Gillespie v. MacDonald Pontiac Buick GMC Ltd.
(1984), 64 N.B.R. (2d) 243
New Brunswick Court of Queen's Bench
Trial Division
Judicial District of Moncton
Dickson, J.
December 5, 1984.
See important note at end.
Reproduced with permission of Maritime Law Book Ltd.,
which claims copyright in the headnote and indexing.
Maritime Law Book Ltd. Summary:
A purchaser bought a used car from the dealer allegedly on the conditions that there was no warranty about condition of the car, that the purchaser would insure the vehicle was in satisfactory condition and that the car was sold on an "as is" basis. Before payment of the purchase price the purchaser mentioned an oil leak to the dealer and was assured it would be repaired. The purchaser paid the purchase price and immediately encountered problems. The purchaser brought an action for return of the purchase price. The dealer alleged that the car was sold on an "as is" basis, that the Consumer Product Warranty and Liability Act did not apply and that the dealer was not liable for the repair of the car.
The New Brunswick Court of Queen's Bench, Trial Division, allowed the action and held that the existence of the defect amounted to a breach of the implied warranty under the Act that the car was fit for the purpose of use as an automobile and that the failure to repair amounted to a breach of the express warranty given to the purchaser before the purchase price was paid that the car would be repaired.
Consumer Law -- Topic 1686
Sale of goods -- Statutory warranties -- General -- Contracting out of -- A purchaser bought a used car allegedly on an "as is" basis and without any warranty as to the condition of the car -- The purchaser was assured by the dealer that an oil leak would be repaired -- The purchase price was paid and the dealer subsequently refused to repair the car -- The purchaser brought an action for recovery of the purchase price -- The New Brunswick Court of Queen's Bench, Trial Division, allowed the action and held that although the purchaser could contract out of the Consumer Product Warranty and Liability Act, there was no intention by the purchaser to contract out where there were major defects.
Consumer Law -- Topic 1728
Sale of goods -- Statutory warranties -- Particular warranties -- Fitness for purpose -- A purchaser bought a used car allegedly on an "as is" basis and without any warranty about the condition of the car -- The purchaser was assured by the dealer that an oil leak would be repaired -- The purchase price was paid and the dealer subsequently refused to repair the car -- The purchaser brought an action for recovery of the purchase price -- The New Brunswick Court of Queen's Bench, Trial Division, allowed the action and held that the purchaser intended that the car be fit for its purpose of use as an automobile and intended to waive the implied warranty under a. 10(1)(a) of the Consumer Product Warranty and Liability Act only in a case of a minor problem.
Statutes Noticed
Consumer Product Warranty and Liability Act, S.N.B. 1978, c. C-18.1, ss. 10(1)(a), 25(1) [paras. 1, 4, 21].
Counsel:
James E. Fowler, for the plaintiff;
M. Morley Rinzler, for the defendant.
This case was heard before Dickson, J., of the New Brunswick Court of Queen's Bench, Trial Division, who delivered the following judgment on December 5, 1984:
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[1] Dickson, J.: In this action the plaintiff who resides at Riverview claims against the defendant company, which has its head office at Moncton, the return of $6,000.00 paid by him to the defendant as the purchase price of a secondhand automobile, the contract for the purchase of which, the plaintiff alleges, was aborted because of defects in the vehicle. The plaintiff pleads breach of express and implied warranties, terms and conditions provided for by the Consumer Product Warranty and Liability Act, S.N.B. 1980, c. C-18.1. The defendant denies its liability for return of the purchase price. It alleges that the vehicle was sold on an "as is" basis and that in any event any defect developed only after delivery was made to the plaintiff and because of his own mis-use.
[2] The pertinent circumstances as disclosed by the evidence were as hereunder stated and I so find.
[3] The defendant operates an automobile dealership business which includes the sale of used vehicles. On the evening of June 14, 1983, the plaintiff visited the defendant's used car lot with a view to purchasing a vehicle. There he spoke to one Siddall, a salesman employed by the defendant. After test-driving two vehicles he expressed to Mr. Siddall an interest in purchasing one of them, a 1980 Thunderbird. He was told the price was $6,695.00 but that the defendant might sell for less. They entered Siddall's office, where the plaintiff made an offer of $6,000.00, tax included. The salesman indicated that he did not think it would be accepted but would "write up" the offer and refer it to his superiors.
