Ryan Gregory Bruce - v. -, 2014 SKPC 160

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2014 SKPC 160 Date: September 29, 2014 File: SC#33 of 2012 Location: Moose Jaw _____________________________________________________________________________ Between: Ryan Gregory Bruce - and - Dan Leonard Auto Sales Ltd. Mr. Jordan Hogeweide For the Plaintiff Mr. Sterling McLean For the Defendant _____________________________________________________________________________ JUDGMENT D.

KOVATCH , J _____________________________________________________________________________ Background [ 1 ] The Plaintiff purchased a used Ford F350, 4 x 4 diesel truck from the Defendant. Within days very significant problems with the truck arose. The Plaintiff had the truck examined by a Ford dealership in Moose Jaw. He had the dealership install a rebuilt diesel engine in the truck, and thereafter brought this action for damages.

The Evidence [ 2 ] The Plaintiff testified that he works for an oil well service company. He used his truck to pull a service trailer to various well sites around Saskatchewan. He had a 2003 Dodge truck, but wanted something a little bigger and more powerful. He saw an advertisement online for a 2005 Ford 350 that was being offered for sale by the Defendant company. In August, 2011 the Plaintiff called that company and spoke to Mr. Dan Leonard, the principal in the Defendant company. Mr.

Leonard told the Plaintiff that this vehicle had around 200,000 kilometres on it. [ 3 ] A few days later, the Plaintiff went to Regina to view and test drive the truck, and to meet with Mr. Leonard. The Plaintiff stated that he test drove the truck, and it seemed a little sluggish, but seemed to be running alright. He did note that there seemed to be some white smoke coming from the truck. When he met with Mr. Leonard, he advised that he needed a bigger truck, preferably a diesel, for his work in the oil field. At this time, Mr. Leonard told the Plaintiff that he stands behind his trucks.

He said that if the truck needs something then he gets it done. Mr. Leonard indicated that this was a sound vehicle and that no repairs were needed. [ 4 ] On September 12, 2011 a Bill of Sale was prepared. The Plaintiff arranged financing and made payment, and took possession of the truck. [ 5 ] The Plaintiff testified that in the one or two days following purchase, he had the oil changed in the truck, the fuel injectors cleaned and filters changed. For some reason, the truck still remained sluggish. [ 6 ] Within days of purchase, the Plaintiff went to work near Lloydminster.

He pulled his service trailer up there, which is not too heavy and could easily be pulled by this truck. He testified that he drove at regular speeds, and did not abuse the truck. [ 7 ] While at Lloydminster, one of his fellow workers noticed a lot of smoke from the truck, and asked if there was a head gasket leak. He had to add a lot of anti-freeze to the vehicle. It was producing a lot of white smoke.

He could not tow the trailer back to Moose Jaw, but rather “limped back to Moose Jaw” with the truck. [ 8 ] On September 23, 2011, the Plaintiff took the truck to Village Ford Lincoln in Moose Jaw where it was examined by a diesel mechanic. The mechanic performed compression and other tests on the motor. He determined that there was insufficient compression in three cylinders to ignite the diesel fuel. Further, the head gasket needed to be replaced, and there was a leak in the EGR cooler system. The Plaintiff testified that he was given three service options: 1.

Remove, fix and essentially rebuild the original motor in the vehicle; 2. Buy a used motor from SGI and replace the existing motor with the used motor; and 3. Buy a re-manufactured motor from Ford and install that motor in the vehicle. [ 9 ] The Plaintiff testified that on September 23 and 24, 2011, he contacted Mr. Leonard to discuss what arrangements could be made for repair of the vehicle. According to the Plaintiff, Mr. Leonard advised that he was going on vacation for two weeks, and asked the Plaintiff to call him after that.

In further telephone conversations, the Plaintiff advised this was unacceptable, and that he needed the truck. The Plaintiff said that he believed that the Defendant was attempting to push the repairs beyond the 30 day limit for return of the vehicle, set by “The Lemon Law”. With the Defendant unwilling to make any repairs the Plaintiff instructed Village Ford in Moose Jaw to install a rebuilt Ford engine.

