Beaulieu v Leisure Time Sales Ltd et al,
138 NBR (2d) 215, 354 APR 215.
New Brunswick Court of Queen's Bench
Trial Division
Judicial District of Moncton
Paul S. Creaghan, J
August 13, 1993
Reproduced with permission of Maritime Law Book Ltd.,
which claims copyright in the headnote and indexing.
Maritime Law Book Ltd. Summary
The plaintiff purchased a motor home from Leisure Time Sales Ltd., the authorized dealer for products manufactured by Fleetwood Canada Inc. After experiencing numerous problems with the unit over the next 18 months, the plaintiff sought rescission of the contract and damages. The New Brunswick Court of Queen's Bench, Trial Division, allowed the plaintiff's action against Leisure Time Sales, but dismissed the action against Fleetwood Canada.
Consumer Law -- Topic 1728
Sale of goods -- Statutory warranties -- Particular warranties -- Of fitness for purpose -- [See Consumer Law -- Topic 1805].
Consumer Law -- Topic 1804
Sale of goods -- Breach -- Remedies of buyer -- Damages -- [See Consumer Law -- Topic 1805].
Sale of goods -- Breach -- Remedies of buyer -- Rescission -- The plaintiff purchased a motor home from Leisure Time Sales -- After experiencing numerous problems with the unit over the next 18 months, the plaintiff sought rescission of the contract and damages -- The New Brunswick Court of Queen's Bench, Trial Division, held that the plaintiff was entitled to rescission and a return of the purchase price, where the defects, taken as a whole, constituted a fundamental breach of the implied warranty to provide a motor home reasonably fit for the purpose for which it was intended -- The plaintiff's entitlement to damages for loss of use and enjoyment and inconvenience was setoff by Leisure Time's entitlement to compensation for the plaintiff's use and enjoyment of the vehicle.
Sale of Goods -- Topic 4106
Conditions and warranties -- Implied or statutory terms as to quality or fitness -- Fitness or suitability of goods -- [See Consumer Law -- Topic 1805].
Sale of Goods -- Topic 6503
Breach -- Remedies of buyer -- Damages, general -- [See Consumer Law -- Topic 1805].
Sale of Goods - Topic 6510
Breach -- Remedies of buyer -- Rescission -- Breach of warranty or condition -- [See Consumer Law -- Topic 1805].
Cases Noticed:
Peters v. Parkway Mercury Sales Ltd. (1975), 10 N.B.R.(2d) 703 (C.A.), refd to. [para. 43].
Sirois v. Centennial Pontiac Buick G.M.C. Ltd. and General Motors of Canada Ltd. (1988), 89 N.B.R.(2d) 244; 226 A.P.R. 244 (C.A.), refd to. [para. 44].
Statutes Noticed:
Consumer Products Warranty and Liability Act, R.S.N.B. 1973, c. C-18.1, s. 10(1) [para. 33].
Counsel:
Andre Beaulieu acted on his own behalf;
Charles LeBlond, for the defendants.
This action was heard on July 26, 27 and 28, 1993, before Paul S. Creaghan, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Moncton, who delivered the following judgment on August 13, 1993.
[1] Paul S. Creaghan, J: In this action the plaintiff seeks rescision and damages with respect to a contract to purchase a motor home sold by the defendant Leisure Time Sales Ltd. and manufactured by the defendant Fleetwood Canada Inc.
[2] On October 13, 1990, the plaintiff purchased a 1991 Cambria 37 foot motor home from Leisure Time Sales as the authorized dealer for products manufactured by Fleetwood. There were problems in obtaining the unit the plaintiff had specified including a colour change, heated mirrors, hydraulic jacks, the chassis year and the tag axle design. However, I am satisfied on the evidence before me that there was no misrepresentation by either Leisure Time Sales or Fleetwood. On October 13, 1990, the plaintiff knew what he was purchasing, agreed to a price adjustment by way of additional equipment, and accepted the unit as a 1991 Cambria manufactured on a 1990 Chevrolet chassis. The evidence also is that the plaintiff was given the option to cancel the purchase agreement and decided to take the unit as it was.
[3] On October 13, 1990, the plaintiff paid the balance of the purchase price of $87,400 and took delivery of the motor home.
[4] From the first day the plaintiff took delivery he experienced problems with the unit. Undoubtedly, these problems were compounded in the plaintiff's mind because he had purchased a unit other than that he had first specified, particularly in that his motor home was constructed on a 1990 chassis which lacked features available in similar motor homes constructed on 1991 chassis.
[5] In any event, before he hot his motor home to his residence it stopped and would not restart and had to go to a local garage for repairs.
