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St. John's, Newfoundland and Labrador, Canada

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Revised Statutes of Newfoundland 1990


CHAPTER D-24

AN ACT RESPECTING THE DIRECT SALE OF GOODS AND SERVICES IN THE PROVINCE

Analysis

1. Short title

2. Definitions

3. Registrar and deputy

4. Persons carrying on business

5. Exceptions to licensing

6. Licensing vendors and salespersons

7. Application for licence

8. Address for service

9. Notice of change

10. Licence for salesperson

11. Salesperson authorized to act

12. Vendor to notify registrar

13. Licence transfer prohibited

14. Registrar's discretion

15. Terms, conditions and restrictions

16. Validity of licence

17. Suspension or cancellation

18. Further information

19. Bonds

20. Appeals

21. Notice of hearing

22. Rescission of contracts

23. Certain referral contracts not binding

24. Investigation by registrar

25. Production of documents, etc.

26. Copy of form of contract

27. Restriction on enforcement of contract

28. Prohibition

29. Production of licence

30. Certificate of registrar

31. Agreements waiving provisions of Act

32. Regulations

33. Offence

34. Evidence of carrying on business

35. Limitation

36. Act to prevail


Short title

1. This Act may be cited as the Direct Sellers Act.

RSN1970 c96 s1

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Definitions

2. In this Act

(a) "direct sale" means a sale by a direct seller acting in the course of his or her business as a direct seller;

(b) "direct sales contract" means an agreement, either oral or in writing, for the direct sale of goods or services, whether for cash or on credit;

(c) "direct seller" means a person who

(i) goes from house to house,

(ii) contacts occupants of houses by telephone, or

(iii) through advertising or otherwise carried out by or for him or her or by or for the relevant vendor requests occupants of houses to contact the direct seller by telephone or present themselves at a hotel room or other non-business premises

for the purpose of

(iv) selling or offering for sale goods or services to them,

(v) soliciting orders for the future delivery to them of goods or services;

(d) "goods" includes articles, commodities, substances or things and an agreement that entitles the holder to purchase or obtain goods;

(e) "house" includes

(i) a building or part of a building in which the occupant resides either permanently or temporarily and premises connected or associated with that building, and

(ii) a building on a farm and land connected or associated with that farm;

(f) "licence" means a licence issued under this Act to a vendor or a salesperson and includes a renewal of a licence;

(g) "licensee" means a person to whom a licence is issued under this Act;

(h) "minister" means the Minister of Justice;

(i) "purchaser" means the purchaser under a direct sales contract;

(j) "registrar" means the Registrar of Direct Sellers referred to in section 3;

(k) "salesperson" means a person who

(i) goes from house to house,

(ii) contacts occupants of houses by telephone, or

(iii) through advertising or otherwise carried out by or for the salesperson or by or for the relevant vendor requests occupants of houses to contact him or her by telephone or present themselves at a hotel room or other non-business premises

for the purpose of

(iv) selling or offering for sale goods or services to them, or

(v) soliciting orders for the future delivery to them of goods or services

for or on behalf of a vendor;

(l) "services" includes an agreement

(i) to install or apply goods, whether or not the goods become part of real property,

(ii) to perform work, labour or service of any kind, or

(iii) that entitles the holder of that agreement to purchase or obtain services; and

(m) "vendor" means the vendor under a direct sales contract.

RSN1970 c96 s2; 1972 No10 s2; 1973 No39 Sch C; 1975-76 No58 s4; 1981 c4 Sch C; 1984 c41 Sch C; 1989 c19 Sch B

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Registrar and deputy

3. (1) The Registrar and Deputy Registrar of Consumer Protection are the registrar and deputy registrar respectively.

(2) In the absence or incapacity of the registrar, the deputy registrar shall perform the functions and exercise the powers of the registrar.

1977 c2 s1

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Persons carrying on business

4. A person who

(a) acts as a direct seller; or

(b) acts as a vendor under a direct sales contract

shall be considered to be carrying on the business of direct selling and shall be subject to and shall comply with this Act.

