B.C. tribunal rules on dispute over online iPhone resale

Facebook Marketplace. (Shutterstock)

A B.C. man who misrepresented a used iPhone as new when he sold it through Facebook marketplace has been ordered to refund $900 to the buyer.

The province's Civil Resolution Tribunal ruled on the dispute last week, finding in favour of the purchaser who claimed he had been sold a phone that was locked and unusable in the summer of 2022.

Harmesh Pall told the tribunal he replied to an ad for iPhone 13 Pro Max that was "brand new, and still sealed in its original box," the decision says.

The seller, Ian Farnsworth, said the buyer ought to have known, given the price point of the phone, that it was not new. Further, he argued the transaction was governed by the "buyer beware" principle.

Tribunal member Kristin Gardner noted that an exception to the buyer beware principle exists if it can be shown, on a balance of probabilities, that the seller "misrepresented" the item.

"A negligent misrepresentation occurs when: 1) a seller makes a representation to the purchaser that is untrue, inaccurate, or misleading, 2) the seller fails to take reasonable care in making the misrepresentation, and 3) the purchaser reasonably relies on the misrepresentation to their detriment," she wrote.

In this case, the tribunal decision said, Pall opened the sealed box but was unable to turn the phone on to check if it worked because the battery was dead. After charging the phone, Pall discovered it was locked and could not be used without entering a username and password.

In a subsequent text exchange, Farnsworth denied knowing the phone was used and and refused Pall's request for a refund, instead telling him to take it somewhere and pay for it to be unlocked, the decision says.

"Mr. Farnsworth essentially advised Mr. Pall that while it might cost him an additional few hundred dollars to unlock the phone, he still got a good deal," it continues.

Gardner said while it was possible that Farnsworth did not know the phone was used, he had "repeatedly" said it was new both in the original Facebook ad and afterward but had failed to "exercise the required reasonable care to ensure (his) representations about the phone were accurate when reselling it."

The tribunal found that Pall likely purchased the phone based on its description as new, and "would not have bought it" if he new it was used. The decision also notes that Pall took steps to make sure the phone had not been reported lost or stolen before buying it.

Farnsworth was ordered to pay $900 in damages for negligent misrepresentation, $21.70 in pre-judgment interest and $125 in CRT fees.