Court proceedings, judgments, court orders and consent agreements

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This section contains links to the various courts where you can view the judgements, court orders and consent agreements related to cases involving the Bureau. It also contains summaries of judgments and orders issued by the courts including consent agreements filed with them for registration as well as matters currently before the courts.

To protect confidential information, the Bureau does not reveal the names of the companies involved unless they were otherwise made public.

2008

Datatech Communications Inc.

Company Name: Datatech Communications Inc., I-Point Media, CommerceCorp Consultants Inc., et al
Date:2008-03-07
Status: Stay of proceedings
Court: Court of Quebec
Court File Number: 500-73-002784-078
Parties: Bakomichalis, Elias; Brewer, Robert; Bakomichalis, Kyriakos; Macneil, Gregory; Balyta, John; Spencer, Stacey Michael; Delormier, Wayne Matthew; Diabo, Ronald; Said, A. Zack; Quadri, (Sayyid) Shahzanish; Aguba Matthew.
Provision(s): Paragraph 52.1(3)(a) of the Competition Act deceptive telemarketing; paragraph 52.1(2)(a) of the Competition Act deceptive telemarketing; and 52.1(9)(a) of the Competition Act deceptive telemarketing; subsection 52(1) of the Competition Act false or misleading representations
Products: Business to Business Directory listings

Summary: On May 22, 2007, the Competition Bureau laid charges against 11 individuals with four counts each under the deceptive telemarketing provisions of the Competition Act for their involvement in a Montreal-based scheme directed toward businesses in the United States. The accused operated under the following names: Datatech Communications Inc.; Liberty Communications; I-Pages America; Infone Publications; I-Point and CommerceCorp.

The charges stem from a Bureau investigation of complaints it received from small and medium-sized businesses in the U.S. alleging that they had received deceptive telemarketing calls from the accused and their companies. The victims were led to believe they were receiving a call from their existing supplier of business directories to renew a subscription, when in fact the American companies had never dealt with the accused previously. As part of the alleged scam from 2000 to 2004, telemarketers contacted their victims, claiming that they were updating information in their business directory listings. The telemarketers implied that the business had ordered a listing in the past and that someone in the company had already authorized an order.

On March 7, 2008, the Public Prosecution Service of Canada (PPSC) decided to stay proceedings in this case having regard to all relevant circumstances.

(3016242)

Imperial Brush Co. Ltd. and Kel Kem Ltd. (c.o.b. as Imperial Manufacturing Group)

Date:2008-02-07
Event: Court Decision
Court: Competition Tribunal
Court File No: CT-2006-010
Parties: Imperial Brush Co. Ltd. and Kel Kem Ltd. (c.o.b. as Imperial Manufacturing Group)
Provisions: Paragraph 74.01(1)(b) of the Competition Act – Adequate and Proper Testing
Product: Creosote Reducing Products

Summary: On February 7, 2008, Justice Phelan of the Competition Tribunal issued an order against Imperial Brush Co. Ltd. and Kel Kem Ltd. (c.o.b. as Imperial Manufacturing Group) pursuant to the Competition Act's deceptive marketing practices provisions.

The Commissioner of Competition alleged in this application that the respondents had engaged in reviewable conduct by making representations to the public that were not based on proper and adequate tests. The representations at issue were found on the labels of four stove and fireplace maintenance products. According to some of these representations, the products were said to eliminate creosote, reduce creosote to an ash, react with chimney deposits to reduce their adhesiveness, or help prevent chimney fires. The Commissioner submitted that the respondents had failed to perform proper and adequate tests before making these representations to the public.

The respondents denied the Commissioner's allegations and asserted that the representations were based on proper and adequate tests. They further submitted that paragraph 74.01(1)(b) infringed section 2(b) of the Canadian Charter of Rights and Freedoms and was not justified under section 1.

The Tribunal found that paragraph 74.01(1)(b), while infringing section 2(b) of the Charter, was justified under section 1.

