defendants would supply 2 men for 8 hours

at $180 at the consumer’s residence to do the work, nor is there a good or service

listed in the direct agreement that the defendants would provide 4 hours of time to

pick up and return parts, materials or supplies at the consumer’s residence. In any

event, the service related to 2 men supplying 8 hours of work at the consumer’s

house or the 4 hours of picking up and returning supplies at the consumers

residence had not been provided to the consumers. In short, there are no terms or

conditions listed in the direct agreements that the defendants would charge these

particular consumers a fee of 3 hours to pick up parts, supplies, and materials on

behalf of the consumer and deliver it to the consumer’s house, nor is there a term

or detail on the number of hours that the electricians will work at the consumer’s

dwelling.

[235] As such, the defendants did not provide any goods or services under the direct

agreements to the consumers at their dwellings in which reasonable compensation

can be deducted from the amount of the refunds that had to be provided to Herold

and Wolchak.

(b) Under What Situations May A Consumer Cancel A Direct

Agreement?

[236] First of all, s. 94 of the CPA 2002, provides that where a consumer has a right to

cancel a consumer agreement under the Act, then the consumer has to comply

with the general procedure or requirements set out in s. 92 for the consumer to

provide the notice of cancellation to the supplier [emphasis is mine below]:

Cancellation

94(1) If a consumer has a right to cancel a consumer agreement under this Act,

the consumer may cancel the agreement by giving notice in accordance

with section 92.

Effective time

90

(2) The cancellation takes effect when the consumer gives notice.

[237] There are 3 ways in which a consumer may cancel a direct agreement under the

CPA 2002:

(1) under s. 43(1) during the 10-day cooling off period

(2) under s. 43(2) if the supplier fails to provide a direct agreement

containing the required information prescribed under s. 42

(3) under s. 18(1) after or while the supplier has engaged in an unfair

practice

(i) Cancelling the direct agreement during the 10-day

cooling off period

[238] Under s. 43(1) of the CPA 2002, a consumer may cancel a direct agreement for

future work for any reason within 10 days after receiving a copy of the direct

agreement. This 10-day cooling period would also apply to direct agreements

where the work had already been completed by the supplier:

Cancellation: cooling-off period

43(1) A consumer may, without any reason, cancel a direct agreement at any

time from the date of entering into the agreement until 10 days after

receiving the written copy of the agreement.

(ii) Cancelling the direct agreement if the supplier fails

to provide a direct agreement containing the required

information prescribed under s. 42

[239] Under s. 43(2) of the CPA 2002, a consumer may cancel a direct agreement within

one year after the date of entering into the agreement if the consumer does not

receive a copy of the agreement that meets the requirements prescribed

under section 42 of the CPA 2002. This right to cancel under s. 43(2) would also

apply to direct agreements where the work had already been completed by the

supplier:

Cancellation: failure to meet requirements

43(2) In addition to the right under subsection (1), a consumer may cancel a

direct agreement within one year after the date of entering into the

agreement if the consumer does not receive a copy of the agreement that

meets the requirements under section 42.

91

(iii) Cancelling the direct agreement when the supplier

has engaged in an unfair practice

[240] Under ss. 18(1) and 18(3) of the CPA 2002, a consumer may cancel a direct

agreement within one year after the date of entering into the agreement if the

consumer has entered into the agreement after or while the supplier has engaged

in an unfair practice [emphasis is mine below]:

Rescinding agreement

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.

Remedy if rescission not possible

18(2) A consumer is entitled to recover the amount by which the consumer’s

payment under the agreement exceeds the value that the goods or

services have to the consumer or to recover damages, or both, if

rescission of the agreement under subsection (1) is not possible,

(a) because the return or restitution of the goods or services is no

longer possible; or

(b) because rescission would deprive a third party of a right in the

subject-matter of the agreement that the third party has acquired in

good faith and for value.

Notice

18(3) A consumer must give notice within one year after entering into the

agreement if,

(a) the consumer seeks to rescind an agreement under subsection (1);

or

(b) the consumer seeks recovery under subsection (2), if rescission is

not possible.

Form of notice

18(4) The consumer may express notice in any way as long as it indicates the

intention of the consumer to rescind the agreement or to seek recovery

where rescission is not possible and the reasons for so doing and the

notice meets any requirements that may be prescribed.

Delivery of notice

92

18(5) Notice may be delivered by any means.

When notice given

18(6) If notice is delivered other than by personal service, the notice shall be

deemed to have been given when sent.

Address

18(7) The consumer may send or deliver the notice to the person with whom the

consumer contracted at the address set out in the agreement or, if the

consumer did not receive a written copy of the agreement or the address

of the person was not set out in the agreement, the consumer may send or

deliver the notice,

(a) to any address of the person on record with the Government of

Ontario or the Government of Canada; or

(b) to an address of the person known by the consumer.

[241] Since the defendants had failed to provide a direct agreement to all 11 consumers

containing the information prescribed by s. 42 of the CPA 2002 and as required

under s. 35(1) of O. Reg. 17/05, then the 11 consumers were entitled to cancel the

agreements under s. 43(2). As such, all 11 consumers had the right to cancel the

direct agreements with the defendants within one year of signing or entering the

direct agreement, since none of the direct agreements had complied with s.

35(1)(4) and s. 35(1)(13) of the CPA 2002. As for the consumers who did notify

the defendants within the 10-day cooling-off period under s. 43(1), then they were

entitled to cancel their direct agreements for any reason.

(c) Was Proper Notice By The Consumers Requesting A Refund

Given To The Defendants?

[242] The 6 consumers who did demand a refund from the defendants had given proper

notice to the defendants, by verbally informing the defendants by telephone or by

letter that they were cancelling the direct agreements. Just providing notice of the

cancellation is sufficient to trigger the obligation of the defendants to provide a

refund of any payment made by the consumer under the agreement according to

s. 96(1)(a) of the CPA 2002. Equally, asking for a refund from the defendants is

also notice to the defendants that the consumer is cancelling the direct agreement.

Moreover, for all 6 consumers who demanded a refund, the defendants had been

aware of the consumers cancelling those respective jobs based on the response

of the defendants to those notices of cancellation.

[243] For the special case of the consumer Marjorie Riley, she had provided her request

for a refund through the Better Business Bureau, which has complied with the

93

notice requirements under ss. 92(2) and 92(3) of the CPA 2002 of giving notice by

any means, as long as it indicates the intention of the consumer to seek the

remedy being requested and the defendants become aware of the remedy sought

by Riley [emphasis is mine below]:

Form of consumer notice

92(1) If this Act requires a consumer to give notice to a supplier to request a

remedy, the consumer may do so by giving notice in accordance with this

section.

Same

92(2) The notice may be expressed in any way, as long as it indicates the

intention of the consumer to seek the remedy being requested and

complies with any requirements that may be prescribed.

Giving notice

92(3) Unless the regulations require otherwise, the notice may be oral or in

writing and may be given by any means.

(d) Did the prosecution prove beyond a reasonable doubt

the actus reus of the offence of failing to provide a

refund to a consumer within 15 days of receiving

notification?

[244] Ergo, the 6 consumers, Denise Herold, Gladys Canadas, Peter Christensen,

Marjorie Riley, Zaven Tahtadjian, and Boris Wolchak had asked the defendants for

a refund, had been entitled to demand the refunds, since none of the 6 direct

agreements were direct agreements that had failed to contain information required

under s. 35(1) of O. Reg. 17/05, and as such these 6 consumers were entitled to

cancel the direct agreements within 1 year of being provided a copy of their

respective direct agreements. Moreover, all 6 consumers (including Marjorie

Riley’s demand for a refund through the Better Business Bureau to the

defendants). Since none of the 6 consumers received full refunds within 15 days,

the prosecution has proven that the defendants have committed the actus reus

offence of failing to provide a refund to a consumer within 15 days in respect to all

6 of these consumers.

(4) The “Unfair Practice” Charges

“engaging in an unfair practice by making a false, misleading or

deceptive representation to a consumer, contrary to s. 17(1) of the CPA

2002, and thereby committing offence under s. 116(1)(b)(ii) of the CPA

2002”

94

[245] The prosecution submits that the defendants have engaged in an unfair practice

by making false, misleading or deceptive representations to the consumers in

several ways, but does not rely on the testimony and complaints of the consumers

that had suggested that the defendants had overcharged the consumers, which

would be the basis for finding an unconscionable representation described under

s. 15(2)(b) of the CPA 2002.

(a) What is an unfair practice within the meaning of the CPA

2002?

[246] Under s. 14(1) of the CPA 2002, an unfair practice occurs when a person makes a

false, misleading or deceptive representation:

False, misleading or deceptive representation

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

deceptive representation.

[247] A “representation” is defined under s. 1 of the CPA 2002, to mean:

“representation” means a representation, claim, statement, offer, request

or proposal that is or purports to be,

(a) made respecting or with a view to the supplying of goods or

services to consumers, or

(b) made for the purpose of receiving payment for goods or

services supplied or purporting to be supplied to consumers;

[248] Moreover, s. 17(1) of the CPA 2002, prohibits a person from engaging in an unfair

practice while s. 17(2) deems a person to be engaging in an unfair practice when

they perform one of the acts described in section 14, 15 or 16:

Unfair practices prohibited

17(1) No person shall engage in an unfair practice.

One act deemed practice

(2) A person who performs one act referred to in section 14, 15 or 16 shall

be deemed to be engaging in an unfair practice.

95

[249] For the acts that the prosecution contends that the defendants have performed so

as to deem them to be “engaging in an unfair practice”, it appears to be one of the

acts described in ss. 14(2)(10), 14(2)(13), 14(2)(14), 14(2)(15), and 14(2)(16)

[emphasis is mine below]:

Examples of false, misleading or deceptive representations

14(2) Without limiting the generality of what constitutes a false, misleading or

deceptive representation, the following are included as false,

misleading or deceptive representations:

…

10. A representation that a service, part, replacement or repair is

needed or advisable, if it is not.

…

13. A representation that the transaction involves or does not

involve rights, remedies or obligations if the representation is

false, misleading or deceptive.

14. A representation using exaggeration, innuendo or ambiguity as

to a material fact or failing to state a material fact if such use or

failure deceives or tends to deceive.

15. A representation that misrepresents the purpose or intent of

any solicitation of or any communication with a consumer.

16. A representation that misrepresents the purpose of any charge

or proposed charge.

[250] In addition, s. 15 of the CPA 2002 further provides that it is an unfair practice for

someone to make an unconscionable representation [emphasis is mine below]:

Unconscionable representation

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

Same

(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;

96

(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.

[251] And because the defendants have performed acts described in ss. 14(2) and 15,

the prosecution contends that the defendants have contravened s. 17(1) of the

CPA 2002 by engaging in an unfair practice by making a false, misleading or

deceptive representations to the consumers, thereby making it an offence under

s. 116(1)(b)(ii) of the Act:

116(1) A person is guilty of an offence if the person,

…

(b) contravenes or fails to comply with,

…

(ii) in respect of Part III, Unfair Practices, subsection 17(1),

(b) What were the false, misleading or deceptive

representations made by the defendants to the

consumers?

[252] For the false, misleading, or deceptive representations made by the defendants to

the consumers, the prosecution contends that the defendants performed the act

described under s. 14(2)(14) on many occasions by making “a representation

using exaggeration, innuendo or ambiguity as to a material fact or failing to state a

material fact if such use or failure deceives or tends to deceive”. In that respect,

the prosecution submits that the defendants made the following misleading or

deceptive representations:

97

 by the defendants not informing consumers who call Ivan's Electric Ltd.

for a service call that that Ivan's Electric Ltd. was no longer operating

and then appearing at the consumer’s residence and telling the

consumer that Insight Electric Inc. was there to do the job, even though

the consumer had called Ivan's Electric Ltd. to attend at the consumer’s

residence;

 by the defendants arriving at the consumers residence in the Ivan's

Electric Ltd.’s red van displaying the name, the logo, and the telephone

numbers of Ivan's Electric Ltd., and then informing the consumer that

Insight Electric Inc. was doing the job, even though the consumer had

called Ivan's Electric Ltd. to attend at the consumer’s residence;

 by the defendants displaying on the Ivan's Electric Ltd.’s red van the

electrical contractor’s licence number for Insight Electric Inc., which is

not the proper licence number for Ivan's Electric Ltd.;

 by the defendants placing Ivan's Electric Ltd. stickers that state Ivan's

Electric Ltd.’s telephone numbers and name on Insight Electric Inc.’s

forms and agreements provided to the consumer;

 by the defendants displaying or presenting Ivan's Electric Ltd. electrical

contractor’s licence number to the consumer when it had been revoked

by the ESA;

 by the defendants including a 30% cancellation fee term in the direct

agreements with the consumers, which is not legally permissible in a

“direct agreement” under s. 35(1) of O. Reg. 17/05;

 by the defendants promising to give the consumers a one-year warranty

on parts and labour, but then not including that promised guarantee in

the direct agreement provided to the consumers;

 by the defendants not informing consumers who call Ivan's Electric Ltd.

for a service call that that Ivan's Electric Ltd. was no longer operating

and then appearing at the consumer’s residence and telling the

consumer that Insight Electric Inc. was doing the work, but then the

consumer would be given direct agreements, proposals, or written

agreements, business cards, and stickers that would contain the name,

logo, telephone numbers, and electrical contractor’s licence number for

Ivan's Electric Ltd.;

 by the defendants informing the consumer that Insight Electric Inc. was

doing the work when the defendants arrived at the consumer’s

residence, but then charging the consumer’s credit card to Ivan's Electric

Ltd.’s account;

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 by the defendants omitting to tell the consumers who call Ivan's Electric

Ltd. for service that the consumers will be charged a $180 service call

charge or a $360 emergency service call charge just for the defendants

to drive to the consumer’s home or to inform the consumer that their

emergency, after-hours, holidays, and week-end rates are double the

regular rate of $180 an hour for each electrician that attends the

consumer’s house, and then to charge the consumer for the service call

after arriving at the consumer’s residence.

(c) The prosecution does not have to prove that the

consumers had relied on the defendants’ false, misleading

or deceptive representations before entering into the

agreement with the defendants in order to establish that

there has been an unfair practice.

[253] In addition, the prosecution does not have to prove that the consumers had relied

on the defendants’ false, misleading or deceptive representations before entering

into the agreement with the defendants in order to establish that the defendants

had engaged in an unfair practice. In Ramdath v. George Brown College of

Applied Arts and Technology, [2013] O.J. No. 3151, at paras. 13 to 15, the Court

of Appeal for Ontario held that in order to prove there had been an unfair practice

under the CPA 2002 based on a false, misleading or deceptive representation,

proof of reliance by the consumer on that false, misleading or deceptive

representation is not required in order to establish that there has been an unfair

practice, since s. 18(1) of the CPA 2002 clearly provides that a consumer who

enters into an agreement "after or while a person has engaged in an unfair

practice" is entitled to any remedy that is available in law and that proof of reliance

is not a prerequisite [emphasis is mine below]:

The appellant argues that the promise contained in the program description was

only that the students would have an opportunity to obtain the designations. This

did not amount to an unfair practice, as there was ample information available on

the Internet and elsewhere that students could access with respect to the

requirements for industry association designations. Further, even if it could be

considered an unfair practice, each individual member of the class must prove

that he or she relied on the misrepresentation contained in the course calendar

before being entitled to a remedy under the CPA.

We reject the submission that the program description did not amount to an

unfair practice. The trial judge found as a fact that the representation was

misleading and that it would be unreasonable to expect students to conduct

independent research to verify its accuracy. This finding is entitled to deference

and we see no error in the trial judge's conclusion in this regard.

As to the reliance issue, we do not view the CPA as requiring proof of reliance in

order to establish that there has been an unfair practice and that there is

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entitlement to a remedy under the Act. Section 18(1) of the CPA clearly provides

that a consumer who enters into an agreement "after or while a person has

engaged in an unfair practice" is entitled to any remedy that is available in law,

including damages. Proof of reliance is not a prerequisite. In any event, as noted

by the trial judge, the individual damage awards are to be determined in the next

phase of the litigation and individual circumstances will be considered.

[254] Ergo, the prosecution only has to prove there has been a representation or

omission by the defendants to the consumers using exaggeration, innuendo or

ambiguity as to a material fact or failing to state a material fact if such use or

failure deceives or tends to deceive, and does not have to prove that any of the

consumers had actually relied on the representation or omission to prove there

has been an unfair practice.

(d) Did the prosecution prove the actus reus of the offence

beyond a reasonable doubt that the defendants

respectively engaged in an unfair practice by making false,

misleading

or deceptive

representations to the

consumers?

[255] The prosecution submits that the defendants had engaged in an unfair practice by

making false, misleading or deceptive representations to the consumers in many

different ways, but does not rely simply on the defendants overcharging the

consumers.

(i) Is there evidence that the defendants have grossly

over-charged the consumers so as to make it an

unfair practice?

[256] Most of the 11 consumers complained about being overcharged by the defendants

for the work that had been done for the consumers. The provision for finding the

defendants guilty of engaging in an unfair practice related to overcharging a

consumer is for an making an unconscionable representation under s. 15(2)(b)

where the price grossly exceeds the price at which similar goods or services are

readily available to like consumers.

[257] In Memorial Gardens Ontario Ltd. v. Ontario, [1992] O.J. No. 98, at paras. 5 to 7,

the Court of Appeal of Ontario held that the circumstances of the particular

transaction, including those of the consumer and the representor, must be taken

into consideration in determining if the consumer representation is

unconscionable, and that knowledge of the representor who knew or ought to have

known that the price charged grossly exceeds the price at which similar goods or

services are readily available to like consumers may not be conclusive that there

has been an unfair practice, since it is but one fact that may be taken into account

in determining whether, in a particular transaction, a consumer representation was

unconscionable. In addition, the Court of Appeal held that it would be incorrect for

a court to simply equate finding that the price had grossly exceeded the price at

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which similar goods were readily available as proof of the offence, when there is a

paucity of evidence to establish that the price at which the goods (or services)

were offered had exceeded the market price to the level of unconscionability

[emphasis is mine below]:

I agree with the construction of the sections as stated by Finlayson J.A. The

elements of the offence created by s. 17(2) [am. 1989, c. 72, s. 26] are that a

person engage in an unfair practice, knowing it to be an unfair practice. The acts

specified in s. 2(a) and (b) (now s. 2 paras. 1 and 2) are unfair practices. The act

specified in s. 2(b) is an unconscionable consumer representation made in

respect of a particular transaction. I think it is clear from the wording of s. 2(b)

that all of the circumstances of the particular transaction, including those of the

consumer and the representor, must be taken into consideration in determining if

the consumer representation is unconscionable. If the legislature had intended

that a consumer representation was unconscionable, regardless of any other

factor, if made by a representor who knew or ought to have known of the

circumstances specified in a subheading of s. 2(b), it would simply have said so.

Instead, by the section, the significance of such knowledge is recognized as a

fact that "may be taken into account" in determining whether, in a particular

transaction, a consumer representation was unconscionable, that it was an unfair

practice. But such knowledge may not be conclusive. Would it be unconscionable

for an unwilling vendor to start at a price that might fall within s. 2(b)(ii) if his

purpose is simply to settle at a good price with a knowledgeable and insistent

purchaser? It all depends on the circumstances.

In the result, then, I think the trial judge was wrong in simply equating a finding

that the price grossly exceeded the price at which similar goods were readily

available with proof of the offence.

For these reasons, I would allow the appeal, set aside the conviction, and in the

exercise of our discretion, I would enter an acquittal. I reached this conclusion

because of the clear evidence of the circumstances of the purchasers and the

paucity of the evidence relied on to establish that the price at which the goods

were offered exceeded the market price to the level of unconscionability.

[258] Ergo, to find the defendants had committed an unfair practice by excessively

overcharging a consumer, there would have to be evidence of prices that other

electricians would charge for their goods or services to like consumers to

determine if the defendants’ prices do grossly exceed the price at which at which

similar goods or services are readily available to like consumers. In the trial,

evidence had come from Nigel Avey, the electrician who had provided an estimate

to the consumer Peter Christensen and from a comment made by Joe Peragine,

the ESA inspector, who supposedly told the consumer, Zaven Tahtadjian, that

Tahtadjian’s job should have only cost a much lower amount than what the

defendants had charged for the work.

(A) Prices of what Nigel Avey, a master electrician,

would charge for his services.

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[259] At trial, Nigel Avey testified that he is a master electrician. He also said that he

had received a call from a consumer named Peter Christensen for a quote for

some work and had either emailed or faxed the quotation dated June 10, 2012

(see Ex. #23) to Christensen for the amount of $1,070.00 (not including HST):

RE: Replace 100A meter base, service conduit and wires to

panel

- Supply and Install 15 ft of 1¼” PVC Conduit to panel.

- Supply and install #3 RW90 Wiring from meter base to panel.

- Supply and Install New 100A meter base.

- Arrange for disconnection of electrical service to perform

repairs, with Hydro Company and Electrical Safety Authority.

- Provide ESA permit and inspections.

- Arrange to have power restored with Hydro company and

ESA

SUBTOTAL

HST

$1,070.00

Extra

TOTAL

[260] However, Nigel Avey prepared the quotation without actually attending inside the

Christensen residence and had prepared the quotation based on a 100 amp

service when the Christensen house actually had a 200 amp service. As such, the

quotation prepared by Nigel Avey would not be a price that can be used to

establish that the defendants’ price to Peter Christensen had grossly exceeded the

price at which similar goods or services are readily available to like consumers.

(B) Opinion of Joe Peragine, an ESA inspector, on

how much an electrical job should cost.

[261] Joe Peragine had testified that he had been a master electrician, but has not paid

his fees for that licence since an ESA inspector is not permitted to provide services

as an electrician on the side. The consumer Zaven Tahtadjian had acknowledged

after seeing a transcript of an ESA proceeding that he had testified at earlier, that

the ESA inspector that he had called, Joe Peragine, had informed Tahtadjian

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during a telephone call that the work that had been done at the Tahtadjian house

should have been worth $300 to $400, and that the job was probably a $400 job.

However, when Joe Peragine was called to testify at the trial, Peragine testified

that he does not recall the conversation that he had with the consumer Zaven

Tahtadjian, after he had done the inspection of the Tahtadjian house after Insight

Electric Inc. did work there. Accordingly, Zaven Tahtadjian’s evidence of what Joe

Peragine had stated as what the cost of the job should have been is hearsay

evidence, if it is being used for the truth of its contents, and cannot be admitted as

evidence that the defendants’ price had grossly exceeded the price at which

similar goods or services are readily available to like consumers in respect to the

consumer Zaven Tahtadjian’s matter.

(ii) By analogy, is the omission of informing the

consumers that they are buying a $10 hamburger

instead of a $3 hamburger an unfair practice?

[262] The prosecution contends that the consumers who called Ivan's Electric Ltd. or

Ivan Valovic were never told by them that the defendants would charge a $180

service call charge or the $360 emergency service call charge for just attending at

the consumer’s residence, considering that the consumer would have to pay to the

defendants a minimum fee of $360 comprising of the $180 service call charge and

$180 for a minimum of one hour for troubleshooting or for checking out the

consumer’s problem, or if the consumer is being charged the emergency rate

applicable to after hours, weekends, or holidays, then the consumer would have to

pay to the defendants a minimum fee of $720 comprising of the $360 emergency

service call charge and $360 for a minimum of one hour for troubleshooting or for

checking out the consumer’s problem before even beginning any repairs or

installations. This omission would be an unfair practice by false, misleading, or

deceptive representation, since the consumer would have to pay the defendants a

service call charge that they do not know that the defendants would be charging

just to attend at the consumer’s residence.

[263] In short, the consumers by analogy were not even told they would be paying for a

$10 hamburger (the $180 service call charge or the $360 emergency service call

charge) on the telephone when the consumers had called the defendants to attend

the consumer’s residence or that they had even ordered a hamburger from the

defendants (which would be charged at a price $10) that they would be required to

pay for when the defendants arrived with that $10 hamburger (the $180 service

call charge or the $360 emergency service call charge) .

(iii) Is the 30% cancellation fee imposed on the

consumers in the agreement an unfair practice?

[264] The direct agreements (Proposals) that some of the consumers were provided had

included the term, “We charge a 30% Cancellation Fee.” The prosecution

contends that charging the consumer such a cancellation fee is not permitted

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under the direct agreement provisions of the CPA 2002. The amount of the

cancellation fee also coincidentally coincides with the amount of the deposit that

the defendants had required the consumers, Denise Herold and Boris Wolchak, to

provide to the defendants for work that had been contracted to be done by the

defendants sometime in the future after the direct agreements were entered into.

Ergo, when these two consumers had decided to cancel their direct agreements

with the defendants, the defendants would already have the 30% cancellation fee

from the deposit that these two consumers had provided to the defendants as part

of their agreement, and would consequently make it much more difficult for the

consumers to get their deposit back based on the term in the agreement that the

defendants would charge a 30% cancellation fee.

[265] Despite these agreements being direct agreements, the defendants had argued

that if the agreements were not direct agreements, then the parties could agree to

the term being in their agreement that there would be a 30% cancellation fee

according to normal contractual agreements that are not direct agreements.

(A) Is the 30% cancellation fee legally permitted to

be a condition in a direct agreement under the

CPA 2002?

[266] Considering that the agreements or contracts between the defendants and the

consumers are direct agreements with the meaning of the CPA 2002, s. 35(1) of

O. Reg. 17/05 does not legally permit the defendants to charge the consumers a

30% cancellation fee if the consumer decides to cancel the agreement or contract

with the defendants, since consumers are legally permitted to cancel a direct

agreement within the 10-day cooling off period under s. 43(1) of the CPA 2002,

which would then trigger the defendants obligation to refund any payment made

under the direct agreement under s. 96(1)(a) of the CPA 2002. As such, the 30%

cancellation fee term cannot be included in the direct agreements with the

consumers, but by putting that term in the agreement with the consumers that the

defendants would be charging the consumer a 30% cancellation fee, the

defendants would be engaging in an unfair practice by making a false, misleading

or deceptive representation.

(iv) When a consumer calls Ivan's Electric Ltd.’s

telephone number to hire an electrician and the

defendants omit to inform the consumer that Ivan's

Electric Ltd. is no longer operating and then Insight

Electric Inc. arrives at the consumer’s residence to

do the job be an unfair practice?

[267] By omitting to inform the consumers that Ivan's Electric Ltd. is no longer operating

during the initial call and then when a different company named Insight Electric

Inc. arrives at the consumer’s residence instead of the Ivan's Electric Ltd., which

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the consumer had called to attend for a service call in some circumstances could

be making a false, misleading, or, or deceptive representation.

(A) Was there anything improper about Ivan

Valovic and Ivan’s Electric Ltd. passing on

jobs to Insight Electric Inc.?

[268] It would not be improper for Ivan's Electric Ltd. or Ivan Valovic to pass jobs onto

Insight Electric Inc., if the consumer had been made aware by Ivan's Electric Ltd.

or Ivan Valovic that such an action would occur when the consumer had first called

Ivan's Electric Ltd. or Ivan Valovic to provide a service to the consumer, and that

the consumer had agreed to Insight Electric Inc. providing the service to the

consumer.

(B) Is the failure to disclose that Ivan's Electric

Ltd. is no longer operating and that Ivan's

Electric Ltd. or Ivan Valovic had passed the job

to Insight Electric Inc., who then arrives at the

consumer’s residence to do the job, a material

fact that has to be disclosed to the consumer

during the initial telephone call made by the

consumer to Ivan's Electric Ltd. or Ivan

Valovic?

[269] If a consumer calls Ivan's Electric Ltd. or Ivan Valovic to provide a service and

Ivan's Electric Ltd. was no longer legally able to operate because its electrical

contractor’s licence had been revoked by the ESA, then it would be a material fact

that would have to be disclosed to the consumer that Ivan's Electric Ltd. was no

longer operating, as well as informing the consumer that Insight Electric Inc. could

provide the service or do the job for them, otherwise the consumer would be

expecting Ivan's Electric Ltd. to appear at the consumer’s residence.

(C) Were the consumers confused about who they

had called to be their electricians when Insight

Electric Inc. appeared at the consumer’s

residence instead of Ivan's Electric Ltd. who

had been called by the consumers to provide

the service?

[270] In some cases, the consumers in this proceeding had questioned who they were

dealing with, since the consumer had initially called Ivan's Electric Ltd. and had not

been told during that call that Ivan's Electric Ltd. was no longer operating or that

Ivan's Electric Ltd. had had passed the job onto Insight Electric Inc. or that Insight

105

Electric Inc. would be appearing to do the job. Then, to add even more confusion

to the consumer as to who was doing the work for the consumer, Ivan Valovic

would drive up in the red van with the Ivan's Electric Ltd.’s name, logo, and

telephone numbers, and then inform the consumer that he was there as Insight

Electric Inc. and then provide the consumer with Insight Electric Inc. business

cards, stickers or direct agreements, but then, as it occurred in one case, would

charge the credit card payment back to the Ivan's Electric Ltd. account, which

would then show up as “Ivan's Electric Limited” on the consumer’s credit card

statement.

