2017 QCCQ 9618, 2017 QCCQ 9618

R. c. Dragan 2017 QCCQ 9618 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Criminal Division No: 500-73-002379-051 500-73-002380-059 DATE: July 24, 2017 ______________________________________________________________________ BY THE HONOURABLE DOMINIQUE B. JOLY, J.Q.C. ______________________________________________________________________ HER MAJESTY THE QUEEN The prosecution v.

JOHN DRAGAN The accused ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The accused has been charged under s. 52 of the Competition Act ( Act ) with making knowingly or recklessly, between March 18, 1999 to January 31, 2004 , false or misleading representation to the public in a material respect with respect to the products Super Mini Ear ( Mini Ear ) and Clear Vue Super Booster Indoor Mini Dish TV/FM Antenna ( Clear Vue ) (counts 1 to 10) and between January 2000 to May 2004, that diverse range of products would be delivered within a specified period of two to five weeks (counts 11 and 12). [ 2 ] The last indictment on June 2, 2014 is written in French and states, about the false representation : − for the Super Mini Ear : Counts 1 and 2: “permet d’entendre tout ce qui était inaudible auparavant.”; Counts 3 and 4 : “contient de nouvelles technologies”; Counts 5 and 6: “peut s’insérer facilement dans toute oreille”; − for the Clear Vue : Counts 7 and 8: “améliore la qualité des signaux captés par la télévision et la radio”; Counts 9 and 10 : “opère comme une antenne géante et peut remplacer le service de câble ‘’; − Counts 11 and 12 : “que le délai de livraison desdits produits était de 2 à 5 semaines.’’ [ 3 ] On April, 7, the Crown stated that it had no evidence to offer on count 13 and the accused was acquitted on that count.

It seems that the minutes of the Court doesn’t mention this acquittal. The Court therefore confirms the acquittal on count 13. CONTEXT [ 4 ] The accused was the majority shareholder, Director and senior officer of JD Marvel Products (JD Marvel) and CDN Mail Order Exchange Inc. (CMOE). He commenced operation of JD Marvel in 1993 and incorporated CMOE in October 2003.

CMOE sometimes operated under the name US Mail Order Exchange. [ 5 ] These companies were mail order business that advertised a wide variety of products for sale in catalogs, brochures, inserts and internet, to the public through Canada and the United States. The advertisements for many of these products contain delivery times of two to five weeks. Sometimes the delivery time was specified on the product advertisement itself and sometimes it was on the order form contained within the catalog.

The products were largely produced and ordered most of the time, from Asia. [ 6 ] While CMOE was incorporated as a new company, it provided essentially the same products for sale and operated largely in the same manner as JD Marvel. Both companies used the same products catalogue save for the cover page, operated from the same business premises, engaged the same employees, and used the same external service providers to input and ship orders. [ 7 ] Both companies operated in Pointe Claire, Quebec and filed bankruptcy on August 26, 2004. [ 8 ] All the witnesses and the evidence admitted demonstrate that Mr.

Dragan is the decision maker. At the Office, in Pointe- Claire, in addition to Mr. Dragan, there are only three employees, an accountant, an assistant accountant and an administrative assistant. [ 9 ] In addition, JD Marvel hired a person to prepare the advertising. All advertising content was approved by Mr. Dragan. [ 10 ] JD Marvel hired the company “Dav Mat” in 1997 to open mail and organize the customer orders.

Over time ‘’Dav Mat’’ picks up the mail from the various post offices boxes, deposits cheques into JD Marvel banks accounts, processes white mail, handles refund requests and for a short period of time, in late 2003-early 2004, handles customer service on behalf JD Marvel and CMOE. All directions are provided by Mr. Dragan.

[ 11 ] The processing and shipping of orders at JD Marvel was handled by a third-party logistics business, ‘’Harling’’ and later ‘’Post Continental’’ (‘’PC’’) due to various disagreements between ‘’Harling’’ and JD Marvel or Mr. Dragan. [ 12 ] “Dav Mat” would provide “Harling” with the order information which was then imputed into an electronic database that was customized for JD Marvel.

The purpose of the database was to manage and complete order fulfilment and generate reports for JD Marvel regarding the statutes of orders. ‘’PC’’, much like ‘’Harling’’ would input the orders into a customized database, prepare labels, send the products out and prepare shipping reports for JD Marvel. [ 13 ] Both, ‘’Harling’’ and ‘’PC’’, sent out the orders in inventory on the instruction from Mr. Dragan. [ 14 ] ‘’Dav Mat’’, ‘’Harling’’ and ‘’PC’’, regularly send reports to Mr.

Dragan about the status of the orders, inventory including Back Order Reports, etc. [ 15 ] Between March 18, 1999 and December 31, 2001 the Competition Bureau analyzed 1622 complaints received from customers in regard to JD Marvel: 1466 complaints for non-delivery of the product; 710 complaints for unreasonable delay in delivery (in circumstance where no delivery time was stated on the advertisement); 53 complaints for failure to deliver within time specified of five or six weeks on the advertisement; and 92 complaints in relation to product performance. [ 16 ] The Bureau, than, commenced an inquiry.

SUBMISSIONS OF THE PARTIES [ 17 ] The Crown submits that Mr. Dragan was already experienced in the mail order industry. It also submits that as early as Mai 2000, Mr. Dragan met with a representative of the Competition Bureau, Luc Beauséjour, and this person advised him of approximatively 100 complaints regarding shipping delays. [ 18 ] Mr. Dragan was well aware of the problem of delays in delivery throughout the time he operated both JD Marvel and CMOE and failed to take corrective measures to address the issue.

This was not a situation where on one occasion a particular product was delivered late by a supplier or an error was made on the part of the fulfilment house. Rather, Mr. Dragan systematically failed to order sufficient inventory to meet the demands of his consumers resulting in regular delays. Furthermore, when informed of the issues by various sources he failed to take corrective measures.

His conduct was intentional or at minimum reckless. [ 19 ] The delay is a material respect to s. 52 of the Competition Act . [ 20 ] The Petitioner intends also to prove that for two specific products, the Super Mini Ear [1] and the Clear Vue Antennas [2] , the representations are misleading and also false in a material respect.

Experts, Gilles Cagnone and Alain Hébert, had testified about that and the accused was well aware about the situation. [ 21 ] For examples: In June 2001, the Office of Compliance, Centre for Devices and Radiological Health of the US Food and Drug Administration wrote to JD Marvel Products regarding their concerns about the representations made in the advertisements of Mini Ear issued by JD Marvel. The US FDA found that the claims fit the definition of a hearing aid and advised JD Marvel of the US legislative requirements for advertising such a product.

The US FDA’s concerns were in relation to the product being advertised as a hearing aid, but the letter should have alerted Mr. Dragan to the risks in advertising the Mini Ear as he was currently doing. Save for the disclaimer that was later added by Mr. Dragan that the device is not a hearing aid, no other modifications were made by Mr.

