IN THE SMALL CLAIMS COURT OF NOVA SCOTIA
Citation: Samson v. Mr. Automotives, 2023 NSSM 37
Date: 20230814
Claim: No. SCAT 519981
Registry: Antigonish
Between:
Joe Samson
CLAIMANT
And
662818 N.B. Ltd., dba Mr. Automotives
DEFENDANT
Adjudicator: |
Raffi A. Balmanoukian, Adjudicator |
Heard: |
March 28, July 26, and August 1, 2023 by Teams |
Final Written Submissions: |
July 11, 2023 |
Counsel: |
Harold MacIsaac, for the Claimant Andrew Cormier, corporate principal, for the Defendant |
Balmanoukian, Adjudicator:
[1] What we have here, is a failure to mitigate.
[2] Joe Samson bought a 2013 Dodge Dart from the Defendant. It seriously malfunctioned within a week or so. He bought the parts and paid for the labour to fix at least the immediate problem. But he didn’t get the work done. Instead, it has been parked and decaying at a local garage for over a year, fully and expensively insured and with a high-interest loan, while he pursued this litigation. He says it’s a lemon. He wants his money and his carrying costs back.
[3] The Defendant says that it would have fixed the problem, on its own dime or under an after-market warranty, had it but known of the situation in a proper fashion and if the Defendant had cooperated with its instructions on how to proceed. It says that it sold the car in good faith and that the Claimant got what he got, and that any losses he suffered are for his account for failure so to cooperate.
[4] I have concluded that it was unreasonable for the Claimant to let the car sit (and sit, and sit) and to let the losses accumulate, without even attempting to put the car back on the road, or alternately crystallizing his loss and pursuing the Defendant for the shortfall. However, I have also concluded that the Defendant does have liability for initial losses pursuant to consumer protection and other legislation, and that the after-market warranty is in these circumstances not worth the paper it is printed on – and that the Defendant knew or should have known this at the time it sold that expensive product to the Claimant. Finally, I conclude that although the Defendant may not have had actual knowledge of any weaknesses or defects in the car at the time of sale, this does not affect its liability for pecuniary damages and it doth protest too much as to the steps it “woulda coulda shoulda” taken but for the Defendant’s actions or inactions.
[5] To understand these conclusions, it is necessary to review the chronology of events (and where it is disputed) in some detail before discussing the applicable law.
Joe Samson
[6] The Claimant gave evidence on his own behalf. In early 2022, he was looking for a car, having recently disposed of his former vehicle. For about a month, he went back-and-forth with Elliott Carr, a salesman with the Defendant. They floated various vehicles and how they could fit Mr. Samson’s tastes and budgets.
[7] Eventually, Mr. Samson found the subject vehicle which was at a third party dealership (Price Auto Sales of Fredericton, NB) and discussed it with Mr. Carr, and how it could be viewed and acquired. Financing was front and centre – the lender (Autocapital Canada Inc.) originally wanted $2000 down, then $1000. Eventually, the Defendant dropped the price by $500 and Mr. Samson was to provide the other $500. That was still difficult for him – he eventually provided $100 to “hold” the car pending a viewing, and if the purchase was consummated he would pay the other $400. There was some evidence that Mr. Carr was importuning to complete the deal, having by then expended considerable effort on “the file.”
[8] The Defendant took the car to Antigonish. Later evidence claimed that there were no problems on the long drive from Fredericton. They arrived in the late afternoon, and the Claimant took it on a short town drive. He claimed he was unable (or at least actively discouraged) from taking it on the highway and was pressured to complete or decline the transaction; and, it being approximately 6:00 pm, was “too late” to have a mechanical inspection. Aside from an issue with the trunk latch, the Claimant did not notice anything amiss. He signed the purchase and loan documentation and paid the remaining $400. The price of $9,473.89 plus tax, registration, warranty, and the euphemistic “finance fee” and “licensing fee” came to $13,999.99. There was a separate bank administration fee as well which appears to have been actual “spent money” when compared with the breakdown of the actual loan advance.
[9] Within a week or at most two, the bloom was off the rose. Numerous electrical problems manifested themselves. The back up camera didn’t work. The car would shut off if someone was not sitting in the driver’s seat; the key could be taken out of the ignition and the car would still run. The interior lights didn’t work for a time. The cruise control worked “when it wanted.”
