Higher-Than-Advertised Prices: Where’s the Injury?

The past decade has seen an increase in the number of class actions based on subsection 224(c) of the Consumer Protection Act (Act) in Quebec. Whether it’s in the airline, automotive or retail sectors, merchants have been accused of charging higher prices for goods or services than those advertised, a practice which is prohibited by subsection 224(c) of the Act. Although several of these class actions have been certified, no decision on the merits had so far been rendered — that is, not until very recently.

In a first, the Quebec Superior Court (QSC) rendered judgment on the merits in the case of Union des consommateurs c. Air Canada. It dismissed the class action on the basis that no consumer had suffered an injury and that Air Canada could legally charge the amounts in question to customers who purchased tickets.

The case involved the sale of tickets by Air Canada on its website between June 30, 2010, and February 8, 2012. The Union des consommateurs (Union) alleged that Air Canada had breached subsection 224(c) of the Act by applying taxes, fees and charges that had been detailed prior to payment, but only at the second step of the ticket reservation process. Following certification of the class action by the Quebec Court of Appeal, Justice Karen Rogers of the QSC presided over the hearing on the merits.

According to Justice Rogers, Air Canada would have breached subsection 224(c) of the Act. However, she concluded that the class action members had not suffered any injury and, therefore, could not claim either a reduction of their obligations or compensatory damages. The QSC also rejected the ultimate sanction claimed by the Union, namely an award for punitive damages of up to C$10 million. The impossibility to reoffend — Air Canada having ceased the practice in question well before the class action’s certification — and the warnings on Air Canada’s website that the fares displayed did not include all charges convinced the QSC that Air Canada had behaved without ignorance, carelessness or negligence.

The absolute presumption of prejudice articulated by the Supreme Court of Canada in Richard v. Time Inc. does not apply in this case. For it to apply, the Union would have had to prove a sufficient nexus between the prohibited practice and the contracts binding consumers to Air Canada. In light of the evidence submitted, the QSC concluded the opposite: the manner in which Air Canada displayed its prices on its website did not influence consumers’ decision to purchase tickets.

The QSC concluded that if a practice prohibited under the Act is committed, it does not automatically follow that consumers are harmed. Consumers are still required to prove or, at least, quantify the alleged injury pertaining to the “informational defect” that was suffered by consumers as a result of the violation of the Act. Remedies provided under the Act are not intended to enrich consumers, especially where there is no evidence of harm.

This decision, while having several implications for proceedings based on subsection 224(c) of the Act, will also shed useful light on many consumer law class actions, regardless of the alleged prohibited practice, where such practice does not harm consumers.

In this case, Air Canada was represented by Blakes lawyers Robert Torralbo, Catherine Beagan Flood, Simon Seida and Anthony Cayer.

For more information, please contact:

Simon Seida            +1-514-982-4103
Andréa Daigle         +1-514-982-4126

or any other member of our Class Actions or Consumer Protection groups.