The Tribunal also concluded that the respondents' representations were not based on adequate and proper tests before they were made to the public. Justice Phelan provided the following non-exhaustive list of factors to be considered in determining whether a test is "adequate and proper":

  • depends on the claim made as understood by the common person;
  • must be reflective of the risk or harm which the product is designed to prevent or assist in preventing;
  • must be done under controlled circumstances or in conditions which exclude external variables or take account in a measurable way for such variables;
  • are conducted on more than one independent sample wherever possible (e.g. destruction testing may be an exception);
  • results need not be measured against a test of certainty but must be reasonable given the nature of the harm at issue and establish that it is the product itself which causes the desired effect in a material manner; and
  • must be performed regardless of the size of the seller's organization or the anticipated volume of sales.

The Tribunal issued a cease-and-desist order and also ordered the respondents to pay an administrative monetary penalty of $25,000.00.

On May 14, 2008, the Tribunal ordered that the respondents insert a notice of the Tribunal's findings in one English and one French national newspaper and that they pay the applicants' costs in the amount of $40,000.00.

Court documents

2005-04-01 — Reasons and Order (PDF; 1.82 MB; 44 Pages)
2005-01-11 — Reasons for Order and Order Regarding Public Notice and Costs (PDF; 195.63 KB; 6 Pages)

Announcements

2008-02-11 — Competition Bureau Wins Court Order Against Chimney Products Company
2008-02-11 — Competition Tribunal Imposes Terms of Order Against Imperial Manufacturing Group

(3068271)

2007

International business directories

Company Names: Commercial Business Supplies, Merchant Transaction Supplies, Merchant Supplies Services and International Business Directories.
Date: 2007-05-29
Event: Sentencing of Michael Mouyal
Court: Court of Quebec, Montreal
Court File Number: 500–73-1866-025 and 500–73-1866-0257
Parties: Michael Mouyal and the companies of the Mouyal Corporate Group
Provision(s): Sections 52 (False or Misleading Representations) and 52.1 (Deceptive Telemarketing) of the Competition Act
Product(s): Office Supplies and Business Directories

Summary: Summary: Mme Justice Corté of the Court of Quebec, Penal and Criminal division, sentenced Michael Mouyal following his guilty plea. Mouyal was sentenced to a fine of $1,000,000 for his role in a deceptive telemarketing scam that generated over $136-million in deceptive sales during a six-year period. He also received two years probation, 240 hours of community service and a 10-year prohibition order prohibiting him from engaging in telemarketing sales of office supplies or business directories.

The scam operated from boiler rooms in Toronto, Montreal, and St. John's Not-for-profit organizations, businesses and government agencies in Canada, the United States and the United Kingdom were contacted by telemarketers who claimed to be their regular supplier of office supplies or business directories and were calling to renew previous orders from the victims. The scam was based on creating false and misleading impressions that a previous business relationship existed between the telemarketing operation and its victims. Businesses would then receive overpriced office supplies or virtually useless business directories that they would not have ordered were it not for the false and misleading representations.

Court documents:

Judgement

(108572)

Polar spas

Date: 2007-04-12
Event: Default Judgment
Court: Federal Court
Court File Number: T-2069-06
Parties: 732311 Alberta Ltd.
Polar Spas (Edmonton) Ltd.
Polar Spas Inc. (British Columbia)
Ken Nickel
Provisions: 74.01(1)(a) False or misleading representations
74.12 Consent agreement
Products: Hot tubs, home leisure products

Summary:
The Commissioner of Competition was granted a default judgment against Polar Spas, an Alberta-based hot tub dealer, and Ken Nickel, the company’s president, for breaking their commitments to pay monetary penalties under the terms of a consent agreement negotiated between the parties in August 2006.

In the consent agreement, Polar Spas gave an undertaking to cease making false or misleading representations, and to disclose all material conditions and restrictions that apply to offers of cash-back and rebates. The company ran a “cashable vouchers” promotion in 2004 and 2005 using advertisements, radio commercials and verbal representations made by sales staff. These ads conveyed the impression that customers were guaranteed to get 75% of their purchase price back in cash, provided they passed a “financial memory test” and remembered to apply for the rebate three years from the date of purchase. However, there were other stringent conditions that had to be met, and the final value of the voucher was contingent on the number of claims filed.

