Javier Narvaez v. Board of Trustees, Ontario Motor Vehicle Dealers Compensation Fund, 2020 CanLII 87947

Licence Appeal Tribunal

Tribunal File: 12700/MVDA

Date: 2020-10-05

Appeal from a Decision by the Board of Trustees, Ontario Motor Vehicle Dealers Compensation Fund, under the Motor Vehicle Dealers’ Act, 2002 to Disallow a Claim

Between:

Javier Narvaez

Appellant

v.

Board of Trustees, Ontario Motor Vehicle Dealers Compensation Fund

Respondent

DECISION AND ORDER

APPEARANCES

Before: D. Gregory Flude, Vice-Chair

For the Appellant: Javier Narvaez, Self-Represented

For the Respondent: Husein Panju, Counsel

Heard by Videoconference: August 20, 2020

REASONS FOR DECISION

1The appellant, Javier Narvaez, has had his claim for compensation denied by the Board of Trustees (the “Trustees”) of the Motor Vehicle Dealers Compensation Fund (the “Fund”). He has exercised his right under s. 85 of O. Reg 333/08 (the “regulation”) to appeal the denial to this Tribunal.

2The Fund provides compensation when a consumer suffers a financial loss as a result of a financial default on the part of a registered dealer. It is agreed that Mr. Narvaez suffered a financial loss in the bankruptcy and receivership of Dean Myers Chevrolet Buick GMC Corvette (“Dean Myers”). The dispute arises out of the Trustees’ position that he was not a consumer. The Trustees submit that the transaction Mr. Narvaez entered into with Dean Myers was a business transaction and business transactions are not covered by the Fund.

3While Mr. Narvaez’s loss is substantial and real and the facts are sympathetic, for the reasons that follow I find that Mr. Narvaez was involved in a business transaction and is not entitled to compensation from the Fund.

ANALYSIS

The Wording of the Regulation

4Entitlement to compensation from the Fund is set out in s. 79 of the regulation. It sets out 4 preconditions the most important of which, in this context, is that Mr. Narvaez had to be acting as a “consumer within the meaning of the Consumer Protection Act, 2002.” The Consumer Protection Act, 2002, S.O. 2002 c. 30 Sched. A defines a consumer as “an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes.” Mr. Narvaez states that he was purchasing the vehicle from Dean Myers for personal use. The Trustees point to the fact that this vehicle was the 11^th of 16 vehicles purchased by Mr. Narvaez. Mr. Narvaez concedes that the other vehicles were purchased for export to his native Ecuador. It is the Trustees’ position that the transaction was also a business transaction.

5Mr. Narvaez carries the onus of establishing his entitlement to compensation. In the ordinary course, he would present his evidence first. In this case, the bulk of the evidence surrounding the Trustees’ decision is in the hands of the Trustees, so by agreement between the parties, the Trustees presented their evidence first.

Not A Consumer Transaction

6The applicant takes that position that he was transitioning from living in Ecuador to living in Canada at the end of January and the beginning of February 2020 and purchased a Yukon for his personal use. It was his evidence that he was living in Cuenca, Ecuador, and working at the head office of his employer, Importadora Sudamericana Importractor Co. Ltd., (“Importractor”). He decided to move to Canada to attend a language school to improve his English. According to his evidence, he quit his job on January 31, 2020 and as he was moving back to Toronto, he called his friend Joe Dos Santos, and asked him to purchase a Yukon for him. He believes this call occurred either on January 31 before he left Ecuador or on a stopover on the flight back on February 1^st. When pressed he said it was on January 31st and he called from Ecuador. He produced no phone records relating to this call. The transaction in question concerned an agreement to purchase a 2020 GMC Yukon (the “Yukon”) for $77,000 signed by Mr. Dos Santos on Mr. Narvaez’s behalf, on February 1, 2020.

7The vehicle purchase documentation does not identify a vehicle. It sets out the make and model, options, and price, but there is no Vehicle Identification Number (“VIN”). The lack of a VIN was the root of Mr. Narvaez’s problems. On February 7, 2020, Mr. Narvaez paid the balance of the amount outstanding to Dean Myers. There was no amendment to the purchase agreement to add a VIN, so the purchase was simply for any new 2020 Yukon with a certain trim level.

8On February 12, 2020 Mr. Narvaez was notified that Dean Myers had been placed into receivership by its major creditor.