The Plaintiff advised that work was completed and he is now still using the truck. [ 10 ] Counsel for the Defendant cross-examined the Plaintiff as to how the Plaintiff utilised or handled the vehicle, about some of the discussions between the Plaintiff and Defendant and, most importantly, had the Plaintiff agree that a rebuilt motor has a two year warranty, and is essentially like a new engine. [ 11 ] The Plaintiff also called his friend, Mike Corbiell. Mr. Corbiell testified that he works with the Plaintiff, and that it was on the first trip following purchase, that they noticed problems with the motor.

[ 12 ] The Plaintiff also called Mr. Jay Bekar, who is the mechanic at Village Ford who worked on the vehicle. He testified as to the very significant problems with the engine, and the steps that he took to install a rebuilt engine. He agreed that the rebuilt engine is “basically a new engine”. He was confronted with a couple of quotes as to the cost of purchasing a used diesel engine from SGI. He agreed that a price of $4,850.00 or $6,000.00 was reasonable to purchase a used engine with approximately the amount of mileage that the Plaintiff’s engine had.

He also agreed that the labour to remove the old engine and install a used engine, should be the same as was required to remove the old engine and install the re-manufactured engine. [ 13 ] Mr. Dan Leonard testified for the Defence. He testified that he used this truck for approximately two weeks prior to it being purchased by the Plaintiff. Mr. Leonard said he pulled a bobcat on a trailer and did landscaping. He said the truck ran like it was brand new and there were no mechanical problems.

Because the truck ran so well, it was his view that the Plaintiff tried to pull something much too heavy, or abused the engine, and thus the problems occurred. [ 14 ] Mr. Leonard said that when called by the Plaintiff, about the engine problems, he instructed the Plaintiff to bring the vehicle back to him to be checked out. He said the Plaintiff didn’t want to bring it back and said he wanted a new motor put in. Mr. Leonard confirmed that there was a 30 day guarantee on the truck. He said this was a consumer law.

He said he would have fixed the truck if it had been brought back, but the Plaintiff never did bring the vehicle back. Analysis [ 15 ] Both parties referred the Court to the case of Robert Murch v. Dan Leonard Auto Sales Ltd. and Dan Leonard , 2013 SKQB 314 . It is a case amazingly similar and on point with the case at bar. In that case, Mr. Justice Barrington-Foote held that The Consumer Protection Act , S.S. 1996 Ch. C-30.1, could not be applied or utilised as the Plaintiff was purchasing the vehicle for business purposes. The Act and the

definitions in the Act apply to consumer purchases, and not business purchases. However, Mr. Justice Barrington-Foote went on to hold that The Sale of Goods Act , R.S.S. 1978, Ch. S-1 does apply. Further, that there was a contract of sale and purchase. Accordingly, he then determined what the express and implied terms of that purchase contract were. In the case at bar, there is clearly a contract for sale and purchase. The Sale of Goods Act has application. I must determine the express and implied terms of that sales contract. [ 16 ] I begin by noting that s. 16 of The Sale of Goods Act , R.S.S. 1978, Ch.

S-1 reads as follows: Implied conditions as to quality or fitness 16 Subject to the provisions of this Act and of any Act in that behalf 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 except as follows: 1.

Where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment and the goods are of a description that it is in the course of the seller’s business to supply, whether he be the manufacturer or not, there is an implied condition that the goods shall be reasonably fit for that purpose; 2.

Where goods are bought by description from a seller who deals in goods of that description, whether he is the manufacturer or not, there is an implied condition that the goods shall be of merchantable quality but if the buyer has examined the goods there shall be no implied condition with regard to defects which such examination ought to have revealed; 3. An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade; 4. An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.

[ 17 ] Both of the parties testified that the Plaintiff advised of the nature of his work and that he was looking for a truck with a bit more power to do that work. The Defendant said it was a good truck and would fulfil that purpose. As a result, I would imply a warranty that the truck was fit for that purpose, a warranty that the truck was of merchantable quality, and a warranty as to quality or fitness for that purpose. [ 18 ] Both parties also testified about discussions of and their knowledge of a 30 day warranty under consumer laws. It was not made known to me precisely what law they were referring to.

It would seem to me however, that they were likely referring to ss. 48 to 54, inclusive of The Consumer Protection Act . I have already concluded on the basis of the Murch decision that The Consumer Protection Act did not have any direct application to this matter. I say it does not have direct application, because in my view, the parties were entitled to adopt the warranty provisions of that Act , as part of their contract in this contract of sale. I would conclude that has happened here. Mr. Leonard told the Plaintiff and stated in evidence that he warrants his vehicles for a period of 30 days.

