Unreported Judgments
From time to time, judgments of interest to the legal community, which
do not, for one reason or another, appear in the regular reports in this province,
will be published in the McGill Law Journal. In all cases, the words in smaller
type are extracted verbatim from
in
larger type are those of the editors.
the judge’s notes; words appearing
COMBINES: MISLEADING ADVERTISING
REGINA v. COLONIAL FURNITURE COMPANY (OTTAWA)
LIMITED, Magistrate’s Court, Ottawa, Ont., December 13, 1962,
Magistrate Sherwood.
Magistrate Sherwood
I have now had an opportunity to consider the evidence and the gist of
this offence is, misleading -the public –
leading them to believe
that they are getting a commodity at a price lower than is regularly
charged for the same or comparable items in the mea, when in fact they
are paying the usual or regular price for such an item, or in any event
does not usually or normally sell [sic] for the higher price shown in the
advertising.
that is
Where the advertisement is:
“Regular
“Special
–
–
–
–
–
–
and the commodity normally sells in the area at the special price, there
is a clear offence.
In
this case the advertisement
is “Comparable $479.00 value”, on
one side, of the advertisement and on the other side “Exceptional Value
this case witnesses called by the Crown established that
at $389.00”. In
this MK1 Model
is a special value and compares favourably with the
costlier Clairtone Princess Model which sold at a price of $470.00 and
superior to R.C.A. and Electrohome models selling at $499.00. The section
under which the charge is laid is based on protecting a gullible and often
stupid public who rely on the good faith of merchandisers, a reliance often
misplaced. Here, I am satisfied that the advertisement accurately indicates
the value of comparable machine and there is no suggestion in its wording
that this machine normally or ever sells at a higher price, and honestly
advises the public of an unusually good value.
Under the circumstances no defense evidence is required[.]
Cas dismissed.
COMBINES: MISLEADING ADVERTISING
REGINA v. BECKER, Magistrate’s Court, Niagara Falls, Ont.,
September 13, 1963, Magistrate Roberts.
Magistrate Roberts .
The accused is charged that he did, at the City of Niagara Falls in the
Province of Ontario, on or about the 18th of September, 1962, unlawfully
McGILL LAW JOURNAL
[Vol. 15
by publication of an advertisement in the Evening Review, a newspaper
published in the City of Niagara Falls, for the purpose of promoting the
sale of Admiral television sets, make materially misleading representation
to the public concerning the price at which Admiral television sets have
been or are, ordinarily sold, contrary to the provisions of the Combines
Investigation Act.1
This is a charge under sec. 33C(1) of .the Combines Investigation Act.
The charge against this accused was instituted as a result of an
advertisement advertising the sale of Admiral television sets, inserted
by the accused, in the September 18th, 10,62 issue of the Niagara Falls
Evening Review. Included in this advertisement was a reproduction of a
television set on the picture area of which set were printed the following
words:
“TWIN SPEAKERS
23″ Console
Only
$196
Save over $100”
Mr. Dennis Olorenshaw, Advertising Manager of the Canadian Admiral
Corporation Limited, gave evidence for the Crown that the television set
depicted in the adveitisement was undoubtedly the Camrose model, C51(1X.
Counsel for the Crown introduced, through this witness, a television price
list which showed that the suggeste
retail price of this particular set
was $3.95.
The Crown also called a number of persons who were engaged in the
retail sale of television sets in the City of Niagara Falls on or about
September 18th, 19.62.
Mr. Robert Slinn, a former employee of B. F. Goodrich Company, swore
that the firm for which he was employed sold six Camrose models, CSlIX
television sets, and that two of -these sets were sold for $269.05 and four
of them for $249.95.
Mr. Paul Waselynchuk, a former employee of Rosbergs Department
Store, swore that the Camrose model, CSI1X, was marked for sale at a
Trice of $299.00 but that his best recollection was that the set was in fact
sold at $269.00.
Mr. Donald Swalm gave evidence that the Camrose model, C511X,
was sold by him at prices ranging from $239.00 to $259.00.
Mr. Oswald Greenwood gave evidence that he sold two Camrose models,
C54t1X, at the retail price of $224.95.
Mr. Ross Overholt swore that his retail price for the Camrose model,
CSJlX, was $234.00, plus -tax.
At the conclusion of the Crown’s case, Mr. Clement, on behalf of the
accused, elected not to call any witnesses and, after hearing argument by
both MTr. Tyrrill, counsel for the Crown, and Mr. Clement, I reserved
judgment.
1R.S.C. 1952, c. 31’4, see. 330, as amended by 2-3 Eliz. II, S.C. 1953-54, c. 51,
8-9 Eliz. II, S.C. 19,0, c. 45, 9-10 Eliz. II, S.C. 1960-61, c. 42, and 11-12 Eliz. II,
S.C. .1062-63, c. 4.
No. 4]
UNREPORTED JUDGMENTS
The accused is charged with a breach of see. 33C(1) of the Combines
Investigation Act, which is as follows:
“33C.
(1) Every one who, for the purpose of promoting the sale or
use of an article, makes any materially misleading representation to
the -public, by any means whatever, concerning the price at which such or
like articles have been, are, or will be, ordinarily sold, is guilty of an
offence punishable on summary conviction.
(2) Subsection (1) does not apply to a person who publishes
an advertisement that he accepts in good faith for publication in the
ordinary course of his business.”
It was the submission by counsel for the Crown. that the accused made
a materially misleading representation to the public when he advertised
in the September Ith, 1062 edition of the Niagara Falls Evening Review
that a purchase of a Gamrose model, C51-1X, Admiral
television set
from him at a price of $1J6.00 would result in a saving to the purchaser
of more than $100.00.
Mr. Tyrrill argued that the accused ought to have been aware of the
prices at which this particular model was being sold by his competitors
within the community and that since his advertised price of $196.00 was
not more than $100.00
less than the price at which this model was sold
by his competitors, he was therefore guilty of an offence under sec. 3,30(1)
of the Combines Investigation Act.
Mr. Clement, on behalf of the accused, submitted to the Court that
the words complained of in the advertisement could be interpreted to mean
that a price of $1,96.00 for the Camrose model, C511X Admiral television
set was over $100.00 less than the suggested retail price for this particular
model.
it
From the evidence,
is obvious that the Camrose model, C51.1X
Admiral television set had a suggested retail price of $&19j95. It would
-also appear that this particular set was sold by various television dealers
in the City of Niagara Falls during the period from January, 1062 to
September, 1962, at prices ranging from a low of $106.00, as advertised
by the accused, to a high of $269,95.
The accused is charged with an offence of a quasi-criminal nature
3C(1.) should be strictly
and I suggest that it is elementary that sec.
interpreted. On my view of the evidence it is quite obvious that the words
complained of in this advertisement are capable of more than one inter-
pretation and are by no means an unequivocal statement, by the accused,
that a purchase from him of the television model depicted in his advertise-
ment, at a price of $196.00, would amount to a saving of over $100.00
when compared with the retail price charged by any other dealer in the
City of Niagara Falls for that same model.
In my opinion, the Crown has failed to prove, beyond a reasonable
doubt, that the accused is guilty of the offence as charged[.]
Charge dismissed.
McGILL LAW JOURNAL
[Vol. 15
COMBINES: MISLEADING ADVERTISING
REGINA v. AL-LIED TOWERS MERCHANTS LIMITED (I),
Magistrate’s Court, Hamilton, Ont., June 5, 1964, Magistrate Marck.
Magistrate Marck
This is a matter that came before me on the 26th of May, a plea of “Not
Guilty” was presented on behalf of Allied Towers Merchants and I remanded
the matter until today for judgment.
I have given this matter careful consideration and I have come
to
the conclusion that the charge must be dismissed. The reasons are two-fold.
Firstly, I am not satisfied that sec. 330(1) of the Combines Investi-
gation Act is valid legislation in that the subject matter appears to be
adequately legislated in sec. 360 of the Criminal Code of Canada; the
Criminal Code being the criminal statute, I would on that grounds dismiss
the charge. Further, on the facts of the matter before me I would only
comment this, the price advertised in the newspaper was a list price supplied
by the manufacturer. To hold that that was not a proper price would mean
I would have to hold that the manufacturer sold his goods and purported
to suggest to the retailer that they be sold at a price other than a fair
price. In this case, the company
involved was the Kodak Company and
they supplied a list price. The list price I could only interpret as a fair
and reasonable price which the manufacturer feels can be charged off.
I could not find the price on the evidence before me as being unrealistic
or unreasonable. In these days where there is increasing competition in
the retail merchandising field I can honestly say I feel that the consumer
is getting a better deal today because of the competition and a better
break. We had the evidence from four or five retailers of Canada. For
these reasons I would dismiss the charge.
Charge dismissed.
COMBINES: MISLEADING ADVERTISING
REGINA v. ALLIED TOWERS MERCHANTS LIMITED (I),
County Court, Wentworth County, Ont., March 17, 1965, Mr. Justice
Sweet.
Mr. Justice Sweet
There are appeals against three acquittals by His Worship, Magistrate
Albert Marck at Hamilton,’ on three charges of contravention of sub-
(1) of sec. 3C of the Combines Investigation Act.1 One of the
section
acquittals was on June 5, 1F64. Two of them were on July 2, 1064.
The relevant subsection is:
“Every one who, for the purpose of promoting the sale or use of an
arbicle, makes any materially misleading representation to the public,
by any means whatever, concerning the price at which such or like
articles have been, are, or -will be, ordinarily sold,
is guilty of an
offence punishable on summary conviction.”
R.S.C. 1952, c. 314, as amended by 8-9 Fliz. II, S.C. 1QQ6D, c. 45.
No. 4]
UNREPORTED JUDGMENTS
With the oral consent of counsel the appeal was heard on the evidence
taken before the learned magistrate as set out in a transcript of that
evidence.
The charges arose out of an advertisement which the Respondent caused
to be published in the Hamilton Spectator on July 17, 19.63. Among ather
items it dealt with a camera referred to in the advertisement as a Minolta
SR-1 35 mm camera; a projector referred to as a Kodak A-15 projector,
and film referred to as Kodachrome 11 movie film.
Associated with the camera in the advertisement was “List price $109.95”.
In connection with the projector there was “List price $69.50”. Related to
the film there was “List price $4.95”. The advertisement offered
those
articles at the following prices: the camera, $1.29.88; the projector, $42.88;
and the film, $3.59.
It was submitted on behalf of the Appellant that the use of the words
“list price” was a breach of the relevant subsection under the circumstances
which existed according to submissions on behalf of the Appellant.
In my opinion, for such an advertisement to constitute a contravention
of the subsection there must be:
(a) A representation to that portion of the public to which the advertisement
is directed that the price indicated as the list price is the price at
which the aTticle is ordinarily sold in -the area covered by the adver-
tisement; and
(b) The fact that that price is not the price at which the article is
ordinarily sold in that area.
The onus for establishing all of that is upon the Appellant.
Relevant is the meaning of the words “list price” to those at whom
the potential retail buyers in the area
the advertisement was aimed, –
covered by the newspaper.
