Holt v. General Motors of Canada, 2022 NSSM 15

IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Citation: Holt v. General Motors of Canada , 2022 NSSM 15 Date: 20220210 Claim: No. SC T 497044 Registry: Truro Between: Christopher Randall Holt and Jolanda Alina Holt CLAIMANTS and General Motors of Canada and Pye Chevrolet Buick GMC DEFENDANT S Adjudicator: Julien S. Matte, Adjudicator Heard: February 7, 2022 (via teleconference) Counsel: Christopher and Jolanda Holt representing themselves as the Claimants Robert Mroz for the Defendant, General Motors of Canada Alex MacKinnon for the Defendant, Pye Chevrolet Buick GMC Matte, Adjudicator, 1 .

In 2014, the Claimants were excited that Chevrolet had introduced a compact sedan with a diesel engine. The Chevy Cruze seemed like a perfect fit for their retirement years and need for a car with low maintenance and a long life. The Claimants paid extra to protect the car from rust with undercoating and to protect themselves from unexpected issues with an extended warranty. Despite these measures, a few months after taking delivery, problems with the car started and never stopped until the Chevy Cruze was left in their driveway and has sat idle ever since.

2 . This matter is before the Court for a second time after the Defendants successfully appealed an earlier judgment of this Court, with the Supreme Court sending the matter back for a new hearing. The facts of this case are largely uncontested and detailed below. The Defendants, namely the manufacturer and dealer of the 2014 Chevy Cruze at issue both rely on the provisions of the Limitations of Actions Act and ask the Court to find that the claims are statute barred. 3 .

Other than the Claimants, the only witness called before the Court was a service manager with the Defendant Pye Chevrolet Buick GMC whose testimony was brief. The Claimants tendered service records, letters to GM Canada, recall letters, the front page of the original bill of sale, receipts for parts and pictures. The Defendant GM Canada tendered the same letters sent by the Claimants, warranty terms and GM Customer Call Logs while the Defendant Pye Chevrolet Buick GMC submitted the General Service Policies 2019 edition. No objections were made as to the admissibility of any of the evidence. FACTS 4 .

Based on this evidence, the Court finds the following facts, facts largely uncontested: a. The Claimants purchased a 2014 Chevy Cruze from the Defendant Pye Chevrolet Buick GMC on January 9 2014 for $35,316.50 all inclusive; b. Included in the purchase price was an extended 5 year warranty at the cost of $1,881.00; c. Mr. Holt is mechanically inclined having learned from his father, an airplane mechanic and maintained vehicle including diesel ones his entire life; d. On May 15, 2014 the Chevy Cruze’s Check Engine light came on due to a clogged particulate filter. At the time there was 9,115kms on the odometer; e.

On June 2, 2014 the Chevy Cruze’s SES lights came on and the regeneration of the vehicle was required; f. On October 3, 2014 the Chevy Cruze’s rear window defogger stopped working; g. On December 9, 2014 the Chevy Cruze’s the entire vehicle was shaking under braking. Rear rotors refinished; h. On January 15, 2015 the Chevy Cruze ’ s brake pedal began to vibrate and the rear rotors had to be replaced; i. On May 26, 2015 the error message “Diesel Exhaust Quality Poor” was displayed on the Chevy Cruze. As a result the first catalytic converter was replaced; j.

On June 10, 2015 the error message “ Diesel Exhaust Quality Poor ” was again displayed on the Chevy Cruze as well as the SES lights. The nitrogen sensor and turbo charger had to be replaced. k. On June 14, 2015 the error message “ Diesel Exhaust Quality Poor ” was displayed on the Chevy Cruze again. The second catalytic converter had to be replaced. At the time there was 31,530 kms on the odometer; l. On June 15, 2016, the “Check Engine” light came on the Chevy Cruze. At the time there was 60, 955 kms on the odometer;

m. On October 18, 2016 the SES light came on the Chevy Cruze. The third catalytic converter was replaced; n. On January 17, 2017, General Motors issued a recall on NOX position 1 that needed to be replaced; o. On February 22, 2017 the error message “ Diesel Exhaust Quality Poor ” was displayed on the Chevy Cruze again. An exhaust particulate was replaced and a problem with the turbo charger was addressed; p. On March 21, 2017 the error message “ Diesel Exhaust Quality Poor ” was displayed on the Chevy Cruze again. A catalytic conveyer had to be replaced for a fourth time; q.

