BILL 2 – 2004
BUSINESS PRACTICES AND CONSUMER PROTECTION ACT

 
Part 10 -- Inspections and Enforcement

 
Division 1 -- Inspections

Inspections

149 An inspector may conduct an inspection for the following purposes:

(a) determining compliance with

(i) this Act and the regulations,

(ii) the conditions of a licence, or

(iii) a compliance order, direct sales prohibition order, property freezing order, undertaking or court order made under this Act;

(b) assessing an applicant for a licence.

Inspection powers

150 (1) For the purposes of an inspection, an inspector may do any of the following:

(a) enter the business premises of a person at any reasonable time;

(b) inquire into any business, affairs or conduct of a person;

(c) inspect, audit or examine any record, goods or other thing or the provision of services in the premises;

(d) inspect a vehicle or vessel that is being used for business purposes;

(e) require any person who has possession or control of any of the records, goods or other things in the premises, vehicle or vessel to produce the records, goods or things;

(f) make a record, including a record on film, audio tape, video tape or otherwise, of the premises, vehicle or vessel and any thing in or on the premises, vehicle or vessel;

(g) remove any record from the premises, vehicle or vessel for the purpose of making copies;

(h) remove and retain any record, good or other thing that may be required as evidence from the premises, vehicle or vessel.

(2) The authority under subsection (1) must not be used to enter a private dwelling except with the consent of the occupant or with the authority of a warrant under section 152 [inspection under warrant].

Inspection powers -- additional powers of director

151 (1) For the purposes of an inspection, the director has the same powers that the Supreme Court has for the trial of civil actions to do the following:

(a) summon and enforce the attendance of witnesses;

(b) compel witnesses to give evidence on oath or in any other manner;

(c) compel witnesses to produce records and things.

(2) When the director exercises a power under subsection (1), a person who fails or refuses to do any of the following is liable, on application to the Supreme Court, to be committed for contempt as if in breach of an order or judgment of the Supreme Court:

(a) attend;

(b) take an oath;

(c) answer questions;

(d) produce the records or things in the person's custody or possession.

(3) Section 34 (5) [non-compellability of financial institutions and officers of financial institutions] of the Evidence Act does not apply to the exercise of powers of the director under this section.

Inspection under warrant

152 (1) If satisfied by evidence given under oath that entry on or into a building, receptacle or place, including a private dwelling, is necessary for any purpose related to carrying out an inspection, a justice may issue a warrant authorizing an inspector to enter on or into that building, receptacle or place and conduct an inspection.

(2) In the warrant, a justice may authorize an inspector to do one or both of the following:

(a) enter at a specified time or within a specified period;

(b) enter by force, if necessary.

(3) An inspector may make an application for a warrant under subsection (1) without notice to any other person.

Records or things retained

153 Subject to the regulations, an inspector must return, within a reasonable time, any record or thing retained by the inspector to the person from whom it was taken.

 
Division 2 -- Undertakings, Compliance Orders and Direct
Sales Prohibition Orders

Undertakings

154 (1) If the director has reason to believe that a person is contravening, is about to contravene or has contravened this Act or the regulations, the director may accept from the person a written undertaking that is in a form and that contains the terms and conditions the director determines are appropriate in the circumstances.

(2) Without limiting subsection (1), an undertaking may include one or more of the following terms and conditions:

(a) an undertaking to comply with this Act and the regulations;

(b) an undertaking to refrain from engaging in an act or practice;

(c) an undertaking to compensate consumers or a class of consumers, including reimbursing any money or returning any other property or thing received from consumers in connection with a consumer transaction;

(d) an undertaking to provide a bond in accordance with the Bonding Act or other security and the circumstances under which the security may be realized;

(e) an undertaking to reimburse to the director the costs of any inspection, including actual legal costs;

(f) an undertaking with respect to the form, content and maintenance of trust accounts, records, contracts, advertisements or other documents;

(g) if two or more persons give the undertaking, all the persons named in the undertaking are jointly and severally responsible for complying with the undertaking and are jointly and severally liable for the payment of any amounts under the undertaking.

(3) The director may terminate an inspection of or proceeding against a person on the acceptance of an undertaking from the person.

Compliance orders

155 (1) After giving a person an opportunity to be heard, an inspector may order the person to comply with this Act and the regulations if satisfied that the person is contravening, is about to contravene or has contravened this Act or the regulations.

(2) A compliance order must

(a) name the person in respect of whom the order is issued,

(b) describe the person's act or practice that is contravening, is about to contravene or has contravened this Act or the regulations,

(c) identify the section of this Act or the regulations that is being contravened, is about to be contravened or has been contravened,

(d) be dated and signed by the inspector issuing the order, and

(e) inform the recipient that the director may file the compliance order with the Supreme Court and that a filed order is deemed to be an order of the Supreme Court.