Generally speaking, though subject to significant qualification, persons
using words would be taken to have used them in their ordinary, plain
and generally accepted meaning, and those using them and those to whom
they are communicated are entitled to have them construed accordingly.
However, words are known sometimes to have different meanings to
different people. They might convey to some groupings something dif-
ferent than to others. Their associated connotation may not necessarily
be the game everywhere. The context in which words are used might affect
the impressions they convey. Their meaning might differ from era to era.
Colloquial usage may not be the same as the classical. The impression made
by words -and intended to he made by them might be governed by the
circumstances under which they are used by whom they are used, to whom
they are communicated, where they are used, how they are used, when
they are used and the purpose of their use.
I find that the manufacturers of the three articles, the camera, the
projector and the film suggested prices at which those articles respectively
be sold at retail, and that there were, accordingly, manufacturers’ suggested
retail prices in respect of all of them. I find, too, that when the words “list
price” were used in the trade those words meant that price so suggested.
I also find that the prices indicated in the advertisement as list prices
were the manufacturer’s suggested retail prices and that those prices were
in that sense the actual list prices.
McGILL LAW JOURNAL
[Vol. 15
It would seem, too, that although the practice of manufacturers sug-
gesting retail prices is not universal in the industry, it is not unusual.
Whatever may be the usual practice of retail dealers in photographers’
supplies, the suggestions of the manufacturers regarding the retail prices
are not always followed.
It was, in effect submitted on behalf of the Appellant that the evidence
does not in any event do mre than indicate that it is in the trade that
those prices are known as list prices and that whatever knowledge those
referred to by counsel for the Appellant as sophisticated buyers may have,
the general effect of the use of the words “list price” is that it is a repre-
sentation that those prices are the prices at which the goods are ordinarily
sold.
The advertisement was directed towards the public buying at retail,
not to the trade. It would seem that the placing together in the advertise-
ment of the two prices, one referred to as the list price and the other
the price -at which the Respondent was offering the goods for sale, was
to invite comparison for the purpose of promoting a sale. The inclusion
of what is indicated as the “list price” would seem to be pointless if it
were not intended to indicate, in some way, relationship to retail price.
The fact that the prices advertised as list prices were the prices at
which the manufacturer suggested the merchandise be sold at retail does,
in my view, give them a significant relationship to retail price. The con-
sidered opinon of what a manufacturer honestly believes its products should
bring when sold at retail should not, in my opinion, be treated as without
relevance.
It would, of course, obviously be wrong for a manufacturer to pretend
to suggest a retail price, without believing that such a price is fair and
reasonable -in order that a retail dealer might have available an exaggerated
amount designed for untruthfully persuading prospective purchasers that
they would be buying advantageously
the article for
substantially less than that amount.
if they acquired
However, in my opinion such a situation could not, on the evidence in
this case, be found to exist here. In my opinion, there is no evidence of
dishonesty or bad faith on the part of the manufacturers in suggesting
the retail prices. It must, I think, for the purposes of this matter, be
assumed that the manufacturers honestly suggested those prices as amounts
which they considered the merchandise should reasonably be expected to
bring when sold by retail.
I do not think that “list price” is an unfamiliar term to retail buyers
in general. It must, I think, be taken that in ae onsiderable range of products
the term is known generally to the retail buying public as one indicating
the amount which a manufacturer suggests as the retail selling price of
an article it produces. Furthermore, I do not think it can reasonably be
inferred that potential buyers in general do not know that a retailer some-
times sells below that price.
To find that “list price” as used here is a material misrepresentation
would, I think, be tantamount to a finding that words which are factually
true in a well-recognized context are -misleading in the manner in which
they were used. There may, indeed, be circumstances under which that
would be so, but I do not think that it has been established that that is
so in this ease.
No. 4]
UNREPORTED JUDGMENTS
Furthermore, I think that the basic general principle of the accused
being entitled to the benefit of a reasonable doubt on charges under punitive
legislation is applicable also in this case where the guilt or innocence of
the accused may, at least in some degree, be dependent upon semantics.
I find that it has not been established that the Respondent has repre-
sented to the public that the relevant articles were ordinarily sold at the
prices indicated in
the advertisement as “list prices”.
Even if
it had been established that the advertisement constituted
such a representation the onus would still be on the Appellant to establish
in the
that the articles were not ordinarily sold at the prices indicated
advertisement as list prices.
Among the witnesses called on behalf of the Appellant were persons
associated with six firms selling photographers’ supplies. One of those
firms was the Respondent.
Four of those witnesses gave evidence regarding the number of cameras
of the relevant kind sold by firms with which they were associated. Evidence
of the quantity sold was not in all cases precise, but the aggregate of all
sales of the camera referred to in the evidence by those four was approxi-
mately fifty. According to the evidence of five of those witnesses the prices
charged by the firms with which they were associated ranged from $129.00
to $169.95.
There was very little evidence regarding sales of the projector. One
of the witnesses referred to a price of $59.00.
There was no evidence as to the quantity of the film sold. According
to the evidence of five witnesses the prices charged by the firms with
which they were associated ranged from $3.99 to $4.S9.
If
the prices of a sampling of dealers were to be depended upon to
establish prices at which articles are ordinarily sold, then, in my opinon
it would be necessary to prove beyond a reasonable doubt that the prices
charged by those selected dealers were, indeed, the prices at which the
commodities were ordinarily sold.
In that event it would seem to me that to determine whether their
price ranges should be accepted as indicative and representative of ordinary
prices there should be evidence of their sales policies, their method of
advertising and their promotional techniques and how they compare with
other dealers in the area. I would think, too, that there should be evidence
of the number of retail outlets handling the type of merchandise in the
relevant area. Without that evidence the percentage which the number
sampled bears to the entire number in the area would not be indicated.
The quantity of the articles in question sold in the area should also be
in order that it might be determined -whether or not the
made known
quantity of that merchandise sold by the selected dealers is sufficient for
their prices to have significant probative value.
In my opinion the evidence in this case is inadequate to indicate the
sales policies of the selected dealers, how they compare with other dealers
in the area covered by the Hamilton Spectator, the number of dealers in
that area and the aggregate of the relevant goods sold in that area. In
some respects the evidence does not even indicate the quantity of goods
sold by the selected dealers.
In the view which I take of the matter, it
is not necessary for me to
decide whether a prima facie case could be made on behalf of the Appellant
by a sampling of dealers and I do not decide it.
McGILL LAW JOURNAL
[Vol. 15
Counsel for the Appellant pointed out that the Respondent never sold
the goods at the prices indicated in its advertisement as list prices.
I am of the opinion that the price at which an article is ordinarily
sold, within the meaning of the legislation, is not the price at which the
person making the representation ordinarily sells it, but what is meant
is the price at which it
is ordinarily sold generally in the area in which
the representation is made.
There is uncontradicted evidence that the prices of those firms with
which witnesses were associated were less than the amounts indicated as list
prices in the advertisement but for the reasons indicated this is not sufficient
under the circumstances for a finding that the prices of those dealers were
the prices at which the articles were ordinarily sold within the meaning
of the legislation.
In my opinion there is not adequate evidence for a finding that the
amounts indicated as list prices in the advertisement were not the prices
at which the -articles to which they were respectively related, are ordinarily
sold within the meaning of the subsection.
In my opinion, the onus which is upon the Appellant has not been met.
Appeals dismissed.
COMBINES: MISLEADING ADVERTISING
REGINA v. PRODUITS DIAMANT LTEE, Magistrate’s Court,
Ottawa, Ont., August 12, 1965, Magistrate Strike.
Magistrate Strike
The accused in this case is charged with making [a] materially misleading
representation to the public concerning the price at which jars of Vachon
Confiture Aux Fraises avec Pectine were sold contrary
to sec. 33C (1)
of the Combines Investigation Act ‘ and amendments thereto.
this case
The evidence in
is not in serious dispute. The defendant
company among other things manufacture strawberry jam in 48 oz. con-
tainers. These containers were of two varieties. One was an ordinary round
glass jar and the other a more or less fancy jar with an imitation glass top.
From time to time, this jar was referred to by the company as a “candy jar”
and might be useful to a householder after the contents had been used.
Up until June 1,961, the candy jar was marketed at $1.29 and the
ordinary jar at $0.99. In June of 1.961, however, the company chang-d its
marketing policy and sold the two jars for the same price. However, on
the fancy jar there appeared the words “170 off/en moins”. Both these
jars appeared on the shelves of various chain stores and other merchants
until at least the 26th of May 1964.
There was some variation in the wholesale price which reflected the
various changes which took place
in the
manufacture of jams there is a high content of sugar but at no time was there
any difference between the price of the so-called candy jar and the regular
jar.
the price of sugar because
in
I ILS.C. 1052, c. 314.
No. 4]
UNREPORTED JUDGMENTS
I agree with the contention of the Grown that in this case the company
when it changed its policy, established a new selling price for both the
so-called candy jar and the regular jar. This is borne out by the length
of time during which the “170 off/en moins” was used. It is also borne
out by the correspondence between the company and its distributors and
also by the fact that when in 1964 the company changed its label and
instead of using the “Off” label used words indicating “Free Kitchen Jar”,
the price remained the same. While it may be true that the company
adopted the new label sometime in March 1964, it would still in my
opinion, be responsible for the jars with the “Off” label which were still
on the shelves of the merchants who had purchased them from the company.
While I am not able to accept the arguments of counsel for the
company, I was rather impressed by the honesty and sincerity of Mr.
Robillard who gave evidence on behalf of the company. Mr. Robillard
maintained that the public were still receiving a bargain because to use
his expression “it was a package deal” and
the public were not only
receiving [the] value of the jam but also the container which could be useful
around the kitchen.
It appears to me, however, that the average person buying the product
would consider that the ordinary price of the jam was at least 170 more
than he or she was paying for it when as a matter of fact the company
had established a price which was the same as the price of the regular jar.
I would, therefore, come to the conclusion that for the purpose of
promoting sale of the strawberry jam that [sic] the company had made a ma-
terially misleading representation to the public as charged.
The evidence indicates that when the officers of the Department were
making their investigation on the complaint, -he company was completely
co-operative; gave them every assistance and indeed changed their method
of promoting the sale of this product and in assessing a penalty, I would
be of -the opinion that an order under sec. 3- (1) of the Combines Investigation
Act is quite unnecessary.
Conviction entered
(fine of $100 imposed).
COMBINES: MISLEADING ADVERTISING
REGINA v. R. & A. COHEN LIMITED, Magistrate’s Court,
Ottawa, Ont., November 15, 1965, Magistrate Sherwood.
Magistrate Sherwood
The prosecution consists of seven counts charging the accused with violations
of sec. 33C of the Combines Investigation Act.
The prosecution arose out of advertisements in issues of the Ottawa
Journal dated October 2nd and October 23rd, 19,64, and the Ottawa Citizen
of November 20th and December lalth, 1964. These are Ottawa’s only two
daily newspapers, and both have substantial circulation in Ottawa and
the surrounding area for some distance. All four ads were placed on the
instructions of the accused and relate to various Electrohome Hi-Fi sets.
