National Onsite Service Ltd. v. Christopher Thauberger, 2014 SKPC 53

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2014 SKPC 053 Date: March 6, 2014 File: 209/09 Location: Regina _____________________________________________________________________________ Between: National Onsite Service Ltd. and Christopher Thauberger - and - Trans Canada Truck Repairs

(2001) Ltd. and Douglas Hilderman David Barth For the Plaintiffs Greg Cherneski and Laurie Cherneski For the Defendant Trans Canada Truck Repairs Douglas Hilderman and Andrea Hilderman For the Defendant Douglas Hilderman _____________________________________________________________________________ JUDGMENT J.D. KALMAKOFF , J _____________________________________________________________________________ INTRODUCTION [ 1 ] The Plaintiff, Christopher Thauberger was the owner, operator and president of a company called National Onsite Service

Ltd. in Regina, Saskatchewan. The company’s business included landscaping, gravel hauling and snow removal, among other things. In late October of 2008, Mr. Thauberger bought a dump truck for his company from the Defendant, Douglas Hilderman. [ 2 ] Although Mr. Thauberger knew, at the time he bought the truck, that it would need some repairs, the extent and cost of those repairs turned out to be much greater than he had expected. Also, when Mr.

Thauberger tried to register the truck in Saskatchewan, it did not pass safety inspection, leading to more costly repairs, and lost income because the truck was out of service until it was able to pass safety inspection. [ 3 ] The truck had last passed safety inspection in Manitoba in November, 2007. That safety inspection was performed by the Defendant, Trans Canada Truck Repairs

(2001) Ltd. (“TCTR”). The safety inspection, under Manitoba legislation, was valid until November 30, 2008. Mr. Hilderman provided a copy of the safety inspection report to Mr. Thauberger when he sold the truck to him. [ 4 ] Mr. Thauberger claims that Mr. Hilderman intentionally or negligently misled him into thinking that the necessary repairs would be easy and inexpensive, and that he relied on Mr. Hilderman’s representations in deciding to buy the truck.

He also claims that the safety inspection conducted by TCTR was negligently done, as the truck should not have passed inspection in November 2007, given its condition. Mr. Thauberger says he relied on both Mr. Hilderman’s representations and the safety inspection to his detriment, and accordingly, Mr. Hilderman and TCTR should be jointly and severally liable for the resulting repair costs and loss of income. FACTUAL BACKGROUND [ 5 ] In the fall of 2008, Mr. Thauberger wanted to purchase a dump truck for his company to use, primarily for gravel hauling and snow removal.

He was looking for a used truck, and for obvious reasons, wanted one that had a valid safety inspection certificate. Pickings were slim; Mr. Thauberger was unable to find anything in Saskatchewan or Alberta that met his needs. Eventually, Mr. Thauberger found a truck that piqued his interest, through the online classified advertising site, Kijiji. The truck was a 1982 Ford LTL, owned by the Defendant Douglas Hilderman of West St. Paul, Manitoba. [ 6 ] After obtaining further information, including the exchange of photographs, through e-mail correspondence with Mr. Hilderman, Mr.

Thauberger decided to purchase the truck. He arranged to meet Mr. Hilderman in Virden, Manitoba, to inspect the truck. Before Mr. Hilderman drove the truck to Virden, it had an odometer reading of 337,848 kilometres. [ 7 ] Mr. Thauberger did not make any arrangements to have the truck inspected by a mechanic before finalizing the purchase. Instead, he brought along a friend who had a Class 1A driver’s licence, and could drive such a vehicle. Mr.

Thauberger’s friend took the truck for a test drive, and then did a walk-around, to make a cursory inspection of its condition. [ 8 ] As one might expect with a 26 year old vehicle, the truck had some problems. Mr. Hilderman drew some of those problems to Mr. Thauberger’s attention, and Mr. Thauberger noticed other problems on his own. There is no evidence to suggest that Mr. Hilderman did anything to conceal the truck’s defects. [ 9 ] The truck was obviously old, and had been heavily used. It had some significant issues. For example, the box of the truck was rusted out, to a state where it was no longer useable.