[10] Notably, the car had an after-market remote start at the time of the Claimant’s purchase; and the Canada General warranty (for which the Claimant paid $899 plus tax) was said only to become effective after 30 days (although the warranty in evidence suggests otherwise) and contains numerous exclusions and limitations – 36 are listed as excluded warranty events; another 16 for roadside reimbursement events; and 9 more for the entire contract. Most notably for current purposes, the contract “will cease to operate and no reimbursement will be paid to you where the vehicle….has been modified from the manufacturer’s original specifications.” Mr. Samson also alluded to unspecified other “after market parts.” He also claimed that electrical components were not covered, although my own reading is it is more accurate to say electrical components were not covered in numerous – perhaps most – specific and unremarkable circumstances. On cross-examination, Mr. Samson said he derived this understanding from a discussion his mother had with Canada General.
[11] The warranty also had a “cap” of $1500 per event, was only operative for 6 months or 8000 km, and was subject to a claim “administration fee” of $100. There is also a provision saying the warranty provider “may” ask for an owner contribution in the event a warranty claim results in betterment.
[12] Mr. Samson testified that he was told by the Defendant that they would “go 50/50” on things the warranty did not cover (a time period was not specified; however, the Defendant’s checklist, initialed by the Claimant, refers to 50% of “safety related issues” within 30 days of delivery). He testified that Canada General advised that electrical matters were not covered. There is a dispute as to whether, and with whom, any discussion with Canada General took place.
[13] Mr. Samson also complained that an oil change was overdue.
[14] More significantly, he said that shortly after purchase, the Claimant alleges that he discovered tape over the turbocharger wastegate; that at least allegedly as a consequence, the vehicle would overheat and/or go into “limp” mode, with a disputed resultant limitation on performance and speed.
[15] He took the car to Warren Benoit, a red seal mechanic who testified. The vehicle is still at his business. I will discuss this further in due course. Mr. Samson bought, and paid for, $1144.25 worth of electrical parts and for Mr. Benoit’s labour, plus the vacuum hose assembly. The associated tasks have not been performed.
[16] Mr. Samson completed his direct testimony by saying that although he did not expect a flawless 9 or 10 year old car, he expected a vehicle that would “last as long as the loan” (said to be April 2025), and that he wanted the car “gone” with restitution for payments.
[17] On cross examination, he had no explanation for why Canada General claimed to have no record of an inquiry, except to say it was his mother who had contacted them (as well as Mr. Jardine, to whose evidence I shall return). He further testified that it was his decision to take the vehicle to Mr. Benoit (on a flatbed). After receiving Mr. Benoit’s diagnosis after about a week, he declined to have the vehicle repaired, saying he “changed [his] mind” and was “disgusted.” He says Mr. Benoit’s recommendation was “take the car back.”
[18] He did not obtain a second opinion, declining the Defendant’s instructions to have the vehicle taken to a Dodge dealership, as “the dealership wanted to be paid for diagnostics, and I didn’t want to pay for what I already knew.” He said he researched the vehicle (that is to say, the make, year and model) before buying, and found “good reviews.”
[19] The sum total of his evidence is he felt the “deal was done wrong” and given the proximity of the breakdown, that Mr. Automotives should “take the car back,” from Antigonish rather than transported or towed to Fredericton.
[20] He denied the Defendant offered anything under its “50/50” warranty.
[21] He denies having “tweaked” with the engine, or having taped the vacuum hose.
Warren Benoit
[22] Mr. Benoit, a 20+ year red seal mechanic, testified but was not qualified in these proceedings as an expert. He was consulted when the vehicle “died on the road.” It was left with him and he was able to replicate the stalling issues. He also noticed the oil was “old.” He had done prior work on Mr. Samson’s other cars.
[23] He identified and spoke to the cracked hose, which was not readily visible and which had been taped. The turbo was not reading boost pressure. He recommending returning the vehicle to the dealer.
[24] He testified that the remote starter was (to his knowledge) the only after market part on the vehicle (aside from the tape) and that the items he specified (and was paid for) would fix the car-quitting and turbo issues. That is, the wiring harness and ignition and vacuum hose would be repaired and, at least to my impression, the remote starter removed. He said that the car would “not be 100%” but would address the immediate issues.
[25] On cross examination, he testified that he “usually” provides an oral or written quote; that he was in fact paid for labour and materials – the parts remain available and the labour has not been done – and has not repaid any of this amount. He says he advised Mr. Samson to return the car before he got parts (or paid for them and the labour).