Price information was obtained either from employees of the accused, or
from the tags on the sets, and proofs of the ads were sent to the accused.
McGILL LAW JOURNAL
[Vol. 15
These ads used the expression “Regular Price $
Although the ads may have been worded in some cases by the newspaper
advertising salesmen, the accused cannot avoid responsibility for them.
“‘, and then
lower price either without comment or with such words as
showed a
“Clearance”, or “Special”. The Journal ad of October 2nd
is headed
“October Sale”, and that of October 23rd is headed “Sale Floor Models”.
The Citizen ad of November 20,h is headed “November Specials”, and that
of December 11th, “Christmas Sale”.
Evidence showed that Electrohome published price lists covering the
various sets they produced including those which are the subject of these
charges.
The price list included a “Dealer Net” which was the price paid by
the retailer for the set, and “Suggested List” which was the price at
which it was suggested the retailer sell the set. These lists were mailed
out to Electrohome franchised dealers of which the accused was one of
many in the Ottawa area. The evidence was that the suggested list prices
were fair and realistic having regard to the quality of the sets. From
they might
time to time both prices would be varied, and in particular,
be reduced if the sets were not selling well.
In the cases of the sets referred to in these charges Electrohome
reduced the prices from those shown as “Regular” in the Cohen ads as
follows:
from $359.50 to $3M9.50 June 10th, 1964
from $499.50 to $419.50 February 28th, 1,964
Romano M
Capistrano
Montego 40 from $669.50 to $629.50 June 10th, 1964
from $429.50 to $379.50 May 11th, 1964
Lafayette
Both Magistrate Elmore in Regina v. Eddie Black’s Limited,1 and Judge
Sweet in Regina v. Allied Towers Merchants Limited (1)2 have defined the
meaning of “regular price”, and I accept the combined effect of these
judgments as meaning the price at which an article is ordinarily sold
generally in the area in which the representation as to “Regular Price”
is made. The Crown called as witnesses representatives of all the other
franchised Electrohome dealers in Ottawa itself, except one no longer in
business, and did not call two other dealers who sell just outside Ottawa,
or dealers further outside but within the circulation area of the papers.
It tried through oral evidence and invoices to account for all sales of
the Televant sets in Ottawa during a period of about one year ending
December, 1964. It accounted for many of them, and none were, on their
face, sold within eight months prior to October, 1964 at or above the
prices shown in the ads -as “Regular”. The value of some of these figures
has been questioned, not without some reason, by counsel for the accused
because in some cases a trade-in was taken in addition to the price shown.
The most important piece of evidence from the other retailers was,
in my opinion, that each of them swore that they had never knowingly
sold a set at a price higher than -the Electrohome suggested list prices
from time to time, but often sold them for lower prices.
No witnesses were asked in an absolutely unequivocal way whether
they were ,referring to the original suggested list price or that price as
1 (1962) 38 C.P.R. 140.
2 Reported, supra, at p. 1654.
No. 4]
UNREPORTED JUDGMENTS
amended from time to time, but I certainly took the latter meaning from
the question, and felt the witnesses did likewise. That dealers reduced
their prices when Electrohome reduced suggested list prices seems obvious.
Failure to do so would frustrate the whole purpose of the reduction.
Apart from the clear impression I got that the dealers were testifying
that they followed the suggested list prices from time to time, there is
the evidence of H. J. Saslove …. There is also evidence of sales of sets
in Ottawa which show sharp reductions in price which coincide generally
It seems clear
with Blectrohome reductions in suggested list prices….
therefore that whatever the real value of these sets may have been, and
regardless of the purpose of any reduction in -the suggested
list price,
the regular prices of these sets at -the time of -the ads in the Journal and
Citizen were substantially lower in all cases than the “regular price” shown
in the ads, and would remain lower after the sale and until the sets were
cleared.
I am satisfied and so find that members of the public reading the
Journal ad of October 2nd, 1964, would assume and were intended
to
assume that by reason of the October sale they could buy a Capistrano
set at $399.00 instead of the regular price of $499.50, or a Montego 40
at $599.00 instead of the regular price of $669.50.
In fact the regular
price of the Capistrano had been $419.50 or less since February, 1964,
-and of the Montego M $629.50 or less since June, 1064.
Similarly in
the same ad
the regular prices of the Romano and
Lafayette were represented at $359.50 and $429.50 respectively, when in
fact they had been $819.50 or less from May, 1.64, and $37&.50 or less
from June, 1964 respectively. Whether or not these sets at the advertised
price constituted good value –
and there is every reason to believe they
did –
nonetheless the public were misled into believing they were getting
a much better bargain than they in fact were by reason of the October sale.
Turning to the Journal ad of October 23rd one finds the Montego
again shown as “regular price” $669.50 and now offered as a special floor
model sale at $525.00. There is no reason to doubt that the further reduction
was by reason of the set being a floor model or that it was a bargain,
but it was not the bargain represented by the ad. For over four months
this set had been regularly or ordinarily selling at $629.50 or less, not
$669.50.
The Ottawa Citizen ad of November 20th, 1964, is headed “November
Specials” and shows a Capistrano as “Regular $499.00” and “Special
$399.00”. The same findings apply here. The regular price of this set had
in fact been $419.50 for almost nine months, and the ad materially mis-
represented the degree of saving to the public by reason of the “November
Special” even though the special price may have been excellent value.
The final ad
is the Citizen ad of December 11th, M964 described as a
“Christmas sale”. It -again represents -to the public that certain substantial
savings are available to them by reason of the Christmas sale on a wide
range of articles. Included is an Electrohome Romano shown as regular
$379.00 for $215.00.
In fact the regular or normal price in Ottawa for
the Romano had been $319.50 or less for some six months. This is the ad
in which Crown and defense agreed that the ad should have shown $359.00
not $379.00 as the regular price, the mistake being the newspapers. Never-
theless the ad materially misrepresented to the public the amount of saving
offered to it by reason of the Christmas sale.
McGILL LAW JOURNAL
[Vol. 15
It follows that there will be a conviction on each count by reason of a
misrepresentation in each case of the price at which the article was ordinarily
sold in this area.
Convictions entered on each count
(fine of $100 imposed on first count;
suspended sentence on each of 6 others).
COMBINES: MISLEADING ADVERTISING
REGINA v. MOUNTAIN FURNITURE COMPANY LIMITED,
Magistrate’s Court, Peterborough, Ont., July 19, 1966, Magistrate
W. R. Philp.
Magistrate Philp
one –
Mountain Furniture Company Limited, is charged, that on or about the
2,1st day of October, 1965, at the City of Peterborough, in the County
of Peterborough in the said Province, –
for the purpose of promoting
the sale of a Featherweight Firm Rest Mattress, manufactured by Feather-
weight Mattress Limited, and sold by the said Mountain Furniture Com-
pany Limited, at 368 George Street in the said City of Peterborough, by
means of a label, bearing the price $99.00 affixed to the said Featherweight
Firm Rest Mattress, did unlawfully make a materially misleading repre-
sentation to the public, concerning the price at which such Featherweight
Firm Rest Mattresses, have been, are, or will be ordinarily sold, contrary
-to sec. 33C(1) of ithe Combin’es Investigation Actl –
for
the purpose of promoting the sale of a Featherweight Firm Rest Mattress,
manufactured by Featherweight Mattress Limited and sold by the said
Mountain Furniture Company Limited at 368 George Street in the said
City of Peterborough, by means of a representation made verbally by a
sales clerk on the premises of the said Mountain Furniture Company
Limited to the (purchaser of the said mattress –
Ronald J. Kinsley, at
the time of the said purchase, that the said Featherweight Firm Rest
Mattress was valued at $79.50, it did unlawfully make a materially misleading
representation to the public concerning the price at which such Featherweight
Firm Rest Mattresses have been, axe, or will be ordinarily sold, contrary
to see. 33C (1) of the Combines Investigation Act.
and secondly –
These counts, upon which there has been a plea of not guilty and on
which the evidence has been heard, are now before me for judgment.
it reads –
Re count number one –
for the purpose of promoting
the sale of a Featherweight Firm Rest Mattress, manufactured by Feather-
weight Mattress Limited and sold by the said Mountain Furniture Company
Limited at 368 George Street in the said City of Peterborough, by means
of a label, bearing the price $99.00 affixed to the said Featherweight Firm
Rest Mattress, it unlawfully made a materially misleading representation
to the public, concerning the price at which such Featherweight Firm Rest
Mattresses have been, are or will be ordinarily sold, contrary
to sec.
33C(1) of the Combines Investigation Act, and amendments thereto. Mr.
I R.S.C. 1952, c. 314, as amended.
No. 4]
UNREPORTED JUDGMENTS
Kinsley, an investigator of the retail branch of the department charged
with the enforcement of the Combines Investigation Act, observed in the
window of the accused’s store, in the City of Peterborough, on October
the 19th, 1.965, a mattress bearing the label, Featherweight “Firm-Rest”
Mattress, Manufactured by the Featherweight Mattress Limited, with the
pre-ticketed price of $99.00 affixed hereto, together with a sale sign of
$34.95. On October the 21st he returned and purchased such a mattress
for the said price and took delivery. I find as a fact that on the date of
the sale, this particular mattress, Exhibit two, was removed from the
second floor and not from the basement. This finding is based on the
evidence of Mr. Kinsley and Mr. Blondeau, who gave detailed and specific
evidence of the same, as against the evidence of Mr. Carol, who although
positive in this particular matter, had to acknowledge that many of the
in that he
details of the sale were somewhat vague, understandably
regarded the sale as merely another one in the ordinary course of business
and attached no particular importance thereto. On purchase and payment,
Mxr. Kinsley obtained a receipt for the same, exhibit one, wherein the
mattress was described as “Firm Rest”, with the approval of Mr. Winstock,
the president of the Company.
On the date of the purchase, Mr. Kinsley was shown a number of
mattresses in the basement of the store by Mr. Carol, the store salesman,
several of which were inspected, and bore the label, “Siesta”, pre-ticketed
at $79.50, and manufactured by the Featherweight Mattress Limited. They
were on sale also at $34.50. There were other mattresses displayed,
pre-ticketed at $69.50. Mr. Carol advised the purchaser both in relation
to the Firn Rest Mattress and those in the basement, that the manufacturers
were using up some old discontinued lines of labels, that the labels meant
nothing and should not be considered, and that all the mattresses on sale,
were of comparable value, irrespective of the labels and pre-ticketed prices,
and were on sale for $34.50.
