McGouey v. Lawson Motors Ltd.
(1982), 42 N.B.R. (2d) 225; 110 A.P.R. 225
New Brunswick Court of Queen's Bench, Trial Division
Judicial District of Saint John
Barry, J.
September 24, 1982
(S/C/1829/81)
Reproduced with permission of Maritime Law Book Ltd.,
which claims copyright in the headnote and indexing.
Maritime Law Book Ltd. Summary
The plaintiff brought an action against the defendant used car dealer for rescission on the sale of a used car, which collapsed from rust seven weeks after the sale. The New Brunswick Court of Queen's Bench, Trial Division, allowed the action.
Sale of Goods -- Topic 4105
Conditions and warranties -- Implied or statutory terms of quality or fitness -- Duties of seller -- The New Brunswick Court of Queen's Bench, Trial Division, held that under the Consumer Product Warranty and Liability Act, R.S.N.B.1973, c. C-18.1, the seller of a used car had a duty to inspect the car before sale and was not entitled to rely upon a government inspection sticker on the car -- See paragraph 10.
Sale of Goods -- Topic 4107
Conditions and warranties -- Implied or statutory terms of quality or fitness -- Durability -- The New Brunswick Court of Queen's Bench, Trial Division, granted rescission of the sale of a used car, where the car collapsed from rust seven weeks after the sale.
Cases Noticed
Gallant v. Larry Woods Used Cars Ltd. (1982), 42 N.B.R.(2d)
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262; 100 A.P.R. 262, dist. [para. 11] .
Statutes Noticed
Consumer Product Warranty and Liability Act, R.S.N.B. 1973, c. C-18.1, ss. 4, 5, 7, 10, 12, 14, 15, 16, 17, 19(1) [para. 9].
Counsel
Harry G. Colwell, for Wendy McGouey;
W.S. Reid Chedore, for Lawson Motors Ltd.
This case was heard on September 22, 1982, at Saint John, N.B., before BARRY, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Saint John, who delivered the following judgment on September 24, 1982:
[1] Barry, J.: On September 24, 1980, the plaintiff, then 18 years of age, purchased a 1975 Pontiac Astra from the defendant for $1,745.55. She borrowed the money to buy the car, as she had just finished grade 12 and started to work.
[2] Her sister Judy and Judy's boyfriend, William Babineau, were with her when she inspected the vehicle. All were under 21 years of age.
[3] Ray Greenlaw was the salesman for the defendant and he had no personal knowledge of the car except to say that it was a good car at a good price with nothing wrong with it. He believed what he said and in fact the defendant or its employees did not know that the so-called "frame" of unibody construction was so rusted that in less than 3,000 miles and six-seven weeks after the purchase, the spring shackles in the rear perforated the floor of the car rendering it inoperable, which it still is.
[4] Miss McGouey wants her money back by an order for rescission of the contract plus the cost of certain repairs, snow tires, and interest of $576.00 on the borrowed money.
[5] The car is now at the premises of the defendant where it was towed on March 11, 1981, or thereabouts. It is almost worthless now. One witness, Clayton Daye, a very experienced independent witness and body repairman, described a Pontiac Astra (a Chevrolet Vega is the same car) as the most terrible car ever made or at least one of the worst. Mr. Keyes of the defendant company naturally denies this statement, but I prefer Daye's assessment. What happened to the car in question has happened so often, and to some Chrysler Valiants as
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well, that a special part is now available to replace the rusted-out frame, which I prefer not to call a frame as I know one. It is a piece of molded body metal, according to the witnesses.
[6] When this car was traded in to the defendant on July 1, 1980, it had an "inspection sticker" of recent origin required by the N.B. Government annually. Any person who relies on any such sticker is ill-advised, but the defendant did not put the car on a lift to check the rusted condition of the under connections and the rust must have been there in 1980 and visible. It did not develop in eight weeks to the point of collapse. If Mr. Daye would expect it, why not the defendant, which dealt in these cars? Many things are common knowledge in any trade, and the defendant company is anything if not experienced in the new and used automobile business.
[7] The only express guarantee or warranty on the car was a (50/50) warranty and a 30 day power train warranty. The defendant offered to repair the car at a total cost of about $300.00 on a 50/50 basis but the plaintiff could not afford this deal and wanted the contract cancelled.
[8] We now come to a rather new statute, c. C-18.1, R.S.N.B. 1973, but assented to on June 28, 1978. It is called Consumer Product Warranty and Liability Act. At common law the plaintiff could not succeed, but under this statute very strict obligations and liabilities were placed on certain vendors.
[9] I will quote some of the applicable sections:
4(1) In every contract for the sale or supply of a consumer product the following statements are express warranties given by the seller to the buyer:
(a) any oral statement in relation to the product that the seller makes to the buyer, unless the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the seller's statement;
(b) any written statement in relation to the product that the seller makes to the buyer, whether or not the buyer relies on the statement, unless the circumstances show that it would be unreason-
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able for him to rely on the statement; and
(c) any statement in relation to the product, however made, that the seller makes to the public or a portion thereof, whether or not the buyer relies on the statement, unless the circumstances show that it would be unreasonable for the buyer to rely on the statement.
