D004 | S020 | S-261878

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C'--.
u.=261878
No.
Vancouver Registry
SUPRE RlTISH COLUMBIA
Between
and
ARTIC MACHINERY LTD.
XUZHOU CONSTRUCTION MACHINERY GROUP IMP. &
EXP. CO., LTD., XCMG NORTH AMERICA CORPORATION,
XCMG CANADA LTD., XCMG AMERICA FINANCIAL, LLC,
VICTOR JIANG, PAUL BECHARD, TERRI FODCHUCK,
CASEY GUAY, GENGZONG QIU, JOSEPH BELLANCA aka
JOE BELLANCA, CHRISTOPHER LI aka CHRIS LI, MICHEL
RHEAUME, ANT RENTALS LTD, BO ZHOU,
SAIYINJIRIGALA BATOCHIR, aka SAIN, MICHAEL
LANGSTON aka MIKE LANGSTON
NOTICE OF CIVIL CLAIM
Plaintiff
Defendants
This action has been started by the plaintiff(s) for the relief set out in Part 2 below.
If you intend to respond to this action, you or your lawyer must
(a) file a response to civil claim in Form 2 in the above-named registry of this court
within the time for response to civil claim described below, and
(b) serve a copy of the filed response to civil claim on the plaintiff(s).
If you intend to make a counterclaim, you or your lawyer must
(a) file a response to civil claim in Form 2 and a counterclaim in Form 3 in the
above-named registry of this court within the time for response to civil claim
described below, and
(b) serve a copy of the filed response to civil claim and counterclaim on the
plaintiff(s) and on any new parties named in the counterclaim.
JUDGMENT MAY BE PRONOUNCED AGAINST YOU IF YOU FAIL to file the response to
civil claim within the time for response to civil claim described below.

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Time for response to civil claim
A response to civil claim must be filed and served on the plaintiff(s),
(a) if you were served with the notice of civil claim anywhere in Canada, within 21
days after that service,
(b) if you were served with the notice of civil claim anywhere in the United States of
America, within 35 days after that service,
(c) if you were served with the notice of civil claim anywhere else, within 49 days
after that service, or
( d) if the time for response to civil claim has been set by order of the court, within
that time.
Part 1: STATEMENT OF FACTS
I. Overview
1. This claim arises from Artie's and XCMG's operations in British Columbia. XCMG's
defective equipment, inadequate parts support, failure to process and pay warranty
claims, and Serial Plate Tampering (defined below) caused significant losses to Artie.
Artie seeks statutory franchise remedies, damages, and other relief arising from these
breaches.
II. The Parties
2. The plaintiff Artie Machinery Ltd. ("Artie") is a corporation incorporated pursuant to the
laws of British Columbia with a head office in Prince George, British Columbia. It is in
the business of selling and servicing heavy machinery and other equipment for use in the
construction and forestry industries, among others.
3. The defendant Xuzhou Construction Machinery Group Imp. & Exp. Co., Ltd. ("XCMG
China"), is a company formed pursuant to the laws of the People's Republic of China
("PRC"), with a head office in Xuzhou, China. It is in the business of manufacturing
heavy machinery and other equipment for use in various industries.
4. The defendant XCMG North America Corporation ("XCMG North America") is a
company formed pursuant to the laws of the State of Delaware, in the United States of
America,-with a head office in Las Vegas, Nevada, USA.
5. The defendant XCMG Canada Ltd ("XCMG Canada"), is a company formed pursuant
to the laws of Alberta, with a head office in Edmonton, Alberta.

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6. The defendant XCMG America Financial, LLC ("XCMG Financial") is a company
formed pursuant to the laws of the State of Delaware, in the United States of America,
with a head office in Houston, Texas, USA.
7. XCMG North America, XCMG Canada, and XCMG Financial are direct or indirect
subsidiaries of and are under the complete control of XCMG China.
8. The full particulars of the intercorporate structure amongst XCMG China, XCMG North
America, XCMG Canada, XCMG Financial, and XCMG Subsidiaries ( collectively, the
"XCMG Corporate Defendants" or "XCMG") are known to the Defendants and not to
the Plaintiff. The XCMG Corporate Defendants are mere alter egos of one another and
were used for improper purposes as further particularized below.
9. Victor Jiang is a resident of Canada and the Chief Executive Officer ofXCMG Canada.
Victor Jiang is the highest ranking XCMG representative in Canada. He also acts as a
representative for all XCMG Corporate Defendants.
10. Paul Bechard is a resident of Canada and was the Vice President of Sales ofXCMG.
11. Terri Fodchuk is a resident of Canada and the Supply Chain and Logistics Manager of
XCMG Canada.
12. Casey Guay is a resident of Canada and was a parts supervisor ofXCMG.
13. Gengzong Qiu is a resident of the United States of America and the Chief Executive
Officer of various XCMG Corporate Defendants, including XCMG Financial and XCMG
North America.
14. Joseph Bellanca is a resident of the United States of America and the Vice President of
Risk and Program Management of XCMG Financial.
15. Christopher Li is a resident of Canada and the Vice President of Operations for XCMG
Canada.
16. Michel Rheaume is a resident of Canada and was the Vice President, After Sales of
XCMG Canada.
17. Saiyinjirigala Batochir aka Sain is a resident of Canada and a Business Development
Manager of XCMG Canada.
18. Collectively, the above-named defendants (both the XCMG Corporate Defendants and
the XCMG individual representatives) are the "XCMG Defendants ".