[26] He speculated that the engine “might not have long to live” but admitted that this was indeed speculative and that, if there were internal problems, it could be “anything between $500 and $2500” to repair or a replacement engine “could be between $2000 and $5000.”
[27] He does not recall any mention of any warranty.
[28] He lists “storage fees” at $15 a day for 420 days, comparing it favourably to the “going rate” of about $25.
Alison Samson
[29] Alison Samson, the Claimant’s mother, was a most forceful and at times emotional witness. It became clear throughout the case that she, rather than the Claimant, was the primary force behind this litigation.
[30] She testified that she, along with the Claimant and her now-late husband, would be on the calls discussing this vehicle. She insisted that she was told the vehicle had no after-market parts, and considered the salesman, Mr. Carr, to be “pressuring” at the time of delivery and that he “had to leave.” She was also “a bit worried” about the high-interest loan documents, and that she was told the loan could be rolled into a less costly one after a year’s due performance.
[31] She testified that the interior lights went out immediately, but this was just a fuse. She says the Claimant checked the oil on the second day of ownership and that it was “black as molasses.”
[32] Approximately a week later, after the problems I have recounted manifested themselves, Mr. Carr told her they could not return the vehicle as “the deal is done.” She says they were then “ghosted” for eight days, and that they were eventually told to take the vehicle to the Dodge dealership in Port Hastings (a $180 tow away), but that the dealership would not do any diagnostics without approval from Mr. Automotives. She says Mr. Jardine told her that Mr. Benoit was “not to touch” the car. On re-cross examination, she admitted that Mr. Jardine was not told they had parts on hand, and was adamant that the car was to “go to Dodge.”
[33] She was adamant that “if they [the Defendant] had answered our calls, we would have worked with them.” She then engaged counsel.
[34] When she called Canada General, a person “with an Indian accent” said the warranty was not in their system (yet).
[35] Mr. Automotives did not, according to Ms. Samson, “get back to us” as owners until March 2023. This action was filed on December 22, 2022.
[36] Although she rode in the car a number of times, she was “too scared” to drive it herself. She later testified that she doesn’t drive.
[37] The New Brunswick MVI was expired in September 2022.
[38] On cross-examination, she said that although she called Mr. Automotives several times, she was not referred on to Mr. Cormier (owner) but eventually only to Mr. Jardine. I will later discuss their evidence.
[39] The electrical parts were ordered a week or a week and a half after the transfer of ownership.
[40] According to her, Mr. Jardine wanted the Claimant to take the car to the closest Dodge dealership (Port Hastings) and would pay for it. It is common ground that for disputed reasons, the car was not diagnosed nor was an estimate provided by Dodge.
[41] She also said Mr. Benoit promised to refund the prepaid labour, but has not yet done so.
[42] She denies having access to the “50/50” warranty as “there was no answer when we called.”
[43] She says that the car has to be “stored” and fully insured, and that they couldn’t afford to take it home and her (and the Claimant’s) residential landlord prohibits non-operational cars.
[44] Finally, she denies any communication failure with the Claimant could have been a result of him being out of cell range, as messages / voice mail would have been obtainable when back in service. There is no signal problem at the home.
Elliott Carr
[45] Mr. Carr was the Defendant’s first witness. It is fair to say he had the most, but by no means all, of the contact with the Claimant and his family. He has worked for the Defendant for about three years, and testified that the dealership does 50-55 vehicles a month on average.
[46] As noted, he worked with Mr. Samson and his needs and constraints for about four weeks, cycling through several prospective vehicles. Samson found and referred the Dodge as a prospect on his on initiative. It looked several times that this would not be a fit, either because of down payment and loan terms, or insurance costs. Eventually, these were hammered into place as noted above.
[47] He insisted that the Claimant (and his mother) were “very happy” with what they say, that they “couldn’t believe how good it was,” and that they were given every opportunity to have it inspected and to take it wherever they wanted for a drive, including having a mechanic on-site or arranging for a delivery time that would facilitate a mechanical inspection.
[48] When the Claimant texted a week later with his issues, Mr. Carr said he would need to take it to a mechanic and to provide a quote. He characterized Alison Samson as “absolute chaotic.” He referred the Claimant to General Warranty. Further, he said that Mr. Automotive’s in-house procedure for such matters is “always the same” – mechanic, and quote. And sometimes a second opinion. He said that he has “always received a quote in similar situations.”
