Vehicle Sale (Previous Accident)

Motor Vehicle Dealers Act, 2002, SO 2002, c 30, Sch B

Disclosure by motor vehicle dealers

30 (1) Motor vehicle dealers shall disclose in writing to customers and to motor vehicle dealers such information as may be prescribed and shall make the disclosure at such time as may be prescribed. 2002, c. 30, Sched. B, s. 30 (1).

Remedies

(2) If a motor vehicle dealer fails to make a disclosure as required under subsection (1) or fails to do so in a timely way, in addition to any other remedies that may be available, the person to whom disclosure should have been made is entitled to such other remedies as may be prescribed. 2002, c. 30, Sched. B, s. 30 (2).

O. Reg. 333/08: GENERAL under Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched. B

9. (1) A customer of a registered motor vehicle dealer is entitled to compensation from the Fund in respect of a claim for a pecuniary loss if,

(a) the claim arose from a trade in a motor vehicle between the customer and the dealer;

(b) the claim meets the requirements set out in a paragraph of subsection (3);

(c) at the time of the trade, the dealer was a registrant;

(d) the customer was acting in the trade as a consumer within the meaning of the Consumer Protection Act, 2002; and

(e) the customer has given the dealer, in accordance with section 37 of the Act, a written notice of demand for payment of the claim and the dealer has refused to pay the claim or is unable to do so. O. Reg. 333/08, s. 79 (1).

(2) Subsection 37 (3) of the Act does not apply to a notice given under clause 79 (1) (e) of this Regulation. O. Reg. 333/08, s. 79 (2).

(3) The requirements for a claim mentioned in clause (1) (b) are the following:

1. The claim arose from an act or omission of the registered motor vehicle dealer that was the subject of a proposal under clause 9 (1) (a) or (b) of the Act to suspend, revoke or refuse to renew the registration of the dealer and,

i. the dealer did not request a hearing by the Tribunal, or

ii. the dealer requested a hearing by the Tribunal and the Tribunal ordered the registrar to suspend, revoke or refuse to renew the registration of the dealer.

2. The claim arose from a trade in connection with which the registered motor vehicle dealer has been convicted of an offence.

3. The trade from which the claim arose was a purchase or lease of a motor vehicle from the registered motor vehicle dealer. A law enforcement authority has seized the vehicle and indicated that it will not be returned to the purchaser or the lessee.

4. The trade from which the claim arose was a purchase or lease of a motor vehicle from the registered motor vehicle dealer. A creditor, other than a creditor of the customer, has legally seized the vehicle and indicated that it will not be returned to the purchaser or the lessee.

5. The trade from which the claim arose was a purchase or lease of a motor vehicle from the registered motor vehicle dealer. The claim does not exceed the total sale price of the vehicle at the time of the purchase, if the claim arose from a purchase of the vehicle, or the lease value of the vehicle included in the information mentioned in subparagraph 1 i of subsection 41 (1) at the time of the lease, if the claim arose from a lease of the vehicle. The claim is for a deficiency that the dealer has refused to remedy. The deficiency is something that,

i. the vehicle does not have and the customer had indicated was material to the trade for the vehicle to have, or

ii. the vehicle has and the customer had indicated was material to the trade for the vehicle not to have.

6. The claim is for the return of a deposit or other payment by the customer under a contract for the purchase or lease of a motor vehicle from the registered motor vehicle dealer. The dealer has not delivered to the customer, within the time period required by the contract, the vehicle or an alternative motor vehicle that is acceptable to the customer. The customer has made a demand for a refund of the deposit or payment. The dealer has refused without legal justification to make the refund or is unable to make the refund by reason of bankruptcy or insolvency.

7. The claim relates to an extended warranty that was sold by the registered motor vehicle dealer or facilitated through the dealer. The claim is for,

i. the return of all payments made by the customer under the warranty that were unearned because the dealer has not complied with clause 47 (7) (c),

ii. subject to subsection (5), the cost of repairs or replacement that should have been, but were not, provided under the warranty, if the dealer was the seller of the warranty, or

iii. the amount for which the dealer is liable under subsection 47 (3), if the dealer was not the seller of the warranty.

8. The claim relates to a service plan that was sold by the registered motor vehicle dealer or facilitated through the dealer. The claim is for,

i. the return of all payments made by the customer under the service plan that were unearned because the dealer has not complied with clause 48 (6) (c), or

ii. the cost of goods or services that should have been, but were not, provided under the service plan, if the dealer was the seller of the plan.

9. The claim is for a refund owed to a customer under clause 50 (10) (b) or (11) (b) if the customer is entitled to a refund under the applicable clause.

10. The amount of the claim is the subject of a judgment or an order made by a court for the payment of compensation or the making of restitution by the registered motor vehicle dealer to the customer. The judgment or order has become final by reason of the expiration of the time for appeal or of having been confirmed by the highest court to which an appeal may be taken.