Mr. Thauberger was aware of this, and was prepared to accept it in that fashion, and pay the cost of repairing the box. The truck had other minor problems, upon which I will not comment, as it is clear from the evidence that Mr. Thauberger was also prepared to accept those minor problems, and either live with them or bear the cost of repairing them. [ 10 ] There were, however, two significant problems with the condition of the truck that were the subject of discussion between Mr. Thauberger and Mr. Hilderman:

(1) One of the hinges of the truck’s hood was not attached. When Mr. Thauberger asked about this, Mr. Hilderman said he had fixed it before, and it was an “easy fix”. He suggested that Mr. Thauberger may even be able to fix it himself;

(2) The hoist used for raising and lowering the truck’s box was evidently leaking oil. Mr. Hilderman told Mr. Thauberger that he thought it was either a seal or an O-ring, which could be “quite easily repaired”. [ 11 ] Mr. Thauberger says that he relied on Mr. Hilderman’s assertion that these problems would be easy to repair. There is no evidence that Mr. Thauberger sought further details, or asked Mr. Hilderman what he meant by “easy fix” or “easy to repair”. In the end, a bill of sale was drawn up, in which the vehicle was sold to Mr. Thauberger “as is, where is” for a price of $15,225.00. Mr.

Hilderman provided Mr. Thauberger with the vehicle’s registration, and agreed to leave the Manitoba licence plates on the vehicle, and let registration continue for 24 hours so that Mr. Thauberger would have time to bring the vehicle to Regina and register it in Saskatchewan. [ 12 ] Mr. Hilderman also provided Mr. Thauberger with the truck’s current Manitoba Truck & Tractor Inspection Certificate.

The Inspection Certificate was produced as part of a mandatory inspection conducted pursuant to Manitoba’s Periodic Mandatory Vehicle Inspection Regulations (being Regulation 76/94 of The Highway Traffic Act, C.C.S.M. c. H60).

Section 3 of those regulations prohibits heavy trucks such as the one at the centre of this case from being operated on highways in Manitoba unless they are inspected and found to comply with provincial safety standards every twelve months. [ 13 ] The inspection which produced that certificate had been conducted by the Defendant, TCTR. It was completed on November 2, 2007, at which time the truck had an odometer reading of 334,243 kilometres.

The Inspection Certificate bears an Inspection Expiry Date of November 30, 2008, meaning that another inspection would be required before that date in order for the truck to be lawfully driven on the highway.

The Inspection Certificate also contained the following message: - THIS INSPECTION IS NOT A WARRANTY - This inspection addresses safety components within the Provincial Vehicle Inspection Handbook but does not guarantee these components will comply with the standards for any unspecified future period of time. [ 14 ] Saskatchewan has similar legislation regarding annual safety inspection of heavy trucks ( The Vehicle Inspection Procedures Regulations, 2007 and The Vehicle Inspection Regulations, 2013 , being Regulations 6 and 12, respectively, under The Traffic Safety Act , S.S. 2004, c. T-18.1), so when Mr.

Thauberger returned to Regina, he took the truck to a business called Frame & Wheel to have a safety inspection conducted. [ 15 ] The truck failed the safety inspection at Frame & Wheel, largely due to a buildup of corrosion on the frame rails. As a result of the truck failing inspection, further repairs were necessary. The frame had to basically be dismantled, the corrosion buildup removed from various parts, and then reassembled. [ 16 ] Cliff Hubick, a commercial vehicle inspector with SGI, was qualified as an expert witness in the field of commercial vehicle inspections.

He testified that, in his opinion, it was not possible that such a buildup of corrosion could have occurred between November 2, 2007 when TCTR completed its inspection and October 8, 2008, when the vehicle was brought to Frame & Wheel in Regina. He also said that, if that corrosion buildup existed at the time of the inspection done by TCTR, it should not have passed. However, he acknowledged in cross-examination that, once the rust or corrosion buildup was cleaned off the frame rails, they were sufficiently structurally sound to pass safety inspection. [ 17 ] Greg Cherneski owns 50 percent of TCTR.