[271] In addition, many of the consumers were presented with documents, payments, or

information that would indicate that both Ivan's Electric Ltd. or Insight Electric Inc.

were there that day doing the job at the consumer’s residence.

[272] Furthermore, after Ivan's Electric Ltd.’s had been told to immediately stop

operating on April 16, 2012, the defendants contend that the consumers were not

confused about who was doing the job, since the consumers would be told that

Insight Electric Inc. was doing the job upon the defendants arrival at the

consumer’s home, and that the consumers did not care who was doing the job, but

only that the job was being done. However, for this contention that the consumers

did not care who had been doing the job, there is conflicting evidence since the

consumers, Boris Wolchak and Zaven Tahtadjian, had been concerned that Ivan

Valovic was not licensed after the work had been completed and complained that

someone who was not licenced should not have taken or done the job. Moreover,

the evidence that the consumers did not care who was doing the job may be self-

serving, considering that many of the consumers had filed complaints with the

ESA for various reasons.

[273] Moreover, the defendants themselves had created the situation which would likely

confuse or tend to deceive the consumers by first telling the consumers that

Insight Electric Inc. was doing the job, even though Ivan's Electric Ltd. had been

initially called by the consumer for the service call, and then Ivan Valovic billing the

consumer’s payments by credit card and depositing the payments directly to Ivan's

Electric Ltd.’s account, despite the consumers had now been told that Insight

Electric Inc. was doing the job and had been provided Insight Electric Inc.

business cards, stickers and agreements. Or, in the particular situation with the

consumer, Boris Wolchak, Ivan Valovic had placed Ivan's Electric Ltd. stickers

onto the Insight Electric Inc. direct agreement form. As well, in the situation with

the consumer, Nigel Lundie, Ivan Valovic’s red van had the Ivan's Electric Ltd.

name on the van but had the electrical contractor’s licence number for Insight

Electric Inc.

[274] On the other hand, the defendants contend that there is no law that requires that

the vehicle arriving at the consumer’s house has to have specific wording or

names on it, and that when a consumer, for example, calls “Rogers Cable” for

service and then a truck with the name “Intek Communications” shows up at the

106

consumer’s house to do the service, it would not be unusual or improper.

However, this analogy would not apply to the defendants, since the consumers

had initially called Ivan's Electric Ltd. and then the defendants would arrive in the

Ivan's Electric Ltd. red van with its name on the side at the consumer’s residence,

but then tell the consumer that they were Insight Electric Inc. and there to do the

job. The use by the defendants of different company names at the same time

would be evidence that would likely or tend to deceive the consumer.

[275] And, even if the consumers did not specifically testify that they had been confused

about who was doing the job or even care about who was doing the job, these

conflicting company names and electrical licence numbers on display or presented

to the consumers would be an unfair practice by making a false, misleading or

deceptive representations. Moreover, as the Court of Appeal had held in

Ramdath, the prosecution does not have to prove there had been reliance by the

consumer on that false, misleading or deceptive representation in order to

establish that there has been an unfair practice.

(v) Is omitting to inform the consumer during the initial

telephone call what the defendants’ rates are for

emergency service calls or that they will charge the

consumer a service call charge for attending at the

consumer’s residence an unfair practice?

[276] The defendants said that the consumers would not be told about what they charge

as an emergency rate or that they would charge the consumer a service call

charge for attending at the consumers residence, unless the consumers ask them

on the telephone for their rates, but that the defendants would inform the

consumers at the consumer’s residence or that it would be set out in the written

direct agreement what their rates would be before any work is commenced, and

that the consumer can then choose to accept or not accept to do the work

proposed.

[277] Ergo, omitting to inform the consumers that there will be a service call charge of

$180 or $360 at the emergency rate just for the defendants to attend at the

consumers dwelling or that the defendants will charge the consumer double their

rates for after-hours, or on weekends or on holidays, or for immediate and same

day emergency situations or visits, could in some circumstances be construed as

a false, misleading or deceptive representation.

[278] The defendants had also admitted that if they were to inform the consumers what

their rates were on the initial telephone call, then the consumers may call

someone else for the job or service.

[279] On the other hand, if the consumer does not agree to the defendants doing the

proposed work or accept the defendants’ terms or proposal to do the work, the

consumer would still have to pay the defendants the emergency rate of $360 for

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the service fee and an additional $360 for a minimum of one hour for

troubleshooting and identifying the problem at the consumer’s residence, which

would total $720 that the consumer would have to pay the defendants if the

consumer decides not to proceed with the job that is set out and described in the

direct agreement that had been provided to the defendants. In other words, that

$720 charge may dissuade or deter the consumer from calling another electrician,

since the consumer would just have to pay another electrician more money just to

appear.

[280] Therefore, in the circumstances, including consideration of the vulnerability of the

consumer, and if it is clear that the consumers were made aware what the

defendants rates were, including that the defendant are charging the consumer

emergency rates and that there would be a service call charge just for attending

the consumer’s residence and that these rates are clearly spelled out in the written

direct agreement presented to the consumer before the consumer voluntarily

chooses to go ahead with the work and then proceeds to sign the agreement, then

in those circumstances it may not be an unfair practice by making a false,

misleading, or deceptive representation.

(vi) Did the defendants commit an unfair practice by not

providing a detailed breakdown of the work

involved and the cost of the labour and parts in

their agreements with the consumers?

[281] For the consumers, Zaven Tahtadjian and Peter Christensen, these consumers

did not receive a detailed list of parts and labour for the work to be done, so that

when Ivan Valovic told both consumers that additional work or materials are

required that had not been part of the original agreement, it would have been very

difficult for either of these two consumers to challenge the defendants on whether

the additional work should have been covered by the first agreement, since there

had not been a detailed list of materials, parts or labour, or an accurate description

of the work to be done in the first direct agreement provided to the consumers. As

such, it could be reasonably be inferred in the circumstances that informing a

consumer that additional work or material is required to be obtained or done that is

not covered by the first direct agreement could be a false, misleading, or deceptive

representation to a consumer, when there is not a detailed list of parts or labour or

work to be done with their corresponding prices that had been provided in the first

direct agreement.

(E) HAVE THE DEFENDANTS RESPECTIVELY ESTABLISHED THE DEFENCE OF

DUE DILIGENCE ON A BALANCE OF PROBABILITIES?

[282] In respect to the defendants’ due diligence, the prosecution contends that the

defendants have failed to establish on a balance of probabilities that they had

taken all reasonable steps in the circumstances to avoid committing the actus reus

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of the offences in those 89 charges, and as such, convictions should be entered

on all 89 charges.

[283] However, the defendants contend that they have proven that they had taken all

reasonable steps to avoid committing those offences so to establish the defence of

due diligence on a balance of probabilities. In particular, the defendants submit

that they had a reasonable belief that their agreements with the 11 consumers

were not direct agreements, and as such, they were not required to include the

“Consumer’s Rights” statements in their written agreements or to be bound by the

direct agreement provisions regarding what they could not put in their agreements

or what they had to put into their agreements. And, because they had reasonable

believed that they were not bound by the direct agreement provisions of the CPA

2002, they had reasonably believed that they could enter into agreements with

consumers that included a 30% cancellation fee if a consumer cancelled a job with

them, or that they could charge whatever prices they believed would correspond

with their experience and efficiency.

[284] And, as a consequence of their reasonable belief that their agreements were not

direct agreements, they submit that they should not be convicted for failing to

provide an agreement containing the information required to be in a direct

agreement or in failing to provide a refund within 15 days. Equally, the defendants

submit that because they had reasonably believed that their agreements were not

direct agreements then they had also reasonably believed that they could freely

contract and bargain with consumers and enter into agreements that included

conditions and terms that the defendants and consumers had agreed to, including

a 30% cancellation fee when the consumer cancelled the job. And, because they

believed their agreements were not direct agreements then the defendants believe

that they did not have to give a refund to a consumer where they had completed

the job under the contract that both parties had freely bargained for, as well as

believing that they had been entitled to charge a consumer the cancellation fee

when a consumer cancelled the agreement.

[285] Furthermore, in respect to the charges of engaging in an unfair practice, the

defendants submit that the situation of consumers calling Ivan's Electric Ltd. to do

the job and Ivan's Electric Ltd. then passing the job to Insight Electric Inc., and the

apparent confusion about who was actually doing the job was not their doing, but

that of the ESA who would not renew Ivan Valovic’s master electrician’s licence

and then directing Insight Electric Inc. to stop operating as licenced electrical

contractor on April 16, 2012, for safety reasons because Ivan's Electric Ltd. no

longer had a licenced master electrician. Moreover, the defendants contend that

neither Ivan Valovic had wanted to go work for Insight Electric Inc. nor did Peter

Valovic want to have Ivan Valovic work for Insight Electric Inc. on jobs, and that

they were both trying to do their best with their untenable situation with the ESA.

Moreover, the defendants submit that they did not intentionally try to confuse the

consumers as the consumers were always informed as soon as the defendants

arrived at the consumer’s house that Insight Electric Inc. was doing their job, and

109

that there is nothing in law that requires that Ivan Valovic’s red van had to have

particular wording on it. And, if there had been any confusion to the consumer

about who had been doing the job, the defendants submit that the consumers still

got what they had bargained for.

[286] In addition, the defendants submit that they would accommodate the edicts of the

ESA soon as they were made aware of any concerns the ESA had, such as when

they were paying Ivan's Electric Ltd.’s accounts expenses directly with money paid

by consumers for an Insight Electric Inc. job where Ivan Valovic did the work for

the Insight Electric Inc.’s customer, but had stopped doing that soon as they were

told by the ESA that they could not do that.

[287] Furthermore, the defendants contend that the consumers were told they were

bargaining for a $10 hamburger (the cost of the defendants’ job) when the

proposed agreement for the job was presented to the consumer and that they

could choose to accept the agreement and pay for the $10 hamburger or they

could choose not to pay for the $10 hamburger and try to find a $3 hamburger

somewhere else.

[288] However, the prosecution submits that the defendants’ contention that the

defendants had a reasonable belief that their agreements were not direct

agreements would in essence mean that the defendants had committed the

offences by relying on a reasonable mistake of law, where such reliance on a

mistake of law has not been accepted as a defence in Canada that had not been

based on an officially induced error: La Souveraine, Compagnie d'assurance

générale v. Autorité des marchés financiers, [2013] S.C.J. No. 63 (S.C.C.).

[289] Moreover, the prosecution submits that both Ivan Valovic and Peter Valovic had

been aware of the application of the CPA 2002 in respect to their dealings with

consumers, since Peter Valovic had been made aware of the application of the

CPA 2002 to consumer agreements and to their transactions with consumers as

early as 2008 while completing the master electrician course. And, that Ivan

Valovic had been aware of the application of the CPA 2002 in his dealings with

consumers as of June 25, 2011, considering that Ivan Valovic, himself, in

corresponding with the consumer, Denise Herold, had mentioned the application

of s. 43 of the CPA 2002 in his letter that he had sent to Denise Herold when

Herold had cancelled her agreement with Ivan's Electric Ltd. and demanded the

return of her deposit (see p. 21 of the Joint Book of Authorities).

[290] In addition, the prosecution contends that Peter Valovic did not adequately

supervise Ivan Valovic when Ivan Valovic started working for Insight Electric Inc.

sometime after April 16, 2012, to ensure that no offences were committed under

the CPA 2002 by Insight Electric Inc. in jobs that Ivan Valovic worked on.

Moreover, the prosecution submits that Peter Valovic failed to adequately instruct

and supervise Ivan Valovic’s interactions and dealings with consumers and had

left the responsibility on all aspects of estimating, entering into agreements on

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behalf of Insight Electric Inc., and in responding to consumer complaints, to Ivan

Valovic, even though Insight Electric Inc. was Peter Valovic’s company.

[291] Moreover, the prosecution contends that the relationship between Insight Electric

Inc. and Ivan Valovic was a sham and that it was in reality the “Valovic Electric

Company”, in which Ivan Valovic and Peter Valovic were acting in concert to get

around Ivan Valovic’s difficulties with the ESA, when the ESA would not renew

Ivan Valovic’s master electrician’s licence after it lapsed on June 18, 2010.

(1) Does having a reasonable mistake of law establish a due

diligence defence for a strict liability offence?

[292] For the reason why they had believed their agreements were not direct

agreements, the defendants had testified that they had relied on their lawyer Evan

Moore’s opinion that their contracts with consumers were not direct agreements

and the off-the-cuff comments by the ESA Review Panel on August 26, 2011, that

Evan Moore’s argument had logical merit that the direct agreement provisions of

the CPA 2002 did not apply to situations where a consumer calls or solicits an

electrician to attend at their house, but that it only applies to situations where an

agreement is entered into by a consumer from a door-to-door sales transaction. In

addition, the defendants said that had talked with other electricians and

tradespeople and had looked at their agreements and contract forms and said that

no one else had the Consumer’s Rights Statement or the 10-day cooling-off period

language in their agreements that they were using with consumers. Moreover,

Peter Valovic testified that in his master electrician course he had not been taught

that an electrician’s agreements with consumers were direct agreements or on

what language to put into agreements.

[293] Firstly, someone who contends, as a defence, that they were not aware of a

particular law or that they had mistakenly believed that a particular law did not

apply to them is nevertheless caught by s. 81 of the P.O.A. which provides that

“ignorance of the law is not a defence”:

Ignorance of the law by a person who commits an offence is not an excuse

for committing the offence

[294] Although it is been a long standing principle that it is not a defence for an accused

person to rely on a mistake of law as the reason for committing an offence, the

Supreme Court of Canada did recently consider in La Souveraine, Compagnie

d'assurance générale v. Autorité des marchés financiers, [2013] S.C.J. No. 63,

whether a defence based on a reasonable mistake of law should be available to

an accused for a strict liability offence. Wagner J., writing for the majority, held at

paras. 3 and 57 that the due diligence defence was not available in this case,

because the appellant was relying on a pure mistake of law. He also emphasized

that under Canadian law, a mistake of law can ground a valid defence only if the

mistake was an “officially induced error” and if the conditions laid down in R. v.

Jorgensen, [1995] 4 S.C.R. 55, with respect to the application of such a defence

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are met. Furthermore, Wagner, J. concluded that an accused gains nothing by

showing that it made a reasonable effort to know the law or that it acted in good

faith in ignorance of the law, since such evidence cannot exempt them from

liability [emphasis is mine below}:

For the reasons that follow, I find that the appeal must fail. The offence in

question is one of strict liability. The actus reus was established, and the due

diligence defence was not available in this case, because the appellant was

relying on a pure mistake of law.

…

However, this defence will not be available if the defendant relies solely on a

mistake of law to explain the commission of the offence. Under Canadian law,

a mistake of law can ground a valid defence only if the mistake was an

officially induced error and if the conditions laid down in R. v. Jorgensen,

[1995] 4 S.C.R. 55, with respect to the application of such a defence are met.

A defendant can therefore gain nothing by showing that it made a reasonable

effort to know the law or that it acted in good faith in ignorance of the law,

since such evidence cannot exempt it from liability.

[295] Furthermore, Wagner J. confirmed at paras. 68 to 82 in La Souveraine,

Compagnie d'assurance générale v. Autorité des marchés financiers, that the

Supreme Court has held on many occasions that a reasonable mistake of law is

not a defence even though an accused person has exercised due diligence to find

out and verify the nature of the applicable law. However, he did acknowledge that

if the rule that ignorance of the law excuses no one were to be absolute, then the

rule could seriously hinder the application of another cardinal rule of the criminal

justice system, that there can be no punishment without fault, but in the present

circumstances he was not prepared to adopt a new exception to the rule in which

a mistake of law could be used as a valid defence but only in very specific

circumstances [emphasis is mine below]:

This Court has held many a time that the fact that a defendant has exercised

due diligence to find out and verify the nature of the applicable law is not a

defence (City of Lévis, at para. 22). It has characterized the rule with respect

to ignorance of the law as "an orienting principle of our criminal law which

should not be lightly disturbed" (Jorgensen, at para. 5, per Lamer C.J.). In

City of Lévis, at paras. 22-27, LeBel J. noted that this rule has the same

weight in regulatory law.

The rule with respect to ignorance of the lawexists to ensure that the criminal

justice system functions properly and that social order is preserved. G. Côté-

Harper, P. Rainville and J. Turgeon explain this rule, conveyed by the maxim

"ignorance of the law is no excuse", as follows (Traité de droit pénal canadien

(4th ed. 1998), at p. 1098):

[TRANSLATION] The presumption of knowledge of the law becomes the

quid pro quo for the principle of legality. The legislature assures citizens that

it will not punish them without first telling them what is prohibited or required.

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But in exchange, it imposes on them an obligation to ask for information

before acting... .

Fear of social disorder and anarchy is the main argument of those who

want to uphold the maxim. To accept an unrestricted possibility of hiding

behind a subjective excuse of ignorance would be dangerous and improper.

In Jorgensen, Lamer C.J. also endorsed this view, quoting the following

passage on the rationale for the rule against a defence based on mistake of

law:

Don Stuart identifies four aspects of the rationale for the rule against

accepting ignorance of the law as an excuse:

1. Allowing a defence of ignorance of the law would involve the

courts in insuperable evidential problems.

2. It would encourage ignorance where knowledge is socially

desirable.

3. Otherwise every person would be a law unto himself, infringing

the principle of legality and contradicting the moral principles

underlying the law.

4. Ignorance of the law is blameworthy in itself.

(Canadian Criminal Law: A Treatise (3rd ed. 1995), at pp. 295-

98.) [para. 5]

It should nonetheless be noted that if the rule that ignorantia juris non excusat

-- ignorance of the law excuses no one -- were absolute, this could seriously

hinder the application of another cardinal rule of our criminal justice system:

there can be no punishment without fault. The overlap between these rules is

all the more significant given the current simultaneous proliferation of

regulatory measures and penal statutes. Indeed, several authors have

pointed out that it is now impossible for citizens to have comprehensive

knowledge of every law:

[TRANSLATION] The presumption of knowledge of laws was acceptable and

defensible in the past because those laws concerned only serious offences

and crimes against morality. The situation is very different today, and the

criminal or penal law must be interpreted by consulting an abundant case

law. The much-discussed multiplication of penal statutes must also be

considered, and no one, not even criminal lawyers and other specialists in

such matters, can profess to know all of them. The situation created by this

proliferation of statutes is aggravated by the problem of their publication,

which, although formal, is often not really effective.

(Côté-Harper, Rainville and Turgeon, at p. 1099)

Dickson J. also commented on this in Sault Ste. Marie, at p. 1310:

Public welfare offences obviously lie in a field of conflicting values. It is

essential for society to maintain, through effective enforcement, high

standards of public health and safety. Potential victims of those who carry on

latently pernicious activities have a strong claim to consideration. On the

other hand, there is a generally held revulsion against punishment of the

morally innocent.

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Despite the problems that flow from regulatory measures, the rise in the

number of such measures and the commensurate multiplication of penal

provisions designed to enforce them go hand in hand with the evolution of

modern societies. These trends are well established. Regulatory measures

are adopted to protect the public from dangers that can result from activities

that are otherwise legitimate. The reason why penal sanctions are used in

this context rather than civil law or administrative law sanctions lies in the

deterrent power of penal law (H. Parent, Traité de droit criminel, vol. 2 (2nd

ed. 2007), at paras. 496-500). Cory J. eloquently explained the importance of

regulatory offences in R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R.

154, at pp. 221-22:

It is difficult to think of an aspect of our lives that is not regulated for our

benefit and for the protection of society as a whole. From cradle to grave, we

are protected by regulations; they apply to the doctors attending our entry

into this world and to the morticians present at our departure. Every day,

from waking to sleeping, we profit from regulatory measures which we often

take for granted... .

In short, regulation is absolutely essential for our protection and well being as

individuals, and for the effective functioning of society. It is properly present

throughout our lives.

The foregoing discussion underscores the conflicts that inevitably result from

the constantly expanding presence of regulatory measures. Such measures

play an essential role in the implementation of public policy. The rule that

ignorance of the law is not a valid defence supports the state's duty in this

regard. For this reason alone, it needs to be enforced.

At the same time, the rise in the number of statutes coupled with their

growing complexity increases the risk that a citizen will be punished in

circumstances in which ignorance of the law might nevertheless be

understandable.

In light of all these considerations, I find that the objective of public protection

that underlies the creation of regulatory offences militates strongly against

accepting a general defence of reasonable mistake of law in this context. As

Cory J. noted in Wholesale Travel, at p. 219,

[r]egulatory legislation involves a shift of emphasis from the protection of

individual interests and the deterrence and punishment of acts involving

moral fault to the protection of public and societal interests.

Moreover, it is incumbent on a regulated entity that engages in an activity

requiring specific knowledge, including knowledge of the applicable law, to

obtain that knowledge. The following observations of Hugues Parent are of

particular relevance in a regulatory context such as the one in the instant

case. Although he objects to the rule conveyed by the maxim "ignorance of

the law is no excuse" being absolute, Parent mentions a very important limit -

- unforeseeability of the mistake -- that would have to apply should the rule be

relaxed:

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[TRANSLATION] An individual who acts in ignorance of a provision he or she

is not in a position to know about, despite being in good faith and exercising

due diligence, does wrong unknowingly, and therefore unintentionally. Such

an individual cannot therefore be held liable.

To be successfully argued, insurmountable ignorance of the law must be

unforeseeable, which means that it must not be related to an activity

requiring special knowledge: thus, a professional fisher charged with

possession of immature lobsters cannot use ignorance of the law as a

defence. As O'Hearn Co. Ct. J. stated in [R. v. Maclean (1974), 17 C.C.C.

(2d) 84 (N.S. Co. Ct.)], "if an accused wishes to indulge in an activity that

requires special knowledge including knowledge of the applicable law, he

can fairly be held to be under an obligation to acquire that knowledge".

Because the information needed to attain that knowledge is essential, it must

be accessible and comprehensible. [Emphasis in original; footnotes omitted.]

(Traité de droit criminel, vol. 1 (3rd ed. 2008), at paras. 580-81)

The regulator at issue in the instant case, the AMF, is not required by law to

reply to those to whom the law applies or to inform them about their rights

and obligations. As a result, it was not reasonable in this case for the

appellant to view the AMF's silence as a confirmation of its interpretation of

that law. …

Furthermore, even if the AMF's conduct were so vexatious as to justify

accepting a new exception to the rule with respect to ignorance of the law,

which I cannot find to be the case here, I am of the opinion that the steps

taken by the appellant to avoid breaking the law do not meet the

requirements for the due diligence defence. The appellant relied solely on the

legal advice of professionals acting for a third party, Flanders, in Manitoba. A

reasonable person would at least have sought an independent opinion from a

member of the Barreau du Québec, preferably one who specializes in

insurance law. Thus, the appellant in this case has not shown that it took all

reasonable steps to avoid breaking the law.

I am well aware of the difficulties of statutory interpretation that might result

from the complexity of certain regulated activities. Here, it is troubling that the

AMF itself had serious difficulty interpreting the applicable law in deciding

whether the transactions in question were lawful. Is it reasonable to require

those to whom regulatory measures apply to have a more extensive

knowledge of the law than the body responsible for enforcing it?

As I mentioned above, the complexity of regulations results from the need to

ensure the proper functioning of civil society (Wholesale Travel, Sault Ste.

Marie, City of Lévis). In this regard, I agree with the following comment made

by Lamer C.J. in Jorgensen:

... the complexity of contemporary regulation makes the assumption that a

responsible citizen will have a comprehensive knowledge of the law

unreasonable. This complexity, however, does not justify rejecting a rule

which encourages a responsible citizenry, encourages government to

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publicize enactments, and is an essential foundation to the rule of law. [para.

25]

I would therefore suggest postponing the debate about the appropriateness

of accepting a new exception to the rule that mistake of law can be a valid

defence only in very specific circumstances.

(2) Due diligence for the improper contract charges

[296] For the direct agreements provided to the consumers in this proceeding, the

defendants have failed to prove on a balance of probabilities that they took all

reasonable care to provide a proper agreement to the consumers by ensuring that

the written agreements provided to the consumer contained information required,

such as a proper detail of the goods and services to be provided to the consumer

and their prices under ss. 35(1)(6) and (9) of O. Reg. 17/05; the Consumer’s

Rights statement which includes the 10-day cooling off period provision under s.

35(1)(11) and 35(2) of O. Reg. 17/05; and the name of the person who had

negotiated and concluded the agreement with the consumer under s. 35(1)(4) of

O. Reg. 17/05; and the one-year warranty on parts and labour provided orally to

the consumers under s. 35(1)(13) of O. Reg. 17/05.

[297] First of all, their reasonable belief that their agreements are not direct agreements

is a mistake of law defence which does not establish a due diligence defence,

since a reasonable effort to know the law or that they had acted in good faith in

ignorance of the law has not been accepted as due diligence for a strict liability

offence, as held by Wagner J. in La Souveraine, Compagnie d'assurance générale

v. Autorité des marchés financiers (S.C.C.).

[298] Moreover, it should also be noted that the ESA Review Panel did not make an

actual finding that the direct agreement provisions of the CPA 2002 did not apply

to situation in which a consumer calls an electrician to attend at the consumer’s

residence to provide good and services, nor did it have to consider the question of

whether the direct agreement provisions of the CPA 2002 applied to the

defendants in that particular ESA proceeding.

[299] Furthermore, the opinion of the defendants’ lawyer, Evan Moore (which had not

been provided as evidence in this trial) would have been a narrow interpretation of

what a direct agreement encompasses and not one commensurate with the

purpose or object of the CPA 2002, which is the protection of consumers. Nor

does it correspond with the principle of “caveat venditor”, which makes the vendor

shoulder the financial risk in the vendor-consumer relationship and the obligation

to ensure that the necessary information has been provided to the consumer in

order for the consumer to properly make a decision on whether or not to enter into

an agreement. More important, a narrow interpretation of what a direct agreement

should encompass would not fulfill the object of the CPA 2002, which is to protect

consumers in the marketplace. Ergo, “door-to-door sales” agreements are direct

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agreements, but they are only one example of a direct agreement and not the only

transaction or circumstance covered by the direct agreement provisions of the

CPA 2002.

(3) Due diligence for the fail to refund charges

[300] Similar to the offence of failing to provide a proper contract to a consumer, the

defendants had relied on their reasonable belief that their agreements were not

direct agreements, which had made them to reasonably believe that they were not

bound by the provisions applicable to direct agreements, and as such, did not

have to provide refunds for work that had already been completed under the

agreements, and that they were also not obligated to return the deposits they had

received from the consumers, Denise Herold or Boris Wolchak, since the

consumers had entered into an agreement in which there had been a 30%

cancellation fee if the consumers cancelled the agreement. However, their

mistake of law defence also is not a defence to committing the offences of failing

to provide a refund within 15 days and is not evidence of due diligence.

[301] Under the CPA 2002, once a consumer cancelled the direct agreement, if they

were rightfully permitted to cancel the agreement then the defendants were

obligated to refund any payment made under the agreement to the consumer

within 15 days of the notice of cancellation. Moreover, since the 30% cancellation

fee is not a legally permitted term in a direct agreement, then the defendants could

not charge the consumers the 30% cancellation fee and had to refund the deposit

within 15 days of the cancellation. The defendants had failed to do so and had not

taken any reasonable steps to refund the deposit within 15 days..

[302] In addition, the defendants contend that they did not provide a full refund to the

consumers, since they were entitled to reasonable compensation. However, their

interpretation of what can be deducted as reasonable compensation is incorrect.

Only goods and services actually provided by the defendants and as bargained for

under the direct agreements and delivered to or provided at the consumer’s

dwelling can be deducted as reasonable compensation from any payments

received by the defendants under the direct agreements. The deductions for the

cost of picking up and returning parts, materials and supplies, and for losing a

day’s work, and the credit card service charge are not goods or service bargained

for in the direct agreement and actually delivered to or provided at the consumer’s

dwelling, and therefore, such costs cannot be deducted from the refunds that had

to be returned to the consumers.

[303] Furthermore, there were no reasonable steps undertaken by the defendants to

refund any of the payments made under the direct agreements when the

consumers had cancelled the direct agreements as they were rightfully entitled to

do, even after the jobs had been completed. Instead, there had been a

determined effort by Ivan Valovic to keep nearly all of the deposits from the

defendants by taking large deductions from the deposits from Denise Herold or

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Boris Wolchak, or to simply deny any refund to the other consumers who had

rightfully cancelled their direct agreements and demanded a refund under

provisions of the CPA 2002.

[304] In addition, Peter Valovic, as the director of Insight Electric Inc., had failed to take

any reasonable steps to prevent Insight Electric Inc. from failing to provide a

refund to the consumers who had rightfully cancelled their direct agreements

under the provisions of the CPA 2002. He had instead let Ivan Valovic to deal with

those consumers, who had cancelled the direct agreements and demanded a

refund, which falls short of taking all reasonable steps.

