Registrar's Decision

Compliance > Registrar’s Decisions > Registrar’s Decision 20-12-015

Registrar's Decision 20-12-015

HEARING FILE NUMBER: 20-12-015

IN THE MATTER OF THE MOTOR DEALER ACT, R.S.B.C. 1996 C.316AND THE BUSINESS PRACTICES AND CONSUMER PROTECTION ACT, S.B.C. 2004, C.2

DATE OF DECISION: March 26, 2021

COMPLAINANT: Vehicle Sales Authority of BC (the “Authority”)

LICENSEE/UNLICENSED PERSON: Lenux Auto Sales & Service Ltd. (Motor Dealer Registration #40604, Expired) and Hassan (Dario) Dariosh Zahedian (Salesperson Licence #204804) (“Respondents”)

INTRODUCTION:

An investigation was conducted by the Authority on the Respondents, as a result of receiving 2 complaints from consumers. The first complaint involved a 2010 Mercedes ML350, the second, a 2007 Volkswagen EOS Sport Convertible.

As the alleged legal breaches are similar in both cases and involve the same dealer and salesperson, the Authority sought to combine these two cases for efficiency and expediency purposes.

ISSUES:

The Authority alleged the Respondents:

In the Mercedes Transaction:
- Advertised the Mercedes as having no accidents when it had 2 previous collision claims, both from 2017 totaling $3,551.96, along with a glass claim from 2017 totaling $1,004.15, which is a contravention of section 5(1) of the Business Practices and Consumer Protection Act, S.B.C. 2004, c.2 (“BPCPA”),
- Sold the Mercedes to Mr. Kumar without providing him with a complete CarFax Report or with a Purchase Agreement, therefore not making the required statutory declarations regarding the previously sustained damage in excess of $2,000, contrary to sections 21 and 23 of the Motor Dealer Act Regulation, BC. Reg. 447/78 (“MDA-Reg.”) and of section 5(1) of the BPCPA,
- Advertised the Mercedes as having a 2 Year Full Power Train Warranty, but when the sale was finalized only included a 1 Year or 20,000 km Mechanical Break Down Protection Warranty, contrary to section 5(1) of the “BPCPA”, and
- Advertised the Mercedes as having an odometer reading of 189,000 km, when the actual odometer reading was 196,000 km, contrary to section 5(1) of the “BPCPA”.
In the Volkswagen Transaction:
- Sold the Volkswagen to Mr. Bybel and failed to provide him with a CarFax report and failed to declare on the Purchase Agreement that there had been previous damage in the amount of $4,479.82, and that the VW EOS had been previously registered outside of the province, therefore failing to make the required statutory declarations, contrary to sections 21 and 23 of the MDA-Reg and breached section 5(1) of the BPCPA; and
- Provided the VSA with an inspection report from CAS Automotive, which Investigator Manhas discovered had been falsified after investigating its origin with CAS Automotive, contrary to section 33(2)(a) of the MDA-Reg [Code of Conduct].

Due to the alleged legislative breaches, the Authority’s Notice of Hearing recommended the following consumer remedies and compliance actions:

Order Lenux Auto to pay for the pending repairs to Harwinder Kumar’s Mercedes,
Order Lenux Auto to reimburse Greg Bybel $1,142.80 for the repairs to the Volkswagen,
Cancel the salesperson licence of Hassan Zahedian,
Impose an administrative penalty on Hassan Zahedian,
Award the Authority investigation and hearing costs, and
Any other such order the Registrar deems just and proper.

OUTCOME

The Registrar found:

In the Mercedes Transaction:
1. Lenux Auto misrepresented the Mercedes as having no damage over $2,000.
2. Lenux Auto failed to provide a purchase agreement to the consumer,
3. Lenux Auto misrepresented the odometer reading of the Mercedes in an advertisement, and
4. The consumer has failed to prove detrimental reliance on the above misrepresentations.
5. There was no clear, convincing and cogent evidence provided to establish why the corporate veil of Lenux Auto should be pierced and liability placed personally on Hassan Zahedian as a declared shareholder, but not sole owner.

There was no clear, convincing and cogent evidence provided to establish why the corporate veil of Lenux Auto should be pierced and liability placed personally on Hassan Zahedian as a declared shareholder, but not sole owner.

The Registrar is without jurisdiction to take regulatory action against Lenux Auto as their Motor Dealer Registration had expired at the time the complaints were made and therefore there is no licence to regulate or risk of harm to mitigate.

