Yao v. Terminal Avenue Automotive Ltd., 2023 BCPC 144

Citation: Yao v. Terminal Avenue Automotive Ltd. 2023 BCPC 144 Date: 20230619 File No: 2270729 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: WEI QIN YAO CLAIMANT AND: TERMINAL AVENUE AUTOMOTIVE LTD. DBA PORSCHE CENTRE VANCOUVER DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE D. BOBLIN Appearing on their own behalf: W. Yao Counsel for the Defendant: T. Pearce Place of Hearing: Vancouver, B.C. Dates of Hearing: March 23, 24 and May 1, 2023 Date of Judgment: June 19, 2023 INTRODUCTION

INTRODUCTION [ 1 ] The Claimant, Wei Qin Yao, is suing the Defendant, Terminal Avenue Automotive Ltd. dba Porsche Centre Vancouver, for losses she incurred arising out of her purchase of a used 2014 BMW435i xDrive Coupe (the "Vehicle") from the Defendant. [ 2 ] In a civil trial, the burden of proof is on the Claimant to prove her case on a balance of probabilities. [ 3 ] The Claimant alleges that the Defendant made fraudulent misrepresentations in the written Motor Vehicle Purchase Agreement (the “Purchase Agreement”) which would allow her to rescind the Purchase Agreement and receive a refund of the entire purchase price of $28,000.

The Claimant also seeks reimbursement for expenses related to vehicle towing, vehicle inspection, a company search and filing and service fees, for a total claim of $28,669.84. [ 4 ] The alleged fraudulent misrepresentations in the Purchase Agreement are an incorrect odometer reading; a declaration that the Vehicle had not been registered outside British Columbia; and a declaration that the Vehicle had not sustained damages requiring repairs over $2000. [ 5 ] The Claimant also alleges that the Vehicle did not correspond to its description, was not safe and suitable for transportation, and was not reasonably durable, which is contrary to the implied warranties found in ss. 17 and 18 of the Sale of Goods Act, R.S.B.C. 1996, c. 410 (the “ SGA ”). [ 6 ] The Defendant does not dispute that they made errors in filling out the Purchase Agreement by failing to note that the Vehicle had previously been registered in Ontario and by providing an odometer reading that was 362 km too low.

There is also no dispute that the Vehicle underwent a repair when owned by the previous owner after the Vehicle hit a curb, and the cost of the repair exceeded $2000. [ 7 ] The Defendant argues, however, that the Claimant does not have a valid claim for rescission and has no basis for damages for misrepresentation.

Additionally, the Defendant argues that the Vehicle was reasonably durable, fit for its purpose, and corresponded with its description when sold, such that there is no basis for contractual damages pursuant to the SGA . [ 8 ] The Defendant provided me with the following authorities in support of their position, which I have reviewed and considered in making my decision: Brar v. Sunrise Service Ltd ., 2013 BCPC 317 ; Clayton v. North Shore Driving School , 2017 BCPC 198 ; Kuczerpa v. Jim Pattison Industries Ltd ., 2000 BCSC 1327 ; Peters v. Econo Car Centre Ltd ., 2003 BCPC 286 ; Sugiyama v.

Pilson , 2006 BCPC 265 ; Zhang v. Tsai , 2017 BCCA 371 ; Bruce MacDougall, Misrepresentation and (Dis)Honest Performance in Contracts (2nd ed); Business Practices and Consumer Protection Act , S.B.C. 2004, c. 2, ss. 4 – 10; Motor Dealer Act , R.S.B.C. 1996, c. 316, s. 13 ; Motor Dealer Act Regulation , B.C. Reg. 447/78, ss. 21 – 23; and Sale of Goods Act , R.S.B.C. 196, c. 410, ss. 17 – 18. EVIDENCE AT TRIAL [ 9 ] At trial, I heard testimony from six witnesses. The Claimant and her daughter, Xin Ran Lu, testified in support of the claim.

For the Defendant, I heard from Michael Hwang, who was the Preowned Sales Manager at Porsche Centre Vancouver at the material time; Geng (David) Zhao, the Sales Executive at Porsche Centre Vancouver who sold the Claimant the Vehicle; Peter Wong, the General Sales Manager at Porsche Centre Vancouver; and Dr. Deke Botsford, the previous owner of the Vehicle.

The parties also filed a Joint Book of Documents as an Exhibit at trial, which the witnesses identified and discussed during their testimony. [ 10 ] Included in the Joint Book of Documents at Tab 15 is an Automotive Expert Opinion Report prepared by John Hall (“Hall”). The Claimant did not dispute Hall’s opinion or his qualifications to give it. She agreed in a Document Agreement signed by the parties on March 13, 2023 and filed as Exhibit 1 that Hall’s report is admissible as opinion evidence without the need for Hall’s presence at trial and she did not lead any expert evidence in her own case.

I have reviewed Hall’s qualifications, as set out at paragraph one of his report and in his curriculum vitae attached to his report as Appendix C, and I am satisfied that he is qualified to give the opinion he provided in this case. COMMENTS ON THE WITNESS’ TESTIMONY [ 11 ] Generally, all the witnesses testified in a relatively clear and straightforward manner and my impression was they were all doing their best to be accurate and forthcoming.

