Stewart Locke - v. -, 2012 SKPC 124

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2012 SKPC 124 Date: July 30, 2012 File: SC#229 of 2011 Location: Saskatoon _____________________________________________________________________________ Between: Stewart Locke - and - Anthony Elliott Stewart Locke For the Plaintiff Anthony Elliott For the Defendant _____________________________________________________________________________ JUDGMENT M.L. GRAY , J _____________________________________________________________________________ BACKGROUND [ 1 ] The Plaintiff responded to the Defendant’s advertisement for the sale of a 1998 Grand Touring Ski-Doo described to be in

“good condition”. The Defendant was asking $3,200.00 but accepted $2,900.00 offered by the Plaintiff. Although the snowmobile was delivered the following day, the Plaintiff did not use the machine until December 2010, when he discovered that it did not run properly. It was taken to a qualified mechanic and the Plaintiff paid $3,240.10 to get the sled “up to par”; the engine repair cost $2,581.92. [ 2 ] The Plaintiff now seeks compensation for the entire cost of the repairs and alleges that the Defendant fraudulently misrepresented the condition of the vehicle at the time of sale.

EVIDENCE Stewart Locke [ 3 ] On August 19, 2010, the Plaintiff came upon the Defendant’s advertisement for the sale of a 1998 Grand Touring Ski-Doo for $3,200.00. He arranged to see the machine the same day. The snowmobile was on a trailer; the Plaintiff looked at the engine and listened to it run for a time. The Defendant told him that the snowmobile was in “good condition” but the Plaintiff did not ask any specific questions about the vehicle or its engine. Given the season, it was not taken for a test drive.

The Plaintiff acknowledged that from past experience he believes that most vendors would say there is nothing wrong with a vehicle they were trying to sell; however, he did not consider having a qualified mechanic inspect the snowmobile before making an offer. Rather, he relied on his own impression that the vehicle was in “fairly decent condition for the year it was....being however many years it was old.

Twelve years old”. [1] His offer of $2,900.00 was accepted by the Defendant. [ 4 ] The next day the Defendant delivered the snowmobile which was started, reversed off the trailer onto a dolly and taken to the front of the Plaintiff’s garage where it was stored, open to the elements, until winter. In the interim, the Plaintiff would start the engine every three weeks and let it idle to charge the battery. He noticed nothing out of the ordinary about the engine. [ 5 ] On December 27, 2010, the Plaintiff loaded the snowmobile onto a trailer in order to transport it to the lake.

In order to load it, he started the engine and took a “running start” when he noticed that the engine was “chugging” or hesitating. He drove it about 50 feet onto the trailer and turned off the engine. At the lake, the snowmobile was driven off the trailer and taken for a short drive at about 20 mph. It became apparent that something was wrong with the engine and that the vehicle should not be used. The Plaintiff also noted difficulty turning the snowmobile. [ 6 ] The Plaintiff took the sled to a mechanic on January 12, 2011. The vehicle had not been used since the day at the lake.

A week later, he looked at the engine with Chris Bill, a mechanic. The snowmobile had been dismantled and revealed a damaged piston resulting from a loose piece of metal in the cylinder. The crank bearing was badly burnt. The Plaintiff maintained that this damage could not have been discovered without taking the snowmobile apart. He also saw that the sliders on the skis were worn which caused the difficulty with turning. [ 7 ] Mr. Bill provided a verbal estimate of repairs which the Plaintiff recalled to be around $2,400.00.

He authorized the necessary repairs as well as additional work which he felt needed to be done to “bring the machine up to par”. He believed all the repairs done were necessary to ensure that the snowmobile would be reliable. He received a 90 day warranty on the work done by Mr. Bill.

The final bill was $3,240.10. [ 8 ] The Plaintiff acknowledged that the repairs were more than the purchase price and that he did not contemplate mitigating his loss by selling the machine for parts or contacting the Defendant. [ 9 ] In cross-examination, the Plaintiff admitted that a simple compression test would have revealed whether the engine was working properly, but he did not have the appropriate tools. He also acknowledged that he could have determined the condition of the skis by simply lifting the front end of the ski and looking at it.

