Harry Paley - v. -, 2015 SKPC 63

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 201 5 SKPC 063 Date: April 15, 2015 File: 63/14 Location: Wynyard, Saskatchewan _____________________________________________________________________________ Between: Harry Paley - and - Mark Olson Harry Paley For the Plaintiff Mark Olson For the Defendant JUDGMENT P. DEMONG, J Introduction [ 1 ] Harry Paley is a 76 year old carpenter who resides in the City of Yorkton.

In December of 2013 he purchased a used vehicle from 28 year old Mark Olson who resides on a farm near Wadena. [ 2 ] Shortly after purchasing the vehicle he noted a number of deficiencies relating to the vehicle. He brought these deficiencies to the attention of Mark Olson. Mark Olson corrected one of the deficiencies but refused to make any further accommodation.

[ 3 ] Mr. Paley now brings action against Mark Olson alleging that Mark Olson had, during the negotiations that led up to the sale, made certain representations about the quality of the vehicle, that Mr. Paley says he relied on these and that they operated as inducements to purchase the vehicle. Specifically he alleges that Mark Olson represented that the vehicle was in good operating condition and that it had four new tires, a spare tire, four new brakes, air conditioning and a wheel alignment. Mr.

Paley alleges that these representations were untrue and he seeks damages in the sum of $3,238.20 to repair the vehicle. [ 4 ] Mark Olson has defended the action. He generally denies that any of the representations as alleged actually occurred. He says that in any event the written contract stipulated that the vehicle was sold in “as is” condition with no warranty. He further alleges that Mr. Paley had every opportunity to inspect and test drive the vehicle before purchase and that he did so.

While not expressly stated in the defence it is clear that Mark Olson is relying on the legal maxim caveat emptor , traditionally characterized as “buyer beware”. Mark Olson asks that the plaintiff’s claim be dismissed in its entirety. Evidence [ 5 ] In or about the summer of 2012, Mark Olson obtained a 2000 Ford Windstar van from a third party on trade. While the particulars of the trade were not made known to the Court, Mark says that the value that he attributed to this van approximates $2,400.00. While in possession of the vehicle he made some minor repairs to the vehicle.

Mark is not a mechanic by trade and has no formal training as a mechanic. He does have a garage on the farm where he does mechanical work. Much of the repair work was done by him. He says that he fixed the front brakes and in so doing purchased two rotors at a cost of $68.33. He changed the oil and the oil and air filters at an additional cost of $94.17. He changed the wiper blades at a cost of $23.28 and he had a third party do a four wheel alignment on the vehicle at a total cost of $401.43. He says he purchased and placed two new tires on the vehicle. [ 6 ] Mark never plated the vehicle.

When he took it in for the alignment, he carried it on a trailer. He never used the vehicle in any real sense. He drove it once or more in his farmyard. [ 7 ] In late 2013, Mr. Paley was looking to buy a vehicle that he could use in the course of his business to transport his equipment to and from work sites. He has, over his life time, owned ten or twelve vehicles and says that he has some basic mechanical knowledge respecting vehicles. He can do minor repairs but no body work. [ 8 ] In December of 2013, he was looking through a magazine called the ‘Bargain Hunter’ and he saw an advertisement for a used vehicle.

The advertisement read: 2000 Ford Windstar SEL, 3.8 litre, pwr sliding doors, leather, 7 passenger, rear a/c and heat, new tires, 4 wheel alignment, new front struts, new brakes, new windshield, new battery, no rust, very clean, must be seen $3300. Wadena [phone number] [ 9 ] Mr. Paley phoned the number and Mark Olson’s father, Gary Olson answered. (Mark Olson resides on his father’s farm.) Mr. Paley says that Gary Olson immediately advised him that it was Mark’s vehicle and not his. Mr.

Paley says that he asked about the information set forth in the advertisement and was told that Mark had been a mechanic since he was twelve years old and that when he sells a vehicle he goes right through the vehicle to make sure everything is working. [ 10 ] Mr. Paley says that he asked how many kilometres were on the vehicle. Gary responded that he didn’t know but would get back to Mr. Paley. Either Gary or Mark phoned back later that day and advised Mr. Paley that there were 225,000 kilometres on the vehicle. Mr. Paley says it was Gary who phoned him back. Mark says that in fact he was the one who phoned Mr.

Paley back. [ 11 ] Mr. Paley drove out to see the vehicle the next day. He brought his son along so that if he purchased the vehicle he would have an additional driver. Mr. Paley’s son was not brought along to inspect the vehicle and played no role in its inspection or in any negotiations relating to its purchase. He did however overhear much of what was discussed between Mark and Mr. Paley leading up to the eventual purchase of the vehicle.