On April 19, 2017 the error message “ Malfunction Indicator Lamp ” was displayed on the Chevy Cruze. The ECM was reprogrammed by General Motors in an attempt to fix problem; r. On May 28, 2017 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. NOX sensor was replaced and the ECM was reprogrammed again; s. On August 6, 2017 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. A faulty exhaust gas temperature sensor was replaced. t. On August 27, 2017 the error message “ Check Engine Light ” was displayed on the Chevy Cruze.

At the time, the odometer reading was at 85 , 234 kms u. On May 23, 2018 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. This time, the Claimants took the Chevy Cruze to another GM dealership, Tantramar, in Amherst, Nova Scotia. Parts were ordered and the work completed by August 31, 2018. At the time, the odometer reading was at 99,922kms. v. On October 7, 2018 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. w. On October 29, 2018 the error message “ Check Engine Light ” was displayed on the Chevy Cruze.

The drop speed warning came on as well as the DEF warning. We brought the Chevy Cruze into the Trantramar the next day. x. Due to the many issues, the Chevy Cruze stayed at Trantramar for three months until January 29, 2019. General Motors covered the cost of a loaner vehicle until December 12, 2018 and Tantramar covered the costs until the end of January 2019. y. On January 31, 2019 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. z. On February 1, 2019 an unusual code was displayed on the Chevy Cruze ad cleared by Tantramar; aa.

On February 6, 2019 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. bb. On May 30, 2019 the error message “ Check Engine Light ” was displayed on the Chevy Cruze. cc. There were seven recalls for the Chevy Cruze between January 2016 and June 2017 cowering emission problems, the accelerator pedal and others.

5 . The Claimants also testified that General Motors had intended to send a field engineer to assess the Chevy Cruze but never did. According to the Claimants the General Motors dealership in Tantramar had been surprised that no engineer was ever sent to investigate. 6 . The Claimants sent the Defendant General Motors Canada three detailed letters dated August 28, 2017, December 14, 2017 and June 21, 2019 requesting that the Defendant General Motors Canada buy back the Chevy Cruze. 7 . The Claimants filed a claim in this Court on February 28, 2020 claiming $25,000.00 in damages plus costs.

Although the precise cause of actions are not plead, based on the reasons for the claim attached to the Form 1, the Claimants advance claim on the basis of breach of contract and warranty. Limitation of Actions Act 8 . The Defendants both rely on the Limitation of Actions Act (“Act”) arguing that the Claimants knew or ought to have known all of the elements of their claim no later than December 2017 when they sent a letter to General Motors Canada threatening litigation. 9 .

While the Claimants question the quality of service they received from the Defendant Pye Chevrolet Buick GMC, using two instances where parts were not re-installed before the Chevy Cruze was returned to them, as examples, the thrust of their argument is that the vehicle they were sold was so defective as to render it useless. In other words, a breach in the contract of purchase and sale. 10 .

The contract was signed by the parties on January 9, 2014 and calls for a 2014 Chevy Cruze diesel automobile, undercoated with an extended warranty for 60 months or 100,000kms in exchange for the sum of $35,316.50 inclusive of taxes and fees. By all accounts the Claimants paid the amount requested by the Defendant Pye Chevrolet Buick GMC. The Claimants received delivery of a new 2014 Chevy Cruze .

While none of the parties provided the full terms of the contract with only the front page of the standard form submitted, there appears to be little disagreement between the parties that the vehicle sold to the Claimants was a substandard quality. Given the extensive service records and recalls, the Court has little hesitation in finding that the Claimants did not get what they bargained for. 11 . However, from the first issues in May of 2014 until December 2018, the Claimants were able to rely on the extended warranty to address the issues as they arose.

