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AR 187/99 GENERAL LICENSING AND SECURITY REGULATION

(Consolidated up to 115/2015)

ALBERTA REGULATION 187/99

Fair Trading Act

GENERAL LICENSING AND SECURITY REGULATION

Table of Contents

                1      Definitions

                2      Application

Part 1
Licensing

                3      Limited term of licence

                4      Duplicate licence

                5      Refunds

                6      Death of licensee

                7      Partnership

                8      Transfer of licence

                9      Records

              10      Duty to produce licence

              11      Offences


Part 2
Security

              12      Definitions

              13      Application of Part

              14      Term of security

              15      Meaning of claim

              16      Declaring security forfeit

              17      Valid unpaid claims

              18      Application by claimant

              19      Notice to business operator

              20      Admission but no payment

              21      No reply by business operator

              22      Directors jurisdiction when business operator disputes claim

              23      Arbitration when business operator disputes claim

              24      Failure to comply by business operator

              25      Failure to comply by claimant

              26      Decision provided to Director

              27      Appeal of arbitrators award

              28      Claim becoming valid under arbitrators award

              29      Claimant obtaining judgment

              30      Proceeds of security

              31      Remainder of security proceeds

              32      Return of cash security

              33      Extinguishment of late claims

              34      Trade‑in allowance

Part 3
Transitional Provisions, Repeals, Expiry and Coming into Force

              35      Existing securities

              36      Claims before Sept. 1, 1999

              37      Repeal

              38      Expiry

              39      Coming into force

Definitions

1   In this Regulation,

                               (a)    “Act” means the Fair Trading Act;

                              (b)    “licence” means a licence under the Act.

Application

2   This Regulation does not apply to the business designated as the automotive business under the Designation of Trades and Businesses Regulation.

Part 1
Licensing

Limited term of licence

3(1)  The Director may issue a licence for a limited term or for a specified date in any case where the Director considers it appropriate to do so.

(2)  The fee for a licence under subsection (1) is 1/2 the fee that is otherwise payable.

Duplicate licence

4(1)  If the Director is satisfied that a licence has been lost, destroyed, defaced or mutilated, the Director may issue a duplicate licence to the licensee.

(2)  The fee for a duplicate licence is $40.

Refunds

5(1)  The Director may refund the whole or part of any licence fees paid if the Director is satisfied that

                               (a)    the licensee is unable to commence the business covered by the licence, or

                              (b)    the licence was issued or renewed in error.

(2)  The Director may refund a licensing fee on a pro rata basis based on the number of full years remaining on a multi-year licence if

                               (a)    the Director is satisfied that the licensee has ceased carrying on licensed activities, and

                              (b)    the licensee requests in writing that the Director cancel the licence.

AR 187/99 s5;226/2009

Death of licensee

6   If a licensee dies during the term of the licence, the licence is deemed to be held by

                               (a)    the licensee’s executor,

                              (b)    the administrator of the licensee’s estate, or

                               (c)    the licensee’s next of kin where letters of administration have not been granted,

until the licence expires or the business ceases to be carried on by any of those persons, whichever event occurs first.

Partnership

7(1)  The term of a licence issued to a partnership expires when there is a change in the partners.

(2)  When there is a change in the partners, the remaining partners of the partnership must notify the Director and return the licence to the Director.

Transfer of licence

8   A licence does not confer any property right and no licensee may sell, transfer, assign, lease or otherwise dispose of or deal in a licence.

Records

9   In addition to the requirement to create and maintain financial records in accordance with section 132(1) of the Act, every licensee and former licensee must maintain all records and documents created or received while engaged in the business authorized by the licence for at least 3 years after the records were created or received.

AR 187/99 s9;259/2005

Duty to produce licence

10   Every licensee must produce the licensee’s licence for inspection or provide details about the licence that make it possible to determine if the person has been issued a licence when requested to do so

                               (a)    by a customer or potential customer of the licensee,

                              (b)    by an inspector or the Director, or

                               (c)    by a peace officer as defined in the Provincial Offences Procedure Act.

