Tribunals Ontario / Tribunaux décisionnels Ontario

Licence Appeal Tribunal / Tribunal d'appel en matière de permis

Licence Appeal Tribunal File Number: 16479/MVDA

Appeal from a Decision of the Board of Trustees, Ontario Motor Vehicle Dealers Compensation Fund, under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched B to deny a claim

Between:

Yahya Saeed Appellant

and

Board of Trustees, Ontario Motor Vehicle Dealers Compensation Fund Respondent

DECISION AND ORDER

VICE-CHAIR: Avril A. Farlam, Vice-Chair

APPEARANCES:

For the Appellant: Yahya Saeed, Self-represented For the Respondent: Jean Lu, Counsel

HEARD: May 15, 2025

OVERVIEW

1Yahya Saeed, the appellant, appealed the November 5, 2024 decision (“Decision”) of the Board of Trustees, Ontario Motor Vehicle Dealers Compensation Fund, the respondent, denying his claim for compensation under the Motor Vehicle Dealers Compensation Fund (“Fund”) under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched B (“Act”) and Ontario Regulation 333/08 (“Regulation”).

2The appellant’s claim arose following his purchase of a 2015 Honda Accord (the “vehicle”) pursuant to an agreement dated July 31, 2023 from a motor vehicle dealer (“Dealer”). The appellant also purchased at that time an extended warranty from First Canadian. The vehicle’s odometer reading at the time of purchase was 219,944 km.

3The respondent determined that the appellant’s claim for compensation is not eligible for reimbursement out of the Fund because it did not meet the criteria for compensation under s. 79(3) of the Regulation because:

(a) There was a lapse of approximately six months between the date on which the Dealer replaced the right front wheel and the date on which the appellant approached the Dealer again to replace the wheels. Given the passage of time, the respondent could not determine whether the suspension problem existed at the time of purchase or occurred subsequently.

(b) Had the problem persisted after the initial replacement of the right front wheel, the appellant could have made a claim under the extended warranty. As such, the appellant failed to mitigate his losses.

(c) Apart from the repair costs, the appellant’s claim for the loss of use of his vehicle was not based on the rental of an equivalent vehicle but on a calculation based on minimum wage. Section 79 states that the entitlement for compensation is limited to “pecuniary loss”. The appellant’s claim for the loss of use is not grounded in out-of-pocket expenses and is therefore not compensable by the Fund (“loss of use claim”).

4Although the appellant’s claim was originally $5,622.06, the appellant confirmed in his Notice of Appeal (“NOA”) that he reduced his claim on appeal to $4,827.65 after acknowledging his loss of use claim is “outside legal scope”. As a result, the loss of use claim was not an issue before me.

5The appellant’s grounds for appeal set out in his NOA can be summarized as follows:

(a) The issue of the vehicle pulling or veering to the right was a significant defect that existed at the time of purchase and his actions reflect a reasonable attempt to resolve this. After the test drive the appellant informed the sales representative and his manager about the strong veering to the right and emphasized that this needed to be fixed before delivery. After his wife picked up the vehicle, he “later discovered” the issue was unresolved. When he returned to the Dealer, he was informed of a bent rear right wheel which they suggested might be causing the problem. The Dealer promised to replace the wheel which after three months was installed at no charge but the veering issue persisted. The appellant sourced two wheels and asked the Dealer to install them free of charge as a goodwill gesture so he had Canadian Tire install the rear left wheel and inspect the front wheels for any bends. Canadian Tire recommended replacing the front right wheel and he did. The vehicle still pulled to the right, confirming the issue wasn’t due to a bent wheel. The appellant visited a Midas mechanic who attributed the veering to the bald tires, after only 23,000 km. After putting brand-new tires, balancing and aligning, and inspecting the front end, the veering persisted. At a second Midas location, the “true cause” was identified as a suspension issue. “Only after fixing the suspension did the veering stop. These repeated attempts show that the problem existed at the time of purchase rather than occurring afterward”.

The appellant relies on s. 80(1) of the Act in support of his submission in the NOA that customers have two years to make a claim. The appellant also relies on s. 79(3)(5)(ii) in support of his submission that his claim meets the requirements, as the vehicle had a deficiency (pulling/veering to the right) present at purchase which the Dealer did not disclose, initially misrepresented, and later refused to remedy. The appellant also relies on the Consumer Protection Act, s. 15 in support of his submission that unconscionable representations are prohibited. The appellant also submits in his NOA that “due to my limited knowledge of car mechanics, I got harmed with a bad deal and overcharged for a vehicle with this significant issue.

(b) The appellant cancelled his extended warranty within one month of purchasing the care because this was his right, it was an unnecessary extra cost, and he did not expect the veering issue would require major suspension repair because he believed it was a small case of bent wheel which was going to be taken care of soon, and because the vehicle was old, he figured the warranty company will likely deny claims using “pre-existing reasoning”.

ISSUE

6The issue to be determined is whether the appellant’s claim for compensation meets the criteria under s. 79 of the Regulation.

RESULT

7For the reasons set out below, pursuant to s. 85(7) of the Regulation, the appellant’s Claim for compensation from the Fund is refused.

