IN THE SMALL CLAIMS COURT OF NOVA SCOTIA
Cite as: Villeneuve v. Sypher, 2014 NSSM 70
Claim No: SCCH 424894
BETWEEN:
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Peggy Villeneuve |
Claimant |
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Name |
Nick Scott Sypher |
Defendant |
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Editorial Notice: Addresses and phone numbers have been removed from this electronic version of the judgment.
Peggy Villeneuve – Self Represented
Nick Scott Sypher – Self Represented
DECISION
This claim follows the purchase of a
vehicle by the Claimant from the Defendant. For the most part, the facts are
not seriously in dispute.
On January 19, 2014, the Claimant, Peggy
Villeneuve, answered an advertisement in Kijiji placed by the Defendant, Nick
Sypher. The ad was not tendered into evidence but a string of correspondence sent
through Kijiji was tendered as an exhibit. Mr. Sypher acknowledged the ad was
placed. Originally, the ad provided the vehicle was a 2003 Suburu Forester with
approximately 135,000 km and “no rust”. Ms. Villeneuve accepted the offer and
provided a deposit of $300. A contract was signed containing the provision,
"as is, where is".
This was followed by several key
discoveries by Ms. Villeneuve once she received the registration. Upon closer inspection,
it was discovered that the vehicle was in fact a 2002 model with 148,325 km on
it. The parties renegotiated the price to $4000. When Ms. Villeneuve went to
register the vehicle, the registration was still in the name of the previous
owners, Carla Rioux and Patrick Bell. She contacted the RCMP to ensure the
vehicle was not stolen. She concluded the vehicle was not stolen, and paid the
balance of the funds to Mr. Sypher.
She spoke with Mr. Bell and was advised that the couple had sold the vehicle to Mr. Sypher for $700 before they moved away. It was in need of major repairs. The couple apparently attempted to void the registration after Ms. Villeneuve’s call. Ms. Villeneuve tendered into evidence a sworn affidavit from Ms. Rioux and Mr. Bell but neither of them testified in court. She initially demanded a refund from Mr. Sypher, but was refused. Eventually, the registration was transferred on February 1, 2014.
Ms. Villeneuve drove the car for approximately two weeks and found it shook when driven. She contacted Michael Parker to determine if the vehicle was safe to drive. Mr. Parker attended to her house for pictures and advised her of a broken control arm assembly underneath the vehicle. Mr. Parker told her the vehicle was “undriveable”. She was given a rejection sticker effectively voiding the initial motor vehicle inspection. She took the vehicle to Canadian Tire to determine the cost of repairing the vehicle. She tendered into evidence a quote for $2031.91.
On cross examination, she acknowledged that she had the vehicle for approximately two months. She signed the contract for the purchase of the vehicle and took it away without any further conditions. She further described the shaking when the car exceeded 70 km/hour. She took the vehicle to Canadian Tire and found the control arm was broken. The car had been driving very wobbly.
Michael John Parker is a Motor Vehicle Inspector employed by Service Nova Scotia. He entered into evidence the Motor Vehicle Inspection reports related to the vehicle, the first dated
January 20, 2014 when the car was owned by
the Bells and the second time when it was owned by Ms. Villeneuve. The first inspection
was dated January 27, 2014. The vehicle had been driven an additional 235 km.
The first certificate showed the vehicle passed the inspection, while the
second was failed. He inspected the vehicle himself on February 5, 2014. He
took a number of photographs. The certificates and photos were entered into
evidence as Exhibit #2. He noted several concerns with the vehicle especially
around the steering linkages and the tires. Specifically, the left control arm
was rusted through, there were holes in the rear frame near the mounting holes
and the exhaust was rusted through. In his opinion, this would cause the car to
appear “wobbly” when driven.
Charles Patrick McNamara is the common-law
spouse of Ms. Villeneuve. He looked at the vehicle when it was purchased and
noted no rust on the body, or as he stated “it looked fine”.
Nick Scott Sypher purchased the car from
Ms. Rioux and Mr. Bell on January 10, 2014. It was a quick sale for $700.00.
According to Sypher, “they wanted it gone”. He had the vehicle inspected at
Oulton’s Auto Shop and it passed its Motor Vehicle Inspection. He acknowledged
the registration was not transferred.