RSN1970 c96 s5

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Exceptions to licensing

5. (1) A person shall not carry on the business of direct selling in the province unless he or she is the holder of a licence under this Act.

(2) A person is considered not to be carrying on the business of direct selling and is not required to be licensed under this Act where he or she is

(a) a person selling newspapers;

(b) a person selling dairy or bakery products, firewood or coal, where that person or his or her employer resides or has a place of business in the province;

(c) a person selling motor vehicles, farm implements, feed grain, feed supplements, fertilizer or weed spray, where he or she resides or has a place of business in the province;

(d) a person selling farm products, fish or meat;

(e) a merchant having a recognized retail store in the province and selling goods or services of a sort or class ordinarily sold at that store;

(f) an employee of a merchant referred to in paragraph (e) who has the written authority of that merchant to sell the applicable goods or services;

(g) a person holding written authority from the Canadian National Institute for the Blind to sell goods or services;

(h) a person selling goods or services on behalf of an organization or corporation having objects of a benevolent, religious, charitable, philanthropic, educational, agricultural, scientific, artistic, social, political, professional, fraternal, sororal, sporting, athletic or other useful nature and not formed for gain;

(i) a person in respect of business for the carrying on of which he or she is required to be licensed under the Securities Act, the Life and Accident Insurance Agents Licensing Act, the Investment Contracts Act, the Insurance Companies Act or the Real Estate Trading Act; or

(j) a person or one of a class of persons exempted from the application of this Act by the regulations.

(3) For the purpose of paragraph (2)(e)

(a) the expression "recognized retail store" does not include a dwelling, mail-order office, display room, office, repair or service shop, warehouse, studio or other place of a similar nature; and

(b) the word "merchant" does not include a person who has a recognized retail store where more than 50% of the goods or services sold by him or her in the province are sold by direct sale.

RSN1970 c96 s6

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Licensing vendors and salespersons

6. (1) The registrar may issue licences under this Act to vendors and salespersons, and a licence issued to a vendor shall be known as a vendor's licence and a licence issued to a salesperson shall be known as a salesperson's licence.

(2) The holder of a vendor's licence may carry on the business of direct selling in every respect, except that he or she may not act as a salesperson for another vendor.

(3) The holder of a salesperson's licence may only act as a direct seller for or on behalf of the vendor whose name is specified in his or her licence under section 10.

(4) The licence issued to a vendor or salesperson shall specify the sort or class of goods or services which it covers, and a vendor or salesperson shall not, in the course of the business of direct selling, sell or offer for sale, or solicit orders for the future delivery of, goods or services of a sort or class other than those specified in his or her licence.

(5) A corporation or partnership which applies for a licence as a vendor shall designate 1 individual to act as its representative, and the licence shall be in the name of the corporation or partnership and there shall be designated on the licence the name of the individual who is authorized to act as the holder of the vendor's licence on behalf of the corporation or partnership.

(6) The acts of the individual designated under subsection (5) are considered to be not only his or her own acts but also the acts of the corporation or of each and every partner in the partnership.

RSN1970 c96 s7

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Application for licence

7. (1) A vendor or salesperson shall apply for a licence or a renewal of a licence to the registrar upon a form provided by the registrar and shall send along with the application form the fee prescribed by the regulations.

(2) A vendor or salesperson may be required by the registrar to verify by affidavit the statements made in the application form.

(3) Where a licence has been refused, a further application for it may be made upon new or other material facts or where it is clear that material circumstances have changed.

RSN1970 c96 s8

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Address for service

8. (1) An applicant for a licence or renewal of a licence shall state in the application an address for service in the province and a notice given under this Act or the regulations shall for all purposes be considered to be sufficiently served if delivered or sent by registered mail to the licensee at the address for service stated in his or her application for a licence, unless the licensee has notified the registrar in writing of a change of address for service under section 9, in which case that notice shall be sufficiently served if delivered or sent by registered mail to the licensee at the latest address for service of which the registrar has been notified.