It appears from the evidence of Mr. Silverburg, president of the
Featherweight Mattress Limited, that his firm had dealt with Mountain
Furniture Company Limited, for some years, that his company pre-ticketed
mattresses for customers who requested the same, and that this had been
that ordinarily the line of Firm
the case with the accused’s company –
Rest Mattresses, were manufactured for one particular retailer, not the
accused company, and that the label, “Firm-Rest”, pre-ticketed at $99.00,
had been affixed to this particular one, exhibit two, in error, by a factory
employee. Furthermore, that most of the mattresses sold to the accused,
and I believe all that we are concerned with, were designated and billed
–
indicating
as between manufacturer and retailer. as “Reverse-A-Mats”
a specific quality of mattress, with different shapes of –
or patterns of
ticking on the top and bottom, which apparently in the trade indicates a
cheaper line of such articles. He states, and it appears correct, that the
specific labels attached to the mattresses are of little importance, except
possibly in the retail trade, with which he was not concerned, and as
mentioned, as between manufacturer and retailer, they were all classed
and invoiced as reverse-a-mats. He further declared that the mattress known
in the line as Firm Rest, are manufactured by his firm, for the Adams
Furniture Company alone, and when pre-ticketed at $99.00 such a price
was for an ensemble, consisting of a mattress, spring, headbaard, and
legs, and when ensembles are sold, the .pre-ticketed label attached is attached
MCGILL LAW JOURNAL
[Vol. 16
to the mattress only. It
is apparent that the company has a wide line of
labels, setting out various names, as Firm Rest, Siesta, etc., including
some bearing the name, Reverse-a-mat, but the latter are not used on
the mattress sold to the accused, – merely the names of the particular
line. I understand from his evidence, that his company pre-ticketed mattresses
at the request of a retailer, at a price specified or agreeable to the retailer,
and this is the general course of business in respect to the accused, and
that he was unaware of and not concerned with the sales price, to the
consumer. The Firm Rest Line was manufactured for the Adams Furniture
Company, but that this paxticularr one sold, Exhibit two, though bearing
the label of Firm Rest, in fact was a Reverse-a-mat grade. This particular
mattress together with the Siesta Line were invoiced to the retailer, at
between $10.00 to $17.00, and that no regard was had to the particular
name attached to the label, by the accused’s salesmen, although the label
and pre-ticketed prices were very evident to a potential purchaser. A
number of retailers, experienced in the trade, were called by the prosecution.
It is admitted that none of them sold a Firm Rest line, or a line identical
to Exhibit two. Appairently the accused was the only outlet in Petzrborough
of the Reverse-a-mat line, manufactured by the Featherweight Mattress
Limited, although those retailers were familiar with and sold mattresses
of a quality of Reverse-a-mats. On examination, each stated that mattresses
similar to Exhibit two would retail at a price range of $35.00 to $40.00,
and further that the actual price in this instance of $34.95, was a reasonable
price. It appears that Exhibit two, bearing the name of Firm Rest was the
only one that Mr. Kinsley observed in the store on the date he purchased.
At no time was there any discussion concerning the sale of an ensemble –
only a mattress.
I find that the manufacturer had no knowledge of what the retail
price would be for the mattress sold to the accused – with the possible
exception of the true Reverse-a-mat mattresses line, as explained above,
by Mr. Silverberg. The Reverse-a-mat line appears to have been usually
pre-ticketed in the manner mentioned, based on Mr. Silverburg’s evidence,
and what was observed by Mr. Kinsley. The president of the accused’s
firm in exhibit three states that he never sold these mattresses at the
pre-ticketed price, and has never attempted to do so, – merely that he
handled many pre-ticketed mattresses, and as Mr. Silverburg explains,
they were pre-ticketed if the retailer so desired, and this was a fact in this
particular instance.
Section 33C(1) of the Combines Investigation Act, provides: “Everyone
who, for the purpose of promoting the sale or use of an article, makes
any materially misleading representation to the public, by any means
whatsoever, concerning the price at which such or like articles have been,
are, or will be ordinarily sold, is guilty of an offence punishable on sunnary
conviction.”
Defence counsel has argued that the name Firm Rest attached
to
Exhibit two, was affixed in error, that Mr. Kinsley was not misled by the
pre-ticketed price attached thereto, and that in fact he was an agent
provocateur who deliberately selected for purchase a mattress which had
the highest pre-ticketed price, that the salesman, Mr. Carol, pointed out
to him that the names and pre-ticketed prices meant nothing, that the
manufacturer was merely using up
line of
merchandise, on the articles displayed, and that all were of comparable
labels of a discontinued
No. 4]
UNREPORTED JUDGMENTS
value and were being sold at the same price –
as he stated, just pick
out the one that appeals to you. Further that there is no evidence as to
what a Firm Rest mattress of the line manufactured for the Adams Furni-
ture Company, is ordinarily sold for in this area. Jessup, J., of the Supreme
Court of Ontario, in what I believe to be an unreported case of about
March the 1-9th, 1965, in Regina v. Allied Towers Merchants Limited (11)2
on appeal by way of a stated case, from a decision of Magistrate R. B.
Dnieper, held that sec. 33C, subsection 1, is an offence of strict liability,
and that mens rea is not an ingredient of that offence. No doubt Mr.
Kinsley as an investigator was not personally misled by anything he saw
advertised or by any statement made to him, however we are not concerned
wNith his purpose on making this purchase, as ehe section refers to [a]
materially misleading representation to the public. Mr. Carol would have us
believe that a potential customer having before him a choice of mattresses
pre-ticketed at $99.00 and $79.50 or $69.95, and being informed by him that
they are all of
the pre-ticketed
similar value, being sold at the same price –
that such a potential customer
would not be influenced by such pre-ticketed prices, as denoting to some
degree their respective values.
labels and prices meant nothing –
is,
Defence counsel has drawn my attention to the judgment of Judge
Sweet of the County Court of the County of Wentworth, in Regina V.
Allied Towers Merchants Limited (1)3 wherein he stated, “I am of the
opinion that the price at which an article is ordinarily sold, within the
meaning of the legislation, is not the price at which -the person making
the
the representation ordinarily sells -them, but what is meant
is ordinarily sold in general in the area in which
prdce at which it
the representation is made.”14 It is admitted that the identical mattress
manufactured by Featherweight Mattress Limited, is not sold by any
other retailer in this community. The prosecution meets this argument
in the trade, who have
by calling a number of retailers experienced
expressed the opinion that the retail price for such a grade and type
of mattress, similar to Exhibit -two, would be in the 35
to 40 dollar
price bracket. If the learned County Court Judge inferred that the amti-
cles means a similar article, he would appear to be limiting the provisions
of .the statute, since the section refers to “concering the price at which
such, or like articles, have been, are, or will be ordinarily sold, etc.” –
In this context I would assume that like article means similar in quality.
If the Crown must establish that such an article must be ordinarily sold
at a given price in the area where the representation with which we are
concerned is made, then any arrangement on the part of a retailer, of
the nature of a special franchise or sole sales agency in a given area,
would appear to render the legislation ineffective. I would find that the
phrase means, articles of similar quality. Minor differences in specifications,
not known or observed by the public, but only determinable by an experienced
person, after a mattress is opened, and its construction is observed in
detail, I would find, does not bar such articles as being similar.
On the evidence of Mr. Silverburg, the manufacturer, and Mr. Winstock,
the president of the accused Company, the pre-ticketed price was not the
2 Since Teported at [1965] 2 O.R. 628, [1966] 1 C.C.C. 220, 46 C.P.R. 239.
3 Reported, supra, at p. 654.
4 Ibid., at pp. 657-658.
McGILL’ LAW JOURNAL
[Vol. 15
the obiter in
like product was ordinarily expected
price at which Exhibit two, or a
to be sold in the area. If
the -last mentioned case, and I
quote, “The considered opinion of what a manufacturer honestly believes
his products should bring, when sold at retail, should not, in my opinion,
be treated as without relevance,”0
is correct, then the facts of that case,
and the one before me, shows [sic] a startling dissimilarity. In this case, the
pre-ticketing of the pnice was done at the request of the retailer, and
apparently the manufacturer was not concerned with what the selling
price might be, nor again, was there any concern shown, as to the amount
of the pre-ticketed price, with the possible exception of the pre-ticketed
price on a true Firm Rest Mattress –
the pre-ticketing of Exhibit two,
was in error, denoting carelessness at least. On the facts of this case, and
all the evidence, the general policy of pre-ticketing, had little or no relevance
to -the actual retail price of the article, but would appear to be rather a
form of advertising, and done for the purpose of assisting sales.
I find therefore, that in the case before me, the pre-ticketed price
on Exhibit two, was of such an exaggerated amount, and had the result,
though done in error, of untruthfully persuading prospective purchasers
that they would be buying advantageously if they acquired the article for
substantially less than that amount, and further, that this would be the
case even if at the time, such a potential purchaser was informed by
the salesman to disregard such pre-ticketing prices entirely.
Therefore i find that the prosecution has established a case and the
accused is convicted on the first count.
The second count reads – For the purpose of promoting the sale of
a Featherweight Firm Rest Mattress manufactured by Featherweight
Mattress Limited and sold by the said Mountain Furniture Company Limited
ot 368 George Street in
the said City of Peterborough, by means of
representation made verbally by a sales clerk on the premises of the said
Mountain Furniture Company Limited to the purchaser of the said mattress,
Ronald J. Kinsley, at the time of the said purchase, that the said Feather-
it unlawfully made a
weight Firm Rest Mattress was valued at $79.50,
materially misleading representation
the price
at which such Featherweight Firm Rest Mattresses have been, are, or will
be ordinarily sold, contrary to sec. 33C(1) of the Combines Investigation
Act.-
to the public concerning
The evidence given on the first count was adopted as far as applicable
in this case. On the date of the sale of Exhibit two, Mr. Kinsley and
Mr. Carol inspected a number of mattresses in the basement. All or some of
them –
there may be a conflict of evidence on this point, were products
of Featherweight Mattress Limited, and carried a pre-ticketed label affixed
thereto, bearing the name Siesta, and a pre-ticketed price of $70.50.
I
find that Mr. Carol made the same statement to this line, as mentioned
above in connection with the sale of Exhibit two, namely to the effect that
the labels on the various mattresses meant nothing, that the manufacturer
was merely disposing, of old labels –
or labels of a discontinued line, and
that all the mattresses were of the same comparable value, including exhibit
two, and all were being sold at $34.95. Whatever may have been said
in this respect, or even that the Firm Rest line of mattresses, such as
0 Ibid., at p. 656.
No. 4]
UNREPORTED JUDGMENT
Exhibit two, were valued at $79.50, in fact, there was nota Firm Rest
Mattress, or any mattress designated as Firm Rest, ticketed at $79.50.
I am not concerned with what the result might have been if the count
had referred to the specific type. Siesta Mattresses, pre-ticketed at $79.50,
rather than the Firm Rest, as Exhibit two. On all the evidence, this charge
is dismissed.
Conviction entered on the first count
(fine of $250 and costs imposed);
second charge dismissed.
COMBINES: MISLEADING ADVERTISING
REGINA v. FEATHERWEIGHT MATTRESS LIMITED, Magis-
trate’s Court, Peterborough, Ont., July 19, 1966, Magistrate W. R.
Philp.