In any event, this is not a case where my decision turns on my assessment of the credibility of the witnesses and the reliability of their testimony because there is no material dispute between the parties about what happened in this case. Rather, the dispute arises in relation to the legal inferences I am asked to draw based on the evidence. FACTS [ 12 ] The evidence at trial establishes the following facts: [ 13 ] On November 28, 2020, the Claimant purchased the Vehicle from the Defendant. The purchase price was $28,000. [ 14 ] The Vehicle was previously owned by Dr.

Deke Botsford, an orthopaedic surgeon who lives in Campbell River, BC. Prior to Dr. Botsford owning the Vehicle, it belonged to his mother, who lived in Ontario. Dr. Botsford inherited the Vehicle when his mother passed away in 2018 and had it shipped to and registered in BC in 2019. Dr.

Botsford traded in the Vehicle to the Defendant in the fall of 2020. [ 15 ] On intake and prior to the Claimant’s purchase of the Vehicle, the Defendant conducted a physical inspection, test drive and cosmetic inspection, and reviewed a CarFax report for the Vehicle, in accordance with their established practice for intake of used vehicles. There were no issues noted with the Vehicle.

In particular, the CarFax report did not reveal any accident or damage records for the Vehicle or any repairs over $2000. [ 16 ] In addition, on November 12, 2020, the Defendant sent the Vehicle to The BMW Store for a 1 Hour Safety Inspection and

Vehicle Health Check. It is the Defendant’s practice to send off-brand vehicles to a certified shop that specializes in those vehicles, rather than perform the inspection on​site. The inspection by The BMW Store did not reveal any problems with the Vehicle. [ 17 ] The Defendant’s Sales Executive David Zhao (“Zhao”) handled both the trade in and the sale of the Vehicle to the Claimant.

On or about November 14, 2020, he posted an advertisement on social media that described the Vehicle as follows: “2014 BMW 435i, no accident, local car with one set of snow tires and rims; low mileage 26,600 km; price $28,995”. [ 18 ] The Claimant’s husband reached out to and communicated with Zhao expressing interest in the Vehicle. Thereafter, the Claimant and her husband were both involved in the purchase and in communications with Zhao. [ 19 ] On November 20, 2020, the Claimant and her husband both participated in a test drive of the Vehicle around their neighbourhood.

There were no noticeable issues with the Vehicle during the test drive. [ 20 ] At the time of the test drive, Zhao provided the Claimant with the last page from The BMW Store 1-Hour Safety Inspection and the Vehicle's CarFax report dated November 5, 2020. [ 21 ] At the time of purchase, the Vehicle was no longer under the 4-year manufacturer's warranty, which was known to the Claimant; however, the Vehicle was sold with a 90-day powertrain warranty and a three day/300 km exchange policy.

The Defendant also offered the Claimant the option to buy an extended warranty from a third party, but she declined to do so. [ 22 ] The Claimant drove the Vehicle for 9 and ½ months after purchase with no problems. Then, on September 9, 2021, the Vehicle stopped working. The Claimant took the Vehicle to a mechanic shop, Auto West BMW, to be inspected on or around September 11, 2021. Auto West BMW told the Claimant that the engine had seized and would need to be repaired or replaced. The Claimant declined to do so.

The odometer reading, as shown on the Auto West BMW Report, was 29,922 km. [ 23 ] The Claimant advised the Defendant about the problems with the engine, but as her 90-day powertrain warranty had expired, the Defendant did not offer her any repair or return. [ 24 ] In his Automotive Expert Opinion Report, Hall opined that of three possible causes for the Vehicle’s engine failure, the most likely or probable cause is a manufacturer’s defect in the oil pump and/or crankshaft bearings.

ANALYSIS Rescission of the Purchase Agreement [ 25 ] The first issue I must resolve is whether the Claimant is entitled to rescission of the Purchase Agreement. For rescission to be an available remedy in this case, the Claimant must establish the following requirements ( Zhang v. Tsai , 2017 BCCA 371 , at para. 31 ): a. A positive misrepresentation must have been made by the Defendant; b. The representation must have been of an existing fact; c. The representation must have been made with the intention that the Claimant should act on it; d.

The representation must have induced the Claimant to enter into the contract; e. The Claimant must have acted promptly after learning of the misrepresentation to disaffirm the contract; f. No innocent third parties must have acquired rights for value with respect to the contract property; and g.

It must be possible to restore the parties substantially to their pre-contract position. [ 26 ] The first four requirements can be more succinctly stated as requiring an operative misrepresentation; that is, a statement intentionally made by the representor that is false and material, which is communicated to the representee, who reasonably relies on the statement as one reason to enter into the contract. [ 27 ] Reliance means that the representation must have induced the Claimant to enter into the contract.

Inducement has two parts: that the representation is material in the objective sense that a reasonable representee might rely on it, and that the misrepresentation has been relied on by the representee as one reason for having entered the contract concerned.

The inability of the Claimant to satisfy any one of these four requirements will preclude any relief for her for an operative misrepresentation in the contracting process (Bruce MacDougall, Misrepresentation and (Dis)Honest Performance in Contracts (2nd ed.), at pages 73 – 74, page 212). [ 28 ] In this case, I find that none of the misrepresentations in the Purchase Agreement were operative misrepresentations, for the following reasons.