ANALYSIS

The Fund

8The respondent administers the Fund established under the Act which is a consumer protection program which allows consumers to apply for compensation for financial losses arising from certain transactions with a registered motor vehicle dealer.

9Section 42(5) of the Act mandates that a claimant’s entitlement to compensation shall be determined in accordance with the criteria and procedures set out in the Regulation. Section 79(1) of the Regulation provides that a customer of a registered motor vehicle dealer is entitled to compensation from the Fund in certain circumstances which include:

(i) the claim arose from a trade in a motor vehicle between the customer and the dealer – s. 79(1)(a);

(ii) at the time of the trade the dealer was a registrant – s. 79(1)(c); and

(iii) the customer was acting in the trade as a consumer within the meaning of the Consumer Protection Act, 2022, S.O. 2002, c. 30, Sched. A (“CPA”) – s. 79(1)(d)

10Section 79(4)(e) of the Regulation provides that even if the appellant meets the criteria under s. 79(1), the appellant will be disqualified if he misrepresents the nature of the claim or provides false or misleading evidence in support of the claim.

11If a claim is denied, the claimant may appeal to the Tribunal. After a hearing, the Tribunal may allow the claim, in whole or in part, or refuse to allow the claim pursuant to s. 85(7) of the Regulation.

12The onus is on the appellant to demonstrate that he/she meets the criteria and is entitled to compensation.

Appellant Is Not Entitled to $4,827.65 Compensation from the Fund

13I find the appellant is not entitled to $4,827.65 compensation from the Fund because the appellant has not established that he is eligible for compensation under the Act and s. 79 of the Regulation.

14It is not seriously in dispute that the Dealer was registered and that the appellant is a consumer within the meaning of the CPA at the time of the trade. It is also not in dispute that the appellant has worked as a registered motor vehicle salesperson, is experienced in trades including sales agreement, and had worked in the motor vehicle industry, all of which are admitted by the appellant in his testimony.

15The real dispute between the parties is whether the the claim put forward by the appellant arose from the trade in a motor vehicle between the appellant and the Dealer.

16The evidence does not establish that the appellant’s claim arose from the condition of the vehicle at the time of the trade. The passage of time between the purchase of the vehicle from the Dealer and the claim makes it unlikely that his claim for the suspension problem arose from the condition of the vehicle at the time of the trade. Instead, it appears more likely than not that the claim arose from subsequent wear after the appellant had purchased the vehicle for the following reasons.

17Firstly, the evidence of the appellant’s expert witness, Bryce Padfield, is not helpful in establishing that the appellant’s claim arose from the August, 2023 trade of the vehicle between the appellant and the Dealer. Mr. Padfield’s March 13, 2025 report states “Upon inspection after an alignment it was found that the rear suspension bushings were worn and separating. Therefore, replacement of all related components needed replacing.” Mr. Padfield testified to the same effect.

18Mr. Padfield did not inspect the vehicle until June 2024 as set out in his report and his testimony. By that time, the trade of the vehicle between the appellant and the Dealer had been completed some ten months earlier, the vehicle had been through a fall, winter and spring season and had been driven some additional 24,000 kms since the trade. When he did inspect the vehicle, he attributed the need for repairs to “bushings were worn and separating”. Mr. Padfield had no knowledge of the mechanical state of the vehicle at the time of the trade between the appellant and the Dealer and only observed wear in June, 2024.

19Secondly, other mechanics had inspected and worked on the vehicle between the time of the trade and Mr. Padfield’s involvement. There is no evidence before me that these other mechanics agreed with Mr. Padfield’s opinion about the need for repairs, or the nature or cause of the repairs. These other mechanics did not provide any opinions about the vehicle experiencing “veering” and did not provide any testimony at the hearing.

20Specifically, Canadian Tire performed tire work on the vehicle on May 15, 2024, and did not note any “veering” or need for other repairs, and charged $45.20. Further, a Midas shop which does not employ Mr. Padfield invoiced the appellant $998.58 for doing an alignment, and tire work on the vehicle on June 7, 2024. There is no reference on the June 7, 2024 to the vehicle “veering” or needing any other repairs and the mechanic who worked on the vehicle on June 7, 2024 did not testify or provide any other information to support the appellant’s appeal before me. The same shop performed a front end inspection on the vehicle on June 6, 2024 and charged the appellant $56.44, did not note any mechanical concerns, and charged the appellant for labour only. The mechanic who worked on the vehicle on June 6, 2024 did not provide any other information to support the appellant’s appeal.

21As a result, Mr. Padfield’s evidence lacks corroboration by other mechanics who worked on the vehicle the same month he did. This raises further concern about Mr. Padfield’s evidence which I do not find helpful on the issue before me and I give it little weight.

22Although the appellant testified that he found the vehicle to be veering to the right at the time of purchase and his concerns were dismissed by the Dealer which he later viewed as “misrepresentation”, I find that the appellant’s evidence does not support his claim in this appeal.

23Thirdly, the weight of the evidence is that the appellant was not concerned about the condition of the vehicle at the time he purchased it from the Dealer and I do not find the appellant’s testimony to the contrary to be reliable in view of his conduct and documentation as follows.