What does that mean? It would seem to me that he had in mind the kinds of warranties contained in s. 48 and following in the Act , and that he intended to provide those kind of warranties to the Plaintiff. As a result, he was warranting that the truck was of acceptable quality, that it was reasonably fit for the purpose detailed, that it would be reasonably durable, and that it was free of any known or patent defects. [ 19 ] Having determined that these warranties are present, I now ask whether this truck met or complied with these warranties. In my view, it did not.

Firstly, it would appear to me that there was virtually a total engine failure within days and within the warranted 30 days of the purchase. Under such circumstances, I would have great difficulty in concluding that the vehicle was reasonably durable or reasonably fit for the stated purpose. In addition, I note that Exhibit P-3, the initial invoice from Village Ford when the truck was taken in for inspection, notes that the truck had 184,787 kilometres on it. The Bill of Sale, Exhibit P-1 says that the truck had 183,160 kilometres on it.

By simply deducting the second number from the first, I would conclude that the Plaintiff put 1,627 kilometres on the vehicle between the time of purchase and the time of the engine failure. In the case of Clandening v. Robinson

(2001) S.J. No. 564 , His Honour Judge Matsalla was dealing with the sale of a used vehicle, where the fuel pump failed shortly after purchase. He was dealing with whether this was a breach of the warranty under s. 48 of The Consumer Protection Act . He made the following comments: It is evident that the Act does not impose on the seller an obligation to assure that “for a reasonable period of time” a used vehicle is to be kept in the same condition as a new vehicle, rather the seller is obliged to see to it that the vehicle and “its components” are to be durable for a reasonable time.

The phrase “durable for a reasonable period” is not defined in the Act except that the meaning of the phrase requires a consideration of the description of the product, its price, the warranties from the seller and the necessary maintenance that the product requires and the manner in which it has been used. Further: Essentially, I must decide whether it was reasonable for a fuel pump on a 1995 truck worth $13,995.00 with more than 130,000 kilometres on it at the time of purchase to function for 1,605 kilometres over a period of three weeks.

He concluded that it was reasonable that the vehicle and the fuel pump should function longer than that and as a result the vehicle was not reasonably durable. [ 20 ] In the case of Anderson v. Auto Clearing

(1992) Ltd. , 2010 SKPC 147 , His Honour Judge Agnew dealt with the sale of a used Dodge diesel truck. At para. 29 he stated: The plaintiff purchased a vehicle which was at the time approximately three years old and had roughly 153,000 kilometres on it. Within less than a year, and after less than 10,000 additional kilometres, the engine suffered what Mr. Byornson described as “catastrophic failure”. I find that the engine in the truck was not “durable for a reasonable period”, nor was it of “acceptable quality”. The defendant has therefore breached both of these statutory warranties.

On the basis of these authorities, I would conclude that the engine was not durable for a reasonable period of time. [ 21 ] Mr. Leonard testified that he believed the Plaintiff pulled something much too heavy and drove the truck very hard causing the engine failure. He testified that the truck was in very good shape, like new, at the time of sale. However, the Plaintiff testified that he took due care and did not abuse the vehicle. That is the only real evidence regarding the handling of the vehicle. As a result, in my view, Mr. Leonard’s theory is just that, a theory, and is entirely speculative.

There is another very important reason however, why I

could not accept this evidence and theory. The Bill of Sale was prepared and issued by the Defendant. The Contra Proferentum Rule applies and this document must be strictly construed against the Defendant. The Bill of Sale contains this notation: Notice to Purchasers I, Dan Leonard, the owner of this dealership, cannot guarantee the accuracy of the odometer reading on the vehicles in this lot.

The odometer may have been rolled back to a lower mileage. [ 22 ] It seems to me that the purpose of this Notice is to prevent a buyer from bringing an action to allege that a vehicle had higher mileage or usage, and was of a lesser quality than was represented. In this notice, Mr. Leonard has clearly stated that there is no warranty respecting the amount of kilometres on the vehicle and that one cannot rely upon the odometer reading. As a result, in my view, it would be completely unfair and contradictory for me to now allow Mr.