Dragan with respect to the representations in the Mini Ear. [ 22 ] Claude Forest, President of the Order of hearing Aid Acousticians of Quebec (Ordre des audioprothesistes) wrote also several “mises en demeure” dated 1996, 1999 and 2002 to what he alleged were misleading representations about the Mini Ear . He pointed out that the Mini Ear corresponds in all aspects to a hearing aid because of its form and the audience for which it is destined and the advertisement makes it clear that the product is intended for clients that do not hear well.

These documents are not relevant except to demonstrate the representations of the Mini Ear were, than, brought to Mr. Dragan’s attention. [ 23 ] Even if Mr. Dragan had everything necessary to notice complaints, he showed a lack of interest in the nature of the complaints. Even after he commenced with CMOE, he continues to represent the Mini Ear in catalogues and inserts. [ 24 ] The Defense submits that the Court has to make a difference between advertising which is misleading and that which is puffery. [ 25 ] This is marketing.

While there are of course limits, a certain amount of exaggeration is permitted and will not rise to the civil standard let alone the high standard of the criminal activity. [ 26 ] The Defense reminds that we are in front of a full mens rea offence. [ 27 ] The accused was running a business. He sold products. He was responsible for two million orders with ‘’Harling ’’ alone. Every manufactured product will have a certain number of defective samples, or “bad apples”. [ 28 ] Mr. Dragan sold an impressive quantity of both the Mini Ear and the Clear Vue .

Any assessment of complaints or returns must be done in the context of those large numbers of sales. Proving that a small number of purchasers were unhappy or returned a product does not rise to the criminal standard required to prove that a product did not live up to a representation made. [ 29 ] We can’t forget it is the Crown that has the burden of proof. The post-1999 prohibition on false and misleading advertising is designed to catch serious criminal conduct. [ 30 ] For the delay, the representation doesn’t make it, a material respect. There is no promise or guarantee attached to the words of

the representation. The Crown didn’t prove that the average purchaser would have found the words Allow 2-5 weeks for delivery so essential as to have likely been influenced by those words in a purchasing decision. [ 31 ] Mr. Dragan also insisted on ensuring customers who did not receive their orders in 35 days would receive back orders notices; something both Mr. Nantel (an expert) and Mr. Brewer from Federal Trade Commission suggested was good practice. [ 32 ] The proof doesn’t reveal a large excess in delays. (P-50 report from “Harling” to Mr. Dragan) and the two highest delay times are in 2002.

The proof reveals “Harling” had withheld the inventory at the end of 2002. 2002 represents the only year when the shipping times surpassed 35 days. Delays are largely the result of the actions of someone else other than Mr.

Dragan. [ 33 ] Delivery delays for Post-Continental were longer but we have to take into account the nightmare transfer from ‘’Harling’’ to ‘’PC’’. [ 34 ] Even if the delivery times from April 2003 to July 2004 were on average a few weeks longer than five weeks, it would appear that the delivery times were moving in the right direction. [ 35 ] Finally, if the Court is convinced about the commission of the infraction, the Defense asks the Court to invoke the minimus non curat lex principle and acquit.

THE LITIGATION [ 36 ] The Defense is conceded that the representations were made by or under the supervision of Mr. Dragan to the public for the purpose of promoting a product [ 37 ] The litigation is, then: Has the Crown proven beyond a reasonable doubt that:

a) a representation was false or misleading;

b) in a material respect;

c) the accused had knowledge of the false or misleading character of the representation or reckless in that regard? THE LAW General impression [ 38 ] The test for determining whether an advertisement is false or misleading is to be made by the trier-of- fact on the basis of the general impression of the advertisement. [ 39 ] This general impression test is set out in s. 52 (1) (4) of the Competition Act :

(4) In a prosecution for a contravention of this section, the general impression conveyed by a representation as well as its literal meaning shall be taken into account in determining whether or not the representation is false in a material respect. [ 40 ] The Appeal Court of Nova Scotia in 2009, in the analysis of the

article 52 of the Federal Competition Act , confirmed this conclusion of the trier-of-fact: “1. The general impression of the advertisement must be determined. In doing so, the nature of the particular portion of the public to whom is directed must be considered. The literal meaning of the advertisement is to be considered as well. (…).” [3] [ 41 ] To describe the general impression, the Crown submits the trier-of-fact must consider the ultimate impression left upon the reader as a result of what is said and implied in the advertisement. In addition, it quotes a paragraph from FTC v.

Sterling Drug Inc. , which is taken up in Imperial Tobacco [4] that says we must consider the advertisement in its entirety and not to engage in disputatious dissection. The ultimate impression upon the mind of the reader arises from the sum total of not only what is said but also of all that is reasonably implied. The Court agrees with that. [ 42 ] In Richard v.

Time [5] , in 2012, the Supreme Court that quashed the Appeal Court, says: “The dissection of the text by the Court of Appeal resembles the classical civil law approach to contract analysis and strays from the determination of the general impression the entire advertisement conveys to a consumer.” [ 43 ] “The courts must not approach a written advertisement as if it were a commercial contract by reading it several times, going over every detail to make sure they understand all its subtleties.

Reading over the entire text once should be sufficient to assess the general impression conveyed by a written advertisement. (…)”. [6] [ 44 ] “In the case of false or misleading advertising, the general impression is the one a person has after an initial contact with the advertisement, and it relates to both the layout of the advertisement and the meaning of the words used.” [7] [ 45 ] “The literal meaning simply means that every word used in a representation must be interpreted in its ordinary sense.” [8] [ 46 ] Even if the case is based on the Quebec Consumer Protection Act (QCPA) , the

interpretation or definition of general impression repeats in 2012, what was said in 1971. There is no reason to give that expression found in several laws, another meaning. Who is the consumer for the purposes of s. 52 to the Competition Act ? [ 47 ] The Crown says that it has to be considered from the point of view of the average purchaser, average consumer or average buyer to whom the representation is directed. The Defense uses the term ordinary citizen but quotes the Superior Court of Ontario’s decision in R .v.

Stucky [9] that says: “What is clear from the cases is that whether or not a representation is misleading will be determined from a consideration of the representation in context and from the perspective of the average person to whom it was directed.” [ 48 ] The Crown accepts the fact that generally the courts defined the average purchaser by the objective standard of the

“reasonable person”. The courts have been mindful that the level of sophistication of the average purchaser may vary depending on the service or product being purchased. For example, an average purchaser would not necessarily be expected to understand representations containing highly-technical terms used in a particular industry, but would be expected to be knowledgeable and discerning of representations relating to the purchase of routine items.

In short, even when applying the “reasonable person” standard, the nature of the product and the audience to whom the representation is directed must be considered. [ 49 ] These two ways to define the consumer for the purposes of s. 52 of the Competition Act , seem right and reconcilable. [ 50 ] The Crown goes further by suggesting that the average consumer is the “credulous and inexperienced” buyer as it is explained in the Supreme Court of Canada’s decision Richard v.

