VanWart v. MacDonald et al.
New Brunswick Court of Queen's Bench
Trial Division
Judicial District of Saint John
151 N.B.R. (2d) 129; 387 A.P.R. 129; 151 R.N.-B. (2e) 129
Reproduced with permission of Maritime Law Book Ltd.,
which claims copyright in the headnote and indexing.
Maritime Law Book Ltd. Summary
A purchaser sued to rescind a contract for the purchase of a used car and to recover damages. The New Brunswick Court of Queen's Bench, Trial Division, rescinded the contract, and awarded the purchaser $2,339 in damages plus costs and reasonable disbursements.
Consumer Law -- Topic 1608
Sale of goods -- Distributor -- What constitutes -- The New Brunswick Court of Queen's Bench, Trial Division, concluded that a person who regularly purchased cars at a low price intending to sell them for a quick profit was a distributor under the New Brunswick Consumer Product Warranty and Liability Act -- See paragraphs 1 to 14.
Consumer Law -- Topic 1724
Sale of goods -- Statutory warranties -- Of durability -- A purchaser sued a car distributor to rescind an automobile purchase contract and recover damages -- The distributor, who had purchased the car as junk, misrepresented to the purchaser that it had belonged to his wife, worked great, was reliable, etc. -- The car's engine had serious problems -- The distributor refused a refund, but offered to have his mechanic replace the engine provided the purchaser paid half the cost -- The purchaser's sales receipt was marked "as is, where is" -- The New Brunswick Court of Queen's Bench, Trial Division, allowed the action, where the distributor had breached the implied warranty under the Consumer Product Warranty and Liability Act that the car would be durable for a reasonable period of time.
Practice -- Topic 9769
Small claims -- Costs -- A plaintiff succeeded in a small claims action for the rescission of a contract and damages -- The action required more than usual pretrial preparation -- Both sides were represented by counsel -- An examination for discovery was held -- The trial lasted over half a day with ten witnesses -- The New Brunswick Court of Queen's Bench, Trial Division, awarded the plaintiffs solicitor's costs and reasonable disbursements -- See paragraphs 20 to 22.
Words and Phrases
Distributor -- The New Brunswick Court of Queen's Bench, Trial Division, discussed the definition of "distributor" as used in the Consumer Product Warranty and Liability Act, S.N.B. 1978, c. C-18.1 -- See paragraphs 1 to 14.
Statutes Noticed
Consumer Product Warranty and Liability Act, S.N.B. 1978, c. C-18.1, ss. 1(1) [para. 1]; 12(1), 12(2) [para. 15].
Interpretation Act, R.S.N.B. 1973, c. I-13, s. 17 [para. 3].
Authors and Works Noticed
Oxford English Dictionary [para. 2].
Counsel
Frank Longstaff, for the plaintiff;
Eric L. Teed, Q.C., for the defendants.
This case was heard on July 14, 1994, before McLellan, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Saint John, who delivered judgment on July 26, 1994.
[1] McLellan, J.: The plaintiff seeks to rescind a contract for the purchase of a used car and to recover damages. A major issue is whether the seller was a "distributor" as defined by the Consumer Product Warranty and Liability Act, S.N.B. 1978, c. C-18.1. If the seller was a "distributor" within the meaning of that Act, then that Act would apply to the transaction. That Act gives a buyer significant legal rights. It defines "distributor" as follows:
"1(1) In this Act
. . . . .
"'distributor' means a person who supplies consumer products as part of his regular business and, without limiting the generality of the foregoing, includes a producer, processor, manufacturer, importer, wholesaler, retailer or dealer."
[2] I note that the Oxford English Dictionary defines "retailer" as follows:
"A retail trader or dealer; one who sells goods in small quantities."
[3] In interpreting the intention of the legislature, the Interpretation Act directs that:
"17. Every Act and Regulation and every provision thereof shall be deemed remedial, and shall receive such fair, large and liberal construction and interpretation as best ensures the attainment of the object of the Act, Regulation or provision."
[4] The plaintiff Tara Lynn VanWart who is 19, with the assistance of her parents bought a 1987 Firefly automobile on Monday, December 13, 1993 in Saint John after responding to a newspaper advertisement as follows:
"Firefly. 1987, 3 cylinder automatic, low milage, 3-door hatchback, very good condition, runs excellent, super gas milage, $2,400. 738-8735."
[5] The person Miss VanWart bought the car from was the defendant Kerry MacDonald, a steel fabricator at Saint John Shipbuilding, whose home telephone number is 738-8735. In discussions with Miss VanWart's parents and with Miss VanWart, Mr. MacDonald had led them to believe that the car had been his wife's car for a long time. During the discussions leading up to the sale. Mrs. MacDonald says she "didn't pay much attention" and was "in and out".
[6] Mrs. VanWart says that Mr. MacDonald told her and Mr. VanWart that the car "belonging to his wife", "worked great", was "easy on gas", "reliable" and "used on a daily basis". Mrs. MacDonald says that she told them that she "operated it", "it worked fine" and "I drove it to town all the time". At the time the sale was completed Mrs. MacDonald says she told Miss VanWart "it's a good little car - drives good".
[7] Shortly after the purchase, Miss VanWart discovered that the car's engine had serious problems and was consuming about a litre of oil per day. About ten days later Ms. VanWart asked for her money back from Mr. MacDonald. He refused and was unwilling to replace the engine unless it was done by his mechanic and Miss VanWart paid half the cost.