When asked why the repairs included the replacement of all the pistons

rather than just the one which was damaged, he replied, “if you’re going to rebuild the engine, do a proper job and keep the engine balanced”. [2] Christopher Bill [ 10 ] Mr. Bill, the owner of Rev Sports and Marine, was qualified as an expert with respect to the repair of snowmobiles. He has worked exclusively on snowmobiles, motorcycles and boats since 1989. Although he was not the mechanic who worked on the snowmobile in question, he did supervise his employee, a qualified mechanic, who did the repairs. After the Plaintiff brought the snowmobile to the shop, a compression test was conducted on the engine.

That revealed one cylinder was down in compression. A small pen light was used to visually inspect the top of the piston while manually moving the cylinder. In this manner, he was able to see the damaged piston which caused the improper compression. He then ruled out other potential sources of mechanical difficulty with the snowmobile such as bad gasoline, a dirty carburetor, or snow scuff. The mechanical team then disassembled the engine to find the problem.

Once it was dismantled, they discovered that the crank bearing on one of the cylinders had begun to disintegrate, which caused overheating and the piston failure. Inside the motor, they discovered a leaking water pump shaft which Mr. Bill opined was the direct result of age and use. Although the water pump was just leaking, it could have failed at any time, damaging the pistons and negating any warranty that he offered on the other repairs. [ 11 ] When asked about how readily the damage to the snowmobile could have been discovered or anticipated, Mr. Bill said “A compression test.

With the 90 pounds down would have been an indication that even if you didn’t have a little pen light you could have drained the coolant and as soon as you saw the damage on top of the piston, then you would have saw (sic) it right away”. [3] He further stated that the bearing which was badly burnt was “probably damaged before and it was just on the – on the edge of letting go”. [4] Later he stated “the bearing could have been ready to fail but that’s the type of thing, unless you completely disassemble it, you wouldn’t have known”. [5] [ 12 ] His opinion was that the vehicle condition was “about average” for a vehicle of that age and number of miles.

He also opined that the repairs done to the snowmobile were necessary to create a reliable machine. [ 13 ] In cross-examination, Mr. Bill was of the view that approximately $1,200.00 worth of repairs had nothing to do with the engine. When asked whether the buyer or vendor would have been able to recognize the damage at the time of sale, Mr. Bill opined that it would depend on how bad the damage was.

If the bearing had been damaged in August, it would not have been revealed by the engine simply idling, but would have been detectable when the engine was under stress; for example, when the vehicle was delivered, it was reversed down a ramp from the trailer and application of the brakes would cause the engine to rev at a higher rate giving an audible clue as to the damage. If nothing untoward was heard in that process, Mr. Bill concluded that the damage had not yet occurred. Anthony Elliott [ 14 ] In 2009, the Defendant bought two snowmobiles for his family including the one ultimately sold to the Plaintiff.

It was only used once and as a result, he decided to sell it in 2010. The Plaintiff answered his advertisement and came to see the machine. The vehicle was started, it ran “pretty good” and the Plaintiff looked under the hood. The Defendant could not recall the details of their conversation, but believed that it lasted 20-30 minutes and concluded with the Plaintiff offering him $2,900.00 for the sled which he accepted.

In regard to his representations as to the condition of the vehicle, he told the Plaintiff that “it was in good condition, especially for a 1998 sled, and he could see how many kilometres it had...”. [6] [ 15 ] The vehicle was used in February or March of 2010 and there were no mechanical difficulties with it. He had never taken the snowmobile to a garage. The Defendant did not know how many people owned the machine before him but believed it was two others. He did not know that there was anything wrong with the snowmobile when he sold it. The machine ran well when it was started at the time of sale.

He delivered the snowmobile to the Plaintiff the next day and heard nothing more until he received a demand for the cost of the repairs which were done to the snowmobile.

[ 16 ] He asked for and received from the Plaintiff an itemized bill for the repairs done by Rev Motorsports. After reviewing it, he met personally with Mr. Bill and was informed that $1,193.47 of that bill had nothing to do with the engine repair. THE LAW [ 17 ] The law applicable to the case at hand revolves around the common law principles of caveat emptor and misrepresentation. If a fraudulent misrepresentation is made out by the Plaintiff, the principle of caveat emptor will not apply.

