2012 QCCQ 313, 2012 QCCQ 313

Herzan c. Rouleau 2012 QCCQ 313 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-32-124020-100 DATE: January 17, 2012 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ MARTIN HERZAN -and- WENDY HERZAN […] Brockville, Ontario […] Plaintiffs v.

LAURENT ROULEAU -and- LES PLACEMENTS LAURENT ROULEAU INC., doing business under the name ROULEAU AUTO […] Montreal, Quebec […] Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Martin and Wendy Herzan sue Laurent (Larry) Rouleau and Rouleau Autos claiming $2,957,65 representing repair costs of a 2003 Mazda truck purchased on May 29, 2010 at the premises of Rouleau Auto on […], in Montréal-Est. [ 2 ] The Plaintiffs allege that they purchased the vehicle based on false representations made by the Defendants that it was in excellent mechanical condition.

When the Plaintiffs returned to their residence in Brockville, Ontario, and attempted to have the vehicle certified, they were informed that substantial repairs were required to make the vehicle roadworthy. [ 3 ] The Defendants assert that the contractual relationship is between Wendy Herzan, as purchaser and a corporation doing business under the name Rouleau Auto and that the action should be dismissed with respect to Martin Herzan and Laurent Rouleau. [ 4 ] As a matter of fact, Les Placements Laurent Rouleau Inc., is indicated in the Quebec register as doing business at […], under the name Rouleau Auto and Larry Rouleau is indicated as shareholder and director.

Les Placements Laurent Rouleau Inc. also does business under the name Auto Notre-Dame. [ 5 ] The contract of sale signed May 29, 2010 (P-8), names Rouleau Auto as the "Commerçant" and Wendy Ellen Clark as the "Consommateur" . [ 6 ] It follows therefore that the contractual recourse is between Wendy Herzan and the corporation, Les Placements Laurent Rouleau Inc. ISSUES [ 7 ] The Court must determine if Mrs Herzan, as purchaser in a consumer contract, is entitled to an award of damages because of

the representations made by the vendor at the time of sale and/or pursuant to legal warranties available because of the Consumer Protection Act . And if so, it must determine the amount of these damages.

FACTS [ 8 ] The Plaintiffs, who are residence of a rural area in Brockville, Ontario, required a truck and visited Montreal where they met Laurent (Larry) Rouleau at the premises of Rouleau Auto on […]., Montreal. [ 9 ] They were responding to an advertisement (P-5) they had seen on the website autotrader.ca , the description reads as follows: Description: MAZDA B3000 CAB PLUS SE 2003 126000 km, 6 cylindres, automatique, 3 portes, rouge, original, très propre, excellente mécanique, garantie, échange accepté, financement disponible, 5500 $. [ 10 ] Their testimony established that they intended to purchase a vehicle that was roadworthy and that would pass a safety inspection as required in the province of Ontario.

An extended warranty was less of an issue. [ 11 ] The advertisement that Rouleau Auto had permitted Autotrader to place was inaccurate in that the sticker for the vehicle indicated a price of $5,800 and that the vehicle was a class "D" vehicle as defined in the Consumer Protection Act , that is to say a vehicle having more than 80,000 km and being older than five years. [ 12 ] Larry Rouleau told them that he could not obtain an extended warranty from a third party if he sold the vehicle to a purchaser that was not a resident of Quebec. [ 13 ] The Plaintiffs admit that they understood that there would be no possibility of a third-party contractual warranty but they testify that they were told by Mr Rouleau that the car was in good mechanical condition and it that it had been inspected by Rouleau Auto who carried out several repairs that are listed on the sticker (P-2) namely: "1.

Disques et freins avant neufs, 2. Bougies neuves, résistance de 3.

Chaufrette [sic] neuve, cam sensor neuf" [ 14 ] The sticker mentions a sale price of $6,000 plus taxes, but it also mentions "SPÉCIAL 5,800$" . [ 15 ] In fact, the parties negotiated a price of $5,000. [ 16 ] The Herzans say that when the document was tendered for signature, the manuscript "For future repairs" that appears on the document had not yet been written. [ 17 ] The contract also contains, under the handing: "GARANTIE Sold as seen without warranty because buyer is from Ontario." [ 18 ] Mr Rouleau testifies that when he was asked whether the car could be certified in Ontario, he replied that he did not know Ontario law and could not answer the question. [ 19 ] He maintains, however, that the car was roadworthy. [ 20 ] When asked why the expression "for future repairs" was mentioned in the contract in connection with the discount from $5,800 to $5,000, he could not specify any particular repairs that he believed would be necessary in the future.

ANALYSIS [ 21 ] On the whole of the evidence, the Court accepts the Plaintiffs' position that they decided to purchase the car on the basis that it was roadworthy and did not require any substantial repairs and that if they had known the extent of the repairs actually required, they would not have completed the sale. [ 22 ] This belief came both from the advertisement that they had seen which was based on information provided from Rouleau Auto and by their conversations with Laurent Rouleau at the time of the sale. [ 23 ] Upon having the vehicle inspected at a reputable garage, in Brockville, Ontario, a number of repairs were required, most notably the replacement of the rear brake drums and shoes and front ball joints. [ 24 ] The tires were also replaced because the treads were to low, despite the fact that Mr Rouleau had "thrown in" an extra pair of tires expressing the opinion that both sets of tires were adequate. [ 25 ] A perusal of the invoice, totalling $3,033.73 shows that, generally speaking, the repairs had to do with parts of the car that can wear out and that require replacement periodically such as breaks, ball joints, tires and routine maintenance such as the replacement of oil and filter and lubrication.