[ 12 ] Mr. Paley says that when he attended at the Olson farm it was very cold. Mark was there with his father. The vehicle was out in the yard and available for inspection. Mr. Paley described its appearance as nice and shiny. A photograph of the vehicle which had been taken before it was sold to Mr. Paley confirms that appearance. It is shiny. There is no dirt or dust on it. The tires are bright and black. It looks like it had been thoroughly cleaned. There is no indication of any rust or scratching. [ 13 ] Mr. Paley says that Mark confirmed that there was no rust and no dents. Mr.

Paley says Mark opened the hood and pointed to the battery and indicated that it was new. Mr. Paley says it certainly looked new and was polished clean. The tires also looked new. Mr. Paley says that he did not bother to check the tread wear because the tires were packed with snow. [ 14 ] Mr. Paley testified that Mark then indicated that “the brakes are all new front and back”. Mr. Paley asked to take the vehicle for a test drive but the vehicle was not plated. Mark and Mr. Paley did however go for a short test drive of about 1/4 of a mile to the edge of the Olson property and back. Mr.

Paley says that the brakes were spongy in the sense that the pedal had to be pressed almost to the floor to get any response. When he pointed this out to Mark, he says that Mark advised him that because the brakes were new they would require some time to “build up”. [ 15 ] Mr. Paley checked the dash board and the odometer and noted that it read 225,000. He asked if the air conditioning worked and Mark replied that it did. Mr. Paley says that he relied on that representation and did not bother to turn on the air conditioning to see whether it worked or not.

He suggested that it would not in any event be possible to check an air conditioner in very cold weather. [ 16 ] Mr. Paley then asked whether or not he should get it safety checked. He says that Mark replied that there was no need to, that he went through the vehicle and that Mr. Paley should have no problem with it at all. Mr. Paley says that Mark confirmed that the vehicle was in good operating condition. Mr. Paley then advised Mark that he would take him at his word and agreed to purchase the vehicle for $3,200.00. Mr.

Paley advised that as the negotiations wrapped up, Gary Olson advised him that “he could drive to Hawaii and back with no problem at all”. [ 17 Mr. Paley paid in cash and received a receipt. A handwritten notation on the receipt reads “sold as is condition-no warranty”. Mr. Paley drove the vehicle home and problems with the vehicle quickly became apparent. [ 18 ] Blair Paley was the son that Mr. Paley brought with him. He was present during the discussions between Mark and Mr. Paley. He testified that he overheard the conversations which Mr. Paley says occurred. He confirms Mr.

Paley’s version of these conversations and specifically denies that Mark Olson ever suggested that only a couple of the tires were new or that only a couple of the brakes were new. They were black and shiny. [ 19 ] As Mr. Paley drove the vehicle home he became concerned with what he described as a noticeable shimmy to the wheels. He says that he kept the vehicle at below the posted speed limit due to that concern. [ 20 ] The very next day, Mr. Paley attempted to start the vehicle but he had no luck. It had been parked outside but he had plugged it in.

He phoned Mark to complain and he says that Mark quickly confirmed that it was not likely the starter. Rather, Mark confessed that the battery was not new. Mark agreed to buy him a new one and instructed him to go to the Napa store in Yorkton. Mark subsequently contacted Napa to buy a battery for pick up by Mr. Paley. Mr. Paley did so. [ 21 ] The next day Mr. Paley replaced the battery. He started the vehicle and backed it up about 20 feet. He says that the power steering hose broke off. He subsequently taped it up and refilled the power steering fluid.

He then drove it to his mechanic who ordered a power steering hose for him. He advised the Court that his mechanic told him that the broken hose was actually an air hose and unsuitable for power steering. [ 22 ] There were other problems. On the second day that he owned the vehicle, he says the front bumper fell off the vehicle. It had been attached with glue and duct tape. He also noted that the tires had changed colour from black and shiny to a duller grey.

He was of the opinion that they had previously been covered in black polish which had come off during the drive home. [ 23 ] One week after purchasing the vehicle, Mr. Paley went to wash it at a wand style car wash service. He immediately noticed that red paint or dye was running off of the front hood. A photograph taken after this wash and tendered into evidence shows very significant scratching along the width and breadth of the hood.