(3) In a compliance order, an inspector may order a person to stop engaging in or not engage in a specified act or practice.

(4) The director may include one or more of the following orders in a compliance order:

(a) that a person reimburse any money or return any other property or thing received to a consumer or a class of consumers;

(b) that a person compensate other persons or a class of persons who have suffered loss or damage as a result of a contravention of this Act or the regulations;

(c) that a person take specified action to remedy an act or practice by which the person is contravening, is about to contravene or has contravened this Act or the regulations;

(d) that a person reimburse to the director all or a portion of the actual costs of any inspection, including actual legal costs, incurred by the director for the inspection of that person in respect of the contravention referred to in the compliance order.

(5) The inspector must serve a copy of the compliance order on the person named in the order.

(6) If a compliance order is made against two or more persons, all the persons against whom the order is made are jointly and severally responsible for complying with the order and are jointly and severally liable for the payment of any amounts the persons are required to pay under the order.

(7) A compliance order may be reconsidered in accordance with Division 1 of Part 12 [reconsiderations].

Direct sales prohibition orders

156 (1) In this section:

"direct sales contract" has the same meaning as in section 17 [definitions];

"direct seller" means

(a) a supplier who enters into direct sales contracts, solicits consumers to enter into direct sales contracts, or both, or a salesperson of that supplier, and

(b) a person, including an officer and a director, who performs services related to the management of the business of a supplier referred to in paragraph (a).

(2) After giving a direct seller an opportunity to be heard, the director may order the direct seller to stop entering into direct sales contracts or soliciting consumers to enter into direct sales contracts, for a period of time specified in the order or until the director rescinds the order, if there are reasonable grounds to believe that

(a) based on the past conduct of the direct seller, it is contrary to the public interest for the person to carry on the business of a direct seller, or

(b) the direct seller has contravened this Act or the regulations.

(3) A direct sales prohibition order may be reconsidered in accordance with Division 1 of Part 12 [reconsiderations].

Filing undertakings or orders in Supreme Court

157 (1) The director may file with the Supreme Court

(a) an undertaking,

(b) a compliance order, or

(c) a direct sales prohibition order.

(2) An undertaking, compliance order or direct sales prohibition order filed under subsection (1) is deemed for all purposes, except appeal from the undertaking or order filed, to be an order of the Supreme Court and enforceable as an order of the court.

 
Division 3 -- Appointment of Receivers and Property Freezing Orders

Receivers and trustees

158 (1) In this section, "receiver" includes a trustee or receiver manager.

(2) If an inspector has begun an inspection of a person, the director may apply to the court, on notice or without notice to anyone, for the appointment of a receiver of the property of that person.

(3) On application under subsection (2), the court may appoint a receiver of the property of the person if it is satisfied the appointment is in the best interest of any of the following:

(a) that person's creditors;

(b) persons whose property is in the possession of or under the control of that person;

(c) consumers.

(4) A receiver appointed under this section is the receiver of all the property belonging to, held by, held on behalf of or held in trust for the person named in the order, and the receiver has authority, if directed by the court, to wind up or manage the business and affairs of the person named and all necessary or incidental powers.

(5) If the director applies for the appointment of a receiver without notice to anyone, the receiver

(a) is to be appointed for a period not longer than 8 days, and

(b) is not to be authorized to wind up the business or affairs of the person named in the order

unless the court, after the hearing, otherwise orders.

(6) On application with notice, the court may vary or rescind an order made under this section.

Order to freeze property

159 (1) The director may make a property freezing order under subsection (2) in respect of a person under inspection if the director believes the order is advisable for the protection of persons dealing with the person under inspection.

(2) The director may order, on terms the director considers reasonable, one or more of the following:

(a) that the person under inspection

(i) not take any of the person's property from the possession of another person named in the order who has the property on deposit, under control or for safe keeping, and

(ii) not dispose of the person's property or otherwise deal with the person's property in a way that reduces the value of the property, whether the property is acquired by the person before, on or after the date of the order;

(b) that a person to whom the order is directed hold property in trust, if the person has, in British Columbia, on deposit, under control or for safe keeping any property of the person under inspection;

(c) that a debtor of the person under inspection

(i) hold in trust property that is payable or transferable in satisfaction of the debt, or

(ii) transfer to a receiver property that is payable or transferable in satisfaction of the debt;

(d) that a lessor, to whom the order is directed, of safety deposit boxes, safes or compartments in safes, not permit the opening or removal of a safety deposit box, safe or compartment in a safe leased to the person under inspection;

(e) that a person to whom the order is directed hold the property affected by the order in that person's possession, safe keeping or control in trust for an interim receiver, custodian, trustee, receiver manager, receiver or liquidator who has been appointed or whose appointment has been applied for under any of section 158 [receivers and trustees], the Company Act, the Law and Equity Act, the Personal Property Security Act, the Supreme Court Act, the Bankruptcy and Insolvency Act (Canada) or the Winding-up and Restructuring Act (Canada).