Time [10] . [ 51 ] The trier-of-fact must determine whether the “average consumer” or the “credulous and inexperienced” buyer would be misled by the advertisements. [ 52 ] The Defense responds that Richard v. Time is based on the Quebec Consumer Protection Act and can’t be applied when the Crown chooses to prosecute under

section 52 as opposed to the administrative or regulatory regime which is available to them. [ 53 ] The Crown submits that the court in Richard , quotes with approval a passage from the case of R. v. Colgate-Palmolive Ltd , a case decided under the Combines Investigation Act , the predecessor to the Competition Act . Additionally, the SCC noted that the relevant provisions of the QCPA at issue are “based to a large extent” on what is now subsection 52(4) of the Act . [ 54 ] It adds that in 2013, in the Commissioner of Competition v.

Chatr Wireless Inc. [11] , the Ontario Superior Court acknowledged differences between the purpose of the WCPA and the Act . Nonetheless, the court adopted the definition of the “credulous and inexperienced” consumer as the starting point in assessing the average consumer.

The judge accepted that the target of the advertising in that case was a credulous and technically inexperienced consumer of wireless services. [ 55 ] The Court has to nuance: In the Commissioner of Competition , the judge has, at one point, to decide if the administrative monetary penalty provided for in s.74.1 (1) of the Act does engage s.11 of the Charter. He quotes at its par.547, Wigglesworth and concludes that the matters which fell within the ambit of s.11 were “criminal and penal matters”. He writes: “Section 74.1 (4) provides that the terms of any order made against a person under paragraph (1) (b),(

c) or (

d) shall be determined with a view to promoting conduct by that person is in conformity with the Deceptive Marketing Practices Part of the Act , and not with a view to punishment.” The judge concludes that 74.1 (1) (

c) doesn’t engage s.11 of the Charter . [ 56 ] It seems to the Court that the judge could accept the notion of the “credulous and inexperienced” customer used in Richard v. Time because in that particular case, this

section in the Act may be comparable to the C.P.A . [ 57 ] To bring the Court to apply the “credulous and inexperienced” customer in the present case, the Crown refers to paragraphs 43 and 45 in Richard and reminds that the SCC noted the relevant provisions of the C.P.A at issue are “based to a large extent” on s. 52 (4) of the Combines Investigation Act , a slightly different version of which can now be found in s 52(4) of the Competition Act . [ 58 ] The Supreme Court says: ‘’Today’s Consumer Protection Act establishes a much more elaborate legal scheme than the previous version did.

Its enactment reflects the Quebec legislature’s desire to extend the protection of the C.P.A. to a broader range of contracts and to explicitly regulate certain business practices that are considered fraudulent as regards their effect on consumers.” [12] [ 59 ] It is in this context that the Supreme Court compares the choice of words used in the two laws. It doesn’t mean that the Supreme Court adopts the “credulous and unexperienced” consumer when the Crown chooses to use a

section of the Competition Act that requires a full mens rea . [ 60 ] The Court agrees with the Defense, that legislation, C.P.A., is not criminal legislation. It is provincial and civil, or administrative, with penal provisions [ 61 ] Even if there is a penal proceeding that the Director of Criminal and Penal Prosecutions can institute in the

section 277, there is no mention of mens rea . [ 62 ] The Courts accepts the argument of the Defense:

Section 219 prohibits a merchant, manufacturer or advertiser from making false or misleading representations to a customer. But under

Chapter III, we find the Penal Provisions.

Section 277 makes it an offence to contravene

section 219. There is no mention of mens rea . Under

section 287, a due diligence defence is provided for. This is a strict liability offence- similar to the alternative regime under the Competition Act , not

section 52 . Materiality [ 63 ] The Crown must prove the representation was material, in that it was: “…so pertinent, germane or essential that it could affect the decision to purchase”. [13] (The Court underlines) [ 64 ] At this step, extraneous evidence may be considered, but not for the purpose of altering the general impression of the respective representation. [14] [ 65 ] Finally, 52

(1.1) Competition Act : “ For greater certainty, in establishing that subsection (1) was contravened, it is not necessary to prove that any person was deceived or misled.” [ 66 ] That

part is clear. The Crown doesn’t have to prove that anyone had, in fact, been misled or deceived by the alleged offending representation. All that is required is that an hypothetical average purchaser would find the representation in question to be false or misleading in a material respect.

ANALYSIS The Mini Ear [ 67 ] It is not contested that JD Marvel or CMOE advertised and sold the Mini Ear . The issue is words used in the advertisements. [ 68 ] Counts 1 and 2 : “Vous permet d’entendre tout ce qui était inaudible auparavant” The advertisement gives details : “Les chuchotements, une musique douce, même une conversation à distance. (…) Élève le niveau de son comme aucun autre ne peut le faire.” “Lets you hear what you haven’t been able to before.

Soft spoken words, quiet music, even a distant conversation. (…) The Super Mini Ear enhances sound like nothing else can! ” [ 69 ] Counts 3 and 4: “The Mini Ear contient de nouvelles technologies.” Put into context, the advertisement is “New breakthroughs in electronic make it affordable” “Offert à un prix abordable grâce à de nouvelles technologies en électronique”. [ 70 ] Counts 5 and 6: “Peut s’insérer facilement dans toute oreille. The advertisement: Light and compact enough you won’t feel you have it on. The unit comes with three sizes of ear tips for the perfect fit and instructions.

Fits in either ear.” “Il s’insère parfaitement dans votre oreille. L’unité comprend trois formats d’écouteurs pour un ajustement parfait. Convient à l’une ou l’autre des deux oreilles. ” [ 71 ] The expert, Gilles Cagnone, is a licensed hearing aid technician and Professor in the Hearing Aid department at Rosemont College in Montreal.

His mandate was to assess the performance of the Super Mini Ear device by means of electroacoustic measurement in a 2-cc coupler in the ear; to evaluate the ergonomic, esthetic and mechanical characteristics of the device and did a critical analysis of the notice and advertising for the device. [ 72 ] He tested two Mini Ear that were provided by the inspector Poiré. She purchased the first one like every customer would do; directly from JD Marvel. The other one was obtained from a customer who made a complaint. This elderly gentleman, Mr. Siry, said that he had tried it and it did not work.

In need of a second Mini Ear for testing, the inspector Poiré contacted him and offered him to purchase it from him. [ 73 ] Mr. Siry made an affidavit. He didn’t use it because it did not solve his hearing issues. The product didn’t fit his ear. The batteries only lasted 15 minutes. He didn’t modify or alter the components of the Mini Ear . [ 74 ] To be able to say that the batteries only lasted 15 minutes, it is because Mr. Siry tested it. To say the product didn’t fit in his ear, it is because he tested it. Even if he wrote an affidavit, the Court concludes that Mr.