[ 24 ] Mr. Paley again phoned Mark to complain and says that he was advised that the vehicle was now Mr. Paley’s problem as it had been sold ‘as is’. [ 25 ] Mr. Paley says that he has since had the vehicle checked by his mechanic and has been told that there are no new brakes in the back of the vehicle. They are, apparently, so bad that the vehicle should not be used on the highway. [ 26 ] Mr. Paley says that about one month after purchasing the vehicle, he noticed a small piece of black tape covering a portion of the odometer.

He peeled it back and noticed the reference on the odometer was not kilometres, as he had been told, but rather, miles. He says that the dashboard backing is black, and the tape was small and also black and he had not earlier noted it. In the result, he says that he has effectively purchased a vehicle which had 225,000 miles on it, not 225,000 kilometres. The conversion, from miles to kilometres, equates to a vehicle which has in fact been driven for 362,100 kilometres. [ 27 ] Mr. Paley had other problems. He asserts that the overdrive on the transmission doesn’t work. The cruise control doesn’t work.

The key for the back hatch does not fit the lock. He asserts that the tires were not new but were approximately 50 percent used. [ 28 ] Mr. Paley says that he has, in the first five months of owning the vehicle, put $1180.00 in repairs into the vehicle.

He has submitted estimates for further work which he says needs to or should be done to the vehicle: -December 18, 2013- power steering leak-replace hose-$110.80 -December 18, 2013- estimate to replace brakes-$850.34 -December 19, 2013- estimate to replace four new tires-$619.42 -April 21, 2014 - replace left front wheel hub assembly-$53.90 -April 16, 2014- test air conditioning, axle change, p/s leak-$115.50 -April 17, 2014-hub assembly front wheel parts-$119.89 -September 27, 2014- clamp and pipe assembly -parts and labour to install- $385.61 -March 29, 2014-cv drive shaft and core deposit-$217.18 -Undated-estimate for air conditioning repairs-$1,038.86. [ 29 ] In cross-examination Mr.

Paley confirmed that the ad did not state that there were 4 new tires, nor did it say 4 new brakes. He confirmed that the ad said nothing about the vehicle coming with a spare tire. Mr. Paley confirmed that he had in fact signed the receipt which had been prepared by Mark Olson. [ 30 ] Mark Olson gave evidence at trial. His father Gary was not called to give evidence even though he was present in the court room throughout the trial and notwithstanding that the Court was advised by Mark on two occasions that he would testify on Mark’s behalf. [ 31 ] Mark says that he spoke to Mr.

Paley over the phone before he came out to see the vehicle. Mr. Paley had asked him a number of questions about the vehicle and Mark indicated to him that it was not purchased by Mark brand new; that the front tires were just recently replaced new; that the front brakes had just been replaced brand new; that the rear tires and brakes were in good condition. [ 32 ] Mark says that Mr. Paley also asked about the vehicle’s mileage. He is adamant that he told Mr.

Paley that there were 225,000 miles (not kilometres) on the vehicle. [ 33 ] Mark further indicated that he did not at any time place any black tape over a portion of the odometer which might hide its recording of miles instead of kilometres. [ 34 ] Mark says that when he placed the advertisement in the Bargain Hunter he phoned it in and it was then recorded and written by

Bargain Hunter staff. When asked why the advertisement referred to new tires instead of 2 new tires, and new brakes instead of 2 newbrakes, Mark indicated that if the advertisement was 32 words or less then the advertisement would be free. Implicit is the suggestionthat he chose to parse his words to ensure that the advertisement was placed for free. When the Court pointed out that the advertisementas written incorporates 42 words (actually 40) Mr. Olson indicated that he had been warned that it was over the limit but was accepted asfree.

He indicated that his intention was to keep it as short and as informative as possible. [35] Mark was asked about the battery which was identified as new and why if new, he quickly replaced it when it didn’t work. Heasserted that in fact it had been a new battery, but he did not provide the court with a receipt for this new battery (although he hadprovided receipts of all of his other input costs) because this brand new battery was “through a warranty on an old battery that he hadreplaced”. Because it was a warranty replacement he hadn’t paid money outright when he had received it. [36] Mark says that when Mr.

Paley attended to look at the vehicle, he and Mr. Paley took it for a test drive. Mr. Paley heard it run, andhe and his son looked at it inside and out and underneath the hood. He says that he swept the snow off the tire treads so that Mr. Paleycould see the treads that remained. He says that he specifically told Mr. Paley that the front, but not the back brakes had been replaced.During the test drive he says that Mr.

Paley asked for a warranty and Mark specifically told him ‘that the vehicle would be sold as iscondition as to what he sees, and there would be no warranty’. [37] Mark advised the Court that he did not use the vehicle. It was accepted on trade-in and stored with some slight repair, for thepurpose of eventual resale. [38] Mark confirmed that Mr. Paley called him complaining of a number of problems but specifically denies that he ever inspected thepower steering or repaired it using an air hose. He suggests that the previous owner may have done so.