[8] Further investigations revealed that by a transaction begun on December 6, 1993 and completed on December 8, 1993 Mr. MacDonald had bought the car from Brett Chev Olds for a total, including G.S.T. and P.S.T. of $1,267.09. In an attempt to bar the operation of the Consumer Product Warranty and Liability Act to that sale, on the bill of sale Mr. MacDonald had signed below the following conspicuous statement: This vehicle is junk. There is no expectation of driving this vehicle.
[9] Thus Mr. MacDonald owned the vehicle for about five days before the sale was completed to Miss VanWart on December 13, 1993. During that time Mr. MacDonald says "I had my mechanic go over the car ... He comes to my home." The person that Mr. MacDonald called "his mechanic" is Ronald Williston, a licensed motor vehicle mechanic. Mr. MacDonald says he had Mr. Williston replace brake pads on this car. After Mr. and Mrs. MacDonald discussed the sale of the car with Mr. and Mrs. VanWart on December 11, 1993, Mr. and Mrs. MacDonald say the car was parked until it was delivered at the completion of the sale on December 13, 1993.
[10] Thus it appears that Mrs. MacDonald may have had the use of the car in question for about three days, from December 8 until December 11, 1993, except when it was having its brakes fixed or had to be available to be shown to prospective purchasers.
[11] Mr. MacDonald says he trades cars as a hobby and that what he gets out of it is that he always has a car for his wife to drive. He emphasizes that it is just a hobby and that he does not have the tax exempt status of a dealer. Although he apparently does not keep accounting records, he says that "over the course of a year I don't make anything". He emphasizes that he is not in the business of selling used cars and that it is only a hobby. He says "if I was in the business, I'd sell 30 or 40 a week".
[12] Mr. Keary Coyle, the used car sales manager for Brett Chev Olds, says that Mr. MacDonald "buys from us ... at a reduced price". During the previous year Mr. Coyle says that Brett has sold eight other vehicles to Mr. MacDonald. Mr. Tom Walton, the supervisor of motor vehicle registrations, presented some 13 print-outs of different motor vehicle registrations to Mr. MacDonald in 1993. I note that such registration records would not disclose any vehicles that he might have sold on informal consignment from other people.
[13] Mr. MacDonald explains that a couple of those 13 vehicles are owned by other people but are registered in Mr. MacDonald's name "to keep insurance down". For example, he says that he does that for his brother who he says has "three impaired driving convictions and can't afford insurance".
[14] In the circumstances I am very hesitant to attach any weight to anything said by Mr. or Mrs. MacDonald. On all of the evidence before me, I am convinced on a balance of probabilities that Mr. MacDonald bought the Firefly car at a low price intending to sell it quickly at a profit to a consumer. In my opinion his course of conduct of regularly doing that is sufficient to label him for this case as a retailer of used cars and thus as a distributor within the meaning of the Consumer Product Warranty and Liability Act. Accordingly, that Act applies to this transaction.
[15] The Consumer Product Warranty and Liability Act includes the following:
"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 purpose of subs. (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."
[16] On the evidence before me, I am not satisfied that the engine of the car was durable for a reasonable period of time. In view of the various oral representations by Mr. and Mrs. MacDonald as to the car, contrasted by the evidence of the lady who had traded it in to Brett's Chev Olds and the evidence of Miss VanWart and the garageman she took it to, I attach no significance to the words "as is, where is" on the receipt dated December 13, 1993 for $2,000.
[17] In my opinion Miss VanWart gave Mr. MacDonald a reasonable opportunity to rectify the breach.
[18] The car was used by Miss VanWart until about the end of January, 1994. She had expenses for extra oil estimated at $26.88 which I think roughly offset the advantage of having the car, such as it was. In my view, she cannot claim reimbursement for the insurance she had on the car, because she had the protection and the benefit of that insurance while she was able to drive the car.
[19] In the circumstances, I will allow rescission of the contract of sale of the car and award judgment to Miss VanWart against Mr. MacDonald for the amount paid for the car according to sales tax records which is $2,000, plus for the sales tax paid of $220 and transfer fee of $8, being a subtotal of $2,228. As the car has not been driven for six months, I also allow simple interest at 10% for six months or $111, for a total of $2,339.
[20] With regard to costs, I note that an action for debt or damages of up to $3,000 can be filed under the Small Claim Rule. Solicitor's costs are not usually allowed under that rule.
[21] Here there was a need for much more pretrial preparation than is usually the case in claims of this size and both sides were represented by counsel. There was an examination for discovery and a trial that lasted more than half of a day with ten witnesses. Thus this strikes me as an appropriate case to allow costs to Miss VanWart against Mr. MacDonald. I allow her solicitor's costs on scale 3 in the amount of $550 and reasonable disbursements. Mrs. VanWart cannot be compensated for her time on this matter. I do not allow costs to Mrs. MacDonald, who was represented by the same lawyer as her husband.
[22] For these reasons there will be judgment for the plaintiff Tara Lynn VanWart against the defendant Kerry MacDonald rescinding and terminating the sale of the Firefly car and awarding her judgment against him of $2,339, with costs of $550 and reasonable disbursements.
Judgment for the plaintiff.
Editor: Gary W. McLaughlin