Magistrate Philp
Featherweight Mattress Limited is charged, that on or about the 21st day
of October, 1965, at the City of Peterborough, in the County of Peterborough,
in the said Province, for the purpose of promoting the sale of a Feather-
weight Firm Rest Mattress manufactured by
the said Featherweight
Mattress Limited and sold at Mountain Furniture Company’ Limited 368
George Street in the said City of Peterborough, by means of a label bearing
the price $99.00 affixed to the said Featherweight Firm Rest Mattress,
unlawfully made a materially misleading representation
the public
concerning the price at which such Featherweight Firm Rest Mattresses
have been, are or will be ordinarily sold, contrary to sec. 330(1.) of
the Combines Investigation Act.’ The accused pleaded not guilty and the case
is before me for judgment.
to
On October the 19th, 1965, the witness Mr. Kinsley, an investigator
for the Department and Branch in charge of the enforcement of the Combines
Investigation Act, noted from the displays on the store window of the
Mountain Furniture Company Limited, Peterborough, at the time, a mattress
bearing the label attached thereto of a Firm Rest Mattress, manufactured
by the accused including the label, pre-ticketed at $9q.00. This mattress
was apparently on sale for $34.95.
On October the 29th he returned, purchased, paid for and took delivery
of the mattress, at the time located on the second floor of the store –
and
obtained a receipt, Exhibit one, wherein it was described as a Fim Rest,
with the consent of the president of that store. On the same occasion he
observed in the basement, a number of mattresses manufactured by the
accused, pre-ticketed with labels describing them as Siesta and pre-ticketed
at $79.50. They also were on sale at $34.95. The salesman was explicit
when showing both the first named mattress, in fact purchased, and the
Siesta line in the basement, that the purchaser should pay no attention
all were of equal quality, and
to the labels or the pre-ticketed prices –
the manufacturer was merely using up odd old labels of a discontinued
line of merchandise. The discussion between them involves only the sale
1 R.S.C. 1952, c. 314.
McGILL LAW JOURNAL[
[Vol. 15
of the mattress –
ensembles were ever discussed (ensembles would be –
spring, headboard, legs) –
less headboard).
there was no mention whatsoever in the evidence that
including mattress,
(which is an ensemble
or continental units
Subsequently on December the 7th, 1j965, Miss Olivia Lozinski, one of
the witnessses herein, and Mr. M. Lecours as representatives of the Director
of Investigation and Research, under a search warrant, Exhibit eight, given
by the Chairman of the Restrictive Trade Practices Commission, attended
at the accused’s place of business in Toronto, interviewed Mr. Silverburg,
the president of the concern, and other executives. They made such searches
of the files and business papers and removed apparently, those documents
that might be of interest to them on a subsequent charge, directing their
attention particularly -to any arrangements, agreements, invoices, etc., bearing
on the sales and financial dealings with Mountain Furniture Company. A
number of these exhibits are filed herein.
Exhibits 3 and 4 are some 17 invoices of the accused company, covering
the merchandise sold to Mountain Furniture Company Limited, over a
period of approximately one year. These invoices were in the main, for
mattresses described therein as reverse-a-mats, and invoiced to the retailer
at 1-6 to 17 dollars. It appears that in the trade reverse-a-mats are mattresses
with different coloured tickings on top and bottom, and certain other speci-
fications probably of interest only to the retailer and manufacturer, –
and
such a line of merchandise is recognized in the trade as definitely a cheaper
kind and in the lower price range. A large percentage of the articles so
invoiced were for reverse-a-mat mattresses, although a number of reverse-a-
mat box springs were sold and separately invoiced –
there are three
additional articles which are of no consequence in this case. These invoices
in Exhibit three specify – pre-ticketed, $79.50. The description reverse-a-mat
is used only on the invoices in the trade, as between manufacturer and
retailer, rather than any particular name attached
to the product, or
referred to in advertising, such as Firm Rest, Siesta, etc.
t I find as a fact that the accused company would, at the request of
the retailer, ticket his order with such a price as the retailer might desire
or indicate, and that the accused company was not interested or concerned
with either the pre-ticketed price, or with the price that the retailer might
sell to the public.
It appears that the accused sold these reverse-a-mats only to the
Mountain Furniture Company in Peterborough, although other furniture
dealers might sell mattresses of the same general specifications. It is further
proven that the accused manufactured for the Adams Furniture Company
only, a line of merchandise – mattresses, of a superior quality to the
reverse-a-mats, which were sold to the public at $99.00, usually, if not
always, as an ensemble. This line is labelled Firm Rest, and wae [sic]
advertis;ed
s such, Exhibit thirteen. The Firm Rest line, manufactured for
Adams Furniture Company Limited, is not iold in this area. Furthermore,
Exhibit two, sold to Mr. Kinsley, was in fact a reverse-a-mat, though beaing
the label, Firm Rest.
The accused processed the orders following the specifications given, for
the particular grade and name, and eventually the labels were affixed,
when desired by the retailer, the labels carried the pre-ticketed price.
Mr. Silverburg’s explanation is that the label, Firm Rest, $99.00, was
affixed to Exhibit two, by an employee
in the factory, by error, and
No. 4’1
UNREPORTED JUDGMENTS
further, that when ensembles or continental units are pre-ticketed, the
label is attached to the mattress only. There is no evidence that a true
Firm Rest mattress, according to the manufacturer’s specifications, had
ever been sold by the Mountain Furniture Company Limited. The latter pur-
chased, in the main, reverse-a-mats, or such mattresses and box springs,
and possibly could have sold the same as a continental unit or possibly
as an ensemble, but there is no evidence that in fact the retailer did so,
and upon the sale of Exhibit two, the sale of a mattress only was discussed.
There is no evidence that anything but the sale of the mattress was ever
discussed on the demonstration of the Siesta line pre-ticketed at $79.50.
In the written argument of the defence, considerable attention was
given to the accuracy of describing Exhibit two as a Firm Rest Mattress.
Certainly, according to the specifications given by Adams Furniture Com-
pany to the accused, and manufactured by them, it was not a Firm Rest
Mattress in quality, as Exhibit two is a reverse-a-mat. Defence argues that
the name Firm Rest used throughout the charge is consequently in error,
and the charge has failed. However, Exhibit two did carry, a Firm Rest
label, and whether it was done for the purpose of selling this particular
mattress, or mattresses of the Siesta and other lines does not in my opinion
render the charge defective.
It is admitted by the Crown that the true Firn Rest Mattresses are not
sold in this city and indeed, the Mountain Furniture Company Limited
is the only retailer in this city that carries any of the products of the
accused. There is evidence that the mattresses of the reverse-a-mat quality,
and similar to Exhibit two, are sold locally, and that a reasonable price
for the same would be in the 35 to 40 dollar price range.
The pertinent section of the Combines Investigation Act, ste. M3(1),
provides that, “Anyone who, for the puapose of pronoting the sale or use
of a article, makes any materially misleading representation to ithe public,
by any means whatsoever, concerning the price at vhich such, or like articles,
have been, are, or will be ordinarily gold, is guilty of an offence punishable
on summary conviction.”
I find that Exhibit two was pre-ticketed
in error. In the case of
Regina v. Allied Towers Limited (11),2 it was held by Mr. Justice Jessup of
the Ontario Supreme Court, on an appeal by way of a stated case, from
Magistrate R. B. Dnieper, about March
the 19th, 1965, that sec. 33C
subsection 1, is an offence of strict liability and mens rea is not an ingre-
dient of the offence. The defence admits that the accused is not basing
its defence on mens rea, but on the fact that the Crown’s evidence did not
relate to the charge against the accused, and with respect to the name
Firm Rest. This latter defence is. I believe, disposed of above.
Both counsel have referred
to the judgment of his honour, Judge
Sweet of the County Court of the County of Wentworth, dated March the
,17th, 10.65, in Regina v. Allied Towers Merchants Limited (I).3 He states, “I
am of the opinion that the price at which an article is ordinarily sold, within
the meaning of the legislation, is not the price at which the person making
the representation ordinarily sells .it, but what is meant is the price at
which it is ordinarily sold in general, in the area where the representation
2 [1965) 2 O.R. 628, [1966] 1 C.C.C. 220, 46 C.P.R. 239.
a Reported, supra, at p. 654.
McGILL LAW JOURNAL
[Vol. 15
is made”. 4 Mattresses of the specifications of Firm Rest, as sold by the
accused as an ensemble were not on sale in this city, but mattresses of
the quality of reverse-a-mats, and of a like quality to Exhibit two, though
not necessarily the same specific specifications, are sold locally, and the
price at which they would be sold is established. Any difference that may
exist between Exhibit two and other reverse-a-mats sold in this city were
of a variety only determinable by a person with long experience in the
-trade, and after investigating the construction of the mattress by opening
up the interior hereof, and closely examining its constituent parts. I question
if such differences are a bar to a finding that two such articles on being
compared are “like” articles, within the meaning of and intention of this
statute. I find that the Crown has proven the similarity of the product,
Exhibit two, and other mattresses of reverse-a-mat quality offered for sale
locally, and of course, the selling price of $34.95, and the pre-ticketed price
placed on Exhibit two, as represented to the public have been established.
Judge Sweets reference to the lack of bad faith on the part of the
manufacturer is one of the differences between the facts of that case and
those of the one at bar. In the instant case, there is at least great careless-
ness in pre-ticketing Exhibit two, and the fact that the accused pre-ticketed
this and other mattresses of the Siesta line, without regard, knowledge,
or interest in the price that they might be sold to the consumer. The public
would of course have no knowledge that Mountain Furniture had no other
mattress identical to Exhibit two and ticketed at $99.00, on sale.
For these reasons and on all the evidence, the accused is convicted.
Conviction entered
(fine of $250 and costs imposed).
COMBINES: MISLEADING ADVERTISING
REGINA v. AMALGAMATED CARPETS & FURNISHINGS
LTD., Magistrate’s Court, Edmonton, Alberta, March 3, 1970, Magis-
trate G. Forbes.
Magistrate Forbes
In this case we have the evidence of Mrs. Palmer; someone, she doesn’t
know who came -to her and directed the insertion of the advertisement which
is now an exhibit in two copies before this Court. There had been previous
dealings and previous advertisements and there was no protest about the
insertion of the advertisement.
From all the circumstances, those circumstances and other circumstances
I draw the conclusion that this insertion of this advertisement was authorized
by Amalgamated Carpets, 11330 –
105 Avenue. The documents, exhibits
before me which were seized at that address all bear the title Amalgamated
Carpets and Furnishings, Ltd., 11330 –
105 Avenue, Edmonton 17; and
from that I draw The conclusion by inference that the accused is the legal
person who authorized the insertion of the advertisement.
4Ibid., at pp. 657-658.
No. 4″1
UNREPORTED JUDGMENTS
I have before me the documents seized at the address of the accused
covering a substantial period of time. These all indicate sales of the carpet
concerned or carpet that was produced to Mr. Kratzenberg and to Mr.
McKeller as being the carpet concerned but I have no doubt and it’s, of
course, not denied before this Court that it was the carpet concerned.
It was misdescribed as two tone although that may be just loose language.
According to the evidence before me that is not the only misdescription. It
is described as a heavy duty nylon carpet; the evidence before me indicates
it is not a heavy duty carpet.