(4) Due diligence for the unfair practice charges

[305] In respect to the “unfair practices” charges, the defendants argue that they had

taken all reasonable care in preventing or avoiding committing those offences,

since they contend that they had not purposely tried to deceive the consumers in

who or which company was doing the job for the consumer. Moreover, the

defendants contend that Ivan Valovic did not want to go work for his son’s

company, Insight Electric Inc., nor did Peter Valovic want his father, Ivan Valovic,

to come work for Insight Electric Inc., but the defendants had believed that the

ESA had left Ivan Valovic with no choice, since someone who was not the Director

of the ESA had informed Ivan Valovic on April 16, 2012, that he had to

immediately stop operating Ivan's Electric Ltd., even though the ESA had not been

correct that Ivan's Electric Ltd. had to immediately stop operating, as the Director’s

Proposal to Revoke Ivan's Electric Ltd.’s electrical contractor’s licence would be

automatically stayed if an appeal was filed and that Ivan's Electric Ltd. could have

properly remained operating between April 12, 2012, to March 14, 2013, when the

Review Panel of the ESA upheld the Director’s Proposal of Revocation and had

lifted the stay.

[306] This issue arose because Angela Jackson, the Statutory Director of the ESA, had

on April 2, 2012, issued a Proposal to Revoke Ivan's Electric Ltd.’s electrical

contractor’s licence for safety reasons because Ivan's Electric Ltd. no longer had a

licenced master electrician because Ivan Valovic’s master electrician’s licence had

lapsed on June 18, 2010. In explaining why the ESA was incorrect to inform him

that Ivan's Electric Ltd. had to immediately stop operating, Ivan Valovic said that

the Director’s Proposal to revoke Ivan's Electric Ltd.’s licence was automatically

stayed if he appealed the Director’s Proposal, and that the stay of the Proposal of

revocation would not be in effect until all appeal proceedings for the licence

revocation proposal that the defendants were rightfully allowed had been

completed, which would have included his appeal to the Ontario Divisional Court.

As such, the defendants submit that Ivan's Electric Ltd. could still keep operating

until his appeal of the Director’s Proposal to revoke the company’s licence was

completed, and until that time, the revocation of the electrical contractor’s licence

was automatically stayed and Ivan's Electric Ltd. could continue operating.

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[307] However, the three-member Review Panel that had to review the Director’s

Proposal to revoke Ivan's Electric Ltd. electrical contractor’s licence had upheld

the Director’s Revocation Proposal on the basis of safety concerns and then also

lifted the automatic stay on March 14, 2013. This meant that on March 14, 2013,

Ivan's Electric Ltd. could no longer operate, since its electrical contractor’s licence

had been revoked as of March 14, 2013, and that Ivan's Electric Ltd. could have

continued operating between April 2, 2012, when the Director had issued the

Proposal to revoke the licence and March 14, 2013, when the Review Panel lifted

the automatic stay of the application of the Director’s proposal. But more

importantly, Ivan's Electric Ltd. did not have to immediately stop operating on April

16, 2012, when the ESA had informed Ivan Valovic that Ivan's Electric Ltd. had to

stop operating immediately, and as such, Ivan Valovic would not have gone to

work for Insight Electric Inc. until March 14, 2013, instead of having to do so much

earlier in April of 2012.

[308] In other words, the defendants had relied on the erroneous directive of the ESA for

Ivan's Electric Ltd. to immediately stop operating on April 16, 2012, as the reason

that Ivan Valovic had to start working for Insight Electric Inc. And, in trying to

comply with the ESA edict to immediately stop operating Ivan's Electric Ltd., the

defendants submit that they had tried their best to accommodate the ESA. In

addition, until Ivan Valovic had exhausted all his appeals and it became certain

that Ivan's Electric Ltd. could no longer operate, he did not want to spend the

money to repaint the name, logo, telephone number and electrical contractor’s

licence numbers on Ivan's Electric Ltd. red van, because he would then have to

incur the unnecessary cost to change everything back.

[309] In addition, Ivan Valovic testified that he could not just stop consumers from calling

the Ivan's Electric Ltd.’s telephone numbers, since the Yellow Pages were printed

a year in advance and that the Yellow Pages internet ads were contracted to run

for a particular period and paid for in advance, and that these ads could not simply

be cancelled and stopped because of their contractual agreement with them.

[310] Moreover, he also did not want to cancel all of Ivan's Electric Ltd. telephone

numbers, especially if he succeeded in his appeals and the ESA would have to

renew his master electrician’s licence and reinstate Ivan's Electric Ltd. electrical

contractor’s licence.

[311] However, even if Ivan's Electric Ltd. did not have to stop operating until March 14,

2013, the date when the automatic stay had been lifted, which would had stayed

the operation of the Director’s Proposal to revoke the licence, the issue is still

whether the defendants had made a false, misleading or deceptive representation

to a consumer after April 16, 2012, despite whether or not the ESA had been

erroneous in informing Ivan Valovic that Ivan's Electric Ltd. had to stop operating

immediately on April 16, 2012.

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[312] The defendants could have easily informed any callers that Ivan's Electric Ltd. was

no longer operating and that Insight Electric Inc. could attend to do the job if the

caller wish for Ivan's Electric Ltd. to attend and then inform the consumer that a

red van with the name of another company would be attending, but that it would

still be Insight Electric Inc. attending, and then give Insight Electric Inc.’s electrical

contractor’s licence number and telephone number if they wanted Insight Electric

Inc. to attend to do the job and the consumer could then decide if they wished to

call Insight Electric Inc. for the job or service call. Those potential actions and

information provided to the costumer certainly for the circumstance could have

been sufficient to ensure that former customers of Ivan's Electric Ltd. and new

customers who observed Ivan's Electric Ltd.’s Yellow Pages ads and who called

Ivan's Electric Ltd.’s telephone numbers would not have been confused or misled

or deceived on who would be attending to do the job.

[313] But when material information that Ivan's Electric Ltd. is no longer operating is not

provided to a former customer or to a new customer who calls the telephone

numbers associated with Ivan's Electric Ltd. or Ivan Valovic, and then Insight

Electric Inc. appears at the consumer’s residence would be a misleading or

deceptive representation, even if the consumer is told that Insight Electric Inc. is

doing the job and enters into an agreement with Insight Electric Inc. Again, as

held in Ramdath v. George Brown College of Applied Arts and Technology, [2013]

O.J. No. 3151 (O.C.A.), proof that the consumer had relied on the misleading or

deceptive representation to enter into the agreement is not required to prove the

offence of engaging in an unfair practice.

[314] Moreover, from Ivan Valovic’s testimony, consumers were not told by the

defendants on the telephone when they called Ivan's Electric Ltd. that Ivan's

Electric Ltd. was no longer operating. Instead, the consumers were simply told

they would be attending and then when the defendants arrived at the consumer’s

residence in the Ivan's Electric Ltd. red van displaying the Ivan's Electric Ltd.

business name, the defendants would then inform the consumers that Insight

Electric Inc. was there to do the job.

[315] And, in respect to the charging of credit card payments from consumers to the

Ivan's Electric Ltd. account instead of to the Insight Electric Inc. account, the

defendants contend that Ivan's Electric Ltd. still had ongoing expenses and that

Insight Electric Inc. had agreed to pay for Ivan's Electric Ltd.’s expenses with

money that Ivan Valovic would have earned on the jobs he was doing on behalf of

Insight Electric Inc. and that such money could be from the payments made by the

consumer by credit card on the jobs that Ivan Valovic worked on and that any

money that would go to Insight Electric Inc. would be worked out between Ivan

Valovic and Peter Valovic themselves.

[316] However, the prosecution submits that this is a sham and that the payments made

by the consumers by credit card was being credited to Ivan's Electric Ltd. instead

of Insight Electric Inc. and that Ivan's Electric Ltd. was still operating under the

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guise of working for Insight Electric Inc., since Ivan's Electric Ltd. had been told by

the ESA that it could no longer operate.

[317] In response, the defendants said that they had not been told by the ESA that they

could not do this and that their accountant said they could do this, and that they

had only stopped crediting the Ivan's Electric Ltd. account with consumers’ credit

cards payments after they were told they could not do this by the ESA.

[318] However, this action of charging a consumer’s credit card payment to Ivan's

Electric Ltd. instead of Insight Electric Inc. would have been a misleading

representation and an unfair practice, since the consumer had entered into a

contract with Insight Electric Inc. just after being told that Insight Electric Inc. was

doing the job, but then the payment went to Ivan's Electric Ltd. which could then

present a problem for the consumer if they were seeking a remedy to obtain the

return of the payment from Ivan's Electric Ltd., since the consumer had entered an

agreement with Insight Electric Inc. Moreover, this is also the reason that

consumer protection legislation would have requirements that suppliers provide

the proper names and addresses of the supplier and contain prohibitions against

actions or representations which would mislead consumers or prevent them from

obtaining remedies from the supplier.

Furthermore, for most of the consumers

who dealt with Ivan Valovic, the credit card payments were made even before the

work had been started by the defendants, which means the representation of

making the payment to Ivan's Electric Ltd. instead of Insight Electric Inc. had

occurred before the work had even been commenced by Insight Electric Inc.

[319] The defendants also had submitted that the consumers did not care who showed

up to do the job, but only cared that someone was there to do the job. However, if

that evidence comes only from the defendants, then it would be inadmissible

hearsay and cannot be relied on for its truth. However, as held by the Court of

Appeal for Ontario in Ramdath v. George Brown College of Applied Arts and

Technology, [2013] O.J. No. 3151, at paras. 13 to 15, the prosecution is not

required to prove that the consumers had believed in the misleading

representation as the basis for entering into the agreement in order to prove that

the defendants had engaged in an unfair practice. As such, even if the consumers

did not care who was doing the job initially, it certainly would matter to the

consumer afterwards, if the consumer needed to seek a remedy from the correct

electrical contractor, which would be the purpose of such legislation that would

prohibit the defendants from making a false, misleading, or deceptive

representation that could confuse or mislead the consumer in who actually was

doing the job.

[320] Furthermore, the defendants contend that even if the consumers may have had

some confusion of which company, Ivan's Electric Ltd. or Insight Electric Inc., was

doing the job, the defendants contend that the consumers did not get less than

what they had bargained for, even though they had originally called Ivan's Electric

Ltd. to attend their residence to do electrical work, yet Insight Electric Inc. had

121

arrived to do the job. However, representations which confuse the consumers of

who was actually doing the job is only one of the false, misleading or deceptive

representations made to the consumers. There were also the omissions in which

the consumers did not know that they would be charged a $180 service call

charge by the defendants for just showing up at the consumer’s residence, as well

as the inclusion of the 30% cancellation term in the direct agreements which is not

legally permitted to be in a direct agreement that had also been evidence of false,

misleading or deceptive representations made to the consumers.

[321] Accordingly, the defendants have failed to prove on a balance of probabilities that

they took all reasonable care to avoid engaging in an unfair practice by making a

false, misleading, or deceptive representation to a consumer.

(5) Due diligence for the charges against Ivan Valovic and Peter

Valovic in their capacity as directors of their respective

corporations.

[322] In respect to the charges in which Ivan Valovic and Peter Valovic were

respectively charged as directors of Ivan's Electric Ltd. and Insight Electric Inc., for

failing to prevent the corporations from failing to provide a proper direct agreement

to a consumer, for failing to prevent the corporations from failing to provide a

refund to a consumer within 15 days, and for failing to prevent the corporations

from failing to engage in an unfair practice, neither had proven on a balance of

probabilities that they had taken all reasonable steps in the circumstances to

prevent Ivan's Electric Ltd. or Insight Electric Inc. from committing those offences.

[323] For Ivan Valovic, as the director of Ivan's Electric Ltd., he was the person who had

actually prepared 10 of the 11 direct agreements that did not have the necessary

information required to be provided to a consumer, and the person who had

denied the consumers any full refunds, and the one who had driven to consumers’

houses in his red van displaying the name of Ivan's Electric Ltd. and then

providing Ivan's Electric Ltd. stickers to consumers in one case after telling the

consumer that Insight Electric Inc. was doing the job, and the one who had dealt

with the consumers. As such, Ivan Valovic failed to take all reasonable steps to

prevent Ivan's Electric Ltd. from committing any of the offences.

[324] And, in respect to Peter Valovic, as a director of Insight Electric Inc., he had failed

to properly supervise and instruct Ivan Valovic, who had prepared the direct

agreements on behalf of Insight Electric Inc. for the consumers, and in preventing

Insight Electric Inc. from failing to provide the consumers with a direct agreement

with the information required under s. 35(1) of O. Reg. 17/05. In fact, Peter

Valovic testified that he had copied his direct agreements forms from his father’s

forms that had contained the 30% cancellation fee term, which is not a term or

condition legally permitted in a direct agreement. In addition, he failed to take all

reasonable steps in preventing Insight Electric Inc. from failing to provide a refund

to a consumer within 15 days of the consumer’s notification of the cancellation of

122

the agreement. In fact, he had allowed Ivan Valovic to correspond and deal with

the consumer’s cancellation of the direct agreements and whether refunds that

Insight Electric Inc. had been obligated under law to make should be made within

the 15 days. And, in regards to taking all reasonable steps in the circumstances in

preventing Insight Electric Inc. from engaging in unfair practices by making false,

misleading, or deceptive representations to the consumers, Peter Valovic did not

properly supervise and instruct Ivan Valovic, who was dealing with the consumers,

so that the consumers would not be confused by whether Ivan's Electric Ltd. or

Insight Electric Inc. was doing the job for the consumer.

[325] Moreover, neither can rely on the mistake of law defence as evidence of due

diligence in preventing Ivan's Electric Ltd. or Insight Electric Inc. from committing

their respective offences.

(6) Can the defendants rely on the ESA’s missteps or

confusion caused by the ESA in dealing with the renewal

of Ivan Valovic’s Master Electrician’s Licence or Ivan's

Electric Ltd. electrical contractor’s licence as a due

diligence defence?

[326] On this contention, the actions or omissions towards the consumers in making

false, misleading or deceptive representations about who was doing the job for the

consumer, about not informing the consumer of the rates the defendants charged

for making the service call or their rates for after-hours, holidays, weekends, or for

same day or immediate service for emergencies, and in not providing a detailed

list of the work involved, the parts, materials, or labour to be provided and their

prices, had nothing to do with any missteps or errors that the ESA had made in

respect to Ivan Valovic’s or Ivan's Electric Ltd.‘s licencing problems. Ivan Valovic

could still have worked as an electrician with Insight Electric Inc. and not engaged

in unfair practices by making false, misleading, or deceptive representations,

despite his problems with the ESA.

(F)

DEFENDANTS’ CHARGES IN RESPECT TO EACH OF THE 11

CONSUMERS

(i) Denise Herold

[327] In relation to the consumer Denise Herold, the defendants, Ivan's Electric Ltd. and

Ivan Valovic, were respectively charged with committing 4 charges in 4 counts

between June 12, 2011 and June 29, 2011. They are the following:

Charges in relation to the consumer Denise Herold - counts #1, #2, #3, and

#4 on Information #5731 (4 charges):

123

(#1) Ivan's Electric Ltd. failed to deliver to a consumer on June 12, 2011, a direct

agreement containing the information required by s. 35(1) of the O. Reg. 17/05,

contrary to s. 42 of the CPA 2002, thereby committing an offence under s. 116(2)

of the CPA 2002 (1 charge).

(#2) Ivan Valovic, as a director of Ivan's Electric Ltd., on June 12, 2011, failed to take

reasonable care to prevent the corporation from failing to deliver to a consumer a

direct agreement containing the information required by s. 35(1) of the O. Reg.

17/05, contrary to s. 42 of the CPA 2002, and thereby committed an offence

under s. 116(3) of the CPA 2002 (1 charge).

(#3) Ivan's Electric Ltd. on June 29, 2011, failed to refund to a consumer within 15

days after the date the said consumer gave notice of cancellation, contrary to s.

96(1)(a) of the CPA 2002, thereby committing an offence under s. 116(1)(b)(viii)

of the CPA 2002 (1 charge).

(#4) Ivan Valovic, as a director of Ivan's Electric Ltd., on June 29, 2011, failed to take

reasonable care to prevent the corp. from failing to refund a consumer within 15

days after the date the said consumer gave notice of cancellation, contrary to s.

96(1)(a) of the CPA, and thereby, committed an offence under s. 116(3) of the

CPA 2002 (1 charge).

[328] The consumer Denise Herold had called Ivan's Electric Ltd. about not having

power in her condominium apartment. Peter Valovic appeared on behalf of Ivan's

Electric Ltd. on Sunday, June 12, 2011.

[329] Herold agreed to and paid Ivan's Electric Ltd. for the work contained in the first

direct agreement (Work Order) prepared by Peter Valovic on June 12, 2011, for

troubleshooting the problem, which turned out had been a problem with the

building’s line and not a problem within Herold’s apartment. However, without

charge Peter Valovic said that he did fix a light in Herold’s laundry room that had

not been working. For Peter Valovic’s services, Ivan's Electric Ltd. had charged

Herold $406.80 (including tax) for the work which was paid by Herold using her

credit card.

[330] The first direct agreement (Work Order) (see p. 17 of Joint Book of Documents)

that pertains to the original service call provided to Herold on June 12, 2011,

stated:

1) Troubleshoot on half power out in apartment, Found problem

with building line, open panel

Fix burnt out light in laundry room

360.00

Emergency service call

Total Labour

360.00

124

Total Parts

TOTAL

___________

HST

46.80

406.80

[331] However, the first direct agreement (work order) presented to Herold on June 12,

2011, did not contain the name of the person who had negotiated the direct

agreement for Ivan's Electric Ltd. In addition, the first direct agreement did not

contain the “Consumer’s Rights under the CPA 2002” statement, which includes

the 10-day cooling off period set out in ss. 35(1) and (2) of O. Reg. 17/05, nor did

the first direct agreement contain a fair description of the goods and services to be

supplied by the defendants as required under s. 35(1)(6), nor did it contain an

itemized list of the prices at which the goods and services are to be supplied to the

consumer as required under s. 35(1)(9) of O. Reg. 17/05. Specifically, the service

call charge had not been listed, nor a detailed list of the parts and materials and

their prices to be supplied to Herold by the defendants were set out in the first

direct agreement.

[332] In addition, during Peter Valovic’s troubleshooting of Herold’s apartment, Herold

agreed to have Ivan's Electric Ltd. do additional electrical work later that week, on

June 14, 2011. Herold had accepted and signed a second direct agreement

(Proposal) presented by Ivan's Electric Ltd. on the same date of June 12, 2011, to

install a new circuit breaker panel, new receptacles and switches inside her unit,

as well as a GFI device in her bathroom. The total job was going to cost her

$6215. A deposit of $1864.50, which was about 30% of the total cost for the work

was requested from Herold, which she had paid to Ivan's Electric Ltd. using her

credit card.

[333] The second direct agreement (Proposal) (see p. 18 of the Joint Book of

Documents) submitted to and agreed to by Herold on June 12, 2011, stated:

360.00

- Remove old fuse panel and install new circuit breaker panel,

retro-fit in wall

Parts & labour

2500

Inspection

325

HST

_____________

$2825

- Install new receptacles & switch’s inside unit

Install GFI in bathroom

Parts & labour

$3000

125

Inspection

HST

390.00

___________

$5390.00

30% deposit of $1864.50 PAID

Balance of $4350.50

Total Job

$6215.00

Total Parts

___________

HST

46.80

TOTAL

406.80

[334] Similar to the first direct agreement (Work Order) provided to Herold for the

original service call, the second direct agreement (Proposal) for future work that

had been presented to Herold on June 12, 2011, also did not contain the name of

the person who had negotiated or concluded the second direct agreement for

Ivan's Electric Ltd., as required by s. 35(1)(4) of O. Reg. 17/05. Peter Valovic

testified at trial that he had prepared the second direct agreement for Herold, but

his name does not appear anywhere on the agreement. It only contained a

signature on a line beside the Heading “Authorized Signature”, for which the

person’s name is not readily identifiable. The second direct agreement for future

work also contains a term that the consumer would be charged a 30% cancellation

fee, which is a term that is not legally permitted to be in a direct agreement. In

addition, the second direct agreement does not contain the “Consumer’s Rights

under the CPA 2002” statement, which includes the 10-day cooling off period that

is required under ss. 35(1)(11) and 35(2) of O. Reg. 17/05; nor did the second

direct agreement contain a fair description of the goods and services to be

supplied by the defendants as required under s. 35(1)(6); nor did it contain an

itemized list of the prices at which the goods and services were to be supplied to

the consumer, as required under s. 35(1)(9) of O. Reg. 17/05. Specifically, no

parts or materials that were to be supplied and at what cost were listed on the

second direct agreement, nor had the service call charge of $180 been listed that

Ivan's Electric Ltd. charges consumers just for appearing at the consumers’

residence.

[335] Ergo, the prosecution has proven beyond a reasonable doubt that Ivan's Electric

Ltd. had committed the actus reus of the offence set out in count #1 of failing to

deliver to Denise Herold on June 12, 2011, a direct agreement containing the

information required by s. 35(1) of O. Reg. 17/05, which is contrary to s. 42 of the

CPA 2002.

[336] Then, after realizing that no work had been necessary in respect to her apartment

from her initial call and after having discussions with a friend, Denise Herold then

decided to cancel the direct agreement for future work on all the work orders and

126

had called Ivan's Electric Ltd. on June 13, 2011, at 4:00 p.m. to cancel the job.

She had also sent a fax on June 13, 2011, informing Ivan's Electric Ltd. that she

had talked to the Ministry of Consumer Services and was told that she had a 10-

day cooling-off period and that a 30% cancellation fee could not be charged by the

defendants (see p. 18 of the Joint Book of Documents).

[337] After receiving Herold’s notice of cancellation, Ivan Valovic, on behalf Ivan's

Electric Ltd., then sent Herold a letter dated June 25, 2011 (see pp. 21 and 22 of

the Joint Book of Documents), acknowledging that he had received the notice from

Herold on June 13, 2011, that she was cancelling the job. Therefore, Herold’s

notice to cancel the direct agreement had been within the 10-day cooling off period

that allows consumers to cancel a direct agreement for any reason under s. 43(1)

of the CPA 2002. However, Ivan Valovic, in the same letter had made reference

to s. 43 of the CPA 2002, and to the direct agreement requirements in s. 35 and s.

83, where he further wrote that a direct agreement is “an agreement negotiated at

(a) other place than supplier’s place of business or (b) at a market place, an

auction, trade fair or exhibition.” He also informed Herold that Ivan's Electric Ltd.

did not solicit the contract with her and that she had been the one who had called

and asked Ivan's Electric Ltd. to provide her with their services under contract. He

also informed Herold that Ivan's Electric Ltd. did not have a place of business, and

that since the contract had been negotiated at Herold’s place, then Ivan's Electric

Ltd.’s “place of business” would be the customer’s place, and as such, would not

be a direct agreement. He further wrote that if he were wrong about the

agreement not being a direct agreement, then he informed Herold about s. 83 of

O. Reg. 17/05 and the “limitations on cancellation” of a direct agreement and that

the supplier is entitled to “reasonable compensation” for services that were

received by the customer. He also informed Herold that by the time that she had

cancelled the job, Ivan's Electric Ltd. had already gathered supplies and had

booked off the day for 2 electricians (Ivan Valovic and Peter Valovic) to work at

Herold’s home. Therefore, Herold was informed that Ivan's Electric Ltd. would

charge Herold their rate of $180 an hour for 3 hours spent buying supplies and

doing preparations for the job, as well as for one hour spent to return the unused

supplies to the supplier, which would total $720 plus tax. He then wrote that he

would also deduct a 2% Visa charge and that the total cost of $855.73 plus tax

would be subtracted from her deposit of $1864.50, which would leave the amount

of $1008.77 that would be the amount of the refund that Ivan's Electric Ltd. would

be offering to her as a refund.

[338] Ivan Valovic also testified at trial that he did not hear anything from Denise Herold

in respect to his offer to refund her $1008.77. Then in a letter dated October 19,

2013 (p. 23 of Joint Book of Documents), Ivan Valovic, on behalf of Ivan's Electric

Ltd., had informed Herold that he had called her on October 17, 2013, about their

issue about the refund and that Herold had said she had lost the June 25, 2011,

letter, but had agreed to accept the amount of $1008.77 as settlement and that the

“Proposal” of June 12, 2011, would be closed and final.

127

[339] Then in an acknowledgment dated October 19, 2013 (p. 24 of the Joint Book of

Documents), Denise Herold wrote and signed the document stating that she had

accepted the payment of $1008.77 from Ivan's Electric Ltd. in settlement of all

accounts, namely, for both the work order and the second direct agreement dated

June 12, 2011. When Herold received the refund amount of $1008.77, it had not

been the full amount of the deposit that she had paid on June 12, 2011, and it had

been over two years since she had demanded the refund from Ivan's Electric Ltd.

[340] However, the deductions made by the defendants from Herold’s deposit, was not

“reasonable compensation” allowed under s. 83(1)(2) of O. Reg. 17/05, since the

defendants’ time used to pick up the supplies and to return the supplies, the 2%

service charge incurred by the defendants for the credit card payment made by

Herold for the 30% deposit, and the loss of a day for 2 electricians who had made

themselves available to do the job, had not been “goods or services” set out in the

second direct agreement that had been supplied or provided to Herold at her

residence under the second direct agreement. Moreover, this interpretation by the

defendants on the amount of the defendants’ deductions from Herold’s deposit is

not reasonable compensation for a good or service received by Herold under the

second direct agreement at her residence is in line with the purpose of the CPA

2002 to protect consumers, and is in accordance with the maxim “caveat venditor”,

which describes the modern merchant-consumer relationship, in which the

supplier or vendor has to incur the financial risks before a job is commenced in

respect to consumer agreements governed by the CPA 2002.

[341] Furthermore, the 2% credit card charge the defendants had deducted from

Herold’s deposit is also not “reasonable compensation” for a good or a service that

the consumer Denise Herold had received at her residence as part of the goods or

services to be provided by the defendants under the second direct agreement, but

is an expense that the defendants would incur in running their business or the cost

of doing business for the defendants. Moreover, the idea that the 2% credit card

service charge is not “reasonable compensation” for a good or service supplied to

Herold is in accord with s. 85(2)(8) of O. Reg. 17/05 and s. 99(2) of the CPA 2002,

which provides that the credit card service charge incurred by the consumer

canceling the job has to be returned to the consumer by the credit card company if

the credit card company is notified of the cancellation of the job under a direct

agreement and the credit card charges are to be reversed.

[342] In addition, the defendants had been properly notified of Herold’s cancellation of

the second direct agreement on June 13, 2011, which is within the 10 day cooling-

off period. As such, the defendants were obligated to refund her full deposit within

15 days of that notice of cancellation under s. 43(1) of the CPA 2002. And, since

the defendants failed to do so by June 29, 2011, the prosecution has proven that

Ivan's Electric Ltd. has committed the actus reus of the offence set out in count #3

of failing to provide a refund to Denise Herold, a consumer, within 15 days of the

notice of the cancellation.

128

[343] And, in respect to the 2 charges against Ivan Valovic, as the director of Ivan's

Electric Ltd., the prosecution has proven beyond a reasonable doubt that Ivan

Valovic has committed the actus reus of the offence set out in count #2 of failing to

prevent the corporation from failing to deliver to Denise Herold on June 12, 2011,

a direct agreement containing the information required by s. 35(1), and the actus

reus of the offence in count #2 of failing to prevent the corporation on June 29,

2011, from failing to refund to Denise Herold within 15 days after the date she

gave notice of cancellation.

[344] And, as for the defendants’ due diligence defence for these counts, the defendants

have failed to prove on a balance of probabilities that they had taken all

reasonable care in the circumstances to prevent these 4 offences from being

committed.

[345] Ergo, convictions will be entered against Ivan's Electric Ltd. for counts #1, and #3,

while convictions will be entered against Ivan Valovic for counts #2 and #4 in

respect to Information #5731.

(ii) Gladys Canadas

[346] In relation to the consumer Gladys Canadas, the defendants, Ivan's Electric Ltd.

and Ivan Valovic, were charged with respectively committing 4 charges in 2 counts

between September 19, 2011 and October 12, 2011. They are the following:

Charges in relation to the consumer Gladys Canadas - counts #7, and #8 on

Information #5731 (4 charges):

(#7) Ivan's Electric Ltd. and Ivan Valovic on September 19, 2011, failed to deliver to a

consumer a direct agreement containing the information required by s. 35(1) of

the O. Reg. 17/05, contrary to s. 42 of the CPA 2002, thereby committing an

offence under s. 116(2) of the CPA 2002 (2 charges).

(#8) Ivan's Electric Ltd. and Ivan Valovic on October 12, 2011, failed to refund to a

consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of the CPA 2002, thereby committing an

offence under s. 116(1)(b)(viii) of the CPA 2002 (2 charges).