The Odometer Reading [ 29 ] The first fraudulent misrepresentation the Claimant alleges the Defendant made involves an incorrect odometer reading for the Vehicle recorded in the Purchase Agreement as 26,506 km, which is 362 km lower than the reading recorded on the ICBC Certificate of Insurance. [ 30 ] The Defendant does not dispute that they made an error in recording the odometer reading in the Purchase Agreement because they failed to update the information they recorded in their system about the Vehicle’s odometer reading at intake.

I find that the odometer reading was a misrepresentation; however, it was not an operative misrepresentation, in my view, because I find that the Defendant did not intend that the Claimant would rely on the incorrect odometer reading recorded in the Purchase Agreement. Rather,

the recording of the odometer reading as 26,505 km was simply a mistake in the Defendant’s preparation of the Purchase Agreement. The evidence establishes that the Vehicle’s odometer reading was recorded differently in the online advertisement (26,600 km), The BMW Store Inspection Report (26,735 km), the Purchase Agreement (26,506 km), and the ICBC Insurance Certificate (26,868 km), all of which were available to the Claimant before or at the time of purchase. [ 31 ] In addition, the difference between the odometer readings in the Purchase Agreement and the ICBC Insurance Certificate was only 362 km.

While I accept that mileage is a factor purchasers of used vehicles consider, the difference in mileage here is insignificant, only 1.3% of the total mileage on the Vehicle, which difference I find is insufficient to be objectively material in the context of a used vehicle. [ 32 ] The Claimant has failed to establish that “the representation must have been made with the intention that the Claimant should act on it,” as required for rescission to be a remedy available to her. [ 33 ] Furthermore, I find that the Claimant did not rely on the odometer reading recorded in the Purchase Agreement in deciding to purchase the Vehicle.

In other words, the Vehicle's odometer reading having been recorded as 362 km lower than it was did not induce the Claimant to purchase the Vehicle. I make that finding because w hen the Claimant purchased ICBC insurance for the Vehicle on November 28, 2020, at the dealership, before she took possession of the Vehicle, she learned that the correct odometer reading was 26,868 km. She agreed in cross examination that she understood at that time that the reading on the ICBC Certificate was the correct mileage.

More importantly, she agreed that she was “okay” with that mileage amount and testified that the mileage amount as recorded on the ICBC Certificate did not affect her decision to purchase the Vehicle.

Her testimony that she would not have continued with the purchase of the Vehicle if she had known there was a disparity between the odometer readings recorded on those two documents is not persuasive. [ 34 ] The Claimant has failed to establish that “t he representation must have induced the Claimant to enter into the contract,” as required for rescission to be a remedy available to her. [ 35 ] Finally, the evidence establishes that when the Claimant learned about the incorrect odometer reading in the Purchase Agreement, she did not take any steps to disavow the Purchase Agreement, return the Vehicle, avail herself of the opportunity to exchange the Vehicle within the first three days, or otherwise rethink her decision to purchase the Vehicle.

On the contrary, the Claimant took possession of the Vehicle and drove it for 9 and ½ months until the engine seized and only then did she raise any concerns about the Purchase Agreement. [ 36 ] The Claimant has failed to establish that she “ must have acted promptly after learning of the misrepresentation to disaffirm the contract,” as required for rescission to be a remedy available to her. Registration Outside of British Columbia [ 37 ] The second allegedly fraudulent misrepresentation involves a declaration that the Vehicle had not been registered outside British Columbia.

In the Purchase Agreement, under Vehicle Declarations, in response to the question, “Has the Vehicle ever been registered outside British Columbia?” the Defendant ticked the box marked “No”. [ 38 ] The Defendant does not dispute that this was another error on the document, because the vehicle had been registered in Ontario.

However, I find that this misrepresentation is not an operative misrepresentation because the evidence establishes that Zhao told the Claimant’s husband that the Vehicle had been previously owned in Ontario before the Claimant made her decision to purchase the Vehicle. [ 39 ] A WeChat communication at Tab 12 of the Joint Book of Documents shows that Zhao had a conversation with the Claimant’s husband via WeChat on November 21, 2020.

In that conversation, the Claimant’s husband expressly asked Zhao if the Vehicle came from Ontario and Zhao told the Claimant’s husband that the Vehicle had been purchased in Ontario and was brought to BC by the previous owner. [ 40 ] The evidence at trial establishes that the Claimant’s husband was involved with the Claimant in all aspects of the purchase of the Vehicle, including the initial contact with Zhao, the test drive, conversations with Zhao via WeChat, and sale price negotiation.

The Claimant and her daughter both testified that the purchase of the Vehicle was a big decision for the family and one that the Claimant made with a great deal of care and consideration. The Claimant testified that she knew her husband was communicating with Zhao and was content to have him do that, because she trusted him to get the information.

I have difficulty accepting her testimony that her husband did not pass on the information about the Vehicle having been registered in Ontario to her; however, if he did not, there is no evidence that the Defendant had any knowledge of that fact. [ 41 ] In any event, information about the Vehicle’s origin in Ontario was clearly set out in two places on the front page of the CarFax report that Zhao gave the Claimant prior to the purchase, a copy of which is found at Tab 2 of the Joint Book of Documents.