9Contrary to his evidence that he had decided to move to Canada at the end of January 2020, there is evidence to suggest that Mr. Narvaez moved to Canada in and around March 2016. In that year he applied for and received an Ontario G1 driver’s licence (learner’s permit). The first of the string of vehicles he purchased was plated in Ontario on March 24, 2016. The Ministry records show that Mr. Narvaez had a Toronto address at that time, an address he continues to occupy today. In addition to the Yukon, Mr. Narvaez purchased 6 vehicles in 2016, 2 in each of 2018 and 2019, and 4 vehicles in 2020. These 14 vehicles were shipped to Ecuador.

10Mr. Narvaez testified that he purchased the 14 vehicles for Importractor. He stated that the purchase of the Yukon was different and that it was for his personal use. He states that he was living in Ecuador in January 2020, and decided to quit his job and move to Canada to take courses to improve his English. He resigned effective immediately on January 31, 2020 and headed to the airport. He called a friend in Toronto as he was in the process of departing Ecuador and asked him to go Dean Myers and purchase a GMC Yukon for him. It was his friend who signed the purchase contract on his behalf on February 1, 2020 and, according to his testimony, it was the friend who paid the $1,000 deposit on his credit card.

11As further support of his intention to move to Toronto and purchase the Yukon for his personal use, Mr. Narvaez submitted the following documents:

• A credit card authorization for the purchase of a Toyota Tacoma from Yorkdale Toyota Scion dated January 20, 2020;

• A typed letter of resignation from his job with Importractor dated January 31, 2020;

• A TD Insurance quote for coverage on a 2020 Yukon dated February 17, 2020;

• A purchase agreement dated February 27, 2020 for the purchase of a Yukon from Old Mill Cadillac Chevrolet Buick GMC Limited (“Old Mill”) with the names “Guererro Narvaez” and Ceasar written on it;

• A letter dated March 9, 2020 from Old Mill indicating the purchase did not go through “Due to circumstances beyond the control of our dealership or Mr. Narvaez Guerrero;”

• An application for a G2/G1 road test dated February 28, 2020; and

• A letter of acceptance dated April 6, 2020 indicating that Mr. Narvaez had started an English language course at Hansa Language School on March 2, 2020. The address given is Cuenca, Ecuador.

12I find that the evidence and chronology relied on by Mr. Narvaez are at best equivocal in light of his knowledge of the impact of the receivership on the return of the funds. The only document that is in any manner contemporaneous with the payment of funds is the resignation letter. I place very little weight on it. He purportedly hand-delivered the letter to his Ecuadorian employer on January 31, 2020.

13I note that the letter itself is not on company letterhead and uses the English “Co. Ltd.” not the Spanish “Cia Ltda.” This usage appears to me unlikely from a native Spanish speaker, living in Ecuador and working out of the head office. Together with the evidence suggesting that Mr. Narvaez moved to Toronto in 2016, and the purchase of 2 Toyota Tacomas in Toronto on January 20, 2020 discussed below, the letter is sufficient in my mind to raise a doubt about its authenticity. Even if the letter is authentic, it does not establish that the sale was a consumer sale.

14Eleven days before January 31, Mr. Narvaez was apparently in Toronto purchasing 2 Toyota Tacomas for export to Ecuador, calling into question his evidence that he was living in Ecuador. The credit authorization was signed and dated on January 20. He did not testify that this transaction was handled from Cuenca and there is no fax banner on the authorization form. That does not mean that he was not present in Ecuador in January, 2020, but he has not produced a copy of his airline ticket indicating his return flight.

15I do not accept the Trustees’ position that the use of the term “Insert business name” on the credit card authorization indicates that Mr. Narvaez was acting in a business capacity. The Trustees misread the form. The reference to a business name is for the name of the company charging the credit card, i.e. Yorkdale Toyota Scion, not the person authorizing the charge.

16The rest of the documents listed above date after February 12, 2020 when Mr. Narvaez became aware of the receivership and that he would be treated as an unsecured creditor. They do not provide any insight into the nature of the purchase.