(2) Where a notice referred to in subsection (1) is sent by registered mail, it is considered to be served on the day it is deposited in the post office by the sender of the notice.

RSN1970 c96 s9

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Notice of change

9. A licensed vendor shall notify the registrar in writing of

(a) a change in his or her address for service; and

(b) a change in partners, in the case of a partnership.

RSN1970 c96 s10

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Licence for salesperson

10. (1) An application for a licence as a salesperson shall be accompanied by a notice given by a licensed vendor stating that the applicant is authorized to act as a salesperson representing that vendor.

(2) A licence issued to a salesperson shall specify as the principal of the licensee the vendor who has given the notice accompanying the application for that licence under subsection (1).

RSN1970 c96 s11

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Salesperson authorized to act

11. A salesperson who is the holder of a licence is considered to be authorized by the vendor specified in the licence to act for or on behalf of that vendor.

RSN1970 c96 s12

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Vendor to notify registrar

12. Where a vendor

(a) terminates the services of a salesperson; or

(b) is informed by a salesperson that he or she no longer wishes to represent the vendor,

that vendor shall, within 5 days after he or she has terminated the salesperson's services or is informed by the salesperson that he or she no longer wishes to represent the vendor, give notice in writing to the registrar, stating the effective date of termination of representation under paragraph (a) or (b) and

(c) the receipt of that notice by the registrar shall operate as a cancellation of the licence of the salesperson of that effective date.

RSN1970 c96 s13

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Licence transfer prohibited

13. (1) A vendor shall not transfer the licence of a salesperson to another vendor.

(2) Where a salesperson whose licence is cancelled is appointed by another vendor, or is reappointed by the vendor with whom he or she was previously licensed, that salesperson shall make a new application to the registrar for a licence.

RSN1970 c96 s14

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Registrar's discretion

14. The registrar may

(a) issue a licence or a renewal of a licence; or

(b) without stating a reason for his or her refusal, refuse to issue a licence or a renewal of a licence

to a person who applies for a licence under section 7.

RSN1970 c96 s15

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Terms, conditions and restrictions

15. (1) A licence is issued or renewed subject to those terms, conditions and restrictions that the registrar considers necessary and those terms, conditions and restrictions that may be prescribed by the regulations.

(2) A licensee shall comply with the terms, conditions and restrictions to which his or her licence is subject.

RSN1970 c96 s16

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Validity of licence

16. A licence is valid until March 31 next following the date of issue unless before that time it is cancelled or suspended, but, subject to compliance with this Act and the regulations, a licence may be renewed annually in accordance with this Act.

RSN1970 c96 s17

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Suspension or cancellation

17. (1) The registrar may suspend or cancel a licence where in his or her opinion the action is in the public interest, and the registrar may suspend or cancel a licence where he or she is satisfied that the licensee

(a) has violated this Act or the regulations or has failed to comply with 1 or more of the terms, conditions or restrictions to which his or her licence is subject;

(b) has made a material misstatement in the application for his or her licence or in the information or material submitted by the licensee to the registrar under section 18;

(c) has been guilty of misrepresentation, fraud or dishonesty; or

(d) has demonstrated his or her incompetency or untrustworthiness to carry on the business in respect of which his or her licence was issued.

(2) Where the licence of a vendor is suspended or cancelled, the licences of all salespersons of the vendor shall be automatically suspended or cancelled.

(3) When a licence has been suspended or cancelled under this Act, the holder of the licence shall immediately return the licence to the registrar.

(4) The registrar may reinstate a suspended or cancelled licence for a reason that appears to him or her to be adequate.

RSN1970 c96 s18

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Further information

18. The registrar may at any time require that further information or material be submitted within a specified time by an applicant for a licence or a licensee, and he or she may require verification by affidavit or otherwise of information or material then or previously submitted.

RSN1970 c96 s19

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Bonds

19. (1) The registrar may require an applicant for a licence to deliver to him or her within a specified time a bond to the Crown in the form and amount that he or she may prescribe.