[4] The offer was written up an a printed form used by the defendant for
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such purpose. The "total due" was entered as $6,000.00. It is difficult to interpret the figures on the offer form but they appear to have contemplated that the plaintiff was in addition to have turned in the car which he then owned as a trade-in, at an agreed value of $545.18. However, this appears to have no bearing on the issues. A space on the form headed "vehicle condition and remarks" was left blank at this stage. The reverse side of the form contained a full page of "conditions" in small-print. Among other things the conditions purported to exclude application of the Consumer Product Warranty and Liability Act. There is no suggestion in the evidence that the reverse side of the offer was ever read by or drawn to the attention of the plaintiff in discussions between the parties.
[5] Mr. Siddall left the room and shortly returned with one Goguen, the defendant's general sales manager. Mr. Goguen told the plaintiff that his offer was not high enough and that they would require "$200.00 more" than the offer made. The plaintiff told them that $6,000.00 was his limit and left the premises.
[6] The following morning, Wednesday the 15th, Mr. Siddall phoned the plaintiff, indicated that the defendant might accept the offer, and requested the plaintiff to return. The plaintiff visited Siddall at his office and was told by him that the defendant would accept the offer subject to the condition that there would be no warranty as to condition of the vehicle and that it would be the responsibility of the plaintiff to ensure that it was in satisfactory condition before "putting the money on the table". The plaintiff indicated that he would accept on those terms, whereupon the salesman wrote on the original offer form in the blank space referred to earlier: "At reduced price customer assumes
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responsibility for any repairs - As is condition". A copy of the offer was given to the plaintiff for use in arranging financing through his bank and the car was turned over to the plaintiff pending completion of the transaction.
[7] The plaintiff testified that the following day, Thursday the 16th, he noticed a "puddle" of oil from the car in his driveway; that, regardless, he had not looked under the car nor had either then or subsequently had any mechanic or other person check the car out; that he had phoned Siddall that evening to advise of a small delay in obtaining financing and had mentioned to him the oil leak; that the salesman had suggested that it was "probably minor anyway, not to worry" and to bring in the car the next day "and they'd fix it up".
[8] The following day, Friday, the plaintiff, having obtained funds from his bank, visited Siddall to complete the transaction. The plaintiff testified that he again mentioned the oil leak and had been told that "the shop is busy" but to "bring the car in on Monday morning and they'd fix up". The plaintiff then paid the purchase price of $6,000.00 and was given a receipt for the payment and the registration. The plaintiff says that at this time he had advised Mr. Siddall that he would be going to St. George for the week-end but that nothing had been suggested about care of the car or checking further any possible leak problem.
[9] The plaintiff and his wife left for St. George to visit relatives the same afternoon. The plaintiff testified that after passing Saint John en route the car had stalled on one occasion; that he had stopped at the next garage where it was found that the oil in the engine was down 2 1/2 litres; that he had driven at moderate speed and had at no time observed the oil warn-
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ing light on; that he had subsequently checked the oil at intervals and was obliged to add another litre before reaching St. George; that he had returned to Moncton on Sunday evening; and that over the whole return trip he had been obliged to add 6 or 7 litres in total.
[10] Early Monday morning the plaintiff went in the car to see Mr. Sidall and told him of the oil problem. The latter checked the oil and found it again to be down 1 or 1 1/2 litres. The car was taken into the shop, raised on a hoist, and checked by the defendant's mechanics, who found that the rear main oil seal required replacement. This repair would apparently involve several hours work.
[11] The plaintiff testified that Mr. Siddall then left the shop and went to the showroom; that after a few minutes he returned and advised him that "they were not going to fix the car"; that Siddall had expressed regret but told him that Mr. Goguen had so directed and that "maybe (the plaintiff) should speak to" someone higher up; that Siddall had also told him that if he were willing to pay half the costs the defendant would assume responsibility for the balance; and that he had remonstrated that "that was not the deal", whereupon Mr. Siddall had replied that "he knew that was the deal but they weren't prepared to repair the car".