Offences

11   A contravention of section 9 or 10 is, for the purposes of section 162 of the Act, an offence.

Part 2
Security

Definitions

12   In this Part,

                               (a)    “business operator” means a person who operates a business and who is

                                        (i)    required to be licensed under the Act when operating that business,  and

                                      (ii)    required to submit a security to the Director to be eligible for the licence;

                              (b)    “cash security” means security in the form of

                                        (i)    cash that has been deposited with the Director, or

                                      (ii)    a term deposit or similar instrument issued in favour of the Government of Alberta;

                               (c)    “claim” means a claim described in section 15;

                              (d)    “claimant” means a consumer who has a claim;

                           (d.1)    “consumer” means

                                        (i)    a consumer within the meaning of the Act,

                                      (ii)    a consumer within the meaning of the Energy Marketing and Residential Heat Sub‑metering Regulation (AR 246/2005),

                                     (iii)    a buyer or consignor of goods sold at an auction,

                                     (iv)    a creditor who is a client of a collection agency,

                                       (v)    a debtor who has entered into a debt repayment agreement with a debt repayment agency,

                                     (vi)    a borrower who borrows a payday loan from a payday lender, or

                                    (vii)    a consumer within the meaning of section 13(1) of the Employment Agency Business Licensing Regulation;

                               (e)    “surety”, in respect of a cash security, means the Director.

AR 187/99 s12;259/2005;226/2009;45/2012;140/2014

Application of Part

13   This Part applies to

                               (a)    any security submitted to the Director on or after September 1, 1999,

                              (b)    any security submitted to the Government of Alberta under the Collection Practices Act, the Licensing of Trades and Businesses Act or the Public Auctions Act, and

                               (c)    any claim submitted to the Director on or after September 1, 1999.

Term of security

14(1)  A surety who wishes to terminate a security submitted in respect of a business operator must give the operator and the Director 3 calendar months’ notice of the termination date.

(2)  A business operator who has submitted a cash security to the Director and who wishes to terminate the security must give the Director 3 calendar months’ notice of the termination date.

(3)  A security for which a notice of termination has been given in accordance with subsection (1) or (2) remains in force until the end of the last day of the 3‑month notice period.

Meaning of claim

15(1)  A consumer has a claim against a business operator if the consumer suffers financial loss because

                               (a)    the business operator fails to comply with the provisions of the Act or regulations that apply to the business or a term or condition of the business operator’s licence,

                              (b)    the business operator fails to comply with a contract between the consumer and the business operator and the contract is entered into in the course of the operator’s business,

                               (c)    of the business operator’s fraud, breach of trust, misrepresentation, theft, conversion, negligence or default with respect to goods or services sold or any money collected in the course of the operator’s business,

                              (d)    the business operator fails to account to the consumer for all money collected for or on behalf of the consumer, or

                               (e)    the business operator fails to comply with a condition of the operator’s security.

(2)  A consumer does not have a claim against a business operator unless, while the operator’s security was in force,

                               (a)    the consumer had received goods or services or was or is entitled to receive goods or services from the operator,

                              (b)    the consumer had, in the course of the operator’s business, entered into a contract with the operator,

                               (c)    the consumer paid money to or deposited money with the operator, or

                              (d)    the operator did or omitted to do something that led or contributed to the consumer’s financial loss referred to in subsection (1).

AR 187/99 s15;259/2005

Declaring security forfeit

16(1)  When a claim against a business operator becomes a valid unpaid claim, the Director may declare the business operator’s security to be forfeit and require the surety under the security to pay to the Director the principal amount of the security.

(2)  A surety who receives a declaration under subsection (1) while the security is in force or within 2 years after the security ceases to be in force must pay the principal amount of the security to the Director within 30 days of receiving the declaration.

(3)  Where the validity of a claim against a business operation may not be determined within the 2‑year period referred to in subsection (2), the Director must send a notice of liability relating to the claim

                               (a)    to the surety under the business operator’s security, and

                              (b)    where the security is cash security, to the business operator.

