Douglas v. Red Sea Auto & Sales Date:, 2011 BCPC 343

Citation: Douglas v. Red Sea Auto & Sales Date: 20111205 2011 BCPC 0343 File No: 38952 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: GEORGE HERBERT DOUGLAS CLAIMANT AND: RED SEA AUTO & SALES LTD. and RED SEA AUTO & SALES DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S.D. FRAME Appearing on their own behalf: Mr. G. Douglas Place of Hearing: Kamloops , B.C. Date of Hearing: November 28, 2011 Date of Judgment: December 5, 2011 [ 1 ] This is an application for a default order.

The claim is with respect to a 2004 Ford Mustang SVT Cobra, vehicle identification number 1FAFP48Y54F182178. Mr. Douglas purchased this vehicle through a private sale directly from Hai Ming Wei. At the time, the vehicle was being stored on the back lot of Red Sea Auto & Sales Ltd. where Mr. Douglas was an employee. Mr. Douglas went through the usual process of conducting a lien search and ensuring clear title before purchasing the vehicle. The vehicle was transferred to Mr. Douglas’ name. He produced a copy of the transfer to Frank Hernandez, the sales manager of Red Sea Auto & Sales Ltd. Mr. Hernandez gave Mr.

Douglas the keys to the car. [ 2 ] Mr. Douglas subsequently stopped working for Red Sea Auto & Sales Ltd. when that business caught fire. He lost his tools and his 1996 GMC truck in the fire. Because the company had no insurance, his losses were not covered. [ 3 ] In July 2011, Mr. Douglas’ vehicle was towed for reasons unrelated to this claim. When he arrived at the towing yard to pick up his vehicle it had been turned over to Red Sea Auto & Sales Ltd. who had produced a lien claiming title to the car. The lien was apparently registered in February 2010 after the purchase was completed.

No lien notice was ever delivered to Mr. Douglas and Red Sea Auto & Sales Ltd. was not entitled to place that lien on the vehicle. The liening agent has refused to disclose the documentation to Mr. Douglas even though the lien relates to property owned by him. However, Susan Ralph, the registry agent apparently told Mr.

Douglas that they had not received the proper papers to put the lien on the car but put the lien on it anyway, having been told that Red Sea Auto & Sales Ltd. would provide the rest of the papers. [ 4 ] Red Sea Auto & Sales Ltd. produced a Motor Vehicle Sale or Purchase Agreement purporting to be made by Mr. Douglas. He did not enter into this Purchase Agreement with Red Sea Auto & Sales Ltd. He has never signed the documentation. It does not even have a specific date for the sale.

A Warehouse Lien Act Notice was sent to one Matthew Shaw giving notice that the vehicle would be sold on December 6 by Red Sea Auto & Sales Ltd. I have issued an Order requiring the Defendant to preserve the vehicle. [ 5 ] Mr. Douglas was unable to receive any satisfactory relief from the police either as he was told that it was a civil matter. Red Sea Auto & Sales Ltd. refuses to disclose where the vehicle is being kept. [ 6 ] Mr.

Douglas, in applying for his default order, seeks the return of the vehicle with no damage to it and title cleared. [ 7 ] I order that Red Sea Auto & Sales Ltd. and Red Sea Auto & Sales return the 2004 Ford Mustang, vehicle identification number

1FAFP48Y54F182178 to George Herbert Douglas clear of any liens or charges. The issue on reserve is whether I have jurisdiction to order the discharge of the lien filed in the Personal Property Registry under base registration number 413962F as a PPSA Security Agreement. It is clear that there was no such PPSA Security Agreement. The documentation provided purports to be a Warehouse Lien Act lien. [ 8 ] The Warehouse Lien Act provides for very specific forms of notice which were clearly not given in any respect in this matter.

As such, the lien is void, two months having passed since Red Sea Auto & Sales Ltd. and Red Sea Auto & Sales had any notice of any pre- text of any lien they may have had with respect to that vehicle. In fact, it has been nearly two years since Red Sea Auto & Sales Ltd. knew that Mr.

Douglas purchased the vehicle. [ 9 ] I find that the lien is defective and is void pursuant to s. 3(3) of the Warehouse Lien Act and order that Red Sea Auto & Sales Ltd. and Red Sea Auto and Sales and any of its agents registering the warehouse lien discharge that lien forthwith. [ 10 ] As I have said, the lien was apparently registered as a PPSA Security Agreement in the Personal Property Registry. There are specific provisions in the Personal Property Security Act which provide for the discharge of security agreements. Under s. 1 of that Act , court is defined as Supreme Court.

Consequently, I have no jurisdiction to order that the Personal Property Registry discharge the Security Agreement registered by Red Sea Auto & Sales Ltd. and Red Sea Auto & Sales. Mr. Douglas will have to pursue the remedies available under that legislation if the Defendant does not discharge the Security Agreement in accordance with this order. I also order that Red Sea Auto & Sales Ltd. and Red Sea Auto & Sales forthwith register a discharge of their PPSA Security Agreement registered under number 413962F as part of my order to return the property Mr. Douglas. _____________________ S. D.

Frame Provincial Court Judge