Siry tried it before to conclude that this product doesn’t fit in his ears and has not solved his problem. The inspector Poiré couldn’t ignore that. [ 75 ] The affidavit was not contested and was admitted at the trials. The Court concludes that Mr.

Siry didn’t modify or alter the components of the product. [ 76 ] What is the expert saying about each representation? [ 77 ] Counts 1 and 2: “ Lets you hear what you haven’t been able to before”, “Vous permet d’entendre tout ce qui était inaudible auparavant, ”: [ 78 ] The expert: “Given the amplified response curve that is mainly in the low frequency range, the high background noise level of the device, and the inappropriate feedback, for all practical purposes only environmental noise can be heard.

Owing to the unfavourable signal-to-noise ratio, the sound received is the low intelligibility and is practically useless.” [ 79 ] He explains: ⇒ Soft spoken words, quiet music, even a distant conversation, the understanding being that these can be heard. Owing to the absence of voicing, the spectrum of soft spoken words is mainly located in the high frequency region.

Because the response curve of the device is mainly in the lower frequencies and natural resonance is eliminated by the presence of the device in the ear canal, there is no case in which soft spoken words can be heard. ⇒ Quiet music will not be reproduced with fidelity because of the non-linear response curve, and distorsion and background noise will make listening to quiet music, even unpleasant. ⇒ As for distant conversation, owing to the low sensibility of the microphone and the overall electro-acoustic characteristics of the device, there is no case in which it can be followed, much less understood. [15] [ 80 ] “The Super Mini Ear enhances sound like nothing else can’’; “ Élève le niveau de son comme aucun autre ne peut le faire .’’ The expert: “This claim is truly ironic: who would ever aspire to equal or surpass the poor quality performance of this sorry device.

As stated earlier, although the sound level is amplified, it is amplified in such an unsatisfactory way that one wonders what the potential uses of the device might be.” [16] [ 81 ] The Defense damages the credibility of this expert. First at all, the expert in the first trial, recognized that it is important for his comparative results to be valid, both devices must be in the exact same condition when he receives them. Because the first device was brand new, the second one has to be brand new.

If the expert compares testing results which were done on a new device versus testing done on a used device the results can be inaccurate. [ 82 ] The expert learned only in cross-examination that the second device was not brand new but maintained that his findings are accurate in terms of the fact that they analyse the device per se and the results are similar in both. The measures that he obtained are valid for both.

[ 83 ] For that reason, the Defense concludes: Regardless of the fact that he was testifying for the first time as an expert and was getting paid, his first and only loyalty should have been to his principles as a scientist. His quick abandonment of those principles alone should make the Court question his reliability as an expert witness as well as the reliability of his expertise. [ 84 ] The Defense adds that the expert had to correct his graph found at page 9 of his English report, after he declared that low ranges are from 100 Hz to 500-750Hz, mid from 750Hz to 2000 Hz and high beyond 2000Hz. The REAR in

section 5.2.1 should, then, express more significant improvement in mid frequencies and improvement even into the high frequencies. [ 85 ] It is the same thing for the graph shown at page 10. The expert says the graph below shows that the gain was positive only in the low frequencies, where it average 10 to 15 dB. In fact, the graph shows a benefit in the low and mid ranges.

The peak is in the mid- range and there are some benefit close to 2000 Hz where the high frequency sounds begin. [ 86 ] Low and high gains were confirmed with human samples, two women and one man, but the expert is not able to remember their age and who they are. [ 87 ] Finally, the expert affirms that he tested the Mini Ear with the receiver in but at trial the receiver is missing. It is curious. [ 88 ] The Court notices that Mr. Cagnone testifies for the first time, as an expert. When he described the Low, Mid and High ranges, it is clear that his graphics don’t represent what he is saying about them. Mr.

Cagnone, nevertheless, maintains his conclusions but didn’t say why. [ 89 ] He insists to say that it is important to have a brand new sample to compare with the first one but is not so important when he learns that the second sample was not brand new. [ 90 ] The Court would have needed more explanation to be convinced about his conclusions; his report is not sufficiently accurate or reliable for Sound evaluation. [ 91 ] Counts 3 and 4: The reproach described is “contient de nouvelles technologies”. [ 92 ] The advertisement is : “New breakthroughs in electronic make it affordable ” “Offert à un prix abordable grâce à de nouvelles technologies en électronique ”. [ 93 ] The expert says: “The new technologies in electronics referred to the advertising are not present.

In fact, most of the components included in the device are based on analog technology that has been used for several years. There is nothing revolutionary or high-tech; quite the contrary, the quality of the components is very average, even mediocre.” [ 94 ] Materiality: If this representation is untruthful about the new breakthroughs in electronic, is this representation so pertinent, germane or essential that it could affect or likely influence the average purchaser’s decision to purchase the respective product? The answer is no. [ 95 ] Counts 3 and 4 have to be put in context.

The advertisement doesn’t say, “you have to buy this product because of his new breakthroughs in electronics’’. [ 96 ] The literal meaning of the advertisement is simple. The reference at the technology is in link with the price and only with the price. The advertisement indicates why the company is capable to sell this product at this price. It doesn’t go further. It doesn’t give any other information, any specific examples. [ 97 ] The Mini Ear is sold at a very low price.

Is the fact to add the reason why the company is capable to sell this product at this price, (what is for sure, at least, a puffery) will really influence the decision of a consumer? [ 98 ] The first thing that could or will influence the consumer about his decision to buy or not this product will be about what it could bring to him. After having been interested by the product, the price will have for sure, a certain influence in his decision. [ 99 ] The price in itself is particularly low. The product pretends to do what the customer is interested in.

Does the consumer need to know why it is so cheap to make his decision? At this point, the Court concludes that it doesn’t have any effect. [ 100 ] The Court doesn’t have to go further with counts 3 and 4. [ 101 ] Counts 5 and 6 : “peut s’insérer facilement dans toute oreille”. [ 102 ] The Crowns’ submissions about claims in English and French: “ Light, compact and discreet, the unit comes with three size of ear tips for the perfect fit. Fits either ear.” “Il s’insère parfaitement dans votre oreille”. « L’unité comprend trois formats d’écouteurs pour un ajustement parfait.

Convient à l’une ou l’autre des deux oreilles.» [ 103 ] The expert, in his report, quotes or uses these terms: Light and compact enough you won’t even feel you have it on.” He, than, concludes: “This assertion is quickly belied. The device’s considerable size and anatomical adaptation are far from satisfactory, as show in the photographs. It protrudes even from the largest ears.

As for a perfect fit provided by three sizes-not three earphones but three ear tips-one should exercise caution.” [ 104 ] The indictment, the Crown’s submissions, and the expert’s conclusion don’t use the same words found in the advertisement. [ 105 ] The Court has to take into account what is reproached in counts 5 and 6. The Mini Ear “peut s’insérer facilement dans toute oreille” and that representation is misleading. [ 106 ] What does it mean to use these words normally? Easy insertion in any ear. That’s it. No more than that.