(2) The registrar may require an applicant for a renewal of a licence to deliver to the registrar within a specified time

(a) a bond to the Crown in the form and amount that he or she may prescribe; or

(b) a certificate of a surety company that a surety bond previously filed on behalf of the applicant is in force.

(3) A bond given under this Act shall be forfeited and the amount shall be recoverable from the person bound by the bond as a debt due the Crown, where

(a) a conviction of an offence under this Act or the regulations or of an offence involving fraud, theft or conspiracy to commit an offence involving fraud or theft under the Criminal Code has been made by a court;

(b) a judgment based on a finding of fraud has been given; or

(c) a winding-up or receiving order has been made under the Bankruptcy Act (Canada) or the Winding-up Act (Canada),

against the person in respect of whose conduct the bond was conditioned, or, where that person is a partnership, a partner of that partnership, and the conviction, judgment or order has become final.

(4) In respect of every act and omission occurring during the term of a licence or licence renewal, every bond shall continue in force for a period of 2 years after the licence or licence renewal to which it relates expires or is cancelled.

(5) The minister may, with the prior approval of the Lieutenant-Governor in Council and upon those terms and conditions that he or she may prescribe, assign a bond forfeited under this Act or may pay over money recovered under a bond to

(a) a person who may become, in respect of a claim arising out of a direct sales contract, a judgment creditor of the person bonded;

(b) the Registrar of the Supreme Court in trust for a person referred to in paragraph (a); or

(c) a trustee, custodian, interim receiver, receiver or liquidator of a person referred to in paragraph (a),

and every assignment of a bond or payment over of money made by the minister under this section shall be done in accordance with an order of the Lieutenant-Governor in Council relating to that assignment.

(6) Where the Crown becomes a creditor of a person under this Act, the debt may be recovered by action or other proceeding in a court as a debt due the Crown.

(7) When a bond has been forfeited under subsection (3) by reason of a conviction or judgment referred to in paragraph (3)(a) or (b) and 2 years have elapsed since

(a) that conviction or judgment; or

(b) the vendor or salesperson in respect of whom the bond was furnished ceased to carry on business,

and the minister has not received notice in writing of a claim against the proceeds of the bond or of a portion of the bond which remains in the possession of the minister, the Lieutenant-Governor in Council may direct the minister to pay to a person who, upon forfeiture of the bond, made payments under the bond, the proceeds, less the amount of expenses that have been incurred in connection with an investigation or otherwise relating to that vendor or salesperson.

RSN1970 c96 s20

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Appeals

20. (1) Where a person is dissatisfied with a decision of the registrar respecting the issue, renewal, suspension, cancellation or reinstatement of a licence, he or she may appeal from that decision to a judge of the Trial Division.

(2) Where a person proposes to appeal under subsection (1), he or she shall, within 30 days after the decision of the registrar from whom he or she proposes to appeal, serve on the registrar a written notice of his or her intention to appeal.

(3) A notice of appeal served under subsection (2) shall be signed by the appellant or by his or her solicitor or agent, and, in the notice, the grounds of the appeal shall be set out, and the appellant shall file a copy of the notice in the office of the Registrar of the Supreme Court.

RSN1970 c96 s21; 1974 No57 Sch C;
1986 c42 Sch A

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Notice of hearing

21. (1) The appellant shall, not less than 14 days before the hearing of the appeal, serve upon the registrar a written notice of the day appointed for the hearing.

(2) The judge shall hear the appeal and the evidence adduced before him or her by the appellant and the Crown in a summary manner and shall decide the matter of the appeal.

(3) The registrar shall produce before the judge on the hearing of the appeal all papers and documents in his or her possession affecting the matter of the appeal.

(4) The costs of the appeal are in the discretion of the judge and he or she may make an order respecting them in favour of or against the Crown and may fix the amount of the costs.