4(2) The seller shall be deemed to have made any statement
(a) made by his agent or employee, unless he proves that the agent or employee was not acting within the scope of his actual, usual or apparent authority; or
(b) made in writing on the product or its container or in a label, tag, sign or document attached to, in close proximity to, or accompanying the product, unless he proves that the statement was made by another person who was not a distributor of the product and that he neither knew nor ought to have known that the statement was made.
4(3) Where a statement was made in a manner or circumstances that it appears that the statement was made by the seller, it shall be presumed that the statement was made by the seller unless he proves that it was not his statement.
4(4) In this section
(a) "makes" includes causes to be made;
(b) "statement" means a promise or representation of fact or intention that is made before or at the time of the contract.
5 Where there is a written contract, oral and other extrinsic evidence is admissible in any court to establish an express warranty notwithstanding that it adds to, varies or contradicts the written contract.
7 An express warranty does not exclude or restrict an implied warranty provided by this Act.
10(1) Subject to subsection (2), in every contract
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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.
10(2) There is no implied warranty under paragraph (1)(a)
(a) as regards any defect that is known to the buyer before the contract is made;
(b) as regards any defect that the seller has reason to believe exists and that he discloses to the buyer before the contract is made;
(c) if the product is a used product and the buyer examines it before the contract is made, as regards any defect that the examination ought to reveal;
or
(d) if there is a sale or supply by sample, as regards any defect that a reasonable examination of the sample ought to reveal.
12(1) In every contract for the sale or supply of a consumer product there is an implied warranty given by the seller to the buyer that the product and any components thereof will be durable for a reasonable period of time.
12(2) In determining a reasonable period of time for the purposes of subsection (1), regard shall be had to all relevant circumstances, including the nature of the product, whether it was new or used, its use as contemplated by the seller and buyer at the time of the contract, its actual use and whether it was properly maintained.
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14(1) Where the seller is in breach of a warranty provided by this Act, the buyer shall give him a reasonable opportunity to rectify the breach, unless
(a) the buyer is unable to do so, or is unable to do so without significant inconvenience; or
(b) the breach is a major breach.
15 Where the seller is in breach of a warranty provided by this Act, the buyer may recover damages for any loss that he has suffered because of the breach and that was reasonably foreseeable at the time of the contract as liable to result from the breach.
16(1) Where the seller is in breach of a warranty provided by this Act and does not rectify the breach pursuant to any opportunity that the buyer gives him under section 14 or otherwise, the buyer may reject the product if he does so within a reasonable time after he discovers the breach and he discovers the breach not later than sixty days after delivery of the product.
16(a) [sic] Notwithstanding that the buyer discovers the breach later than sixty days after delivery of the product, where the breach is a major breach the buyer may reject the product if he does so within a reasonable time after he ought to have discovered the breach.
17(1) Subject to subsections (2) and (3), where the buyer rejects the product pursuant to section 16, he is released from his obligations under the contract and may recover from the seller any payments that he has made on the price and damages for any other loss that he has suffered because of the breach and that was reasonably foreseeable at the time of the contract as liable to result from the breach.
19(1) For the purposes of sections 17 and 18, payments on the price shall be deemed to include
(a) any finance charges or other credit costs that the buyer has reasonably incurred in relation to the product, whether paid to the seller or to another person; and
(b) any consideration that the buyer gives to the seller, whether or not it is money.
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[10] I consider that the rusted frame was a major breach of warranty entitling the plaintiff to reject or rescind the contract. Under the statute, it is my opinion that there is an obligation on vendors of consumer products to take all reasonable inspection steps and they are not entitled to rely on a so-called "safety sticker" which could be little less than a joke depending on the inspector. Of course, some inspection stations are above reproach and can be relied upon, but there is nothing to stop an owner from replacing very good tires with very poor ones immediately after inspection. There is nothing in the Act entitling a dealer to rely on such a sticker.
[11] The latest case reported is Gallant v. Larry Wood Used Cars Ltd. (1982), 38 N.B.R.(2d) 262; 100 A.P.R. 262, where Dickson, J., rejected a claim on a similar fact case, but where the car was sold on an "as is -- where is" basis. He found, in effect, that Gallant had overused the car without due care and it had 100,000 miles on it. In the instant case, the plaintiff is a young girl driving back and forth from work with one trip to Sussex only. The facts are clearly different.
[12] I have no hesitation in imposing liability on the defendant. The purchase price was proven at $1,745.55. The finance interest rate of 21.5% was admitted. The plaintiff had the use of the car for nearly 3,000 miles for which I allow $300.00 reduced by the $80.00 for new snow tires now held by the defendant. Rounding the figures off, I direct that judgment be entered in favour of the plaintiff against the defendant in the sum of $1,500.00 plus interest from September 30, 1980, at 21.5% plus costs. The amount involved I fix at $2,000.00.
Judgment for plaintiff.
Editor: David C.R. Olmstead
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