[347] The consumer Gladys Canadas had called Ivan's Electric Ltd. on September 19,

2011, about 4:15 p.m. because power was out in her basement and for her oven.

Ivan Valovic said he arrived at Canadas’ house sometime after 4:00 p.m. After

troubleshooting for the problem, Ivan Valovic determined that there had been a

subpanel or subservice in which a breaker for the dryer had been flipped off by her

daughter for safety reasons before Canadas and her family had left for a vacation.

Ivan Valovic then presented a work order for his services of $406.80. Canadas

signed the work order and paid the full amount with her credit card. Canadas had

not been told on the telephone that Ivan's Electric Ltd. would charge Canadas a

129

service charge of $180 to just attend the consumer’s residence and had been

upset that Ivan's Electric Ltd. had charged her so much just to flip a breaker switch

on to restore power to the basement and to the oven.

[348] After talking with her daughter, Canadas then wrote a letter to Ivan's Electric Ltd.

dated September 25, 2011, which is 6 days after receiving the direct agreement of

September 19 (see pp. 31 and 32 of the Joint Book of Documents), and stated

that Ivan's Electric Ltd. did not tell her about the service call charge and then wrote

that she had been charged a $180 service charge and another $180 for just

“switching the OFF switch ON”, and also complained about being substantially

overcharged for 10 minutes of work. She also informed Ivan's Electric Ltd. that

she had called other electricians who had informed her that service charges could

be from zero to $85 and that the charge for turning the switch on would be $20 to

$25 or included in the service charge. Canadas then wrote that the right price

should have been $110 ($85 for service call and $25 for turning on the switch) and

demanded a refund of $296.80 by certified cheque or a credit to her credit card

within the next 15 days.

[349] Ivan Valovic then responded to Canadas’ letter on behalf Ivan's Electric Ltd. and

sent Canadas a letter dated October 3, 2011 (p. 33 and 34 of Joint Book of

Documents). Ivan Valovic wrote he did not agree with Canadas demand for a

refund and then explained that Ivan's Electric Ltd. had not been called in for an

estimate, but for a service call. He also informed her that normally after 4:00 p.m.

he charges double their regular rate, but that he had only charged her the regular

rate of $180 for the service charge and $180 for a minimum of one hour on the job.

He also wrote that he spent ¾ of an hour in her home and also time travelling to

and from her home. In addition, he informed Canadas that she had been only

charged Ivan's Electric Ltd.’s minimum charge. Furthermore, he informed her that

she did not ask Ivan's Electric Ltd. on how much they charged when she called

them on the telephone or while Ivan's Electric Ltd. was at her home during the

repairs.

[350] The direct agreement (Work Order) (see p. 29 of the Joint Book of Documents)

provided to Canadas on September 19, 2011, stated:

SERVICE CALL CHARGE

180

Service call to check power out in basement and oven

Troubleshoot on power

Check services and

180

Restore power to subservice

Total Labour

Total Parts

360.00

130

___________

HST

46.80

TOTAL

406.80

[351] However, the direct agreement (Work Order) provided to Canadas, on September

19, 2011, did not contain the name of the person who had negotiated or concluded

the direct agreement for Ivan's Electric Ltd. that is required to be provided under

ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Ivan Valovic had testified at trial that he

had prepared the agreement, but his name is not anywhere on the agreement. In

addition, the agreement does not contain the “Consumer’s Rights under the CPA

2002” statement, which includes the 10-day cooling off period that is required and

provided under ss. 35(1)(11) and 35(2) of O. Reg. 17/05.

[352] Therefore, since the direct agreement provided to Canadas does not contain the

information required under s. 35(1) of O. Reg. 17/05, the prosecution has proven

beyond a reasonable doubt that Ivan's Electric Ltd. had committed the actus reus

of the offence set out in count #7 of failing to deliver to Gladys Canadas on

September 19, 2011, a direct agreement containing the information required by s.

35(1) of O. Reg. 17/05, which is contrary to s. 42 of the CPA 2002. In addition,

since Ivan Valovic is a director of Ivan's Electric Ltd. and had been the person who

had prepared and provided the direct agreement to Gladys Canadas on behalf of

Ivan's Electric Ltd., then the prosecution has also proven beyond a reasonable

doubt that Ivan Valovic, as a party to the offence, had also committed the actus

reus of the offence in count #7.

[353] In addition, since Gladys Canadas had not received a copy of the direct

agreement that had met the requirements under s. 42 of the CPA 2002, then

under s. 43(2) of the Act, Canadas had the right to cancel the direct agreement

within one year of receiving a copy of the direct agreement on September 19,

2011. Canadas did so implicitly on September 25, 2011, when she sent Ivan's

Electric Ltd. a letter demanding a refund. And, once Ivan's Electric Ltd. received

Canadas’ letter demanding a refund, then Ivan's Electric Ltd. had to refund her

payment within 15 days of receiving the notice. Moreover, since Ivan's Electric

Ltd. had failed to provide the refund to Canadas within 15 days of being informed

implicitly of the cancellation of the direct agreement when Canadas had demanded

a refund from them, then the prosecution has proven beyond a reasonable doubt

that both Ivan's Electric Ltd. and Ivan Valovic, as a party to the offence, had on

October 12, 2011, respectively committed the actus reus of the offence set out in

count #8, of failing to provide Gladys Canadas a refund within 15 days after the

date the she gave notice of the cancellation.

[354] And, as for the defendants’ due diligence defence for the 4 charges contained in

these 2 counts, the defendants have failed to prove on a balance of probabilities

that they had taken all reasonable care in the circumstances to prevent these 4

offences from being committed.

131

[355] Ergo, convictions will be entered against both Ivan's Electric Ltd. and Ivan Valovic

for the committing the 4 charges set out counts #7, and #8 on Information #5731

(iii) Catherine Telford

[356] In relation to the consumer Catherine Telford, the defendants, Ivan's Electric Ltd.

and Ivan Valovic, were charged respectively with committing 4 charges in 2 counts

between December 8, 2011 to January 6, 2012. They are the following:

Charges in relation to the consumer Catherine Telford - counts #9, and #10

on Information #5731 (4 charges):

(#9) Ivan's Electric Ltd. and Ivan Valovic between December 8, 2011 to December

12, 2011, failed to deliver to a consumer a direct agreement containing the

information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the

CPA 2002, thereby committing an offence under s. 116(2) of the CPA 2002 (2

charges).

(#10) Ivan's Electric Ltd. and Ivan Valovic on January 6, 2012, failed to refund to a

consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of CPA, thereby committing an offence

under s. 116(1)(b)(viii) of the CPA 2002 (2 charges dismissed as no evidence

adduced on this count).

[357] The consumer Catherine Telford had called Ivan's Electric Ltd. because her

electric furnace was not working on December 8, 2011. Ivan's Electric Ltd. had

worked on her electric furnace previously in 2007, 2008, and 2010. Telford had

testified that she had called other electricians in the Yellow Pages, but they did not

fix electric furnaces, except for Ivan's Electric Ltd.

[358] Ivan Valovic had attended Telford’s residence on December 8, 2011. Ivan's

Electric Ltd. had Telford sign a direct agreement (Work Order) dated December 8,

2011, for the amount of $819.25 for parts and labour for troubleshooting the

furnace and for replacing the thermostat. She paid that amount in full with her

credit card. However, Ivan's Electric Ltd. had to return two more times to repair

the electric furnace as it only worked intermittently. Ivan Valovic also informed

Telford that he had to get heater element parts from Montreal to repair the furnace,

but that the furnace could still run with just some of the elements working. On

December 9, 2011, Telford again called Ivan's Electric Ltd. to attend because her

electric furnace was not working and when Ivan's Electric Ltd. appeared, Telford

signed a direct agreement (Proposal) for $360 plus tax to check to see why the

furnace was not working. And, then on December 12, 2011, Ivan's Electric Ltd.

was called in again by Telford to check her electric furnace because it was only

working intermittently. Telford then signed another direct agreement (Proposal) for

$904 that included the December 9 Proposal and for attending on December 10th

as well. Telford paid the $904 in full by credit card. For all those service calls

132

made by Ivan's Electric Ltd. from December 8 to December 12, Telford’s electric

furnace was still not working properly.

[359] Eventually, Telford called in another electrician, Langstaff & Sloan Inc., and on

December 14, 2011, Telford signed a direct agreement (Invoice) (see p. 45 of the

Joint Book of Documents) for $476.86 to replace the heating coil in the furnace

and for checking connections on all parts within the furnace and to install a new

LCD thermostat to control the furnace. Telford testified at trial that the electrician

from Langstaff & Sloan Inc. had just simply gotten the part locally to fix her furnace

and did not have to order that part from Montreal. Moreover, Telford testified that

she has not had problems with the electric furnace since Langstaff & Sloan Inc.

attended her house to fix the furnace.

[360] The December 8, 2011, direct agreement (Work Order) (p. 42 of the Joint Book of

Documents) submitted to Telford by Ivan's Electric Ltd. had stated:

SERVICE CALL CHARGE

180

Troubleshoot on furnace not coming “on” at “Auto”

Test furnace O.K

Thermostat intermittent problem. Pick up at supply

Pick up thermostat and replace

90

180

Total Labour

Total Parts

630.00

95.00

1 H/C thermostat 95.00

___________

HST

94.25

TOTAL

819.25

[361] In respect to the first direct agreement (Work Order) dated December 8, 2011,

there is no name of the person from Ivan's Electric Ltd. who had negotiated or

concluded that agreement with Telford that is printed or visible on the document,

which is to be provided in the agreement as required under ss. 35(1)(4)(ii) and (iii)

of O. Reg. 17/05. Furthermore, the December 8^thdirect agreement does not

contain the “Consumer’s Rights under the CPA 2002” statement, which includes

the 10-day cooling off period that is required by and provided for under ss.

35(1)(11) and 35(2) of O. Reg. 17/05. In addition, the defendants contend that

Catherine Telford would be informed at the conclusion of the job that there would

be a 1 year warranty on parts and labour, but that condition was not contained or

133

set out in the first direct agreement provided to Telford, as required by s. 35(1)(13)

of O. Reg. 17/05.

[362] For the second direct agreement (Proposal) (p. 43 of Joint Book of Documents)

provided by Ivan's Electric Ltd. to Telford and signed by Telford on December 9,

2011, it had stated:

1) Service call to check heating not coming on at middle of night

N/CH

stop working Ivan’s in checking day before thermostat

problem

2) Ivan’s come to check – Found intermittent problem with fan

relay and on sequencer not coming “on” only intermittently ….

Working customer ordered Ivan’s to get and replace fan relay

and sequencer

$180

3) Ivan’s went to supplier pick up parts Dec. 9.11 (Friday) Ivan’s

come to customer Dec. 10.11 (Saturday) to replace parts

Customer don’t want Ivan’s to replace parts. She said that

she will get gas furnace.

4) Monday 12.11 (Dec.12.11) 7 AM Customer Katy phone Ivan’s

to come and see why the furnace is not working. Ivan’s come

and test sequencer not working (TOP) intermittent problem

with fan relay and one lower element burned out

180

___________

$360 + tax

[363] Similar to the first direct agreement (Work Order) provided to Telford, the second

direct agreement (Proposal) provided to Telford on December 9, 2011, also does

not have the name of the person from Ivan's Electric Ltd., who had negotiated or

concluded that agreement with Telford that is printed or visible on the document.

Only a signature appears on the authorized signature line which cannot readily

identify the name of the person who had concluded or negotiated the direct

agreement with Telford. Furthermore, the December 9 direct agreement does not

contain the “Consumer’s Rights under the CPA 2002” statement, which includes

the 10-day cooling off period that is required by and provided for under ss.

35(1)(11) and 35(2) of O. Reg. 17/05. In addition, the December 9 direct

agreement also contains a term that the consumer would be charged a 30%

cancellation fee, which is not legally permitted to be a term in a direct agreement.

In addition, the defendants contend that Catherine Telford would be informed at

the conclusion of the job that there would be a 1 year warranty on parts and

labour, but that condition was not contained or set out in the second direct

agreement provided to Telford, as required by s. 35(1)(13) of O. Reg. 17/05.

[364] For the third direct agreement (Proposal) (see p. 44 of Joint Book of Documents)

provided by Ivan's Electric Ltd. to Telford and signed by Telford on December 12,

2011, it had stated:

134

1) Replace furnace top sequencer

2) Replace fan relay

$180 + tax

$360 + tax

_____________

$540 + tax

250

_____________

790 + tax

Parts sequencer & fan relay

#1 Proposal

360 + tax

1050 + tax

3) If customer require (****) Need to replace

lower element ….

$985 + tax

including installation

$1050 + tax

-250

_____________

800 + tax

Ivan’s is doing job # 1 + 2 and proposal #1

Ivan’s is giving discount to customer

HST

TOT

104

904.00

Customer don’t want replacement on element Job #3

[365] Moreover, the third direct agreement (Proposal) provided to Telford on December

12, 2011, also does not have the name of the person from Ivan's Electric Ltd., who

had negotiated or concluded that agreement with Telford that is printed or visible

on the document. Only a signature appears on the authorized signature line which

cannot readily identify the name of the person who had concluded or negotiated

the direct agreement with Telford.

Furthermore, the December 12 direct

agreement does not contain the “Consumer’s Rights under the CPA 2002”

statement, which includes the 10-day cooling off period that is required by and

provided for under ss. 35(1)(11) and 35(2) of O. Reg. 17/05. In addition, the

December 12 direct agreement also contains a term that the consumer would be

charged a 30% cancellation fee, which is not legally permitted to be a term in a

direct agreement. In addition, the defendants contend that Catherine Telford

would be informed at the conclusion of the job that there would be a 1 year

warranty on parts and labour, but that condition was not contained or set out in the

third direct agreement provided to Telford, as required by s. 35(1)(13) of O. Reg.

17/05.

[366] Therefore, since all three direct agreements provided to Catherine Telford do not

contain the information required under s. 35(1) of O. Reg. 17/05, the prosecution

135

has proven beyond a reasonable doubt that Ivan's Electric Ltd. had committed the

actus reus of the offence set out in count #9 of failing to deliver to Catherine

Telford between December 8, 2011 to December 12, 2011, a direct agreement

containing the information required by s. 35(1) of O. Reg. 17/05, which is contrary

to s. 42 of the CPA 2002. In addition, since Ivan Valovic is a director of Ivan's

Electric Ltd. and had been the person who had prepared and provided all 3 direct

agreements to Catherine Telford on behalf of Ivan's Electric Ltd., then the

prosecution has also proven beyond a reasonable doubt that Ivan Valovic, as a

party to the offence, had also committed the actus reus of the offence in count #9.

[367] And, as for the defendants’ due diligence defence for these 2 charges contained in

count #9, the defendants have failed to prove on a balance of probabilities that

they had taken all reasonable care in the circumstances to prevent those 2

offences from being committed.

[368] Furthermore, for the 2 charges laid respectively against Ivan's Electric Ltd. and

Ivan Valovic in count #10 on Information #5731, that is related to the offence of

failing to provide a refund within 15 days to Catherine Telford had been dismissed

earlier in the trial, since no evidence had been adduced on those 2 charges.

[369] As such, convictions will be entered against Ivan's Electric Ltd. and Ivan Valovic

respectively on the 2 charges contained in count #9 on Information #5731.

(iv) Peter Christensen

[370] In relation to the consumer Peter Christensen, the defendants, Ivan's Electric Ltd. ,

Ivan Valovic, Insight Electric Inc., and Peter Valovic had been charged

respectively with committing 11 charges in 5 counts between June 1, 2012 and

June 20, 2012. They are the following:

Charges in relation to the consumer Peter Christensen - counts #11, #12,

#13, #14 and #15 on Information #5731 (11 charges):

(#11) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. between June 1, 2012

and October 14, 2012, engaged in an unfair practice by making a false,

misleading or deceptive representation to a consumer, contrary to s. 17(1) of the

CPA 2002, thereby committing offence under s. 116(1)(b)(ii)] of the CPA 2002 (3

charges).

(#12) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. between June 1, 2012

and September 14, 2012, failed to deliver to a consumer a direct agreement

containing the information required by s. 35(1) of the O. Reg. 17/05, contrary to

s. 42 of CPA 2002, thereby committing an offence under s. 116(2) of the CPA

2002 (3 charges).

136

(#13) Peter Valovic, as a director of Insight Electric Inc., failed to take reasonable care

on June 1, 2012, to prevent the corporation from failing to deliver to a consumer

a direct agreement containing the information required by s. 35(1) of the O. Reg.

17/05, contrary to s. 42 of the CPA 2002, and thereby committed an offence

under s. 116(3) of the CPA 2002 (1 charge).

(#14) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on June 20, 2012,

failed to refund to a consumer within 15 days after the date the said consumer

gave notice of cancellation, contrary to s. 96(1)(a) of the CPA 2002, thereby

committing an offence under s. 116(1)(b)(viii) of the CPA 2002 (3 charges).

(#15) Peter Valovic, as a director of Insight Electric Inc., on June 20, 2012, failed to

take reasonable care to prevent the corporation from failing to refund to a

consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of the CPA 2002, and thereby, committed an

offence under s. 116(3) of the CPA 2002 (1 charge).

[371] The consumer Peter Christensen had called Ivan's Electric Ltd. on June 1, 2012,

because he did not have power in some parts of his house. After Christensen had

obtained the number for Ivan's Electric Ltd. from the Yellow Pages, he had called

Ivan's Electric Ltd. to attend at his house to check out the problem. During the call

with Ivan's Electric Ltd., Christensen was not informed that Ivan's Electric Ltd.

would charge a service call charge at the rate of $180 for the regular rate and

$360 for the emergency rate just to appear at the consumer’s house. Ivan Valovic

then arrived at the Christensen house at about 7:30 to 8:00 a.m. on June 1, 2012,

in the Ivan's Electric Ltd. red van with the name, logo, and telephone number for

Ivan's Electric Ltd. displayed and painted on the van, and then provided

Christensen an Ivan's Electric Ltd. business card. However, when the first direct

agreement (Proposal) was presented by Ivan Valovic, Christensen noticed that the

first direct agreement was on a Insight Electric Inc. form. When Ivan Valovic was

question about the Insight Electric Inc. name, Christensen said that Ivan Valovic

had replied that he did not have any forms in Ivan's Electric Ltd.’s name and that

Insight Electric Inc. and Ivan's Electric Ltd. were sister companies. In addition,

after the job was completed Peter Christensen said that an Ivan's Electric Ltd.

sticker was placed on the back of his breaker panel. On that day, only Ivan

Valovic was present at the Christensen house.

[372] After troubleshooting the Christensen house for the cause of the electrical

problem, Ivan Valovic had prepared the first direct agreement (Proposal) on an

Insight Electric Inc. form for the amount $6621.80 to repair and fix the electrical

problem and then provided it to Peter Christensen. After Christensen had been

told by Ivan Valovic that the situation was dangerous and the house could catch

on fire and about the consequence that the meter box or meter could be blown

across the street by the electrical problem, Peter Christensen believed it was a

grave situation and urgent, so Christensen agreed to have the work done and

signed the first direct agreement (Proposal) on June 1, 2012. Peter Christensen

137

then paid the $6621.90 amount for the first direct agreement (Proposal) in full with

his credit card, although Christensen had believed that Ivan Valovic had only pre-

authorized that amount with his credit card and had not actually sent the full

payment of $6621.90 through to Christensen’s credit card company for payment.

The first direct agreement did not contain a detailed list of parts or material that

would be used in the job, especially the amount of piping or conduit or wiring that

would be provided for the job.

[373] However, after Ivan Valovic had already commenced working on the Christensen

house under the first direct agreement, Ivan Valovic found additional work that

needed to be done, which Ivan Valovic claimed had not been included in the first

direct agreement, and presented the second direct agreement (Proposal) for

$1695, including tax, to Christensen for the additional work. For the additional

work, Ivan Valovic had told Christensen that the meter box was not in the same

area as the area where the fuse box was in the basement and that an additional

30 feet of piping or conduit and wiring would be required to complete the additional

job. Moreover, Ivan Valovic explained that for the first direct agreement he had

calculated the amount of conduit and wiring needed vertically and not horizontally,

since he did not realize the fuse box in the basement had not been in the same

area as where the meter box was located outside. Christensen agreed to the

additional work and also signed the second direct agreement (Proposal) on June

1, 2012. Christensen also paid the $1695 amount for the second direct agreement

in full by credit card, even though he had believed that his credit was only being

pre-authorized while Ivan Valovic had actually put the full amount of $1695 for

payment through Christensen’s credit card.

[374] To pay for the electrical repairs and installations to his house, Christensen had

been hoping that his insurance would cover the cost of the electrical repairs. But

when he found out that his insurance company would not cover the repairs,

Christensen then asked Ivan Valovic if Insight Electric Inc. could issue an invoice

for the electrical work on his house to his wife’s Montessori school, which Ivan

Valovic had testified that he had concerns that the defendants may not receive

payment for the job after the job was completed, so Ivan Valovic testified that he

had immediately decided to charge the full payment to Christensen’s credit card.

And, as such, required the payments for the work in both direct agreements to be

paid fully up front. However, Ivan Valovic charged the payments to Ivan's Electric

Ltd. instead of Insight Electric Inc.’s account, but said that he did so because he

did not have Insight Electric Inc.’s account numbers for the credit card payment.

[375] In addition, Christensen had asked or called the defendants afterwards to provide

an invoice containing a detailed breakdown of parts and materials and their cost.

The invoice requested by Peter Christensen was then prepared by Ivan Valovic on

an Insight Electric Inc. form and was dated June 1, 2012, and made out to the

“Trafalgar Ridge Montessori School”. It had been sent out by mail several weeks

after the job had been completed. However, it did not contain a detailed list of the

parts and materials used or their cost, but only referred to two statements that “All

138

parts and labor included” (see p. 60 of the Joint Book of Documents). Christensen

had also been told by Ivan Valovic that the receipts had been thrown away and

that the invoice could not include a list of parts broken down by parts.

[376] Christensen also obtained a quote or estimate from Nigel Avey, an electrician by

fax or email on June 10, 2012, which had been for an amount substantially lower

than what he had been charged by the defendants. Avey had provided a quote

that was substantially lower than the defendants’ amounts in the 2 direct

agreements. However, Avey’s estimate had been based on an 100 amp service

and had been given without Avey actually attending inside the Christensen’s

house, while the defendants’ 2 direct agreements had been based on a 200 amp

service and had been prepared after Ivan Valovic had physically checked out the

Christensen house. As such, Nigel Avey’s estimate for the cost of doing the work

at the Christensen House is not reliable or fair to the defendants in deciding

whether there is evidence that the defendants had grossly overcharged

Christensen for the installation and repairs to Christensen’s house.

[377] Subsequently on receiving a quote from another electrician, Christensen was

convinced that the defendants had overcharged him for the piping and wiring in

the second direct agreement, since he had measured a horizontal distance of 10

feet and believed it had not been the 30 feet (more or less) that the second direct

agreement had referred to, and so Christensen then called his bank to dispute the

payment he made by credit card to the defendants. Christensen said he had also

been alarmed when he saw the 2 credit card charges on his credit card statement

for Ivan's Electric Ltd. when he had believed that his credit card had only been

used for pre-authorization of the 2 payments and that it would not be finalized or

the payments being sent through until he received an invoice from the defendants.

[378] Christensen then said that he had called Ivan Valovic on his cellphone to come

back and discuss what he thought about being grossly overcharged and that he

would be willing to pay a reasonable amount, otherwise he would dispute the

charge. However, Ivan Valovic told him that the matter was done and that the

payments had gone through, and then he was told that he should contact the ESA.

Christensen said that the defendants had done the work on a Friday and that he

had called Ivan Valovic on or about Tuesday (June 5, 2012) the following week

after the work had been done to work something out on the overpayment for the

work.

[379] Christensen then said he had contacted his credit card company and tried to have

the charges for the payments to Ivan's Electric Ltd. reversed. He also said he had

contacted the Better Business Bureau and had filed a complaint against the

defendants indicating that Ivan's Electric Ltd. had done the work, but overcharged

for the work and requested a refund of $7060. He also filed a complaint with the

ESA.

139

[380] Christensen also said that the dispute with his credit card company lasted 3 or 4

months and that Ivan Valovic had also sent letters and documents to the credit

card during this dispute.

[381] The first direct agreement (Proposal) (see p. 65 of the Joint Book of Documents)

dated June 1, 2012, that had been provided by Insight Electric Inc. to Christensen

had stated:

Weather heavy rain and winds

1) ESC [emergency service call] to check some power out in the

house

2) Troubleshoot on service and wiring & power supply

Found service equipment pulled down outside and damage –

burning wiring and equipment Need to be replaced

3) Replace el. hardware, outside, meter, piping and wiring

4) Permits, inspections & arrangements

$5860 + tax

HST

761.80$

---------------

6,621.80

All parts included

[382] In respect to the first direct agreement (Proposal #1) dated June 1, 2012, there is

no name of the person from Ivan's Electric Ltd. who had negotiated or concluded

that agreement with Peter Christensen that is printed or visible on the document,

which is to be provided in the agreement as required under ss. 35(1)(4)(ii) and (iii)

of O. Reg. 17/05. Only a signature appears on the authorized signature line which

cannot readily identify the name of the person who had concluded or negotiated

the direct agreement with Christensen. As well, the June 1 direct agreement does

not contain the “Consumer’s Rights under the CPA 2002” statement, which

includes the 10-day cooling off period that is required by and provided for under

ss. 35(1)(11) and 35(2) of O. Reg. 17/05. In addition, the first direct agreement did

not contain a fair description of the goods and services to be supplied by Insight

Electric Inc. as required under s. 35(1)(6) of O. Reg. 17.05, nor did it contain an

itemized list of the prices at which the goods and services were to be supplied to

the consumer, as required under s. 35(1)(9) of O. Reg. 17/05. Specifically, no

parts or materials that were to be supplied and at what cost were listed on the first

direct agreement, nor had the service call charge or the emergency rate charges

been listed. Moreover, the December 12 direct agreement also contains a term

that the consumer would be charged a 30% cancellation fee, which is not legally

permitted to be a term in a direct agreement. In addition, the defendants contend

that Peter Christensen would be informed at the conclusion of the job that there

would be a 1 year warranty on parts and labour, but that condition was not

140

contained or set out in the first direct agreement provided to Christensen, as

required by s. 35(1)(13) of O. Reg. 17/05.

[383] For the second direct agreement (Proposal #2) (see p. 66 of the Joint Book of

Documents) dated June 1, 2012, that had been provided by Insight Electric Inc. to

Christensen for additional and unexpected electrical work had stated:

Proposal #2

1) Additional work to proposal #1

Piping going under ground to home, Need to be cut off

(Code) and rerouted outside

Piping and wiring inc. Refed 30’ (more or less)

$1500 + tax

HST

195

------------

1,695

All parts included

[384] Similar to the first direct agreement (Proposal #1) provided to Peter Christensen,

the second direct agreement (Proposal #2) provided by Ivan's Electric Ltd. to

Christensen on June 1, 2012, also does not contain the name of the person from

Ivan's Electric Ltd., who had negotiated or concluded that agreement with

Christensen that is printed or visible on the document. Only a signature appears

on the authorized signature line which cannot readily identify the name of the

person who had concluded or negotiated the direct agreement with Christensen.

Furthermore, the second direct agreement (Proposal #2) dated June 1, 2012, also

does not contain the “Consumer’s Rights under the CPA 2002” statement, which

includes the 10-day cooling off period that is required by and provided for under

ss. 35(1)(11) and 35(2) of O. Reg. 17/05. In addition, the second direct agreement

did not contain a fair description of the goods and services to be supplied by

Insight Electric Inc. as required under s. 35(1)(6) of O. Reg. 17.05, nor did it

contain an itemized list of the prices at which the goods and services were to be

supplied to the consumer, as required under s. 35(1)(9) of O. Reg. 17/05. In

particular, no parts or materials that were to be supplied and at what cost were

listed on the second direct agreement. Furthermore, the second direct agreement,

also contains a term that the consumer would be charged a 30% cancellation fee,

which is not legally permitted to be a term in a direct agreement. In addition, the

defendants contend that Peter Christensen would be informed at the conclusion of

the job that there would be a 1 year warranty on parts and labour, but that

condition was not contained or set out in the second direct agreement provided to

Christensen, as required by s. 35(1)(13) of O. Reg. 17/05.