(3) A property freezing order does not apply to assets in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the order expressly states that it applies to those assets or securities.

(4) The director must serve a property freezing order on each person to whom it is directed and on each person under inspection who is named in the order.

(5) A property freezing order takes effect in respect of a person at the time the property freezing order is served on the person or at a later time specified by the director in the order.

(6) Any property affected by a property freezing order continues to be affected by the order and remains frozen under it until the director, in writing,

(a) rescinds the order, or

(b) orders the release of that property.

Payment into court

160 (1) A person who receives a property freezing order may pay money into the Supreme Court if

(a) the person is in doubt as to the application of the order to any money on deposit with, or under the control of, the person, or

(b) a person not named in the order claims a right to or interest in the money.

(2) If a person pays money into court under subsection (1), the person is discharged from liability to the extent of that payment.

Notice filed in land title office

161 (1) The director may

(a) file in a land title office, if the director makes a property freezing order, a notice that proceedings are being or are about to be taken that may affect land belonging to the person referred to in the notice, and

(b) revoke or amend the notice by filing the revocation or amendment in the land title office.

(2) The registrar under the Land Title Act must register a notice, revocation or amendment filed under subsection (1) against the land described in the notice.

(3) A registered notice has the same effect as a registered certificate of pending litigation.

Application to court respecting property freezing order or filed notice

162 (1) The following persons may apply to the Supreme Court for an order cancelling or varying a property freezing order or registered notice under section 161:

(a) a person to whom the order is directed;

(b) a person under inspection in respect of a contravention of this Act or the regulations who is named in the order;

(c) a person who has an interest in land in respect of the registered notice that is filed in the land title office;

(d) a person not referred to in paragraphs (a) to (c) who is otherwise affected by the property freezing order.

(2) The court may cancel or vary a property freezing order or registered notice, as the court considers just, if the court finds that

(a) all or part of the order or notice is not required to protect persons who are dealing with the person under inspection who is named in the order, or

(b) affected persons are unduly prejudiced by the order or notice.

(3) In an application under this section, the court must give greater weight to the protection of persons who are dealing with the person under inspection than to the carrying on of the business of the person under inspection.

Application to court for disposition of property frozen

163 (1) The director may apply to the Supreme Court for an order for the disposition of property that is subject to a property freezing order under section 159 (2) (a) to (d) [order to freeze property].

(2) On an application under subsection (1), the court may make any order that the court considers just.

(3) Without limiting subsection (2), the court may order that

(a) the property is forfeited to the director for disposal by the director, and

(b) after deducting the actual costs of disposal, including actual legal costs, the director is to pay the proceeds from the disposal to

(i) a compensation fund, or

(ii) the Consumer Advancement Fund.

(4) Property that is the subject of a court order under this section must not be forfeited or disposed of until the later of the following:

(a) 30 days after the order;

(b) if the order is appealed, 30 days after the decision on the appeal has been given.

 
Division 4 -- Administrative Penalties

Administrative penalties

164 (1) After giving the person an opportunity to be heard, the director may impose an administrative penalty on the person if the person contravenes

(a) a prescribed provision of this Act or the regulations,

(b) a condition of a licence,

(c) a compliance order,

(d) a direct sales prohibition order,

(e) a property freezing order, or

(f) an undertaking.

(2) Before the director imposes an administrative penalty on a person, the director must consider the following:

(a) previous enforcement actions for contraventions of a similar nature by the person;

(b) the gravity and magnitude of the contravention;

(c) the extent of the harm to others resulting from the contravention;

(d) whether the contravention was repeated or continuous;

(e) whether the contravention was deliberate;

(f) any economic benefit derived by the person from the contravention;

(g) the person's efforts to correct the contravention.

(3) If the director imposes an administrative penalty on a person, a prosecution for an offence under this Act for the same contravention may not be brought against the person.

(4) A person who has been charged with an offence under this Act may not be subject to an administrative penalty in respect of the circumstances that gave rise to the charge.

(5) If a corporation contravenes

(a) a prescribed provision of this Act or the regulations,

(b) a condition of a licence,

(c) a compliance order,

(d) a direct sales prohibition order,

(e) a property freezing order, or

(f) an undertaking,

an officer, director or agent of the corporation who authorized, permitted or acquiesced in the contravention is also liable under this section, whether or not an administrative penalty is imposed on the corporation.

Amount of penalty

165 (1) An individual on whom an administrative penalty is imposed is liable to a penalty of not more than $5 000.

(2) A corporation on which an administrative penalty is imposed is liable to a penalty of not more than $50 000.