He denies ever having repairedthe front bumper with glue or duct tape and he says that he has never applied dye or paint to the vehicle although he had previouslywashed it. He suggests that Mr. Paley has lied to the Court and that Mr. Paley likely caused the damage to the hood himself. [39] Mark insists that the air conditioning was working on the vehicle when he had last tried it, in the summer of 2013.

He says that hemade the specific decision of not warranting that it was in working order at the time of the sale because “air conditioning systems canleak out over the winter period when they are not used”. [40] In cross-examination Mark testified that in fact he had never driven the vehicle. The repairs that he did himself, he did on the farm;the work to the front suspension and wheel alignment he had done at a garage and towed the vehicle using a trailer for that purpose.

Hisentire use of the vehicle was to drive it a short distance along the farm road. [41] While Mark denies much of the testimony tendered by Mr. Paley in relation to the discussion they had on the farm just prior topurchase, he eventually conceded in cross-examination that he told Mr.

Paley that “to the best of my knowledge it’s in good workingorder”. [42] When Mark finished giving his evidence in cross-examination he was asked by the Court if he intended to call his other witness. (Hehad stated twice at the beginning of the trial that he intended to call his father.) Mark’s reply was “I do, but I would prefer, I guess, I’llpass....”. [43] When Mark had finished giving evidence I was left with a most unsatisfactory state of affairs, but one which is not uncommon whendealing with self-represented litigants who are unfamiliar with the need or the manner of giving evidence as to damages. Mr.

Paley hadadvised at the commencement of trial that perhaps Blair Paley would give evidence on the nature and extent of Mr. Paley’s damages, butdid not do so. While receipts and quotes from mechanics in respect of the alleged damages were placed into evidence, the mechanics whoprepared these quotes were not called to testify and/or made available for cross-examination. [44] I drew this defect in his case to his attention at the conclusion of trial, something which I believe is incumbent on a Provincial CourtJudge sitting in Small Claims.

In that regard I refer to the decision of Madame Justice Wilkinson in Syniuk v Kornberger, 2013 SKQB404 which was an appeal from a Small Claims ruling. In similar circumstances the Small Claims Court had failed to provide anadjournment to allow the plaintiff to call expert evidence to prove his damages.

While Madame Justice Wilkinson was sympathetic to thelower court’s plight, she noted that the plaintiff had misconceived the approach to be taken in terms of proving their loss (paragraph 27of that decision), and determined that the preferable course in that situation would have been an adjournment, on terms, in order to allowthe plaintiffs to procure the necessary evidence.

[45] I therefore explained the problem regarding Mr. Paley’s omission and granted an adjournment for thirty days, within which time hewas to give the Court notice of his intention to call an expert in support of his damages claim. Mr. Paley expressed concern about thecost that this might entail and I explained to him that in the event of success some or all of this additional expense could be sought formthe defendant as costs, in the event he was successful. [46] While I thought that my direction in this regard was clear, apparently neither party understood it.

I was advised, some days later thatMark Olson had been phoning the court house asking when a decision would be rendered and that Mr. Paley had filed a letter with thecourt clerk seeking to appeal my judgment. [47] By further order I explained the reason for the adjournment (to allow Mr. Paley the opportunity to provide an expert notice andopinion in support of the cost to correct the alleged deficiencies, or the vehicle’s diminished value).

I extended the time within which thematerials would have to be filed, and gave further direction on how the matter would thereafter proceed. [48] Notwithstanding that further order and extension of time, Mr. Paley chose not to take advantage of this adjournment. He has notprovided the Court with any information suggesting that he chose to have the matter come back to Court to hear evidence on the damagescomponent of his claim. The time to do so is now well past.

I am obliged to assess damages based on the information before the Court,subject to the somewhat relaxed rules of evidence available to this Court and of course, my determination pursuant to

section 28.1 of TheSmall Claims Act, 1997 which allows the Court to give consideration to any oral or written testimony or report which it considers to becredible and trustworthy. Analysis of the Evidence [49] Except where expressly otherwise stated in this judgment, to the extent that the evidence of Mr. Paley and Mark Olson conflict, Iprefer the evidence of Mr. Paley. There is no question that Mark Olson was keen to sell this vehicle and there is no question that thisvehicle had a number of mechanical and other deficiencies, either known to him or unknown. I have listed a number of them.