[385] The invoice provided to Christensen (see p. 60 in the Joint Book of Documents)

stated:

141

1) Emergency service call and trouble shooting on partial power

loss as proposal June 1, 2012 #1

720.00

2) Emergency Replacement of electrical hardware after blew out

short in 200 amp meter box and colapsing (collapsing) of

underground piping and wring during off day havi (heavy)

storm June 1. 12 as proposal #1 All parts & labour included

service call and trouble shooting on partial power loss as

proposal June 1, 2012 #1

4890.00

3) unskejuled (unscheduled) electrical inspection and Hydro

disconnect arangment (arrangement) as proposal #1

250.00

4) Adidional (Additional) replasment (replacement) of service

piping and wiring as proposal #2 June 1.12

All parts & labour included

1500.00

SUBTOTAL

HST

7360.00

956.80

TOTAL

8316.80

[386] As for which company appeared to do the job for Christensen, Christensen had

initially called Ivan's Electric Ltd. before 7:00 a.m. using the Ivan's Electric Ltd. ad

he had seen in the Yellow Pages book because they offered emergency service,

but there is no evidence that Christensen had been told during that initial call that

Ivan's Electric Ltd. was no longer operating, or had there been a discussion about

what it would cost and that there would a service call charge to just appear at the

consumer’s house, or that Christensen would by charged at the emergency rates

for the service call or work. And, then when the defendants arrived at the

Christensen house, the defendants said that they had told Christensen that Insight

Electric Inc. was there to do the job, despite the defendants appearing in the Ivan's

Electric Ltd.’s red van that displayed the name, the logo, and the telephone

numbers for Ivan's Electric Ltd. In addition, Christensen said that he had been

presented with a Ivan's Electric Ltd. business card by Ivan Valovic (see p. 50 of

the Joint Book of Documents) and an Ivan's Electric Ltd. sticker was placed on the

back of his breaker panel after the work had been completed on June 1, 2012 (see

p. 55 of the Joint Book of Documents). However, the two direct agreements and

the invoice provided to Christensen had been on Insight Electric Inc. forms (see

pp. 58, 59, and 60 of the Joint book of Documents). On the other hand, both credit

142

card payments made by Christensen for the amount of the 2 direct agreements

were deposited into the accounts of Ivan's Electric Ltd. (see p. 57 of the Joint book

of Documents). And, after Christensen had complained to the Better Business

Bureau about Ivan's Electric Ltd. in respect to the work done at the Christensen

house, Ivan Valovic had sent a letter dated September 14, 2012, on Ivan's Electric

Ltd. letterhead to respond to the complaint and wrote that Ivan's Electric Ltd. had

not being working for Peter Christensen, but that Insight Electric Inc. had

performed the job (see p. 57 of the Joint book of Documents). Still, in the eyes of

the consumer Peter Christensen and the evidence presented at trial, both Ivan's

Electric Ltd. and Insight Electric Inc. had presented themselves to the consumer

Peter Christensen as the company doing the electrical work at the Christensen

house, and as such both Ivan's Electric Ltd. and Insight Electric Inc. would be

liable for any of the offences committed in respect to the consumer Peter

Christensen.

[387] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and had been the person who had attended at Peter Christensen’s house on

June 1, 2012, and had been the person who had prepared and provided the 2

direct agreements to Christensen, then Ivan Valovic would also be a party to any

offence that Ivan's Electric Ltd. has committed, since a corporation can only act

through a human person.

[388] Accordingly, since the 2 direct agreements provided to Peter Christensen did not

contain the information required under s. 35(1) of O. Reg. 17/05, the prosecution

has proven beyond a reasonable doubt that the defendants, Ivan's Electric Ltd.,

Ivan Valovic, as a party to the offence, and Insight Electric Inc., have committed

the actus reus of the offence set out in count #12 of failing to deliver to Peter

Christensen on June 1, 2012, a direct agreement containing the information

required by s. 35(1) of O. Reg. 17/05, which is contrary to s. 42 of the CPA 2002.

In addition, since Ivan Valovic is a director of Ivan's Electric Ltd. and had been the

person who had provided a Ivan's Electric Ltd. business card to Christensen and

then prepared and provided the two direct agreements and the invoice to Peter

Christensen, then the prosecution has also proven beyond a reasonable doubt

that Ivan Valovic, as a party to the offence, had also committed the actus reus of

the offence in count #12.

[389] Furthermore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc. had respectfully committed on June 1, 2012, the actus reus of the

offence set out in count #11 of engaging in an unfair practice by making a false,

misleading or deceptive representation to Peter Christensen, since Christensen

had not been told that Ivan's Electric Ltd. was no longer operating during the initial

telephone call Christensen had made to the Ivan's Electric Ltd. (this is after the

ESA had directed Ivan's Electric Ltd. to stop operating as a licenced electrical

contractor on April 16, 2012) and that they could call Insight Electric Inc. if they

wanted service; that Christensen was provided 2 direct agreements on Insight

143

Electric Inc. forms yet Christensen had observed Ivan Valovic appear in a van with

the name, logo and telephone numbers of Ivan's Electric Ltd. and that Christensen

had also been provided with an Ivan's Electric Ltd. business card and

Christensen’s credit card payments were paid to Ivan's Electric Ltd.; that

Christensen had not been told on the initial call that Ivan's Electric Ltd. would be

passing the job to Insight Electric Inc.; that the defendants would be charged a

service call charge of $360 just for the defendants to appear at the Christensen

house; that the defendants emergency rate of $360 would be double the regular

rate of $180; that Christensen would be charged the emergency rate for that job;

that the defendants did not provide a detailed list of parts or material on the two

direct agreements that would be used for the work so that Christensen would be

unable to question why Christensen would have to pay for additional parts or

materials required for additional work when that work should have been included

in the first direct agreement, especially when the defendants contend that they

charged Christiansen and other consumers a flat rate for the work; and that in the

2 direct agreements there was a term that Christensen would be charged a 30%

cancellation fee when this term is not legally permitted to be in a direct agreement.

[390] And, in respect to the charges related to the defendants failing to provide a refund

to Christensen within 15 days of being informed of the cancellation of the 2 direct

agreements, the defendants had been notified of Christensen’s request for a

refund when Christensen had called Ivan Valovic to discuss the charges to his

credit card and to discuss a reasonable amount to be paid for the work on or about

June 5, 2012, and also through Christensen’s effort to have the charges reversed

through his credit card company and from his complaint to the Better Business

Bureau. Ivan Valovic had knowledge of Christensen efforts to reverse the credit

card charges and the complaint to Better Business Bureau from evidence that Ivan

Valovic had responded to both the credit card company and to the Better Business

Bureau concerning Christensen’s complaints.

Therefore,

Ivan Valovic’s

knowledge and awareness of these efforts by Christensen to reverse the

payments is deemed to be notice of the cancellation of the 2 direct agreements by

Christensen to the defendants.

[391] Moreover, since the 2 agreements that Christensen had signed were direct

agreements, then Christensen legally had a 10-day cooling off period under s.

43(1) to cancel the agreement for any reason or to cancel the 2 direct agreements

under s. 43(2) within one year after the 2 agreements were signed, if the 2 direct

agreements do not contain the information required under s. 35(1) and (2) of O.

Reg. 17/05, or if the defendants had engaged in an unfair practice to Peter

Christensen under s. 18(3) of the CPA 2002. Accordingly, Christensen provided a

notice of cancellation to the defendants when Christensen had called Ivan Valovic

on or about Tuesday June 5, 2012, to discuss being overcharged and a request

for a more reasonable amount for the work, which would be notice to the

defendants Christensen was cancelling the 2 direct agreements and demanding a

refund of the payments he had already made to the defendants.

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[392] Therefore, the defendants were obligated to refund to Peter Christensen within 15

days of that notice of cancellation under s. 43(1) of the CPA 2002 or by June 20,

2012. And, since the defendants failed to do so by June 20, 2012, the prosecution

has proven that the defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the

offence, and Insight Electric Inc., has committed the actus reus of the offence set

out in count #14 of failing to provide a refund to Peter Christensen, a consumer,

within 15 days of the notice of the cancellation.

[393] And, in respect to the 2 charges against Peter Valovic, as the director of Ivan's

Electric Ltd., the prosecution has proven beyond a reasonable doubt that Peter

Valovic has committed the actus reus of the offence in count #13 of failing to

prevent the corporation, Insight Electric Inc., on June 1, 2012, from failing to

deliver to Peter Christensen on June 1, 2012, a direct agreement containing the

information required by s. 35(1); and the actus reus of the offence in count #15 of

failing to prevent the corporation on June 20, 2012, from failing to refund to Peter

Christensen within 15 days after the date Christensen gave notice of cancellation.

[394] And, as for the defendants’ due diligence defence for these 11 charges contained

in the 5 counts, the defendants have failed to prove on a balance of probabilities

that they had taken all reasonable care in the circumstances to prevent these 11

offences from being committed.

[395] Ergo, convictions will be entered against the defendants, Ivan's Electric Ltd. , Ivan

Valovic, and Insight Electric Inc. for the 9 charges contained in counts #11, #12,

and #14 on Information #5731 and convictions will be entered against the

defendant, Peter Valovic, for the 2 charges contained in counts #13 and #15 on

Information #5731.

(v) Terry Bardeau

[396] In relation to the consumer Terry Bardeau, the defendants, Ivan's Electric Ltd.,

Ivan Valovic, Insight Electric Inc., and Peter Valovic had been charged

respectively with committing 8 charges in 4 counts on December 16, 2012. They

are the following:

Charges in relation to the consumer Terry Bardeau - counts #5, #6, #7, and

#8 on Information #8091 (8 charges):

(#5) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on December 16,

2012, failed to deliver to a consumer a direct agreement containing the

information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the

CPA 2002, thereby committing an offence under s. 116(2) of the CPA 2002 (3

charges).

(#6) Peter Valovic, as a director of Insight Electric Inc., on December 16, 2012, failed

to take reasonable care to prevent the corporation from failing to deliver to a

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consumer a direct agreement containing the information required by s. 35(1) of

the O. Reg. 17/05, contrary to s. 42 of the CPA 2002, and thereby committed

an offence under s. 116(3) of the CPA 2002 (1 charge).

(#7) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on December 16,

2012, engaged in an unfair practice by making a false, misleading or deceptive

representation to a consumer, contrary to s. 17(1) of the CPA 2002, thereby

committing offence under s. 116(1)(b)(ii) of the CPA 2002 (3 charges).

(#8) Peter Valovic, as a director of Insight Electric Inc., on December 16, 2012, failed

to take reasonable care to prevent the corporation, failed to take reasonable

care to prevent the corporation. from engaging in an unfair practice by making a

false, misleading or deceptive representation to a consumer, contrary to s. 17(1)

of the CPA 2002, and thereby, committed an offence contrary to s. 116(3) of the

CPA 2002 (1 charge).

[397] The consumer Terry Bardeau had called Ivan's Electric Ltd. on a Saturday

because two lights had not been working in the basement bathroom and furnace

room of Bardeau’s house and Ivan Valovic said he would come on Sunday

although Bardeau had not asked them to come on the Sunday. In addition, there

had been no discussion of price during the telephone conversation nor did

Bardeau ask about prices. After arriving at the Bardeau residence on Sunday,

December 16, 2012, at about 8:00 a.m., Bardeau said Ivan Valovic presented

himself as Ivan's Electric Ltd. and that Ivan Valovic had appeared in a red van that

said Ivan's Electric Ltd. on it.

[398] Ivan Valovic then changed the light fixture, which Bardeau had supplied, in the

basement bathroom. Bardeau testified that Ivan Valovic did not present the direct

agreement (Proposal) to him before Ivan Valovic commenced to do the work.

After the work was completed, Bardeau said that Ivan Valovic had presented

Bardeau with a direct agreement (Proposal) dated December 16, 2012 (Exhibit

#3), for the amount of $926.60, on which Bardeau had seen Ivan Valovic place an

Ivan's Electric Ltd. orange-coloured sticker over the Insight Electric Inc. name at

the top of the document which had been an Insight Electric Inc. form. The logo for

Insight Electric Inc. had been still visible in the upper left hand corner of the direct

agreement. Bardeau said he then signed the direct agreement on December 16,

2012. Bardeau also paid the full amount using his credit card, but said that he did

not learn about that amount until after the work had been completed. Bardeau

testified at trial that he was shocked at the bill, since Ivan Valovic had only been at

his house for one or two hours.

[399] Bardeau had also testified that he did not know who Insight Electric Inc. was and

that he had not called Insight Electric Inc. to do any work. He also said he did not

have a discussion with Ivan Valovic on who Insight Electric Inc. was.

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[400] Bardeau’s credit card payment was also made to Ivan's Electric Ltd. (see p. 112 of

the Joint Book of Documents).

[401] Then a day after Ivan Valovic had been at the Bardeau house, Bardeau said that

the light in the basement would not go on when he flipped the light switch.

Bardeau testified that he contacted the ESA and an ESA inspector attended his

house when Bardeau was not there and then said that the inspector did something

to fix the problem and that his bathroom light was working after that.

[402] The direct agreement (Proposal) (see p. 113 of the Joint Book of Documents and

Exhibit #3) dated December 16, 2012, that had been provided by Insight Electric

Inc. to Bardeau stated:

Discount 25%

1) Service call to check power out in basement bathroom &

hallway – Customer removed some fixture - Problem not

there

280 +tax

2) Troubleshooting on circuit. Found neutral wiring open. Power

line O.K. – Trace circuit from service (aluminum wiring)

Found bad connections in furnace room fixture box and

improper mix of wiring - Need to be repair and pig tailed to

CO/ALR connections (50% discount on troubleshooting Sat.

Sund. Double rate. Customer charged regular rate on

Sunday.

180 + tax

360 + tax

3) Repairs to wiring in fixture box in furnace room

Install fixture in bathroom

For repowered – some power on some off – found one bad

connection

Parts included (wiring, Al. connectors Nolug compound)

___________

$820 + tax

HST

106.60

$ 926.60

NOTE: Home should be inspected for defects and retrofit to

CO/ALR connections as per Code.

[403] In respect to the direct agreement (Proposal) dated December 16, 2012, provided

to Bardeau, there is no name of the person from Insight Electric Inc. who had

negotiated or concluded that agreement with Terry Bardeau that is printed or

visible on the document, which is to be provided in the agreement as required

under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. There is not even a signature that

appears on the authorized signature line. As well, the December 16, 2012 direct

147

agreement does not contain the “Consumer’s Rights under the CPA 2002”

statement, which includes the 10-day cooling off period that is required by and

provided for under ss. 35(1)(11) and 35(2) of O. Reg. 17/05. Moreover, the

December 16 direct agreement also contains a term that the consumer would be

charged a 30% cancellation fee, which is not legally permitted to be a term in a

direct agreement. In addition, the defendants contend that Terry Bardeau would

be informed at the conclusion of the job that there would be a 1 year warranty on

parts and labour, but that condition was not contained or set out in the direct

agreement provided to Bardeau as required by s. 35(1)(13) of O. Reg. 17/05.

[404] As for which company appeared to do the job for Bardeau, Bardeau had initially

called Ivan's Electric Ltd. on a Saturday, but there is no evidence that Bardeau

had been told during that initial call that Ivan's Electric Ltd. was no longer

operating, or had there been a discussion about what it would cost and that there

would a service call charge to just appear at the consumer’s house, or that

Bardeau would be charged at the emergency rates for the service call or work.

And, then when Ivan Valovic arrived at Bardeau’s house on Sunday, December

16, 2012 (this is after the ESA had directed Ivan's Electric Ltd. to stop operating as

a licenced electrical contractor on April 16, 2012), Ivan Valovic had come in the

red van with Ivan's Electric Ltd.’s name, logo, and the telephone numbers for

Ivan's Electric Ltd. displayed on it. However, when Bardeau had been presented

with the direct agreement, Bardeau said he observed Ivan Valovic put an orange

Ivan's Electric Ltd. sticker on the direct agreement (Exhibit #3) which also

contained the Insight Electric Inc. name and logo in the upper left hand corner of

the direct agreement. Therefore, on the basis of Exhibit #3, which contained both

the names of Ivan's Electric Ltd. and Insight Electric Inc., then both Ivan's Electric

Ltd. and Insight Electric Inc. had presented themselves to the consumer Terry

Bardeau as the company doing the electrical work at the Bardeau house on

December 16, 2012, and as such both Ivan's Electric Ltd. and Insight Electric Inc.

would be liable for any of the offences committed in respect to the consumer Terry

Bardeau.

[405] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and had been the person who had attended at Bardeau’s house on December

16, 2012, and had been the person who had prepared and provided the direct

agreement to Terry Bardeau, then Ivan Valovic would also be a party to any

offence that Ivan's Electric Ltd. has committed, since a corporation can only act

through a human person.

[406] Therefore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc., had respectfully committed the actus reus of the offence in count #5

of failing to deliver to Terry Bardeau on December 16, 2012, a direct agreement

containing the information required by s. 35(1) of O. Reg. 17/05, which is contrary

to s. 42 of the CPA 2002.

148

[407] The prosecution has also proven beyond a reasonable doubt that Ivan Valovic, as

a party to the offence, had also committed the actus reus of the offence in count

#5.

[408] Furthermore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc. had respectfully committed on December 16, 2012, the actus reus of

the offence set out in count #7 of engaging in an unfair practice by making a false,

misleading or deceptive representation to Terry Bardeau, since Bardeau had not

been told that Ivan's Electric Ltd. was no longer operating during the initial

telephone call Bardeau had made to the Ivan's Electric Ltd. (this is after the ESA

had directed Ivan's Electric Ltd. to stop operating as a licenced electrical

contractor on April 16, 2012) and that they could call Insight Electric Inc. if they

wanted service; that Bardeau was provided a direct agreement on Insight Electric

Inc. form yet Christensen had observed Ivan Valovic put an orange Ivan's Electric

Ltd. sticker on the Insight Electric Inc. form and that the Insight Electric Inc. name

and logo was still visible on the direct agreement; that Ivan Valovic appear in a red

van with the name, logo and telephone numbers of Ivan's Electric Ltd. even

though the ESA had directed Ivan's Electric Ltd. not to operate as a licenced

electrical contractor after April 16, 2012; that Bardeau’s credit card payment was

paid to Ivan's Electric Ltd. on December 16, 2012, after the ESA had directed

Ivan's Electric Ltd. not to operate after April 16, 2012; that Bardeau had not been

told on the initial call that Ivan's Electric Ltd. would be passing the job to Insight

Electric Inc.; that the defendants would be charged a service call charge of $360

just for the defendants to appear at the Bardeau house; that the defendants

Sunday rate of $360 would be double the regular rate of $180; that Bardeau would

be charged the Sunday rate for that job; and that in the direct agreement there

was a term that Bardeau would be charged a 30% cancellation fee when this term

is not permitted to be in a direct agreement.

[409] And, as for the 2 charges against Peter Valovic, as the director of Insight Electric

Inc., the prosecution has proven beyond a reasonable doubt that Peter Valovic

has committed the actus reus of the offence in count #6 of failing to prevent the

corporation, Insight Electric Inc., on December 16, 2012, from failing to deliver to

Terry Bardeau on December 16, 2012, a direct agreement containing the

information required by s. 35(1); and the actus reus of the offence in count #8 of

failing to prevent the corporation on December 16, 2012, from engaging in an

unfair practice by making a false, misleading or deceptive representation to Terry

Bardeau.

[410] And, as for the defendants’ due diligence defence for these 8 charges contained in

the 4 counts, the defendants have failed to prove on a balance of probabilities that

they had taken all reasonable care in the circumstances to prevent these 8

offences from being committed.

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[411] Ergo, convictions will be entered against the defendants, Ivan's Electric Ltd. , Ivan

Valovic, and Insight Electric Inc. for the 9 charges contained in counts #5 and #7

on Information #8091 and convictions will be entered against the defendant, Peter

Valovic, for the 2 charges contained in counts #6 and #8 on Information #8091.

(vi) Eva Patterson

[412] In relation to the consumer Eva Patterson, the defendants, Ivan's Electric Ltd. ,

Ivan Valovic, Insight Electric Inc., and Peter Valovic had been charged with

committing 12 charges in 3 counts between December 26, 2013 and January 15,

2014. They are the following:

Charges in relation to the consumer Eva Patterson - counts #1, #2, and #3

on Information #5740 (12 charges):

(#1) Ivan's Electric Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic, on

December 26, 2013, engaged in an unfair practice by making a false,

misleading or deceptive representation to a consumer, contrary to s. 17(1) of the

CPA 2002, thereby committing offence under s. 116(1)(b)(ii) of the CPA 2002 (4

charges).

(#2) Ivan's Electric Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic, on

December 26, 2013, failed to deliver to a consumer, a direct agreement

containing the information required by s. 35(1) of the O. Reg. 17/05, contrary to

s. 42 of the CPA 2002, thereby committing an offence under s. 116(2) of the

CPA 2002 (4 charges).

(#3) Ivan's Electric Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic on

January 15, 2014, failed to refund to a consumer within 15 days after the date

the said consumer gave notice of cancellation, contrary to s. 96(1)(a) of the CPA

2002, thereby committing an offence under s. 116(1)(b)(viii) of the CPA 2002 (4

charges dismissed as no evidence adduced on this count).

[413] The consumer Eva Patterson had called Ivan's Electric Ltd. out of the Yellow

Pages to check and repair the power lines and mast at her house that had been

downed by tree branches from the “ice storm” in late December of 2013. During

the telephone call with someone from Ivan's Electric Ltd. Patterson testified that

there had been no discussion about what it would cost or that there would a

service call charge to just appear at Patterson’s house, or that Patterson would be

charged at the emergency rates for the service call or work. Nor had Ivan's

Electric Ltd. informed Patterson that Ivan's Electric Ltd. could no longer operate

(the ESA had revoked Ivan's Electric Ltd. electrical contractor’s licence on March

14, 2013) and that Patterson could call Insight Electric Inc. to do the service call or

that Ivan's Electric Ltd. would be passing the job to Insight Electric Inc. Eva

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Patterson had testified that she had not met anyone from Insight Electric Inc. and

only met people from Ivan's Electric Ltd. but had received an invoice from Insight

Electric Inc. Patterson also said she thought she was dealing with Ivan's Electric

Ltd.

[414] However, after arriving at the Patterson residence on December 26, 2013, the

defendants contend that they informed Patterson that Insight Electric Inc. would be

doing the job. Both Ivan Valovic and Peter Valovic were present at Patterson’s

house.

[415] After troubleshooting the problem, Ivan Valovic prepared a direct agreement

(Proposal) on an Insight Electric Inc. form for $5452.25. Patterson had signed the

direct agreement and paid the full amount by her credit card before the work had

commenced. Patterson also said that later her credit card statement showed that

her payment had been charged to Insight Electric Inc. In addition, Patterson said

she got her money back from her insurance company minus a $500 deductible,

but had not approached the defendants for a refund. However, Patterson said that

she had inquired with the ESA or with the City of Mississauga if the defendants’

prices were reasonable.

[416] Patterson also testified that she had observed the red truck that arrived and

parked in her driveway and had displayed the name Ivan's Electric Ltd. on it. She

also said the Ivan's Electric Ltd. truck that came to her house had also looked like

the truck in the Ivan's Electric Ltd.’s ad that she had copied from the Yellow Pages

(see p. 176 of the Joint Book of Documents). She also said she had received in

the mail an Insight Electric Inc. invoice for the amount of $5452.25 for “rebuild

house service after ice storm as proposal” (see p. 174 of the Joint Book of

Documents).

[417] The direct agreement (Proposal) (p. 172 of Joint Book of Documents) dated

December 26, 2013, that had been submitted by Insight Electric Inc. to Patterson

stated:

1) Emergency Service call to check power lines down

$720 + tax

Service damaged due ice storm

2) Call Hydro disconnect service

3855 + tax

3) Remove damaged service and

3) Rebuild service mast and hardware as need

4) Permits/inspections/arrangements

250 + tax

151

___________

$4825 + tax

HST 627.25

$ 5452.25

Paid in full

[418] In respect to the direct agreement (Proposal) dated December 26, 2013 provided

to Eva Patterson, there is no name of the person from Insight Electric Inc. who had

negotiated or concluded that agreement with Patterson that is printed or visible on

the document, which is to be provided in the agreement as required under ss.

35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only four initials, “I.V.P.V.” appears on the

authorized signature line. In addition, the direct agreement did not contain a fair

description of the goods and services to be supplied by the defendants as required

under s. 35(1)(6), nor an itemized list of the prices at which the goods and services

are to be supplied to the consumer as required under s. 35(1)(9) of O. Reg. 17/05.

Specifically, the $360 emergency service call charge had not been listed nor a

detailed list of the parts and materials and their prices to be supplied to Patterson

by the defendants. Moreover, the December 26 direct agreement also contains a

term that the consumer would be charged a 30% cancellation fee, which is not

legally permitted to be a term in a direct agreement. In addition, the defendants

contend that Eva Patterson would be informed at the conclusion of the job that

there would be a 1 year warranty on parts and labour, but that condition was not

contained or set out in the direct agreement provided to Patterson, as required by

s. 35(1)(13) of O. Reg. 17/05.

[419] However, this direct agreement (Proposal) provided to Patterson did contain a

statement on the front page that stated, “See additional agreement statement on

back – Direct Agreement Reg. 17/05, S. 35(1)”. The statement required under s.

35(2) in respect to “Your rights under the Consumer Protection Act, 2002” was

printed on the back of the document.

[420] As for which company appeared to do the job, Patterson had initially called Ivan's

Electric Ltd., but there is no evidence that Bardeau had been told during that initial

call that Ivan's Electric Ltd. was no longer operating or that Insight Electric Inc.

would be doing the job or that Ivan's Electric Ltd. would be passing the job to

Insight Electric Inc. And, then when Ivan Valovic and Peter Valovic arrived at

Patterson’s house on December 26, 2013 (this is after the ESA had revoked Ivan's

Electric Ltd. electrical contractor’s licence on March 14, 2013), they had come in

the red van with Ivan's Electric Ltd.’s name, logo, and the telephone numbers for

Ivan's Electric Ltd. displayed on it. There is also evidence that the electrical

contractor’s licence number for Insight Electric Inc. was on the van even though

the name of Ivan's Electric Ltd. was still displayed on the van. However, the

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defendants testified that they had informed Patterson when they first arrived at the

Patterson house that Insight Electric Inc. would be doing the job. In addition,

Patterson had been presented with an Insight Electric Inc. direct agreement.

Therefore, on the basis of the evidence, both Ivan's Electric Ltd. and Insight

Electric Inc. had presented themselves to the consumer Patterson as the company

doing the electrical work at the Patterson house on December 26, 2013, and as

such both Ivan's Electric Ltd. and Insight Electric Inc. would be liable for any of the

offences committed in respect to the consumer Eva Patterson.

[421] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and Peter Valovic is a director and the directing mind of Insight Electric Inc.,

and since both Ivan Valovic and Peter Valovic had personally been present at

Patterson’s house on December 26, 2013, and Ivan Valovic had been the person

who had prepared and provided the direct agreement to Eva Patterson, then Ivan

Valovic would also be a party to any offence that Ivan's Electric Ltd. has committed

and Peter Valovic would also be a party to any offence that Insight Electric Inc.

has committed, since a corporation can only act through a human person.

[422] Therefore, the prosecution has proven beyond a reasonable doubt that all four

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, Insight

Electric Inc., and Peter Valovic, as a party to the offence, had respectfully

committed, the actus reus of the offence of in count #2 of failing to deliver to Eva

Patterson on December 26, 2013, a direct agreement containing the information

required by s. 35(1) of O. Reg. 17/05, which is contrary to s. 42 of the CPA 2002.

[423] Furthermore, the prosecution has proven beyond a reasonable doubt that all four

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, Insight

Electric Inc., and Peter Valovic, as a party to the offence, had respectfully

committed on December 16, 2012, the actus reus of the offence set out in count

#7 of engaging in an unfair practice by making a false, misleading or deceptive

representation to Eva Patterson, since Patterson had not been told that Ivan's

Electric Ltd. was no longer operating during the initial telephone call Patterson had

made to Ivan's Electric Ltd. (the ESA had revoked Ivan's Electric Ltd. electrical

contractor’s licence on March 14, 2013) and that they could call Insight Electric

Inc. if they wanted service; that Patterson was provided a direct agreement on

Insight Electric Inc. form yet Patterson had observed both Ivan Valovic and Peter

Valovic appear in a red van with the name, logo and telephone numbers of Ivan's

Electric Ltd. even though the ESA had revoked Ivan's Electric Ltd. electrical

contractor’s licence on March 14, 2013; that Patterson’s credit card payments

were paid to Insight Electric Inc. on December 26, 2013, although Patterson

thought she was dealing with Ivan's Electric Ltd; that Patterson had not been told

on the initial call that Ivan's Electric Ltd. would be passing the job to Insight Electric

Inc.; that the defendants did not inform Patterson during the initial telephone call

that the defendants would charge Patterson a service call charge of $360 at the

emergency rate just for the defendants to appear at the Patterson house; that the

defendants’ emergency rate of $360 would be double the regular rate of $180; that

153

Bardeau would be charged the emergency rate for that job; and that in the direct

agreement there was a term that Patterson would be charged a 30% cancellation

fee when this term is not permitted to be in a direct agreement; and that the

defendants did not provide a detailed list of parts, prices, or materials in the

December 26, 2013, direct agreement provided to Patterson that would be used

for the work.