[12] The plaintiff then went home but returned after lunch. The plaintiff testified that he had then seen Mr. Goguen to whom he explained his understanding that the car would be fixed; that Goguen had replied that the "only way they would fix would be on a 50-50 cost sharing basis" and if this were not agreeable to the plaintiff that
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they would "give his money back" and sell the vehicle to someone else; that he had indicated that he would take his money back; that Goguen had then told him that one Blakney, the defendant's used car manager, was "away till Wednesday" and that he should return the vehicle on that day; and that on the assumption that his money would be returned he had gone later the same day to another dealer where he had purchased another 1980 used car.
[13] The plaintiff further testified that on the Wednesday morning he again attended at the defendant's premises where he was introduced by Siddall to Blakney; that Siddall had explained the problem of the oil leak to Blakney and that he had undertaken to repair the vehicle on the assumption that it was "just a minor leak"; that Blakney had then taken the position that the plaintiff was bound by what he described as a "curb and gutter" (when you cross the curb, you got 'er) agreement and that they would not either repair the vehicle or return the purchase price. The plaintiff had then placed the vehicle's keys on the desk and indicated he would consult a lawyer. The Thunderbird was left at the defendant's premises - where it has since remained - and the plaintiff retrieved and departed in his former car which he had left there.
[14] The plaintiff's wife testified that she had been present, inter alia, at the meeting with Mr. Goguen and that he had then instructed her husband to "wait till Wednesday when Blakney comes back to get his money back". Her evidence also tends to confirm the difficulties with the oil level and the stalling on the "720 km trip St. George and return."
[15] One Power, who was not in any way connected with the purchase, was also called as a witness on behalf of the plaintiff. He testified that on the
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Wednesday morning, the 22nd, while purchasing a set of tires for his own vehicle from the defendant, he had parked next to a Thunderbird car in the yard; that when it became necessary for the defendant to pick up another set of tires the defendant's employee with whom he had been dealing, took the Thunderbird to fetch the other set of tires; that when he asked the employee if the vehicle was for sale, he had been told that "somebody else had purchased it" and that there were "problems" with the car. While it was very possible the same Thunderbird, the evidence is somewhat short of establishing that fact and I attach no importance to it in resolving the issues between the parties.
[16] Mr. Siddall's version of what occurred does not differ greatly from that of the plaintiff although there is a little difference in emphasis. He testified that on the evening of the 14th he had referred the plaintiff's offer to Mr. Goguen; that he had told the plaintiff that his "boss" would not accept but that he would refer the $6,000.00 offer to the used car manager next day; that on the 15th, when the plaintiff had returned, he had told him that Blakney would accept $6,000.00 but only on condition that there would be no warranty and that he had advised the plaintiff to "take the vehicle and have it checked over as no warranty"; that he had at that time given him use of the vehicle for the purpose of having it checked and made that purpose clear; that on Thursday when the plaintiff called to advise that he would not have a cheque till Friday the plaintiff had replied to his query whether or not the car had yet been checked that he had referred to "only one thing" viz., that there were "a couple of drops of oil in the driveway where the car was parked"; that he had advised the plaintiff to have it checked and that if it were a "major thing they will not fix at that price" but that "if it were a valve cover gasket or something minor, there would be no problem"; that the plaintiff had replied that he "would ima-
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gine that it was something minor", that after the cheque had been paid on Friday the plaintiff had again mentioned an oil leak and he had replied that it was "kind of late now"; that when the plaintiff had indicated he was going to St. George he (the witness) had said that it appeared to be only a small oil leak and "shouldn't bother anyone"; that the way the plaintiff had explained the problem to him it appeared to be "just a natural seepage"; that on the Wednesday he had related to Blakney in the plaintiff's presence what had occurred and that Blakney had told the plaintiff "there was nothing we can do"; that on the Thursday he had told the plaintiff to bring the car in on Friday but only to have it "looked at" with no undertaking to have it "fixed up"; that when on Friday he had said he was going to St. George he presumed the plaintiff had had the car checked over as he had said the car "checked out alright".
[17] Mr. Goguen testified that when on the 14th he had offered the car to the plaintiff for $6,200.00 the plaintiff had said "No, a union representative always gets his own way" and had then departed; that the plaintiff's wife had not been present at any of the discussions with him and he had met her only at discovery; that he had told the plaintiff on Monday, the 20th, that if he were not agreeable to sharing the cost of repair his money would be returned if the car were returned in the same condition, but that "if you want your money back you'll have to see Blakney".