(4)  A surety who receives a notice under subsection (3)(a) must, if a claim referred to in subsection (3) is found to be a valid unpaid claim, pay the principal amount of the security to the Director within 30 days of receiving a declaration under subsection (1), notwithstanding that the 2‑year period referred to in subsection (2) has expired.

Valid unpaid claims

17   A claim becomes a valid unpaid claim

                               (a)    if the claimant makes an application under section 18, the claimant has not obtained a judgment against the business operator in respect of the claim and section 20, 21, 22, 24 or 28 applies, or

                              (b)    if the claimant makes an application under section 29, the claimant has obtained a judgment against the business operator in respect of the claim and section 29(3) applies.

Application by claimant

18(1)  A claimant who purports to have a claim against a business operator may apply to the Director for a payment from the proceeds of the operator’s security.

(2)  A claimant may not make an application under subsection (1) in respect of a business operator if the claimant has commenced a court action against the operator that is based on the grounds that gave rise to the claim unless the court action has been discontinued.

(3)  A claimant who is making an application under subsection (1) must submit a statutory declaration that contains

                               (a)    particulars of the basis of the claim,

                              (b)    the amount of the claim,

                               (c)    a statement that the claimant has never commenced an action in a court against the business operator that is based on the grounds that give rise to the claim or, if the claimant commenced such an action, a statement that the action was discontinued,

                              (d)    as an exhibit, a copy of any contract that is relevant to the claim that is in the possession of the claimant, and

                               (e)    if payment by the claimant is an element of the claim, as an exhibit, proof of payment by the claimant.

(4)  The statutory declaration of a claimant whose claim is based on the business operator’s failure to comply with the requirements of the Direct Sales Cancellation Regulation, the Energy Marketing Regulation or the Travel Clubs Regulation that arise when a claimant cancels a sales contract or agency contract must also contain

                               (a)    if a copy of the sales contract or agency contract was received by the claimant, the date on which it was received,

                              (b)    the date on which the notice of cancellation was given and the method of giving the cancellation, and

                               (c)    as an exhibit, the copy of the notice of cancellation, if any, made and kept by the claimant.

AR 187/99 s18;109/2000;56/2002;10/2004;246/2005

Notice to business operator

19   When a claimant submits a statutory declaration that meets the requirements of section 18 and any other information required by the Director and the Director is satisfied that, if the particulars provided by the claimant are correct, the claimant has a claim against a business operator, the Director must send to the business operator

                               (a)    a copy of the claimant’s statutory declaration, and

                              (b)    a notice requiring the business operator to inform the Director in writing within 30 days after the date of the notice whether the seller admits or denies the claim.

AR 187/99 s19;259/2005

Admission but no payment

20   If the business operator who receives the Director’s notice under section 19 admits to the claim within the 30‑day period referred to in section 19, but does not pay the claim within 15 days after the Director receives the operator’s admission, the claim becomes a valid unpaid claim for the purposes of this Regulation.

No reply by business operator

21   If a business operator who receives the Director’s notice under section 19 fails to reply to the Director within the 30‑day period referred to in section 19 and does not pay the claim within that 30‑day period, the claim becomes a valid unpaid claim for the purposes of this Regulation.

Directors jurisdiction when business operator disputes claim

22(1)  The Director is responsible for determining if a claim is valid when a business operator who receives the Director’s notice under section 19 denies the claim within the 30‑day period referred to in section 19 and

                               (a)    the amount of the claim does not exceed $1000,

                              (b)    the claim is based on the cancellation of a direct sales contract under section 27 or 28 of the Act,

                           (b.1)    the claim is based on the cancellation of a time share contract or a points‑based contract under section 5 or 6 of the Time Share and Points‑based Contracts and Business Regulation, or

                               (c)    the claim is based on the cancellation of a travel club contract under section 13, 14 or 15 of the Travel Clubs Regulation.

(2)  The Director may take whatever steps the Director considers appropriate to determine if the claim is valid and require the claimant and the business operator to provide additional information.

(3)  After taking those steps, the Director may

                               (a)    dismiss the claim, or

                              (b)    declare the claim to be valid, establish the amount of the claim to which the claimant is entitled  and notify the business operator of the declaration.