[49] On cross-examination, Mr. Carr reiterated that the vehicle originally came from Price Auto Sales, and that although that dealership usually uses City View Automotive for its mechanical work, he was not sure if that was the case in this instance. He usually does not review such paperwork, his field being sales. There was a “couple days’ wait” between inquiry and availability, and he didn’t know what if anything was done during that time. The vehicle was described as “mint condition,” qualified as “for a 13 as mint as you could get.” He believed all options listed on a spec sheet were on the vehicle and working, “with small possible exceptions.” He was not actually aware of anything that fell into this category, but did not drive the car himself. In his words, “all I did was provide the financing.”
[50] Mr. Automotives’ mechanic “looked over” the car before it left. Again, he emphasized that he was “not aware of anything not functioning and Joe could look all he wanted.”
[51] Mr. Carr spoke on the phone to the Claimant (and his mother) after the “test drive” and said that the first he heard of a refusal to take the car on the highway was at this hearing. Mr. Automotives’ M.O., as he would have it, is that the customer is to “have all the time they need” and if there are issues, then he, Mr. Carr, “would do all of the talking” rather than the delivery drivers. “They would not have been told they could not go on the highway.”
[52] He did admit that although Mr. Samson was free to walk away, he (Carr) was incentivized to consummate a deal, given the amount of time heretofore invested – that “I work hard for all my clients.” He said that usually, “any amount” would be adequate to hold the car for review, at that stage (it being recalled that Mr. Samson e-transferred $100 of the required $500 deposit for such purpose).
[53] Once again, he emphasized that he told the Claimant (or his mother) of the need for a mechanical diagnostic for the various items complained of shortly after purchase, and that “I don’t look under the hood.” Nevertheless, he denied intending to sell a car knowingly in such a state.
[54] He denied meaningful problems in communication functions – that his calls went to voice mail and eventually the parties connected. He did not specify a dealer to which to take the vehicle but admitted Patrick Jardine may have done so.
[55] He testified that once a quote is in hand, the Defendant would decide whether to authorize the repair, get a second opinion, or take the car to Fredericton to be serviced on its account. They might take it back to fix, but would not take possession to rescind the transaction.
[56] When asked if Mr. Automotives could have obtained its own quote, Mr. Carr testified that he passed the file to Mr. Jardine once Ms. Samson became aggressive.
[57] He said he would have approved “a $150 diagnostic” but this did not happen. He characterized the (immediate, non-turbo) problems as electrical, and that the remote start appears to have been after-market and not installed by them.
Patrick Jardine
[58] Mr. Jardine is a former co-owner of the Defendant, and still involved with the business along with other enterprises. He may best be described for these purposes as handling “escalations” that cannot be handled at the sales level (he also described himself as “in control of the money for the dealership”). He has taken various courses by virtue of which is a “certified operator” for various dealerships and brands, including NADA, GM, and Chrysler. Although he is a certified service manager for Chrysler, he is not a mechanic. He, like Mr. Benoit, was not qualified in these proceedings as an expert.
[59] The matter was escalated from Mr. Carr to Mr. Jardine on or around day 4 of the post-sale contact between the parties. Mr. Jardine reached Mr. Samson that night, and was told that Mr. Samson wanted to return the car – the engine light was on, there were the stalling incidents described earlier, and the car was in “limp” mode. Mr. Jardine told him to get the car diagnosed at Chrysler, which was a $180 to $200 tow. Mr. Jardine said Mr. Automotives would pay for it, but warned that the Chrysler diagnostic equipment would be able to detect any tampering, with a time stamp. In the event of such tampering, neither they nor the after-market warranty would pay up.
[60] They spoke three times in total; complaints included the oil, the ignition problem, and Mr. Samson’s conclusion that the vehicle was a “piece of junk.” Although Mr. Samson said that “his mechanic friend” diagnosed the vehicle’s issues, he never mentioned Mr. Benoit by name.
[61] Alison Samson, according to Mr. Jardine, “became abusive,” and refused to “let him take the car.” She insisted the car was a “piece of junk” and “you’re taking it back.” By day 5, he concluded he was getting nowhere.
[62] Mr. Jardine testified that the pressure in the vacuum hose would be so intense that tape (of any kind) would not hold it and there was “no way” it would get to Antigonish from Fredericton – the implication being that this was a post-delivery item. On cross examination, he said that the vehicle would go into limp mode, but that the vehicle could stall in or out of limp mode.