There are no allegation that the Defendants refused to pay for service within the warranty period. In fact, efforts were made to repair the vehicle past the 100,000 kms mark reached in and around September 2018. 12 . According to s.8(1)(

a) of the Act a claim cannot be filed 2 years from the day on which the claim is discovered. Discovery of a claim is the day on which the damage was or ought to have been known, that the damage was contributed by

an act or omission, that the defendant was responsible and that the damage was serious enough to file a claim. 13 . The Court agrees that the Claimants knew of the damage and that the damage were caused by

an act of omission of the Defendants by the time the letters were sent to the Defendant General Motors in early 2017. Arguably by the end of the first year of ownership, the Claimants were aware that the Defendants had sold them a defective vehicle. 14 . However, in order to start the 2 year clock, the Claimants must also have known that “the injury, loss or damage is sufficiently serious to warrant a proceeding”. Up until September 2018, the Claimant’s relied on the extended warranty to pay for repairs. The Claimants also relied on the Defendants representations that the repairs would address the issues.

In fact up until December 2018, the Defendant General Motors Canada had agreed to send an engineer to look at the Chevy Cruze presumably to determine if it could be properly fixed. 15 . However, the engineer never came, the Defendant General Motors instead offered the Claimant $1000.00 to resolve all issues while the Defendant Pye Chevrolet Buick GMC offered one hour of free labour. Despite the Defendants’ argument, The Claimant’s opinion in 2017 as to their legal rights is not determinative under the Act . 16 .

The Court finds that, at the earliest, the cause of action crystallized in December 2018 when it became clear that the Defendants had

no intention of addressing the breach of the contract. Up to that point, the Claimant did not know nor should they ought to have known whether the Defendants breach would lead to damages sufficiently serious to warrant a proceeding given that the Defendants kept repairing the vehicle and intimated that an engineer’s opinion would be obtained presumably to get to the bottom of the issues. 17 . The Claimant filed their claim in February 2020, well within the 2 year limitation period as prescribed by s. 8 of the Act . 18 . In the alternative to a finding under the Act the Defendants argued the following: a.

Allegation of manufacturing defects without evidence to support breach of standard b. Rescission is not an appropriate remedy for a breach; c. No evidence led as to cost of fixing vehicle; d. Contributory negligence for leaving vehicle unused in driveway; 19 . As noted above, the Court distills from the claim submissions attached to Form 1 as a claim for breach of contract/warranty and are claiming damages for not having received what they bargained for.

Whether the Claimants have provided sufficient evidence to support a claim in negligence for manufacturing defects is not fatal to the claim before this Court although may absolve the Defendant General Motors Canada from liability. Breach of Contract / Warranty 20 . The Claimants had use of the Chevy Cruze without problems from January to May 2014 for 9,115 kms before problems started. The Claimant noted that for a full year, from June 2015 to June 2016, they drove 30,000kms problem free. Between June 2016 and August 2017, the Claimants only added 23,000 kms with frequent servicing.

Between August 2017 and May 28, 2018 the Claimants added 13, 000 kms of service free use. From May 2018 to January 2019, the Chevy Cruze was off the road approximately 6 months from May to August and October 2018 to January 2019. In the end the Claimants drove 53,000 kms of trouble free mileage, with about the same for sporadic use with frequent service. The final service record provided from February 2019 shows an odometer reading of nearly 110,000kms. 21 .

The Court finds that between January 2014 and February 2019, the Claimants were able to use the Chevy Cruze, a four door diesel sedan, manufactured by the Defendant General Motors for approximately 50% of the time as the vehicle was intended to function. The Claimants inability to use their Chevy Cruze as intended for the other 50% of the time was no fault of their own. The Claimants submitted records for maintenance, along with pictures of products used and receipts.