The company was to pay an administrative monetary penalty of $35,000 and Ken Nickel was to pay a penalty of $10,000. Registration of the agreement with the Competition Tribunal was contingent on payment of the monetary penalties, which was due 20 days after execution of the agreement. As payment was not received, the agreement has not been registered and the Commissioner subsequently filed a statement of claim in Federal Court. Neither the company nor its president filed a defence.

Court documents

Statement of Claim
Motion for Default Judgement
Order – Federal Court file T-2069-06

(3082256)

2006

Tom Taylor, Ravenshoe Services Ltd.

Date: 2006-12-13
Event: Sentencing
Court: Provincial Court of British Columbia
Court File Number: 138908-1
Parties: Tom Taylor, Ravenshoe Services Ltd.
Provision(s): s. 202, 206, 207 of the Criminal Code – Gaming and betting
Products: Unsolicited mailings of lottery promotions

Summary: In June 2004, charges (nine counts) were laid in the Provincial Court of British Columbia against Tom Taylor and Ravenshoe Services Ltd., under the gaming and betting provisions of the Criminal Code. These charges relate to direct mail lottery schemes that brought in approximately $47 million under the names Canadian Lottery Buyers Association, International Monetary Funding, International Lottery Commission and Transworld Lottery Commission. The lottery schemes were mailed to residents of the United States, the United Kingdom, Australia and New Zealand from 1995 to 2002.

On December 13, 2006 – following a joint submission by the accused and the Crown – Tom Taylor pled guilty to two counts and agreed to a $225,000 fine and other conditions. The court also imposed a probationary term of one year and 100 hours of community service, which includes speaking to seniors about the potential financial harm in responding to certain marketing material. While the corporate accused, Ravenshoe Services Ltd., was unable to pay a fine, the Court said that if the company had such an ability, a $775,000 fine would have been imposed.

Alan Benlolo, Elliot Benlolo and Simon Benlolo

Date: 2006-06-08 and 2005-11-25
Event: On appeal from the sentence
Court: Court of Appeal for Ontario
Court File Number: C42553 and C42481
Accused — individuals: Alan Benlolo, Elliot Benlolo and Simon Benlolo
Provision(s): 52 (1) of the Competition Act False or misleading representations
Product: Internet business directory

Summary: Alan Benlolo, Simon Benlolo, and Elliot Benlolo appealed their sentences and fines that were imposed on them for violating the false or misleading representations provisions of the Competition Act (Section 52) for operating a Yellow Pages type scam in 2000. For more court decisions resulting from the trial, please visit the Competiton Bureau's website www.competitionbureau.gc.ca.

Their scam involved sending close to 900,000 mail pieces to businesses and non profit organizations in Canada. These mail pieces falsely appeared to be bills or invoices from Bell Canada or Yellow Pages, when in fact they were solicitations to have the recipients' business details appear in Internet-based directories operating under the names Yellow Business Pages.com and Yellow Business Directory.com.

After being found guilty by a jury on April 23, 2004, Madam Justice Molloy of the Ontario Superior Court sentenced Alan and Elliot Benlolo on October 1, 2004, to three years in federal penitentiary and a $400,000 fine each for their involvement in the scam. Simon Benlolo received a nine-month conditional jail sentence (including three months house arrest) and a $100,000 fine. Another individual who was involved in the scam, Victor Serfaty received an 18-month conditional jail sentence (including six months house arrest), 100 hours of community service and a $15,000 fine, though he did not appeal his sentence or fine.

The Court of Appeal for Ontario heard the appeal filed by Alan, Elliot and Simon Benlolo on November 25, 2005, and handed down its unanimous decision on June 8, 2006. The Court of Appeal dismissed the appeal of the sentences by Alan and Elliot Benlolo, but allowed the appeal of Simon Benlolo, in part, by reducing his fine to $35,000.