In hisdesire to ‘pitch’ the quality of his vehicle he made a number of representations and took a number of steps to make the vehicle morevisually presentable. He did so in a slipshod fashion, and in my view for the purpose of attempting to hide obvious deficiencies. [50] I have reviewed and considered the original advertisement for the vehicle which refers to ‘new tires’ and ‘new brakes’ and a ‘newbattery’. I have reviewed the photograph of the vehicle which was taken just prior to its sale and note its bright and shiny condition, andacknowledge Mark’s evidence that he cleaned it just prior to the sale.

I note that we live in Canada and Canada uses (at least for thepurposes of determining distances driven by vehicles), the metric system. [51] I note that Gary had assisted Mark regarding certain representations about the vehicle. He stated that Mark had been a mechanicsince he was 12 years old and that when he sells a vehicle he goes through it to make sure that everything works. He stated that one coulddrive to Hawaii and back without a problem. I accept that the latter comment is more fairly characterized as puffery.

I am not sure that Ican determine that Gary was acting as Mark’s agent when he made this comment and in any event, I think I can take judicial notice ofthe fact the Hawaii is an island. It is impossible to drive a vehicle from Wadena to Hawaii. Nevertheless, it is clear to me that Gary waspresent at the sale and to some extent participated in the sharing of information about the vehicle. [52] My concern is that, notwithstanding Mark’s assertions that he carefully qualified many aspects of the vehicle’s quality during thenegotiations, he did not call his father to confirm his version of those conversations.

The Court would have liked to hear from Gary. TheCourt had been told that Gary would testify and Gary was present and available throughout the trial to do so. [53] I draw an adverse inference against the defendant regarding Gary’s failure to testify.

I am satisfied that such failure amounts to animplied admission that the evidence of that absent witness would be contrary to the defendant’s case, or at least would not support it (seeMurray v City of Saskatoon (1952), (SK CA), 2 DLR 499 at 506-6). [54] I also have concerns with Mark’s suggestion that the only reason he did not qualify whether there were 2 rather than 4 new tires and

brakes in the advertisement is that if he had added a couple of more words the advertisement would not have been free. The advertisement clearly had more words than the 32 word ‘free’ maximum, yet it was still free. Rather, I am satisfied that Mark intended to induce prospective purchasers into the belief that there were four new tires and four new brakes. I believe that objectively viewed a reasonable person would consider the advertisement as constituting an entire unit.

If a person attends to the market and purchases a dozen eggs identified as ‘fresh’ I am satisfied that they need not thereafter ask the manager if all of them are fresh instead of just 2. [ 55 ] I do not accept that Mark thereafter advised Mr. Paley that only two tires were new. If so, why would he have carefully polished all of the tires to a black sheen? I do not accept that he drew Mr. Paley’s attention to the fact that only two brakes were new. I say this because I do not believe that Mr.

Paley lied when he told me that he had some express reservations about the sponginess of the brakes on the very short test drive that he took, but was assuaged by Mark’s assertions that they needed time to build up. [ 56 ] The photographs tendered at trial show that after Mr. Paley cleaned the vehicle with a wand style car wash and red paint or dye poured from the front hood. The photograph taken thereafter looks like a hood that has had significant chipping over the years. I do not believe that when washing the vehicle Mr.

Paley could have or would have, as suggested by Mark Olson, scratched it with the wand repeatedly and over an extended portion of the hood. If Mark had cleaned this vehicle to a bright shine just prior to sale, how could he not have known about this significant scratching which became apparent after a simple wand wash? [ 57 ] I am also concerned that the battery was represented as new and meticulously cleaned just prior to sale, but as soon as Mr. Paley complained it was quickly replaced by Mark.

The natural inference is that it was not new but had been made to look new. [ 58 ] I am particularly concerned with the characterization of the mileage as kilometres rather than miles. Most people in Canada speak of mileage in kilometres. Most vehicles in Canada register kilometres and not miles. While Mark insists that he represented miles instead of kilometres, this is hotly disputed by Mr. Paley and his son, and Gary was not called to support Mark’s version of this conversation or Gary’s own representations made over the phone.

I am satisfied that most people would have sought far more information about the vehicle if they were advised that the vehicle actually had the equivalent of closer to 360,000 kilometres on it rather than 225,000. [ 59 ] In my view, Mark’s credibility is further stretched when he advised Mr. Paley that the vehicle was in good operating condition. Why would he say that? He had never driven it off of the farmyard. It is questionable as to whether he had ever driven it to any extent whatsoever.