Therefore, even if I accept the Claimant’s testimony that her husband did not pass on the information to her, it was recorded in the CarFax report and available to her. [ 42 ] I find that the misrepresentation in the Purchase Agreement was not made with the objective intention that the Claimant would act upon it, because from the Defendant’s perspective, the Claimant knew about the Vehicle's history in Ontario already, whether from her husband, the CarFax report, or both.

In addition, because the Claimant knew or would have known about the Vehicle’s history in Ontario if she read the CarFax report, I also find that she did not rely on the error in the Purchase Agreement in deciding whether to purchase the Vehicle. [ 43 ] The Claimant has failed to establish either that “the representation must have been made with the intention that the Claimant should act on it,” or that “ t he representation must have induced the Claimant to enter into the contract,” as required for rescission to be a remedy available to her.

The Prior Repair [44] The third allegedly fraudulent misrepresentation involves a declaration in the Purchase Agreement that the Vehicle had notsustained damages requiring repairs over $2000. In the Purchase Agreement, under Vehicle Declarations, in response to the question,“Has the Vehicle sustained damages requiring repairs totalling more than $2000?” the Defendant ticked the box marked “No”. [45] The Defendant argues that this declaration is not a false statement or a misrepresentation at all, because the Purchase Agreementstates that the dealer is answering the questions set out in the Vehicle Declarations

section ''to the best of knowledge and belief” and theDefendant had no knowledge of any prior repairs to the Vehicle over $2000. I agree. [46] It was only after the engine seized that the Claimant found an invoice tucked inside the owner's manual in the Vehicle thatdescribed a prior repair to the Vehicle performed by Seymour Services on March 18, 2019. The invoice amount is $2,446.36 andindicates that repairs were performed after the Vehicle “hit a curb” when the Vehicle had 14,366 km on the odometer. Dr.

Botsfordtestified that he was leaving the icy parking lot of the hospital one day after work when the Vehicle slid into and hit a curb at slow speed. [47] There is no evidence that Dr. Botsford told the Defendant about the invoice or the repair when he traded-in the Vehicle. On thecontrary, Dr. Botsford testified that although he does not recall specifically, he likely did not inform the Defendant, as he did not considerit to have been an accident which required disclosure.

He testified further that he paid for the repair out of pocket, and he also did notinform ICBC because he did not consider it to have been a collision. As a result, the prior repair did not show up on the CarFax reportunder the "Accidents/Damage" section. There is an entry on the CarFax report under "Service History" from March 18, 2019, whichreads "Two wheel alignment performed Wheel bearing(s)/hub(

s) replaced”; however, there is no cost of this service indicated becauseCarFax reports do not typically show the cost of items under "Service History". [48] Michael Hwang, the Preowned Sales Manager at Porsche Centre Vancouver when the Vehicle was traded-in and sold to theClaimant, testified that the use of CarFax reports to determine the history of used vehicles is standard in the used car industry. Mostbranded dealerships and about 90% of used car dealers use CarFax reports.

CarFax reports tell them if the vehicle has any liens,accidents, where it has been serviced, and whether it has been registered in the United States. It is a very detailed report and the mostreliable source of information in the resale market.

The Defendant obtains the most extensive CarFax report available (the top tier of fourtiers) and considers them reliable, because the information comes directly from ICBC for vehicles registered in BC, and from othervehicle insurers in other provinces. [49] The Defendant’s witnesses all testified that they did not know about the prior repair despite having obtained the CarFax reportand having the Vehicle inspected by The BMW Store. Neither report indicated a prior repair over $2000.

The Defendant’s witnesses andHall all testified that, to their knowledge, an accident that was not reported to ICBC would not show on the CarFax report. Thus, at thetime of the sale of the Vehicle, the Defendant was unaware of the invoice or the repair, other than what is noted on the CarFax report,which lists it as a "service" with no dollar amount. [50] I am satisfied that the Defendant conducted all investigations required prior to selling the Vehicle to say truthfully that theVehicle had not undergone prior repairs over $2000, to the best of their knowledge and belief.

The Claimant has failed to establish that “apositive misrepresentation must have been made by the Defendant.” [51] In the alternative, if I am wrong and this misrepresentation or any of the misrepresentations are operative misrepresentations, theClaimant has not established that rescission of the Purchase Agreement is a remedy available to her, for two other reasons. [52] First, the last element required for rescission is that the parties can be restored substantially to their pre-contractual positions.

Inthis case, the Claimant had use of the Vehicle for 9 and ½ months and the Vehicle is now in a significantly different state than it wasprior to the purchase; therefore, this is not a case where rescission is appropriate. [53] Second, if any operative misrepresentations were made, they can only be categorized as innocent misrepresentations, in my view.As I will discuss in more detail shortly, there is no evidence that the Defendant made any of the misrepresentations in the PurchaseAgreement fraudulently or negligently. [54] In Kuczerpa v.