Court documents:

Appeal decision:

(108610)

2005

Commercial business supplies

Date: 2005-09-30
Event: Jail Sentence
Court: Court of Quebec
Court File Number: 500-73-001865-027
Parties: Commercial Business Supplies, Merchant Transaction Supplies, Merchant Supply Services, and International Business Directories, 153595 Canada Inc., 162013 Canada Inc., 162014 Canada Inc., 174440 Canada Inc., M.M. International Business Directories Ltd., and 3350550 Canada Inc. Randolph Misiurak, Stéphane Ouellet, Charles McCulloch, François Lefort, Michael Mouyal.
Provision(s): 52.1 of the Competition Act —  Deceptive Telemarketing
Products: Business supplies and business directories

Summary: Not-for-profit organizations, businesses and government agencies in Canada, the United States and the United Kingdom were contacted by telemarketers who claimed to be the regular supplier of office supplies or were renewing a business directory order. The telemarketers failed to disclose material information, such as the terms and conditions of delivery, which included a 20% return fee. Businesses would then receive office supplies or directories that they would not have ordered were it not for these false and misleading representations.

Individuals involved in the scam have already plead guilty and were given sentences: Randolph Misiurak, 40, Montreal, and Stéphane Ouellet, 39, Montreal. Charles McCulloch, 39, Toronto, received a conditional discharge and François Lefort, 37, Montreal, received an unconditional discharge. Justin Pold, 37, of Montreal, who was in charge of the directories scam for International Business Directories, was sentenced to 18 months in prison. Pold also received two years probation, a seven-year prohibition order under section 34(2.2) of the Competition Act as well as an order prohibiting him from participating in any activity involving the sale of office supplies or business directories by telemarketing. Michael Mouyal and the companies await trial, scheduled for November 2006.

(108572)

Sears Canada Inc

Date: 2005-04-01
Event: Court Decision/Prohibition Order
Court: Competition Tribunal
Court File No: CT-2002-004
Parties: Sears Canada Inc.
Provisions: 74.01(3) of the Competition Act – Ordinary Price: supplier’s own
Product: All Season Passenger Tires

Summary: On April 1, 2005, Justice Dawson of the Competition Tribunal issued an order against Sears Canada Inc. pursuant to the Competition Act’s deceptive marketing practices provisions. This order follows the Tribunal's January reasons that Sears breached the Act by exaggerating the savings available to consumers when they advertised discounts on certain tires across Canada. In these reasons, the Tribunal also upheld the constitutional validity of the relevant provisions of the Act.

The Tribunal found that Sears had not sold a substantial volume of the tires at the regular price within a reasonable period of time prior to the publishing of the representations, given that Sears had only sold a total of 1.28% at the regular price within the preceding 12 months. In addition, the Tribunal found that Sears had not offered the tires at the regular price in good faith, in that Sears did not truly believe that their regular prices were genuine and bona fide prices, set with the expectation that the market would validate those regular prices.

The Tribunal ordered the following against Sears:

  • an administrative penalty in the amount of $100,000;
  • costs in the amount of $387,000 inclusive of fees, disbursements and taxes; and
  • a prohibition order requiring Sears not to engage in the reviewable conduct or substantially similar conduct, with respect to tires or other automotive related products and services for a period of 10 years from the date of the Order.

Court documents

2005-04-01 — Court Decision
2005-01-11 — Reasons for Decision

(108569)

2004

All Communications Network of Canada Co.

Date: 2004-11-03
Event: Court decision
Court: Halifax Provincial Court
Court File Number: 1222594
Parties: All Communications Network of Canada Co.
Provision(s): 55 of the Competition Act – Multi-level marketing; 55.1 of the Competition Act – Pyramid selling
Products: Long-distance telecommunication services

Summary: In August 2002, eight charges were laid in Halifax, N.S. against All Communications Network of Canada Co.(ACN) for allegedly recruiting new participants to its multi-level marketing plan by exaggerating income expectations without disclosing the income of a typical participant in the plan and with operating an illegal scheme of pyramid selling by offering recruitment bonuses to participants who paid for the right to recruit other participants.