[ 107 ] The expert based his conclusion on an ergonomic evaluation in six points:

chapter 6, shell, ear tips, faceplate, volume control, battery compartment and switch. They are not all relevant for this specific point. [ 108 ] To the negatives points, the expert writes: - Shell : “Shape and volume not compatible with ear anatomy, particularly in the pinna region. Product is not customized. Difficult to keep the device in place if the temporomandibular joint moves.

Tends to fall out by itself due to excess weight inside and outside the concha of the auricle and poor retention at the inner wall of the ear canal.” – Ear tips : “Non-customized shape allows acoustic leakage, producing a high-pitched how, characteristic feedback.

The weight of the device is poorly distributed, which, in combination with poor retention at the inner wall of the ear canal due to the absence of customization, results in a risk of losing the device.” [17] [ 109 ] The evaluation about faceplate, volume control, battery compartment and switch doesn’t help to determine if the Mini Ear is easy to insert in each ear. [ 110 ] The

chapter 7, Esthetic evaluation, is also not relevant. For sure, the device is bulky and highly visible but it doesn’t mean it can’t be inserted in any ear. [ 111 ] Ear tips, positive points: “Easy to insert and remove.”; “Made of a soft material that is agreeable to wear.” Furthermore, to be sure that everybody would be capable to use it, the company furnishes three sizes of ear tips. [ 112 ] The Crown suggests that the consumer would have to have an ear canal that is compatible in size with one of the three tips.

To be acceptable, it would need more than three sizes of ear tips. [ 113 ] The Court doesn’t agree with these pretentions. The ear tips are easy to insert and remove. They are made in a soft material and agreeable to wear. They will be inserted in a device and to help the customer, this device comes with three sizes of ear tips. How many ear tips would it take to satisfy the Crown? [ 114 ] The device is effectively large and not as esthetic that others hearings devices in the industry.

It is also not the most compatible device but it is not sold at the same price as well. [ 115 ] The Court can’t conclude that there is misleading or false representations.

Clear Vue Antennas [ 116 ] Counts 7 and 8: “ont prétendu faussement que le Clear Vue améliore la qualité des signaux captés par la télévision et la radio”. [ 117 ] More specifically, the advertisement says: “ Clear Vue power-boosts TV and radio signals to give you a super-sharp, super- crisp picture.” “ Clear Vue vous émerveillera en vous assurant une image super claire et super précise.” [ 118 ] The words used in the advertisement, are very strong: “super-sharp, super-crisp picture”; “vous émerveilera…image super claire et super precise”. [ 119 ] The expert made many tests in two different places, at St-Rémi, his place of work and at Lachine, to the residence of his uncle, with different instruments. [ 120 ] At Lachine, the expert is at the half distance between St-Rémi and the Mont-Royal and in a perpendicular position to the signals of Mont-Royal.

It was the exact place where he wants to make the tests. [ 121 ] In St-Rémi, the expert is at around 20 km of the Mont-Royal tours where the signals are emitted and the circuits on which the expert connects are also in a perpendicular position to the Mont-Royal. [ 122 ] He proceeds on that way to give a chance to the Clear Vue . [ 123 ] There is nothing in examination or in cross-examination that could indicate in any way that tests don’t respect proper rules or are not done correctly.

The Court is convinced that everything was done correctly by the expert. [ 124 ] His report permits to conclude that the Clear Vue unit is a signals amplifier; an amplifier of FM and TV signals for indoor use. The mini-dish is, nevertheless, only decorative and is of no use in receiving signals. The Clear Vue is not an antenna. [ 125 ] Is the Clear Vue power-boots TV and radio signals to give a super-sharp, super-crisp picture? [ 126 ] “It must amplifying noise in a way that increases the signal-noise ratio of the signal if it is to obtain a better picture. And it is essential to avoid introducing noise.

Noises, even weak noises, are easily reproduced in the TV image in the form of the dots or lines. This stems from the fact that a TV channel’s picture is amplitude modulated (AM modulation).” [18] [ 127 ] The device is a signals amplifier but the internal circuits of the device add noise to amplified signals. The Clear Vue generates signals. In the two graphs of page 19 of the expert’s report (on ANT IN and on OUT 1 and Out 2), we can see the various parasitic signals generated by Clear Vue .

The levels of these signals are extremely high. [ 128 ] The conclusion of the expert Hébert, is then not surprising: “ Clear Vue , when operated with the switches on the HI and AC settings, becomes an interference-causing device that generates strong signals in the television set and the home cable network.” [ 129 ] The expert also concludes: The only use where Clear Vue might be effective would be as an amplifier of cable signals when the signals provided by the hookups inside the house are greatly reduced. [ 130 ] This conclusion is important.

[ 131 ] If we look at the picture seen in the advertisement [19] it is highly possible that it is this exact kind of “noise” that we will see in our television when the hookups inside the house are greatly reduced. The expert , who tried to obtain an improvement of this magnitude, writes : “When we applied the cable signals directly to Clear Vue and added the loss between Clear Vue and the television set, we were able to eliminate the effects of the deterioration and reproduce an effect similar to the above picture.” [ 132 ] There is a diagram at page 3 of the report.

Even if the expert reproduces that, to explain something else, we can notice that the Clear Vue is built to permit to apply the cable directly to it (ANT In) and it is correct to connect the coaxial cable from the television to the Clear Vue (Out 1 or Out 2).

The expert or any other person don’t have to transform the Clear Vue to obtain a gain and ameliorate the image. [ 133 ] The Court is then, not surprise to learn that seven customers wrote: “the biggest surprise is that the antenna actually improves the reception on my little TV “, it does make a difference” or “really works great”. [ 134 ] The Clear Vue is able to ameliorate the quality of the image in a particular context and it is highly possible, that it is customers in this situation, who will want this product. [ 135 ] Because we’re not in an administrative context or a regulatory regime, the Court concludes, for counts 7 and 8, that the Crown did not discharge its burden of proof. [ 136 ] Counts 9 and 10 : “Opère comme une antenne géante et peut remplacer le service de câble. ” [ 137 ] The advertisement : “Utilise le câblage AC de votre maison comme une antenne géante. – Uses the AC wiring of your home as a giant antenna” “Vous pourriez ne plus avoir besoin du câble - You may never need cable again”. [ 138 ] The expert writes: “For an antenna to be effective, its elements (radials) must be of a specific length in relation to the desired reception frequency so that is resonates at this frequency.

This explains why the elements of outdoor antennas are of different lengths and why the elements of indoor antennas are telescopic. Furthermore, antennas need to be oriented in order to obtain the best picture. The wiring in your house does not have these capacity.” [20] (The Court underlines) [ 139 ] In the first paragraph, the expert explains that the wiring can contain large numbers of parasitic signals. The Defense says: “But it might not.” The expert continues: But logically, the gain will increase when the wiring has fewer parasites. Mr. Hébert concedes that this important variable is dramatic.

