The Divisional Court held that a Motor Vehicle Dealer engaged in an unfair practice under the Consumer Protection Act, 2002 by failing to provide a Bill of Sale (detailing history and condition of car) and details of financing (including the total cost of borrowing and rate of interest) at the time of the vehicle purchase.
The Respondent, Davidson purchased a motor vehicle from the Applicant, Motor Vehicle Dealer. Davidson paid the down payment and commenced payments. The vehicle turned out to be a lemon and problems subsequently arose. The Dealer refused to take the vehicle back. Following two days of trial, the Trial Judge granted rescission of the agreement to purchase the vehicle. The vehicle was ordered to be returned to the Dealer and the Dealer was ordered to return all payments to Davidson, in the amount of $7,964.00.
The Dealer appealed the trial judge’s decision on two grounds. First the Dealer alleged that the trial judge erred by finding the vehicle was a consumer purchase. If it was not a consumer purchase then the Consumer Protection Act, 2002 would not apply. The Divisional Court held there was plenty of evidence that the vehicle was used extensively for personal use, in addition to business use. As a result, Davidson was a Consumer and the Consumer Protection Act, 2002 applied to the agreement to purchase the vehicle.
Under section 14 of the Consumer Protection Act, 2002, it is an unfair practice to make a false, misleading or deceptive representation. The Dealer’s second ground of appeal alleged that the trial judge erred by finding that the Dealer made a false, misleading or deceptive representation. The Dealer promised to provide a Bill of Sale with details of financing information when the vehicle was purchased. The Bill of Sale is required, by law, under the Motor Vehicle Dealers Act, 2002. A purchaser of a car is entitled to expect a Bill of Sale that details the history and condition of the car. The Dealer’s promise fell within the definition of “representation” in section 1 of the Consumer Protection Act, 2002. Failure to fulfill the promise was a false, misleading or deceptive representation and therefore the Dealer engaged in an unfair practice.
Section 18 of the Consumer Protection Act, 2002 provides that any agreement, entered by the Consumer Davidson, after or while the Dealer engaged in an unfair practice, may be rescinded by the Consumer Davidson. The remedy of rescission is the “unmaking of a contract” and brings the parties as far as possible back to the position they were in before entering the contract. For that reason, it was ordered that Davidson receive all his money back and the vehicle be returned to the Dealer.