Absent any appreciable test drive, it does not sit well for Mark to then pass off a vehicle as being in good operating condition when clearly it had innumerable problems and clearly when he had no real means of testing his assertion. [ 60 ] When I consider all of the evidence, I am satisfied that Mark Olson advertised that the vehicle had new tires and new brakes. I am satisfied that he then orally represented that all of the tires and brakes were new and that the vehicle had 225,000 kilometres on it and that the air conditioning was working. I am satisfied that the battery was not new as suggested.

I am satisfied that the representations in this regard were untrue and made to induce a subsequent purchaser like Mr. Paley, and did induce Mr. Paley to purchase the vehicle in reliance on those representations. [ 61 ] I am satisfied however, that the vehicle had recently had a wheel alignment. Mark Olson has provided receipts in confirmation thereof. I am also satisfied that there were no representations made about the existence of a spare tire.

Issues [ 62 ] Does the legal maxim ‘ caveat emptor ’ extinguish any remedy that a purchaser of a used vehicle has against the seller of that vehicle in a private sale between individuals? [ 63 ] Do general representations relating to a used vehicle’s good quality, or exaggerated claims of reliability operate as representations which would effectively act as a warranty of a vehicle’s quality or fitness for its intended purpose? [ 64 ] Do specific representations made by a private seller of a vehicle, which are relied upon to a purchaser’s detriment, constitute warranties the breach of which would allow a purchaser redress?

[65] Do the general words ‘sold as is condition - no warranty’ on a sales receipt signed by the parties operate as negating any specificrepresentations made in the course of negotiating a contract for the sale of a used vehicle? [66] If the plaintiff is entitled to damages what are those damages and how are they calculated? Issues 1 and 2 [67] In Frey v Sarvajc, 1994 Sask R 249, 2000 SKQB 281 Madame Justice Wilkinson had the opportunity to comment on thelaw in relation to the private sale of vehicles. From that decision, certain principles of law arise.

First, a sales transaction between privateindividuals does not gain the consumer protections afforded to individuals under The Consumer Protection Act, SS 1996 c C-30.1 asamended or the implied conditions as to quality and fitness under s. 16 of The Sale of Goods Act, RSS c S-1. Rather, a buyer shouldrealize that, when he buys a second-hand car, defects may appear sooner or later, and in the absence of an express warranty, he has noredress. [68] Justice Wilkinson cited with approval several tenets of the common law in relation to a private sale between individuals.

Atparagraph 16 she refers to the following statement of principle: Under common law, where there has been no evidence of fraud, the purchaser of a product may not complain of defects in a product thatthe 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 awarranty on the item before agreeing to buy it.... [69] At paragraph 17 she confirms: At common law, in the absence of a fiduciary or analogous relationship, there is not, as between negotiating parties any duty ofdisclosure.

Almost always the seller of a used car knows of its defects, or at least some of them, but he is not under any duty to disclosethem to a potential buyer unless there has been on his part active concealment, that is, he has done something to the car with the intent toprevent the defect being discovered. [70] At paragraph 20 she asserts: ...An inspection by a mechanic is a matter of ordinary vigilance on the part of many purchasers. It is an inquiry the purchasers here werein a position to make and there is no indication the seller obstructed them from doing so.

I conclude the defects, as such, were patent anddiscoverable by inspection and ordinary vigilance on the part of the purchasers... At paragraphs 22 and 24 she speaks specifically to manipulation of an odometer: The odometer reading on a vehicle is a crucial piece of information for prospective purchasers of used vehicles... ... a salesman’s misrepresentation as to the mileage of the vehicle amounted to an express warranty, the breach of which resulted indamages. [71] There is no question that Mr. Paley found innumerable problems with the vehicle after he purchased it.

Some of these problems Ihave found to be contrary to specific representations made by Mark and many are not. That said, I am satisfied that Mr. Paley failed toexercise that ordinary vigilance that most purchasers of used vehicles should take. If he was buying a used vehicle he should havesatisfied himself of its potential utility by having a mechanic look the vehicle over. I find that those several deficiencies he identified after

purchase, and which were not the subject of an express representation are subject to the principle of ‘caveat emptor’. [72] In addition, I conclude that those problems not subject to an express representation are not caught by the general representation thatthe vehicle was in ‘good operating condition’. This general statement should not have been made by Mark who had not even test driventhe vehicle, but what does the general representation mean? Is it in good operating condition having regard to its age? To its mileage?According to Mark’s experience with old vans generally? According to other equally aged Fords?