There is no air of reality to any allusions that the Claimants were anything but conscientious car owners and did not contribute to their damages. 22 . Under both the Sale of Goods Act and the Consumer Protection Act , a purchaser of a good may have grounds to pursue a seller where the goods received is not “of merchantable quality” (s.17(

b) and s.3(

h) respectively). As quoted by Justice Leblanc in McAsphalt Industries Ltd , mercantile quality has been defined as “reasonably fit for general purposes such goods serve”. 23 . The Court finds that the 2014 Chevy Cruze sold to the Claimant by the Defendant Pye Chevrolet Buick GMC on January 9 2014 was not reasonably fit for the purpose that a vehicle was intended to serve, namely driving. The Court finds that the Defendant is in breach of its contract with the Claimant and breaches of implied warranty pursuant to s.17(

b) of the Sale of Goods Act and s.3(

h) of the Consumer Protection Act and liable for damages. DAMAGES 24 . Damages are intended to put an aggrieved back to a position where they would be if the breach had not occurred. The Defendants argued that on the one hand, rescission of the contract is not appropriate and on the other the Claimants have failed to provide evidence to support any another form of damages. 25 . The Defendant General Motors of Canada referred to three cases where courts refused the remedy of rescission in circumstances where the claimant had used the vehicle for a shorter period of time than the Claimants here. In Western v.

Freeway , a 1996 Supreme Court of British Columbia decision, the court found that the vehicle at issue, had electrical problems which caused among other issues,

the battery to go dead every few days. The car at issue was used for a little over a year with electrical problems corrected or repaired within six months. Ultimately the Court found that there was no fundamental breach that would have entitled the plaintiff to the remedy of rescission. The decisive factor was not the length of use but rather the magnitude of the problem. 26 . In Prazma v. Cushman’s Ent Ltd, a 1995 case from the Saskatchewan Court of Queen’s Bench, the court was dealing with the

interpretation of a consumer protection statute in the context of a car sold as new with pre-existing body damage. The Court found that “ [I]n my view the alleged breaches, including the dent to the door, are not breaches of a substantial character that would entitle Prazma to reject the vehicle”. Again the minor nature of the breach was determinative of the Court’s unwillingness to order rescission. 27 . In Wilmot v. Toyota Canada 2011 NSSM 48 , this Court dealt with damages arising from the failure of fittings causing corrosion and leading to the failure of transmission fluid lines.

Ultimately the Court found the defendants liable for damages under contract, warranty and pursuant to legislation. There was no basis for rescission given the facts. 28 . As found above, the Claimants received a vehicle that only ran as intended for approximately half the time it was in use. In contrast to the case cited by the Defendant General Motors, electrical problem over a six month period and an undisclosed dent to a new vehicle, or corroded fittings, the Claimant’s experience is far closer to what might be termed a breach going to the heart of the contract. 29 .

The Court finds that the purchaser of a vehicle is entitled to expect it to run as intended, forward and backwards, on a daily basis with few interruptions within the expected lifetime of that vehicle. While not all vehicles are created equal, even the Defendant General Motors Canada would no doubt agree that their vehicles are not intended to fail after five months then on a regular basis forevermore. The basic new vehicle warranty offered by the Defendant General Motors guarantees the fitness of various components for use anywhere from 60,000 kms to 160,000 kms.

On that basis, the Court finds that the intended life of the 2014 Chevy Cruze, subject to proper maintenance is approximately 180,000kms. 30 . In comparison to the facts in the caselaw presented, rescission in the circumstances of this case is far more justified as a remedy. However, given that the Claimants were able to use the Chevy Cruze for half of its time without issue and the Defendants honoured the extended warranty in all instances giving the Claimants use of the vehicle, albeit with frequent interruption, rescission of the contract does not fit the circumstances. 31 .

The Claimants are entitled to damages. Given the uncontested facts, there is no amount of money that could repair this vehicle and absence of such evidence is not fatal to the claim. The best measure of damages in the circumstances starts with the market value of a 2014 Chevy Cruze fit for its intended use minus the market value for the Claimant’s Chevy Cruze. 32 . No documents were provided by either party to suggest the current value of the 2014 Chevy Cruze, a vehicle with 115,000 kms which has ben parked since 2019.