To succeed in a claim for misrepresentation, the Plaintiff must prove the amount of damage suffered and that the damage suffered flowed from a breach or misrepresentation. [7] [ 18 ] The law applicable to private sales of secondhand goods was canvassed by Madam Justice Wilkinson in Frey v. Sarvajc [8] at paras. 10 and 11 , she wrote: 10. This was a transaction between private individuals. As a result, the Plaintiffs gain no protection afforded either from The Consumer Protection Act S.S. 1996, c. C-30.1or from the implied conditions as to quality and fitness under s. 16 of The Sale of Goods Act, R.S.S. 1978, c.

S-1 . The Defendant was not in the business of selling used vehicles. 11. The oft-quoted authority in transactions of this kind is Bartlett v. Sidney Marcus Ltd., [1965] 2 All E.R. 753 at page 755 where Lord Denning, M.R. stated: ...A buyer should realize that, when he buys a secondhand car, defects may appear sooner or later; and, in the absence of an express warranty, he has no redress... [ 19 ] As noted by Kolenick J. in Wiebe, supra, at para. 13, the statement quoted by Madam Justice Wilkinson is a general expression of the concept of caveat emptor .

At para. 16 of Frey, supra , Justice Wilkinson quoted Kinch v. Sharbell [9] for the following statement of the principle: Under common law, where there is no evidence of fraud, the purchaser of a product may not complain of defects in a product that the purchaser has had an opportunity to inspect before purchase. This is referred to as the maxim caveat emptor. It is expected that if the vendor has not been fraudulent in the sale of a product, it is the responsibility of the purchaser to have obtained a warranty on the item before agreeing to buy it.

The definition attributed to caveat emptor in Black’s Law Dictionary is “let the buyer beware”. [ 20 ] Defects in products are categorized as patent or latent defects which are described in Halsbury ’s Laws of England [10] as follows: Defects of quality may be either patent or latent. Patent defects are such as are discoverable by inspection and ordinary vigilance on the part of the purchaser; latent defects are such as would not be revealed by any inquiry which a purchaser is in a position to make before entering into the contract for purchase.

As regards patent defects, the vendor is not bound to call attention to them; the rule is caveat emptor ; a purchaser should make inspection and inquiry as to that which he is proposing to buy. [ 21 ] In Wong v. Wruck [11] at paras. 19-21, Scott J. summarized the principles applicable to the sale of used goods as follows:

19 To summarize, a seller of a used car is under no duty to disclose its defects unless he has actively concealed them. The seller isnot bound to call attention to defects the purchaser could observe through ordinary inspection and inquiry-the rule is “buyer beware”. 20 However, fraudulent misrepresentation on the part of the seller will have an impact on the principle of caveat emptor. Fraud may be found when the vendor has actively concealed a latentdefect.

However, if the latent defect is unknown to the vendor, there will be no redress for the purchaser and the principle of caveatemptor or “buyer beware” will apply (McGrath v. MacLean (1979), (ON CA), 95 D.L.R. (3d) 144 (Ont. C.A.) at p.150.) 21 A fraudulent misrepresentation is a statement known to be false or made not caring whether it is true or false (Waddams, The Law of Contracts, 5th ed. para. 416; Derry v. Peek (1889), 14 App. Cas. 337 (H.L. (E.)).

Such a statement must be material to thedecision of the purchaser to enter the agreement and the misstatement must serve as an inducement to the making of that decision(McCamus, The Law of Contracts, 2005, p. 326). ISSUES [22] The issues to be determined in this case are: 1. Has the Plaintiff established, on a balance of probabilities, that the Defendant fraudulently misrepresented the mechanical conditionof the vehicle and if he has, to what compensation is he entitled? 2. If he has not, do the principles of caveat emptor apply?

ANALYSIS [23] The evidence of the Plaintiff and the Defendant with respect to this transaction is very similar. Their meeting lasted 20-30minutes, and included a visual inspection of the snowmobile for obvious damage; the engine was started and the Plaintiff listened to itrun. This Court is satisfied that at the time of the sale, the snowmobile was represented by the Defendant to be in “good condition”. Indeed, the Plaintiff’s evidence was that he concluded from his conversation with the Defendant that the snowmobile was in “fairlydecent condition for the year that it was”.