Jim Pattison Industries Ltd., 2000 BCSC 1327, at paras. 17 – 18 and 22 – 23, the court held that rescission is anavailable remedy for innocent misrepresentation only where the innocent misrepresentation goes to the substance of the good, not merelythe quality. [55] The court said, at paragraph 18: In Ruscheinsky v. A. Spencer & Co., (BC SC), [1948] 2 W.W.R. 392 (B.C.S.C.), Mr. Justice Coady said, at p. 396: ... The principle may be found in many cases to the effect that innocent misrepresentation is not a ground for rescission of an executedcontract.

There is one well-recognized exception to that principle, however, and this case, it seems to me, clearly falls within thatexception.

Spencer Bower on Actionable Misrepresentation at p. 251, in discussing the general principle referred to the above and theexceptions thereto, says:- The exception in question relates to those cases in which, though there has been no fraud or mala praxis, there has been amisrepresentation lead to error in substantialibus, or "essential error," that is to say, where the representee has received under the contractsomething totally different, in substance and nature, from that which was represented.

Kerr on Fraud, p. 115, says: A misrepresentation made through honest mistake ... is not a ground for rescinding a transaction, unless the subject-matter be different insubstance from what it was represented to be. In cases where a contract is sought to be rescinded on the ground of fraud, it is enough toshow a fraudulent representation as to any part of that which induced the party to enter into the contract which he seeks to rescind; but

where there has been an innocent misrepresentation or misapprehension, it does not authorize a rescission, unless it be such as to show that there is a complete difference between what was represented and what was taken, so as to constitute a failure of consideration. [ 56 ] In this case, none of the alleged misrepresentations go to the substance of the Vehicle; rather, they go only to its quality – mileage, whether it had previously been registered out of province, and whether there was a prior repair over $2000.

This is not a case where there is a “complete difference” between what was represented by the Defendant and what was sold to the Claimant, in my view, so as to constitute a failure of consideration. [ 57 ] In sum, for all the above reasons, the Claimant has failed to establish on a balance of probabilities that: 1) There was an operative misrepresentation made in the Purchase Agreement; 2) If there was an operative misrepresentation, she acted to disavow the Purchase Agreement immediately upon learning of it; 3) If there was an operative misrepresentation, it is possible for the parties to be restored substantially to their pre​ contractual positions; and 4) If there was an operative misrepresentation, it was not merely innocent and/or that it went to the substance, not the quality of the Vehicle. [ 58 ] The Claimant is not entitled to rescission of the Purchase Agreement and a return of the purchase price of the Vehicle.

DAMAGES FOR FRAUDULENT OR NEGLIGENT MISREPRESENTATIONS [ 59 ] Having found that the Claimant is not entitled to rescission of the Purchase Agreement, the second issue I must determine is if she is entitled to tort damages due to the alleged misrepresentations.

The Claimant is entitled to damages if she can establish that the misrepresentations were not only operative, but also fraudulent or negligent. [ 60 ] Because I have found that none of the misrepresentations made in this case are operative misrepresentations, that should be the end of the analysis; however, in the event I am wrong, I will discuss briefly whether the Claimant has shown that the misrepresentations are fraudulent or negligent. [ 61 ] The tests for both negligent and fraudulent misrepresentation are set out in Clayton v.

North Shore Driving School , 2017 BCPC 198 , at para. 122 . [ 62 ] To establish fraudulent misrepresentation, the Claimant must prove the following: (

a) the wrongdoer must make a representation of fact to the victim; (

b) the representation must be false in fact; (

c) the party making the representation must have either known it was false or made it recklessly without knowing whether it was true or false; and (

d) the victim must have been induced by the representation to enter into the contract. [ 63 ] The Claimant has not proven the necessary elements for fraudulent misrepresentation because there is no evidence that the Defendant made any of the misrepresentations at issue in this case knowing they were false, or made them recklessly without knowing whether they were true or false. [ 64 ] On the contrary, the evidence establishes that the misrepresentations in the Purchase Agreement in relation to the odometer reading and the Vehicle’s origin were simply drafting errors.

With respect to the representation in the Purchase Agreement about there being no prior repairs over $2000, the evidence establishes that the Defendant was diligent in investigating the Vehicle’s history and did not know the representation was inaccurate at the time of the sale. I find that the prior repair was not known to or discoverable by the Defendant by resort to any information available to them at the time of the sale. Dr.

Botsford testified that he most likely did not and would not have told the Defendant about the prior repair because he did not think that the repair arose out of an accident or collision.

Furthermore, the invoice the Claimant found in the Vehicle long after the sale was not out in the open or easy to find; rather, it was tucked inside the Owner’s Manual and there is no evidence that either the Defendant or The BMW Store found the invoice upon inspection of the Vehicle. [ 65 ] There is no support in the evidence for the Claimant’s submissions that the Defendant knew about the repairs and misled her on purpose, or that they falsified the truth about the car repair details, or that they made the declarations without doing any research. [ 66 ] There is no evidence to support her suspicion or theory, raised for the first time in closing submissions, that the Defendant sold the Vehicle to another customer and then allowed that customer to return the Vehicle to them pursuant to the Defendant’s three day/300 km exchange policy just before she bought it and hid that information from her.