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19. Ant Rentals Ltd ("Ant Rentals") is a company formed pursuant to the laws of British
Columbia and has locations throughout Vancouver, Kelowna, and Calgary.
20. Bo Zhou is a resident of Canada and is the founder/ owner/ director of Ant Rentals.
21. Michael Langston is a resident of Canada and the Chief Operating Officer of Ant Rentals.
22. Collectively, Ant Rentals, Bo Zhou, and Michael Langston are the "Ant Rentals
Defendants".
XCMG & Alter Egos
23. The XCMG Corporate Defendants, through the actions of the XCMG individual
representatives, were the alter egos of one another and were used interchangeably as
instruments to implement a coordinated course of conduct directed at Artie, including the
fraudulent conduct and conspiracy pleaded below.
24. At all material times, the XCMG Corporate Defendants, through the actions of the
XCMG individual representatives, operated as a single economic enterprise under
common ownership, management, and control, with few corporate formalities to
distinguish the boundaries of one "XCMG" company from any other.
25. The XCMG Defendants did not observe genuine corporate separateness in practice.
Responsibilities, revenues, risks, and liabilities were freely shifted among them at the
direction of a small group of individuals - including Gengzong Qiu, Victor Jiang, and
Joseph Bellanca - without regard to corporate form.
26. XCMG Financial functioned as a non-arm's-length financing and enforcement arm of the
XCMG Corporate Defendants, deployed to extract payments, impose defaults, and apply
pressure where operational misconduct made the underlying commercial arrangements
unsustainable.
27. The XCMG Defendants held themselves out to the Plaintiff as a unified enterprise, acted
interchangeably in negotiations and performance, and collectively benefited from the
fraudulent conduct alleged herein below.
Ant Rentals Alter Ego
28. Bo Zhou operated Ant Rentals at all material times, such that it was effectively one and
the same with his personal goals and directions.
29. As described herein below, Bo Zhou - with the assistance of Michael Langston - had Ant
Rentals deploy its own workforce to carry out unlawful conduct, in concert with the
XCMG Defendants.

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III. Formation of relationship between Artie and XCMG
30. In or around 2017, Artie established a new heavy equipment dealership in Prince George,
British Columbia.
31. Discussions between Artie and XCMG also began in 2017, where, after a search to
identify a suitable equipment line, Artie approached XCMG to discuss a potential
distributorship relationship.
32. Discussions between Artie and XCMG were held principally between Ryan Martin, a
director and officer of Artie, and an individual by the name of "Sand", a representative of
XCMG.
33. During their discussions, Sand, on behalf ofXCMG represented to Ryan Martin of Artie
that XCMG equipment was compliant with Canadian Standards Association ("CSA") and
otherwise built in conformity with current industry regulations.
34. Relying on these representations, in 2017, Artie entered into an agreement with XCMG
to operate as XCMG's exclusive distributor in British Columbia. The 2017
distributorship agreement was made orally.
IV. Distributorship Agreements
35. In or around May 10, 2019, XCMG wished to enter into a written dealership agreement
with Artie. As a result, the parties have entered into three written agreements since 2019:
on May 10, 2019, May 10, 2022, and September 5, 2024 (the "2024 Dealership
Agreement", and together with the dealership agreements dated May 10, 2019, and May
10, 2022, the "Distributorship Agreements"). The 2024 Dealership Agreement
established a territory-based dealership framework in British Columbia under which Artie
was expected to promote and service XCMG equipment within its assigned area and was
effectively constrained from carrying competing product lines and from selling outside its
territory without XCMG's approval, while XCMG retained the ability to sell directly
(including online) into Artie's territory. Key provisions of the 2024 Dealership
Agreement are as follows:
(a) Restrictions on competing products. Artie is prohibited from distributing,
offering, or selling competing products without XCMG Canada's prior written
approval, subject to limited exceptions set out in the agreement (sections 1.3, 2.3).
(b) Restrictions on sales outside the territory. Artie is restricted from marketing or
selling products to persons located outside the Area of Primary Responsibility
(the "APR") (section 2.4).

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(c) Sole Dealer. XCMG Canada appoints Artie as sole dealer for sale/rent/lease of
Products within Artie's APR (section 2.1).
(d) Floor plan financing. Artie must continuously maintain floor plan financing
exclusively for the purchase of the XCMG products, in an amount and with a
financing institution approved by XCMG Canada, and must provide XCMG
Canada an opportunity to provide financing agreeable to Artie (section 7.1)
(e) XCMG direct sales/ online sales into the territory ("dual distribution"). The
agreement permits XCMG Canada to sell products directly to customers,
including through an online sales portal, including to customers located within
Artie's APR (sections 2.1, 2.5).
(f) Dealer service/ support obligations. Artie is required to use commercially
reasonable efforts to promote sales and provide after-sales support (including
warranty and non-warranty service) within the APR, and to maintain parts support
for the installed base as described in the 2024 Dealership Agreement (section 3.1).
(g) Warranty administration and reimbursement. The agreement provides that
new products sold through Artie are covered by XCMG Canada's standard
limited warranty, which Artie must provide to end users without modification,
and it sets out a warranty-claim process requiring Artie to submit claims no later
than fourteen (14) days after completion of the repair. It further requires XCMG
Canada to accept or reject claims within thirty (30) days ofreceipt (failing which
the claim is treated as accepted), requires XCMG Canada to issue payment or
credit within thirty (30) days after acceptance, and permits resubmission by Artie
within ten ( 10) days where a claim is rejected for procedural or technical non­
compliance. (Sections 8.1-8.4).
36. As will be set out in Part 3 (legal basis), the Plaintiff pleads that the 2024 Dealership
Agreement along with any financing agreements constitute a franchise agreement for the
purposes of the Franchises Act. In none of the dealership agreements, including the 2024
Dealership Agreement, did any of the XCMG Defendants provide Artie with disclosure
documents.
V. Quality and Safety Issues
3 7. Artie experienced persistent failures, defects, and safety-related issues affecting certain
XCMG machines and related components (collectively, the "Defects").
38. Particulars of the Defects include the following:

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(a) The graders supplied by the Defendants were defective and not as represented.
They suffered recurring mechanical and transmission failures, were poorly
designed for service and repair, and were delivered without the factory
attachments promised. The Defendants knew, or ought to have known, of these
problems, had identified corrective fixes, and still supplied the graders without
making the fixes or disclosing the issues.
(b) The Defendants supplied forestry-configured machines that were unsafe and not
fit for forestry work. The cabs were delivered with non-forestry glazing instead of
industry-standard protective material, and the cab mounts later developed
structural cracking. The Defendants were notified but refused to correct the defect
or provide warranty support. The Plaintiff was forced to pay for temporary
reinforcement repairs, which did not fix the underlying structural problem.
(c) The Plaintiff gave the Defendants an industry-standard quick coupler system to
copy so the excavators, buckets, and common attachments would be compatible.
The Defendants instead manufactured non-standard, incompatible couplers and
bucket lugging. As a result, the equipment could not safely or reliably use
third-party attachments in normal commercial work. The Plaintiff had to buy
compliant aftermarket couplers and remove and replace the factory lugging on
approximately 100 buckets, incurring substantial labour and material costs to
make the equipment usable.
(d) The Defendants supplied multiple wheel loaders that were defective, unreliable,
and unsafe for normal operation. The loaders repeatedly suffered operational,
electrical, hydraulic, and attachment-system failures and could not provide
dependable commercial service. The Plaintiff gave notice and the Defendants'
technicians attended, but the defects were not corrected and warranty support was
effectively denied.
(e) Throughout the dealership relationship, the Defendants repeatedly supplied
equipment that was incomplete, misconfigured, defective, or unsafe, including
machines delivered with missing or incorrect attachments, hydraulic
contamination, and recurring electrical and operational failures, compounded by
chronic parts and service deficiencies. The Plaintiff repeatedly notified the
Defendants and relied on assurances-including those made in connection with
the renewed dealer agreement-that the defects would be corrected and that
warranty and historical costs would be addressed. The Defendants did not follow
through, failed to provide timely parts or support, and effectively denied warranty
coverage, causing ongoing operational disruption and loss to the Plaintiff.
VI. Failure to process and pay warranty claims
39. Under the parties' dealership and warranty arrangements, Artie performed warranty
repairs to XCMG equipment and submitted claims for reimbursement, and XCMG was

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required to compensate Artie for approved warranty work in accordance with the
warranty process and reimbursement terms.
40. The 2024 Dealership Agreement contemplated a defined warranty-claims process and
timelines, including deadlines for claim submission and for XCMG to accept or reject
claims and pay approved amounts.
41. XCMG repeatedly represented that Artie's warranty reimbursement claims (the
"Warranty Claims") would be addressed but failed to implement or administer a
workable warranty-claims process and systematically failed or refused to adjudicate and
pay Warranty Claims.
42. Michel Rheaume, Victor Jiang, Saiyinjirigala (Sain) Batochir, and Perry Satermo were
point-people to address warranty concerns, along with other dealership issues which Artie
experienced with XCMG. However, they never substantively addressed any of them.
43. In the period leading to September 2024, Warranty Claims were largely left unresolved,
resulting in Artie being unable to recover costs it incurred in performing warranty work
and supplying warranty parts and labour. XCMG failed to provide satisfactory reasons
for the non-payment and/or denial of Warranty Claims. This pattern continued until
September 2024, when XCMG acknowledged that it would re-process the Warranty
Claims if Artie entered into the 2024 Dealership Agreement I finance agreements.
44. The volume of unpaid or denied Warranty Claims became substantial and ongoing,
creating a significant cash-flow burden for Artie and impairing its ability to service
customers and support the XCMG product line.
VII. 2024 Dealership Agreement entered into based on false assurances and duress
45. In the months leading up to September 2024, Artie, as represented by Ryan Martin,
entered into discussions with XCMG, as led by Victor Jiang, acting on behalf of all arms
of XCMG, regarding restructuring the parties' arrangements, which led to the 2024
Dealership Agreement and the 2024 Master Finance Agreement.
46. The discussions occurred while Artie was experiencing significant financial pressure,
including pressure arising from ongoing product defects, unprocessed / denied Warranty
Claims, parts delays, and related operational disruption attributable to XCMG equipment.
47. In the months leading up to September 2024, representatives ofXCMG, including Victor
Jiang, Joseph Bellanca, Gengzong Qiu, and Quan Liu, communicated threats and
ultimatums to Artie representatives, namely Ryan Martin and Timothy Martin, including
threats oflitigation and statements to the effect that XCMG could financially overwhelm
Artie and end its business if it did not enter into the 2024 Dealership Agreement.

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48. As a precondition to commencing negotiations, including discussions of a new floor plan
financing arrangement and addressing outstanding warranty amounts, and in or around
April 2024, XCMG demanded that Artie permit XCMG to retrieve machines that were
then in Artie's possession and control, including machines in which Artie held an
ownership and/or a security interest.
49. As consideration for Artie permitting XCMG to retrieve machines that were then in
Artie's possession and control, Victor Jiang, in or around the summer of 2024, promised
Artie representatives, chiefly Ryan Martin and Tammy Williams, that XCMG would pay
Artie's owing CRA debt.
50. Artie agreed to the equipment return demand because it believed it had no practical
alternative at the time, including because it could not readily secure a replacement
product line or dealership arrangement with another manufacturer while carrying
unresolved XCMG warranty and capital costs. XCMG did not deliver on its promise of
paying Artie's CRA debt.
i. XCMG Financial and Artie enter into a Master Financing Agreement
51. During the 2024 negotiation period, XCMG Financial and Artie entered into a Master
Financing Agreement, dated September 19, 2024.
52. The Master Financing Agreement established a revolving inventory financing facility
intended to enable Artie to purchase inventory from XCMG Canada.
53. The agreement contemplated that specific financings would be documented by separate
"Loan Schedules" identifying the financed inventory and setting out the repayment terms
for each advance.
54. As security for Artie's obligations, Artie granted XCMG Financial a security interest in
the financed inventory and defined collateral and proceeds, as set out in the Master
Financing Agreement.
ii. Representations and Assurances from 2024 negotiations
55. In the course of negotiations, XCMG, through Victor Jiang, represented to Artie that
XCMG was implementing a new, workable warranty process comparable to established
industry manufacturers, and that valid outstanding Warranty Claims would be reviewed
and paid.
56. XCMG proposed that outstanding warranty amounts be tracked through term-loan style
instruments under which approved warranty claims would be applied as credits against
amounts XCMG claimed were owing.
57. Victor Jiang made the following specific representations:

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(a) On or about March 29 2024, XCMG (as led by Victor Jiang) and Artie (as led by
Ryan Martin) were engaged in discussions regarding amounts owed by XCMG to
Artie. As part of those discussions, an early draft of a reconciliation spreadsheet
summarizing amounts owed by XCMG to Artie (the "XCMG Reconciliation
Spreadsheet") was discussed at a meeting held at Artie's office, attended by
Ryan Martin, Tammy Williams (a representative of Artie), Victor Jiang, Tim Lu
(representative of XCMG), and Joseph Bellanca.
(b) On or about April 12, 2024, Victor Jiang visited Artie's office with an early draft
of the 2024 Dealership Agreement. During a meeting held in an Artie boardroom,
and attended by Victor Jiang, Ryan Martin, and Tammy Williams, Victor Jiang
represented that if the agreement were accepted and signed by Artie, XCMG
would reprocess Artie's outstanding Warranty Claims, including the amounts
captured in the XCMG Reconciliation Spreadsheet.
(c) Between June 26, 2024, and July 2, 2024, Victor Jiang again visited Artie's
office. During a meeting attended by Victor Jiang, Ryan Martin, and Tammy
Williams, the parties reviewed the XCMG Reconciliation Spreadsheet. At this
point, the XCMG Reconciliation Spreadsheet captured various debts which
XCMG owed to Artie, including outstanding Warranty Claims and payments for
machines sold by Artie but not yet paid for. The amounts captured in the XCMG
Reconciliation Spreadsheet, as prepared by Tammy Williams, represented
amounts which Victor Jiang admitted were owing to Artie in the various meetings
/ correspondence which the parties held/ shared leading up to September 2024.
(d) On June 28, 2024, in an email from Victor Jiang to Tammy Williams (and
copying others), Victor Jiang instructed Tammy Williams to share the XCMG
Reconciliation Spreadsheet with other members of XCMG (including, Quan Liu,
Joseph Bellanca, Gengzong Qiu, and XCMG's legal representations, including
Jonathan Fleisher of Cassels Brock & Blackwell LLP).
(~) On July 2, 2024, Tammy Williams shared, in an email, with the XCMG group the
XCMG Reconciliation Spreadsheet.
(f) Discussions between Artie and XCMG continued until the signing of the 2024
Dealership Agreement / Master Finance Agreement. Victor Jiang would
correspond, inter alia, with Tammy Williams, requesting invoices which are
captured in the XCMG Reconciliation Spreadsheet. For instance, on August 9,
2024, Victor Jiang emailed Tammy Williams for the sales and rental contracts
that are captured under the "offsets" of the XCMG Reconciliation Spreadsheet.
iii. XCMG assurances during 2024 negotiations not delivered
58. Relying on the representations made by Victor Jiang that the Warranty Claims would be
reprocessed and revaluated upon Artie entering into the 2024 Dealership Agreement and

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Master Finance Agreement, representatives of Artie sent, for reprocessing, outstanding
Warranty Claims.
59. Instead of honouring the representations that Victor Jiang made, on behalf of XCMG,
after execution of the 2024 Dealership Agreement and related financing, XCMG, instead,
issued demands for payment and threats of enforcement action against Artie. Warranty
Claims were largely unprocessed.
60. XCMG and/or XCMG Finance treated Artie as in default and imposed interest, fees, and
other charges, including in circumstances where Artie disputed the underlying amounts
because of unresolved Warranty Claims and defect-related costs.
61. XCMG continued to supply or place units into Artie's inventory and/or financing
arrangements that were not ready for sale or were materially defective, while Warranty
Claims remained unpaid and parts required for warranty repairs were delayed or required
prepayment.
62. Artie suffered further loss and damage, including increased financing costs, lost revenue,
operational disruption, and additional remediation and holding costs associated with
defective or unsaleable units.
63. While the 2024 Dealership Agreement was formally entered into between XCMG
Canada and Artie, and the 2024 Master Finance Agreement was formally entered into
between Artie and XCMG Financial, both agreements were in substance with all of the
XCMG Corporate Defendants as the various XCMG bodies did not maintain genuine
corporate separateness in practice, but instead operated as a single enterprise and as alter
egos of one another. Both agreements, furthermore, are "franchise agreements" as will be
set out in Part 3.
VIII. Warranty threats
64. In or around June 2025, Victor Jiang, on behalf of XCMG, proposed a "warranty set off
agreement" under which Artie would be permitted to set off warranty claims against
amounts XCMG claimed were owing by Artie. This was not a bona fide resolution of
Artie's outstanding Warranty Claims. XCMG acknowledged only approximately $2.4
million of Warranty Claims for set-off purposes, despite approximately $6 million in
outstanding Warranty Claims being owing to Artie, and used the limited
acknowledgement to maintain commercial pressure on Artie while withholding payment
or meaningful credit for the balance.
IX. XCMG violates exclusivity clause
65. Since in or around May 2024, XCMG has appointed and/or authorized Ant Rental to act
as a dealer or distributor for the sale, lease, or rental of XCMG equipment within Artie's