This is supported by the evidence of Mr. Bill who described the condition of the machine asbeing “average” for its age. There were no warranties extended by the Defendant or requested by the Plaintiff; specifically, the Plaintiffneither sought nor received any assurance or warranty that the machine was sufficiently reliable to be driven 10 miles into the bush on acold day without fear that it would break down. Rather, the Plaintiff “trusted” that the snowmobile could be used in that fashion.

Thereis no evidence that he drew that conclusion on the basis of representations made by the Defendant. [24] It is clear from the evidence of Mr. Bill that the problems with the engine were patent defects which would have beendiscoverable with a compression test and a visual inspection with a pen light. As such, the Defendant was under no obligation to disclosethem even if he was aware of their existence; I accept his evidence that he was not.

This conclusion is supported by the evidence of Mr.Bill who said that if no unusual sounds were heard when the snowmobile was reversed down a ramp and under high revs, the engine waslikely all right at that time. There is no evidence that the noise later noticed by the Plaintiff was heard when the snowmobile wasreversed down a ramp and delivered to the Plaintiff’s home. Mr. Bill also testified that the bearing was probably damaged before thesale and on the verge of letting go, but that would not have been apparent to either party without disassembling the engine.

However, asimple compression test would have been a signal that all was not well with the engine. The Plaintiff acknowledged that he has ownedsnowmobiles for 20 years and is familiar with small engine repair and maintenance; the benefit of a compression test was apparent tohim but he did not have the tools necessary to perform such a test and did not seek an opportunity to have such a test conducted. There isnothing in the evidence to suggest that the Defendant made any false representations with respect to the snowmobile, nor did he dissuade

or discourage the Plaintiff from making any inspection he wished or from asking any questions about the engine function. [25] In

summary, the Defendant owned the snowmobile for a short time and had not made any repairs to it. He claimed that themachine was in good condition at the material time and that he was not aware of any defects or problems before or during the saleprocess. There is no evidence from the certified mechanic, Mr. Bill, or the Plaintiff that the Defendant knew of any defects in thesnowmobile prior to selling it. Thus, there is no evidence of active concealment or misrepresentation on the part of the Defendant, nordoes it appear that he had a reckless disregard for the truth.

In conclusion, the Plaintiff has not established, on a balance of probabilities,that the Defendant misrepresented the mechanical state of the snowmobile at the time of sale. [26] The snowmobile was purchased in the summer when it could not be taken for a proper test drive, yet the Plaintiff did not seekthe opinion of a qualified mechanic. Nor did he request any maintenance records, maintenance information, or ask any specific questionsabout the engine.

It is clear that in spite of the Plaintiff’s view that vendors will say an item is in good condition even if it is not inorder to make a sale and that a snowmobile might be sold in the summer in order to conceal defects, he chose to make the purchasewithout exercising due diligence as to the mechanical condition of the vehicle. He knew the vehicle was 12 years old and chose to makea purchase without requesting any inspection by a qualified mechanic or any maintenance records. He made no attempt to incorporateany warranty into his offer to purchase.

The onus is on the Plaintiff to make inquiries and inform himself as to the condition of thevehicle being purchased; any failure to do so is to his own peril. CONCLUSION [27] Having found that there is no evidence of a fraudulent representation on the part of the Defendant, and that the defect waspatent, or discoverable, the principle of caveat emptor applies. The Defendant is not liable for the costs of repair to the snowmobile andthe Plaintiff’s claim is dismissed. [28] The parties to this action will assume their own costs. __________________________________ M.L.

Gray, J [1] Transcript p. 11, lines 4-10. [2] Transcript p. 44, lines 11-14. [3] Transcript p. 79, lines 7-12. [4] Transcript p. 88, lines 1-2. [5] Transcript p. 88, lines 8-10. [6] Transcript p. 112, lines 23-25. [7] See R. (sic) v. Wiebe, [2011] S.J. No. 49 (Sask. Prov. Ct.). [8] 2000 SKQB 281 , [2000] S.J. No. 382 (Sask. Q.B.). [9] (PE SCTD), 173 Nfld & P.E.I.R. 336 (P.E.I.S.C.) [10] (3rd ed.) Vol. 34, at p. 211, para. 353

[11] [2008] S.J. No. 511(Sask. Prov. Ct.)