However, the evidence convinces me that this is the carpet referred
to in the advertisement. We have the evidence of Mr. Kratzenberg and Mr.
McKeller in particular who apparently are involved in both contract and
retail work. Their evidence indicates the price of $9.95
is a materially
excessive one. I think an answer I got from one witness, I can’t recall
which one, indicates that it is common to advertise a price for carpet
including installation and underlay. While this is not set out one way or
the other in the advertisement, I think in fairness to the accused I must
assume that is the kind of price intended.
There is the evidence of Mr. Bell and Mr. Harris. These would appear
to be sales in remote areas and as I understand the law, the price involved
in this type of thing is the price in the trading area concerned.
The evidence indicates beyond any doubt, that the price in this trading
area, the Edmonton trading area of this type of carpet is something sub-
stantially less than $9.95. The advertisement, by stating the words, “Retail
$9.95 while wholesale stock lasts. Is $3.95 yard,” is making the representa-
tion that the retail price ordinarily is $9.95. I think the accused’s own records
are the most substantial evidence to the contrary supported by the other
evidence, that the maximum ordinary retail price in the Edmonton area for
this carpet installed with underlay is something in the vicinity of $6.50
to $6.95 a yard; on occasions much less.
There will be a finding of guilty.
Conviction entered
(fine of $200 and costs imposed
and prohibition order granted).
COMBINES
REGINA v. AMEUBLEMENT DUMOUCHEL FURNITURE
LIMITED, Provincial Court (Criminal Division), Ottawa-Carleton,
February 6, 1970, Judge T. Swabey.
Judge Stabey
I think this case falls within the decision in the Mountain Furniture
Company, Limited case.’ Pamricularly I refer to tbhe second count in that
case, where it reads:
For the purposes of promoting the sale of a featherweight Firm Rest
Mattress manufactured by Featherweight Mattress Limited and sold by
‘Reported supra, at p. 662.
McGILL LAW JOURNAL
[Vol. 15
the said Mountain Furniture Company, Limited at 368 George Street in
the city of Peterborough by means of a representation made verbally by
a sales clerk on the premises of the said Mountain Furniture Company,
Limited to the purchaser of the said mattress, Ronald J. Kinsley at
the time of the said purchase, that the said featherweight Firm Rest
Mattress was valued at $79.50, it did unlawfully make materially mis-
leading representations
to the public concerning the price at which
such featherweight Firm Rest Mattresses have been, are, or will be
ordinarily sold, contrary to section 33C(1).
The representation in that case was made by a clerk to an investigator
who, if I am not mistaken, was the same investigator as appears in this
case, Mr. Kinsley.
The representation in that case was made by a salesman or a clerk to
Mr. Kinsley who was opermting as an investigator under the Combincs
Investigation Act. In that case there was a conviction on the charge.
At first glance, it may not appear to be right on all fours, because in that
case there was pre-ticketing of the mattresses. However, the misleading
representation was made verbally, not by the price tag. The clerk in the
store made a-representation to the effect that the price tags did not mean
anything, that it was an old line and that they were discontinuing the line.
In the case before me today I have indicated that I am satisfied that
on two occasions, first with Mr. Kinsley and then, on the second occasion
when Mr. Rodgers visited the premises, the saleslady, Mrs. Paquette, an
employee of the defendant company, made a representation which in fact,
in my view, was materially misleading, within the meaning of the section
of the Combines Investigation Act.
I therefore convict the accused on both counts.
Judge Swabey
SENTENCE
The disturbing feature about these charges is that it has almost become
common practice on.the part of people in business to make statements such
as these –
statements which, clearly, are not true, at all. Perhaps it is an
indication of the depth to which our ethics in business have dropped. And
this causes much concern in these days, when it comes to protection of the
consumer. Of course this is a matter for the Government’s concern; and
the Government’s concern is reflected by the number of prosecutions which
have been brought before the Courts in the last year.
i intend to award costs –
and they will be considerable, in view of
the witness having come from Toronto.
The order that has been provided and which has been submitted to
the Court will go.
There will be a fine of $200 and costs, and the costs will be the amount
of the witness fees, plus travelling.
The Clerk of the Court: Is that on each count?
Judge Swabey: That is $200 on each count.
Conviction entered
(fine of $200 on each of two counts imposed
and order of prohibition granted).
No. 4]
UNREPORTED JUDGMENTS
COMBINES: MISLEADING ADVERTISING
REGINA v. MICHAEL BENES, Provincial Court (Criminal
Division), Ottawa-Carleton, October 7, 1969, Judge Fitzpatrick.
Judge Fitzpatrick
Michael Benes is charged that he did: “on or about the 16th day of December
in the year 1968, at the City of Ottawa, in the regional municipality of
Ottawa-Carleton unlawfully did at premises known municipally as 400
McArthur Avenue for the purpose of promoting the sale of a toy, to wit,
an Eldon Custom Bank car set, model 9558, make a materially misleading
representation to the public by means of a price tag reading “9558 Whol.
26.65 R-39.95” affixed to the said toy concerning the price at which the
said toy has been or is ordinarily sold contrary to section 33C()
of the
Combines Investigation Act.1
The evidence submitted by the Crown is to the effect that two officers
from the Combines Investigation Branch attended at the premises of Uni-
versal Agencies, which it
is agreed is a wholly owned business carried on
by the defendant Michael Benes; that they attained, with extremely little
difficulty admission to the premises. They were given a blue card, which
is Exhibit one, and which they were asked later on to fill in. They never,
of course, did.
On entering the premises –
they were in fact looking for Eldon Custom
Bank car set, model 9558 because of information which they had received.
They found some models of this type of car in the premises of Michael
Benes. There is a tag, legend, if you like, which referred to this particular
model, which read “9558, wholesale 26.65; retail 39.95”. They did not pur-
chase at that time, nor did they subsequently purchase this particular item.
The other evidence which was submitted by the Crown was to the
effect that, first of all, Eldon Industries of Canada had made deliveries.
Photostatic copies of invoices, which copies had been made by the witness
from the company, who was the sales manager for this part of Ontario
for that company, showed delivery to Universal Agencies of 24 Custom
Bank sets 9558 had been effected by invoice dated August 30, 1968.
It
showed that the price per unit of those sets to Universal Agencies was $17.80.
There is also another invoice, Exhibit four, Top Value Limited of 98
George Street, Ottawa, again for eight sets of this particular kind, showing
a unit price of $17.80 a unit. Exhibit three, which is an invoice, shows that
76 Custom Bank sets, unit price of $18, had been sold to A. J. Freiman
Limited on Blair Road, Ottawa. The reason for the difference in the unit
price was explained by the company representative as follows: the price
of $17.80 was given to Top Value Limited and the company or business
owned by the defendant because they were jobbers, and large retail institu-
tions such as A. J. Freiman Limited paid a slightly higher unit price of $18.
Evidence was given by one of the investigators for the Combines Branch
that he had made inquiries at 15 retail outlets in the Ottawa area, and had
found three which sold this particular model produced by this particular
company, and evidence was given by representatives of each of those three
companies or places of business, and the price at which it was sold retail
1 R.S.C. 1952, c. 314, as amended.
McGILL LAW JOURNAL
[Vol. 15
1
in their particular establishment was roughly $28; in one case $28.98,
and in another $23.88, substantially lower. I have no hesitation in finding,
first of all, that the goods which were displayed at the defendant’s place
of business and represented to be Eldon Custom Bank car sets, model 9558,
were in fact that particular model produced by that particular company.
Mr. Cousineau gave evidence for the defence. His, evidence was to the
effect that he purchased several of those items or sets at that particular
place of business for resale in his ‘retail outlet in Hull. He said that he
purchased several Eldon Custom Bank car sets, model 9558, and I have
no doubt whatsoever that that was the item that was being sold, legend
or tag attached “Wholesale price $26.65; retail $39.95”.
With regard to the remainder of Mr. Cousineau’s evidence, I must say
that I find it to be extremely vague. He did indicate that he had sold two
sets, he thought, at a retail price of $39.95. I have very grave doubts
whether he did. I do not wish to impugn his evidence as to its thruthfulness;
I merely feel Mr. Cousineau was rather confused in his evidence. He had
no invoices because unfortunately his place of business was destroyed by
fire. Nevertheless, because of the manner in which he gave his evidence, I
certainly have very grave doubts whether in fact he actually sold those
items at a price of $39.95. I rather suspect that when he brought them to
his place of business he very quickly learned they were being sold at a
far less price at other places. I think that if I had to make a judgment
on that point I would certainly be inclined to find that Mr. Cousineau im-
mediately dropped his price to the competitive level of the other store.
He mentioned what he called a price war. I do not believe there was
any price war at all. I think Mr. Cousineau really reduced his price, cer-
tainly not because of a price war, but merely because other businesses were
selling this particular item at a much lower range.
I think it would be useful if I read into the record at this point
sce. 33C of the Combines Investigation Act. Subsection 1 reads:
‘Every one who, for the purpose of promoting the sale or use of an
article, makes any materially misleading representation to the public,
by any means whatever, concerning the price at which such or like
articles have been, are, or will be, ordinarily sold, is guilty of an
offence punishable on summary conviction.
I have no doubt that the legend or price tag, which I read into the
record, and which mentioned “wholesale $26.65; retail, $39.95” was there
for a purpose. What was that purpose ? I really have to come to the
conclusion that it was there for a misleading purpose. It was there to
indicate to a prospective buyer –
and the evidence is that at least 20 per
cent or more of this particular business during the Christmas season was
retail trade, so-called by the trade, people coming in to buy – what the
price was. The reason for this tag was to mislead those purchasers into
believing they were going to get for $26.65 what would cost them at the
ordinary retail price $39.95. And of course this simply was not true. There
was no evidence submitted to me that anyone purchased this anywhere,
either in this store or anywhere else, at a retail price of $39.95, except for
Mr. Cousineau’s evidence which, as I say, on the point of resale, I do not
care to accept, and resale goes to the heart of the section. That is what
it is all about.
There was no suggestion in this tag that the suggested retail price
was $39.95. It is a plain statement that the wholesale price is $26.65; the
No. .4
UNREPORTED JUDGMENTS
retail price is $39.95. The only purpose of the tag, as far as the public
who came into the store off the street is concerned, is to have them believe
that what would normally cost $39.95 in a so-called retail store they were
going to get here for $26.65, which is what it was sold for to anyone who
came in there. So that, looking at those facts, and bringing them within
the terms of the subsection which reads: “Every one who, for the purpose
of promoting the sale”; that is what the sign was there for, to sell those
articles, “or use of an article, makes any materially misleading representa-
tion”, is this materially misleading ? I have no hesitation in finding that
it is. The suggested retail price of $39.95 was in fact not actually so there
or anywhere else, for that matter. I continue with the subsection: “–
to
the public, by any means whatever -“. This was after all a very pertinent
means to use to mislead the public concerning the price at which those
articles were to be sold.
Thefore, having said this, I have no hesitation whatsoever in finding
the accused guilty as charged.
Conviction entered
(fine of $100 imposed
and prohibition order granted).