(4)  If that amount established in the declaration remains unpaid for 30 days after the declaration is made, the claim in the amount established by the Director becomes a valid unpaid claim for the purposes of this Regulation.

AR 187/99 s22;56/2002;105/2010

Arbitration when business operator disputes claim

23(1)  Subject to sections 24 and 25, arbitration must be used to decide a claim if the business operator who receives the Director’s notice under section 19 denies the claim within the 30‑day period referred to in section 19 and

                               (a)    the amount of the claim exceeds $1000,

                              (b)    the claim is not based on the cancellation of a direct sales contract under section 27 or 28 of the Act,

                               (c)    the claim is not based on the cancellation of a travel club contract under section 13, 14 or 15 of the Travel Clubs Regulation, or

                              (d)    the claim is not based on the cancellation of a time share contract or a points‑based contract under section 5 or 6 of the Time Share and Points‑based Contracts and Business Regulation.

(2)  Subsection (1) applies despite any agreement between the business operator and claimant to have the claim determined in a different manner.

(3)  The arbitration is governed by the Arbitration Act and the arbitration rules established by the Director.

(4)  Section 3 of the Arbitration Act does not apply to an arbitration under this Regulation.

(5)  The Director must provide the business operator and claimant with a list of 3 candidates to be arbitrator, and each candidate must be

                               (a)    a member of the Alberta Arbitration and Mediation Society, or

                              (b)    a person who is not a member of the Society but is approved by the Director.

(6)  The business operator and the claimant must each nominate an arbitrator from the list provided by the Director.

(7)  If the business operator and the claimant nominate the same candidate, that candidate is the arbitrator for the arbitration and if the business operator and claimant nominate different candidates, the candidate that was not nominated is the arbitrator for the arbitration.

AR 187/99 s23;226/2009;105/2010;33/2011

Failure to comply by business operator

24(1)  If the business operator fails to comply with the Arbitration Act or the Director’s rules and the non‑compliance is, in the arbitrator’s opinion, significant, the arbitrator must notify the Director in writing of the non‑compliance.

(2)  If the Director receives a notice under subsection (1), the arbitration ends and the claim becomes a valid unpaid claim for the purposes of this Regulation.

Failure to comply by claimant

25(1)  If the claimant fails to comply with the Arbitration Act and the Director’s rules and the non‑compliance is, in the arbitrator’s opinion, significant, the arbitrator must notify the Director in writing of the non‑compliance.

(2)  If the Director receives a notice under subsection (1), the arbitration ends and the claim is dismissed.

Decision provided to Director

26   When the arbitrator completes the arbitration, the arbitrator must provide the Director with a copy of the decision.

Appeal of arbitrators award

27   The business operator or the claimant may appeal the award of an arbitrator under this Regulation to the Court of Queen’s Bench only on a question of law in accordance with section 44(2) of the Arbitration Act.

Claim becoming valid under arbitrators award

28   A claim that has been submitted to arbitration becomes a valid unpaid claim for the purposes of this Regulation for the amount established by the arbitrator if

                               (a)    the arbitrator’s award is that the claimant has a valid claim in an amount established by the arbitrator,

                              (b)    the arbitrator’s award has become final by reason of lapse of time or being confirmed by the highest court to which it may be appealed, and

                               (c)    the arbitrator’s award remains unpaid 30 days after the award has become final.

Claimant obtaining judgment

29(1)  A claimant who has obtained a judgment against a business operator that is based on grounds that give rise to a claim may apply to the Director for a payment from the proceeds of the operator’s security.

(2)  A claimant making an application under subsection (1) must submit a statutory declaration that contains

                               (a)    particulars of the basis of the claim,

                              (b)    as an exhibit, a copy of the judgment, and

                               (c)    a statement that the judgment has become final by reason of lapse of time or of being confirmed by the highest court to which it may be appealed and has not been satisfied within 30 days after it became final.