In my view the statement cannot betaken to operate as an express representation as to the quality or fitness of each and every part of the van. [73] While I have concerns about the mileage that the van was purported to have on it, I cannot conclude, more likely than not, that Markknew that the black tape had been attached to the odometer screen, and even though I have my suspicions, I note, that like the scratchedhood, the power steering and the front bumper, among others, Mr.

Paley has not specifically sought compensation for these, nor has headduced any evidence as to how the Court might assess the lost value arising therefrom. In my view, the Court cannot, given Mr. Paley’spurposeful decision not to lead evidence in this regard, now open this action to allow further evidence to be adduced. Issue 3 [74] I am satisfied that the express representation that Mark made respecting new tires, new brakes and an operating air conditioningsystem were untrue.

He knew that the brakes and the tires were not all new and he was, at best, wilfully blind in his assertion that the air-conditioning system was working at the time of purchase. I am satisfied that these representations were made to induce Mr. Paley topurchase the vehicle and that Mr. Paley relied on them in a material way in his decision to buy the vehicle. Fraudulent misrepresentationshave an impact on the principle of caveat emptor. A fraudulent misrepresentation is a statement made not caring whether it is true orfalse.

A person who relies on that fraudulent misrepresentation to his or her detriment is entitled to be made whole, either throughrescission of the agreement or by seeking a measure of damages sufficient to put him back into the position he would have been had therepresentations been true.

There is abundant case law for this proposition but the Supreme Court of Canada has very recently concludedthat Canadian common law in relation to good faith performance of contracts is piecemeal, unsettled and unclear. [75] In Bhasin v Hrynew, 2014 SCC 71 the Court determined that good faith performance of contractual performance is ageneral organizing principle of the common law of contract which underpins and informs the various rules in which the common law, invarious types of contractual relationships recognizes obligations of good faith contractual performance and that within that concept, thereis a common law duty to act honestly in the performance of those obligations.

The Court confirmed that a contracting party should havedue regard to the legitimate contractual interests of the contracting partner. The Court concluded that this principle of honesty applies totransactional agreements. Selling a used car is a transactional agreement. Simply put, a party to the contract cannot act dishonestly. [76] This does not mean that in the instant circumstance Mark was obliged to disclose every problem with the vehicle. He need not act asMr. Paley’s fiduciary. He could have remained silent throughout the negotiations and made no representations at all.

But he did not.Bhasin stands for the proposition that Mark is not at liberty to make untrue statements which have the effect of inducing Mr. Paley toenter into the agreement. If this is done, Mr. Paley is entitled to damages calculated on the basis of what Mr. Paley’s economic positionwould have been if Mark had fulfilled his duty. [77] On this basis I am satisfied that Mr. Paley is entitled to damages unless it can be said that the written clause on the receipt ‘as iscondition - no warranty’ operates to nullify or negate the express representations that Mark made.

Issue 4 [78] There is no question that Mark Olson seeks to rely fully on the receipt that was executed by the parties which reads that the vehiclewas sold ‘as is condition-no warranty’. In that regard I had the distinct feeling that Mark felt that whatever representations he madeorally about the vehicle prior to its ultimate sale would be trumped or negated by this subsequent written qualification. [79] With due respect, I do not think that this is what the law stipulates. These two parties were negotiating a contract for the sale of aused vehicle.

Representations were made about the vehicle and those representations constitute part of the factual matrix of the contractthat is in issue before the Court. In Gallen v Nunwieller, 1984 Carswell BC 104 (BCCA), the British Columbia Court of Appeal wasobliged to determine whether or not oral representations made before a contract was signed and which contradicted the writtenagreement were warranties binding on the parties.

[ 80 ] The Court concluded that once it is decided that an oral representation is a warranty, then the oral warranty and the written contract must be interpreted together, and, if possible, harmoniously, in an attempt to attach the correct contractual effect to each. If there is a contradiction, then there is a presumption in favour of the written document, but this rule is not absolute and, if, on the evidence, it is clear that the oral warranty was intended to prevail, it will prevail. [ 81 ] I am satisfied that the express representations made by Mark Olson were admissible in evidence in these proceedings.

I say this because as I look to the factual matrix surrounding this contract, the conversations provide context for the agreement. This evidence has been entered to show that the contract would or could be invalid by reason of a fraud or a mistake and to support an allegation that the document itself was not intended by both of the parties to constitute the entire agreement. I cannot comfortably say that a mere receipt, in this case, incorporates or sets down all of the terms of the contract.

It is not so comprehensive that I can conclude that it was intended by both parties to constitute the entire agreement. [ 82 ] I am satisfied that a reasonable person in Mr. Paley’s shoes would have read the phrase ‘sold as is condition - no warranties’, as a recognition that the vehicle was being sold as perceived by Mr.

