Alberta Motor Vehicle Industry Council sued for negligence

A $5-million class-action lawsuit alleges the Alberta Motor Vehicle Industry Council's negligence caused numerous car owners to lose thousands of dollars to a failed auto-consignment company.

The lawsuit, recently filed in Calgary, claims the Alberta Motor Vehicle Industry Council (AMVIC) failed to effectively regulate the business practices within the auto industry, andalleges Service Alberta failed to properly oversee AMVIC.

The allegations relate to the failure of Treadz, a Red Deer-based, auto-consignment company. The lawsuit claims Treadz, owned by Sean Patrick O'Brien, failed to pay owners after their vehicles were sold and failed, as promised, to remove liens from the vehicles.

But the lawsuit makes the broader claim that Service Alberta failed to properly oversee AMVIC by not ensuring AMVIC acted to correct serious deficiencies in its policies and operational conduct identified in two reviews.

As reported by CBC News in April, an internal Service Alberta draft review of AMVIC, conducted in the fall of 2014, found so many serious problems it recommended immediate action to maintain public and industry confidence in the arm's length regulator.

The review also found AMVIC executive director John Bachinski acted "as a tyrant and dictator who interprets any question of decision, direction or process as disobedience and responds with intimidation, veiled threats of firing, or general bullying and belittling."

The council licenses and regulates both auto dealers and repair shops. It alsoinvestigates consumer complaints.

It is supposed to serve as the self-regulating watchdog over the industry on behalf of the public. AMVICoperates under the purview of Service Alberta, which appoints a board to oversee it.

Failure to investigate

The lawsuit claims that despite the scathing review, AMVIC "failed to fully implement the recommendations" made by Service Alberta in March 2009, February 2013 and August 2014, and "to date, Service Alberta has failed to sanction AMVIC for its failure to implement these recommendations."

Specifically in relation to Treadz, the class-action lawsuit also claims AMVIC failed to properly and efficiently investigate the concerns and/or claims made by its members and failed to adequately compensate them from the compensation fund.

Because of this alleged negligence, the class-action members claim AMVIC and Service Alberta failed to protect them from unfair business practices and failed to enforce legislation related to the same.

None of the allegations has been proven in court and no statement of defence has been filed.

The organizationhas a long history of problems. The draft review, obtained by CBC News, found numerous serious issues, includingpoor-quality investigations, lowmorale,an extraordinarily high rate of staff turnover and the factBachinskiimproperly involved himself in investigations.

Outside the legislatureMonday, Service Alberta Minister Deron Bilous said he could not comment on the lawsuit because it is now before the courts. He also declined to say what, if any, changes might be made to AMVIC by his department.

Bilous would only say AMVIC would be reviewed as part of the new government's ongoing review of all the province's agencies, boards and commissions.

If you have information about this story, or information for another story, contact us in confidence at cbcinvestigates@cbc.ca.