The Ontario Court of Appeal recently upheld what it noted to be the first award of aggregate damages under s. 24 of Ontario's Class Proceedings Act. In Ramdath v George Brown College, the Court considered the interplay between class actions and consumer protection legislation and confirmed that aggregate damages may be available in consumer protection class actions.

Background

In 2010, students commenced a class action against a George Brown College (GBC) concerning a misleading representation about a GBC post-graduate program. Course calendars for GBC's program in International Business Management suggested that students could earn three industry designations though the program, when in fact students could only earn a graduate certificate.

At the common issues trial, the trial judge found that this misrepresentation breached the unfair practice provision of Ontario's Consumer Protection Act. At the damages trial, the trial judge awarded aggregate damages based on the statutory cause of action. GBC cross-appealed the aggregate damages award, arguing that damages could only be proven on an individual basis.

Decision on the Availability of Aggregate Damages

The overall essence of GBC's cross-appeal was that the class members were required to prove a causal link between the unfair practice (GBC's misrepresentation) and damages. GBC argued that proving causation and quantifying damages would depend on proof of individual issues, such as the extent to which class members relied on GBC's misrepresentation. Accordingly, GBC took the position that aggregate damages could not be assessed on a class-wide basis.

In rejecting GBC's cross-appeal, the Court stressed that the statutory claim for unfair practice was specifically designed to remove any reliance requirement in misrepresentation cases. In the view of the Court, GBC was effectively attempting to reintroduce reliance as an element of Consumer Protection Act claims.

The Court agreed that proof of causation was required. However, the Court held that the relevant causal link is the link between the impugned agreement and the damages suffered. In other words, the consumers must have suffered damages flowing from an agreement entered while the defendant was engaged in an unfair practice. The extent to which the unfair practice actually induced the consumer to enter the agreement is irrelevant. Thus, in the Court's view, proof of reliance is not an individual issue that precludes the possibility of an aggregate damages award.

Takeaway Points

The following takeaway points on aggregate damages emerge from the Court's decision:

  • The Court endorsed the trial judge's suggested criteria for deciding whether aggregate damages should awarded, which is as follows:
    1. The reliability of the non-individualized evidence that is being presented by the plaintiff;
    2. Whether the use of this evidence will result in any unfairness or injustice to the defendant (for example, by overstating the defendant's liability); and
    3. Whether the denial of an aggregate approach will result in a wrong eluding an effective remedy and thus a denial of access to justice.
  • Consumer Protection Act unfair practice claims do require proof of causation. However, the relevant causal link is the link between entering the impugned agreement and suffering damages. In this context, it is not necessary for consumers to individually prove that they relied on a misrepresentation that caused them to enter the agreement. Moving forward, we expect that the causal link between the agreement and damages will be an important battleground in future unfair practice claims.
  • Aggregate damages will not be appropriate in all unfair practice claims. In fact, the trial judge in this case initially accepted that the residual value of the program would depend on each student's individual career goals. Aggregate damages may not have been available if the trial judge assessed damages based on this premise. However, GBC's own expert surprised the trial judge by testifying that neither the designations nor GBC's certificate had any significant value in the industry. This lead the trial judge to conclude that damages could be calculated on a class-wide basis, without proof by individual class members. Defendants can take some solace in that this case may be distinguishable in future cases due to its unusual facts.