Registrar's Decision 08-70508

Outcome:

• It is not necessary to show a dealer intended to mislead a consumer by its representation in order to find it to be an intentional act. If a dealer is found to have acted recklessly in relation to its representation, that will be sufficient to say the dealer acted intentionally: Casillan v. 565204 B.C. Ltd. dba Daewoo Richmond 2009 BCSC 1335 (BC Supreme Court).
• It is generally accepted that an intentional misrepresentation can place the contract in jeopardy at common law. The measure of damages can be the whole of the amount paid and is assessed at the time of the breach taking place: Casillan v. 565204 B.C. Ltd. dba Daewoo Richmond 2009 BCSC 1335 (BC Supreme Court).
• The Registrar is not a court of equity and therefore cannot grant the equitable remedy of rescission of the contract.
• The Registrar must consider whether an order to reverse the deal or to pay damages is appropriate. By virtue of section 8.1 of the Motor Dealer Act and section 29 of the Motor Dealer Act Regulation, the Registrar has the authority to apply section 155 of the Business Practices and Consumer Protection Act (the “BPCPA”).
• Section 155(4)(a) empowers the Registrar to require a motor dealer to return the money it has obtained from the consumers.
• The consumers believed they were buying a 2009 Dodge 1500 Laramie with 9,200 km and $1,800 in repaired damage. This was not the case and no amount of money paid as damages would change this fact.
• The estimate for additional repairs was clearly qualified as being incomplete and further inspection was necessary. An award for damages would be too imprecise in this case and the misrepresentation was sufficiently significant. The consumers should not bear the burden of risking additional costs for hidden damages which are unknown.
• In this case, the Registrar found an intentional misrepresentation took place. It was appropriate to order Windmill and Mr. Romaya to refund the purchase price of the Dodge including taxes. There will be no deduction for the Complainant’s use of the Dodge or the damage, since repaired, while in their possession. Such a deduction could allow Windmill to profit from its intentional wrongful act at the expense of the complainants, which is contrary to public policy: Brown & Root v. Aerotech Herman Nelson Inc. et al. 2004 MBCA 63 (Manitoba Court of Appeal), paragraphs 60 to 67, leave to appeal to the Supreme Court of Canada refused (2005), 334 N.R. 194 (note) (S.C.C. Feb 17, 2005).
• Windmill has breached the BPCPA by intentionally misrepresenting the Dodge and a compliance order will be issued. Windmill is ordered to refund the purchase price of the Dodge and the Old Republic warranty on condition that the Complainants return the motor vehicle and sign over ownership to Windmill.
• Windmill is ordered to pay $1,811.97 being the Registrar’s investigation and hearing costs in this matter.
• Windmill is ordered to pay an administrative penalty of $2,500 for breaching the BPCPA.
• Sam Romaya is ordered to pay an administrative penalty of $500 for breaching the BPCPA.

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