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designated territory, contrary to Artie's appointment as XCMG's sole dealer in that
territory.
X. Serial Number Tampering/ CSA non-compliance
66. XCMG engaged in, authorized, and/or knowingly permitted the replacement and/or use
of serial number plates on XCMG equipment supplied into the Canadian market,
including the shipment and use of loose serial plates bearing manufacture dates that did
not match the equipment to which they related (the "Serial Plate Tampering"). Simply
put, the Serial Plate Tampering involved serial plates or decals being replaced with
similar plates or decals to change the apparent year of manufacture.
67. The Serial Plate Tampering had the effect of making affected units appear to be of a
newer model year than their actual manufacture date and thereby misrepresented the age
and related value of the equipment in the Canadian market.
68. On or about March 4, 2025, XCMG Canada, through its CEO Victor Jiang, circulated a
memorandum to dealers titled "Notification/Clarification regarding certain Serial Number
Plates with errors." In it, XCMG Canada acknowledged that loose serial number plates
bearing conflicting manufacture years had been shipped to dealers but attributed the
defect to a "process error".
69. From March to September 2025, Victor Jiang and other representatives of XCMG
explained to Artie that to the extent that there any serial plate abnormalities, they were
simply process errors and that there was no cause for concern.
70. In or around September 2025 to February 2026, Artie received further information about
serial plate anomalies and conducted its own investigation. Artie estimates that Serial
Plate Tampering affected approximately, and likely in excess of, 500 units.
71. In addition to Serial Plate Tampering occurring at various XCMG yards, tampering also
occurred at Ant Rentals. Michael Langston instructed employees at Ant Rentals to
remove and replace 2021 Vehicle Identification Number ("VIN") on XCMG equipment,
including XCMG 4047-DC mobile elevating work platforms and JLG/ Genie machines,
to 2024 VINs. This was overseen by Ant Rentals founder/ owner/ director, Bo Zhou.
Casey Guay ofXCMG supplied VIN plates to Ant Rentals. At XCMG, Terri Fodchuck
and Paul Bechard of XCMG had knowledge and/or were involved and/or oversaw the
removal/ replacement ofVINs, as authorized by Victor Jiang.
72. Since early 2026, Artie discovered that Ant Rentals has moved in/ plans to move into
facilities once owned/ operated by XCMG.
73. On or about late 2025, Ryan Martin, a representative of Artie, raised the Serial Plate
Tampering issue with Victor Jiang of XCMG. Victor Jiang laughed off the issue. In

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particular, Victor Jiang said that his legal advice was that it was permissible and, in any
event, the worst that could happen might be financial penalties for proved damages.
74. When Ryan Martin raised the Serial Plate Tampering issue with XCMG's counsel, John
Fleisher of Cassels Brock & Blackwell LLP, Mr. Fleisher was dismissive of Mr. Martin's
concerns.
75. By altering the manufacturing year, the XCMG Defendants:
(a) Misrepresented the age of the equipment;
(b) Misrepresented and inflated the market value of the equipment; and,
(c) Misrepresented the inspection of the equipment.
76. XCMG has also not held CSA certifications for their equipment.
XI. Artie Payments to XCMG under commercial pressure
77. Given threats from XCMG, Artie continued to make term loan payments to XCMG
totalling in excess of, $1,000,000. Artie made these payments while outstanding warranty
and other claims remained unresolved. Victor Jiang informed Ryan Martin that ifhe
made these payments, then he would speak to the "back office", referencing XCMG
China, to address the various debts which XCMG owed Artie.
78. In or around September 2025, Artie maintained that unpaid warranty reimbursements and
agreed set-off credits should be applied against amounts claimed by XCMG to be owing,
but nonetheless, made a further payment of approximately CAD $500,000 to XCMG
under commercial pressure and in the face of threatened enforcement.
79. Artie made these payments notwithstanding, and without waiver to, the outstanding
warranty reimbursement claims and other contractual credits which remain outstanding
and unresolved.
XII. Artie left with unsold XCMG inventory
80. As a result of XCMG's quality and safety issues, along with Serial Plate Tampering, the
value of Artie's XCMG inventory has significantly diminished.
XIII. Artie pressured to expand operations
81. Artie incurred significant capital and operating expenses in expanding its dealership
operations, including opening additional branch locations in Chilliwack and Kelowna,
British Columbia, expanding its service fleet, and hiring additional personnel to staff and
manage the expanded operations and locations.