24The appellant cancelled the extended warranty that he purchased at the time of the trade with the Dealer within 30 days of the purchase. He explained in his testimony that he felt is was an unnecessary expense which is at odds with his testimony that he thought the vehicle had serious mechanical issues at the time of the trade.

25Although the appellant testified that the vehicle made him feel unsafe during the test drive, neither of the two purchase agreements contain any representations or warranties addressing the concern he says he had at the time of purchasing the vehicle. The purchase agreement dated August 4, 2023 signed by the appellant expressly provides that the vehicle was purchased by the appellant “sold as seen equipped, no verbal promises”. In the same agreement the appellant purchased a warranty from First Canadian for 24 months/24,000 km.

26At the time of the purchase the vehicle was some eight years old and had travelled a distance of 219,944 kms, yet the appellant chose to purchase it, and later cancelled the warranty coverage that may have fixed it. As a result, the appellant deliberately chose to alter the transaction with the Dealer as it was at the time of the purchase, and removed the warranty protection that he could have relied on, and was made concurrent with the purchase of the vehicle.

27As an experienced motor vehicle salesperson, the appellant could have written into the purchase agreement warranties or representations to cover the concerns he said he had at the time but chose not to do so.

28The appellant testified that he did not take delivery of the vehicle himself in August, 2023 but instead delegated this to another person and thus deprived himself of the opportunity to do a pre-delivery inspection of the vehicle. This is at odds with the appellant’s testimony that he had concerns with the condition of the vehicle at the time of purchase.

29After taking delivery of the vehicle, the appellant did not take the vehicle back to the Dealer until November, 2023. After November, 2023 he drove the vehicle another some 24,000km before taking it back to the Dealer in May, 2024 to ask that two wheels he had purchased be installed by the Dealer which the Dealer refused to do.

30The demand letter to the Dealer is dated June 23, 2024, the day after the appellant received the June 22, 2024 for $3,681.28 from Mr. Padfield’s employer for repairs.

31Taking into account the totality of the evidence, I find that there is insufficient evidence before me to establish, on a balance of probabilities, that at the time of the trade, the vehicle had a deficiency (pulling/veering to the right) as alleged by the appellant. As a result, I find the appellant is not entitled to $4,827.65 compensation from the Fund because the appellant has not established that he is eligible for compensation under the Act and s. 79 of the Regulation.

32Section 79 of the Regulation is clear and there is no basis on which the Tribunal can override the statutory entitlement provisions in the Regulation, including the reasons put forward by the appellant.

33The appellant’s evidence and submissions that the trade was based on “misrepresentation” and/or is unconscionable under the CPA and possibly other legislation, and he was charged too much for the vehicle, do not persuade me that his appeal should succeed. If the appellant has a claim against the Dealer based on the contractual agreement, this is not the forum for advancement of those claims. The Tribunal is created by statute and only has the powers given to it by the legislature, here specifically under the Act and Regulation. The issue before me as set out in the Act and Regulation is limited to the appellant’s claim under the Fund which I have found has not been established for the reasons set out above. The criteria for compensation under the Fund is narrow and specific.

34On a plain, purposive reading of the Act and Regulation, the Fund is not intended to be a guarantor or extended warranty for trade in used vehicles. As I have already found, the appellant purchased that type of warranty and chose to cancel it post-trade. Lastly, I find the appellant brought no valuation or other evidence before me to support his view was charged too much for the vehicle. The evidence before me is that the appellant, a consumer with work experience in the motor vehicle industry, entered into a trade with the Dealer willingly and pursuant to the purchase agreement he signed and I so find.

35I am also not persuaded by the appellant’s evidence and submission that his appeal should succeed under s. 79(3)(5)(ii) of the Regulation as the vehicle had a deficiency (pulling/veering to the right) present at purchase which the Dealer did not disclose, initially misrepresented, and later refused to remedy. Section 79(3)(5)(ii) has no application here as it requires that at the time of the trade, there is a deficiency that the customer had indicated was material and the Dealer has refused to remedy.

36I have already found that there is insufficient evidence before me to establish, on a balance of probabilities, that at the time of the trade, the vehicle had a deficiency (pulling/veering to the right) as alleged by the appellant. There is no witness who testified to this effect, other than the appellant who has an obvious self-interest, and Mr. Padfield’s evidence does not persuade me otherwise for the reasons set out above. Further, the appellant did not treat the alleged deficiency as material, leaving out any reference to it in the purchase agreement, delegating pre-delivery inspection to another person, and cancelling the warranty protection he had purchased post-trade.

37As a result, I refuse to allow the appellant’s claim.

Conclusion

38As a result, I find the appellant is not entitled to $4,827.65 compensation from the Fund because the appellant has not established that he is eligible for compensation under the Act and s. 79 of the Regulation.

ORDER

39For the reasons set out above, pursuant to s. 85(7) of the Regulation, the appellant’s Claim for compensation from the Fund is refused.

LICENCE APPEAL TRIBUNAL

Avril A. Farlam, Vice-Chair