On November 26, 2003, the Honourable Judge Patrick H. Curran JPC ruled at the conclusion of a preliminary hearing into these charges that there was not sufficient evidence to show that ACN was operating as a multi-level marketing plan as defined in the Competition Act and as such he discharged ACN on all charges.

Under the Competition Act, if a company's marketing plan does not meet the definition of a multi-level marketing plan, then the multi-level marketing and pyramid selling scheme provisions of the Act do not apply to that company.

PVI International Inc., Michael Golka, Darren Golka

Date: 2004-05-19
Event:Appeal/Cross-Appeal
Court: Federal Court of Appeal
Court File Number: A-408-02
Parties: PVI International Inc., Michael Golka, Darren Golka ("Appellants"), Commissioner of Competition ("Respondents")
Provision(s): 74.01(1)(a) of the Competition Act – "false and misleading representation"; 74.01(1)(b) of the Competition Act – "adequate and proper test"; 74.02 of the Competition Act – "representation as to reasonable test and publication of testimonials"
Product: Fuel saving device

Summary: The Federal Court of Appeal upheld a Competition Tribunal ruling which found that claims made to consumers about a fuel-saving device, known as the Platinum Vapour Injector (PVI), were false or misleading.

The Competition Tribunal decision, which was obtained in May 2002, followed a Competition Bureau investigation into allegations that PVI International Inc., and its owners Michael and Darren Golka, engaged in deceptive marketing practices about its gas-saving device.

After a full hearing, the Competition Tribunal ordered the company to stop making fuel-saving and emission-reduction claims about the PVI, and ordered the company and individuals to pay an administrative monetary penalty.

PVI's appeal of the Tribunal decision was denied by the Federal Court of Appeal. In addition, the Court also found the Tribunal erred in exercising its discretion not to order PVI to publish corrective notices.

Court documents:

2004-05-19 — Court decision

Alan Benlolo, Elliot Benlolo, Simon Benlolo, Victor Serfaty, Yellow Business Pages.com and Yellow Business Directory.com

Date: 2004-03-23 and 2004-10-01
Event: Convictions and Sentences
Court: Ontario Court of Justice
Court File Number: F871/02
Accused – individuals: Alan Benlolo, Elliot Benlolo and Simon Benlolo of Thornhill, Ontario and Victor Serfaty of Toronto, Ontario.
Provision(s): 52 (1) of the Competition Act – False or misleading representations
Product: Internet business directory

Summary: On April 23, 2004 a jury found Alan and Elliot Benlolo guilty on 10 counts under the false or misleading representations provisions of the Competition Act (Section 52). Also convicted were Victor Serfaty on eight counts and Simon Benlolo on two counts for their involvement in a Yellow Pages scam.

The individuals sent out mail pieces that falsely appeared to be bills or invoices from Bell Canada or Yellow Pages, when in fact they were solicitations to have the recipients' business details appear in Internet-based directories operating under the names Yellow Business Pages.com and Yellow Business Directory.com. Between May and December 2000, they sent the mail pieces to approximately 900,000 businesses and non-profit organizations in Canada and generated sales of over sales of over $1 million.

The Competition Bureau received more than 4,400 complaints about the phoney invoices which asked recipients to send either $25.52 or $37.40 to a postal box in Toronto.

On October 1, 2004, Madam Justice Molloy of the Ontario Superior Court sentenced Alan and Elliot Benlolo to three years in federal penitentiary and a $400,000 fine each for their involvement in the scam. Victor Serfaty received a 18-month conditional jail sentence (including six months house arrest), 100 hours of community service and a $15,000 fine. Simon Benlolo received a nine-month conditional jail sentence (including three months house arrest) and a $100,000 fine.

Court documents

Prohibition Order
Reason for Decision
Decision on Unreasonable Delay Under the Charter (PDF; 898 KB; 29 Pages)
Ruling on Solicitor-Client Privilege (PDF; 1.1 MB; 23 Pages)

2002

Tamec Inc.

