Urdea v. Technique Auto Sales Corporation Date:, 2011 BCPC 4

Citation: Urdea v. Technique Auto Sales Corporation Date: 20110111 2011 BCPC 0004 File No: 10-31523 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: CAMELIA URDEA CLAIMANT AND: TECHNIQUE AUTO SALES CORPORATION DEFENDANT REASONS FOR JUDGMENT OF HIS WORSHIP DARRELL W. ROBERTS Appearing in person: Camelia Urdea Appearing for the Defendant: M. Elahi Place of Hearing: Vancouver , B.C.

Date of Hearing: November 24, 2010 Date of Judgment: January 11, 2011 [ 1 ] The Claimant seeks damages from the Defendant for the cost of a warranty on a 2004 BMW X5 motor vehicle (BMW) purchased by her from the Defendant on May 5, 2010 in the amount of $4,505.76 plus an additional amount identified as reimbursement for not being able to purchase what she thought she was getting in a 2012 bumper to bumper warranty on the BMW. On the face of the Notice of Claim, the claim appears to be one in breach of contract.

However, on examination it is a claim for damages for negligent misrepresentation. [ 2 ] In the evidence provided both in the Trial Statements and orally at the hearing, the vehicle in question was advertised on the Internet by the Defendant as a 2004 BMW X5 3.01, low price, low km, and a hot deal that included a “2012 bumper to bumper warranty”. [ 3 ] The Claimant says she first attended at the premises of the Defendant having seen the internet ad and spoke with a salesperson named Kevin, who assured her more than once, that the BMW did indeed have a bumper to bumper warranty, that it was a factory extended warranty that was valid until 2012.

She says she was told by Kevin that the warranty was purchased by the Defendant for the vehicle on behalf of a previous customer and that it would last until 2012 or 140,000 km, whichever came first. She says as well that she was told by salesperson Kevin that the warranty was fully transferable to her if she purchased the vehicle, and she would have the warranty coverage until 2012.

[ 4 ] It is her evidence that she was provided with a copy of the extended warranty that had been purchased. A copy is contained in her Trial Statement and it sets out the information as to the former purchaser of the BMW, the vehicle information, the deductible of $100, the length of protection, 72 months or 140,000 km whichever occurs first, that it is a new vehicle policy, and the policy price of $5,179, together with GST and PST for a total of $5,437.95.

However, the document itself does not identify when the 72 months of protection commenced, or when it expires. [ 5 ] The Claimant testified that she paid a $1,000 deposit on May 5, 2010 for the BMW and received a copy of the bill of sale dated this date from the Defendant. A copy of this document is also included in the Defendant’s Trial Statement. It identifies the total selling price for the BMW of $20,500 plus a small fee for documentation, plus tax, for a total delivery price of $23,240, against which the down payment of $1,000 is noted, leaving a balance payable of $22,240 (Contract of Sale).

The full balance was paid on May 10, 2010. [ 6 ] The contract of sale for the BMW is stamped on the left side: “No implied warranty including any implied warranty of merchantability or fitness for a particular purpose applies to this vehicle”. [ 7 ] The Claimant testified that the salesperson Kevin drew a clear distinction between the factory extended warranty advertised on the internet which he said would be transferred to her and the implied warranty stamp.

Indeed, she says Kevin assisted her in completing a form for the transfer of the factory extended warranty that had been purchased by the previous owner of the BMW, and so on May 10, 2010, the Claimant completed the purchase of the BMW by paying the balance of the purchase price and completing the warranty transfer form with the assistance of the Defendant’s salesperson, Kevin. [ 8 ] The Claimant then says, however, that on May 12, 2010 she called the warranty company identified in the transfer form to find out the details about mailing the document to them and was told in that telephone call that the extended factory warranty policy had expired on May 6, 2010, one day after she entered into the contract of sale.

She testified that she then brought this matter to the attention of the salesperson Kevin, who said he did not know that it had expired. She testified that Kevin then talked to his boss, identified as Mr. Elahi, who said the Defendant would give her a warranty if she paid for half of it. She says she declined this offer and asked to be provided with the warranty which had been represented as accompanying her purchase of the BMW.

At this point, she says there was nothing firm decided upon by the Defendant; it was a case of they would see what they could do. [ 9 ] On May 14, 2010, the Claimant says she drove from Chilliwack, where she lived, to Vancouver to speak again to the salesperson and to his boss at the Defendant’s place of business and found that the warranty that they would provide to her was not a two - year bumper to bumper warranty. It was a very basic warranty covering only engine gaskets and was in all respects inferior. She says that the Defendant manager, Mr.

Elahi, who attended in Court for the Defendant, said the Defendant would not provide the extended warranty in the internet advertising, that it was a mistake, and that the Defendant was protected from her claim or position by the stamp in the contract of sale that said there was no implied warranty and no implied warranty of merchantability. [ 10 ] On May 28, 2010, the Claimant attended again at the premises of the Defendant and this time offered to return the vehicle for a full refund, to which offer the Defendant declined.

She says all the Defendant was willing to offer was a substandard warranty for which she would have to pay half. [ 11 ] Turning to the evidence on behalf of the Defendant, the only person attending the hearing was Mr. Elahi. The salesperson Kevin was not in attendance. Throughout the hearing Mr. Elahi took the position that the stamp on the contract of sale that there is no implied warranty or warranty of merchantability meant that the Claimant knew she was buying the BMW without any warranty. Throughout the hearing the Mr.

Elahi made this stamp the centrepiece of the Defendant’s defence. [ 12 ] At the hearing, the Claimant’s friend, Mr. Nicolae Puscasiu, also testified.