[6] Three days after taking delivery of the unit the plaintiff called Leisure Time Sales with a list of problems including a leak in the roof over the driver's seat. The items are listed in Exhibit P-1-16, and although each one cannot be seen as a major defect in itself, together they may be easily seen as substantial aggravations considering the fact that the unit was brand new. The plaintiff's evidence is that the motor home was taken to Leisure Time Sales for repairs but there is no evidence by way of work orders of repairs undertaken by the defendant itself until January 9, 1991. It is more likely that the repairs made were repairs done by Ed's Travel Trailer Parts and Service as shown on Exhibit P-1-30.
[7] In any event, the cost of all these repairs were paid for by Leisure Time Sales and in November 1990 the plaintiff drove his motor home to Florida. On his way to Florida the plaintiff had a problem with his emergency brake but was able to proceed without having it repaired.
[8] The plaintiff used the motor home in Florida until January of 1991 when he returned to his home in Fox Creek just outside of Moncton, N.B.
[9] On January 9, 1991, the plaintiff brought the unit to Leisure Time Sales in Saint John, N.B., with a long list of complaints or what have been referred to as deficiencies. They are listed on the work order reproduced in Exhibit P-1-16. Although the individual complaints go to defects that might not be seen as major, it is easy to understand that the plaintiff would not be happy with the quality of his unit and taken together they can be seen as serious.
[10] Leisure Time Sales had the unit for five days. By the plaintiff's testimony, the most serious defect was that the exit door would stick and he felt it was dangerous. By the plaintiff's testimony, Leisure Time Sales fixed most of the problems but could not fix the problem with the brake referred to. The plaintiff picked up his motor home and took it to Lounsbury's in Moncton and had the brake problem looked after and Leisure Time Sales again paid for this repair.
[11] In mid-January 1991, the plaintiff headed back to Florida in his motor home. His testimony is that he again experienced all sorts of problems.
[12] The evidence is that when the plaintiff decided to go north around the end of February or beginning of March, the motor home would not start without a boost and that the roof was leaking on the driver's side. The plaintiff and his wife made a list of the defects they found in the motor home which are set out in Exhibit P-1-19. Scrutiny of these complaints again show that they were not individually major in consequence but taken together resulted in serious aggravation.
[13] On March 18, 1991, the plaintiff again brought the unit to Leisure Time Sales in Saint John for correction of some 20 deficiencies as listed on the work order set out in Exhibit P-1-20. The defendant Leisure Times Sales did work to correct the deficiencies and defects complained of and held the vehicle for this purpose for a period of over six weeks to May 3, 1991.
[14] The plaintiff came and got his motor home and continued to have problems. A fan belt broke, there were continued problems with the brakes and the plaintiff had problems starting the unit. He called Leisure Time Sales and told them to come to his residence and take the motor home back to their shop and get it operating properly. In June of 1991, Leisure Time Sales came and got the unit and brought it to Saint John again. The specific problems at this time are listed in Exhibit P-1-23. Leisure Time Sales worked on the problems and kept the vehicle for 10 days from June 18, 1991 to June 28, 1991.
[15] On June 28, 1991, the plaintiff travelled to Saint John to again take possession of his motor home. His testimony is that a couple of weeks later he went to close the door of the unit and the inside of the door stayed in his hand.
[16] By this time the plaintiff was very upset and anything but pleased with the unit. A unit which he had not really specified in placing his original order and which had caused him little but trouble since he took delivery of it in October of 1990.
[17] Again he travelled to Saint John to discuss his complaints with Leisure Time Sales. At this time the plaintiff offered to trade out of his unit, pay additional money and take another 1991 Cambria manufactured on a 1991 chassis.
[18] Leisure Time Sales said it would see what it could do and after consultation with the manufacturer would get back to the plaintiff.
[19] It was about this time that Mr. Derek Dobson, the general manager of Leisure Time Sales and the person who had sold the motor home to the plaintiff, wrote a rather telling memo to himself which was received in evidence as Exhibit P-1-27: "My feelings - Unit has been a lemon since day one, André has been very patient and I believe we should trade him out and let us both out of this nightmare."
[20] Mr. Dobson, in his testimony, admits to writing these feelings but explains the comment as expressing his frustration at not being able to please the plaintiff after many attempts. If Mr. Dobson had cause for frustration, it seems the plaintiff had even more cause to claim frustration.
[21] The plaintiff returned home and continued to experience problems with his motor home. He again had problems with the brake. This time the plaintiff brought the vehicle into Lounsbury's in Moncton for repairs.