Notably, that theory was not put to any of the Defendant’s witnesses in cross examination and so none of them had an opportunity to comment on it. [ 67 ] In addition, as I have explained, the evidence establishes that the Claimant did not rely on any of the misrepresentations in the Purchase Agreement in deciding to purchase the Vehicle. In other words, she was not induced by any of the misrepresentations to enter into the Purchase Agreement. [ 68 ] To establish negligent misrepresentation, the Claimant must prove the following: (

a) there must be a duty of care based on a "special relationship" between the representer and the representee;

(

b) the representation in question must be untrue, inaccurate, or misleading; (

c) the representer must have acted negligently in making said misrepresentation; (

d) the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and (

e) the reliance must have been detrimental to the representee in the sense that damages resulted. [ 69 ] The Claimant has also not proven the necessary elements for negligent misrepresentation. Negligence involves conduct on the Defendant’s part that falls below the standard of care expected of a used car dealership. Although the Defendant made mistakes in filling out the Purchase Agreement, they do not rise to the level of negligence, in my view.

The incorrect odometer reading in the Purchase Agreement was a mistake that was not significant given that it involved a difference of 1.3% of the correct Vehicle mileage as reported on the ICBC Insurance Certificate. In addition, the Claimant knew the correct odometer reading on the date of purchase.

The misrepresentation about the Vehicle’s origin in Ontario was rectified when Zhao told the Claimant’s husband about it and because it was set out in the CarFax Report provided to the Claimant prior to the Vehicle purchase. [ 70 ] With respect to the inaccurate statement about any prior repairs to the Vehicle over $2000, Hall opined in his unchallenged expert report that the Defendant conducted its due diligence prior to selling the Vehicle. [ 71 ] He said, at page 3, para. 3b: In my opinion, Terminal Avenue Automotive would have been unaware if there were any defects with the Vehicle as they carried out due diligence with the sales and vehicle maintenance history.

They utilized Carfax information and documentation which did not show any defects or concerns. Terminal Ave being a Porsche main dealer and experts in the Porsche brand then sought more proof of the Vehicle's condition by utilizing the BMW Store (who is a BMW main dealer and expert in the BMW brand) to inspect and evaluate the Vehicle's condition prior to the sale. The BMW Store would have been aware of any outstanding Technical Service Bulletins (TSBs) or Recalls that may have affected the Vehicle.

The VIN would have been entered into the BMW database automatically when the Vehicle was booked in for the inspections. The inspections did not flag or record any concerns with the Vehicle. These actions displayed a high level of professionalism and future customer care by Terminal Avenue. The Vehicle had a mechanical repair due to the previous owner hitting a curb. The components were replaced and installed correctly by Seymour Services (a professional generic service center) in Campbell River, B.C. The previous owner paid for the repair privately and this repair was not reported to ICBC.

Therefore, the repair did not show on the Carfax report as a concern. [ 72 ] Hall concluded, at page 7: Terminal Ave sold a low kilometer used vehicle in very good condition on November 28, 2020. There were also no open recalls or technical service bulletins issued for the Vehicle.

Therefore, it is my opinion that Terminal Ave carried out due diligence in the sale of the Vehicle. [ 73 ] Again, the evidence I accept establishes that the Claimant did not rely on any of the misrepresentations in the Purchase Agreement in deciding to purchase the Vehicle. [ 74 ] Moreover, even if the Claimant could prove reliance, there is no evidence that the Vehicle's odometer reading, previous registration status, or prior repair caused the engine failure.

On the contrary, about the prior repair in particular, Hall wrote, at page 3 of his report: I contacted Seymour Services to ascertain the type of impact that the Vehicle sustained. I was informed that the Vehicle hit a curb and sustained damage to the steering and suspension components. It is my opinion that this damage could not have caused the engine failure as the Vehicle’s kilometres was recorded at 14,366 km at the time of the repair at Seymour Services. At the time of the Vehicle’s engine failure the odometer reading was 29,921 km.

Therefore, the Vehicle was driven 15,555 km after the repair at Seymour Services.

If the damage which was repaired at Seymour Services affected the engine, the engine would have most likely failed within a few hundred kilometres. [ 75 ] Given that there is no proof that the alleged misrepresentations caused the Claimant’s loss, the Claimant has not shown that reliance on them was detrimental to her in the sense that damages resulted. [ 76 ] Based on witnesses’ evidence at trial and Hall’s expert opinion, I find that the Defendant met the standard expected of a used vehicle dealership in investigating the history of the Vehicle. [ 77 ] The Claimant has not established that she is entitled to tort damages due to the alleged misrepresentations in the Purchase Agreement.

BREACH OF IMPLIED WARRANTIES UNDER THE SGA [ 78 ] The third issue I must resolve is whether the Claimant is entitled to contractual damages for breach of implied warranties under ss. 17 and/or 18 of the SGA .

Section 17 of the SGA [ 79 ] Section 17(1) provides that “In a contract for the sale or lease of goods by description, there is an implied condition that the goods must correspond with the description.” [ 80 ] In my view, the Claimant has failed to establish that the Vehicle did not correspond with its description in the online

advertisement, or any other description the Defendant gave about the Vehicle orally or in writing. [ 81 ] In Clayton v. North Shore Driving School , 2017 BCPC 198 , Giardini PCJ discussed the meaning of s. 17(1) of the SGA and, at para. 92, she set out the test for whether goods correspond with the description, as outlined in Ashington Piggeries v.