He said he attended with the Claimant on every occasion that she was at the Defendant’s premises in the purchase of the 2004 BMW and he confirmed her evidence in every respect, as to the conversations she had with the salesperson Kevin including all of the assurances that the extended warranty coverage on the BMW that had been purchased by the prior owner lasted until 2012 and would be transferred to the Claimant as part of the purchase transaction. [ 13 ] Returning to the evidence of Mr.

Elahi, he confirmed that the Defendant had indeed advertised the BMW as having bumper to bumper warranty coverage until 2012, that the coverage in the advertising was that which had been purchased by the previous owner, as in the document contained in the evidence of the Claimant, and that he only learned the warranty had expired when told this by the Claimant on May 12, 2010. [ 14 ] In my finding of the facts, I accept the evidence of the Claimant, both her oral testimony and the evidence contained in her Trial Statement. It was consistent throughout and is confirmed in every particular by the evidence of Mr.

Puscasiu. I also accept the evidence of Mr. Elahi as to his acknowledgement that the vehicle was advertised as having a 2012 bumper to bumper extended warranty and that he first learned it had expired when told by the Claimant. [ 15 ] Otherwise, I do not accept Mr. Elahi’s evidence where it conflicts with that of the Claimant.

I particularly do not accept that the implied warranty stamp on the contract of Sale has any relevance to the matter in question, which is whether or not the Defendant throughout this transaction represented to the Claimant that the extended warranty coverage lasting until 2012 or 140,000 km. as purchased by the previous owner, would go with the BMW and all that needed to be done was to have it transferred to the Claimant by a simple instrument of transfer without any additional payment. [ 16 ] While the extended warranty coverage is not a specific term of the contract of sale, I accept that it was a representation made by the Defendant to the Claimant on which she relied, and as it turns out, was incorrect. [ 17 ] Thus the claim of the Claimant is one for negligent misrepresentation in inducing her to purchase the BMW on the basis that it had extended warranty coverage to 2012 when by the exercise of reasonable care they ought to have known that the warranty coverage they advertised was about to expire on May 6, 2010 the next day after the claimant’s attendance on May 5, 2010, 6 years after the manufacture of the vehicle. [ 18 ] I find that the Defendant owed a duty of care to the Claimant to use reasonable care in the representations which it made about

the BMW that it offered for sale and that it breached that duty in representing that it carried extended warranty coverage called bumper to bumper coverage until 2012, and that this representation was material and induced the Plaintiff to purchase the vehicle. The Claimant testified that the Defendant’s representation was essential in her decision to buy the BMW and to pay the purchase price of $23,240. By reasonable diligence, the Defendant had the means of knowledge to learn the true facts that the warranty was set to expire on May 6, 2010, and thus avoid the representation.

Damages [ 19 ] The Claimant seeks to measure damages by reference to a plan for warranty coverage called “Extra Care Plus Plan provided by Warranty Canada Direct” in the amount $4,505.76, which includes a base amount plus an inspection fee and sales tax; see page 4 of her Trial Statement. She says that this is the closest warranty she would be able to purchase as a private buyer.

She testified it is reasonably close to the represented warranty and I did not hear the Defendant dispute this. [ 20 ] However the Claimant then seeks to add to this amount the additional of sum of $482.73, being a pro rata portion of the cost of the promised extended warranty coverage which she contends she lost since is was not provided to her. It seems to me this is a misunderstanding of what she has lost. The purpose of the warranty is protection for the cost of defects. She has suffered none for the past six months since the transaction closed on May 10, 2010.

Therefore, the Claimant has not suffered a financial loss during this 6 month period of time and cannot be compensated for what she has not lost. [ 21 ] In reviewing the alternative warranty programs that are set out in the Claimant’s Trial Statement, the Defendant argues that the Claimant should be content with a warranty provided by Global Warranty for 24 months or 40,000 km, the unexpired kilometres on the intended warranty, with a $5,000 per claim limit. The cost of this warranty is $1,799.

However, the Claimant contends and the Defendant does not contest otherwise that it does not provide the same coverage; it is not close to the BMW extended warranty coverage represented to her. In particular, she is not content with the $5,000 limit on any one claim which was not part of the represented extended warranty coverage. [ 22 ] What then, is the true measure of the Claimant’s loss? It is not the original cost of the warranty coverage represented to her. That cost was $5,437.95, the sum paid by the previous owner.

However, there is no evidence that such coverage was now available to her from that warranty provider. [ 23 ] Nor is that cost the $1,799 price quoted by Global Warranty for inferior warranty coverage that is limited to $5,000 per claim. [ 24 ] The answer appears to be provided by the quotation given to the Claimant by Warranty Canada Direct for an Extra Care Plus Plan at a cost of $4,505.76.

However, there should be an appropriate amount deducted for the six month period of time from the date of the purchase of the vehicle to the hearing date, to be precise six months and 14 days that the vehicle appears to have been claim free. Taking this approach, the time remaining for the coverage that was represented is 18 months which is three quarters of the represented coverage period.

This results in a pro rata cost of extended warranty coverage of $3,379.32. [ 25 ] In my opinion there can never be perfect compensation in a case of this kind nor is it required in cases of breach of contract or negligent misrepresentation. The goal is always one of reasonable compensation for the injury suffered. [ 26 ] It is my holding that the sum of $3,379.32 is reasonable compensation for the Claimant for the Defendant’s negligent representation, and I do not find that there is any basis on the evidence to hold the Claimant contributory negligent.

I therefore order that she is entitled to damages in this amount from the Defendant, plus her filing and service costs. ________________________ Darrell W. Roberts, Q.C. Adjudicator