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82. Artie's actual sales volumes for XCMG equipment did not justify that expansion. Artie
undertook these steps in response to pressure from XCMG representatives ( chiefly Victor
Jiang), who stated on multiple occasions to Ryan Martin that if Artie did not expand its
operations as directed, XCMG would terminate or not renew Artie's
distributorship/dealership and appoint another dealer in the territory.
83. For the same reason, Artie also accepted deliveries of XCMG equipment in quantities
that were not commercially reasonable relative to market demand and Artie's ability to
sell or place the equipment.
84. XCMG began pressuring Artie to expand its operations in or around 2021. In or around
2021, at the ConExpo trade show, XCMG representatives Victor Jiang and Paul Bechard
pressured Artie to relinquish territory and/or sales rights relating to Mobile Elevated
Work Platforms ("MEWP") machines, and XCMG thereafter authorized Ant Rentals to
sell MEWPs in areas that overlapped with Artie's dealership opportunity.
85. XCMG supplied and/or permitted Ant Rentals to sell older MEWP units that were
presented as newer through re-vinning / Serial Plate Tampering, enabling Ant Rentals to
undercut market pricing. The loss of its MEWP sales revenue stream increased Artie's
financial difficulties. Aware of Artie's vulnerability, XCMG then began pressuring Artie
to expand into other territories, including Chilliwack and Kelowna, threatening to appoint
other distributors and/or replace Artie in its existing territory if Artie did not comply.
86. As a result, Artie opened its Chilliwack location on or about July 2021, and its Kelowna
location on or about August 2024.
XIV. Relationship between XCMG and Artie is one of a franchisor/ franchisee
87. XCMG exercised complete control over Artie's operations. It prohibited sub-dealers,
restricted any sales outside the APR, and reserved unilateral rights to limit or terminate
outside-APR sales and to run dual distribution-including direct/online sales into Artie's
APR (sections 2.2, 2.4-2.5). It required an Annual Distribution Plan with quarterly
progress reports and imposed Sales Targets (sections 3.2-3.3). It obliged Artie to keep
parts inventories at levels XCMG could increase (section 3.1), to provide financial
statements while granting XCMG audit rights (section 3.6), and to follow XCMG's
warranty procedures, timelines, acceptance/rejection rules, and reimbursement metrics­
using XCMG's repair-time guide as controlling for labour reimbursement (sections 8.2-
8.6). XCMG also controlled brand use and required prior approval for marketing
(sections 4.1, 9)
88. The agreement required payments "in connection with" the business: an Initial Floor-Plan
Order (Exhibit D-1), ongoing purchases under the governing sale terms (sections 5.1-
5.2), and continuous floor-plan financing with an XCMG-approved institution (with

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XCMG reserving the opportunity to provide that financing, which is what occurred in
practice) (section 7.1). XCMG also took a security interest over Artie's XCMG inventory
and related collateral (section 7.2).
i. Ant Rentals is a "franchisor's associate" of XCMG
89. XCMG authorized Ant Rentals to distribute XCMG equipment within Artie's exclusive
territory, supplied Ant Rentals with units and replacement VIN/serial plates, and directed
the movement ofXCMG equipment through Ant Rentals. Ant Rentals participated in the
Serial Plate Tampering and the diversion of dealership opportunities and inventory away
from Artie. Through these activities, Ant Rentals was directly involved in offering and
facilitating XCMG dealership functions and exercised operational involvement over
XCMG equipment.
XV. Involvement of the individual defendants
90. Paul Bechard and Terri Fodchuck led the Serial Plate Tampering. Paul Bechard
participated in, or was aware of, decisions regarding Serial Plate Tampering and
equipment handling. Terri Fodchuck controlled all relevant inventory, including the
importation of legitimate and fraudulent VIN plates into Canada.
91. At a higher level, the Serial Plate Tampering/ communication regarding non-CSA
approved equipment was ordered and covered up by Victor Jiang, Chirstopher Li,
Gengzong Qiu, Joseph Bellanca, and others.
92. Casey Guay and other lower level XCMG Canada operatives participated in fraudulent
plate and decal swaps; or provided support. Casey Guay, for instance, specifically
ordered rivet guns to yard personnel for the Serial Plate Tampering.
93. Saiyinjirigala (Sain) Batochir physically collected plates, including plates implicated in
the Serial Plate Tampering.
94. Michel Rheaume was another senior XCMG employee directing the Serial Plate
Tampering.
95. Bo Zhou and Michael Langston of Ant Rentals directed the Serial Plate Tampering across
Ant Rental's facilities.
96. Ant Rentals worked in concert with XCMG regarding the Serial Plate Tampering and
movement of equipment.
97. The individuals all knew, or were reckless as to the fact, that their own fraudulent
activities rendered the impacted equipment unlawful, unsafe, and unmarketable.

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Part 2: RELIEF SOUGHT
98. A declaration that the 2024 Dealership Agreement and the 2024 Master Finance
Agreement (and any associated financing/ loan agreements) constitute a "franchise
agreement" within the meaning of the Franchises Act, SBC 2015, c 35 (the "Act");
99. A declaration that the relationship between XCMG and Artie is one of a "franchise"
within the meaning of the Act;
100. A declaration that Ant Rentals is a "franchisor's associate" within the meaning of the Act;
101. An order rescinding the 2024 Dealership Agreement and the 2024 Master Finance
Agreement (and any associated financing/ loan agreements) pursuant to section 6(2) of
the Act; in the alternative, an order that the 2024 Master Finance Agreement (and any
associated financing/ loan agreements) are rescinded due to fraudulent
misrepresentations made by XCMG and Victor Jiang;
102. An order that Artie is entitled to the statutory remedies under s. 6(2) of the Act and in
particular, the remedies under s. 6(5) of the Act, including orders that XCMG / Ant
Rentals (as a 'franchisor's associate'), who are jointly and severally liable, shall:
(a) refund to Artie any money received from or on behalf of the franchisee, other than
money for inventory, supplies or equipment,
(b) purchase from Artie any inventory that it purchased under the 2024 Dealership
Agreement and remaining on the effective date of rescission, at a price equal to
the purchase price paid by Artie,
( c) purchase from Artie any supplies and equipment that Artie had purchased under
the 2024 Dealership Agreement at a price equal to the purchase price paid by the
Artie, and
( d) compensate Artie for any and all further losses that Artie incurred in acquiring,
setting up and operating the franchise;
103. An order that XCMG and Ant Rentals, who are jointly and severally liable, pay damages
to Artie pursuant to s. 7 of the Act
104. An order that XCMG pay damages to Artie pursuant to s. 3 of the Act;
105. An order that XCMG and Ant Rentals pay damages for the Defendants' breaches and
wrongful conduct, for which the Defendants are also jointly and severally liable;
106. An order that any amounts owing to XCMG from Artie pursuant to any financing
agreements are extinguished by set-offs arising from Artie's unpaid Warranty Claims;