RSN1970 c96 s22; 1974 No57 Sch C

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Rescission of contracts

22. (1) A direct sales contract is rescinded

(a) where the purchaser serves a notice of rescission on the vendor within 10 days after the day on which the purchaser entered into the contract; or

(b) where

(i) the vendor or salesperson of the vendor was not licensed under this Act at the time that the purchaser entered into the contract,

(ii) the goods or services to be supplied under the contract are not supplied to the purchaser within 120 days after the day on which the purchaser entered into the contract, or

(iii) the vendor or salesperson of the vendor has in respect of that contract failed to comply with 1 or more of the terms, conditions or restrictions to which his or her licence is subject,

and a written notice of rescission is served on the vendor or salesperson of the vendor within 1 year after the day on which the purchaser entered into the contract.

(2) A notice given under subsection (1) may be served on the vendor or salesperson of the vendor by delivering it at or sending it by registered mail to his or her last known address or the address for service referred to in section 8.

(3) A notice given under subsection (1) shall have effect where it indicates the intention of the purchaser to terminate, cancel or withdraw from the contract.

(4) The vendor shall

(a) within 10 days after the day on which a notice of rescission of a contract has been delivered; or

(b) within 15 days after the day on which a notice of rescission of a contract arrives at the post office to which it is addressed

refund to the purchaser the money received under the contract.

(5) Where the consideration for a contract does not exceed $200 and

(a) services specified in the contract have been rendered at the premises of the purchaser prior to the rescission of the contract; or

(b) perishable goods specified in the contract have been delivered and accepted by the purchaser,

the vendor shall be entitled to and may retain from money received under the contract an amount, not exceeding $50, that may be reasonably charged for the services rendered and for the goods which have deteriorated or been consumed.

(6) Where a notice referred to in subsection (1) is sent by registered mail, it is considered to be served on the day following the day upon which it is deposited in the post office by the sender of the notice.

(7) The registrar shall, whenever requested, furnish a purchaser with an address for service of which he or she has been notified under section 8 or 9.

RSN1970 c96 s23

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Certain referral contracts not binding

23. A direct sales contract is not binding on the purchaser where, with respect to that contract, the direct seller, vendor or salesperson gives, or offers to give, a rebate or discount or other value to the purchaser in consideration of his or her giving to the direct seller, vendor or salesperson the name of a prospective purchaser or the names of prospective purchasers, or otherwise aiding the direct seller, vendor or salesperson in making a sale to another person, where the earning of the rebate, discount or other value is contingent upon the occurrence of an event subsequent to the time the purchaser agrees to purchase.

RSN1970 c96 s24

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Investigation by registrar

24. The registrar, or a person authorized by the registrar in writing, may investigate and inquire into a matter the investigation of which he or she considers expedient for the administration of this Act.

RSN1970 c96 s25

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Production of documents, etc.

25. The person making an investigation may at all reasonable times demand the production of and inspect all the books, documents, papers, correspondence and records of the person in respect of whom the investigation is being made and a person who has the custody, possession or control of those books, documents, papers, correspondence or records shall produce them and permit their inspection by the person making the investigation.

RSN1970 c96 s26

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Copy of form of contract

26. (1) A vendor or salesperson of a vendor doing business with a purchaser shall, immediately upon the execution by that purchaser of a form of contract, deliver to the purchaser a true copy of that form of contract.

(2) For the purpose of section 22, upon entering into a direct sales contract with a purchaser

(a) a vendor shall furnish his or her address; and

(b) a salesperson of a vendor shall furnish that vendor's and his or her own address

in writing to that purchaser.

(3) A provision in a written direct sales contract to the effect that that contract contains the entire agreement entered into between the parties shall not prevail over oral representations made by the salesperson or vendor with the intent or effect of inducing the purchaser to enter into the contract.

(4) A vendor or salesperson shall, immediately upon receiving a payment under a direct sales contract, deliver to the purchaser a written receipt.

