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BC Supreme Court finds that a signed motor vehicle purchase agreement relied upon by the car dealership was not a binding agreement, on the basis that the parties did not intend for it to be binding; alternatively, if it was a binding agreement, it was unconscionable and therefore void.  The direct consequence of this finding was that the car dealership was the vehicle's owner.  Eyford Partners LLP acted for the prospective purchaser of the vehicle.  The Court also found that the car dealership gave implied consent to third parties to operate the vehicle that subsequently struck and seriously injured the pedestrian/plaintiff.  The Court concluded that the driver was liable for the accident and the car dealership was vicariously liable for the plaintiff's damages. The decision is now under appeal.

The Supreme Court of British Columbia recently released a decision in Ward v. Thomas, 2022 BCSC 1147, following a sixteen-day trial in Victoria, British Columbia in February and March of this year regarding a motor vehicle accident on 27 August 2018 (“Accident”). Several issues were contested at trial, including: (a) the ownership of the Jeep that struck the plaintiff and her sister, catastrophically injuring the former and killing the latter; (b) the owner’s consent, express or implied, to operate the Jeep at the time of the Accident; and (c) the quantum of damages for the plaintiff, who will require 24-hour care for the remainder of her life.

This decision addressed the application of the term “implied consent” as defined by the Court of Appeal decision in Godsman v. Peck, 1997 CanLII 4030 (B.C.C.A.) to the facts of this case.

Eyford Partners LLP represented the defendant, Aggatha Siah.  The plaintiff alleged that Ms. Siah and Harris Victoria Chrysler Dodge Jeep Ram Ltd. (“Harris”) were the co-owners of the Jeep driven by the defendant, Anthony Thomas, at the time of the Accident and were, therefore, vicariously liable for the plaintiff’s damages under section 86 of the Motor Vehicle Act, R.S.B.C. 1996, c. 318.

Harris third-partied Ms. Siah, alleging that she was the Jeep’s owner pursuant to a Motor Vehicle Purchase Agreement (“MVPA”) signed days before the Accident occurred, which Harris argued had transferred ownership of the Jeep to Ms. Siah.

Background

Ms. Siah attended the car dealership owned by Harris on a busy Saturday afternoon on 18 August 2018, intending to purchase the Jeep by financing it and trading in a vehicle she owned.  The dealership submitted her credit information to a third-party lender but had not received financing approval by the end of that day.  Harris considered it important for its business to have a potential customer leave the lot in the car they were interested in purchasing while the financing was pending.  Ms. Siah was presented with the MVPA and told to sign it. The MVPA was drafted as a cash bill of sale.  Ms. Siah understood that she was signing the MVPA on the basis that she would be responsible for the Jeep’s purchase upon being approved for financing. She was never told that she was signing a binding agreement and that, by signing it, she was agreeing to purchase the Jeep on the terms set out in the MVPA, even if financing ultimately was not available.

Ms. Siah signed the MVPA, and Harris’ employees affixed Ms. Siah’s vehicle’s licence plates onto the Jeep since dealer plates were unavailable.  Ms. Siah drove off the lot in the Jeep later that afternoon. Harris retained a set of keys to the Jeep pending the purchase completion.

The Accident happened nine days later.  The lending institution had not approved financing for the Jeep’s purchase.  The evidence at trial supported a conclusion that Ms. Siah would not have been approved for financing on terms upon which she could agree.

No Binding Agreement

At trial, Harris’ employees testified that financing for the Jeep’s purchase had not been approved and conceded that it had not been the right time to have Ms. Siah sign a “cash bill of sale”.  They viewed the MVPA as an interim document pending financing approval.

The Court reviewed in detail Harris’ business practices and its imperative to place new customers in vehicles even before financing had been approved.  The Court found that part of Harris’ overall marketing and business strategy was to generate new business by having other people see, drive, and like the new vehicles purchased by customers.

The Court was not persuaded that the parties intended to enter into a legally binding agreement by signing the MVPA.  A signed document is usually a reflection of the intention of the executing parties.  However, neither party intended the MVPA to be binding in this case. Harris’ employees understood that the MVPA “would be torn up” when the financing was approved.  Ms. Siah understood that she would only purchase the Jeep if the financing was approved.  The MVPA was missing essential terms including the financing terms.

In the alternative, the Court held that if the MVPA was binding, as argued by Harris, then it was unconscionable and void both at common law and under the Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2.  The Court held that there was a decided inequality of bargaining power in this case.  Harris was in control of generating the documents. The MVPA was a standard form document with confusing terms.  Harris executed hundreds of these documents monthly.  Ms. Siah was very much the weaker party.  She was not told that by signing the MVPA she was bound to pay the dealership more than $50,000 for the Jeep even if financing was never approved.

Consequently, Ms. Siah never acquired ownership of the Jeep for the purpose of vicarious liability under section 86 of the Motor Vehicle Act.  The Court dismissed the action against her and found Harris to be the Jeep’s owner within section 86 of the Motor Vehicle Act.

Consent to Operate the Jeep

Several days after being urged by Harris to take the Jeep pending the financing approval, Ms. Siah’s then-spouse allowed Mr. Thomas to drive the Jeep while Ms. Siah slept and was unaware that such permission was being given.

Mr. Thomas lost control of the vehicle and struck the plaintiff and her sister as they walked alongside the road.

The Court found that Harris was in possession of the Jeep within the meaning of section 86 of the Motor Vehicle Act because Harris:

(a)       was in physical possession of the Jeep when it handed it over to Ms. Siah;

(b)       retained a set of keys for the Jeep and knew where it was normally found;

(c)        could easily have picked up the vehicle if it wanted; and

(d)       was in communication with Ms. Siah over the days when she and her spouse were driving the Jeep vehicle (while awaiting financing approval).

Ms. Siah and her spouse believed that Harris owned the Jeep and would have followed Harris’ direction, e.g., returning the vehicle if asked.  They also would have followed Harris’ directions with respect to who could drive the Jeep.

Under section 86 of the Motor Vehicle Act, an owner is vicariously liable when the vehicle is driven by another if the owner expressly or implicitly consented to the vehicle being driven by another.  Harris had not expressly consented to Mr. Thomas driving the Jeep.

The Court was satisfied that Harris expected others beyond Ms. Siah to drive the Jeep. Harris was in the business of selling cars.  It was in their interest to permit a prospective customer to take a car for an extended test drive.  Harris had placed no limits on who could drive the Jeep in these circumstances.

The Court concluded that:

(a)       Mr. Thomas was liable for the damage suffered in this case;

(b)       Harris was vicariously liable under section 86 of the Motor Vehicle Act;

(c)        Ms. Siah was not liable; and

(d)       the plaintiff was entitled to approximately $5 million in damages.

Ms. Siah was represented by Sandra M. Katalinic, Andrew W. Schleichkorn and Kemily Ho of Eyford Partners LLP.

Associated
People
 
  • Andrew W.
    Schleichkorn

    Associate

    Andrew W.
    Schleichkorn

    Associate

  • Kemily
    Ho

    Associate

    Kemily
    Ho

    Associate

  • Sandra M.
    Katalinic

    Partner

    Sandra M.
    Katalinic

    Partner

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JURISDICTION: British Columbia LEVEL OF COURT: Supreme Court of British Columbia
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