[63] He testified – paraphrasing slightly – that Canada General was great to deal with, having processed about 500 claims through them over the years and that he “never had a problem with them.” That said, it is the customer, not the dealer, who makes the claim. He said that Canada General “logs everything” as a “heavily regulated” provider.
[64] He denied alleging that Mr. Samson “messed with” the turbo or the engine; he insisted that the instructions were to “take it to Chrysler.” He insisted that he set up the appointment and the tow, but that Alison Samson refused to allow this.
[65] When cross examined on the state of the oil, he reverted to this not being a motor vehicle inspection item. He noted a Carfax report would not necessarily log all services.
Andrew Cormier
[66] Mr. Cormier was the final, and briefest, witness despite being the Defendant’s principal. He produced an invoice from City View Automotive indicating the oil had been changed on February 18, 2022 (about two months pre-purchase), at 131,463 km. Notably, the bill of sale to the Claimant on April 1, 2022 shows 131,221 km. There was no explanation for this.
Joe Samson - rebuttal
[67] Mr. Samson gave rebuttal evidence. He characterized the description of his mother’s demeanour as “exaggerated,” and that she was “a little frustrated, not verbally abusive.”
[68] He said that a turbo vehicle with a malfunctioning (taped) hose such as at issue here would “go as fast as you want but not high RPM,” and that the engine light would come on (as it did after a couple days). He denied putting tape on the mechanism.
[69] He did not recall being party to any discussion with Mr. Jardine. His mother contacted him on his behalf and “never heard back.”
[70] He referred to a text on April 20, 2022 in which he texted Mr. Jardine asking whether to send a work order for his appointment with a mechanic, and did not hear back.
[71] On cross examination, he admitted he could have been going 70-100 km/h when the engine light came on (he did not know where he was at the time), and that this was not the same time the vehicle “powered down” on the highway; the conclusion was it had to have gone into limp mode prior to the trip in which it powered down; and as such he took the vehicle on the highway knowing it was or had been in limp mode.
Argument
[72] The Claimant claims that both the Sale of Goods Act, RSNS 1989 c. 408 and the Consumer Protection Act, RSNS 1989 c. 92 apply to this transaction; that there has been a fundamental breach of contract; that he is entitled to rescind the contract and get his money (with carrying costs) back; and that he acted reasonably in response to the issues at hand. In particular, he argues that he does not need to “throw good money after bad” with the associated risk and expense in his modest, skint circumstances.
[73] The Defendant admits that a week or so is not a reasonable time post-purchase for a vehicle to malfunction; but that it was repairable and that they would have worked with the Claimant, either on its own account or through Canada General, and that any loss resulting from the Claimant’s failure to do so is his responsibility.
Findings
[74] Before turning to the applicable law, I make the following findings of fact; I will interpolate others where needed.
[75] The Defendant is a dealer in vehicles, and is subject to the associated consumer protection laws, and this is not affected by the fact that it did not directly source the vehicle nor was it part of its on-site inventory prior to the sale to the Claimant.
[76] The Defendant, if at all, only reviewed the vehicle perfunctorily prior to taking it to the Claimant for purchase.
[77] Although the Claimant and Defendant met late in the day, there was nothing preventing the Claimant from having a mechanic on hand to check it out, nor was the Claimant restricted from having the vehicle only late in the day (although realistically given the distance between Fredericton and Antigonish, it would be afternoon at the earliest).
[78] The Claimant may have felt importuned by the Defendant, given the time of day and the time it took to match him with a vehicle that would “fit,” but he was not prevented from taking a reasonable test drive, including on the highway.
[79] The Claimant did not “tape” the vacuum hose. It was not easily visible. However, the Defendant has not established on a balance of probabilities that the vehicle was not operable at highway speeds with this malfunction. The evidence is that this particular malfunction would result in an “underboost” and that the vehicle would operate inefficiently but would not necessarily be completely inoperable.
[80] The Claimant drove the vehicle after it went into “limp” mode.
[81] The parts and labour for which the Claimant paid would have put the vehicle back into operable condition, but this would not necessarily remediate all issues on this nearly ten year old vehicle.
[82] The issues with respect to the camera, cruise control, ignition, key use, and inability to run without someone in the driver’s seat were electrical in nature, and on a balance of probabilities are most likely related to the after-market starter and the associated disruption of the vehicle’s electrical system(s). Again, the parts and labour paid for by the Claimant and removal of this item would address these issues.