OUTCOME

The Registrar found:

In the Volkswagen Transaction:
1. Lenux Auto failed to declare damage over $2,000 on the bill of sale,
2. Lenux Auto provided to the Authority a falsified inspection report from CAS Automotive,
3. Hassan Zahedian authorized, permitted, or acquiesced in providing the falsified inspection report from CAS Automotive, and
4. Greg Bybel has failed to prove any detrimental reliance on Lenux Auto’s failure to disclosure damage over $2,000 is linked to the $1,192.80 in repairs for the airbag he claims.

In the Volkswagen Transaction:
1. Lenux Auto failed to declare damage over $2,000 on the bill of sale,
2. Lenux Auto provided to the Authority a falsified inspection report from CAS Automotive,
3. Hassan Zahedian authorized, permitted, or acquiesced in providing the falsified inspection report from CAS Automotive, and
4. Greg Bybel has failed to prove any detrimental reliance on Lenux Auto’s failure to disclosure damage over $2,000 is linked to the $1,192.80 in repairs for the airbag he claims.

The Registrar found Hassan Zahedian breached section 33(2)(a) of the MDA-Reg by not acting with honesty and integrity when he permitted, authorized, or acquiesced in Lenux Auto providing a false inspection report to the Authority.

Given the limited liability found against Hassan Zahedian, the Registrar requested the Authority and Mr. Zahedian provide additional submissions on the appropriate compliance response.

Regarding remedy for the Consumers, the Registrar found that:
1. Harwinder Kumar has failed to prove detrimental reliance on the misrepresentations that were found to occur in the Mercedes Transaction, as related to his claimed remedy. As such, the Registrar is without legal authority to provide a remedy to Harwinder Kumar. The Registrar made no comment on any other remedy Harwinder Kumar may be able to seek. Harwinder Kumar should seek independent legal advice.
2. Greg Bybel has failed to prove detrimental reliance on the misrepresentation that was found to occur in the Volkswagen Transaction, as related to his claimed remedy. As such, the Registrar is without legal authority to provide a remedy to Greg Bybel. The Registrar made no comment on any other remedy Greg Bybel may be able to seek. Greg Bybel should seek independent legal advice.

LEGISLATION CITED

Motor Dealer Act, RSBC 1996, c. 316

Business Practices and Consumer Protection Act, SBC, 2004, c. 2

Sale of Goods Act , RSBC 1996, c. 410

Motor Dealer Act Regulation , BC Reg. 447/78

CASES CITED

Abouabdallah v College of Dental Surgeons of Saskatchewan, 2011 SKCA 99 (Saskatchewan Court of Appeal)
Bain v. The Empire Life Insurance Company, 2004 BCSC 1577 (BC Supreme Court)
Best Import Auto Ltd. et al. v. Motor Dealer Council of British Columbia, 2018 BCSC 834 (BC Supreme Court)
Bolger & Vehicle Sales Authority of B.C. v. Carkraft Trading Ltd. et al (February 15, 2018, Hearing File 18-01-003, Registrar)
Brook v. Wheaton Pacific Pontiac Buick GMC Ltd. 2000 BCCA 332 (BC Court of Appeal)
Bunyak v. Darryl’s Best Buys Auto Sales Ltd. (October 5, 2015, File 14-12-002, Registrar)
Casillan v. 565204 B.C. Ltd. dba Daewoo Richmond, 2009 BCSC 1335 (BC Supreme Court)
Crown Autobody and Auto Sales Ltd. v. Motor Vehicle Sales Authority of British Columbia, 2014 BCSC 894 (BC Supreme Court)
F.H. v. McDougall, 2008 SCC 53 (CanLII), [2008] 3 SCR 41 (Supreme Court of Canada)
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)
Miller v. Lavoie (1966), 1966 CanLII 426 (BC SC), 60 D.L.R. (2d) 495 (B.C.S.C.)
Motley v. Regency Plymouth Chrysler Inc., 2002 BCSC 1885
Raymond Abouabdallah v. College of Dental Surgeons of Saskatchewan, 2012 CanLII 18864 (Supreme Court of Canada)
Re: Best Import Auto Ltd. et al. (November 28, 2017, Hearing File 17-08-002, Registrar)
Seidel v. TELUS Communications Inc., 2011 SCC 15 (CanLII), [2011] 1 SCR 531 (Supreme Court of Canada)
Shabern Holding Inc. v. Vancouver Airport Centre Ltd. 2011 SCC 23, [2011] 2 S.C.R. 175 (Supreme Court of Canada
Vavra v. Victoria Ford Alliance Ltd. et al. 2003 BCSC 1297 (BC Supreme Court)
Webster v. Pioneer Garage Ltd. dba Fraser Valley Pre-Owned (April 27, 2018, File 17-07-002, Registrar)
Windmill Auto Sales & Detailing Ltd. v. Registrar of Motor Dealers, 2014 BCSC 903 (BC Supreme Court)

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