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107. Aggravated and punitive damages;
108. Interest pursuant to the Court Order Interest Act, RSBC 1996, c 79;
109. Costs; and,
110. Such other relief that this Honourable Court deems just.
PART 3: LEGAL BASIS
I. Franchises Act
111. The Distributorship Agreements / any associated financing agreement, and each of them,
constitute a "franchise" within the meaning of s. 1 of the Act. XCMG granted the Plaintiff
the right to carry on business in British Columbia under XCMG's business system,
required the Plaintiff to make payments in connection with that business, and exercised
significant control over the Plaintiffs method of operation, including territorial
restrictions, exclusivity conditions, performance mandates, and warranty administration.
112. The franchise was granted for use in British Columbia and operated exclusively in British
Columbia. Pursuant to s. 2 of the Act, the Act applies. Any clause purporting to apply
Alberta law or to oust the jurisdiction of the courts of British Columbia is void and of no
force or effect pursuant toss. 12 and 13 of the Act. The Defendant cannot contract out of
the statute.
113. XCMG wholly failed to provide disclosure in compliance withs. 5 of the Act prior to
execution of any agreement or acceptance of payment. No disclosure documents
containing prescribed financial statements, statutory risk warnings, material facts, copies
of all agreements, or the required certifications were ever delivered.
114. By reason of that failure, the Plaintiff is entitled to rescind the 2024 Dealership
Agreement and the 2024 Master Finance Agreement (and any associated financing/ loan
agreements) with XCMG pursuant to s. 6(2) of the Act within two years of entering into
the franchise agreement and to the statutory remedies flowing from rescission under s.
6(5), including refund of monies paid, repurchase of inventory, supplies and equipment at
the price paid, and compensation for losses incurred in acquiring, establishing, and
operating the franchise. Ant Rentals, as the franchisor's associate, is also liable for the
remedies Artie is entitled to under s. 6(5).
115. XCMG and Ant Rentals are also jointly and severally liable in damages pursuant to s. 7
of the Act.
116. XCMG is also liable for damages for breach of the statutory duty of fair dealing under s.
3 of the Act.

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II. Breach of contract
117. In the alternative, the XCMG Corporate Defendants are liable in breach of contract. The
XCMG Corporate Defendants failed to supply conforming and compliant equipment,
failed to administer and reimburse Warranty Claims, failed to honour agreed warranty
credits and set-offs, undermined territorial protections, and exercised contractual
discretions dishonestly and in bad faith.
118. By reason of these breaches, the Plaintiff has suffered loss including unreimbursed
warranty labour and parts, diminished inventory value, operational disruption,
reputational harm, and lost business opportunities.
III. Economic duress / unconscionability
119. The actions of the XCMG Corporate Defendants constitute economic duress.
120. The XCMG Corporate Defendants threatened litigation and financial ruin if Artie did not
enter into the 2024 Dealership Agreement/ Master Financing Agreement in 2024. The
XCMG Corporate Defendants withheld warranty payments to force the execution of both
the 2024 Dealership Agreement and the Master Financing Agreement. Both the 2024
Dealership Agreement and the Master Financing Agreement are, as a result, voidable.
121. The 2024 Dealership Agreement / Master Financing Agreement are also unconscionable.
They were formed under conditions of unequal bargaining power and constituted an
improvident bargain. The Dealership Agreement and the Master Financing Agreement, as
a result, must be set aside and found void.
IV. Unjust enrichment
122. Further, and in the alternative, the XCMG Corporate Defendants have been unjustly
enriched. The XCMG Corporate Defendants received and retained payments, warranty
labour value, and business benefits generated by the Plaintiff while failing to supply
conforming goods or honour reimbursement obligations. The Plaintiff has suffered a
corresponding deprivation, and there is no juristic reason for the XCMG Defendants'
retention of those benefits.
V. Fraudulent misrepresentation
123. Certain representations made by the XCMG Corporate Defendants and Victor Jiang to
Artie were fraudulent as they were false in fact. It was a false representation that the
equipment was CSA approved / compliant, and it was a false representation that
Warranty Claims would be reprocessed.

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124. The XCMG Corporate Defendants and Victor Jiang knew that these representations were
false or were reckless as to their truth. The XCMG Corporate Defendants and Victor
Jiang intended for Artie to act on the representation, and the Plaintiff was induced to
enter into the contract in reliance upon the false representations.
125. Artie is entitled to the recession of the 2024 Dealership Agreement and Master Financing
Agreement, as a result of the fraudulent misrepresentations.
VI. Negligent misrepresentation
126. In the alternative, the representations of the XCMG Corporate Defendants and Victor
Jiang were negligent.
127. The relationship between the XCMG Corporate Defendants, Victor Jiang, and Artie is a
"special relationship". The XCMG Corporate Defendants and Victor Jiang made certain
representations-namely concerning the reprocessing of millions of dollars of
outstanding warranty payments and that all equipment was CSA approved / compliant­
that invited Artie's reliance. The XCMG Corporate Defendants and Victor Jiang
negligently misrepresented that Warranty Claims would be reprocessed if Artie entered
into the 2024 Dealership Agreement and Master Financing Agreement. Such
representations were untrue, inaccurate, and misleading. The XCMG Corporate
Defendants and Victor Jiang were negligent in making the misrepresentations. Artie
relied on these representations in entering into the 2024 Dealership Agreement and
Master Financing Agreement. Artie's reliance on XCMG resulted in damages to Artie.
VII. Negligence
128. The actions of the XCMG Corporate Defendants and Ant Rentals were, further,
negligent, resulting in the supply of unsafe, uncertified, and dangerous equipment,
resulting in losses to the Plaintiff.
VIII. Civil Conspiracy
129. All Defendants conspired and acted in concert to harm Artie, including by supplying
defective, non-conforming equipment into Artie's market that was not CSA-approved,
misrepresenting or concealing the units' condition/age/compliance (including through
serialNIN plate replacement). All Defendants intended to injure Artie or knew injury
was likely, and Artie suffered loss including lost customers and sales, diminished
inventory value, operational disruption, and reputational harm.
130. XCMG also injured Artie through unreimbursed Warranty Claims.
IX. Tort of interference with economic relations