[22] In August of 1991, the plaintiff got a letter from Fleetwood to the effect that it felt, after discussing the plaintiff's problems with Mr. Dobson, that with the combined resources of Leisure Time Sales and Fleetwood they could "work thru the problems you are currently having". "Derek has agreed to come to your home, to make a list of all the problems you are experiencing. This list will become a part of your personal record, of which Fleetwood will continue to cover under warranty for a reasonable amount of time past the warranty period. "We will also offer a courtesy check at the factory any time you are in the Paxinos, Pennsylvania or the Decatur, Indiana area. Just give us a call 1-800-325-2947 after August 13, 1991, 60 days prior to your desired inspection date."
[23] In early October the plaintiff agreed to drive his motor home to Decatur, Indiana, the location of Fleetwood's manufacturing plant, to have his motor home repaired to factory specifications as suggested in Fleetwood's August letter. A specific list of complaints was referenced for attention which are set out in Exhibit P-1-31. Fleetwood agreed to pay gas and motel expenses. It estimated the time required to complete the repairs as five days commencing November 11, 1991. The plaintiff intended to have this work done by way of a detour on his way to Florida for winter holiday.
[24] The plaintiff delivered the unit to Decatur as agreed and a work order was prepared covering items set out in Exhibit P-1-32. The plaintiff left his motor home and drove to New York City in his utility vehicle. While in New York the plaintiff received a call from Fleetwood in Decatur, on conference with Leisure Time Sales in Saint John, informing him that the factory technicians had now discovered that the unit has a "delamination problem". Essentially, the laminated layers on one side of his motor home were pulling apart. For the moment, the problem is mainly cosmetic but to correct it the whole shell of the unit will have to be disassembled and glued back together again. Fleetwood estimates that it would take two to three weeks at the factory to correct this problem alone as compared to one to three weeks to assemble an entire new unit.
[25] On learning of the new problem with his motor home, the plaintiff, showing amazing patience in my view, agreed to pick up his motor home after completion of the repairs for which it had been brought to Decatur, drive to Florida to complete his vacation and then to return to Decatur in March of 1992 to have the delamination problem fixed.
[26] The plaintiff returned to Decatur from New York on November 15, 1991. Fleetwood, as a part of the repairs they undertook, had the brakes again repaired by a G.M. dealer in Fort Wayne, Indiana.
[27] The plaintiff then left for Florida. The plaintiff again experienced problems with the brake on the unit. While in Florida he experienced problems with the fridge. The door seemed to stick by times and the plaintiff installed hydraulic levelling jacks in the unit. He had problems starting the motor home. He noticed that both sides of the unit were showing signs of the delamination problem.
[28] By his testimony, at this point the plaintiff says he had had enough.
[29] He flew to Moncton in February or March of 1992 and consulted his lawyer and on instructions decided to bring this action claiming rescision of his contract and damages. His lawyer advised Fleetwood and Leisure Time Sales of the plaintiff's intentions and that he would not bring the unit to Decatur in March of 1992 as previously arranged for further repairs.
[30] The plaintiff returned to Florida and drove the motor home to Moncton via Montreal. During this trip he also experienced another brake problem with the unit.
[31] He arrived at his residence in Fox Creek around April 10, 1992 and parked the motor home on his property where it remains to this day.
[32] It is common ground that the motor home purchased by the plaintiff is a consumer product as defined by the Consumer Products Warranty and Liability Act, R.S.N.B. 1973, c. C-18.1.
[33] Section 10(1) of the Act provides:
"Subject to subsection (2), in every contract for the sale or supply of a consumer product there is an implied warranty given by the seller to the buyer
(a) that the product is of such quality, in such state or condition, and as fit for the purpose or purposes for which products of that kind are normally used as it is reasonable to expect having regard to the seller's description of the product, if any, the price, when relevant, and all other relevant circumstances; and
(b) that the product complies with all mandatory federal and provincial standards in relation to health, safety and quality."
[34] My review of the evidence leads me to the conclusion that the motor home purchased by the plaintiff was not in such a condition to be fit for the purpose for which motor homes of that description and price are normally used as might be reasonable to expect.
[35] It is not just the brakes, the leaky roof, the starting problems, the finishings or even the delamination problem that leads me to that conclusion as separate defects; rather, it is the accumulation of these and other continuous problems over a period of 18 months since the plaintiff acquired the unit, beginning on the first day he took delivery, that forces me to such a finding.
[36] By the defendant's own testimony, the unit purchased by the plaintiff was the worst unit with the greatest number of problems that Leisure Time Sales had ever sold during Mr. Dobson's 10 year experience with the company. I think perhaps Mr. Dobson said it best when he characterized the unit as a lemon and described the problems as a nightmare.