[18] Mr. Blakney testified that he had originally approved for Mr. Siddall the sale at $6,000.00 but subject to the condition of "no warranty"; that on the 22nd he had told the plaintiff
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that if he wanted his money back he "would have to see MacDonald", the defendant's proprietor, who was at the time away; and that the car had not at any time been inspected.
[19] It is difficult to have very much sympathy for either of the parties. Both seem to have been intent on trying to outsmart the other. Together they have let a $200.00 problem grow into a much larger one. The plaintiff, who seems to have fancied himself somewhat as a negotiator, was out to drive a hard bargain, whatever the risk to himself. For surely no reasonable person would undertake to make a $6,000.00 purchase of an automobile on an "as is" basis without having it checked over in some degree by a mechanic or some other person, and particularly where he had reason to believe that there might be an oil leakage problem. His speed in closing the deal so quickly seems to have been motivated largely by a desire to drive a car of that particular variety to St. George for the weekend. Indeed his unreasonableness makes somewhat suspect his account of any undertaking given to him by the salesman, and in particular the degree of emphasis he may have placed on the importance of the oil leak which he had detected.
[20] On the other hand, one must question how a car with a defect as serious as a badly-leaking main oil seal could be offered on the market to the public. Evidence on discovery indicates that it had been on the defendant's lot for about three weeks. I accept essentially the plaintiff's account of the difficulties he had in maintaining a proper oil level on the trip to St. George. There is nothing in the evidence to suggest misuse or abuse of the vehicle by the plaintiff on that trip or even how, had there in fact been misuse, such could have been related to the giving out of the oil
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seal. One can only conclude that the seal was just as defective when the car was sold to the plaintiff as it was when it was determined so to be some days later.
[21] It is obvious here, and the plaintiff so acknowledges, that when on the 15th he offered to pay $6,000.00 for the car he appreciated that he would be accepting it on an "as is" basis and with any warranties provided by the Consumer Product Warranty and Liability Act (hereinafter "the Act") waived. Such a waiver is of course contemplated by s. 25(l) of the Act. The sale was not in fact consummated at that time because the defendant, through its salesman, fully contemplated that the plaintiff could withdraw his offer should the plaintiff discover any defect up to the time of paying the purchase price.
[22] Purchase on an "as is" basis and with waiver of the benefits of the Act was still essentially the basis of the agreement when the plaintiff took delivery and paid the purchase price on the 17th. The only question here for resolution is whether or not that agreement was modified at that time by the giving of a warranty that the oil problem would be rectified. The existence of the problem had been pointed out to the salesman on the 16th and again when the money was paid. The plaintiff had been told that the car would be examined in the shop on Friday and then was told to bring it in at the first of the week. I am satisfied, under the circumstances, that such a warranty was given and that the plaintiff was entitled to assume that the car would be repaired. I am also satisfied that there was no intention on the part of the plaintiff, should the problem turn out to be other than a minor one, to waive that implied warranty prescribed by s. 10(1)(a) of the Act that the car would be fit for the purpose of use as an automobile. The existence of the defective oil seal amounted to a breach of the implied
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warranty and the failure to repair amounted to a breach of the express warranty which I have found was given.
[23] The Act provides, by s. 16(1), that in such event a buyer may reject the product, which he has here done, and that in such further event, under s. 17 he may recover from the seller any payments he has made and also any damages he has suffered. Section 19(1)(a) provides that payments on the price shall be deemed to include any finance charges or other credit costs reasonably incurred. The evidence indicates that the plaintiff has paid $6,000.00 and has incurred financing charges amounting to 13 1/2% on that amount since June 17, 1983.
[24] It is my finding that the plaintiff is entitled to enter judgment against the defendant in the sum of $7,148.00. The plaintiff is also entitled to solicitor's costs in the sum of $1,080.00, (representing that amount allowed under scale 2 of the tariff for an "amount involved" of $6,000.00) together with his disbursements, which latter may be taxed if not agreed upon.
Judgment for plaintiff.
Editor: Catherine M. Bowlen
Case comment on this decision
The decision in this case was appealed.
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