Registrar's Decision 19-11-005

Key factual and legal findings:

• Jonathan Watt acting as a salesperson and the dealer engaging or employing an individual as a salesperson while unlicensed
  Section 2 of the SL-Reg prohibits an individual acting as a salesperson unless they are licensed. Based on the evidence submitted, Jonathan Watt was the responsible salesperson at the time of the initial sale of the Acura to Ms. Chang and was in breach of section 2 of the SL-Reg.
  Section 13.1 of the MDA is about a deliberate act of the dealer to employ or engage an individual to act as a salesperson while not licensed. A motor dealer has an obligation to properly supervise its employees, failure to do so can be grounds to cancel a motor dealer’s registration. The evidence confirms that Jonathan Watt took advantage of the confusion during Darryl’s Best Buys’ move. The Registrar found Darryl’s Best Buys, Darryl Wardrop and Jaret Babin were negligent in supervising Jonathan Watt but did not deliberately or recklessly engage or employ Jonathan Watt to be a salesperson, which would be a breach of section 13.1 of the MDA.
• Failing to itemize repairs and vehicle deemed “not suitable for transportation” as per the Motor Vehicle Act
  The statutory duty in section 21(2)(d) of the MDA-R to provide an itemized list of repairs on the purchase agreement is on the dealer, Darryl’s Best Buys. The purpose of this provision is to capture all the terms of the agreement including any repairs to be made. No evidence was placed before the Registrar that Ms. Chang and Darryl’s Best Buys, or Jonathan Watt, had agreed that certain repairs would be made to the Acura as part of the transaction. In fact, the purchase agreement expressly states, “Dealer not responsible for any repairs on car from date of purchase”, which Ms. Chang signed.
  Section 22 of the MDA-R states a motor dealer must ensure that any written representation of a motor vehicle not intended for transportation contains a statement that the motor vehicle is not suitable for transportation and is sold for parts only or purposes other than transportation. Section 27(b) of the MDA-R states that a motor dealer exhibiting or offering for sale a used motor vehicle must affix to it a statement of “Not Suitable for Transportation” if that is the case. To determine if the Acura did or did not legally meet the minimum requirements of the Motor Vehicle Act at the time of the sale, requires assessing vehicle components against the legislated standards. The Inspection Report from two months after the purchase does not confirm if the Acura did or did not meet those minimum standards at the time of the sale or even two months after the sale. There was insufficient evidence to prove this allegation. Court cases have stated a vehicle failure after sale, is not proof that the problems existed at the time of the sale.
• Committing a deceptive act or practice contrary to the Business Practices and Consumer Protection Act
  Section 4 and section 5 of the BPCPA prohibit a motor dealer from committing a deceptive act or practice by ensuring a dealer is forthcoming about the vehicle’s mechanical condition, or about the accuracy of the odometer reading. The Notice of Hearing only singles out Jonathan Watt for this allegation; therefore, the Registrar confined his consideration to Jonathan Watt’s conduct.
  A deceptive act or practice can occur innocently, negligently or deceptively, which includes being reckless. The representation can occur before, during or after the consumer transaction. A deceptive act or practice can also occur by failing to state a material fact. If evidence shows that a misrepresentation or failure to state a material fact occurred, then the burden shifts to the dealer or salesperson to show it was not deceptive.

(a) Odometer
On the evidence, the Registrar found Jonathan Watt wrote the wrong mileage on the purchase agreement in error. The Registrar further found Ms. Chang knew the actual kilometers traveled on the Acura and would not have been misled by the misrepresentation on the purchase agreement.

(b) Failing to declare a material fact – mechanical condition
Generally, a material fact: (a) can be deemed by legislation, such as disclosures; (b) can be communicated by a consumer as a key term for purchasing a specific motor vehicle; or (c) is recognized at common law as any fact that a reasonable person would find important to consider in making a decision. The Registrar found the vehicle’s mechanical condition and Ms. Chang’s concern about the vehicle’s condition would be a material fact for a purchaser. The question was, were these material facts present at the time of the sale?

Court cases have stated a vehicle failure after sale, is not proof that the problems existed at the time of the sale. Applying that principle here, the mere existence of the suggested repair items noted on the Acura dealership’s repair order about two months and over 2,500 km after purchase is insufficient to say these issues were present at the time of purchase. Therefore, there was no evidence that the Acura’s mechanical issues found two months after purchase existed at the time of the sale. Thus, a failure to state a material fact was not shown which is required before the burden moves to the dealer to prove there was no deceptive act or practice.

(iv) Aiding, abetting or causing a person to breach the law or the conditions of a licence or registration and not acting with honesty and integrity
Section 32(2)(i) of the MDA-R prohibits persons from aiding, abetting or causing a person to breach the law or the conditions of a licence or registration. Given the previous findings of the Registrar, it cannot be said that any of the Respondents aided, abetted or caused another Respondent to breach the law or a condition of a license or registration. The Registrar found the allegation of not acting with honesty and integrity under section 33(2)(a) of the MDA-R, was not properly particularized so the respondents could defend themselves.

(v) Similar Fact Evidence
The Authority put forth similar fact evidence before the Registrar that Darryl’s Best Buys’ has various court cases where it has been sued. This evidence was advanced to show Darryl’s Best Buys’ propensity to conduct itself in a specific way and show an established pattern of behavior. However, the evidence did not provide details of why people sued Darryl’s Best Buys and the Registrar could not properly assess whether those cases have sufficient similarity to the case involving Ms. Chang.