He is also a journeyman mechanic, and was also qualified as an expert in commercial vehicle inspections. He observed the truck in his shop after one of his mechanics conducted the November, 2007 safety inspection. He testified that, according to the safety inspection standards in Manitoba, the corrosion buildup was not such that the vehicle should have failed the safety inspection at that time. In his opinion, the corrosion buildup that existed at the time he saw the vehicle did not affect the structural integrity or strength of the frame rails. Therefore, the vehicle was fit to pass safety inspection. [ 18 ] Mr.

Thauberger testified that, in addition to being costly, the extensive repairs required to make the truck functional and

capable of passing safety inspection also kept it out of commission for a significant period of time, resulting in lost income. Accordingly,the Plaintiff claims the following amounts against the Defendants, jointly and severally: - Replacement / repair of the hood: $ 5,417.50 - Replacement / repair of hoist: $ 7,400.00 - Repair of frame / removal of corrosion: $ 6,721.82 - Loss of income due to down time: $13,138.75 [19] The total claim is more than $20,000.00. The Plaintiff, in his statement of claim, waives any amount exceeding $20,000.00. [20] I accept that the expenses Mr.

Thauberger incurred were all necessary to properly repair the hood, and the hoist. I also acceptthat the removal of corrosion and repair of the frame rails was a necessary cost of bringing the vehicle into compliance with safetystandards in Saskatchewan. There is no evidence to suggest that the repairs were unnecessary or frivolous. While there is always apossibility that Mr.

Thauberger may have found less expensive options, there is no evidence from which I can conclude that he wasunreasonable in taking the steps he took, or hiring the people he hired in order to get the repair work done. [21] I also accept that Mr. Thauberger lost out on potential income as a result of the truck being out of service for a much longerperiod than he thought it would be after he bought it. That evidence was not seriously questioned. [22] In my view, the only issue to be determined is whether the Defendants should be held liable, in whole or in part, for the lossMr. Thauberger suffered.

ANALYSIS Is the Defendant, Douglas Hilderman, liable for loss suffered by the Plaintiff? [23] There is no evidence to suggest that Douglas Hilderman was involved in the business of selling used vehicles. This was aprivate sale. As such, the statutory warranties under Manitoba’s Consumer Protection Act, C.C.S.M., c. C200 do not apply, nor does the implied condition of fitness for purpose in

section 16 of Manitoba’s Sale of Goods Act, C.C.S.M., c. S10.[1] [24] The defects in question (the broken hood hinge and the hoist) cannot fairly be described as latent defects. They were either soobvious as to be patent defects, or they were revealed to the Plaintiff by Mr. Hilderman. In such situations, absent evidence of fraud oractive concealment of the defect by the vendor, the maxim of caveat emptor applies, and the buyer will not be compensated for defects ina product he has had the opportunity to inspect before purchase: Kinch v.

Sharbell (1999), (PE SCTD), 173 Nfld. &P.E.I.R. 336 (P.E.I.S.C.T.D.); Frey v. Sarvajc (2000), 2000 SKQB 281 , 194 Sask. R. 249 (Q.B.); Wong v. Wruck, 2008 SKPC116. [25] It is not the existence of defects that is the issue in this case, as there is no evidence that Mr. Hilderman attempted to concealany of the truck’s defects. The Plaintiff argues that Mr. Hilderman should be held liable because he misrepresented the nature and extentof repairs that would be necessary to fix the problems with the hood and the hoist. [26] The essence of the alleged misrepresentation is that Mr.

Hilderman said the problems with the hood and the hoist would be

easy to fix, when in fact they required complicated and expensive repairs. [27] In my view, Mr. Hilderman should not be held liable for those statements. First, the statements made by Mr. Hilderman weremere representations. They were not guarantees or warranties intended to form part of the contract of sale. [28] Second, Mr. Hilderman never held himself out to be a mechanic or any sort of expert in truck repairs. There is no evidencefrom which I can conclude that he knew or should have known that the hinge on the hood would be irreparable, and the entire hoodwould have to be replaced.