Date: 2002-06-18
Event: Prohibition Order
Court: Court of Quebec, District of Montreal
Court File Number: 500-73-001642-012
Party: Tamec Inc. and its subsidiaries Commercial Information Bank of Canada and Deev Inc.
Provision(s): 52 of the Competition Act – False or misleading representation; 52.1 of the Competition Act –  Deceptive telemarketing
Products: Business directories

Summary: Tamec Inc. and its subsidiaries pleaded guilty in a Montreal court to deceptive telemarketing and misleading advertising charges under the Competition Act. The guilty pleas resulted from an investigation by the Competition Bureau into deceptive telemarketing activities aimed at Canadian businesses and government institutions, as well as religious, educational and non-profit organizations, across Canada.

Following the guilty pleas, the accused parties were fined $300,000. The court also imposed an order to be in effect for a period of 10 years which prohibits the convicted parties and their officers from engaging in similar deceptive marketing practices. Tamec has also agreed to commit an additional $180,000 towards a remediation program which will offer victims up to $300 each in free goods and services.

Court documents:

Prohibition Order PDF Document (247 KB)
(French only)

P.V.I. International Inc.

Date: 2002-05-30
Event: Prohibition Order
Court: Competition Tribunal
Court File Number: CT-2001-001
Parties: P.V.I. International Inc., Michael Golka and Darren Golka
Provision(s): 74.01 (1)(a) of the Competition Act – "false or misleading representation"; 74.01 (1)(b) of the Competition Act – "adequate and proper test"; 74.02 of the Competition Act – Representation as to reasonable test and publication of testimonials
Product(s): Fuel saving device

Summary: On May 30, 2002, the Competition Tribunal issued an order against P.V.I. International Inc. ("P.V.I."), Michael Golka and Darren Golka. The Order is the result of a March 1, 2001 application in which the Commissioner alleged that the respondents had engaged in reviewable conducts contrary to paragraphs 74.01 (1)(a) and (b) and section 74.02 of the Competition Act.

The Tribunal determined that P.V.I. made false and misleading representations to the public in promoting its fuel saving/emission reducing device known as the Platinum Vapor Injector. It found that the respondents made certain performance claims regarding the device which were not supported by adequate and proper tests. Claims that the U.S. government had approved the device were also determined to be false or misleading.

The Order prohibits the respondents from making fuel savings, emission reductions and government approval representations when promoting the Platinum Vapor Injector or any similar devices. It requires that Michael Golka and Darren Golka each pay an administrative monetary penalty of $25,000 for their role in the conduct. P.V.I., the company, was ordered to pay an administrative monetary penalty of $75,000. The Tribunal did not order the publication of a corrective notice.

Court documents:

Notice of Application for an Order Pursuant to Section 74.1(1) of the Competition Act (PDF; 1,504 KB)
Response to Application (PDF; 555 KB)

Yellowbusiness.ca (108656)

Date: 2002-05-28
Event: Guilty plea, Fine
Court: Ontario Court of Justice (District of Toronto)
Court File Number: 550-36-00049-013
550-26-287-010
550-26-000291-012
550-26-303-015
550-26-306-018
550-26-305-010
550-26-304-013
550-26-335-017
550-26-336-015
Parties: Yellowbusiness.ca / Peter Kuryliw
Provisions: 52 (1) of the Competition Act – False or misleading representation
Product: Internet business directories

Summary: Peter Kuryliw, the sole director of Yellowbusiness.ca, was fined $30,000 for misleading thousands of businesses and non-profit organizations across Canada with a deceptive mailout for an Internet directory.

In May 2001, Yellowbusiness.ca mailed documents to over 40,000 businesses and non-profit organizations across Canada asking recipients to send a payment to a postal box in the Toronto area for an Internet business directory that listed details of their organizations. The mail piece was misleading in that the format and text of the "bill" and its layout gave the impression that it was a phone bill, and that the costs were related to the Yellow Pages or Bell, or some service that the recipients were already utilizing. Particular language on the bill also gave the impression that this company had been in existence for some period of time and had an established customer base, which was not true.

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