[83] The after-market warranty does not “kick in” after 30 days post-purchase. However, I find it would not have covered the issues at hand even if the Claimant had contacted them properly; I find that a call was lodged but that it was not matched with the subject warranty either because the warranty had not yet been processed, or because the call came from Ms. Samson and not the owner/warranty holder. The Canada General warranty’s exclusions with respect to modifications would have excluded coverage for both the vacuum and the electrical issues. It is clear that this is a very restrictive coverage, with numerous exclusions, a cap on individual and cumulative claims, an administration fee, and a potential betterment discount.
[84] The Claimant unreasonably declined to have the vehicle taken to a Chrysler dealership. I accept Mr. Jardine’s evidence that Ms. Samson was aggressive and unconstructive, and that she had primary carriage of the discussions with the Defendant (both through Mr. Jardine and Mr. Carr).
[85] I do not accept that the oil was changed, given the discrepancy in mileage on the work order and the bill of sale. I also do not accept that the fact an oil change is not an MVI item means that oil doesn’t have to be changed as part of reasonable maintenance.
[86] I do not accept that there were insurmountable communication issues with the Claimant. A call can go to voice mail when a phone is out of a service area or is shut off. I find it is more likely that mutual frustration and talking at cross-purposes led to the breakdown of any prospect for resolution.
[87] I do not accept the Defendant’s evidence to the effect that it would “bend over backwards” to help the Claimant. At some points, butter would not melt in witnesses’ mouths. In point of fact, the Defendant objected to this Court’s hearing of the case on the merits, asserting that it had no jurisdiction (that objection was dismissed earlier in these proceedings). I find that the Defendant effectively threw up its hands at the Claimant’s position after the communication breakdown and (paraphrased) said, “do what you have to do.”
[88] I accept that the Claimant could not store the car at his premises. I equally do not find that this or Mr. Benoit’s, were his only reasonable options.
[89] Lastly for the moment, I find that the Claimant has had to make his high-interest loan payments, and has kept the car insured, from purchase to present. I will discuss the recoverability of these matters later.
Applicable Law
[90] Both the Sale of Goods Act and the Consumer Protection Act differentiate between implied warranties and implied conditions; and one cannot contract out of the Consumer Protection Act, when it applies.
[91] A breach of warranty may rise to damages; a breach of condition may give rise to a right to recission and/or damages. Both are subject to the Defendant’s obligation to mitigate loss.
[92] The relevant provisions of the Sale of Goods Act read:
17 Subject to this Act and any statute in that behalf, there is no implied warranty or condition as to the quality or fitness, for any particular purpose, of goods supplied under a contract of sale, except as follows:
(a) where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the sellers skill or judgement and the goods are of a description that it is in the course of the sellers business to supply, whether he be the manufacturer or not, there is an implied condition that the goods shall be reasonably fit for such purpose, provided that, in the case of a contract for the sale of a specified article under its patent or other trade-name, there is no implied condition as to its fitness for any particular purpose;
(b) where goods are bought by description from a seller who deals in goods of that description, whether he be the manufacturer or not, there is an implied condition that the goods shall be of merchantable quality, provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed;
(c) an implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade;
(d) an express warranty or condition does not negative a warranty or condition implied by this Act, unless inconsistent therewith.
[ emphases added]
[93] And, in the Consumer Protection Act:
26 (1) In this Section and Section 27, “consumer sale” means a contract of sale of goods or services including an agreement of sale as well as a sale and a conditional sale of goods made in the ordinary course of business to a purchaser for his consumption or use but does not include a sale
(a) to a purchaser for resale;
(b) to a purchaser whose purchase is in the course of carrying on business;
(c) to an association of individuals, a partnership or a corporation; or
(d) by a trustee in bankruptcy, a receiver, a liquidator or a person acting under the order of a court.
(2) In this Section and Section 27, “purchaser” means a person who buys or agrees to buy goods or services.