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131. The foregoing allegations against Ant Rentals constitute the tort of interference with
economic relations.
132. Ant Rentals knowingly usurped the MEWP distribution opportunity in British Columbia
despite Artie's pre-existing exclusivity.
133. Ant Rentals is also acting as a dealer or distributor for the sale, lease, or rental of XCMG
equipment within Artie's designated territory.
134. Ant Rentals also participated in Serial Plate Tampering, which interfered with Artie's
lawful business operations.
135. Ant Rentals intended to injure Artie's economic interests and Ant Rental's interference
with Artie's economic relations was by illegal/ unlawful means, resulting in economic
harm/ loss to Artie.
X. Breach of duty of honest performance
136. The XCMG Corporate Defendants breached their duty of honest performance in carrying
out their contracts for all the reasons pleaded herein.
XI. Liability as to the Individual XCMG and Ant Rentals' Defendants
137. The individual Defendants are personally liable because they authorized, directed,
participated in, and/or ratified the wrongful conduct pleaded above.
138. The XCMG Defendants diverted dealership rights, inventory, and business opportunities
to Ant Rentals specifically because of the Ant Rental Defendants' willingness to
cooperate in, and facilitate, the Serial Plate Tampering on equipment intended for sale or
rental in Canada.
139. In substance and reality, the Ant Rental Defendants operated as a functional extension
and alter ego of the XCMG Defendants in the execution of the fraud and wrongdoing
pleaded herein.
140. Thus, all Defendants ought to be found jointly and severally liable for the damages
suffered by the Plaintiff arising from their conduct, whether on the basis of veil-piercing,
directing-mind liability, their personal participation, or otherwise.
XII. Additional Statutory Liability
141. The Plaintiff pleads that XCMG breached the Sale of Goods Act, RSBC 1996, c 410,
including ss. 16, 17 and 18, and are liable for damages and related relief arising from the
supply of goods without good title and free of encumbrance, goods that did not

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correspond with description, and goods that were not reasonably fit for their disclosed
purpose, not of merchantable quality, and not reasonably durable.
142. The Plaintiff further pleads that XCMG made or caused to be made false or misleading
representations to the public, contrary to s. 52(1) of the Competition Act, RSC 1985, c C-
34, in respect of which the Plaintiff claims damages pursuant to s. 36(1) of that Ad.
Plaintiffs address for service:
Fax number address for service (if any):
E-mail address for service (if any):
Place of trial :
The address of the registry is:
Date: March 13 2026
J. Kenneth McEwan, KC,
Julian Wierenga, and
Summer Ibrahim
McEwan Cooper Kirkpatrick LLP
900-980 Howe Street
Vancouver BC V6Z 0C8
(778) 300-9393
.kmcewan@mcewanpartners .com
jwierenga@mcewanpamter .com
ibrahim@mcewanpartner .com
Vancouver, BC
800 Smithe Street
Vancouver, BC V6Z 2El

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APPENDIX
Part 1: CONCISE SUMMARY OF NATURE OF CLAIM:
The plaintiff claims statutory franchise remedies and damages arising from the defendants'
defective supply of equipment, inadequate parts support, failure to process and pay warranty
claims, and serial plate tampering.
Part 2: THIS CLAJM ARISES FROM THE FOLLOWING:
A personal injury arising out of:
D a motor vehicle accident
D medical malpractice
D another cause
A dispute concerning:
D contaminated sites
D construction defects
D real property (real estate)
D personal property
~ the provision of goods or services or other general commercial matters
D investment losses
~ the lending of money
D an employment relationship
D a will or other issues concerning the probate of an estate
D a matter not listed here
Part 3: THIS CLAIM INVOLVES:
□ a class action
□ maritime law
□ aboriginal law

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□ constitutional law
□ conflict of laws
~ none of the above
□ do not know
Part 4: ENACTMENTS:
□ Builders Lien Act
□ Divorce Act
□ Family Relations Act
□ Insurance (Motor Vehicle) Act
□ Insurance (Vehicle) Act
□ Motor Vehicle Act
□ Occupiers Liability Act
□ Supreme Court Act
□ Wills Variation Act
OR
Franchises Act, SBC 2015, c 35

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ENDORSEMENT ON ORIGINATING PLEADING OR PETITION
FOR SERVICE OUTSIDE BRITISH COLUMBIA
The Plaintiff claims the right to serve this pleading on the Defendants, Xuzhou Construction
Machinery Group Imp & Exp. Co. Ltd., XCMG Canada Ltd., XCMG North America
Corporation, XCMG America Financial, LLC, Ant Rentals Ltd, Victor Jiang, Paul Bechard,
Terri Fodchuck, Casey Guay, Gengzong Qiu, Joseph Bellanca (also known as Joe Bellanca), Bo
Zhou, Saiyinjirigala Batochir (also known as Sain), Christopher Li (also known as Chris Li),
Michel Rheaume, and Michael Langston (also known as Mike Langston) outside British
Columbia on the grounds that this proceeding concerns:
a) restitutionary obligations that, to a substantial extent, arose in British Columbia (per
section lO(f) of the Court Jurisdiction and Proceedings Transfer Act (the "CJPTA"));
b) torts committed in British Columbia (per section 1 O(g) of the CJPTA), and
c) a business carried on in British Columbia (per section lO(h) of the CJPTA) .