He was approached by Ms. Villeneuve for the
purchase of the vehicle. She told him she needed to get insurance on the
vehicle before taking it, so she left a security deposit of $300 and the price
was set at $4500. She called him later and indicated she could not get the
registration transferred, she had bought a new car and wanted her money back.
He advised her, the sale was on an “as is, where is” basis. He testified that
Ms. Villeneuve called him about 400 times and threatened him 23 times.
Daniel Gibson is a friend of the Defendant.
He works on cars as a hobby which he estimates he has done for 20 years. He
described the vehicle as being in good shape for a 2002 car with approximately
150,000 km.
The Law
This transaction is a private sale. Mr.
Sypher is not in the business of selling automobiles and thus, none of the
warranties found in the Consumer Protection Act and Sale of Goods Act
apply.
“As is, where is”
The law respecting the sale of used
vehicles differs significantly from the sale of new vehicles. This principle
has been addressed in the courts of Nova Scotia. An excellent review of the law
was provided in the Small Claims Court case of Robinson v. Atkinson 2004
NSSM 31. In that case, Adjudicator MacDonald (now Justice Beryl A. MacDonald of
the Nova Scotia Supreme Court Family Division), stated the following:
“35. A seller can give an express warranty to a buyer that the item sold will for example, continue to operate for a specific period of time. There was no express warranty given by Atkinson to Robinson when Robinson purchased this truck.
36. The motor vehicle inspection certificate issued in respect to the truck is not a document that in any way guarantees, or purports to guarantee, that the truck, examined at the time of the inspection, will continue to work for any period of time after the date of the inspection.
37. The truck purchased by Robinson from Atkinson was purchased second hand and was a 1988 model. Therefore it was approximately 16 years old and this would be obvious to Robinson. Atkinson did tell Robinson that the truck was in good condition but I do not accept that this was given in the nature of a warranty of fitness or to imply that the truck would continue to work for any particular period of time before repairs would be needed. I accept that Atkinson, by placing the words "as is where is " on the receipt given to Robinson did so to clearly indicate he was giving no warranties nor making any representations as to the continued operation of the vehicle. The truck was working on the day of sale and there were no defects known to Atkinson that he attempted to hide from Robinson. I accept the evidence that the clutch in the truck had been installed approximately a year ago and that a clutch may fail without warning.
38. There are few reported cases involving sales of used vehicles between individuals. However, in Keefe v. Ford, 27 N.S.R.(2d) at page 361, Justice Pace quoted from Peters v. Parkway Mercury Sales Limited (1975), 58 D.L.R. (3d) 128 at pp.134-135:
"In my opinion, there is a substantial distinction between the implied condition of fitness in the case of the sale of a second hand car and that which is implied in the sale of a new car. Persons who purchase used cars, especially older models with substantial mileage, must expect defects in such cars will come to light at any time. In the present case the insistence of the plaintiff on the benefit of a used car guarantee and the reluctance of the vendor to give such a guarantee, clearly indicate that the parties realized the possibility that the car was not likely to be free of defects and that some defects might come to light even within the first 30 days following the sale. In my view, they entered into the contract of sale and purchase on that basis. In Godsoe v. Beatty (1959), 19 D.L.R.(2d) 265 ......., Ritchie, J.A., quoted with approval (at p. 267) a passage from 77 Corp. Jr. Sec., at p. 1199 containing the following statement:
‘A used car dealer is not an insurer of the cars he sells and is not required to inspect them for latent defects. Where a second hand motor vehicle will run, the fact that frequent repairs are necessary does not establish a failure of consideration...’"
39. Justice Pace continued in his decision to quote from the decision of Lord Denning in Bartlett v. Sidney Marcus, Ltd., [1965] to ALL E.R. 753, at p. 755:
"It means that, on a sale of a second hand car, it is merchantable if it is in usable condition, even though not perfect. This is very similar to the position under s. 14(1). A second hand car is ‘reasonably fit for the purpose’ if it is in a roadworthy condition, fit to be driven along the road in safety, even though not as perfect as a new car.
