Canadian case law: Arora et al v Whirlpool Canada LP and ...

For example, cl 5 of the Bill provides that thepurpose of the Fair Trading Act 1986 is to contributeto a trading environment in which tradingis fair, there is effective competition and consumersand businesses can participate confidently.• A requirement that auctioneers be registered. 28• An extension to the Minister’s ability to prohibitunsafe goods. 29 This amendment would allow theMinister to declare unsafe any goods where he orshe considers that a reasonably foreseeable use ormisuse of the goods will, or may, cause injury toany person. 30 The Minister may then prohibit thesupply of these goods. The new provision is anextension of the current rule which allows only aconsideration of the “ordinary use” of the goodsrather than a “reasonably foreseeable use or misuse”of the goods. The provision covers goods thatare considered to have the potential to injure “anyperson”, not just people “other than the consumer”.It therefore covers situations where thereis a potential for the good to injure the consumerwho has acquired the good. The provision has thepotential to restrict a consumer’s freedom tochoose to buy a potentially unsafe product and useit in a safe manner or alternatively to assume therisks of using the product in an unsafe manner. 31• An extension of the Disputes Tribunal jurisdictionto cover complaints about misleading conduct. 32• A requirement for a five day cooling-off period forconsumers who purchase extended warranties. 33Selling extended warranties is now common-placein New Zealand. The value of some of thesewarranties is questionable given that the consumeralready has statutory guarantees under the ConsumerGuarantees Act 1993.• The inclusion in the Consumer Guarantees Act 1993of a provision that details how to apply theacceptable quality guarantee to the supply ofelectricity and gas. 34• A new product safety requirement that suppliersmust notify all voluntary product safety recalls tothe Ministry. 35 Commentators have argued thatthis is an unnecessary burden on suppliers thatcould have the unintended consequence of suppliersbecoming unwilling to acknowledge faults in aproduct and order a recall. 36• An extension of the door-to-door sales consumerprotection to telemarketing and other uninviteddirect selling techniques. 37• The introduction of a prohibition on traders makingunsubstantiated representations. 38 This provisionmight seem somewhat redundant given thatany unsubstantiated representation is almost certainlylikely to breach the more general requirementunder s 9 of the Fair Trading Act that tradersnot engage in misleading conduct or the s 13requirement that they not make false representations.Nevertheless, the provision places a heavierburden on suppliers than ss 9 and 13 because itshifts the burden of proof on to the supplier. Inorder to defend an allegation that a claim isunsubstantiated the supplier would have to provethat it had reasonable grounds to justify or substantiatethe claim at the time the claim was made.This general prohibition on unsubstantiated claimsis different from the approach taken in Australiawhich simply allows the regulator to require asubstantiation notice when a supplier makes aclaim or representation promoting or intending topromote their product. 39 The substantiation noticeis required to provide information capable ofsubstantiating the claim or representation.Some of the consumer law reforms not adopted bythe Consumer Law Reform Bill include:• A prohibition on unfair terms. As has been mentionedabove, the most striking omission from theBill is the lack of provisions about unfair contractterms. Regulators in both the United Kingdom andAustralia have accepted that in the case of noncoreterms in standard form consumer contractsthere is an imbalance of power that favours thesupplier and have legislated accordingly. 40 Instandard form contracts the details of the parties’rights and duties can be lengthy and complex.Most consumers do not examine these terms andhave little ability to influence them. 41 The MinistryDiscussion Paper on this topic, published priorto the drafting of the Bill, concluded that there isa strong case for regulating unfair contract termsprovisions in New Zealand. 42 Unfortunately, thegovernment subsequently chose not to proceedwith the unfair terms prohibition at this time.Instead it is planning to monitor the Australianexperience over the next few years. 43• Statutory provisions on unconscionable conduct.Unconscionability remains an area of law coveredby general contract law. The Ministry initiallysupported the idea of including it in the ConsumerLaw Reform Bill. 44 However, the Governmentrejected this in the face of too much protest frombusiness community. There was also concern thata statutory provision was unnecessary given thatNew Zealand already has a well-developed doctrineof unconscionability in the case law. 45304australian product liability reporter October 2012