[424] And, as for the defendants’ due diligence defence for these 8 charges contained in

the counts #1 and #2, the defendants have failed to prove on a balance of

probabilities that they had taken all reasonable care in the circumstances to

prevent these 8 offences from being committed.

[425] Furthermore, for the 4 charges laid respectively against Ivan's Electric Ltd., Ivan

Valovic, Insight Electric Inc., and Peter Valovic, in count #3 on Information #5740,

that is related to the offence of failing to provide a refund within 15 days to Eva

Patterson had been dismissed earlier in the trial, since no evidence had been

adduced on those 4 charges.

[426] Ergo, convictions will be enter respectively against the defendants, Ivan's Electric

Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic, for the 8 charges

contained in counts #1 and #2 on Information #5740.

(vii) Nigel Lundie

[427] In relation to the consumer Nigel Lundie, the defendants, Ivan's Electric Ltd., Ivan

Valovic, Insight Electric Inc., and Peter Valovic had been charged with committing

8 charges in 2 counts on December 27, 2013. They are the following:

Charges in relation to the consumer Nigel Lundie - counts #4 and #5 on

Information #5740 (8 charges):

(#4) Ivan's Electric Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic, on

December 27, 2013, engaged in an unfair practice by making a false,

misleading or deceptive representation to a consumer, contrary to s. 17(1) of the

CPA 2002, thereby committing offence under s. 116(1)(b)(ii) of the CPA 2002 (4

charges).

(#5) Ivan's Electric Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic, on

December 27, 2013, failed to deliver to a consumer, a direct agreement

containing the information required by s. 35(1) of the O. Reg. 17/05, contrary to

s. 42 of the CPA 2002, thereby committing an offence under s. 116(2) of the

CPA 2002 (4 charges).

154

[428] The consumer Nigel Lundie had called Ivan's Electric Ltd. because his neighbour’s

tree had fallen and knocked down his wiring and pole during the “ice storm” in late

December of 2013. During the telephone call with someone from Ivan's Electric

Ltd., Nigel Lundie testified that there been no discussion about what it would cost

or that there would a service call charge to just appear at Lundie’s house, or that

Lundie would be charged at the emergency rates for the service call or work.

Lundie only said there had been a discussion of the problem and that the

defendants would show up the next day. In addition, Lundie was not told during

that telephone call that Ivan's Electric Ltd. could no longer operate (the ESA had

revoked Ivan's Electric Ltd. electrical contractor’s licence on March 14, 2013) and

that Lundie could call Insight Electric Inc. to do the service call or that Ivan's

Electric Ltd. would be passing the job to Insight Electric Inc. Moreover, Lundie

said that it was a Friday, and did not expect to be charged an emergency rate.

[429] However, after arriving at the Lundie residence on December 27, 2013, at about

9:00 a.m. the defendants contend that they had informed Nigel Lundie that Insight

Electric Inc. would be doing the job. Both Ivan Valovic and Peter Valovic were

present at Nigel Lundie’s house. However, Lundie testified that he did not know

who Insight Electric Inc. was and that the two men at his house were operating as

Ivan's Electric Ltd., but that Ivan Valovic told Lundie that the job would be billed

under Insight Electric Inc., but Lundie said he did not care that the job would be

billed under Insight Electric Inc., as Lundie said he just cared at that moment about

getting his house repaired.

[430] Lundie also testified that he had observed the red truck that arrived and also took

a photograph on December 17, 2013, of the Ivan's Electric Ltd. van displaying the

name, logo, and telephone numbers of Ivan's Electric Ltd. (see p. 190 of the Joint

Book of Documents)

[431] Lundie then said that Ivan Valovic had prepared the first direct agreement

(Proposal) on an Insight Electric Inc. form for $6,746.10 and provided it to Lundie.

Lundie did not sign the first direct agreement and does not know why the

agreement was not signed by him, but Lundie said he paid the full amount with his

credit card before the work had commenced.

[432] After Lundie signed the first direct agreement, Lundie said the defendants went to

get parts and materials around 9:30 a.m. and Lundie said he himself then left

shortly after. Then when Lundie returned to his house at about 11:30 to noon, he

said the new mast was already installed. However, Lundie said that Ivan Valovic

had called him about more work that needed to be done at the Lundie house and

when Lundie returned, Ivan Valovic told him at that time about needing to do

additional work not covered by the first direct agreement. Lundie was then

presented with a second direct agreement (Proposal) on December 27, 2013, for

$508.50 to cover more work because the wiring to the meter had been short from

the damage, and as such, there needed to be rewiring done outside to the meter.

Lundie said that he had paid the amount required on the second direct agreement

155

as well by credit card. He also said he was reimbursed by his insurance company

for what he had paid to have the work done.

[433] The first direct agreement (Proposal) (p. 179 of the Joint Book of Documents)

dated December 27, 2013, that had been submitted by Insight Electric Inc. to

Lundie stated:

1) Emergency Service call to check mast down after ice storm

2) Remove damage service mast and all hardware

3) Rebuild service as need/mast wiring meter& ext.

4) Permits/inspections/arrangements

720

1400

3600

250

___________

$5970 + tax

HST

776.10

$ 6,746.10

[434] In respect to the first direct agreement (Proposal) dated December 27, 2013,

provided to Nigel Lundie, there is no name of the person from Insight Electric Inc.

who had negotiated or concluded that agreement with Lundie that is printed or

visible on the document, which is to be provided in the agreement as required

under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only the initials “I.V.P.V.” appear

on the authorized signature line. In addition, the direct agreement did not contain

a fair description of the goods and services to be supplied by the defendants as

required under s. 35(1)(6), nor an itemized list of the prices at which the goods and

services are to be supplied to the consumer as required under s. 35(1)(9) of O.

Reg. 17/05. Specifically, the $360 emergency service call charge had not been

listed nor a detailed list of the parts and materials and their prices to be supplied to

Lundie by the defendants. Moreover, the December 27 direct agreement also

contained a term that the consumer would be charged a 30% cancellation fee,

which is not legally permitted to be a term in a direct agreement. In addition, the

defendants contend that Nigel Lundie would be informed at the conclusion of the

job that there would be a 1 year warranty on parts and labour, but that condition

was not contained or set out in the 2 direct agreements provided to Lundie, as

required by s. 35(1)(13) of O. Reg. 17/05.

[435] However, this first direct agreement (Proposal) provided to Nigel Lundie did

contain a statement on the front page that stated, “See additional agreement

statement on back – Direct Agreement Reg. 17/05, S. 35(1)”. The statement

156

required under s. 35(2) in respect to “Your rights under the Consumer Protection

Act, 2002” was printed on the back of the document.

[436] The second direct agreement (Proposal) for additional work not covered by the

first direct agreement (p.180 of Joint Book of Documents) dated December 27,

2013, that had been provided by Insight Electric Inc. to Lundie stated:

1) additions to previous proposal #1

2) Remove service wiring to outside (wiring short)

and

3) Rewire house wiring (service outside to meter)

Wiring short after damages

4) Install 2 insulators

450

58.50

-------------

508.50

[437] In respect to the second direct agreement (Proposal) dated December 27, 2013

provided to Nigel Lundie, there is no name of the person from Insight Electric Inc.

who had negotiated or concluded that agreement with Lundie that is printed or

visible on the document, which is to be provided in the agreement as required

under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only three initials, “I.V.S.” appears

on the authorized signature line. In addition, the direct agreement did not contain

a fair description of the goods and services to be supplied by the defendants as

required under s. 35(1)(6), nor an itemized list of the prices at which the goods and

services are to be supplied to the consumer as required under s. 35(1)(9) of O.

Reg. 17/05. Specifically, the cost of the 2 insulators or the amount and cost of the

extra wiring is not listed. Moreover, the second December 27 direct agreement

also contained a term that the consumer would be charged a 30% cancellation

fee, which is not legally permitted to be a term in a direct agreement. In addition,

the defendants contend that Nigel Lundie would be informed at the conclusion of

the job that there would be a 1 year warranty on parts and labour, but that

condition was not contained or set out in the 2 direct agreements provided to

Lundie, as required by s. 35(1)(13) of O. Reg. 17/05.

[438] In addition, the second direct agreement (Proposal) provided to Lundie also

contained a statement on the front page that stated, “See additional agreement

statement on back – Direct Agreement Reg. 17/05, S. 35(1)”. The statement

157

required under s. 35(2) in respect to “Your rights under the Consumer Protection

Act, 2002” was printed on the back of the document.

[439] As for which company had appeared to do the job, Lundie had initially called Ivan's

Electric Ltd., but there is no evidence that Lundie had been told during that initial

call that Ivan's Electric Ltd. was no longer operating or that Insight Electric Inc.

would be doing the job or that Ivan's Electric Ltd. would be passing the job to

Insight Electric Inc. And, then when Ivan Valovic and Peter Valovic arrived at

Lundie’s house on December 27, 2013 (this is after the ESA Review Panel had

revoked Ivan's Electric Ltd.’s electrical contractor’s licence on March 14, 2013),

they had come in the red van with Ivan's Electric Ltd.’s name, logo, and the

telephone numbers for Ivan's Electric Ltd. displayed on it. There is also evidence

that the electrical contractor’s licence number for Insight Electric Inc. was on the

van even though the name of Ivan's Electric Ltd. was still displayed on the van. In

addition, the defendants testified that they had informed Lundie when they first

arrived at the Lundie house that Insight Electric Inc. would be doing the job and

would be billing the job to Insight Electric Inc. In addition, Lundie had been

presented with 2 Insight Electric Inc. direct agreements. Therefore, on the basis of

the evidence, both Ivan's Electric Ltd. and Insight Electric Inc. had presented

themselves to the consumer Nigel Lundie as the company doing the electrical

work at the Lundie house on December 27, 2013, and as such both Ivan's Electric

Ltd. and Insight Electric Inc. would be liable for any of the offences committed in

respect to the consumer Nigel Lundie.

[440] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and Peter Valovic is a director and the directing mind of Insight Electric Inc.

and since both Ivan Valovic and Peter Valovic had personally been present at

Nigel Lundie’s house on December 27, 2013, and Ivan Valovic had been the

person who had prepared and provided the 2 direct agreements to Nigel Lundie,

then Ivan Valovic would also be a party to any offence that Ivan's Electric Ltd. has

committed since a corporation can only act through a human person, and that

Peter Valovic would also be a party to any offence that Insight Electric Inc. has

committed since a corporation can only act through a human person.

[441] Therefore, the prosecution has proven beyond a reasonable doubt that all four

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, Insight

Electric Inc., and Peter Valovic, as a party to the offence, had respectfully

committed, the actus reus of the offence of in count #5 of failing to deliver to Nigel

on December 27, 2013, a direct agreement containing the information required by

s. 35(1) of O. Reg. 17/05, which is contrary to s. 42 of the CPA 2002.

[442] Furthermore, the prosecution has proven beyond a reasonable doubt that all four

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, Insight

Electric Inc., and Peter Valovic, as a party to the offence, had respectfully

committed on December 27, 2013, the actus reus of the offence set out in count

#4 of engaging in an unfair practice by making a false, misleading or deceptive

158

representation to Nigel Lundie, since Lundie had not been told that Ivan's Electric

Ltd. was no longer operating during the initial telephone call Lundie had made to

the Ivan's Electric Ltd. (this is after the ESA Review Panel had revoked Ivan's

Electric Ltd.’s electrical contractor’s licence on March 14, 2013) and that they

could call Insight Electric Inc. if they wanted service; that Patterson was provided 2

direct agreements on Insight Electric Inc. forms yet Lundie had observed both Ivan

Valovic and Peter Valovic appear in a red van with the name, logo and telephone

numbers of Ivan's Electric Ltd. even though the ESA had revoked Ivan's Electric

Ltd. electrical contractor’s licence on March 14, 2013; that Lundie had not been

told on the initial call that Ivan's Electric Ltd. would be passing the job to Insight

Electric Inc.; that the defendants did not inform Lundie during the initial telephone

call that the defendants would charge Lundie a service call charge of $360 at the

emergency rate just for the defendants to appear at the Lundie house; that the

defendants’ emergency rate of $360 would be double the regular rate of $180; that

Lundie would be charged the emergency rate for that job; and that in the 2 direct

agreements there was a term that Lundie would be charged a 30% cancellation

fee when this term is not permitted to be in a direct agreement; and that the

defendants did not provide a detailed list of parts or material in the December 27,

2013, direct agreements provided to Lundie that would be used for the job.

[443] And, as for the defendants’ due diligence defence for these 8 charges contained in

the counts #4 and #5, the defendants have failed to prove on a balance of

probabilities that they had taken all reasonable care in the circumstances to

prevent these 8 offences from being committed.

[444] Ergo, convictions will be enter respectively against the defendants, Ivan's Electric

Ltd., Ivan Valovic, Insight Electric Inc., and Peter Valovic, for the 8 charges

contained in counts #4 and #5 on Information #5740.

(vii) Sandra Castator

[445] In relation to the consumer Sandra Castator, the defendants, Ivan's Electric Ltd.,

Ivan Valovic, Insight Electric Inc., and Peter Valovic had been charged with

committing 8 charges in 4 counts between January 14, 2013 and February 15,

2013. They are the following:

Charges in relation to the consumer Sandra Castator - counts #1, #2, #3,

and #4 on Information #8091 (8 charges):

(#1) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on January 14, 2013,

failed to deliver to a consumer, a direct agreement containing the information

required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the CPA 2002,

thereby committing an offence under s. 116(2) of the CPA 2002 (3 charges).

159

(#2) Peter Valovic, as a director of Insight Electric Inc., on January 14, 2013, failed to

take reasonable care to prevent the corporation from failing to deliver to a

consumer a direct agreement containing the information required by s. 35(1) of

the O. Reg. 17/05, contrary to s. 42 of the CPA 2002, and thereby committed an

offence under s. 116(3) of the CPA 2002 (1 charge).

(#3) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on February 15, 2013,

failed to refund to a consumer within 15 days after the date the said consumer

gave notice of cancellation, contrary to s. 96(1)(a) of the CPA 2002, thereby

committing an offence under s. 116(1)(b)(viii) of the CPA 2002 (3 charges

dismissed as no evidence adduced on this count).

(#4) Peter Valovic, as a director of Insight Electric Inc., on February 15, 2013, failed to

take reasonable care to prevent the corporation from failing to refund to a

consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of the CPA 2002, and thereby, committed an

offence under s. 116(3) of the CPA 2002 (1 charge dismissed as no evidence

adduced on this count).

[446] The consumer Sandra Castator had called Ivan's Electric Ltd. to attend her

residence for a service call for insurance purposes because she had aluminum

wiring in her house and she wanted a statement from an electrician that the

aluminum wiring was okay. She also said she went to the Yellow Pages and saw

the Ivan's Electric Ltd. ad that said the company had been in business 37 years

and did aluminum wiring testing, so she called Ivan's Electric Ltd. and talked to

Ivan Valovic the day before he attended at her house on January 14, 2013.

[447] During the telephone call with Ivan Valovic, Sandra Castator testified that there

been no discussion about what it would cost or that there would a service call

charge to just appear at Castator’s house, or that Castator would be charged at

the emergency rates for the service call or work. Castator only said there had

been a discussion about what she wanted done. In addition, Castator was not told

during that telephone call that Ivan's Electric Ltd. could no longer operate (this is

after the ESA had directed Ivan's Electric Ltd. to stop operating as a licenced

electrical contractor on April 16, 2012) and that Castator could call Insight Electric

Inc. to do the service call or that Ivan's Electric Ltd. would be passing the job to

Insight Electric Inc.

[448] When Ivan Valovic arrived on January 14, 2013, at the Castator residence,

Castator said she believes Ivan Valovic appeared in a red van, but she did not

notice the writing on the van. She also said that Ivan Valovic was alone.

[449] After walking around the Castator residence Ivan Valovic prepared an Insight

Electric Inc. direct agreement (Proposal) for $1231.70 for work that Castator had

to do before Ivan Valovic would give her a letter that would say her aluminum

wiring was okay. She then agreed to the work and signed the direct agreement.

160

Castator also said she paid the full amount for the job with her credit card.

However, Ivan Valovic had charged the $1231.70 to the Ivan's Electric Ltd.

account instead of the Insight Electric Inc. account. She also said she was

shocked by the amount that Insight Electric Inc. was charging for the work.

[450] Castator testified that Ivan Valovic had changed the bathroom receptacle to a

GFCI receptacle and had changed the dimmer switch after she had signed the

direct agreement. She also said Ivan Valovic had also put a GFCI receptacle

outside, but it blew and did not work. She then said she bought 2 new GFCI

receptacles and her friend had installed them and that now they both work.

[451] In addition, Castator said that Ivan Valovic showed her some fuses so that if they

blew that she could just press in the middle of the fuse to re-engage the fuse. She

said she was told by Ivan Valovic that they are usually $20 a piece but that he

would sell her 2 of them for just $20 cash. Castator then said that Ivan Valovic

pulled 2 of these fuses out of his pocket and put them on her table but had noticed

later that one was burned and that the other one was not in good condition, so she

did not use those fuses.

[452] After Ivan Valovic left, Castator said that she only then noticed that the direct

agreement had been with Insight Electric Inc. and found it strange, since she had

called Ivan's Electric Ltd. to do the work. She also said that she had noticed that

Insight Electric Inc. had an electrical contractor’s licence number of 7007687, but

that Ivan's Electric Ltd.’s number was 7000089 which she had gotten off the

internet and the Yellow Pages.

[453] Castator then said she called Ivan Valovic on January 15^thor 16^thto ask about the

discrepancy between her calling Ivan's Electric Ltd. and that she had received a

direct agreement from Insight Electric Inc. and also gave her concern about the

different electrical contractor’s numbers. Castator said that Ivan Valovic then told

her that he was contracted out to Insight Electric Inc., but said that Ivan Valovic

had never told her when he was there doing the work that he was contracted out

to Insight Electric Inc.. She also told him how could he contract out, since it was

Ivan Valovic who had appeared at her residence, but Ivan Valovic told her that is

how things are done. Castator also said she questioned Ivan Valovic about the

cost of the GFCI receptacles and the dimmer switch, since she had not been

informed or told about their cost in the direct agreement. She also complained to

him about the fuses she had bought from him and said that Ivan Valovic had

replied that he would bring over fuses to her, but she declined his offer and

believes she had called him a crook because the price for the work was really way

out. Castator then said that Ivan Valovic told her he would sue her for slander.

[454] In addition, Castator said that after Ivan Valovic had left her residence on January

14, 2013, she saw a box that was left behind which was for the GFCI receptacle

and she had looked up on the internet to see what a GFCI receptacle was for and

found information that said not to use a GFCI receptacle with aluminum wiring.

161

She then said she went onto the ESA website and found information that said she

should try to resolve the matter with the electrician first.

[455] The direct agreement (Proposal) (p. 107 of the Joint Book of Documents) dated

January 14, 2013, that had been submitted by Insight Electric Inc. to Castator

stated:

1) Service call to inspect home wiring & service for insurance

90 + tax

purposes

2) Inspect service and outlets through the home

270 + tax

All wiring and devices up to Code and Good

3) Bathroom receptacle and outside receptacle need GFCI and

550 + tax

retrofit to CO/ACR

4) Replace 1 dimmer in dining room

180+ tax

All parts included

___________

$1090 + tax

HST 141.70

-----------------------

$ 1,231.70

NOTE: All wiring and devices are up to Code including service.

All good.

[456] In respect to the direct agreement (Proposal) dated January 14, 2013, provided to

Sandra Castator, there is no name of the person from Insight Electric Inc. who had

negotiated or concluded that agreement with Castator that is printed or visible on

the document, which is to be provided in the agreement as required under ss.

35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only a signature appears on the authorized

signature line which cannot readily identify the name of the person who had

concluded or negotiated the direct agreement with Castator. As well, the January

14, 2013, direct agreement does not contain the “Consumer’s Rights under the

CPA 2002” statement, which includes the 10-day cooling off period that is required

by and provided for under ss. 35(1)(11) and 35(2) of O. Reg. 17/05. In addition,

the direct agreement did not contain a fair description of the goods and services to

be supplied by the defendants as required under s. 35(1)(6), nor an itemized list of

the prices at which the goods and services are to be supplied to the consumer as

required under s. 35(1)(9) of O. Reg. 17/05. Specifically, the cost of the GFCI

receptacles and the dimmer switch had not been listed. Moreover, the January

14, 2013, direct agreement also contains a term that the consumer would be

162

charged a 30% cancellation fee, which is not legally permitted to be a term in a

direct agreement. In addition, the defendants contend that Sandra Castator would

be informed at the conclusion of the job that there would be a 1 year warranty on

parts and labour, but that condition was not contained or set out in the direct

agreement provided to Castator, as required by s. 35(1)(13) of O. Reg. 17/05.

[457] As for which company appeared to do the job for Castator, Castator had initially

called Ivan's Electric Ltd., but there is no evidence that Castator had been told

during that initial call that Ivan's Electric Ltd. was no longer operating and that

Insight Electric Inc. would be doing the job or that Ivan's Electric Ltd. had passed

the job onto Insight Electric Inc., or had there been a discussion about what it

would cost and that there would be a service call charge to just appear at

Castator’s house. And, then when the Ivan Valovic arrived at Castator’s house on

January 14, 2013 (this is after the ESA had directed Ivan's Electric Ltd. to stop

operating as a licenced electrical contractor on April 16, 2012), Ivan Valovic never

told Castator that he was not there as Ivan's Electric Ltd.. But more importantly,

Castator did not notice that she had received an Insight Electric Inc. direct

agreement until Ivan Valovic had left. Therefore, as there is evidence that both

Ivan's Electric Ltd. and Insight Electric Inc. had presented themselves to the

consumer Sandra Castator as the company doing the electrical work at the

Castator house on January 14, 2013, then both Ivan's Electric Ltd. and Insight

Electric Inc. would be liable for any of the offences committed in respect to the

consumer Sandra Castator.

[458] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and had been the person who had attended at Castor’s house on January 14,

2013, and had been the person who had prepared and provided the direct

agreement to Sandra Castator, then Ivan Valovic would also be a party to any

offence that Ivan's Electric Ltd. has committed since a corporation can only act

through a human person.

[459] Therefore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc. had respectfully committed, the actus reus of the offence of in count

#1 of failing to deliver to Sandra Castator on January 14, 2013, a direct agreement

containing the information required by s. 35(1) of O. Reg. 17/05, which is contrary

to s. 42 of the CPA 2002. The prosecution has also proven beyond a reasonable

doubt that Ivan Valovic, as a party to the offence, had also committed the actus

reus of the offence in count #1.

[460] And, in respect to the charges related to the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc., for failing to provide a refund to Sandra Castator

within 15 days of being informed of the cancellation of the direct agreement, those

3 charges had been dismissed earlier in the trial, as Sandra Castator had testified

that she had not asked the defendants for a refund.

163

[461] And, as for the 2 charges against Peter Valovic, as the director of Insight Electric

Inc., the prosecution has proven beyond a reasonable doubt that Peter Valovic

has committed the actus reus of the offence in count #2 of failing to prevent the

corporation, Insight Electric Inc., on January 14, 2013, from failing to deliver to

Sandra Castator on January 14, 2013, a direct agreement containing the

information required by s. 35(1). However, the actus reus of the offence in count

#4 of failing to prevent the corporation, Insight Electric Inc., on February 15, 2013,

from failing to provide a refund to Sandra Castator, a consumer, within 15 days of

the notice of the cancellation had been earlier dismissed in the trial, as Sandra

Castator had testified that she had not asked the defendants for a refund.

[462] And, as for the defendants’ due diligence defence for these 4 charges contained in

count #1 and #2, the defendants have failed to prove on a balance of probabilities

that they had taken all reasonable care in the circumstances to prevent these 4

offences from being committed.

[463] Ergo, convictions will be entered against the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc. for the 3 charges contained in counts #1 on

Information #8091 and a conviction will be entered against the defendant, Peter

Valovic, for the charge contained in count #2 on Information #8091.

(ix) Marjorie Riley

[464] In relation to the consumer Marjorie Riley, the defendants, Ivan's Electric Ltd., Ivan

Valovic, Insight Electric Inc., and Peter Valovic had been charged with committing

12 charges in 6 counts between January 31, 2013 and February 26, 2013. They

are the following:

Charges in relation to the consumer Marjorie Riley - counts #9, #10, #11,

#12, #13, and #14 on Information #8091 (12 charges):

(#9) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on January 31,

2013, failed to deliver to a consumer, a direct agreement containing the

information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the

CPA 2002, thereby committing an offence under s. 116(2) of the CPA 2002 (3

charges).

(#10) Peter Valovic, as a director of Insight Electric Inc., on January 31, 2013, failed

to take reasonable care to prevent the corporation from failing to deliver to a

consumer a direct agreement containing the information required by s. 35(1)

of the O. Reg. 17/05, contrary to s. 42 of the CPA 2002, and thereby

committed an offence under s. 116(3) of the CPA 2002 (1 charge).

(#11) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on January 31,

2013, engaged in an unfair practice by making a false, misleading or

164

deceptive representation to a consumer, contrary to s. 17(1) of the CPA 2002,

thereby committing offence under s. 116(1)(b)(ii) of the CPA 2002 (3

charges).

(#12) Peter Valovic, as a director of Insight Electric Inc., on January 31, 2013, failed

to take reasonable care to prevent the corporation, failed to take reasonable

care to prevent the corporation. from engaging in an unfair practice by making

a false, misleading or deceptive representation to a consumer, contrary to s.

17(1) of the CPA 2002, and thereby, committed an offence contrary to s.

116(3) of the CPA 2002 (1 charge).

(#13) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on February 26,

2013, failed to refund to a consumer within 15 days after the date the said

consumer gave notice of cancellation, contrary to s. 96(1)(a) of the CPA

2002, thereby committing an offence under s. 116(1)(b)(viii) of the CPA 2002

(3 charges).

(#14) Peter Valovic, as a director of Insight Electric Inc., on February 26, 2013,

failed to take reasonable care to prevent the corporation from failing to refund

to a consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of the CPA 2002, and thereby, committed

an offence under s. 116(3) of the CPA 2002 (1 charge).

[465] The consumer Marjorie Riley had called Ivan's Electric Ltd. because of the listing

in the yellow pages to attend her residence for a service call to install a light

switch. She believed she was calling an electrician that had done work for her

before and had asked Ivan Valovic if he had been the one that had done work for

her before and had only charged her $75. Riley says that the person at the other

end of the telephone said he had. However, when Ivan Valovic arrived at her

door, Riley told him he was not the same person that had done work for her before

and Ivan Valovic said that he was the same guy and that he had given her a hug

before.

[466] When the defendants arrived on January 31, 2013, at the Riley residence, Riley

said that Ivan Valovic never told her he was from Insight Electric Inc. and that she

only saw the Insight Electric Inc. name when Ivan Valovic provided her with the

proposal. After the switch had been fixed and Ivan Valovic had found another

problem in the Riley residence, Ivan Valovic prepared a direct agreement

(Proposal) for $305.10 for Riley to accept and sign for the work he had completed.

However, Riley refused to sign the direct agreement because she said it was not

the same price of $70 she had been told it would be over the telephone and

because she thought she was being overcharged, but she still paid the full amount

for the job with her credit card. However, Ivan Valovic had charged the $305.10 to

the Ivan's Electric Ltd. account instead of the Insight Electric Inc. account. Ivan

Valovic had also advised Riley that she was using the wrong size of fuses in her

fuse box.

165

[467] In addition, the work that Insight Electric Inc. did for Riley also required an ESA

inspection for which Insight Electric Inc. had ordered and in which the ESA

charged Insight Electric Inc. $105.09 (see ESA invoice at p. 154 of the Joint Book

of Documents). Ivan Valovic also informed Riley about the need for an ESA

inspection. However, Riley informed Ivan Valovic that she would call the police if

an ESA inspector attended her residence to do the inspection.

[468] Riley had also been unhappy with the amount she was charged by Insight Electric

Inc. for changing one dimmer switch that took about 5 to 10 minutes. Riley also

complained to the Better Business Bureau about Insight Electric Inc. and Ivan's

Electric Ltd. doing a job at her residence and had asked the Bureau to act on her

behalf to obtain a refund from the defendants. However, she said that it was her

friend who had typed out the letter that was sent to the Better Business Bureau.

[469] Ivan Valovic then on Insight Electric Inc. letterhead wrote the Better Business

Bureau three letters dated February 11, 2013, March 1, 2013, and March 9, 2013,

in response to Riley’s complaint to them, and informed the Better Business Bureau

that Riley is not entitled to a refund and that an ESA inspection had been required.

[470] The direct agreement (Proposal) (p. 148 of the Joint Book of Documents) dated

January 31, 2013, that had been submitted by Insight Electric Inc. to Marjorie Riley

stated:

1) Service call to check dimmer – not turning off – also one

180 + tax

kitchen outlet dead

2) Troubleshoot on dead receptacle – Found power out not in

service – block jammed and broken.