[37] The defects, taken as a whole and considered in accumulation from the time the plaintiff took delivery of the vehicle, constituted a fundamental breach of the contract to provide a motor home reasonably fit for the purpose for which it was intended.
[38] In the circumstances of this case, I do not feel the defendants had the right to further opportunity to rectify the breach of implied warranty. The breach was sufficiently major to allow the plaintiff to act unilaterally.
[39] Upon the plaintiff discovering that the second side of his unit was also delaminating, he acted to reject the product and in my view he was within his rights to do so.
[40] The question of the right to rescind a contract on the basis of the breach of a warranty of fitness, whether it be found to be a fundamental breach at common law or a major breach as provided by statute, must in the final analysis be a question of fact that will turn on the circumstances of each case. The concept of a breach that "goes to the root" of the contract is helpful in either case to characterize a situation that should give rise to rescision as a remedy.
[41] Each case must be judged on its own facts and there must be some element of reasonable objectivity applied. Business efficacy requires that a court should exercise caution in granting the remedy and it should be allowed only where the subject matter of the contract is clearly unfit for the purpose intended.
[42] However, this does not mean that the test should be "totally unfit" or "irreparable" as such a measure would, in my view, establish too high a criteria such that the right to rescision for fundamental or major breach would be available only in rare instances.
[43] The defendants rely on Peters v. Parkway Mercury Sales Ltd. (1975), 10 N.B.R.(2d) 703 (C.A.). That case involved problems arising after purchase of a used car and the court clearly drew a distinction between the implied condition of fitness in the case of the sale of a secondhand car and that which is implied in the sale of a new car.
[44] Clearly, the Consumer Product Warranty and Liability Act provides rescision as a remedy where there has been a major breach. Sirois v. Centennial Pontiac Buick G.M.C. Ltd. and General Motors of Canada Ltd. (1988), 89 N.B.R.(2d) 244; 226 A.P.R. 244 (C.A.). On the facts before me, problems became apparent immediately after delivery and continued, accumulated and escalated during the 18 months the plaintiff attempted to use and enjoy the vehicle. In my view, the fact that the plaintiff could make limited use of the motor home during this period does not in itself preclude the claim of rescision in the circumstances of this case. He rejected the product when the delamination of the second side of the unit became evident. He drove the vehicle to his residence and has not used it since. The last defect to become apparent resulted in a "congeries of defects" that could be seen as a serious, major and fundamental breach in the implied warranty of fitness.
[45] Even though the plaintiff had had possession and some enjoyment and use of the motor home for about 18 months prior to his decision to seek rescision, I am of the view that the parties can be returned to a position reasonably close to that in which they were when the contract was entered.
[46] The implied warranty under which the plaintiff is entitled to reject the product and the contract which the plaintiff seeks to rescind is with the defendant Leisure Time Sales Ltd. not with Fleetwood Canada Inc., although the resultant consequence is probably academic in that the two defendants entered a joint defence and it is likely that Fleetwood would extend some indemnification to Leisure Time Sales as a matter of business practice.
[47] Accordingly, the contract as between the plaintiff and the defendant Leisure Time Sales Ltd. is rescinded and the plaintiff shall be entitled to return of the purchase price paid for the unit and Leisure Time Sales Ltd. shall be entitled to return of the unit.
[48] As to damages, I am of the view that the plaintiff is entitled to compensation for loss of use and enjoyment, to include interest, and some amount for aggravation and inconvenience which was caused him in these circumstances. As a setoff, the defendants can claim value for such use and enjoyment of the vehicle as the plaintiff did have and an amount for wear and tear reasonable to such use. In the circumstances of this case, I have decided rather arbitrarily that one should be seen to offset the other.
[49] Accordingly, judgment shall be entered for the plaintiff against the defendant Leisure Time Sales Ltd. in the amount of $87,400 and, upon satisfaction of the judgment, Leisure Time Sales Ltd. may enter upon the plaintiff's premises and repossess the 1991 Cambria 37 foot motor home, serial number 715MM4444765 and the plaintiff shall do all that may be necessary to put Leisure Time Sales Ltd. in lawful possession of the motor home.
[50] The plaintiff is entitled to costs on his action against Leisure Time Sales Ltd. in the amount of $1,575 which I have allowed on an amount involved of $20,000, being the difference between the purchase price and the estimated present value of the unit after necessary repairs, under scale 1, as the plaintiff obviously had legal assistance in the conduct of his case even though he chose to represent himself at trial.
[51] The plaintiff's action against Fleetwood Canada Inc. is dismissed but without costs.
Order accordingly.
Editor: Angela E. McKay