Notice of penalty

166 (1) If the director imposes an administrative penalty on a person, the director must give to the person a notice imposing the administrative penalty that specifies the following:

(a) the contravention;

(b) the amount of the penalty;

(c) the date by which the penalty must be paid;

(d) the person's right to have this decision reconsidered;

(e) an address to which a request for a reconsideration may be given.

(2) A notice imposing an administrative penalty may be reconsidered in accordance with Division 1 of Part 12 [reconsiderations].

Due date of penalty

167 The person on whom an administrative penalty is imposed must pay the administrative penalty

(a) within 30 days after the date on which the notice referred to in section 166 is served on the person, or

(b) if the person requests a reconsideration, within 30 days after the date on which the decision of the director respecting the reconsideration is served on the person.

Enforcement of administrative penalty

168 (1) Subject to a reconsideration or the expiry of the period in which to request a reconsideration, an administrative penalty constitutes a debt payable by the person on whom the penalty is imposed.

(2) If a person fails to pay an administrative penalty as required under section 167, the director may file with the Supreme Court or Provincial Court a certified copy of the notice imposing the administrative penalty and, on being filed, the notice has the same force and effect, and all proceedings may be taken on the notice, as if it were a judgment of that court.

Revenue from administrative penalties

169 The director must pay all amounts derived from administrative penalties to the Consumer Advancement Fund.

Limitation period

170 The time limit for giving a notice imposing an administrative penalty is 2 years after the date on which the contravention occurred.

 
Division 5 -- Court Proceedings

Damages recoverable

171 (1) Subject to subsection (2), if a person, other than a person referred to in paragraphs (a) to (e), has suffered damage or loss due to a contravention of this Act or the regulations, the person who suffered damage or loss may bring an action against a

(a) supplier,

(b) reporting agency, as defined in section 106 [definitions],

(c) collector, as defined in section 113 [definitions],

(d) bailiff, collection agent or debt pooler, as defined in section 125 [definitions], or

(e) a person required to hold a licence under Part 9 [Licences]

who engaged in or acquiesced in the contravention that caused the damage or loss.

(2) A person must not bring an action under this section if an application has been made, on the person's behalf, to the court in respect of the same defendant and transaction under section 192 [compensation to consumers].

(3) The Provincial Court has jurisdiction for the purposes of this section, even though a contravention of this Act or the regulations may also constitute a libel or slander.

Court actions respecting consumer transactions

172 (1) The director or a person other than a supplier, whether or not the person bringing the action has a special interest or any interest under this Act or is affected by a consumer transaction that gives rise to the action, may bring an action in Supreme Court for one or both of the following:

(a) a declaration that an act or practice engaged in or about to be engaged in by a supplier in respect of a consumer transaction contravenes this Act or the regulations;

(b) an interim or permanent injunction restraining a supplier from contravening this Act or the regulations.

(2) If the director brings an action under subsection (1), the director may sue on the director's own behalf and, at the director's option, on behalf of consumers generally or a designated class of consumers.

(3) If the court grants relief under subsection (1), the court may order one or more of the following:

(a) that the supplier restore to any person any money or other property or thing, in which the person has an interest, that may have been acquired because of a contravention of this Act or the regulations;

(b) if the action is brought by the director, that the supplier pay to the director the actual costs, or a reasonable proportion of the costs, of the inspection of the supplier conducted under this Act;

(c) that the supplier advertise to the public in a manner that will assure prompt and reasonable communication to consumers, and on terms or conditions that the court considers reasonable, particulars of any judgment, declaration, order or injunction granted against the supplier under this section.

(4) The director may apply, without notice to anyone, for an interim injunction under subsection (1) (b).

(5) In an application for an interim injunction under subsection (1) (b),

(a) the court must give greater weight and the balance of convenience to the protection of consumers than to the carrying on of the business of a supplier,

(b) the applicant is not required to post a bond or give an undertaking as to damages, and

(c) the applicant is not required to establish that irreparable harm will be done to the applicant, consumers generally or any class of consumers if the interim injunction is not granted.

(6) If the director applies, without notice to anyone, for an interim injunction under subsection (1) (b), the court must grant the interim injunction, on the terms and conditions it considers just, if the court is satisfied that there are reasonable grounds for believing there is an immediate threat to the interests of consumers dealing with the supplier because of an alleged contravention of this Act or the regulations in respect of a consumer transaction.

(7) In an action brought under subsection (1), or an appeal from it, the plaintiff is not required to provide security for costs.

Notice to director

173 (1) A person who

(a) brings an action under section 171 [damages recoverable] must serve the director with a copy of the writ of summons or notice of claim, or

(b) brings an action under section 172 [court actions respecting consumer transactions] must serve the director with a copy of the writ of summons.

(2) On being served under subsection (1) (b), the director, on application to the court, may intervene in the action as a party, on the terms and conditions the court considers just.

(3) The court may proceed with the action even if the director has not been served under subsection (1).