The Claimant suggest that the vehicle has little if any value given that the full history of the vehicle would have to be disclosed to any new purchaser. In December 2018, the Defendant General Motors offered the Claimants $1000 to settle the matter between them. The offer was refused. While the offer was not an offer for market value of the Chevy Cruze, it does give some insight into the value.

The Court notes that General Motors had the opportunity to obtain robust evidence of the Chevy Cruze’s condition in December 2018 but chose not to when it cancelled the planned engineer’s inspection and left the Claimants to fend for themselves. 33 . Based on the evidence provided, the Court finds that the Claimants’ 2014 Chevy Cruze has a value of $1000. 34 . The more difficult question is the value of a comparable vehicle. Either party could have easily provided this information to the Court with a quick internet search.

The Defendants’ invitation to simply find no damages is not satisfactory nor does it reflect the evidence before the Court. Given the aims of this Court as providing informal and inexpensive adjudication of claims, that the Claimants were self represented while the Defendants were represented but elected not to advance evidence in support of its alternative positions on damages and given that this matter has already been heard twice before, the Court finds that it is just and expedient to proceed with the calculation of damages as follows. 35 .

The purchase price of the vehicle was $27,620.00 before add ons, fees and taxes. At the time that the Chevy Cruze was taken off the road, it had 115,000 kms and was just over 5 years old. Using a life expectancy of 180,000 kms, a Chevy Cruze with 115,000 kms will have used up about 64% of its expected useful life. Applying the remaining 36% to the initial purchase price gives a value of $9,943.20 and a rough estimate of the market value of a 2014 Chevy Cruze that is fit for use.

36 . In the interest of predictability and finality the Court finds that the current market value of a 2014 Chevy Cruze is $10,000.00. The Court therefore awards $9,000.00 ($10,000 minus $1000 for the value of the Claimant’s vehicle) for the diminished value of the Claimant’s vehicle as a result of the Defendant Pye Chevrolet Buick GMC’s breaches. 37 . In addition, the Claimants suffered damages from expenses and time related to the repeated trips to the Defendant dealership to address each of the issues as they arose, a nearly 60km one way trip from their home.

Taking into account the mileage and time used, the Court awards $1,750.00 for time and expenses associated with the frequent repairs.

SUMMARY OF FINDINGS 38 . The Defendant Pye Chevrolet Buick GMC is liable for a breach of contract and implied warranties pursuant to the Sale of Goods Act and the Consumer Protection Act . 39 . The Defendant General Motors of Canada was not privy to the contract for purchase and sale of the 2014 Chevy Cruze and therefore not liable to the Claimants for damages in contract. However, it is apparent from the evidence that the Defendant Pye Chevrolet Buick GMC sold the Claimants a lemon, namely a product with inherent defects in design manufacture or assembly.

However, given the evidence and cause of actions considered, the claim against the Defendant General Motors of Canada is dismissed. 40 . The Claimants are entitled to $9,000.00 as a result of the diminished value of the Chevy Cruze caused by the Defendant Pye Chevrolet Buick GMC’s breach in failing to provide the Claimant with a vehicle fit for its purpose. The Claimants are also entitled to $1,750.00 for consequential damages resulting from the breach related to the time and expenses associated with having the Chevy Cruze frequently serviced. 41 .

The Claimants are entitled to the maximum award of $100 for general damages, the reasons should be self evident. 42 . The Claimants are entitled to pre-judgement interest on the total amount of $10,750.00 at the simple rate of 4% in accordance with s.16 of the Regulations for the period of December 2018 to date for a total of 38 months calculated as $1,361.67. The Claimants are entitled to their costs of $199.35 plus $16.32 for service. 43 . The Court orders the Defendant Pye Chevrolet Buick GMC to pay the Claimants $12,427.34. Julien S. Matte, Adjudicator