Leonard to assert this was a good vehicle, like new, with only 183,160 kilometres on it. I conclude that the Defendant did not know how many kilometres were on the vehicle, and did not know how fit or durable the vehicle would be. He did, however, warrant it was reasonably fit and durable and these warranties have been breached. Damages [ 23 ] The Statement of Claim advanced a claim for damages in excess of $19,000.00, being the cost of purchase and installation of the re-manufactured motor.

However, in argument, both counsel agreed that the principle of betterment must be applied and that the measure of damages is the cost of the purchase and installation of a used motor with approximately 183,000 kilometres of use on it. The Defendant introduced as Exhibit D-1 an estimate sheet from Village Ford Lincoln, which quoted on the cost of two used diesel engines. One engine had 101,000 kilometres on it and would cost $6,000.00. The second engine had 217,000 kilometres on it and would cost $4,850.00.

I adopt the mid-point between these two numbers being $5,425.00, as the reasonable cost of a used replacement engine. In addition, I must add the reasonable costs to install the new engine. Mr. Bekar, the mechanic who did the work, testified that the labour to install the re-manufactured engine should be the same as the labour to install a used engine. The Village Ford invoice for installation for the re-manufactured engine, Exhibit P-4, indicates a total labour charge of $2,679.00. In addition, the same invoice shows total charges of $406.21 for gaskets, anti-freeze, transmission fluid, engine oil, etc.

All of these charges would relate to installation of a used engine, as well as a re-manufactured engine. As a result, these charges are also part of the Plaintiff’s damages. [ 24 ] The invoice from Village Ford Lincoln indicates that GST and PST were charged on the cost of the engine and installation costs. Clearly these costs would be added to an invoice for replacement of the engine with a used engine.

However, my understanding is that a business person, as the Plaintiff is, can recover the total GST paid out through the submission of the regular GST returns and reduction of the amount that he is required to remit to the government for GST. As a result, the Plaintiff will suffer no damages by payment of GST.

I don’t know what kind of credits or deductions are allowed regarding the payment of PST, and thus don’t think I can calculate any damages for the Plaintiff because he was required to pay PST for installation of the engine. [ 25 ] The Plaintiff claimed damages of $428.33 for the invoice for the original diagnostic check by Village Ford Lincoln. In my view, that invoice was more related to proving this action than it was to purchase or installation of a new engine. As a result, it should not be allowed as damages. The Plaintiff also claimed $173.56 for a rental vehicle while he was without the truck.

In my view, this amount is nominal and is properly compensated by damages. [ 26 ] Exhibit P-4, the invoice from Village Ford Lincoln for purchase and installation of the re-manufactured motor, shows a deduction of $4,500.00 for the “core return”. The Plaintiff testified about this. He testified that Ford reduced the purchase price for the re-manufactured motor by $4,500.00 because he turned over the old, damaged diesel engine to Ford. Apparently, Ford would then use this old engine and make a new re-manufactured engine.

In their written submissions on damages, the Defendants submitted that the Plaintiff’s total damages should be reduced by this $4,500.00 credit. I don’t agree. There is no evidence that the Plaintiff could have sold the old, damaged engine to any other party for any amount, much less $4,500.00. There is no evidence that Village Ford Lincoln or the Ford Motor Company would have purchased this core for $4,500.00, if the Plaintiff were not purchasing a Ford re-manufactured engine. I rather suspect that Ford was in the business of re-manufacturing motors and selling re-manufactured engines.

I suspect and believe that this $4,500.00 credit was an inducement to have the Plaintiff purchase the re-manufactured engine. Simply stated, if the Plaintiff had purchased a used engine from any other party, he would not have obtained this $4,500.00 credit, and thus this amount cannot reduce his damages that are calculated on the purchase of a used engine.

[ 27 ] In summation then, I calculate the Plaintiff’s total damages as follows: Cost of a used engine: $5,425.00 Labour costs for installation: $2,679.00 Miscellaneous costs related to installation: $ 406.21 Vehicle rental: $ 173.56 Total $8,683.77 [ 28 ] The Plaintiff will have judgment against the Defendant for the total sum of $8,683.77 plus interest under The Pre-judgment Interest Act on that amount from November 1, 2011 to the date of this judgment. This was a difficult matter. The trial took place over two days.

There was a lengthy adjournment between the two dates as the Defendant was ill and not able to attend. As a result, in my view, the Plaintiff is entitled to costs which I hereby fix in the amount $750.00. _______________________ D.J. Kovatch, J