There is no evidence that he knew, or should have known, that due to the age of the truck, parts would not beavailable for the hoist, and the entire hoist would have to be replaced. I am not satisfied that Mr. Hilderman’s statements werefraudulent, or even negligent, misrepresentations that would displace the application of caveat emptor. [29] This case is factually distinguishable from the decision in Sali v. Gigian, 2003 SKPC 98. In Sali, the purchaser bought a usedcar only to find that it needed much more extensive repairs than had been originally represented by the seller.

The purchasersuccessfully sued the seller. However, key to the finding in that case was that the seller told the purchaser that certain important itemslike the brakes and timing belt had recently been replaced when, in fact, they had not. [30] Furthermore, Mr. Thauberger chose to simply rely on Mr. Hilderman’s statements that those problems would be “easy tofix”. He did not seek any further details or clarification about what Mr. Hilderman meant by such a statement.

He did not seek to havethe vehicle examined by a mechanic to get a better idea about the nature and cost of repairs that would be necessary before making thedecision to purchase. In short, he did not take the care a reasonable buyer should take in the circumstances. [31] I am also not satisfied that the statements made by Mr. Hilderman are the type of representations that are actionable under theprinciples set out in Hedley Byrne & Co. v. Heller & Partners, [1964] A.C. 465 (H.L.), on the basis of negligent misrepresentation. [32] As noted by the Supreme Court of Canada in R. v.

Cognos Inc., (SCC), [1993] 1 S.C.R. 87, in order for aclaim to succeed on the basis of negligent misrepresentation: (1) there must be a duty of care based on a "special relationship" between the representor and the representee; (2) the representation in question must be untrue, inaccurate, or misleading; (3) the representor must have acted negligently in making the misrepresentation; (4) the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted. [33] I accept that Mr.

Hilderman owed a duty of care to Mr. Thauberger when it came to statements about the truck. I also acceptthat the statement about the hood and hoist being an “easy fix” turned out to be inaccurate, at best. [34] I am not, however, satisfied that Mr. Hilderman was negligent in making those representations in all of the circumstances.There is nothing to suggest he should have known how difficult it would be to find parts to fix the hoist. There is nothing to suggest thathe should have known the damage to the hood was so extensive as to prohibit reattaching the hinge.

That said, however, the Plaintiffdoes not need to show that Mr. Hilderman knew his statements were false in order to prove that Mr. Hilderman acted negligently. Thestandard to be applied is that of a reasonable person: Cognos, supra. Even so, I do not find that Mr. Hilderman’s statements werenegligent. While Mr. Hilderman expressed an opinion which understated the nature of repairs that would be needed, he did not state thisopinion with certainty. There is nothing in the evidence to suggest that he held his opinion out as being authoritative or particularly well-informed.

There is nothing to suggest that he was aware that Mr. Thauberger was going to rely on his opinion as though it wereauthoritative.

[ 35 ] Furthermore, I am not satisfied, to the extent that Mr. Thauberger relied on Mr. Hilderman’s representations about the hoist and hood problems being “easy fixes”, that he acted reasonably in doing so. The vehicle in question was a 26 year old gravel truck with nearly 338,000 kilometres on it. It was not new, or in anything even close to pristine condition. Mr. Thauberger did not inquire further about the nature of repairs required or the basis for Mr. Hilderman’s opinion. There was nothing to suggest that Mr. Hilderman was a mechanic or an expert in truck repair or maintenance.