Hill [1972], A.C. 441 at 503 – 504 as follows: Whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the ground that their failure to correspond with that part of what was said about them in the contract makes them goods of a different kind from those he had agreed to buy. [ 82 ] The advertisement described the Vehicle as a “2014 BMW 435i, no accident, local car with one set of snow tires and rims; low mileage 26,600 km; price $28,995.” Nothing the Defendant said about the Vehicle thereafter was inconsistent with the description in the advertisement.

The Claimant takes issue with the statements “local car,” “26,600 km” and “no accident” in the advertisement. [ 83 ] Zhao testified that “local car” means the car is registered in British Columbia at the time it is advertised for sale. The “local car” description in the advertisement was true. Dr.

Botsford registered the car with ICBC in BC in 2019, when he had the Vehicle shipped from Ontario, well before he took it to the Defendant as a trade-in. [ 84 ] Zhao also testified that the description “26,600 km” in the online advertisement was a rough estimate he used before he knew the Vehicle’s actual odometer reading.

In my view, although not exact, the information in the advertisement was sufficiently similar to, or in the range of, the different odometer readings recorded during the material time, all of which were known by or available to the Claimant prior to or at the time of purchase, such that the mileage description in the advertisement corresponded to the goods. [ 85 ] Regarding the “no accident” comment in the advertisement, the prior mechanical repair over $2000 is insufficient to establish that the Vehicle was “of a different kind,” or did not correspond to the description provided, in my view.

That is particularly so given that the repair was set out in the CarFax report, albeit in the Service History

section as opposed to the Accidents/Damage section. The entry in the CarFax report was, "Two wheel alignment performed Wheel bearing(s)/hub(

s) replaced,” which is accurate information that was available to the Claimant prior to her decision to purchase. [ 86 ] The Claimant has failed to establish that there was a breach of the implied warranty under s. 17 of the SGA .

Section 18 of the SGA [ 87 ]

Section 18 of the SGA provides: Subject to this and any other Act , there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale or lease, except as follows: (

a) if the buyer or lessee, expressly or by implication, makes known to the seller or lessor the particular purpose for which the goods are required, so as to show that the buyer or lessee relies on the seller's or lessor's skill or judgment, and the goods are of a description that it is in the course of the seller's or lessor's business to supply, whether the seller or lessor is the manufacturer or not, there is an implied condition that the goods are reasonably fit for that purpose; except that in the case of a contract for the sale or lease of a specified

article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose; (

b) if goods are bought by description from a seller or lessor who deals in goods of that description, whether the seller or lessor is the manufacturer or not, there is an implied condition that the goods are of merchantable quality; but if the buyer or lessee has examined the goods there is no implied condition as regards defects that the examination ought to have revealed; (

c) there is an implied condition that the goods will be durable for a reasonable period of time having regard to the use to which they would normally be put and to all the surrounding circumstances of the sale or lease; (

d) an implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade; (

e) an express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent with it. [ 88 ] The implied conditions set out in s. 18 of the SGA , in combination, require the Vehicle to be reasonably fit for its purpose, of merchantable quality, and durable for a reasonable period of time, having regard to the use to which the Vehicle would normally be put and all the surrounding circumstances of the sale. Their application to used vehicles that later suffer from mechanical breakdowns was discussed in Sugiyama v.

Pilsen , 2006 BCPC 265 , at paras. 44 – 46 , where Gulbransen PCJ said: 44 The three warranties implied by s.18 all address different aspects of the same issue regarding the sale of a used car. That is, a used vehicle that has a major breakdown shortly after being purchased, may not have been reasonably fit for the purpose for which it was bought. It may also mean that it was not of merchantable quality when it was sold and that it was not durable for a reasonable period of time. 45 Very much depends upon the particular circumstances of the case.

The dealer who sells a used car is not a guarantor of the car's future performance. Anyone buying a used car knows that some problems will inevitably occur. The older a car is and the more kilometres it travels, the more likely it is that something will break down. 46 Thus, the often quoted words of Lord Denning M.R. in Bartlett v Sydney Marcus Ltd , [1965] 2 All E.R. 753 (Eng.

C.A.) , illustrate how limited the "warranty of fitness" may be for a used car: (at p.755) A second hand car is "reasonably fit for the purpose" if it is in a roadworthy condition, fit to be driven along the road in safety, even though it is not as perfect as a new car.

Applying those tests here, the car was far from perfect. It required a good deal of work to be done on it, but so do many second hand cars. A buyer should realize that, when he buys a second hand car, defects may appear sooner or later; and, in the absence of an express warranty, he has no redress.

Even when he buys from a dealer the most that he can require is that it should be reasonably fit for the purpose of being driven along the road. [ 89 ] Gulbransen PCJ then set out a non-exhaustive list of factors to be considered in assessing the extent of any implied warranty as to fitness, quality and durability for a used vehicle, including: the age of the motor vehicle; the number of kilometres on the odometer; nature of use by prior owners; the price paid by the purchaser; the use made of the car after purchase; the reason for any defective performance or breakdown; and the expectations of the parties as evidenced by any express warranties ( Sugiyama v.