(3) Notwithstanding any agreement to the contrary, the following conditions or warranties on the part of the seller are implied in every consumer sale:
(a) a condition that the seller has a right to sell the goods, and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass;
(b) a warranty that the purchaser shall have and enjoy quiet possession of the goods;
(c) a warranty that the goods shall be free from any charge or encumbrance in favour of any third party, not declared or known to the buyer before or at the time when the contract is made;
(d) where there is a contract for the sale of goods by description, there is a condition that the goods shall correspond with the description; and if the sale be by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description;
(e) where the purchaser, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the purchaser relies on the seller’s skill or judgement and the goods are of a description which it is in the course of the seller’s business to supply, whether he be the manufacturer or not, a condition that the goods shall be reasonably fit for such purpose; provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose;
(f) where goods are bought by description from a seller who deals in goods of that description, whether he be the manufacturer or not, a condition that the goods shall be of merchantable quality, provided that, if the purchaser has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed;
(g) in the case of a contract for sale by sample
(i) a condition that the bulk shall correspond with the sample in quality,
(ii) a condition that the purchaser shall have a reasonable opportunity of comparing the bulk with the sample,
(iii) a condition that the goods shall be free from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample;
(h) a condition that the goods are of merchantable quality, except for such defects as are described;
(i) a condition that the goods, whether bought by description or otherwise, are new and unused unless otherwise described;
(j) a condition that the goods shall be durable for a reasonable period of time having regard to the use to which they would normally be put and to all the surrounding circumstances of the sale.
(4) For the purposes of clause (h) of subsection (3), it is not necessary to specify every defect separately, if the general condition or quality of the goods is stated with reasonable accuracy.
(5) There shall be implied in every consumer sale of services a condition, on the part of the seller, that the services sold shall be performed in a skilful, efficient and competent manner.
(6) This Section applies to contracts entered into on or after the fifteenth day of August, 1975.
[emphases added]
[94] It will be seen that these implied terms are not absolute. I take them in their turn:
[95] Sale of Goods Act: There is no implied condition of fitness for purpose if sold under a trade name. In this case, what was sold was a Dodge Dart. There is also no implied condition of merchantability when there has been “an inspection,” if the inspection should have revealed the defect. I have accepted that the vacuum hose tape was not readily visible; and the electrical issues do not appear to have been patent at the time of completion of the sale.
[96] Consumer Protection Act: the same comments with respect to fitness for purpose and merchantability apply. The principal difference, for current purposes, where there is a “consumer sale” as defined (and as exists here), there is an additional condition as to durability for a reasonable period of time, “having regard to….use….and all the surrounding circumstances of the sale.”
[97] This is an important caveat. It is not a condition as to absolute durability. It is a condition for durability for a reasonable period, in the context of that particular sale and normal use. A nine or ten year old vehicle, specifically, is not held to the same standard as a new one (I am speaking here of statutory liability, without regard for any contractual warranty, from the manufacturer or after-market).
[98] On the flip side, I find that the prohibition in s. 28 of the Consumer Protection Act against “contracting out” of the deemed warranties and conditions voids and severs the “50/50” arrangement from the agreement; the Defendant is fully liable for any breach of warranty or condition within the meaning of that Act.
[99] That liability, too, does not depend on any malfeasance or even negligence by the Defendant. Once there is liability under the Act, good faith or lack of knowledge or lack of negligence is not a defence to pecuniary damages.
[100] So what does that mean here? It is admitted that a week or two is not a reasonable period of durability. But it does not mean that there is a recission-eligible breach of condition for any kind of repairable breakdown. It also does not mean that a vendor subject to the Consumer Protection Act, and who knows not (or claims to know not) of a problem which manifests itself shortly thereafter is scot-free. It must be taken in context.
[101] What is that context here? The Claimant’s own witness is that $1,144.25 would fix both the electrical and vacuum problem, and would have put the car back on the road. It does not mean that other problems would or would not manifest themselves. That is speculative as to when or if they would occur. In the context of a $9,473.89 car (and $13,999.99 once all the plus-plus-pluses are added on), that does not rise to the level of the breach of the condition of durability. Put another way, it does not constitute a fundamental breach.
[102] Counsel for the Claimant cites Canso Chemicals v. Canadian Westinghouse, 1974 Canlii 1336 (NSSC, AD). The cases on fundamental breach try to explain the term in various and sometimes lyrical, almost poetic ways. But they come to this: a fundamental breach occurs when the party at loss has been sold a useless bill of goods, and has received nothing to speak of in value. It is not a mere bad bargain – it is a bargain that is foundationally and profoundly different from that contemplated. As noted in Suisse Atlantique, cited in Canso, “[n]o formula will solve this type of question and one must look individually at the nature of the contract, the character of the breach and its effect on future performance….”