11. The claim is for a liquidated amount that the registered motor vehicle dealer owes to the customer. The dealer has become a bankrupt or a winding-up order has been made or a receiver appointed in respect of the business of the dealer under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or the Winding-up and Restructuring Act (Canada). O. Reg. 333/08, s. 79 (3); O. Reg. 221/09, s. 19 (1).

(4) Despite subsection (1), a customer is not entitled to compensation from the Fund if,

(a) the customer is related, by blood or adoption, to the registered motor vehicle dealer against whom a claim is made or to a director or officer of the dealer;

(b) the customer is a spouse of the registered motor vehicle dealer against whom a claim is made or a spouse of a director or officer of the dealer;

(c) the customer is associated, as described in subsection 1 (2) of the Act, with the registered motor vehicle dealer against whom a claim is made;

(d) the customer was complicit in illegal conduct relating to the trade;

(e) the customer misrepresents the nature of the claim or provides false or misleading evidence in support of the claim; or

(f) the customer made a previous claim for compensation from the Fund based on the same facts or substantially the same facts. O. Reg. 333/08, s. 79 (4).

(5) If the Board determines that a customer of a registered motor vehicle dealer is entitled to compensation from the Fund in respect of a claim described in subparagraph 7 ii of subsection (3), the Board may direct the Trustee, in addition to paying the compensation, to pay the customer the amount of the premiums that the customer is required to make under the extended warranty that is unearned at the time that the customer makes the claim. O. Reg. 221/09, s. 19 (2).

(6) If the Board directs the Trustee to pay the additional payment described in subsection (5) from the Fund, the customer is not entitled to compensation from the Fund for any further claims described in subparagraph 7 ii of subsection (3).

Coyne v. 1072984 Ontario Inc., 2004 CanLII 12104 (ON SC)

[15] The plaintiff pleads that the defendant misrepresented the vehicle to him in as much as he did not disclose to the plaintiff that the vehicle had previously been damaged in an auto collision resulting in repairs in excess of $5, 400.00 prior to the purchase nor was it disclosed to him that the vehicle had been leased by a third party prior to the sale to the plaintiff. The plaintiff seeks restitution for the purchase price of the van ($19, 164.65) plus repairs to the engine ($4,817.18 Can.) less a credit for the use of the van (in the amount of $7,200.00 calculated on the basis of a fair rental charge of $300.00 per month for 2 years) and less a credit for the amount of the sale of the van in December 2002 ($4,000.00) for a total of $12,781.73. The plaintiff seeks restitution based on rescission of the contract as a result of the failure of the defendant to disclose.

(...)

[18] If it can be said that the plaintiff has on the balance of probabilities established a misrepresentation as to the condition of the vehicle or the previous use or its reliability, then he is entitled to a remedy. This court is satisfied that on the totality of the evidence there was no misrepresentation made by the defendant to the plaintiff with regard the vehicle’s condition, previous use, its history, including any collisions it may have been in, or its reliability.

Lefrancois v Ottawa Chrysler Dodge, 2014 CanLII 54172 (ON SCSM)

8. A week later she attended to pick up the vehicle. It was on a typical Ottawa December day, rain and snow. She was shown how the various instruments and controls worked, and she was off with her new purchase. At no time was Mrs Lefrancois told that the vehicle was in a previous accident. According to her, it was a new car and without any blemishes. That is not an unreasonable expectation when purchasing a new vehicle. The odometer showed 242 km. The sales agreement Exhibit # P 2 states that the vehicle is “new. The price was $41,627.47 including a five year extended warranty for $3435.00. It contains no notation that it may have been previously repaired or that it has been in any accident or incident. Mrs Lefrancois had no reason to suspect that the vehicle had been damaged in an accident.

(...)

26. The evidence is uncontroverted that the plaintiff purchased a new vehicle. The sales agreement describes it as “new” with the odometer reading as 242 km.

27. The plaintiff gave evidence that the vehicle was described as new, it was sitting in the defendant’s show room and according to the plaintiff it was described by the salesman as new without any indication of previous damage to the vehicle. I accept her evidence.

28. Based on the evidence of Mr. Shahpou Rahnama and Mr. Gerry Schroeter I also find that it took a considerable amount of force to cause the damage. It is also clear that to that repairs done by the defendant were superficial without addressing the underlying structural damage caused by the accident.

(...)

33. I conclude that while the cosmetic repair only cost $751.55, a proper repair would have cost over $3000.00. Absent evidence from the repair shop that did the repair on behalf of the defendant or anyone with actual knowledge from the dealership, I find that the defendant did not rebut that the damage in this case was both structural in nature and a proper repair would have cost in excess of $3000.00. Accordingly, I conclude that when the car was sold to the plaintiff the vehicle was in a damaged condition.

34. The plaintiff purchased a new vehicle. By selling to the plaintiff a damaged vehicle the defendant has breached its contract. The sale of new vehicles is to be distinguished from the sale of used vehicles. In the latter, one may expect problems, but not if the vehicle is new (see: Peters v. Parkway Mercury Sales Ltd.[1975] N.B.J. No. 74. NBCA))