COMBINES: MISLEADING ADVERTISING
REGINA v. THE ANDREW JERGENS COMPANY LIMITED,
Provincial Court (Criminal Division), Ottawa-Carleton, September
17, 1969, Judge R. J. Marin.
Judge Marn
The charge against The Andrew Jergens Company Limited is pursuant to
see. 330(l) of the Combines Investigation Act.’
The facts, simply related, are as follows:
The Andrew Jergens Company Limited offered for sale a bottle of
shampoo, size 13.5 ounces, with the label on the bottle reading “Special
$1.19 – Regular $1.79 size”, the said item being sold at the outlet-for 86
cents.
I am satisfied that the advertisement, inasmuch as it was repressnted
to be proper and true, was not so; and that it was misleading. Following
what I consider to be a satisfactory- investigation of a number of outlets
in the Ottawa area, there was no indication that $1.79 was indeed the
regular price of this shampoo. Nor is there any indication that it ‘was
ever sold at that price.
I accept the suggestion that there was some measure of cooperation
when the investigating officers visited the offices at Perth of the Andrew
Jergens Company; but I am also satisfied that only a very small percentage
of its regular shampoo is marketed- at $1.79 –
and that only over a period
of some months.
1 R.S.C. 1952, c. 314, as amended.
McGILL LAW JOURNAL
[Vol. 15
There are a number of matters to be taken into consideration when
imposing sentence. One must keep in mind the factors of rehabilitation,
deterrence and retribution. I have no doubt, first, that from the point of
view of rehabilitation I need only gloss over the matter. Keeping in mind
the fact that this is a first offence, I have no doubt that the reputation
of the company is such that the factor of rehabilitation should not be a
major or deciding factor.
On the other hand, from the aspect of deterrence, not only do I have
to consider the factor of deterrence against the Andrew Jergens Company,
but also as it would apply to other companies in the field of cosmetics. I
am aware, as I have been reminded today by counsel, of the many offences
of this nature in the cosmetics field which have come to the attention of
this court in the past year. For reasons unknown to me, there seems to
have been a measure of proliferation in these offences.
The court therefore must take the view that a fine imposed must be
of such proportion as to provide a real public deterrent. And when indeed a
fine fails to act as a deterrent, then there are alternatives, which I would
not care to consider this morning.
The other matter I have to take into consideration, in considering
deterrence, is that such representations as are indicated in this case have
the effect of misleading the general public. They invite the public to subscribe
to or participate in a bargain – which, indeed, is not a bargain. This is
where the factor of retribution comes in.
Retribution is the expression of public disapproval, the disapproval of
society toward crime. Retribution is a doubtful principle, so far as criminal
law is concerned, in its application to persons or property; but I feel that
it
is a very real principle when applied to the provisions of the Combines
Investigation Act, and instances such as I have here.
I am satisfied that, taking all these aspects into consideration I must
impose a fine which will serve the principles I have outlined.
Conviction entered
($750 fine imposed
and order of prohibition granted).
COMBINES: MISLEADING ADVERTISING
REGINA v. GENSER & SONS LIMITED, County Court of
Winnipeg, October 21, 1969, Solomon, C.C.J.
Solomon, C.C.J.
The defendant was charged under the provisions of sec. 33C of the
Combines Investigation Act,’ that it did:
(1)
on the 14th day of January A.D. 1967, at the City of Winnipeg
in the Province of Manitoba, for the purpose of promoting the sale of
General Electric 23″ Console television sets by the publication of an adver-
tisement in the Winnipeg Free Press newspaper published in
the City of
Winnipeg, in the Province of Manitoba, on the 4th day of January A.D. 1967,
1 R.S.C. 1952, c. 314, as amended.
No. 41
UNREPORTED JUDGMENTS
make a materially misleading representation to the public concerning the
price at which the said television sets have been or are ordinarily sold,
–
and –
(2)
on the 7th day of April A.D. 1967, at the City of Winnipeg, in the
Province of Manitoba, for the purpose of promoting the sale of a General
Electric 23″ Console television set by tags attached to the said set located
at its store premises to which the public had access, to make a materially
misleading representation to the public concerning the price at which the
said television sets have been or are ordinarily sold.
This was a trial under the provisions of the Summary Convictions Act.
The Magistrate dismissed the two charges and the informant appealed to
this court by way of a trial de novo under the provisions of the Summary
Convictions Act.
On the basis of the evidence that was presented to this court I have no
difficulty of finding as a fact:
(1) THAT the defendant on the 4th day of January, 1967, advertised
in the Winnipeg Free Press a General Electric black and white 283″
console television set for $288.00 and claimed in the said advertisement
that the regular price of the said set was $399.95.
(2) THAT the defendant on the 7th day of April, 1967, did advertise
to the public by attaching to a General Electric, black and white 23″
console television set, Model 33T65, a sales tag which in effect stated
that the sale price of the set was $299.00 with trade and that the
regular price was $399.95.
(3) THAT the defendant bought the General Electric, black and white
23″ console television sets, Model 33T65, from the General Electric
Company at $180.00 each.
(4) THAT Models 33T65, 31T65 and M2330 all had similar deluxe
MXL chassis with upright console and wood veneer. They were all
General Electric, black and white 23″ console television sets, similar
in construction and operation but a little different in appearance only.
(5) THAT the actual sale prices to the consumers and the suggested
sale prices of the said Models 33T65, 31T65 and M2330, were similar
with some small unappreciable variations which resulted from market
fluctuations rather than from the value differences of the models.
(6) THAT the defendant was a very knowledgeable businessman who
studied and knew values and market fluctuations of the products it
was handling as illustrated by the very modest representations made
by it through a newspaper advertisement that the defendant filed as
Exhibit 11. It states:
its doors
in
Forty years ago the first Genser’s store opened
Winnipeg … from that one small store Genser’s has grown to take
its place as one of the nation’s largest furniture concerns. In forty
years you get to know a few things about furniture styles and
values. And if you are as big as Genser’s you learn how to keep
on growing by giving your customers more for their money,
BETTER quality, BETTER service at lower prices. GENSER’S cus-
tomers are special.., they know quality, they know honest value
when they see it and they KNOW they can get the best values at
Genser’s every day of the year. The gala celebration starts Thursday.
McGILL LAW JOURNAL
[Vol. 15
Come in and take advantage of
customers have been taking for granted for years.
the low prices that Genser’s
(7) THAT the highest market sale price or the suggested sale price
of any General Electric black and white 23″ upright console television
set with MXL chassis was never over $319.00 per set at any time
relevant to these proceedings.
The other General Electric dealers in this area testified that they all
had suggested sale prices given to them by the General Electric Company.
There is not even a suggestion in any part of this evidence that the suggested
sale prices of the sets with MXL chassis was at any time over $319.00 per
set. It should be noted that most of the dealers were almost unanimous in
their presentations that they could not hope to sell these sets at the suggested
sale prices. Some of them felt that they were lucky if they could get a
mark up of 40% on the purchase price. I do not know whether the evidence
established with any certainty the average sale price of these television
sets. I am not sure at what price these television sets are ordinarily sold.
I am convinced, however, that none of these sets were ever sold at $399.95
per set or at any other price that would begin to approach the said sum of
$399.95. Some dealers were selling these types of sets at $270.00; some at
$280.00; and others at a little less and others at a little more but nobody
sold at a price that would approximate the said sum of $399.95. Even the
defendant, as shown by his own advertisement, was selling these sets at
a price range from $259.00 to $299.00 per set, well below what it referred
to in its promotion gimmick as regular sale price of $399.95. I am satisfied
that a fair inference from the evidence before the court can be made to
the effect that the ordinary sale price of these sets was below $300.00
per set.
The evidence that General Electric Company regularly circularized its
agents with memorandums containing the suggested list prices of General
Electric products; the evidence that the purchase price to the agent of
these sets was only $180.00 and that the suggested sale price of the said
sets was never above $319.00; the evidence that other distributors or agents
could not even begin to sell the said television sets at the company’s sug-
gested sale price and had to be satisfied with something much less, places
the defendant, who, by his own admission, is a knowledgeable merchandiser.
in a position that it must have known that the information contained in
these advertisements was false, unless a satisfactory explanation is given
to the contrary. No such explanation was forthcoming.
I am holding that the defendant, who, according to its own admission,
is an experienced, knowledgeable businessman who “knows value” and
“quality” and who sells to its customers at “best values” –
that these
sets which it was buying from General Electric Company for $180.00 per
set, were never sold originally or regularly at $399.95 per set. When the
defendant was placing these advertisements in the newspaper, which adver-
tisements represented that the regular sale price was $399.95, it knew that
the representation was false. When the defendant was attaching a tag to
the television set in its store, which tag represented that the regular or
original price was $39..95, it knew that the representation was not true,
I have no doubt in my mind that the advertisements were intended to mis-
lead the innocent, gullible consumer into believing that these particular sets
were ordinarily sold at $399.95 and that by getting these sets at the defend-
ant’s store at the price of $299.00 per set the consumer was getting a great
No. 4]
UNREPORTED JUDGMENTS
bargain –
actually paying more than the regular price.
the truth of the matter was that the unsuspecting customer was
Although I am holding in this case that there is sufficient evidence to
find, as I do, that the defendant had knowledge of the materially mis-
leading representation when it stated that the regular price was $399.95, I
hold, however, that under the law it
is not necessary to find that the
defendant had knowledge of the misleading representation. Sec. 33C of the
Combines Investigation Act provides:
(1) Everyone who, for the purpose of promoting the sale or use of an
article, makes any materially misleading representation to the public,
by any means whatever, concerning the price at which such or like
articles have been, are, or will be, ordinarily sold, is guilty of an
offence punishable on summary conviction.
(2) Sub-section (1) does not apply to a person who publishes an adver-
tisement that he accepts in good faith for publication in the ordinary
course of his business.
It should be noted that the above section was passed in spite of the
the Criminal Code, namely 306(1)
already existing similar provision in
which provides:
PUBLICATION OF FALSE STATEMENTS. Every one who publishes
or causes to be published in an advertisement containing a statement
that purports to be a statement of fact but that is untrue, deceptive or
misleading or is intentionally so worded or arranged that it is deceptive
or misleading, is guilty of an indictable offence and is
liable to im-
prisonment for five years, if the advertisement is published
(a) to promote, directly or indirectly, the sale or disposal of
property or any interest therein, or
(b) to promote a business or commercial interest.
The reason why sec. 33C was passed
in spite of the provisions of
sec. 306 of the Criminal Code was because it was intended for a different
purpose. There is a material difference between the provisions contained in
trhe Criminal Code and the provisions of the Combines Investigation Act.
The provisions in the Criminal Code created an indictable offence punishable
by imprisonment and the provisions in the Combines Investigation Act were
passed to regulate merchandising in our free enterprise society.
I agree that there is a preasumption that mens rea is an essential
ingredient of every offence. I hold that such presumption can be displaced
by words creating an offence or by the subject matter of the legislation.
I find that the subject matter of this legislation together with the wording
(2) of sec. 33C when read together implies that sec. 33C
of subsec.