Applying those tests here, the car was far from perfect. It required a good deal of work to be done on it; but so do many second hand cars. A buyer should realize that, when he buys a second hand car, defects may appear sooner or later; and, in the absence of express warranty, he has no redress. Even when he buys from a dealer the most that he can require is that it should be reasonably fit for the purpose of being driven along the road. This car came up to that requirement. The plaintiff drove the car away himself. It seemed to be running smoothly."
40. In the case of the situation relating to the truck sold by Atkinson to Robinson, I note that this truck was capable of being driven along the road and that on the day of sale, it appeared to be running smoothly and was driven to 23 Beacon Street as requested by Robinson.
Robinson himself was later able to drive that truck further into the driveway located at 23 Beacon Street.
41. In Sheldon v. Robinson (1997), 158 N.S.R. (2d) 359., the plaintiffs purchased, from the defendants, an eight year old used vehicle on an "as is where is" basis. This was a sale involving a seller of used cars. However, it does provide some guidance in respect to the issue relating to the sale of used cars. Shortly after purchase the plaintiffs in this case encountered engine trouble requiring the expenditure of $829.00 for repair. The small claims court adjudicator allowed the plaintiff’s claim against the defendant dealer on the basis of provisions of the Consumer Protection Act. The Supreme Court Justice on review reversed this decision. Justice Palmeter stated at Paragraph 13, quoting from a previous decision he had made in Penney v. Brent (sic) Pontiac Buick GMC, (1989) 95 N.S.R. (2d) 321:
"The vehicle was sold 'as is', which could mean that the vehicle could only be durable for a short period of time or perhaps not at all. The purchaser accepted the vehicle as is and in my opinion the definition of durability in this case must depend on that circumstance."
42. Justice Palmeter stated at paragraph 18:
“In this case the respondents purchased the motor vehicle in the face of clearly expressed conditions and disclaimers. They had every opportunity to inspect the vehicle and they did assume a substantial risk. In my opinion any warranty, if at all, implied under the Act (Consumer Protection Act) would be minimal at best and not under the circumstances as found by the adjudicator.”
43. Justice Palmeter reversed the decision of the Adjudicator and relieved the Defendant from the payment of any cost of repair to the Plaintiff having determined that the vehicle had operated for a sufficient period of time based on the circumstances of the facts before him.
44. At the time Atkinson purchased the truck
it was running. He had an opportunity to take it for a test drive had he wished
to do so. He did not ask to have it examined by a mechanic. He did little
examination of the truck himself. The vehicle was capable of being driven and
was driven to 23 Beacon Street, Amherst, Nova Scotia. Robinson knew he was
purchasing an old used vehicle. He knew he was purchasing the truck from a
seller who was selling on the basis of an "as is where is" sale.
Therefore, he knew or should have known that the seller was not providing an
warranty in respect to the continued operation of the truck, irrespective of
the comment by the buyer that the truck was in "good condition". As a
result, I find that there was no misrepresentation by Atkinson.
While this decision is not binding on me, I find it to be very
persuasive and informative.
Findings
Based on a review of the evidence, I find the Claimant purchased the vehicle on an “as is, where is” basis. The vehicle was 12 years old and had approximately 148,000 kilometres driven on it. The vehicle had a rusty control arm but otherwise ran and was operable.
I cannot help but take notice of the conduct of the Defendant
throughout this matter. Mr. Sypher saw an opportunity to purchase an
inexpensive vehicle and, with luck, sell it after short ownership for a profit.
In preparing for the sale, his statements were inaccurate, namely, misstating
the age of the vehicle and the mileage. This resulted in Ms. Villeneuve
insisting on a reduced price. He did not attend to the transfer of registration
in his name. Ms. Villeneuve submits that it was to avoid the sales tax on
registration. While that may be the case, I am not satisfied on the evidence
that he did, nor is it relevant as the registration was ultimately transferred
to him and then to Ms. Villeneuve. Mr. Sypher will be liable for any unpaid
sales tax or income tax consequences which may apply to the profit earned on
the vehicle.
It is clear from the review of the cases, the law in Nova Scotia places less onerous requirements on the seller of an used vehicle, particularly where the contract contains the provision, “as is, where is”. The Defendant urged me to consider that clause an absolute defence to a breach of contract. It is not, nor should it be. The provision can be thwarted by a finding of a fundamental breach of the contract, with the result being a clear failure of consideration, a finding of fraud or a breach of a collateral warranty.
