Registrar's Decision

Compliance > Registrar’s Decisions > Registrar’s Decision 19-12-001

Registrar's Decision 19-12-001

File Number: 19-12-001

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: Vehicle Sales Authority of BC

Licensee/Unlicensed person:
Affordable Auto Sales and Services (#40114), Mr. Mohammed Nadir Ghani Zadeh (#201376)

Issues:
It was alleged that Affordable Auto Sales and Services Inc. (“Affordable Auto”):

Misrepresented to the consumer, Dian Greene, that Affordable Auto would pay for certain repairs to the 2006 Nissan Frontier, (“the Frontier”) as a condition of the purchase and did not,
Misrepresented the Frontier as having minor prior damage to the rear bumper when the Frontier had been written-off as salvage and rebuilt,
Misrepresented the Frontier by failing to state a material fact in that the Frontier was a former salvage vehicle subsequently rebuilt,
Misrepresented the Frontier by failing to disclose damage over $2,000, contrary to section 23(b)(ii) of the Motor Dealer Act Regulation, B.C. Reg. 447/78 (the “MDA-R”),
Failed to provide Dian Greene with an itemized list of repairs and any additional costs, if any, on the purchase agreement as required by section 21(2)(d) of the MDA-R,
Failed to disclose to Dian Greene that the Frontier had been brought into British Columbia for the purpose of resale from another jurisdiction contrary to section 23(d) of the MDA-R,
Failed to advertise the Frontier as “not suitable for transportation” as required by section 27(b) of the MDA-R, and

that the above conduct constitutes deceptive acts or practices and/or unconscionable acts or practices contrary to sections 5(1) and 9(1), respectively, of the Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2 (the “BPCPA”), and are also contraventions of sub-sections 33(2)(a) and (e) of the MDA-R (Code of Conduct).

Outcome:
The Registrar found:

Affordable Auto and Mr. Zadeh have committed deceptive acts or practices in relation to this Transaction, by misrepresenting the Frontier to Ms. Greene.
Affordable Auto and Mr. Zadeh have committed unconscionable acts or practices in relation to this Transaction, in the manner that they mispresented the Frontier to Ms. Greene resulting in their taking advantage of Ms. Greene’s inability to protect her interests.
Having found an unconscionable act or practice occurred, Ms. Greene is by operation of the law, entitled to rescind the contract for a full refund. That would also be the appropriate remedy under these specific facts for the deceptive acts or practices.
A compliance order was issued on the following terms:

Dian Greene is awarded $10,930 payable joint and severally by Affordable Auto Sales and Services Inc & Mohammad Nadir Ghani Zadeh, and
Ms. Greene will have to transfer ownership of the 2006 Nissan Frontier to Affordable Auto Sales and Services Inc. at the time of receiving confirmation of payment of $10,930.

The Registrar ordered a separate written hearing to consider compliance action against Affordable Auto and Mr. Zadeh.

Basic Facts as found by the Registrar:

Affordable Auto and Mr. Zadeh purchased the Frontier as a salvage vehicle from Alberta for the purpose of resale. Affordable Auto and Mr. Zadeh then rebuilt the Frontier.
Affordable Auto and Mr. Zadeh sold the vehicle to a consumer prior to the sale in question to Ms. Greene, without advising them of the rebuilt status of the Frontier.
Contrary to the Motor Dealer Act Regulation, Affordable Auto and Mr. Zadeh failed to disclose damages over $2,000 on the purchase agreement. Such declaration was on the ICBC Transfer/Tax Form, which does not meet the legislative requirement, nor the purpose of the legislative requirement of making that declaration to the consumer before the purchase.
Contrary to the Motor Dealer Act Regulation, Affordable Auto and Mr. Zadeh failed to declare the Frontier was purchased in Alberta for the purpose of resale. The legislative duty to declare such a fact exists so consumers have a better understanding of the vehicle’s history.
Contrary to the Motor Dealer Act Regulation, Affordable Auto and Mr. Zadeh failed to itemize a list of repairs on the purchase agreement. The legislative duty to itemize repairs exists as they form part of the transactions’ consideration and vehicles’ valuation.
Contrary to the Business Practices and Consumer Protection Act, Affordable Auto and Mr. Zadeh knowingly misrepresented and minimized the damage to the Frontier. Affordable Auto and Mr. Zadeh were aware of the significant damage, estimated at over $11,000, when they purchased the vehicle as a salvage from Alberta. The failure to disclose this fact was not only deceptive and misleading, but also deliberate, given the Dealer’s prior knowledge of such damages.
Contrary to the Business Practices and Consumer Protection Act, Affordable Auto and Mr. Zadeh failed to disclose to Ms. Greene that the Frontier was purchased as a salvage vehicle and had since been rebuilt by Affordable Auto. The failure to declare the rebuilt status of a vehicle constitutes as a failure to disclose a material fact for the consumer to be made aware of in order to make an informed purchasing decision.
Contrary to the Business Practices and Consumer Protection Act, Affordable Auto and Mr. Zadeh failed to disclose damages over $2,000 which is deemed a material fact as it is required by legislation and the information is material to a consumer’s buying considerations. The act of withholding such facts and failing to declare damages is deemed to be a deceptive act or practice.
Affordable Auto and Mr. Zadeh misrepresented that they would be responsible for making certain repairs to the Frontier and failed to fulfill such representation. Since Ms. Greene’s filing her complaint with the Authority, Affordable Auto and Mr. Zadeh have now offered to make further repairs to the Frontier. This is evidence that the said repairs were not completed prior to the purchase and were not noted on the purchase agreement.
Contrary to the Business Practices and Consumer Protection Act, the amalgamation of the misrepresentations and in considering the transaction as a whole, the conduct clearly shows Affordable Auto and Mr. Zadeh undertook a deliberate course of conduct to try and sell the Frontier at little cost to itself to an unsuspecting consumer who was unable to protect their interests, Ms. Greene, and constitutes an unconscionable act or practice.
Contrary to Motor Dealer Act Regulations (Code of Conduct), Affordable Auto and Mr. Zadeh failed to act with honesty and integrity based on their deliberate conduct to hide facts and make false or misleading representations to the consumer.

Cases considered/referred to:

Bain v. Empire Life Insurance Company 2004 BCSC 1577 (BC Supreme Court).
Best Import Auto Ltd. et al (November 28, 2017, File 17-08-002, Registrar)
Best Import Auto Ltd. v Motor Dealer Council of British Columbia, 2018 BCSC 834 (BC Supreme Court)
Brook v. Wheaton Pacific Pontiac Buick GMC Ltd. 2000 BCCA 332 (CanLII) (BC Court of Appeal)
Harris v. Windmill Auto Sales & Detailing Ltd. (April 10, 2013, File 12-030, Registrar)
Windmill Auto Sales & Detailing Ltd. v. Registrar of Motor Dealers, 2014 BCSC 903 (BC Supreme Court)
Harry v. Kreutziger (1978), 1978 CanLII 393 (BC Court of Appeal);
Ma v. MIV Therapeutics Inc. 2004 BCCA 483 (BC Court of Appeal)
Knapp v. Crown Auto Body and Auto Sales Inc. et al. (September 21, 2009, File 08-70578, Registrar) and affirmed by Crown Auto Body and Auto Sales Ltd. v. Motor Vehicle Sales Authority of British Columbia, 2014 BCSC 894 (BC Supreme Court)
Rushak v. Henneken, 1991 CanLII 178 (BC Court of Appeal).
2258756 Ontario Ltd. dba Auto/One Leasing LP et. al. (February 4, 2014, File 13-11-001, Registrar)
Sugiyama v Pilsen dba Southgate Auto Sales, 2006 BCPC 265 (B.C. Provincial Court)
The Estate of George Mann Sr. v. Ocean Park Ford (File 07-70255, May 19, 2009, Registrar)
Vavra v. Victoria Ford Alliance Ltd., 2003 BCSC 1297 (BC Supreme Court)
Webster v. Pioneer Garage Ltd. dba Fraser Valley Pre-Owned (April 27, 2018, File 17-07-002, Registrar)

Legislation considered/referred to:

Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2, sections 4, 5, 8, 9, 10, 155, 164, 180-182, 189
Code of Conduct (Motor Dealer Act Regulation, section 33)
Motor Dealer Act, R.S.B.C. 1996, c. 316, section 5, 7, 26, 35
Motor Dealer Act Regulation, B.C. Reg. 447/78, sections 21, 23, 27, 32

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