Need to be replaced – customer don’t want it at this time

180 + tax

3) Replace 1 switch for dimmer in kitchen

Note: Customer have incorrect fuses – should replace

15 amp

360 + tax

-- 90

-------------

$270 + tax

Senior discount

HST

35.10

------------

305.10

Customer don’t want to sign

166

[471] In respect to the direct agreement (Proposal) dated January 31, 2013, provided to

Marjorie Riley, there is no name of the person from Insight Electric Inc. who had

negotiated or concluded that agreement with Marjorie Riley that is printed or

visible on the document, which is to be provided in the agreement as required

under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only a signature appears on the

authorized signature line which cannot readily identify the name of the person who

had concluded or negotiated the direct agreement with Riley. As well, the January

31, 2013, direct agreement does not contain the “Consumer’s Rights under the

CPA 2002” statement, which includes the 10-day cooling off period that is required

by and provided for under ss. 35(1)(11) and 35(2) of O. Reg. 17/05. In addition,

the direct agreement did not contain a fair description of the goods and services to

be supplied by the defendants as required under s. 35(1)(6), nor an itemized list of

the prices at which the goods and services are to be supplied to the consumer as

required under s. 35(1)(9) of O. Reg. 17/05. Specifically, the cost of the switch

had not been listed. Moreover, the January 31, 2013, direct agreement also

contains a term that the consumer would be charged a 30% cancellation fee,

which is not legally permitted to be a term in a direct agreement. In addition, the

defendants contend that Marjorie Riley would be informed at the conclusion of the

job that there would be a 1 year warranty on parts and labour, but that condition

was not contained or set out in the direct agreement provided to Riley, as required

by s. 35(1)(13) of O. Reg. 17/05.

[472] As for which company had appeared to do the job for Riley, Riley had initially

called Ivan's Electric Ltd., but there is no evidence that Riley had been told during

that initial call that Ivan's Electric Ltd. was no longer operating and that Insight

Electric Inc. would be doing the job or that Ivan's Electric Ltd. had passed the job

onto Insight Electric Inc., or a discussion that there would be a service call charge

that Riley would have to pay for the defendants just to appear at Riley’s house.

And then when Ivan Valovic had arrived at Riley’s residence on January 31, 2013

(this is after the ESA had directed Ivan's Electric Ltd. to stop operating as a

licenced electrical contractor on April 16, 2012), Ivan Valovic never told Riley that

he was not there as Ivan's Electric Ltd. Therefore, as there is evidence that both

Ivan's Electric Ltd. and Insight Electric Inc. had presented themselves to the

consumer Marjorie Riley as the company doing the electrical work at the Riley

residence on January 31, 2013, then both Ivan's Electric Ltd. and Insight Electric

Inc. would be liable for any of the offences committed in respect to the consumer

Marjorie Riley.

[473] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and had been the person who had attended at Riley’s residence on January

31, 2013, and had been the person who had prepared and provided the direct

agreement to Marjorie Riley, then Ivan Valovic would also be a party to any

offence that Ivan's Electric Ltd. has committed since a corporation can only act

through a human person.

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[474] Therefore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc. had respectfully committed, the actus reus of the offence of in count

#9 of failing to deliver to Marjorie Riley on January 31, 2013, a direct agreement

containing the information required by s. 35(1) of O. Reg. 17/05, which is contrary

to s. 42 of the CPA 2002. The prosecution has also proven beyond a reasonable

doubt that Ivan Valovic, as a party to the offence, had also committed the actus

reus of the offence in count #9.

[475] Furthermore, the prosecution has proven beyond a reasonable doubt that the

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, Insight

Electric Inc., had respectfully committed on January 31, 2013, the actus reus of

the offence set out in count #11 of engaging in an unfair practice by making a

false, misleading or deceptive representation to Marjorie Riley, since Riley had not

been told that Ivan's Electric Ltd. was no longer operating during the initial

telephone call Riley had made to the Ivan's Electric Ltd. (this is after the ESA had

directed Ivan's Electric Ltd. to stop operating as a licenced electrical contractor on

April 16, 2012) and that they could call Insight Electric Inc. if they wanted service;

that Riley was provided a direct agreement on an Insight Electric Inc. form even

though Riley had called Ivan's Electric Ltd. to do the work; that Riley had not been

told on the initial call that Ivan's Electric Ltd. would be passing the job to Insight

Electric Inc.; that the defendants did not inform Riley during the initial telephone

call that the defendants would charge Riley a service call charge just for the

defendants to appear at the Riley residence; and that in the direct agreement there

was a term that Riley would be charged a 30% cancellation fee when this term is

not permitted to be in a direct agreement; and that the defendants did not provide

a detailed list of parts or material in the January 31, 2013, direct agreement

provided to Riley that would be used for the job.

[476] And, in respect to the charges related to the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc., for failing to provide a refund to Marjorie Riley

within 15 days of being informed of the cancellation of the direct agreement, the

defendants had been notified or knew of Riley’s request for a refund made by

Riley through the Better Business Bureau as of at least February 11, 2013, as

indicated by the letter from Insight Electric Inc. to the Bureau dated February 11,

2013, that acknowledged receiving the letter from the Better Business Bureau

dated February 5, 2013, and then states that the “Customer is not entitled to any

refound [sp]” (see p. 150 of the Joint Book of Authorities. Therefore, based on

Insight Electric Inc.’s response written by Ivan Valovic to the Better Business

Bureau, then Ivan Valovic’s knowledge and awareness of these efforts by Riley to

obtain a refund through the Better Business Bureau is deemed to be notice of the

cancellation of the direct agreement by Riley to the defendants as of at least

February 11, 2013.

[477] Moreover, since the direct agreement that Marjorie Riley had signed was a direct

agreement, then Riley legally had a 10-day cooling off period under s. 43(1) to

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cancel the agreement for any reason or to cancel the direct agreement under s.

43(2) within one year after the agreement was signed if the direct agreement did

not contain the information required under s. 35(1) and (2) of O. Reg. 17/05 or if

the defendants had engaged in an unfair practice to Marjorie Riley under s. 18(3)

of the CPA 2002. Accordingly, Marjorie Riley provided a notice of cancellation to

the defendants within the 10 day cooling-off period when Riley had sent a letter of

complaint to the Better Business Bureau, which had then notified the defendants in

a letter dated February 5, 2013, that Riley had demanded a refund from them.

[478] Therefore, the defendants were obligated to refund to Marjorie Riley within 15

days of that notice of cancellation under s. 43(1) of the CPA 2002 that had been

received by the defendants as of at least February 11, 2013, so that the

defendants had to then provide a refund to Marjorie Riley by February 26, 2013.

And, since the defendants failed to do so by February 26, 2013, the prosecution

has proven that the defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the

offence, and Insight Electric Inc., has committed the actus reus of the offence set

out in count #13 of failing to provide a refund to Marjorie Riley, a consumer, within

15 days of the notice of the cancellation.

[479] And, as for the 3 charges against Peter Valovic, as the director of Insight Electric

Inc., the prosecution has proven beyond a reasonable doubt that Peter Valovic

has committed the actus reus of the offence in count #10 of failing to prevent the

corporation, Insight Electric Inc., on January 31, 2013, from failing to deliver to

Marjorie Riley on January 31, 2013, a direct agreement containing the information

required by s. 35(1); and the actus reus of the offence in count #12 of failing to

prevent the corporation on January 31, 2013, from engaging in an unfair practice

by making a false, misleading or deceptive representation to Marjorie Riley; and

the actus reus of the offence in count #14 of failing to prevent the corporation on

February 26, 2013, from failing to provide a refund to Marjorie Riley, a consumer,

within 15 days of the notice of the cancellation.

[480] And, as for the defendants’ due diligence defence for these 12 charges contained

in the 6 counts, the defendants have failed to prove on a balance of probabilities

that they had taken all reasonable care in the circumstances to prevent these 12

offences from being committed.

[481] Ergo, convictions will be entered against the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc. respectively for the charges contained in counts

#9, #11, and #13 on Information #8091 and convictions will be entered against the

defendant, Peter Valovic, for the charges contained in counts #10, #12, and #14

on Information #8091.

(x) Zaven Tahtadjian

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[482] In relation to the consumer Zaven Tahtadjian, the defendants, Ivan's Electric Ltd.,

Ivan Valovic, Insight Electric Inc., and Peter Valovic had been charged with

committing 12 charges in 6 counts between April 16, 2013 and May 3, 2013. They

are the following:

Charges in relation to the consumer Zaven Tahtadjian - counts #15, #16,

#17, #18, #19, and #20 on Information #8091 (12 charges):

(#15) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on April 16, 2013,

failed to deliver to a consumer, a direct agreement containing the information

required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the CPA 2002,

thereby committing an offence under s. 116(2) of the CPA 2002 (3 charges).

(#16) Peter Valovic, as a director of Insight Electric Inc., on April 16, 2013, failed to

take reasonable care to prevent the corporation from failing to deliver to a

consumer a direct agreement containing the information required by s. 35(1) of

the O. Reg. 17/05, contrary to s. 42 of the CPA 2002, and thereby committed

an offence under s. 116(3) of the CPA 2002 (1 charge).

(#17) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on April 16, 2013,

engaged in an unfair practice by making a false, misleading or deceptive

representation to a consumer, contrary to s. 17(1) of the CPA 2002, thereby

committing offence under s. 116(1)(b)(ii) of the CPA 2002 (3 charges).

(#18) Peter Valovic, as a director of Insight Electric Inc., on April 16, 2013, failed to

take reasonable care to prevent the corporation, from engaging in an unfair

practice by making a false, misleading or deceptive representation to a

consumer, contrary to s. 17(1) of the CPA 2002, and thereby, committed an

offence contrary to s. 116(3) of the CPA 2002 (1 charge).

(#19) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on May 3, 2013, failed

to refund to a consumer within 15 days after the date the said consumer gave

notice of cancellation, contrary to s. 96(1)(a) of the CPA 2002, thereby

committing an offence under s. 116(1)(b)(viii) of the CPA 2002 (3 charges).

(#20) Peter Valovic, as a director of Insight Electric Inc., on May 3, 2013, failed to

take reasonable care to prevent the corporation from failing to refund to a

consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of the CPA 2002, and thereby, committed

an offence under s. 116(3) of the CPA 2002 (1 charge).

[483] The consumer Zaven Tahtadjian had called Ivan's Electric Ltd. to attend his

residence during a weekday for a service call for power being out at the residence

because a tree branch fell on the wiring and broke the 200 amp service.

Tahtadjian said he had called 10 electricians and only got their answering

machines. In addition, Tahtadjian said that Ivan's Electric Ltd. was the only

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electrician that had answered when he called them. When Tahtadjian told Ivan

Valovic about not having power because of the downed cable, Ivan Valovic said

he would come right away to Tahtadjian’s house.

[484] During the telephone call with someone from Ivan's Electric Ltd. Zaven Tahtadjian

testified that there been no discussion about what it would cost or that there would

a service call charge to just appear at Tahtadjian’s house, or that Tahtadjian would

be charged at the emergency rates for the service call or work. Tahtadjian said

there had been only a discussion of the problem and that the defendants would

come right away. In addition, Tahtadjian was not told during that telephone call

that Ivan's Electric Ltd. could no longer operate (the ESA had revoked Ivan's

Electric Ltd. electrical contractor’s licence on March 14, 2013) and that Tahtadjian

could call Insight Electric Inc. to do the service call or that Ivan's Electric Ltd. would

be passing the job to Insight Electric Inc.

[485] However, Ivan Valovic had arrived at the Tahtadjian residence on April 16, 2013,

at about 4:00 p.m. and just before rush hour. Only Ivan Valovic had been present

at Zaven Tahtadjian’s house.

Tahtadjian also testified that Ivan Valovic had

arrived in a red van which had Ivan's Electric Ltd.’s name and telephone numbers

displayed on the van.

[486] After walking around the Tahtadjian residence, Ivan Valovic prepared the first

direct agreement (Proposal) for $4068 on an Insight Electric Inc. form for

Tahtadjian to accept and sign. Tahtadjian agreed to the work proposed by Insight

Electric Inc., signed the agreement, and paid the full amount for the job with his

credit card before Ivan Valovic commenced to do any work. However, Ivan

Valovic had charged the $4068 to the Ivan's Electric Ltd. account instead of the

Insight Electric Inc. account.

[487] Tahtadjian, also said that Ivan Valovic had given him a business card in the name

of Insight Electric Inc. and the direct agreement had been on an Insight Electric

Inc. form. Because of the difference between the company he called which had

been Ivan's Electric Ltd. and the different name of Insight Electric Inc. he had been

given on the business card and on the direct agreement, he questioned Ivan

Valovic about the difference. Tahtadjian said that Ivan Valovic had replied that he

worked for Insight Electric Inc. And, because Ivan Valovic had showed up in his

own name, Tahtadjian said that he had also asked Ivan Valovic to write down his

own name on the second direct agreement, since he did not know who Insight

Electric Inc. was.

[488] Then, sometime after commencing the job under the first direct agreement, Ivan

Valovic found that the original connection to the house had not had a “clevis” or

insulator and that additional work would be needed to be done to install the

“clevis”, which had not been included in the first direct agreement (Proposal).

Also, Tahtadjian testified that Ivan Valovic had said that the inspector would not

pass the job unless the clevis or insulator is installed. Tahtadjian also had asked

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Ivan Valovic why he did not pick up a clevis when he had gone for an hour to buy

parts from the Home Depot earlier. Ivan Valovic then informed Tahtadjian that he

could come back the next morning to put on the clevis, but that Tahtadjian and his

wife would have to stay at a motel, since there would be no power. Because of

Tahtadjian’s wife’s health, Tahtadjian did not want to take his wife to a hotel and

agreed to have Insight Electric Inc. install the clevis that evening, and Insight

Electric Inc. presented the second direct agreement (Proposal) for $960.50

(including tax) to Tahtadjian, who agreed to the additional work and signed the

second direct agreement (Proposal) also on April 16, 2013. Tahtadjian also paid

this second amount in full by credit card, but for the second payment Ivan Valovic

had put the payment to Insight Electric Inc.

[489] Furthermore, sometime after the job was completed, Tahtadjian testified that Joe

Peragine, the ESA inspector who had attended to inspect Insight Electric Inc.’s

work, had arrived at about 9:30 p.m. Tahtadjian also said that he had called

Peragine the next day and had been informed by Peragine that the work that had

been done should have only cost $300 or $400, although at trial Peragine testified

that he does not recall the details of the conversation that he had with Tahtadjian

on the telephone. Because of the ESA inspector’s comments, Tahtadjian believed

that he had been overcharged by Insight Electric Inc. and then a few days later

had gone to the Home Depot to price out the cost of the clevis and the cost of a

standpipe. Tahtadjian also believed that Insight Electric Inc. had used the old

standpipe and had charged him for it.

[490] Tahtadjian also said he had asked Ivan Valovic for the return of his credit cards

slips on the next day, April 17, 2013, when Ivan Valovic and his son came to his

house. In addition, Tahtadjian said he had provided a letter dated April 17, 2013,

to Ivan Valovic in which Tahtadjian had written, “I am now warning you not to

charge my credit card of any of the payment, return the slips to me & we will work

out a new price… If you do not return all those payments back to me I will file a

complaint with the Ministry of Commercial Services … ” (see p. 134 of the Joint

Book of Documents). However, Tahtadjian said Ivan Valovic did not return his

credit card slips back.

[491] Furthermore, Insight Electric Inc. had charged Tahtadjian for an hour at the

emergency rate of $360 to go buy the clevis, which Tahtadjian found subsequently

at a building supply store to be priced at $14.49. Tahtadjian also found conduit

priced at $18.89.

[492] The first direct agreement (Proposal) (p. 146 of the Joint Book of Documents)

dated April 16, 2013, that had been submitted by Insight Electric Inc. to Tahtadjian

stated:

1) Emergency Service call to power out due to tree branch fall

on wiring and broke 200 amp service feeder pipe and

associated hardware

720 + tax

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2) Remove damage hardware and piping

3) Install new service stack pipe and refasten meter box

4) Permits, inspections and arrangements

___________

$3850 + tax

--200

---------------------

3600 + tax

HST

468

-----------------------

$ 4068

[493] In respect to the first direct agreement (Proposal) dated April 16, 2013, provided to

Zaven Tahtadjian, there is no name of the person from Insight Electric Inc. who

had negotiated or concluded that agreement with Zaven Tahtadjian that is printed

or visible on the document, which is to be provided in the agreement as required

under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only a two initials “I.V.” appears on

the authorized signature line. In addition, the first direct agreement did not contain

a fair description of the goods and services to be supplied by the defendants as

required under s. 35(1)(6), nor an itemized list of the prices at which the goods and

services are to be supplied to the consumer as required under s. 35(1)(9) of O.

Reg. 17/05. Specifically, the $360 emergency call service rate is not listed and

there is no list of parts or materials to be supplied and at what cost. Moreover, the

April 16, 2013, first direct agreement also contains a term that the consumer would

be charged a 30% cancellation fee, which is not legally permitted to be a term in a

direct agreement. In addition, the defendants contend that Zaven Tahtadjian

would be informed at the conclusion of the job that there would be a 1 year

warranty on parts and labour, but that condition was not contained or set out in the

direct agreement provided to Tahtadjian, as required by s. 35(1)(13) of O. Reg.

17/05.

[494] However, the April 16, 2013, first direct agreement does contain on the back page

a “handwritten” copy of the “Consumer’s Rights under the CPA 2002” statement,

which includes the 10-day cooling off period that is required by and provided for

under ss. 35(1)(11) and 35(2) of O. Reg. 17/05.

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[495] The second direct agreement (Proposal) (p. 147 of the Joint Book of Documents)

dated April 16, 2013, that had been submitted by Insight Electric Inc. to Tahtadjian

stated:

Supply and install 200 amp insulator for Hydro line

850.00

Attachment as proposal April 16.13

___________

Subtotal $850.00

HST

110.50

TOTAL $960.50

[496] In respect to the second direct agreement (Proposal) dated April 16, 2013,

provided to Zaven Tahtadjian, the name of Ivan Valovic had been printed by Ivan

Valovic on the top right corner of the Insight Electric Inc. form and is the name of

the person who had negotiated or concluded that agreement with Zaven

Tahtadjian, which meets the requirement under ss. 35(1)(4)(ii) and (iii) of O. Reg.

17/05.

[497] However, the second direct agreement did not contain a fair description of the

goods and services to be supplied by the defendants as required under s.

35(1)(6), nor an itemized list of the prices at which the goods and services are to

be supplied to the consumer as required under s. 35(1)(9) of O. Reg. 17/05.

Specifically, there is no list of parts or materials to be supplied and at what cost,

especially for the clevis part that had to be installed. Moreover, the April 16, 2013,

second direct agreement also contains a term that the consumer would be

charged a 30% cancellation fee, which is not legally permitted to be a term in a

direct agreement. In addition, the defendants contend that Zaven Tahtadjian

would be informed at the conclusion of the job that there would be a 1 year

warranty on parts and labour, but that condition was not contained or set out in the

direct agreement provided to Tahtadjian, as required by s. 35(1)(13) of O. Reg.

17/05.

[498] However, the April 16, 2013, second direct agreement does contain on the back

page a handwritten copy of the “Consumer’s Rights under the CPA 2002”

statement, which includes the 10-day cooling off period that is required by and

provided for under ss. 35(1)(11) and 35(2) of O. Reg. 17/05.

[499] As for which company had appeared to do the job for Zaven Tahtadjian,

Tahtadjian had initially called Ivan's Electric Ltd., but there is no evidence that

Tahtadjian had been told during that initial call that Ivan's Electric Ltd. was no

longer operating and that Insight Electric Inc. would be doing the job or that Ivan's

Electric Ltd. had passed the job onto Insight Electric Inc., or a discussion that there

would be a service call charge that Tahtadjian would have to pay for the

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defendants just to appear at Tahtadjian house. And, then when Ivan Valovic had

arrived at the Tahtadjian residence on April 16, 2013 (this is after the ESA Review

Panel had revoked Ivan's Electric Ltd.’s electrical contractor’s licence on March 14,

2013), Ivan Valovic did not tell Tahtadjian that he was not there as Ivan's Electric

Ltd. immediately. In addition, Ivan Valovic had driven up to the Tahtadjian

residence in the red van that displayed the name, logo, and telephone numbers of

Ivan's Electric Ltd. However, Ivan Valovic provided Tahtadjian an Insight Electric

Inc. business card and 2 direct agreements on Insight Electric Inc. forms.

Therefore, as there is evidence that both Ivan's Electric Ltd. and Insight Electric

Inc. had presented themselves to the consumer Zaven Tahtadjian as the company

doing the electrical work at the Tahtadjian residence on April 16, 2013, then both

Ivan's Electric Ltd. and Insight Electric Inc. would be liable for any of the offences

committed in respect to the consumer Zaven Tahtadjian.

[500] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and had been the person who had attended at Zaven Tahtadjian’s residence

on April 16, 2013, and had been the person who had prepared and provided the

direct agreement to Zaven Tahtadjian, then Ivan Valovic would also be a party to

any offence that Ivan's Electric Ltd. has committed since a corporation can only act

through a human person.

[501] Therefore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc. had respectfully committed, the actus reus of the offence of in count

#15 of failing to deliver to Zaven Tahtadjian on April 16, 2013, a direct agreement

containing the information required by s. 35(1) of O. Reg. 17/05, which is contrary

to s. 42 of the CPA 2002. The prosecution has also proven beyond a reasonable

doubt that Ivan Valovic, as a party to the offence, had also committed the actus

reus of the offence in count #15.

[502] Furthermore, the prosecution has proven beyond a reasonable doubt that the

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc., had respectfully committed on April 16, 2013, the actus reus of the

offence set out in count #17 of engaging in an unfair practice by making a false,

misleading or deceptive representation to Zaven Tahtadjian, since Tahtadjian had

not been told that Ivan's Electric Ltd. was no longer operating during the initial

telephone call Tahtadjian had made to the Ivan's Electric Ltd. (this is after the ESA

Review Panel had revoked Ivan's Electric Ltd.’s electrical contractor’s licence on

March 14, 2013) and that they could call Insight Electric Inc. if they wanted

service; that Tahtadjian was provided a direct agreement on Insight Electric Inc.

form even though Tahtadjian had called Ivan's Electric Ltd. to do the work; that

Tahtadjian had been provided an Insight Electric Inc. business card and 2 direct

agreements on Insight Electric Inc. forms but that Ivan Valovic had appeared in the

red van with the name, logo, and telephone numbers of Ivan's Electric Ltd.

displayed on it; that Tahtadjian had not been told on the initial call that Ivan's

Electric Ltd. would be passing the job to Insight Electric Inc.; that the defendants

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did not inform Tahtadjian during the initial telephone call that the defendants would

charge Tahtadjian a service call charge just for the defendants to appear at the

Tahtadjian residence; and that in the direct agreement there was a term that

Tahtadjian would be charged a 30% cancellation fee when this term is not

permitted to be in a direct agreement; and that the defendants did not provide a

detailed list of parts or material in the two April 16, 2013, direct agreements

provided to Tahtadjian that would be used for the job.

[503] And, in respect to the charges related to the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc., for failing to provide a refund to Tahtadjian within

15 days of being informed of the cancellation of the direct agreement, the

defendants had been notified or knew of Tahtadjian’s request for a refund made by

Tahtadjian on April 17, 2013.

[504] Moreover, since the direct agreement that Zaven Tahtadjian had signed was a

direct agreement then Tahtadjian legally had a 10-day cooling off period under s.

43(1) to cancel the agreement for any reason, or to cancel the direct agreement

under s. 43(2) within one year after the agreement was signed if the direct

agreement did not contain the information required under s. 35(1) and (2) of O.

Reg. 17/05, or to cancel the direct agreement if the defendants had engaged in an

unfair practice to Zaven Tahtadjian under s. 18(3) of the CPA 2002. Accordingly,

Zaven Tahtadjian had provided a notice of cancellation of the 2 direct agreements

dated April 16, 2013, and a demand for a refund of all his payments to the

defendants within the 10 day cooling-off period, when Tahtadjian on April 17,

2013, verbally told and by written letter dated April 17, 2013, informed Ivan Valovic

to return his credit card slips and all his payments to him and to also work out a

reasonable price with him.

[505] Therefore, the defendants were obligated to refund to Zaven Tahtadjian within 15

days of that notice of cancellation under s. 43(1) of the CPA 2002 that had been

received by the defendants on April 17, 2013, so that the defendants had to then

provide a refund to Zaven Tahtadjian by May 3, 2013. And, since the defendants

failed to do so by May 3, 2013, the prosecution has proven that the defendants,

Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight Electric Inc.,

has committed the actus reus of the offence set out in count #19 of failing to

provide a refund to Zaven Tahtadjian, a consumer, within 15 days of the notice of

the cancellation.

[506] And, as for the 3 charges against Peter Valovic, as the director of Insight Electric

Inc., the prosecution has proven beyond a reasonable doubt that Peter Valovic

has committed the actus reus of the offence in count #16 of failing to prevent the

corporation, Insight Electric Inc., on April 16, 2013, from failing to deliver to Zaven

Tahtadjian on April 16, 2013, a direct agreement containing the information

required by s. 35(1); and the actus reus of the offence in count #18 of failing to

prevent the corporation on April 16, 2013, from engaging in an unfair practice by

making a false, misleading or deceptive representation to Zaven Tahtadjian; and

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the actus reus of the offence in count #20 of failing to prevent the corporation on

May 3, 2013, from failing to provide a refund to Zaven Tahtadjian, a consumer,

within 15 days of the notice of the cancellation.

[507] And, as for the defendants’ due diligence defence for these 12 charges contained

in the 6 counts, the defendants have failed to prove on a balance of probabilities

that they had taken all reasonable care in the circumstances to prevent these 12

offences from being committed.

[508] Ergo, convictions will be entered against the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc. respectively for the charges contained in counts

#15, #17, and #19 on Information #8091 and convictions will be entered against

the defendant, Peter Valovic, for the charges contained in counts #16, #18, and

#20 on Information #8091.

(xi) Boris Wolchak

[509] In relation to the consumer Boris Wolchak, the defendants, Ivan's Electric Ltd.,

Ivan Valovic, Insight Electric Inc., and Peter Valovic had been charged with

committing 16 charges in 8 counts between December 21, 2012 to February 8,

2013. They are the following:

Charges in relation to the consumer Boris Wolchak - counts #21, #22, #23,

#24, #25, #26, #27 and #28 on Information #8091 (16 charges):

(#21) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on December 21,

2012, failed to deliver to a consumer a direct agreement on December 21,

2012, containing the information required by s. 35(1) of the O. Reg. 17/05,

contrary to s. 42 of the CPA 2002, thereby committing an offence under s.

116(2) of the CPA 2002 (3 charges).

(#22) Peter Valovic, as a director of Insight Electric Inc., on December 21, 2012,

failed to take reasonable care on December 21, 2012, to prevent the

corporation from failing to deliver to a consumer a direct agreement containing

the information required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of

the CPA 2002, and thereby committed an offence under s. 116(3) of the CPA

2002 (1 charge).

(#23) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on December 21,

2012, engaged in an unfair practice on December 21, 2012, by making a false,

misleading or deceptive representation to a consumer, contrary to s. 17(1) of

the CPA 2002, thereby committing offence under s. 116(1)(b)(ii) of the CPA

2002 (3 charges).

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(#24) Peter Valovic, as a director of Insight Electric Inc., on December 21, 2012,

failed to take reasonable care on December 21, 2012, to prevent the

corporation, failed to take reasonable care to prevent the corporation. from

engaging in an unfair practice by making a false, misleading or deceptive

representation to a consumer, contrary to s. 17(1) of the CPA 2002, and

thereby, committed an offence contrary to s. 116(3) of the CPA 2002 (1

charge).

(#25) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc., on January 2, 2013,

failed to deliver to a consumer a direct agreement containing the information

required by s. 35(1) of the O. Reg. 17/05, contrary to s. 42 of the CPA 2002,

thereby committing an offence under s. 116(2) of the CPA 2002 (3 charges).

(#26) Peter Valovic, as a director of Insight Electric Inc., on January 2, 2013, failed to

take reasonable care to prevent the corporation from failing to deliver to a

consumer a direct agreement containing the information required by s. 35(1) of

the O. Reg. 17/05, contrary to s. 42 of the CPA 2002, and thereby committed

an offence under s. 116(3) of the CPA 2002 (1 charge).

(#27) Ivan's Electric Ltd., Ivan Valovic, and Insight Electric Inc. on February 8, 2013,

failed to refund to a consumer within 15 days after the date the said consumer

gave notice of cancellation, contrary to s. 96(1)(a) of the CPA 2002, thereby

committing an offence under s. 116(1)(b)(viii) of the CPA 2002 (3 charges).