In fact, this one variable itself includes other variables, such as the position of the wires in the walls and the materials on outside of the walls. In his testimony on May 3, 2017, Mr. Hébert repeated these facts adding that another variable was the length of the wiring. Mr. Hébert agreed that given this facts, results will vary dramatically depending on where you test the machine. [ 140 ] It is of judicial knowledge that when we built a house it is for its structure and its thermal capacity. The wiring of a house is made to transport electricity, to mark the household appliances, heating the home and light.

Neither walls nor wiring are designed to capture television or radio signals. [ 141 ] Even if “that it is true that the unit contains a coupling circuit to collect the signals found in a home electrical wiring”, it appears clear that it is the hazard effect, a completely random circumstances that will permit to obtain a gain. [ 142 ] The expert also draws our attention on the words used in the advertisement “pourriez - may”. Nothing is guaranteed. [ 143 ] He also explains that it would be impossible for the device to receive the exclusive signals of authorized distributors (cable, satellite antenna).

The Defense, argues that for customers who have non-exclusive Cable channels, the expert’s conclusion does not apply. [ 144 ] The Court concludes that it is, first, random, a pure chance, that the Clear Vue obtains a gain and if the customer obtains one, he has to have non–exclusive Cable channels to have “maybe” the possibility that it could replace the cable.

That is a very, very minimal possibility. [ 145 ] More than that, when it is “non-exclusive”, we can think about TVA, Radio Canada… In this kind of situation, there is effectively no need of cable; a simple antenna or “rabbits ears” could usually be sufficient. [ 146 ] The advertisement goes a lot too far. The average consumer can only be duped by this announcement and that, even if the advertisement uses words “like/comme” and “may/peut”. The representation made to the public is false and misleading in a material respect.

It is admitted that it is for the purpose of promoting the sale of the product. [ 147 ] The Court adds that to be sure that the public will be confused, the advertisement shows two pictures: One shows the Clear Vue amplifier through a living-room window.

A larger image of antenna is added and linked to the small image by perspective lines that suggest signals being captured by the dish, when in fact the dish is not capable of capturing signals. [ 148 ] The Court doesn’t see any other reason for showing that, than to mislead the consumer. [ 149 ] It is the same thing in the second picture: A satellite antenna can be seen in the lower left corner of this image. A satellite appears in the upper right corner of the image. A satellite antenna is placed at the base of the letter “V” of the word “ Clear Vue ”.

Yet although Clear Vue is equipped with a small decorative plastic dish, it does not serve as a receiving antenna for satellite signals. [ 150 ] The fact of adding the word “Antenna” after Clear Vue in the title of the advertisement, is also something that misleads the public. [ 151 ] Finally, the advertisement uses also these phrases: “Improve the reception from even the weakest stations without paying a

penny for cable service - Appréciez une réception claire comme du cristal même des stations les plus faibles sans payer un sou pour le service du câble”.

As the Court said before, it goes too far! [ 152 ] Did the accused, knowingly or recklessly, make these representations? [ 153 ] “Before answering this question, the Court will proceed with counts 11 and 12: Ont prétendu faussement que le délai de livraison desdits produits était de 2 à 5 semaines. [ 154 ] Count 11 is related to JD Marvel (between January 17, 2000 and July 31, 2004) and count 12, to CMOE (between November 30, 2003 and July 31, 2004). [ 155 ] Is the representation material? [ 156 ] To prove it, the Crown asked to an expert. Mr.

Nantel used his expertise in the study of consumer behavior, retail trade and e- commerce to analyse the data collected. He divided his report in four parts. The fourth one incorporates the various studies and includes his expert assessment. [ 157 ] He concludes: “Whether because of consumer concerns of the industry’s own criteria, there is no doubt that the shipping time is one, if not the most important, criteria in terms of remote selling.” [21] [ 158 ] From the consumers’ point of view, the situation is even more critical if the product is paid for (cheque or credit card) prior to shipping.

This phenomenon is explained by the inherent risks of any purchase. [22] [ 159 ] He also said: “(…) with the exception of very rare products that are unavailable in stores, consumer’s normal wait times should not exceed normal mail delivery times, i.e., one week.” [23] [ 160 ] He closes with: “In the present case, consumer frustration, dissatisfaction and discontentment will inevitably increase when merchandise is paid quickly and items take longer than seven days to arrive.

Few consumers would make such transactions if they had to deal with these conditions.” [24] [ 161 ] The Court concludes that for the expert’s point of view, the delay is usually material. [ 162 ] The Crown, in counts 11 and 12, accuses Mr. Dragan of failing to meet the stated timeframe of 2 to 5 weeks. [ 163 ] When no delay was announced, consumers, as the expert said, will be very frustrated after one week but it is not what it is in dispute here. [ 164 ] The longest delay announced by the two companies is 2 to 5 weeks.

It is in this regard that we will analyse the failure to meet the deadline. [ 165 ] Commencing in January 2000, the JD Marvel inserts in Canada advertised the products would be delivered within either 2 to 4 or 2 to 5 weeks. The same thing happened in May 2000, in inserts distributed in USA. [ 166 ] Commencing in January 2002, for US catalogs, there is an order form with an announced delay of 2 to 4 or 2 to 5 weeks. In October 2002, there is an order form in Canadian catalogs. The delay is 2 to 5 weeks. [ 167 ] In the two catalogs produced by CMOE, in December 2003 and March 2004, there is an order form.

The delay is 2 to 5 weeks. [ 168 ] To give an idea about the number of catalogs sent, when “PC” took over from “Harling”, as the fulfilment house, (between the end of 2002 and the beginning of 2003), “PC” kept track of the catalogs mailing: “PC” distributed 1 681 950 catalogs for JD Marvel and 1 226 558 for CMOE. It is interesting to note that each catalog was approximatively 25 pages for a large variety of products. [ 169 ] There are also advertised products in Free Standing Inserts (FSIs) in newspaper or coupon envelopes throughout North America.

Neither “Harling” nor “PC” kept track of the distribution. [ 170 ] Ms. Maimone from “Dav Mat”, testifies about the fact that “Dav Mat” tabulates the total amount of orders received as well as the dollar value of the orders. This information was placed on a control sheet and provided daily to Mr. Dragan. [ 171 ] “Dav Mat” organizes the orders based on product codes. “Dav Mat” enters the orders based on the product codes into data base and this information is provided to “Harling”; so they can prepare the products for shipment. The orders are processed continuously.

They are provided to “Harling” once or twice a week. [ 172 ] Mr. Don Dickison, vice-president of “Harling” for 40 years is in charge of JD Marvel account. He provides, among other things, Mr. Dragan with weekly reports of the status of orders and inventory. Ms. Delves also, from “Harling” confirms these reports regarding the status of inventory including Back Order Reports. [ 173 ] Mr.