17By way of example, Mr. Narvaez relied heavily on the fact that he had booked a road test to move from a learner’s permit to a G2 licence that would allow him to drive unaccompanied by a licence driver. He could then drive the Yukon for personal use. I can see no compelling linkage between booking a road test and the purchase of the vehicle. The agreement to purchase the vehicle was dated February 1. Mr. Narvaez became aware that he was an unsecured creditor on February 12. He did not book the road test until February 28, over two weeks after he was aware that he was not getting the Yukon or his money. The test itself was to happen on March 19. It is also the case that Mr. Narvaez had 5 years to complete the progression from a G1 to a full G licence. He was issued a G1 in 2016. The 5 years expire in 2021 and he was required to hold a G2 licence for a year before applying for a test to graduate to a full G. Simply put, he was tight for time and any further delay would have required him to start all over again. This scenario is equally as likely as his insistence that he booked the test to be able to drive the Yukon after he knew he was not getting it.

18With respect to the failed purchase of a Yukon from Old Mill, Mr. Narvaez testified that at the end of February he thought he was going get his money back from the receiver or compensation from the Fund. His cousin, Ceasar, loaned him the money to purchase the Old Mill Yukon. When he knew he was not getting compensation, he cancelled the deal, and those are the circumstances being referred to in the Old Mill letter. This explanation is not supported by the documents. He was informed by the receiver on February 12 that he was being treated as an unsecured creditor. While the receiver made sympathetic comments and undertook to seek a legal opinion, there is nothing in the record post February 12 to suggest a refund was likely. The Trustees’ decision was released on March 27, so he had no immediate expectation of compensation from the Fund in and around February 27.

19The Trustees point to other evidence that they submit calls into question the consumer nature of the transaction. The Yukon purchase was part of a buying spree in early 2020 where, in addition to the Yukon which was never identified, delivered or plated, he purchased 2 Toyota Tacoma’s plated on February 6, a Yukon plated on February 18 and a second Yukon plated on March 2.

20The Trustees also point to how Mr. Narvaez conducted his enquiries with the receiver. There was a lengthy exchange of emails. The correspondent on many of the emails was Alma Global Shipping (“Alma”), a worldwide shipping company. Going through that correspondence the author, Alexander Casco, the owner of Alma, refers to Mr. Narvaez as a “client.” From the very first email, Mr. Casco uses the first-person plural. He talks about “our money,” and states “we will accept any other vehicle” in later correspondence. The Trustees point to Mr. Casco’s wording in the emails as indicative of a business purpose for the purchase. A global shipping company talking about recovery of “our money” denoted a business purchase rather than a consumer purchase. Mr. Narvaez identified Mr. Casco as simply a friend he went to for help.

21Mr. Casco, in his evidence, supported Mr. Narvaez. He identified Mr. Narvaez as someone he met through his uncle. Mr. Casco’s uncle was a friend of Mr. Narvaez’s uncle and so he came to know Mr. Narvaez’s uncle’s family and from there met Mr. Narvaez. He and Mr. Narvaez were not close friends, yet Mr. Casco was the first person Mr. Narvaez went to for help. Mr. Casco decided to help because he felt Mr. Narvaez had gotten a raw deal.

22Mr. Casco acknowledged that Mr. Narvaez was a client who shipped “hundreds of thousands of dollars overseas,” yet he asserts that he did not ship any of the 15 admittedly exported vehicles Mr. Narvaez sent to Ecuador. I find the assertion Mr. Narvaez does not use his friend who runs a shipping company and ships heavy equipment strains credibility. Mr. Narvaez did not put any bills of lading before me to show how the other vehicles were shipped.

23I agree with the Trustees that the immediate involvement of Alma, coupled with the first-person language Mr. Casco used, indicates that the purchase of the Yukon was part of a business undertaking with the aim of shipping the Yukon to Ecuador.

24Looking at the evidence in its totality, I find that Mr. Narvaez has not met his onus of establishing that the sale was a consumer sale. The transaction was one of a series of purchases of large sport utility vehicles in early 2020 that included 2 Toyota Tacomas and 2 other Yukons, all for export. Even accepting Mr. Narvaez’s evidence at face value, it establishes only that he intended to take an English language course in Toronto and had resigned his job with Importractor. I am left only with his assertion that this Yukon, out of five vehicles he purchased in and around the same time, was the only one intended for personal use. This evidence is, of course, self-serving, but the preponderance of evidence persuades me that the Yukon was purchased as part of a business venture.

ORDER

25Mr. Narvaez’s appeal from the decision of the Board of Trustees of the Ontario Motor Vehicle Dealers Compensation Fund to deny his claim for compensation arising out of the receivership and bankruptcy of Dean Myers is dismissed.

LICENCE APPEAL TRIBUNAL

_______________________

D. Gregory Flude