(#28) Peter Valovic, as a director of Insight Electric Inc., on February 8, 2013, failed

to take reasonable care to prevent the corporation from failing to refund to a

consumer within 15 days after the date the said consumer gave notice of

cancellation, contrary to s. 96(1)(a) of the CPA 2002, and thereby, committed

an offence under s. 116(3) of the CPA 2002 (1 charge).

[510] The consumer Boris Wolchak had called Ivan's Electric Ltd. to attend his residence

to check the electricity in his house since electricity in some parts of the house did

not seem to be working properly, as some lights were out and some receptacles

did not work. Wolchak called his son for the number of an electrician and his son

obtained a number for Ivan's Electric Ltd. off of the sticker on his son’s furnace.

Wolchak then called Ivan's Electric Ltd. in the early afternoon and explained his

problem and asked them if they could come over to look at the problem. He was

told they could come.

[511] During the telephone call with someone from Ivan's Electric Ltd., Boris Wolchak

testified that he could not recall if there had been any discussion about costs but

recollects that $350 may have been referred to and that it could have been

referred to as an emergency fee. However, Wolchak recalls having a discussion

at Wolchak’s house that it would cost $350 for Ivan Valovic to come to the

Wolchak house and $350 to do the repair. Wolchak said that Ivan Valovic had told

178

him during the troubleshooting at Wolchak’s house that the main fuse had to be

replaced.

[512] In addition, Wolchak was not told during that initial telephone call that Ivan's

Electric Ltd. could no longer operate (the ESA had directed Ivan's Electric Ltd. to

stop operating as a licenced electrical contractor on April 16, 2012) and that

Wolchak could call Insight Electric Inc. to do the service call or that Ivan's Electric

Ltd. would be passing the job to Insight Electric Inc.

[513] Then, after Ivan Valovic arrived by himself in the late afternoon on December 21,

2012, at the Wolchak residence, Wolchak showed Ivan Valovic where the panel

was in the basement. After troubleshooting for the problem, Wolchak believes

Ivan Valovic then fixed the problem and then prepared a direct agreement

(Proposal) for $1306.28 for Wolchak to accept and sign. Wolchak then signed the

December 21, 2012, direct agreement on an Insight Electric Inc. form and paid the

full amount for the job with his credit card. In addition, Wolchak said he had been

a little surprised by the total amount for the work and that he was being charged

another $350 for after-hours work. Moreover, Wolchak said that when he had

received the December 21, 2012, direct agreement that it had been the first time

he had observed the Insight Electric Inc. name, but cannot recall if he had asked

Ivan Valovic about the Insight Electric Inc. name.

After being shown the

December 21, 2012, direct agreement at trial, Wolchak said he realized he was

wrong about the $350 amount, since the agreement said the amount had been

$360. Furthermore, Wolchak testified at trial that it did not matter to him whether it

was Ivan's Electric Ltd. or Insight Electric Inc., as long as the repair was done.

[514] Furthermore, Wolchak testified that on the copy of the December 21, 2012, direct

agreement that there had been an orange sticker placed on it (see Exhibit #12).

The orange sticker is an Ivan's Electric Ltd. sticker that had been placed on the top

of the form over the Insight Electric Inc. name. However, the Insight Electric Inc.

name and logo is still visible on the top left hand corner of the form. In addition,

Wolchak said that Ivan Valovic had put the sticker on the December 21, 2012,

direct agreement form.

[515] After the work was completed on December 21, 2012, Wolchak called Ivan Valovic

again on January 2, 2013, to check out a problem after a receptacle in the wall in

Wolchak’s family room had felt hot to the touch. During the call Wolchak did not

have any discussions about cost or that Wolchak would have to pay an emergency

rate for that job. Ivan Valovic then arrived by himself on January 2, 2013, and

looked at the problem receptacle and told Wolchak that it had been wired

improperly and needed to be replaced. Wolchak then directed Ivan Valovic to go

ahead and make the change.

[516] Wolchak said he believed he had signed the second direct agreement (Proposal)

on January 2, 2013, for the amount of $779.70, although it is not visible on the

copy of the direct agreement on p. 169 of the Joint Book of Documents, but that

179

there appears to be a faint signature on the pink copy that was entered at trial as

Exhibit #11. Wolchak also said he paid the full amount of $779.70 with his credit

card.

[517] In addition, Wolchak said that Ivan Valovic had explained that the receptacle he

fixed had been improperly installed and that there is the likelihood that other

receptacles would fall into that category as well. Wolchak then asked Ivan Valovic

about how much it would cost to replace the receptacles in his house.

[518] At that point on January 2, 2013, Wolchak also agreed to a third direct agreement

(Proposal) for future work and signed the agreement with Insight Electric Inc. to

replace all the receptacles in Wolchak’s house and to do other repairs to wiring for

the amount of $5085 for the job to be done on January 9, 2013. Wolchak also

provided Insight Electric Inc. with a deposit of $1885 (approximately 1/3 of the total

price) through a payment with his credit card. Moreover, Wolchak said that both

the $779.70 payment for the work on second direct agreement and the deposit of

$1885 for the third direct agreement had been paid on one credit charge for

$2664.70 on January 2, 2013.

[519] However, sometime between January 2 and January 9, 2013, Wolchak called Ivan

Valovic to postpone the future work described in the third direct agreement to

another day because of the state of his basement, which had been crowded and

full of junk. Also, during this time he thought about the amount of approximately

$2000 he had paid to Insight Electric Inc. already for a few hours of work of 2 to

2.5 hours with very little material supplied, that he had decided to talk to another

electrician and realized that he had paid an exorbitant amount for the little work

that had been done, although he said he had no complaints with the quality of Ivan

Valovic’s work. At that point, Wolchak said he went onto the internet and

concluded that he had been grossly overcharged and then wrote two letters, both

dated January 23, 2013 (see pp. 155 and 156 and p. 157 of the Joint Book of

Documents) informing Ivan Valovic and Insight Electric Inc. in the first letter that

Wolchak was cancelling the work set out in the third direct agreement dated

January 2, 2013, and then in the second letter Wolchak wrote an historical record

of what had happened. Wolchak also said he called Ivan Valovic the next day.

[520] The dates at which Wolchak had called Insight Electric Inc. to postpone the job is

established in the Insight Electric Inc. letter addressed to Wolchak dated

December 15, 2013 (see. pp. 164 to 167 of the Joint Book of Documents), when

Ivan Valovic writing on behalf of Insight Electric Inc. states that Wolchak had called

on the evening of January 7, 2013, to postpone the work set out in the January 2,

2013, third direct agreement to January 30, 2013.

[521] Moreover, Wolchak learned about the problems that Ivan Valovic was having with

the ESA and Wolchak had believed that Ivan Valovic had his licence revoked for a

period of time and was not eligible to perform licenced electrical work and may not

have obtained permits for the work. In addition, Wolchak had written a letter dated

180

January 23, 2013 (see pp. 155 and 156 of the Joint Book of Documents), to Ivan

Valovic care of Insight Electric Inc. to complain about his work at Wolchak’s

residence on December 21, 2012 and January 2, 2013. Wolchak had also

complained about being overcharged for the work and that Ivan Valovic was

attempting to overcharge for the work not yet performed and in which he had to

provide the $1885 deposit, so he was now notifying them that he was canceling

the job and through a separate letter was demanding the $1885 deposit be

returned back to him. Wolchak also wrote in the letter that Wolchak had cancelled

the proposed job by telephone on January 24, 2013. He also demanded a return

of $1800 for the labour charges on the other two jobs for the 2 to 3 hours of time

that Ivan Valovic had spent working at Wolchak’s house on December 21, 2012

and on January 2, 2013. He also stated in his letter that he had “cc.” the ESA.

[522] In addition, Wolchak’s cancellation letter to Insight Electric Inc. and to the attention

of Ivan Valovic had been dated January 23, 2013, and said that he was advising

them on January 24, 2013, of this fact and demanded his deposit of $1885 be

returned to him immediately (see p. 157 of the Joint Book of Documents).

[523] Wolchak also said he called Ivan Valovic on January 24, 2013, and personally

informed him that Wolchak was cancelling the job and demanded a refund of his

deposit and said that Ivan Valovic had laughed and said something like “you better

not hold your breath until the time I send you the money”. Moreover, Wolchak

testified that Ivan Valovic made it quite clear he had no intention of refunding

anything.

[524] However, Ivan Valovic, acting for Insight Electric Inc., did not believe that Wolchak

was entitled to a full refund and informed Wolchak by an undated letter that there

was a 30% cancellation fee set out in the third direct agreement of January 2,

2013, which entitled Insight Electric Inc. to keep $1525.50 of the $1885 deposit,

which would leave $359.50 that Insight Electric Inc. would owe Wolchak (see pp.

159 to 161 in the Joint Book of Documents). Ivan's Electric Ltd. also sent Wolchak

a letter dated February 11, 2013, informing Wolchak that there would be no

refund.

[525] Eventually, Insight Electric Inc. refunded $1000 to Wolchak by sending Wolchak a

cheque in the mail. The $1000 cheque had been an Insight Electric Inc. cheque

dated December 15, 2013. Therefore, the $1000 refund had been provided to

Wolchak after some 11 months after the deposit of $1885 had been paid to Insight

Electric Inc. on January 2, 2013. In addition, Wolchak said that the $1000 cheque

had come with a letter from Insight Electric Inc. dated December 15, 2013 (see.

pp. 164 to 167 of the Joint Book of Documents), in which Ivan Valovic writes that

Insight Electric Inc. had been entitled to adopt the 30% cancellation fee of

$1525.50 from the $1885 deposit with $359.50 owing to Wolchak, since Wolchak

had not cancelled the January 2, 2013, third direct agreement within the 10-day

cooling off period, but had done so 21 days afterwards. However, Ivan Valovic

wrote that if he was incorrect on his interpretation about the right to the 30%

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cancellation fee, then Insight Electric Inc. was still entitled to “reasonable

compensation” under the CPA 2002, totaling $1957.07, comprising of $360 + tax

for 2 hours for “job preparation-materials-scheduling”; $1440 + tax for “loss of 4

hours x 2 man = 8 hours $180 per man”; and $157.07 for “electrical inspection for

emergency repair”, which would mean that Wolchak owed Insight Electric Inc. a

balance of $72.07, but Insight Electric Inc. was willing to forgo their entitlements to

the 30% cancellation fee and the “reasonable compensation by offering Wolchak a

$1000 refund in settlement of the third direct agreement.

[526] Furthermore, in the letter from Insight Electric Inc. dated December 15, 2013, to

Wolchak, Ivan Valovic wrote that Ivan's Electric Ltd. had not been working for a

year and had no income and that Ivan Valovic works for Insight Electric Inc.,

contradicts the December 21, 2012, first direct agreement in which Ivan Valovic

had placed an orange Ivan's Electric Ltd. sticker indicating the name, logo,

telephone numbers, and the electrical contractor’s licence number of Ivan's

Electric Ltd.

[527] The first direct agreement (Proposal) (p. 168 of the Joint Book of Documents)

dated December 21, 2012, that had been submitted by Insight Electric Inc. to Boris

Wolchak stated:

1) Emergency Service call to check power loss throughout the

360 + tax

home

360 + tax

2) Troubleshoot on problem. Check service Hydro O.K. test all

breakers – Found defective 2 – quartz breakers

---------

$720 + tax

3) Replace 2 – quartz breakers in service

360

----------------

$1080

Senior discounts

-- 60

___________

$1020 + tax

136 + tax

---------------------

$1156 + tax

2 quartz breakers

HST

150.28

-----------------------

$ 1306.28

182

[528] In respect to the first direct agreement (Proposal) dated December 21, 2012,

provided to Boris Wolchak, there is no name of the person from Insight Electric

Inc. who had negotiated or concluded that agreement with Boris Wolchak that is

printed or visible on the document, which is to be provided in the agreement as

required under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only a signature appears

on the authorized signature line which cannot readily identify the name of the

person who had concluded or negotiated the direct agreement with Wolchak. As

well, the December 21, 2012, first direct agreement does not contain the

“Consumer’s Rights under the CPA 2002” statement, which includes the 10-day

cooling off period that is required by and provided for under ss. 35(1)(11) and

35(2) of O. Reg. 17/05. Moreover, the December 21, 2012, direct agreement also

contains a term that the consumer would be charged a 30% cancellation fee,

which is not legally permitted to be a term in a direct agreement. In addition, the

defendants contend that Boris Wolchak would be informed at the conclusion of the

job that there would be a 1 year warranty on parts and labour, but that condition

was not contained or set out in the direct agreement provided to Wolchak, as

required by s. 35(1)(13) of O. Reg. 17/05.

[529] Furthermore, there are two electrical contractors identified on the December 21,

2012, direct agreement provided to Boris Wolchak. The direct agreement had

been on an Insight Electric Inc. form with its name and logo visible in the upper left

hand corner and an orange Ivan's Electric Ltd. sticker placed in the middle of the

top on the form indicating the name, logo, telephone numbers, and the electrical

contractor’s licence number of Ivan's Electric Ltd. Having the name of two

different electrical contractors on the direct agreement would run afoul of ss.

35(1)(2) and (3) of O. Reg. 17/05 that requires respectively the “name of the

supplier and, if different, the name under which the supplier carries on business”

and the “telephone number of the supplier, the address of the premises from which

the supplier conducts business, and information respecting other ways, if any, in

which the supplier can be contacted by the consumer, such as the fax number and

e-mail address of the supplier”.

[530] The second direct agreement (Proposal) (p. 169 of the Joint Book of Documents)

dated January 2, 2013, that had been submitted by Insight Electric Inc. to Boris

Wolchak stated:

1) E.S.C. [Emergency Service call] to smell of fire

$360 + tax

Receptacle heated up and burning

2) Check receptacle and wiring – receptacle – push in type (no

screws) Heated up … and burning wiring – Ground wiring

not hook up to receptacle

$360 +tax

3) Repairs to burn wires – (install pig tail and connectors) and

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4) Replace Receptacle & Plate

$720 + tax

-- 45

Senior discounts

----------------------

$675 + tax

Wiring, decora receptacle CH/R and

cover plate & connector

15

---------------------

690 + tax

HST 89.70

-----------------------

$ 779.20

[531] In respect to the second direct agreement (Proposal) dated January 2, 2013,

provided to Boris Wolchak, there is no name of the person from Insight Electric

Inc. who had negotiated or concluded that agreement with Boris Wolchak that is

printed or visible on the document, which is to be provided in the agreement as

required under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only a signature appears

on the authorized signature line which cannot readily identify the name of the

person who had concluded or negotiated the direct agreement with Wolchak. As

well, the January 2, 2013, second direct agreement does not contain the

“Consumer’s Rights under the CPA 2002” statement, which includes the 10-day

cooling off period that is required by and provided for under ss. 35(1)(11) and

35(2) of O. Reg. 17/05. Moreover, the January 2, 2013, direct agreement also

contains a term that the consumer would be charged a 30% cancellation fee,

which is not legally permitted to be a term in a direct agreement. In addition, the

defendants contend that Boris Wolchak would be informed at the conclusion of the

job that there would be a 1 year warranty on parts and labour, but that condition

was not contained or set out in the direct agreement provided to Wolchak, as

required by s. 35(1)(13) of O. Reg. 17/05.

[532] Moreover, the consumer Boris Wolchak’s signature is not present on the January

2, 2013, second direct agreement, to indicate that he had accepted the work to be

done in the agreement, although there appears to be a faint signature on the pink

copy entered as Exhibit #11.

[533] The third direct agreement (Proposal) for future work (p. 170 of the Joint Book of

Documents) dated January 2, 2013, that had been submitted by Insight Electric

Inc. to Wolchak stated:

1) Replace all receptacles in house too wire decora CH/P and

184

2) Repairs to wires in receptacle Boxes and Grounds as need

$4500 + tax

585

HST

----------------------

$5085

Deposit

Balance on complete

1885.00

----------------------

$3200.00

Job to be than on Jan 9.13 (Wednesday)

[534] In respect to the third direct agreement (Proposal) for future work dated January 2,

2013, provided to Boris Wolchak, there is no name of the person from Insight

Electric Inc. who had negotiated or concluded that agreement with Boris Wolchak

that is printed or visible on the document, which is to be provided in the agreement

as required under ss. 35(1)(4)(ii) and (iii) of O. Reg. 17/05. Only a signature

appears on the authorized signature line which cannot readily identify the name of

the person who had concluded or negotiated the third direct agreement with

Wolchak. As well, the January 2, 2013, third direct agreement does not contain

the “Consumer’s Rights under the CPA 2002” statement, which includes the 10-

day cooling off period that is required by and provided for under ss. 35(1)(11) and

35(2) of O. Reg. 17/05. In addition, the third direct agreement did not contain a

fair description of the goods and services to be supplied by the defendants as

required under s. 35(1)(6), nor an itemized list of the prices at which the goods and

services are to be supplied to the consumer as required under s. 35(1)(9) of O.

Reg. 17/05. Moreover, the January 2, 2013, third direct agreement also contains a

term that the consumer would be charged a 30% cancellation fee, which is not

legally permitted to be a term in a direct agreement.

[535] As for which company had appeared to do the job for Boris Wolchak, Wolchak

initially called Ivan's Electric Ltd., but there is no evidence that Wolchak had been

told during that initial call that Ivan's Electric Ltd. was no longer operating and that

Insight Electric Inc. would be doing the job or that Ivan's Electric Ltd. had passed

the job onto Insight Electric Inc. And, then when Ivan Valovic had arrived at the

Wolchak residence on December 21, 2012 (this is after the ESA had directed

Ivan's Electric Ltd.’s to stop operating as a licenced electrical contractor on April

16, 2012), Ivan Valovic presented Wolchak with an Insight Electric Inc. business

card and the December 21, 2012, direct agreement on an Insight Electric Inc.

form, but that Ivan Valovic had also placed on the agreement an orange-coloured

Ivan's Electric Ltd. sticker with the name, logo, telephone numbers and the

electrical contractor’s licence number of Ivan's Electric Ltd. Therefore, as there is

evidence that both Ivan's Electric Ltd. and Insight Electric Inc. had presented

themselves to the consumer Boris Wolchak as the company doing the electrical

185

work at the Wolchak on December 21, 2012, then both Ivan's Electric Ltd. and

Insight Electric Inc. would be liable for any of the offences committed in respect to

the consumer on December 21, 2012, and January 2, 2013.

[536] Moreover, since Ivan Valovic is a director and the directing mind of Ivan's Electric

Ltd. and had been the person who had attended at Boris Wolchak’s residence on

December 21, 2012, and on January 2, 2013, had been the person who had

prepared and provided the three direct agreements to Boris Wolchak, then Ivan

Valovic would also be a party to any offence that Ivan's Electric Ltd. has

committed, since a corporation can only act through a human person.

[537] Therefore, the prosecution has proven beyond a reasonable doubt that all three

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc. had respectfully committed, the actus reus of the offence of in count

#21 of failing to deliver to Boris Wolchak on December 21, 2012, a direct

agreement containing the information required by s. 35(1) of O. Reg. 17/05, which

is contrary to s. 42 of the CPA 2002. The prosecution has also proven beyond a

reasonable doubt that Ivan Valovic, as a party to the offence, had also committed

the actus reus of the offence in count #21.

[538] Furthermore, the prosecution has proven beyond a reasonable doubt that the

defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and Insight

Electric Inc., had respectfully committed on December 21, 2012, the actus reus of

the offence set out in count #23 of engaging in an unfair practice by making a

false, misleading or deceptive representation to Boris Wolchak, since Wolchak had

not been told that Ivan's Electric Ltd. was no longer operating during the initial

telephone call Wolchak had made to Ivan's Electric Ltd. (this is after the ESA had

directed Ivan's Electric Ltd.’s to stop operating as a licenced electrical contractor

on April 16, 2012) and that they could call Insight Electric Inc. if they wanted

service; that Wolchak was provided a direct agreement on Insight Electric Inc.

form even though Wolchak had called Ivan's Electric Ltd. to do the work; that

Wolchak had been provided an Insight Electric Inc. business card and 3 direct

agreements on Insight Electric Inc. forms, even though Wolchak had called Insight

Electric Inc. to do the work and Ivan Valovic had placed an orange Ivan's Electric

Ltd. sticker on the first direct agreement dated December 21, 2012; that Wolchak

had not been told on the initial call that Ivan's Electric Ltd. would be passing the

job to Insight Electric Inc.; that in the direct agreement there was a term that

Wolchak would be charged a 30% cancellation fee when this term is not permitted

to be in a direct agreement; and that the defendants did not provide a detailed list

of parts or material in the three direct agreements provided to Wolchak that would

be used for the job.

[539] And, in regards to count #25 and the 2 direct agreements of January 2, 2013, for

the offence of failing to deliver to Boris Wolchak on January 2, 2013, a direct

agreement containing the information required by s. 35(1) of O. Reg. 17/05, which

is contrary to s. 42 of the CPA 2002, the prosecution has also proven beyond a

186

reasonable doubt that all three defendants, Ivan's Electric Ltd., Ivan Valovic, as a

party to the offence, and Insight Electric Inc. had respectfully committed, the actus

reus of the offence of in count #25 of failing to deliver to Boris Wolchak on January

2, 2013, a direct agreement containing the information required by s. 35(1) of O.

Reg. 17/05, which is contrary to s. 42 of the CPA 2002. The prosecution has also

proven beyond a reasonable doubt that Ivan Valovic, as a party to the offence, had

also committed the actus reus of the offence in count #25.

[540] And, in respect to the charges related to the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc., for failing to provide a refund to Boris Wolchak

within 15 days of being informed of the cancellation of the January 2, 2013, third

direct agreement, the defendants had been notified or knew of Boris Wolchak’s

request for a refund made by Tahtadjian on January 24, 2013.

[541] Moreover, since the direct agreement that Boris Wolchak had signed was a direct

agreement then Wolchak legally had a 10-day cooling off period under s. 43(1) to

cancel the 3 direct agreements for any reason, or to cancel the direct agreements

under s. 43(2) within one year after the agreement was signed if the direct

agreement did not contain the information required under s. 35(1) and (2) of O.

Reg. 17/05, or to cancel the direct agreements if the defendants had engaged in

an unfair practice to Boris Wolchak under s. 18(3) of the CPA 2002. Accordingly,

Boris Wolchak provided a notice of cancellation on January 24, 2013, to the

defendants in respect to the third direct agreement dated January 2, 2013, for

future work and a demand for a refund of his $1885 deposit, which had been made

within one year after the agreement was signed if the direct agreement did not

contain the information required under s. 35(1) and (2) of O. Reg. 17/05 or if the

defendants had engaged in an unfair practice to Boris Wolchak under s. 18(3) of

the CPA 2002. Wolchak had on January 24, 2013, verbally told Ivan Valovic of

the cancellation and had also by two written letters dated January 23, 2013, that

had informed Ivan Valovic that the job under the January 2, 2013, third direct

agreement had been cancelled and that Wolchak’s $1885 deposit had to be

refunded immediately.

[542] Therefore, the defendants were obligated to refund to Boris Wolchak within 15

days of that notice of cancellation under s. 43(2) of the CPA 2002 that had been

received by the defendants on January 24, 2013, so that the defendants had to

then provide a refund to Boris Wolchak by February 8, 2013. And, since the

defendants failed to do so by February 8, 2013, the prosecution has proven that

the defendants, Ivan's Electric Ltd., Ivan Valovic, as a party to the offence, and

Insight Electric Inc., has committed the actus reus of the offence set out in count

#25 of failing to provide a refund to Boris Wolchak, a consumer, within 15 days of

the notice of the cancellation.

[543] Moreover, Insight Electric Inc. in keeping part of the $1885 deposit as a 30%

cancellation fee had not been legally permitted under the direct agreement

provisions of the CPA 2002, nor had the deductions made by the defendants from

187

Wolchak’s $1885 deposit as “reasonable compensation” for good or services

under the third direct agreement provided to Wolchak at Wolchak’s residence, was

not “reasonable compensation” allowed under s. 83(1)(2) of O. Reg. 17/05, since

the defendants’ time used to pick up the supplies and to return the supplies, the

loss of a day for 2 electricians who had made themselves available to do the job,

and an ESA electrical inspection that had not been made as there had been no

work done at Wolchak’s residence for the January 2, 2013, third direct agreement,

is not goods or services provided at Wolchak’s residence under the agreement.

Moreover, this interpretation that the defendants’ deductions from Wolchak’s

deposit is not reasonable compensation for a good or service provided to Wolchak

at her residence under the third direct agreement is in line with the purpose of the

CPA 2002 to protect consumers, and is in accordance with the maxim “caveat

venditor” which describes the modern merchant-consumer relationship in which

the supplier or vendor has to incur the financial risks before a job is commenced in

respect to consumer agreements governed by the CPA 2002.

[544] And, as for the 4 charges against Peter Valovic, as the director of Insight Electric

Inc., the prosecution has proven beyond a reasonable doubt that Peter Valovic

has committed the actus reus of the offence in count #22 of failing to prevent the

corporation from failing to deliver to Boris Wolchak on December 21, 2012, a direct

agreement containing the information required by s. 35(1); and of the offence in

count #24 of failing to prevent the corporation on December 21, 2012, from

engaging in an unfair practice by making a false, misleading or deceptive

representation to Boris Wolchak; and in count #26 of the offence of failing to

prevent the corporation from failing to deliver to Boris Wolchak on January 2,

2013, a direct agreement containing the information required by s. 35(1); and in

count #28 of the offence of failing to prevent the corporation on February 8, 2013,

from failing to provide a refund to Boris Wolchak within 15 days after the date he

gave notice of cancellation.

[545] And, as for the defendants’ due diligence defence for these 16 charges contained

in the 8 counts, the defendants have failed to prove on a balance of probabilities

that they had taken all reasonable care in the circumstances to prevent these 16

offences from being committed.

[546] Ergo, convictions will be enter against the defendants, Ivan's Electric Ltd., Ivan

Valovic, and Insight Electric Inc., for the respective 12 charges contained in counts

#21, #23, #25, and #27, on Information #8091 and convictions will entered against

the defendant, Peter Valovic, for the charges contained in counts #22, #24, #26,

and #28 on Information #8091.

5.

DISPOSITION

[547] Accordingly, for the defendant, Ivan Valovic, convictions will be entered against

Ivan Valovic for committing the offences set out in counts #2, #4, #7, #8, #9, #11,

#12, and #14 on Information #5731; as well as for the offences set out in counts

188

#1, #2, #4 and #5 on Information #5740; and for the offences set out in counts #1,

#5, #7, #9, #11, #13, #15, #17, #19, #21, #23, #25, and #27 on Information #8091.

[548] To reiterate, counts #5, #6, and #10 on Information #5731; and count #3 on

Information #5740; and count #3 on Information #8091 had been earlier dismissed

in the trial against the defendant, Ivan Valovic, and as such, acquittals will be

entered for Ivan Valovic for those particular counts.

[549] As for the corporate defendant, Ivan's Electric Ltd., convictions will be entered

against Ivan's Electric Ltd. for committing the offences set out in counts #1, #3, #7,

#8, #9, #11, #12, and #14 on Information #5731; and the offences set out in

counts #1, #2, #4 and #5 on Information #5740; and for the offences set out in

counts #1, #5, #7, #9, #11, #13, #15, #17, #19, #21, #23, #25, and #27 on

Information #8091.

[550] In addition, since counts #5, #6, and #10 on Information #5731; and count #3 on

Information #5740; and count #3 on Information #8091 had been earlier dismissed

in the trial against Ivan's Electric Ltd., acquittals will be entered for Ivan's Electric

Ltd. for those particular counts.

[551] As for the defendant, Peter Valovic, convictions will be entered against Peter

Valovic for committing the offences set out in counts #13 and #15 on Information

#5731; and for the offences set out in counts #1, #2, #4 and #5 on Information

#5740; and for the offences set out in counts #2, #6, #8, #10, #12, #14, #16, #18,

#20, #22, #24, #26, and #28 on Information #8091.

[552] To reiterate, count #3 on Information #5740; and count #4 on Information #8091

had been earlier dismissed in the trial against the defendant, Peter Valovic, and as

such, acquittals will be entered for Peter Valovic for those particular counts.

[553] As for the corporate defendant, Insight Electric Inc., convictions will be entered

against Insight Electric Inc., for committing the offences set out in counts #11, #12,

and #14 on Information #5731; and the offences set out in counts #1, #2, #4 and

#5 on Information #5740; and for the offences set out in counts #1, #5, #7, #9,

#11, #13, #15, #17, #19, #21, #23, #25, and #27 on Information #8091.

[554] In addition, since count #3 on Information #5740; and count #3 on Information

#8091 had been earlier dismissed in the trial against Insight Electric Inc., acquittals

will be entered for Insight Electric Inc. for those particular counts.

Dated at the City of Brampton on April 4, 2017

____________________________

QUON J.P.

Ontario Court of Justice

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