Dickison prepared for the Competition Bureau of Canada (Bureau) Shipping Performance reports for the period of 1999 to 2002, which track the amount of time that passed between a customer order being received and the time it was ordered to be shipped by Mr. Dragan. The proof reveals that no product could be shipped without the authorization of Mr.

Dragan or one of his employees. [ 174 ] In Canada: For 2000: the percentage of products shipped after 41 days was 16.54% ( 9.13% over 51 days) for 2001: 16.51 % ( 9.78% over 51 days) and for 2002: 30% ( 20.14% over 51 days) [ 175 ] In USA: For 2000: the percentage of products shipped after 41 days was 29.95% (18.49% over 51 days) for 2001: 28.38% (17.82% over 51 days) and for 2002: 50.56%(37.85 over 51 days)

[ 176 ] The time that “Harling” had been involved in preparing the orders for processing is included in these reports but not the time that the product might be in the Post and a certain period of time included in the percentage of products shipped after 35 days (column 31-40) [25] [ 177 ] That time in the Post is approximatively two to seven days in Canada (Mr. Dickison), 3 to 5 ( Mr. St-Germain from ‘’PC’’); up to 14 days in US and 2 to 10 days when US bulk was used (Mr.

Dickison); 3 days to 2 weeks and possibly longer in California (Mr.St- Germain). [ 178 ] During a certain period of time, “Harling” withheld inventory because JD Marvel owed funds to “Harling”. “Post Continental” (‘’PC’’/ Mr. St-Germain) replaced “Harling” and Mr. St-Germain says that he was almost fully operational by February-March 2003. Then, from November 2002 to March 2003, the delay is not necessarily attributable solely to Mr. Dragan’s actions and could explain the higher percentage over 50% that was found in 2002. [ 179 ] Mr. St-Germain prepared for inspector Poiré, same kind of reports that Mr.

Dickinson did. It should be noted that these reports were based on customer orders inputted into a database built by ‘’PC’’ for JD Marvel. [ 180 ] We can notice (P-89) that from 2002 to July 2004, in Canada, the percentage of products shipped after 41 days was 70.63 % and in USA, 81.7%. These reports don’t include the time that the product might be in the Post and a certain period of time included in the percentage of products shipped after 35 days (column 31-40). Like the Court wrote before, from November 2002 to the beginning of 2003, the delay is not necessarily attributable solely to Mr.

Dragan. [ 181 ] If we look more specifically at the orders from January 2003 to December 2003: For JD Marvel, the percentage of products shipped after 41 days in Canada, was 60.67 % and in USA, 79.54%. For MOE, the percentage of products shipped after 41 days in Canada, was 100%. In USA, we don’t have the information [ 182 ] From January 2004 to July 2004, the percentage of products shipped after 41 days in Canada, was 94.81 % and in USA, 68.25 %.

For MOE, two catalogues were sent and the percentage of products shipped after 41 days in Canada, was 93.26 % and in USA, 80.50%. [ 183 ] We can, then, easily conclude that it is not the hold-back from ‘’Harling’’ that brings the delay. It also corroborates the testimony of Mr. Dickison who said the stoppage would have been a matter of weeks not months. [ 184 ] We can also notice that between 51 days to 90 days, the percentage is close to 37.95% in Canada and 35.12% in USA for JD Marvel and 33.34% for MOE in Canada.

It is far from 2 to 5 weeks and the time that the product is in the Post isn’t taken into account as well as a certain period of time included in the percentage of products shipped after 35 days (column 31-40) [ 185 ] It is not because these reports were requested by the inspector Poiré that Mr. Dragan doesn’t have any clue about delays. The proof reveals that he is the president of both companies and a very present one. [ 186 ] Like the Court wrote earlier, Ms. Maimone, Mr. Dickison and Ms. Delves testified that “Dav Mat” and “Harling” have consistently produced reports to Mr.

Dragan allowing him to have a clear status of his business. [ 187 ] Mr. St-Germain also testified that ‘’PC’’ provides regular reports for Mr. Dragan. His way to work: The orders would go to “Dav Mat”. They would be open, cheques would be separated and then, the data file would come to ‘’PC’’, two to four times a week. ‘’PC’’ then, enters the information in its data basis that creates reports that were given to Mr. Dragan or his assistant. [ 188 ] Mr.

St-Germain calls these reports “key counts” which is the product number and the distribution in a sense of where the order came from Ontario, BC, etc. [ 189 ] “Basically, the purpose of these reports, is to see how the products did and the time delay that would take, let’s say if it took Canada Post five days to get it to somewhere in the west, and then you figure another five days for it to come back, then you would be able to guage yours orders coming in.” [26] [ 190 ] “The minute we got the files from Dav-Mat, we would process them and probably be able to give him (Mr. Dragan) the report by the next day.” Mr.

Dragan is then, able to ascertain what the outstanding orders were.. [ 191 ] The Court raised something that could deserve attention: When Mr. Dragan decided to go to ‘’PC’’, it is because there is a conflict about amounts of money due to “Harling”. He transfers to ‘’PC’’ and there is another conflict. JD Marvel owed ‘’PC’’ quite a bit money. ‘’PC’’ proceeds exactly on the same way than “Harling”. It was decided not shipping out since Mr. Dragan wasn’t paying for the service.

The delay for this hold back was very short. [27] However, the delay continue to increase considerably. [ 192 ] There is more, in catalog 26-CATE (P-23

H) in February 2003, there is a comment in the announcement of the Clear Vue: “I submitted order status request yesterday and, of course, the item arrived today . I’ve already installed the Mini-dish antenna and it definitely improves my TV reception. Thank you.” “Amy” (The Court underlines). [ 193 ] On the order forms, in the same catalog, we notice ; “Allow 2-5 weeks for delivery.” [ 194 ] In December 2002 (P-24 C), and March 2003 (P-24

D) we had, in the advertisement, the same comment from Amy even if the official delay was announced on the order form. [ 195 ] This delay, on the order forms (2-5 weeks), was written in small print. The comment from Amy that is suggesting people will receive it the day after was in the advertisement. [ 196 ] Did Mr. Dragan approve these kind of advertisements to make sure that customers will be well informed about the fact that

they will have to be patient to obtain what they ordered? It’s clearly not [ 197 ] For someone who is experiencing problems with “Harling” and is in the process of transferring to another company (‘’PC’’); choosing that moment to emphasise that the delay will be very short, is particularly disruptive. [ 198 ] Mr. Rana, the bookkeeper and assistant for Mr. Dragan, when he is operating JD Marvel and CMO, says that Mr. Dragan is the one who is responsible for ordering inventory. [ 199 ] The products are often not shipped out to customers because there was no inventory.