(1) does not require the proof- of mens rea or knowledge of the wrongful
act. I agree with Mr. Justice Jessup of the Ontario Supreme Court in the
case of Regina v. Allied Towers Merchants Limited (II),2 when he stated that:
I therefore conclude that sec. 33C(1) is an offence of strict liability and
that mens Tea, in -the sense I have mentioned, is -not an ingredient of
the offence. I reach such conclusion for the additional reason that in
my opinion the class of acts legislated aboUt in sec. 33C(1) are not
criminal in any real sense but are acts prohibited under a penalty. To
par4phrase the words of Farwell, L.J., at p. 481 of Hobbs v. Winchester
2 [1965] 2 O.R. 628, [1966] 1 C.C.C. 220, 46 C.P.R. 239.
McGILL LAW JOURNAL
[Vol. 15
Corporation, [1910] 2 K.B. 41, in my opinion the legislature intended
that the maker of a materially misleading representation should take the
risk and that the public should be protected irrespective of the guilt
or innocence of the maker subject to the exceptions probided by sub-
section 2.
In order to regulate the normal development of commerce in our society
and to prevent undue exploitation of the consumer, the legislators found it
necessary to place on the statute books many provisions governing the
civil rights of the citizens of this country, which are enforceable in a sum-
mary manner as the provisions of sec. 33C herein. To protect the public,
remedial legislation of the nature that is covered by sec. 33C imposes
strict liability on the offender and mens rea as is generally defined in
criminal cases, is not an ingredient to the offence. When corporations secure
licenses to do business they are given such license to operate their business
within the law including the observance of sec. 33C of the Combines
Inv’estigation Act. For the protection of -the consumer the strict observance
of sec. 03C of the Combines Investigation Act is as essential as the
strict observance of the Weights and Measures Act, of ithe Food and Drug
Act and of other similar -remedial measures.
Conviction entered
(fine of $500 per count imposed).
COMBINES: MISLEADING ADVERTISING
REGINA v. ADVANCE T.V. & CAR RADIO CENTRE LTD.,
Provincial Magistrate’s Court, Winnipeg, Manitoba, January 9, 1969,
Magistrate J.J. Enns.
Magistrate Enns
The accused corporation is charged under sec. 33C(1) of the Combines
Investigation Act, which subsection reads:
Everyone who, for the purpose of promoting the sale or use of an
article, makes any materially misleading representation to the public, by
any means whatever, concerning the price at which such or like articles
have been, are, or will be, ordinarily sold, is guilty of an offence
punishable on summary conviction.
and the particular charge facing the accused reads that
Advance T.V. and Car Radio Centre Ltd. unlawfully did for the
purpose of promoting the sale of an Admiral color television set, by
-the publication of an advertisement in the Winnipeg Free Press, a
newspaper published at the City of Winnipeg in the Province of
Manitoba, on the 15th day of September, 1967, make a materially
misleading -representation to the public concerning the price at which
the said television sets have been or are ordinarily sold, contrary to
section 3 C (1) of the Combines Investigation Act.
On September 15, 1967, an advertisement, five columns wide and
approximately covering the lower two-thirds of the ninth page of the
Wnnipeg daily newspaper known as the Winnipeg Free Press appeared.
This advertisement is the subject matter of this case. lt purports to be an
No. 4]
UNREPORTED JUDGMENTS
advertisement for the accused corporation advertising a “store wide moving
sale” and makes particular reference to Admiral Consol Color T.V. sets
and Admiral Solid State Stereo Gets. The Crown’s chage is in relation to
the T.V. set advertised.
By a statement of agreed facts, it
is determined that at all times
material to the case the accused was a duly incorporated company under
the laws of Manitoba, and carried on business at 636 Sargent Avenue, and
1-300 Portage Avenue, Winnipeg, Manitoba, and did so under the names:
Advance Television Centre, Advance T.V. & Car Radio Centre and Advance
T.V. Sales and ,Service.
The first issue that must be decided is whether in fact the accused
caused the advertisement complained of to be published. From the evidence,
I find that this is so, but that the words “with -rade!’ may have been
omitted mistakenly. As -this omission does not, in my view, affect my
decision, I make no finding as to why the omission arose. Further, I
specifically find that, in view of two other advertisements dated September
1st, 1.967 and September 22nd, 1067, in evidence before me, that the words
included in the advertisement of
“Regular $1,025.00” were deliberately
September ,15, 1967.
And as I have just now used the word “deliberately” I wish to insert
a brief comment on the issue of mens rea, repeating what I said in the
Regina v. Miller’s T.V. Ltd. case, 1 firstly where I said:
as to mens rea, I am in agreement with Jessup, J., of the Ontario High
Court, as indicated in. the Regina V. Allied Towers Merchants Limited
(II) case 2 that the section does not Tequire its proof. It is significant that
sec. 33C(1) does not contain the word “knowingly” immediately before
the phrase “makes any materially misleading representation.”
At the same time, as I indicated in the course of the trial, I do believe
that it is necessary that there is proof that what appears or what is
done in the furtherance of a promotional technique such as an advertisement
was -caused to be done or done by a direct act or deliberate act of the
accused, not some accidental or inadvertent thing. And so
if there is
to
evidence that the accused corporation
cause the advertisement that is conplained of to be published, even if the
advertisement in itself is composed by others, I see no necessity of seeking
further evidence of intent other than the intent to publish the complained
of advertisement. In that sense I would concur with the defence that
some element of mens rea is necessary but no further than what I have
indicated, in -my view.
its officers intended
through
Continuing then, the second issue concerns the identity of the set
advertised. After viewing the advertisement which contains a picture of a
television set, and viewing the mat used for its printing, containing the
number “LK 5311”, and on hearing the witness Mr. Ridge and the evidence
of Mr. Houston, the government inspector, and considering the evidence
as a whole, I find that the set advextised is intended to represent the LK
531d. model. However, in my view, for the purpose of the section under
and LKU 531 are
which the accused stands charged, the models LH 5i
“such or like articles”. I make the finding on the basis of their being
identical or interchangeable in this sales area, according to both Mr. Ridge,
1 (1968), 56 C.P.R. 237.
2 [1065] 2 O.R. 628, [1966] 1 C.C.C. 220, 46 CP.R. 239.
McGILL LAW JOURNAL
[Vol. 15
and the document (BK 14) seized from the accused in which the phrase
“LK 53LU color t.v. (can use LKU models)”
is used.
Having found that the’accused caused the advertisement to be published,
subject to what I said about the possible omission, and having identified
the nodel displayed, I have no difficulty in finding certain lesser yet
necessary findings of fact. I find the advertisement was published “for the
purpose of promoting the sale of” the television sets, and I find that the
wording of the information is proper with reference to the submission by
the defence that in the absence of the word “like”, no evidence relating
to LKU or LH models is relevant. This finding follows from my earlier
observations as to their similarity.
Two issues remain. Firstly, was there a materially misleading represen-
tation to the public, and, secondly, was that representation, if
it exists,
concerning the price at which such or like articles are ordinarily sold. I wish
to deal with the “ordinary selling price” issue first.
The Crown called, as I tally them, nine Admiral dealers out of 10 known
outlets. The accused, of course, was not called by the Crown but documents
from the firm were produced. The three remaining, and not called Admiral
dealers only (purchased 3 model LK 531’s from the Admiral Corporation
distributor in Winnipeg. That is, 3 out of a known 55 sets distributed
in the Winnipeg area during 1967. I find this, then, not to take from the
validity of the evidence of those dealers called and the evidence obtained
from the files of the accused, taken altogether, as being not merely a
sampling, but a good basis for considering what was the ordinary selling
price of the model LK 5311.
In no case, revealed in the evidence, was such a model ever sold for
$1,025.00 in Winnipeg in 1967. In several cases the accused corporation
sold such sets for $569.00 with no trades, in 1967, both before and after
the Sept. 15 advertisement. As the accused sold more than any other dealer,
the prices at which it sold are particularly relevant. Many of the other
nine dealers sold only single sets and therefore are not perhaps so represen-
tative — yet there, too, are numerous examples of prices ranging from
$569.00 to $800.00. I find that in such cases where the dealer either doesn’t
bother picking up the used trade-in model, or where he sells the trade-in
model along with 1 others for a total price of $75.00, ,that in such instances
the true selling price was actually simply the cash paid by the customer.
Likewise, I find that where discounts of over $200.00 are given “for cash”
that the practice amounted to a promotional technique and that the rTeal
selling price, in the ordinary sense of that word, was the cash actually paid.
In conclusion, on the issue of the ordinary selling price, I am of the
opinion that the Crown has established’ beyond any doubt that model
LK 5311’s were not being ordinarily sold for $1,025.00 but for a substantially
lower price.
It remains to be considered whether or not the allegation “Regular
$1,025.00” was a “materially misleading representation to the public”.
Before indicating my view on that, I would mention that in answer to
my question as to the legislative purpose for enacting the subsection here
under consideration, counsel for the Crown suggested that it Was to insure
fair competition, in addition to protecting the consumer. In my view the
main or paramount purpose was to protect the interests of the buyer.
It is because of this view that I make the finding I do with great reluctance
on the Temaining issue.
No. 4]
UNREPORTED JUDGMENTS
I have held the ordinary selling price to be substantially below $1,025.00
for such models –
from the evidence, furthermore, I find no realistic
selling price (except in a very special compassionate case where a dealer
apparently sold one set to a man whose daughter was dying of leukemia)
below that sold by the accused of $569.00. In other words I find the
accused was selling the sets at generally the best price the public could
expect to find.
Nevertheless, the subsection here under consideration does not, in my
view, allow me -to take that factor into consideration. I believe I have dealt
with each essential ingredient in the case and as there is no doubt about
any of them in my mind, and as the subsection does not refer to any direct
detriment or loss to the public thereby (and here there certainly was no
loss but rather some saving to the public, but as it does not penmit me
to I cannot take that factor into consideration), in my view I must therefore
convict the accused accordingly.
[After hearing submissions of Counsel on sentence]
While there are certain similarities as between this and the Miller
case I do feel -there axe certain dissimilarities. One of the facts of the
Miller case was that unlike this case there were several instances where
the sale price they advertised was in fact higher than some of the major
competitors were selling at, so that I think is quite a distinction from this
case where if I recall right, a price of $808 –
if I recall right Hudson’s
Bay Company sold sets for $795, somewhat less than the special being
offered by the accused corporation in that case.
Also, this case arose before there was any previous prosecution on just
this kind of a matter to my knowledge in the city, and in view of the
comments I made in my reasons for judgment I do feel that although I
would not classify it as being merely a technical offence –
if I did that,
then I would be inclined to go along with your submission to impose merely
a nominal one dollar fine. I think it is more than that but I do feel that
it is a minimal infraction and for that reason firstly there will be a fine of
$50 and costs or distress, and I agree with counsel for the defence and
I see no compelling reason for insisting on an order as requested.
The Grown has open to it the full force of the law should there be a
repetition without an order being enforced and I think that no facts here
require such an order to be imposed, and so I’ll make no order.
Conviction entered
(fine of $50 imposed).
