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Manufacturers Face Suit from Auto Dealer

By Jeff Rud, The Times Colonist

Victoria law firm representing dealer who says actions contravene NAFTA...

A Vancouver dealer of high-end used cars is suing the Canadian branches of six major automobile manufacturers for allegedly impeding the free trade of vehicles from the U.S. to Canada.

Todd Macdonald, owner of Westport Motor Cars, has filed the suit in B.C. Supreme Court, listing the Canadian arms of Mercedes-Benz, BMW, Volvo, Toyota, Hyundai, Subaru and Mitsubishi as defendants.

The suit alleges these manufacturers have erected unlawful trade barriers. Macdonald said their actions to delay and impede the import of U.S. cars have cost his business up to $50,000 in 2008.

Macdonald, represented by Victoria lawyer Rory Lambert, has filed under the Class Proceedings Act, meaning the goal is a class-action lawsuit. He encourages dealers or individuals who can prove they have lost money due to these trade barriers to join the suit.

"I'm going to go after these guys for damages and the costs I have incurred," Macdonald said in an interview. "I'm paying tens of thousands of dollars every single month for these unreasonable charges."

Lambert said several manufacturers will not allow Canadians to purchase cars from their U.S. dealers. Others refuse to honour warranties of cars purchased in the U.S. by Canadians, he said.

Macdonald said his main problem is with BMW Canada, which he said changed its practices on the import of cars in November. Now, in order to import a used BMW, Macdonald said he needs a "letter of admissibility" from the company. That costs $350, he said.

BMW also requires $500 for a letter saying the car is not subject to recall, he said. As well, an importer must use a BMW dealership in Canada to ensure the car meets standards. Those changes can cost up to $3,000 or more, Lambert said. And once the work has been performed, it can take up to 20 business days to receive all the documentation, Macdonald said.

"It's unjust delays and expenses that are just extravagant," he said. "The manufacturers are trying to make it so difficult that the cross-border trade is next to impossible to do. BMW, for example, has attached so many different charges and delays into the importation process they never had before and they're doing it to try to deter us from importing the cars into Canada."

Lambert said one of the major problems is that Transport Canada allows manufacturers to be "self-policing" when it comes to ensuring incoming cars comply to standards.

Calls to Mercedes-Benz Canada, BMW Canada, Volvo Cars of Canada, Inc., and Toyota Canada Inc. were not returned. Reached in Vancouver, president Glen Ringdal of the New Car Dealers' Association of B.C. said he was aware of the lawsuit but could not comment.

Lambert and Macdonald said manufacturers are attempting to protect their Canadian dealerships.

"If you just take an average of every car sold in Canada and compare the manufacturer's suggested list price to the same car in the U.S., on average the difference is 30 per cent. The range is from 15 to 50 per cent," Lambert said. "What they're trying to do is, in my opinion, evade the North American Free Trade Agreement."

In order for the suit to become a class-action, Lambert must get the court's approval within three months.