Most of the products had, first, to be produced in Asia and then, delivered by sea to North America. Mr. Rana explains there is a time frame of 30 to 60 days for manufacturing and another time frame of 30 to 40 days for shipping. [ 200 ] Mr. Dickison, Ms. Delves and Mr. St-Germain, also testify about the lack of inventory. [ 201 ] Mr. Dragan was well aware about that. He received weekly Back Order and Items not shipped Reports from “Harling” and ‘’PC’’ billed JD Marvel for its services based on what was shipped out.

The reports generated allowed JD Marvel to know exactly what was shipped and what they were expecting to be charged. [ 202 ] Mr. Rana also testifies that products which were not in inventory would be noted on a back order report that was generated by “Harling” on a regular basis and he would use this information to inform Mr. Dragan of the status of the inventory. [ 203 ] He also explains that JD Marvel tracked the products that were ordered in a JD Marvel Register Report.

This report would show the name of the supplier, the order date and the shipping and expected delivery date of the products. [ 204 ] All reports generated by Mr. Rana showing products ordered and delivery times were provided to Mr. Dragan. [ 205 ] The proof reveals that there is no stop in the mailing inserts or catalogs. If there is no inventory and the mailing continue to be in thousands or millions, it is certain that even when the inventory arrives, there will not be enough products to satisfy all consumers. [ 206 ] Mr.

Dragan, can’t ignore, in the way he is proceeding, that he won’t be able to respect the deadline even if he gives the order to ‘’Harling’’ and/or ‘’’’ to ship out the products at the moment they arrive. [ 207 ] Ms. Delves specifies that she was aware of situations when customers were informed of expected shipping dates, but the expectation could not be met because the number of products arriving fell short of the number of back orders. [28] [ 208 ] This way of doing things ensures that Mr. Dragan is heading into a dead-end.

More and more consumers will be dissatisfied and more and more customers will ask for a refund. [ 209 ] Even though Mr. Dragan quickly caches checks from consumers (Ms. Maimone was directed by Mr. Dragan to deposit all checks from the mail orders on a daily basis into JD Marvel bank account and cash payments were provided to Mr. Dragan personally) the refunds requested by consumers take much longer. [ 210 ] Ms. Maimone testified that the majority of “white mail” received is to the effect that the client didn’t receive the promised refund or didn’t receive the product. [29] [ 211 ] When Ms. Maimone informs Mr.

Dragan about the augmentation of the complaints, his response is to increase the number of employees serving complaints. At the beginning, there were two employees; at the end, fourteen. [ 212 ] Mr. St-Germain also had to increase the number of employees serving complaints. [ 213 ] In addition, Ms. Delves [30] and Mr. Dickison state that Mr. Dragan prioritizes complaints from clients who pass through the Better Business bureau or who send registered letters. It is certain that Mr. Dragan knows exactly who to silence; those who are the most dangerous to his reputation. [ 214 ] Ms.

Maimone of “Dav Mat” had the opportunity to discuss with Mr. Dragan about the increase in the volume of complaints : “I was mentioning to him that we were getting a lot of complaints, the white mail was increasing tremendously with regard to complaints and how was this being handled.” She also speaks to him of the huge influx of white mail complaint about products not being delivered. [ 215 ] She was told that it was being taken care of, don’t worry about it. [ 216 ] When Mr. Dragan started the new company (CMO), Ms. Maimone discussed it with him.

He told her that he was just starting up something new, that something wasn’t working with JD Marvel, he was starting something new and doing the same service, business. [31] [ 217 ] Even after that change, she continues to receive white mail complaining about products that were ordered under JD Marvel. It was in abundance. She then, drew Mr. Dragan’s attention about refunds of which at the times he says they will be refunded.

He told her “don’t worry about that”. [ 218 ] He mentioned to her that he had changed companies and when he changed the companies his lawyers were aware of the circumstances. [ 219 ] The white mail continued and Ms. Maimone started to be agitated by it because she thought it was not fair that customers should wait for this long period of times for refunds that were promised to them. [ 220 ] The customer service by telephone was horrendous. The customers were basically crying on the phone and each time she

brought that to Mr. Dragan’s attention, she was told again, just do the work, just continue banking the cheques. [ 221 ] She felt that people were being defrauded. She, then, continued opening the mail, continuing the business, except the difference was, she was not banking the cheques. She delivered them to Mr. Dragan’s office. [32] [ 222 ] Even if Mr. Dragan gave orders to send out cards’ delay to the customers, the Court doesn’t have proof that it is done in a regular way. In fact, the testimony of Mr. St-Germain proves the contrary.

He explains that if ‘’PC’’ has to advise any client about delay in delivery, he had to get instructions from Mr. Dragan but it is very rarely that ‘’PC’’ did send out any card advising that the product would be delayed. Mr. St-Germain thinks ‘’PC’’ did it twice. [ 223 ] It is not, in the present case, this card, anyway, that will protect Mr. Dragan from the augmentation of complaints and requests for refund. It is not also this card that will make the Court conclude that he observes a good practice in his business. [ 224 ] In fact, by his way of acting, he shows that he didn’t care about customers.

He didn’t care about the announced delay. When he starts to feel the heat, he incorporates a new company that will do exactly the same thing. Why? The only conclusion that the Court could see: to evade its obligations. [ 225 ] He wants at all cost to continue making profits. [ 226 ] When his two companies went bankrupt, there were 28 903 products that weren’t shipped [33] . It was unavoidable. [ 227 ] It is clear that even if he was aware of the risk, he just didn’t care.

This is dishonest. [ 228 ] The evidence in counts 11 and 12 is beyond a reasonable doubt. [ 229 ] In the context, the minimus non curat lex principle can’t receive application . [ 230 ] The Court has to return to counts 9 and 10. [ 231 ] The only interest of Mr. Dragan is the profit. The advertisement goes too far. The representation is more than puffery. It is false and misleading. [ 232 ] Mr. Dragan has the control of his companies. He is the one who approves the announcement. He can’t ignore the Clear Vue is not an antenna and can’t function as an antenna. Yet, this word is found in the name of the product.

He can’t also ignore the pictures used. [ 233 ] The Court could add that his behavior described for counts 11 and 12 demonstrates that he has only one objective. [ 234 ] Mr. Dragan has knowingly or at least, recklessly, made a representation to the public that is false or misleading in a material respect. FOR THESE REASONS, THE COURT : ACQUIT the accused in counts 1 to 8 inclusively; CONDEMNS the accused in counts 9 to 12 inclusively. __________________________________ DOMINIQUE B.

JOLY, J.C.Q Me Narissa Somji and Me Stepeh Fitspatrick For the Crown Me Robert Israel For the accused Dates of hearing: 1 st to 4 th may 2017, 16 th to 18 th may 2017 and 16 th june 2017 [25] Stenographiques notes, Mr. Dickison, February 12, 2013 pp178-180 and P-50 [S.n.]