(3)  When a claimant submits a statutory declaration that meets the requirements of subsection (2) and the Director is satisfied that, if the particulars provided by the claimant are correct, the claimant has a claim against the business operator, the claim becomes a valid unpaid claim for the purposes of this Regulation.

Proceeds of security

30(1)  When the Director declares a security to be forfeit under section 16 and receives the principal amount under the security from the surety, the Director must hold the principal amount until the Director is satisfied that no other valid unpaid claims will be received by the Director, but in no case may the Director hold the amount for more than 3 years after the Director declares the security to be forfeited.

(2)  The Director must, in accordance with subsection (1), distribute the principal amount of the security to claimants who have valid unpaid claims against the business operator.

(3)  If the principal amount of the security is insufficient to pay all of the valid unpaid claims, the Director must pay out the money on a pro rata basis to those claimants.

(4)  If there is a dispute among persons who have valid unpaid claims concerning the amount they should receive from the principal amount of the security under subsection (2) or (3), the Director may pay all or part of the principal amount into the Court of Queen’s Bench, and the Court may determine the amounts to be paid.

Remainder of security proceeds

31   If the whole of the principal amount is not required to pay the valid unpaid claims, the Director must pay the amount that remains

                               (a)    in the case of a security that is not a cash security, to the surety who paid the principal to the Director, and

                              (b)    in the case of a cash security, to the business operator who paid the principal.

Return of cash security

32   If a cash security submitted to the Director is terminated by the business operator who submitted it and no valid unpaid claims have been received by the Director in respect of the operator while the security was in force or within 2 years after the security ceases to be in force, the Director must return the security to the operator.

Extinguishment of late claims

33   After the Director has distributed the principal amount of a security in accordance with sections 30 and 31 or returned a cash security in accordance with section 32, the Director must refuse to accept an application under section 18 or 29 in respect of the security and any claim that was not submitted to the Director in respect of the security prior to the distribution or return is extinguished for the purposes of this Regulation.

Trade-in allowance

34   Where a claim is made by a buyer against a business operator who has entered into a direct sales contract with the buyer and the claim involves a trade‑in allowance, the amount of which was not agreed on, the Director or arbitrator deciding the claim may determine the amount of the trade‑in allowance for the purposes of this Regulation.

Part 3
Transitional Provisions, Repeals, Expiry and Coming into Force

Existing securities

35(1)  Every security provided to the Government of Alberta under the Collection Practices Act, the Licensing of Trades and Businesses Act or the Public Auctions Act is

                               (a)    subject to this Regulation, and

                              (b)    deemed to contain a provision that it is subject to forfeiture in accordance with the procedures of this Regulation.

(2)  If there is a conflict between

                               (a)    a provision in a security referred to in subsection (1), and

                              (b)    this Regulation or the deemed provision in subsection (1)(b),

this Regulation or the deemed provision, as the case may be, prevail.

Claims before Sept. 1, 1999

36(1)  In this section, “former security provisions” means the provisions dealing with bonds and other forms of security and the claims against those bonds or other forms of security in the following repealed enactments:

                               (a)    Collection Practices Act;

                              (b)    Collection Practices Regulation (AR 77/79);

                               (c)    Licensing of Trades and Businesses Act;

                              (d)    Automotive Business Licensing Regulation (AR 188/78);

                               (e)    Direct Selling Business Licensing Regulation (AR 315/82);

                               (f)    Natural Gas Direct Marketing Regulation (AR 237/95);

                               (g)    Prepaid Contracting Business Licensing Regulation (AR 314/82);

                              (h)    Retail Home Sales Business Licensing Regulation (AR 189/82);

                               (i)    Public Auctions Act.

(2)  Despite sections 13 and 35, the former security provisions continue to apply to claims submitted to the Government of Alberta before September 1, 1999 against security provided under the Collection Practices Act, the Licensing of Trades and Businesses Act or the Public Auctions Act.

Repeal

37   The General Licensing Regulation (AR 197/78) is repealed.

Expiry

38   For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on August 31, 2020.

AR 187/99 s38;68/2004;259/2005;115/2015

Coming into force

39   This Regulation comes into force on September 1, 1999.