Pilsen , at para. 59 ). [ 90 ] The Vehicle in this case was seven years old when sold and eight years old when the engine seized. Mileage was 26,868 km on the date of sale. The price paid was $28,000. There is no evidence that use of the Vehicle by the prior owners caused the engine failure. None of these factors significantly affects my assessment of the extent of any implied warranty as to fitness, quality and durability, in relation to the used Vehicle.

Rather, they are neutral factors, in my view. [ 91 ] The factors that have more significance are the expectations of the parties as evidenced by any express warranties, the use made of the car after purchase, and the reason for any defective performance or breakdown. [ 92 ] The only express warranty I have evidence of in this case is the 90-day powertrain warranty the Defendant gave the Claimant on the date of purchase.

Given that the Vehicle lasted approximately three times longer than that warranty, I am unable to find that the Claimant’s expectations in relation to this warranty were not met. [ 93 ] There is no evidence that the Claimant made use of the Vehicle after purchase in any way that contributed to its breakdown. On the other hand, it is significant that the Claimant drove the Vehicle without any issues for 9 and ½ months after purchase and well beyond the term of the 90-day powertrain warranty. [ 94 ] The most important factor in my analysis is the reason for the engine failure.

Hall's unchallenged expert opinion is that the most likely cause of the engine failure is a manufacturer's defect in the oil pump and/or crankshaft bearings . He opined that this defect would not have been detectable to the Defendant when the Vehicle was sold.

Hall observed at page 3 of his Report that, “the documents and reports available on November 28, 2020 indicated that the Vehicle and its engine were in very good condition.” [ 95 ] The Claimant also testified that when she had the Vehicle’s oil changed on April 8, 2021, at MINI Langley, the mechanic there told her that the Vehicle was a very good car and that she “would be driving it forever.” [ 96 ] Derek Rattenbury, Fixed Operations Manager at Auto West Group, where the Claimant took the Vehicle for a repair estimate after the engine seized, wrote in an email to the Claimant, filed at Tab 11 of the Joint Book of Documents, “From time to time things like this do happen on all makes and models including BMW.

Of course, it’s not common but components fail and that is why BMW provides a 4 year or 80,000 km warranty but in this case the vehicle wasn’t driven that much so this potential defect never showed itself for several years after production”. [ 97 ] The evidence establishes that no one, including the Defendant, foresaw the engine failure and the engine failure was not detectable to or discoverable by the Defendant when the Vehicle was sold. [ 98 ]

Section 18 of the SGA applies to used vehicles, such that the Vehicle was required to be reasonably fit for its purpose, of merchantable quality and durable for a reasonable period of time. However, what is expected of used vehicles depends on the circumstances of the case and it is generally accepted that a used car seller is not a guarantor of the vehicle’s future performance.

Based on the evidence and my analysis of the factors to be considered in assessing the extent of any implied warranty as to fitness, quality and durability for a used vehicle, I find that when the Defendant sold the Vehicle to the Claimant, it was reasonably fit for its purpose, of merchantable quality and durable for a reasonable period. [ 99 ] The Claimant has failed to establish that there was a breach of the implied warranty under s. 18 of the SGA . [ 100 ] The Claimant has not established that she is entitled to contractual damages for breach of implied warranties under ss. 17 and/or 18 of the SGA .

OTHER ISSUES [ 101 ] In her Notice of Claim, the Claimant also appears to allege breaches of the Business Protection and Consumer Protection Act , S.B.C. 2004, c. 2 ; the Motor Dealer Act , R.S.B.C. 1996, C. 316 ; the Motor Dealer Act Regulation , B.C. Reg. 447/78 ; and the Canadian Code of Advertising Standards ; however, these claims were not particularized or specified and the Claimant made no submissions about them. Accordingly, I decline to address them.

CONCLUSION [ 102 ] It is very unfortunate that the Vehicle suffered an engine failure; however, the Claimant has not established that her decision to purchase the Vehicle and/or the engine failure arose through any fault of the Defendant. As a result, the remedies the Claimant seeks are not available to her. [ 103 ] Rescission of the Purchase Agreement is not a remedy available to the Claimant because I find that the Defendant did not make any operative misrepresentations in the Purchase Agreement.

In the alternative, if I am wrong and any of the representations were operative misrepresentations, I find that they were innocent misrepresentations that do not go to the substance of the Vehicle, but to its quality. Rescission is also not an appropriate remedy because the parties cannot be restored to their pre-contractual positions. [ 104 ] Nor are tort damages available to the Claimant for misrepresentation because even if there were operative misrepresentations, the

Claimant has failed to establish that they were fraudulent misrepresentations, or negligent misrepresentations. [ 105 ] Nor are contractual damages available to the Claimant because she has failed to establish that there were breaches of the implied warranties under ss. 17 and/or 18 of the SGA . [ 106 ] There is no basis on the evidence in this case to find the Defendant at fault for the Claimant’s losses. [ 107 ] The claim is dismissed. _____________________________ The Honourable Judge D. Boblin Provincial Court of British Columbia