In the circumstances, there was a need for a deeper inquiry, and Mr. Thauberger chose not to make it. In my view, Mr. Thauberger did not act reasonably in relying on Mr. Hilderman’s representations. Is the Defendant Trans Canada Truck Repairs

(2001) Ltd. Liable? [ 36 ] TCTR performed a safety inspection, completing it on November 2, 2007. This was some 11 months before Mr. Hilderman sold the truck to Mr. Thauberger. Greg Cherneski testified that the safety inspection was conducted by an employee at TCTR, Jonathan Banman, who is a qualified mechanic, and qualified commercial vehicle safety inspector. Mr. Cherneski said that he reviewed Mr. Banman’s work, and agreed with his conclusions. [ 37 ] The safety inspection in question was conducted pursuant to Manitoba provincial legislation, which requires annual safety inspection of heavy trucks.

It was not conducted in connection with, or in contemplation of, the sale of the truck to Mr. Thauberger. Nor was it conducted in contemplation of the vehicle being registered in Saskatchewan. However, Mr. Thauberger says that he relied heavily on the fact that there was a valid safety inspection certificate when making his decision to purchase the truck. [ 38 ] Heavy trucks can pose a significant safety hazard due to their size, weight, and the type of cargo they carry. As such, they must be inspected regularly to minimize the danger they pose to other users of the roads.

Inspections are conducted for that purpose. Mandatory safety inspections are not conducted in order to assure prospective buyers that a vehicle is fit for purchase. Also, when a vehicle is imported to Saskatchewan from out of province, it must undergo a safety inspection before it is registered in Saskatchewan. [ 39 ] On the evidence before me, I am unable to conclude that TCTR was negligent in conducting the safety inspection of November 2, 2007.

While Cliff Hubick testified that, in his opinion, the buildup of rust and corrosion he observed in November of 2008 meant the vehicle should not have passed the safety inspection in November of 2007, I am unable to accord much weight to his opinion. He did not see the vehicle in 2007; he was simply offering an opinion based on the corrosion buildup he observed. [ 40 ] The only direct evidence as to the condition of the truck in November 2007 comes from Mr. Cherneski, who indicates that the condition of the frame rails at that time was sufficient to pass safety inspection. There was no structural damage.

His evidence, in that respect, is corroborated by the fact that Frame & Wheel simply cleaned out the corrosion buildup when they examined the vehicle in November of 2008. The major frame components were not replaced, meaning there was no damage to the structure of the steel, even when they observed it. While there may have been corrosion buildup, I am unable to conclude that TCTR was negligent in conducting its safety inspection, or in issuing a safety certificate to the truck. [ 41 ] Furthermore, even if the inspection by TCTR was negligent, I am of the view that TCTR did not owe a duty of care to Mr.

Thauberger, as it related to the sale and purchase of the truck. The inspection conducted by TCTR was not conducted in contemplation of a sale of the vehicle by Mr. Hilderman, or the purchase of it by Mr. Thauberger. It was not held out as any sort of guarantee of continuing mechanical fitness of the vehicle. Most of all, it was not a guarantee of the mechanical fitness of the vehicle at the time Mr. Thauberger bought it. [ 42 ] A safety inspection or certificate is not a guarantee that the vehicle will pass its next safety inspection.

It is a certificate that the vehicle passes minimum safety standards at the time it is inspected. The fact that the legislation requires mandatory vehicle inspections every year implies that even if a vehicle meets safety standards one year, there is a realistic possibility the vehicle will not meet those standards such that it passes inspection the next year. If it were otherwise, one would think that the authorities would not require inspections that frequently.

A purchaser of a vehicle that is more than 25 years old must be taken to be aware that, if he is buying that vehicle nearly one year after its last safety inspection, there is a very real possibility that it will not pass its next safety inspection. CONCLUSION

[ 43 ] I am not satisfied, on a balance of probabilities, that the Plaintiff has proven that either of the Defendants are liable for the losses suffered. Accordingly, the claim is dismissed. [ 44 ] I make no order as to costs. J.D. Kalmakoff, J [1] Since the sale took place in Manitoba, the relevant legislation from that province should govern. However, the corresponding provisions in the The Consumer Protection Act , S.S. 1996, c. C-30.1, and The Sale of Goods Act, R.S.S. 1978, c. S-1, are virtually identical, so the result would be the same even if the Saskatchewan legislation were applied.