RSN1970 c96 s27

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Restriction on enforcement of contract

27. An action shall not be brought by a vendor against a purchaser for the enforcement of a direct sales contract unless the vendor and salesperson were licensed, or, where the vendor is his or her own salesperson, that vendor was licensed, under this Act, at the time that the purchaser entered into the contract.

RSN1970 c96 s28

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Prohibition

28. A person shall not engage, employ, appoint, authorize or permit another person to do any of the things in respect of which a licence is required under this Act unless that other person holds a licence under this Act.

RSN1970 c96 s29

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Production of licence

29. A person licensed under this Act shall produce his or her licence for inspection when requested to do so by a person whom he or she has solicited.

RSN1970 c96 s30

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Certificate of registrar

30. A certificate signed by the registrar stating that on a specified day

(a) a vendor, salesperson or another person named in the certificate was or was not licensed under this Act;

(b) a licence was issued to a vendor or salesperson; or

(c) the licence of a vendor or salesperson was suspended, cancelled or reinstated,

is admissible in evidence as, in the absence of evidence to the contrary, proof of the facts stated in the certificate.

RSN1970 c96 s31

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Agreements waiving provisions of Act

31. An agreement or bargain, verbal or written, express or implied, that a provision of this Act or the regulations shall not apply or that a benefit or remedy provided by those provisions shall not be available, or which limits or abrogates or in effect limits, modifies or abrogates that benefit or remedy, is void and of no effect, and money paid under or by reason of that agreement or bargain is recoverable in a court.

RSN1970 c96 s32

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Regulations

32. The Lieutenant-Governor in Council may make regulations

(a) prescribing the terms, conditions and restrictions to which licences and renewals of licences are to be subject;

(b) prescribing the fees payable upon application for a licence and the renewal of a licence and other fees in connection with the administration of this Act and the regulations;

(c) prescribing the forms of licences, applications and all other forms for use under this Act and the regulations and prescribing the time for the making of applications;

(d) providing for the holding of inquiries into the operation of this Act and into a charge or complaint that a vendor, salesperson or other person who has contravened this Act or the regulations, or has made a false statement in a form, return, account or statement required to be completed or made under this Act or the regulations, or into another matter arising in the administration of this Act, and providing that the person holding that inquiry shall have all of the powers that are or may be conferred upon a commissioner under the Public Inquiries Act, including the power to take evidence under oath or affirmation;

(e) prescribing the returns and statements to be made by licensees and other persons, the information to be given in those returns and statements, and by whom and in what manner and at what times they shall be made;

(f) providing for the examination of applicants for licences and renewals of licences;

(g) providing for the regulation of direct sales by vendors and salespersons;

(h) prescribing what books, accounts and records are to be kept and maintained by vendors and salespersons;

(i) exempting persons or classes of persons from the application of a provision of this Act; and

(j) generally, to give effect to the purpose of this Act.

RSN1970 c96 s33

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Offence

33. A person who contravenes this Act or the regulations, or makes a false statement in an application, form, return, account, record, statement or other document completed or made under this Act or the regulations, is guilty of an offence and liable on summary conviction to a fine of not more than $1,000 for a 1st offence and not more than $2,000 for a subsequent offence, and, for either a 1st or subsequent offence, in default of payment of the fine or in addition to that fine, to imprisonment for a period not exceeding 6 months.

RSN1970 c96 s34

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Evidence of carrying on business

34. Where, in a prosecution under this Act, it is alleged that the accused carried on the business of direct selling without being the holder of a licence under this Act, evidence of 1 transaction is, in the absence of evidence to the contrary, evidence that the accused carried on that business.

RSN1970 c96 s35

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Limitation

35. (1) A prosecution under this Act or the regulations shall be commenced within 2 years from the date on which the offence is alleged to have been committed.

(2) A prosecution for an offence under this Act or the regulations shall not be commenced, except with the written consent of the Attorney General.

RSN1970 c96 s36

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Act to prevail

36. Where the provisions of another Act or of regulations made under another Act conflict with the provisions of this Act or the regulations, the provisions of this Act and the regulations shall prevail.

RSN1970 c96 s37

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