Analysis: Are all the other contests illegal too?

Brenda Pritchard is a partner in the law firm of Gowling Strathy & Henderson, practising exclusively in the area of advertising and promotional law.'With the greatest respect' is a nifty little phrase used by lawyers confronted with a legal decision which...

Brenda Pritchard is a partner in the law firm of Gowling Strathy & Henderson, practising exclusively in the area of advertising and promotional law.

‘With the greatest respect’ is a nifty little phrase used by lawyers confronted with a legal decision which they believe is obviously wrong.

Loosely translated, it means, ‘I know you’re the judge, but this is just plain absurd.’

With the greatest respect, I submit that the recent decision of the Alberta Provincial Court in R. v. Brennan is wrong.

The court held that facsimile or non-purchase entries will not save a promotional contest from being declared an illegal lottery if most contestants enter with a purchase.

If I am incorrect in my assertion, virtually every promotional contest conducted in Canada is also illegal and subject to criminal prosecution.

The facts are simple. The accused, Edward Brennan, wrote and published books of poetry through his company, Bear Trap Pub Dist (1991).

In order to promote the sale of his latest book of poetry at $5.50 a copy, he conducted a promotion whereby for each book purchased, a purchaser obtained a small sheet of five serrated tickets, each eligible for a chance to win a 1994 Ford Mustang at the end of the year.

There was also a weekly draw for $50.

If a person wanted to enter the contest without purchasing the book of poetry, he or she could do so by asking the vendor for a free ticket and simply entering it into the ballot box.

In addition, one could enter by mailing in facsimiles of the ticket, with a limit of five tickets per envelope.

So it appears that there were three ways to enter the contest: (1) by buying the book; (2) by asking for a free ticket; or (3) by mailing in facsimiles with a limit of five per envelope.

In order to win the contest, each selected entrant had to correctly answer a mathematical skill-testing question.

Those of you who regularly conduct promotional contests for your clients or company are likely scratching your head. And, no doubt, the promotional lawyers among you have broken out into a cold sweat.

How is this contest, judged by the court to be an illegal lottery, different from every other promotional contest conducted in Canada?

According to His or Her Honor Judge J.B. Ritchie (sex undisclosed), the typical and often-used facsimile or free ticket entry does not take the promotional contest out of the illegal lottery provisions of s.206(1)(f) of the Criminal Code.

‘He cannot dispose of the vehicle by means of a game of chance or lottery of mixed chance and skill, in which money is paid for the chance.

‘I do not feel that the sometime provision of a free ticket to non-purchasers of the poetry book or the occasional mailing in of facsimiles, acknowledged by the accused himself to be quite infrequent, provide any assistance to the defence.

‘Indeed, these embellishments simply lengthen the odds of a legitimate purchaser of the poetry books and chances [sic] becoming a winner, a circumstance which fairness would want to provide against.’

A strict reading of Section 206(1)(f) of the code would not, with the greatest of respect, support such a conclusion.

The section makes it illegal to dispose of ‘goods, wares or merchandise in a game of chance or mixed chance and skill in which the competitor pays money or other valuable consideration.’

As this is a criminal statute, it must be read strictly. Therefore, in my opinion, if a competitor is not required to pay money or other valuable consideration to enter the contest, the offence is not made out.

Interestingly, this opinion was supported in a feature article published in the Jan-March 1992 edition of the Misleading Advertising Bulletin as follows:

‘Where other means of entry are available, such as using a ‘reasonable hand-drawn facsimile,’ or obtaining entry forms by means other than making a purchase, illegal contests under s.201(1)(f) are avoided since the purchase requirement has been removed.’

The Misleading Advertising Bulletin is published by the Marketing Practices Branch of the Bureau of Competition Policy, ostensibly responsible for interpretation and enforcement of the lottery disclosure provisions relating to the Competition Act.

The cases quoted by the court as authority for the conviction, are neither helpful nor relevant.

The lack of case law is not surprising since, to the best of my knowledge, the issue of facsimile or non-purchase entry has never before been decided by the courts.

In every case, there was some other aspect of the contest which created an illegal lottery.

Mr. Brennan, however, had done his homework. He allowed two other means of non-purchase entry, and he required the winners to correctly answer a skill-testing question.

What, then, motivated the Crown to prosecute Mr. Brennan, and what convinced the court to convict him?

The decision is not a long one, but it is fraught with subtle references to the court’s displeasure with Mr. Brennan.

Apparently the civilian complainant had mistakenly believed that Mr. Brennan’s contest was to benefit charity.

At page two of the judgment, the court found ‘the accused was prominently shown in a wheelchair on the front of the poetry books which also contained a foreword by and photographs of prominent Alberta politicians.’

The fact that Mr. Brennan was unfortunate enough to be confined to a wheelchair, and fortunate enough to have prominent politicians endorse his book of poetry should not be enough to invoke the wrath of the court, in the absence of any clear evidence of fraud on the part of Mr. Brennan to mislead customers as to the nature of the promotion.

Nor, as stated by the court, would the fact that a contest was indeed intended to benefit a registered charity in fact make the contest ‘more legal’ unless a charitable licence had been obtained.

It is hoped the upcoming appeal of this decision to the Alberta Court of Appeal will reverse this anomalous and precedent-setting decision.

Otherwise, the typical Canadian promotional contest as we know it will no doubt become an endangered species.

Until then, promoters are well advised to reassess the purchase requirements in their promotional contests, particularly those available to Alberta residents.

Although an Alberta provincial court decision is not binding on other provinces, it is persuasive.