VSA

Registrar's Decision

Registrar's Decision 19-11-005

File Number: 19-11-005

In the matter of Motor Dealer Act R.S.B.C. 1996 C.316
and Business Practices and Consumer Protection Act, S.B.C. 2004

Complainant: Cheryl Chang and the Vehicle Sales Authority of BC

Licensee/Unlicensed person:
Darryl’s Best Buys Auto Sales Ltd. (#11019), Darryl Gregory Wardrop (#105073), Jonathan Blaine Watt (#212397), Jaret Cameron Babin (#111879)

Issues:

  • Ms. Chang purchased a 2004 Acura with over 210,000 km. Shortly after the purchase she had drivability issues. She filed a complaint which was investigated, resulting in this hearing. During the investigation, the dealer agreed to purchase the Acura back from Ms. Chang for a full refund.
  • It is alleged that Jonathan Watt acted as a salesperson during the sale of the Acura while not licensed as such, contrary to the Salesperson Licensing Regulation (“SL-Reg”).
  • It is alleged that Darryl’s Best Buys, Darryl Wardrop and Jaret Babin employed or engaged a person as a salesperson while they were unlicensed, contrary to the Motor Dealer Act (“MDA”).
  • It is alleged that Darryl’s Best Buys and Jonathan Watt did not itemize required vehicle repairs and that the Acura was not advertised or disclosed as unsuitable for transportation, contrary to the Motor Dealer Act Regulation (“MDA-R”).
  • It is alleged that Jonathan Watt was not forthcoming about the vehicle’s mechanical condition, or about the accuracy of the odometer reading, breaching the Business Practices and Consumer Protection Act (“BPCPA”).
  • It is alleged that all Respondents breached the Motor Dealer Act Regulations [Code of Conduct] by aiding, abetting or causing any person to contravene any law of condition of registration or a licence and not acting with honesty and integrity.
  • The Authority seeks various orders ranging from penalties to suspension and cancellation of registration of Darryl’s Best Buys and of each of the individual’s salesperson licenses.

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.

Outcome:

  • The Registrar found that Jonathan Watt acted as a salesperson during the sale of the Acura while not licensed as such.
  • The Registrar found that Darryl’s Best Buys, Darryl Wardrop and Jaret Babin were negligent in their supervision of Jonathan Watt but dismissed the allegation that they may have deliberately or recklessly employed or engaged Jonathan Watt to be a salesperson contrary to section 13.1 of the MDA.
  • The Registrar found no evidence placed before him that the Respondents agreed to certain repairs and failed to itemize said repairs on the purchase agreement and dismissed this allegation against both Darryl’s Best Buys and Jonathan Watt.
  • The Registrar found no evidence that the Acura was legally “not suitable for transportation” under the Motor Vehicle Act at the time of sale and that Darryl’s Best Buys failed to declare this and dismissed this allegation.
  • The Registrar found that he cannot say the misrepresentation of the odometer reading by Jonathan Watt was deliberate, reckless or negligent and found it to be an honest error, making it an innocent misrepresentation.
  • The Registrar found that, given the evidence before him, he could not say 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 was not properly particularized so the Respondents could defend themselves. The Registrar dismissed this allegation on procedural fairness grounds.
  • The Registrar is without legal authority to intervene and amend the agreement between Ms. Chang and Darryl’s Best Buys of June 25, 2019 to resolve Ms. Chang’s further financial claims. The Registrar notes Ms. Chang should seek the assistance of the courts and the advice of a lawyer regarding any consumer remedy.
  • The Registrar ordered the following process:
  • The Authority to provide submissions on its recommendations of compliance action with rationale and additional evidence within 21 days from the date of this decision.
  • The Respondents will have 21 days within receiving the Authority’s submissions and any additional evidence to file

Response submissions.

  • Should the Authority require, they may submit to the Registrar a reply to the Respondent’s submissions within 14 days.

Legislation considered/referred to:

  • Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2
  • Motor Dealer Act, R.S.B.C. 1996, c. 316
  • Motor Dealer Act Regulation, B.C. Reg. 447/78, sections 21, 23, 27, 32
  • Motor Vehicle Act, R.S.B.C. 1996, c. 318

Cases cited:

  • Bain v. The Empire Life Insurance Company, 2004 BCSC 1577 (BC Supreme Court)
  • Bartlett v Sydney Marcus Ltd [1965] 2 All ER 753
  • Best Import Auto Ltd. et al (File 17-08-002, November 28, 2017, Registrar)
  • Best Import Auto Ltd. v Motor Dealer Council of British Columbia, 2018 BCSC 834 (BC Supreme Court)
  • Bradshaw v. Stenner, 2010 BCSC 1398 (BC Supreme Court)
  • Bunyak v. Darryl’s Best Buys Auto Sales Ltd. (October 5, 2015, File 14-12-002, Registrar)
  • Crest Realty Westside Ltd. (Re/Max Crest Realty Westside) v. W & W Parker Enterprises Ltd., 2014 BCSC 1328 (BC Supreme Court)
  • Crown Auto Body and Auto Sales Ltd., 2014 BCSC 894 (BC Supreme Court)
  • Dian Greene v. Affordable Auto Sales and Services Inc. (March 13, 2020, Hearing File 19-12-001, Registrar)
  • Findlay v. Couldwell and Beywood Motors [1976] 5 WWR 340 (BC Supreme Courts)
  • Harris & Harris v. Windmill Auto Sales & Detailing Ltd. et al. (April 10, 2013, File 12-030, Registrar)
  • Knapp v. Crown Autobody & Auto Sales Ltd et. al (September 21, 2009, File 08-70578, Registrar)
  • Kimberley Shane Stenner v. Lori Noreen Bradshaw et al., 2013 CanLII 11302 (Supreme Court of Canada)
  • Motor Vehicle Sales Authority of British Columbia v. Barnes Wheaton et al. (April 16, 2020, File 19-07-004, Registrar).
  • Sovereign v. Nanaimo Chrysler et al. (June 12, 2013, File 12-029, Registrar)
  • Stanway v. Wyeth Canada Inc., 2012 BCCA 260
  • Sugiyama v. Pilsen dba Southgate Auto Sales 2006 BCPC 265 (Prov. Crt)
  • Windmill Auto Sales & Detailing Ltd. v. Registrar of Motor Dealers, 2014 BCSC 903 (BC Supreme Court)
  • Webster v. Pioneer Garage Ltd. dba Fraser Valley Pre-Owned (April 27, 2018, File 17-07-002, Registrar)
  • Vavra v. Victoria Ford Alliance Ltd. et al. 2003 BCSC 1297 (BC Supreme Court)

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