[103] This car was well used and of “a certain age.” It is not akin to another case cited by the Claimant, Davis v. Chrysler Ltd. et al, (1977), 26 NSR (2d) 410 (SC, TD) in which the vehicle was less than a year old with some 36,000 miles on the clock. Again, context matters.
[104] I will return to damages after discussing what is perhaps the biggest pecuniary issue at hand, namely mitigation.
[105] The Claimant strongly urges that his financial situation puts him in a situation where his ability to mitigate is limited, and cites Canso, supra, and McGregor on Damages (cited with approval in Canso) for the propositions that the Claimant “need not risk his money too far” and “will not be prejudiced by his financial inability to take steps in mitigation.”
[106] Respectfully, insofar as that may be an accurate current statement of the law, it does not give a Claimant carte blanche to claim poverty and to allow damages to click along at whatever pace may suit him. Not only did Mr. Samson have the funds available to purchase parts and labour to get the car “back on the road,” he in fact did so. Then, he either changed his mind or had his mind changed for him through the influence of Ms. Samson or Mr. Benoit. Then the vehicle sat, and sat – with a high interest loan and pricey insurance. He also had the option to crystallize his loss – in effect to “dump” the car – and pursue the Defendant for the difference. Or he could sell the vehicle and “roll over” the deficiency into another vehicle as is very common in the industry (and on which the Court had some information by way of representation by Mr. Cormier, albeit not while under affirmation).
[107] I do not find it reasonable, under any scenario, for the Claimant to let a vehicle sit and decay for over a year, with or without storage fees (Mr. Benoit testified that it would now at a minimum also require a battery, alternator, rotors and associated labour totalling $1313.26 plus tax). This is especially so when he claims not to have a place to store it under his own custody. For clarity, while neither Mr. Benoit nor the Claimant vigorously pursued the alleged storage charge of $15 per day, I find it unreasonable in the extreme for it to sit at that rate for some 420 days.
[108] To summarize, the Defendant is liable for breach of the contextual condition as to durability under the Consumer Protection Act; however, the context of this vehicle and the facts as I have found them do not entitle the Claimant to recission; they entitle the Claimant to compensation for the faulty elements that would be required to make the vehicle operable for a reasonable period of time. The Defendant cannot contract out of that obligation, 50/50 or otherwise. And it does not relieve the Claimant of his duty to minimize or at least reasonably crystallize his losses.
[109] I take a slightly different view with respect to the contract for the after-market Canada General warranty. It covers little, and briefly, to a modest cap, at the best of times. And this situation was not the best of times. While there is even some question as to enrolment (I do not need to, and do not, make a finding on this point), I find that the coverage is so ephemeral as to be worthless and to be worthless from inception in these specific circumstances. Specifically, the Defendant – having testified to a long and extensive relationship with this warranty provider – knew or should have known that the after-market starter would likely put any coverage in jeopardy. To me, there is a complete failure of consideration for the Canada General aspect of this transaction.
[110] And so finally we come to damages.
[111] I have found that the $1,144.25 quoted by Mr. Benoit would have addressed the immediate issues; this was paid. This is awarded.
[112] I find the $899 plus tax paid for the Canada General warranty, in these circumstances, is worthless. I award $1,033.85.
[113] I do not award anything for post-tow decay, loan interest, insurance, or storage charges. The Claimant has not mitigated his losses under these heads, and has not presented any evidence of what his alternate losses, had he crystallized them or “rolled over” the financial obligations into another vehicle loan, would have been.
[114] While it is distasteful that the vehicle was, more likely than not, overdue for an oil change, this was ascertainable with due diligence by Mr. Samson. There was no evidence either of its value or that this violated the statutory warranties and conditions, or pre contractual representations made by the Defendant. I decline to award anything in this respect.
[115] I accordingly order the Defendant to pay the Claimant $2,178.10 together with simple interest at 4% from April 8, 2022 (the date of delivery of the vehicle) to the date of release of judgment. I find this is reasonable given the time of purchase of the Canada General warranty, which was “worthless from the start” and the proximity of the initial problems to the purchase. By my calculation, that is $0.2387 per day. If the parties cannot agree on this amount, or if I do not hear submissions in this regard within 10 days of release of this decision, I will fix it by order.
[116] Success has been very divided. The Claimant has succeeded in establishing some liability, and was compelled to answer a jurisdictional challenge which was bereft of merit. The Defendant has been largely pecuniarily successful. I order no costs.
Balmanoukian, Adj.