Paley when he looked at it and tested it and heard the representations made by Mark and that there were no other warranties which would attach to the vehicle. [ 83 ] In that regard I note the following passage referred to by Anderson J.A. in his support of the majority decision in Nunweiler , citing Lord Denning M.R. in Mendelssohn v Normand Ltd., [1969] 2 All ER 1215 at paragraph 81 of his reasons: There are many cases in the books when a man has made, by word of mouth, a promise or a representation of fact on which the other party acts by entering into the contract.

In all such cases the man is not allowed to repudiate his representation by reference to a printed condition... The reason is because the oral promise or representation has a decisive influence on the transaction- it is the very thing which induces the other to contract - and it would be most unjust to allow the maker to go back on it. The printed condition is rejected because it is repugnant to the express oral promise or representation....

It is illusory to say: “We promise to do a thing, but we are not liable if we do not do it.” To avoid this illusion, the law gives the oral promise priority over the printed clause. [ 84 ] I find general support for my conclusion that the representations made by Mark Olson are actionable when I review, consider and apply Bhasin to the instant case. Issue 5 [ 85 ] Mr. Paley had claimed for the sum of $3,238.20 together with interest and his costs. Much of his evidence dealt with things which were not included in his claim.

The scratching on the hood of the vehicle and the power steering issue, and the additional mileage on the vehicle among others. Mr. Paley was given full opportunity to lead evidence to confirm and assess the cost to correct these additional losses. Notwithstanding an adjournment and a subsequent explanation and further adjournment, Mr. Paley made the choice not to tender evidence in support of those additional losses, and as I said earlier, many of them would have been caught by the principle of ‘ caveat emptor ’.

I am only prepared to consider the loss attributable to each of the specific representations referred to by Mr. Paley in his statement of claim. [ 86 ] Mr. Paley claims for the cost of a new wheel alignment. I am not prepared to award anything under this heading. Mark Olson provided receipts evidencing that a wheel alignment had previously been done on this vehicle. I have heard no expert evidence to suggest that this was done wrong or not at all. [ 87 ] Mr. Paley claims for four new tires. The evidence before me is that two of the tires were new and two were used. Mr. Paley is only entitled to two new tires.

He has submitted a receipt in the sum of $619.42 tax included for the placement of 4 new tires. Mr. Paley is already in possession of two tires that, according to the evidence had fifty percent life left on them. I award Mr. Paley the cost of two new tires less the residual value of the tires he received. To that end I award the cost of two new tires and reduce that by a further fifty percent to reflect the residual value of the tires he received. I calculate that sum to be $154.85. [ 88 ] Mr. Paley claims for 2 new brakes and has submitted an estimate in the sum of $850.34.

I am prepared to accept that estimate at face value. This is not a question in which there need be an opinion by an expert as to whether or not the brakes need to be replaced - something which would call for an expert’s opinion- but rather an estimate as to the cost of putting new brakes onto the vehicle, an estimate which I consider to be trustworthy and credible as per

section 28.1 of the Act . Simply put, I have no reason to doubt that this mechanic’s cost estimate is unreasonable. I award $850.34 for the new brakes.

[ 89 ] Mr. Paley claims for the cost of a new spare tire. There were no representations regarding a spare tire and I am not prepared to award him anything for this alleged loss. [ 90 ] Mr. Paley claims for the cost of repairing the air-conditioning. He has submitted an estimate for this cost in the sum of $1,038.86. I profess to having a real concern about putting a new air conditioning system into a 14 year old vehicle, at fully one third the value of the entire vehicle, but Mark said that the air conditioning worked. I am prepared to award the amount sought. [ 91 ] In total, I award Mr.

Paley the sum of $2,048.05. I award pre-judgment interest on that amount from the date of purchase of the vehicle which is December 13, 2013, and which equates to $24.77. [ 92 ] Mr. Paley has sought and is entitled to his costs. I award him the cost of issuing the summons in this matter in the sum of $33.00 together with his costs of travelling to Wynyard from Yorkton return for both case management conference and trial. He is entitled to a per kilometre charge established by The Public Service Commission Regulations of $.42 per kilometre. The round trip distance from Yorkton to Wynyard equals 294 kilometres.

I award Mr. Paley $246.96 for his cost of travel. In total I award Mr. Paley $279.96 in costs. [ 93 ] In summation I award Mr. Paley the sum of $2,352.78. I direct that this amount be paid immediately. Paul Demong, J