Based on the principles stated above, the car was approximately 12
years old at the time of purchase. It was clearly a used vehicle with
substantial wear and tear and depreciation. Like the Defendants in the cases
cited, Ms. Villeneuve did not take the car for a test drive, nor did she
inquire about the possibility of the car being seen by a mechanic prior to accepting
delivery of the vehicle. She accepted it on sight. When she discovered the
registration had not been signed to Mr. Sypher, he was uncooperative. She
became understandably suspicious. However, her vigilance in this respect came
only after she took delivery of the vehicle and paid Mr. Sypher. Based on the
cases above, I find there to be no failure of consideration or fundamental
breach. Further, there was no evidence of fraud.
Collateral Warranty
I turn now to the issue of collateral warranty, specifically, if the phrase “no rust” appearing in the Defendant’s Kijiji ad is a term of the contract or a collateral contract. A collateral contract is defined by Fridman in the Sale of Goods in Canada as:
“...a statement, on the strength of which a buyer enters into a contract of sale of goods, may not be a term of the eventual contract of sale, but may be treated as more than a “mere” representation. It will then give rise to an entirely separate contract, breach of which, for example, the failure of the goods to come up to the standard expressed in the statement, can give rise to liability on the part of the seller making the statement, even if the main contract purports to exclude his liability. The statement in such cases is being treated as a variety of contractual promise, and not as a representation. The test of whether the statement is binding in this way would seem to be the intention and understanding of the parties in the light of all the surrounding circumstances.”
In reviewing the facts of the case, it is clear from the evidence of both parties that a primary standard for the purchase of the vehicle was the absence of rust. Indeed, the Defendants’ witnesses made a point of stipulating that no rust was visible. However, I accept the evidence of the Claimant's witnesses that the control arm was rusted at the time of purchase. That is clear from the photographs supplied in evidence. This rust caused the steering on the vehicle to fail. Thus, it cannot be said that the vehicle was free of rust.
I find the absence of rust to have been a condition which triggered the contract in the first place. Accordingly, I find the phrase “no rust” to have been a collateral warranty as that term was intended and understood to be an accurate description of the vehicle. Clearly, it was not. As a result, I find the term to have been breached and the Defendant is therefore liable to the Claimant.
In assessing a remedy for breach of contract, the intent is to put the parties in the same position they would have been in had the contract been fulfilled. I find in the circumstances of this case the intention of the parties was for Ms. Villeneuve to have received a 2002 Subaru Forrester. The vehicle was to have been free of rust. It is not free of rust.
Ms. Villeneuve is seeking a complete rescission of the contract. I do not think that appropriate in this case. She has tendered into evidence an unrefuted estimate from Canadian Tire in Cole Harbour, namely, $2031.91. She also stated that another shop estimated approximately $1000 to repair the vehicle. I am satisfied on the evidence that the Canadian Tire work description is correct. However, it is only one estimate and not conclusive. I allow $1500 under this head of damages. I also allow general damages of $100.00.
At the beginning of the hearing, I explained to Ms. Villeneuve that the items she sought in her claim were largely matters of costs (Court fees and gas mileage) or general damages (bother and upset). The latter item is outside the jurisdiction of this Court as the limit for general damages is $100. Had Ms. Villeneuve been aware, she would have filed a claim for less than $5000. Thus, I do not feel it appropriate to award her the full filing fee which she has paid. It was necessary for Ms. Villeneuve to attempt to serve Mr. Sypher personally as he was unavailable for service. She seeks $62.00 in gas mileage, which I allow as an appropriate amount for service.
As a result, the claim is allowed in part. The Claimant, Peggy Villeneuve shall have judgment against, Nick Sypher as follows:
Repairs $1500.00
General Damages $ 100.00
Costs $ 158.80
Total $1758.80
An order shall issue accordingly.
Dated at Halifax, NS,
on September 4, 2014.
______________________________
Gregg W. Knudsen, Adjudicator
Original: Court File
Copy: Claimant(s)
Copy: Defendant(s)