Registrar's Decision 07-70285

Issues:

• Consumer complained that Parkwood misrepresented a Lincoln as having a “small accident over $2,000” when it had about $26,000 of damage prior to the sale.
• Parkwood stated it made no such representation.
• Parkwood argued it made its $2,000 damage declaration in writing on the purchase agreement stating “hit over $2,000” and thus met its statutory duty and was required to say no more.
• Parkwood’s practice was to keep the dealer file on vehicles away from its salespersons, in this case Mr. Hawes. Mr. Hawes was the person alleged to have made the verbal and written misrepresentations

Outcome:

• The statutory duties under the Motor Dealer Act and its regulations are not the full extent of a motor dealer’s or a salesperson’s legal duties to consumers.
• The Business Practices and Consumer Protection Act and even the common law can impose a higher duty of disclosure on a motor dealer than the Motor Dealer Act or its regulations.
• In the right factual circumstances, damage under $2,000 may need to be disclosed under the Business Practices and Consumer Protection Act: an example is cited within the decision.
• Parkwood was aware of at least $17,000 worth of damage to the Lincoln before it sold it to the consumer.
• Parkwood’s practice was to willfully blind its salespeople, an important part of its operations, about crucial information on the vehicles offered for sale.
• Parkwood did not do full vehicle inspections prior to its selling motor vehicles.
• Parkwood committed a deliberate deceptive act or practice in this case as its mere damage over $2,000 written representation said nothing about its actual knowledge and was represented in a misleading way.
• Parkwood was found to have downplayed the damage over $2,000 by orally stating it was “a small accident over $2,000.”
• The Consumer was awarded $11,619 in damages.
• Parkwood was assessed a $7,500 administrative penalty.
• The salesperson, Mr. Hawes, was assessed a $500 administrative penalty. Consideration was given to his employer’s withholding of information.
• Parkwood and Mr. Hawes were jointly and severally liable to reimburse the VSA for its investigation and hearing costs of $3,022.24.
• See the case of Re Parkwood Auto Sales Ltd & Beune & Hawes August 6, 2010 for a decision regarding Parkwood’s registration and Mr. Hawes’ and Mr. Beune’s salesperson licenses.

Click here for the full decision (PDF)