[ 26 ] There is one element, however, that does not appear to be regular maintenance namely the replacement of the manifold, which apparently had been welded to provide a temporary repair. Added value [ 27 ] In general, therefore, the bulk of the repairs that were required to render the car roadworthy also added value.

The Defendants' obligation was to provide a car that did not require immediate replacement of parts but not necessarily to provide a car that had new parts such as breaks and tires. [ 28 ] Without the assistance of expert testimony, it is not possible to establish exactly the amount of this added value, so the Court will arbitrate an amount representing 50% of the repairs. [ 29 ] In this way, the Plaintiffs are compensated for the fact that the car they purchased was not roadworthy but the Defendant is not penalised by requiring renewal of all of the elements that should normally have been partly through their useful life.

Consumer Protection Act ("CPA") [ 30 ] Clearly, this is a class "D" automobile as defined in

section 160 of the CPA. It is, therefore, not subject to a warranty as stipulated in

section 159. [ 31 ] The ordinary warranties from which a consumer benefits in Division 1 of

Chapter III, notably "Goods must be fit for normal purpose" at

article 37, "Durability" at

article 38 and "the requirement that goods be in conformity with description" at

article 40 apply, notwithstanding the absence of the more specific warranties that do not apply because it is a class "D" automobile. We reproduce the relevant articles. 37. Goods forming the object of a contract must be fit for the purposes for which goods of that kind are ordinarily used. 38. Goods forming the object of a contract must be durable in normal use for a reasonable length time, having regard to their price, the terms of the contract and the conditions of their use. 40.

The goods or services provided must conform to the description made of them in the contract. [ 32 ] Articles 42 and 42 also apply both to what were said orally and to the web advertisement that the Defendants permitted to be placed by a third-party on its website. 42. A written or verbal statement by the representative of a merchant or of a manufacturer respecting goods or services is binding on that merchant or manufacturer. 43. A warranty respecting goods or services that is mentioned in a statement or advertisement of the merchant or the manufacturer is binding on that merchant or that manufacturer.

This rule applies to the written warranties of the merchant or the manufacturer not written in the contract. [ 33 ] That advertisement led the consumer to believe that the car was guaranteed to be in excellent mechanical condition. This was certainly not the case, as it required some substantial repairs before being even roadworthy. Liability with respect to each Defendant [ 34 ] The liability of Rouleau Auto is clearly established. Laurent Rouleau acted as a representative of Rouleau Auto. It is not been established that he acted fraudulently.

The car was not subjected to the type of thorough inspection that would have permitted him to know that the car required substantial repairs. [ 35 ] Rouleau, not being a mechanic himself, and not having examined the vehicle personally was negligent in representing that the car was fit for its purposes and in good working condition but he was not necessarily fraudulent in making those negligent representations. [ 36 ]

Article 317 of the Civil Code of Quebec therefore does not prevent Laurent Rouleau from setting up the juridical personality of the corporation to limit his personal liability. 317. In no case may a legal person set up juridical personality against a person in good faith if it is set up to dissemble fraud, abuse of right or contravention of a rule of public order. [ 37 ] The liability in this case is contractual and it is between Rouleau Auto and Wendy Herzan. [ 38 ] The Court arbitrates the damages at $1,500.

Putting in default and choice of recourse [ 39 ] The Defendants raised the fact that when the claim was first made, they offered to take the car back and reimburse the Plaintiffs. [ 40 ] The Plaintiffs would have accepted it if the Defendants covered the costs of towing and guaranteed the reimbursement.

[ 41 ] The Defendants, however, would not cover the costs of towing and also stipulated that the vehicle must be in the same condition that it was in prior to the sale. [ 42 ] The Plaintiffs did not accept to cover the costs of towing and feared that there was a chance they would not be reimbursed because it would be easy for the Defendants to claim that some aspect of the car had been changed during the time it was in their possession. [ 43 ] They rejected this offer and proceeded to begin the process of repairing the car. [ 44 ] Only several days later, when repairs were well underway, did the Defendants accept to come and pick up the truck but at this point that option was no longer feasible. [ 45 ] The Court's comments on this aspect of the case are as follows: [ 46 ] Firstly, the corporate Defendant was in default by virtue of the notification it received where the nature of the repairs required were detailed.

The option of recourse, whether to seek resolution of the sale and restitution of the vehicle in return for the price or to make a claim in damages was that of the purchaser not the vendor. [ 47 ] The vendor, therefore, cannot claim that it has no liability because the purchaser did not accept the restitution. [ 48 ] As well, since the vendor was at fault, it would be the vendor's responsibility to pay towing charges. [ 49 ] For these reasons, the purchaser was entitled to commence the repairs when the vendor did not propose a satisfactory settlement after the putting in default. [ 50 ] In this case, the fact that the purchaser is in Ontario, not Quebec, is of no relevance: if she had been in an equally distant point in the province of Quebec, she would likewise have been entitled to insist upon the towing costs being covered as part of her claim if she had opted for the resolution of the sale and restitution of the vehicle and the return of the sale price.

FOR THESE REASONS, THE COURT: CONDEMNS the Defendant, Les Placements Laurent Rouleau Inc. (Rouleau Auto), to pay, to the Plaintiff, Wendy Herzan, the sum of $1,500, together with interest at the legal rate of 5% per annum and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated from June 9, 2010; CONDEMNS the Defendant, Les Placements Laurent Rouleau Inc. (Rouleau Auto), to pay, to the Plaintiff, Wendy Herzan, judicial costs in the amount of $100; DISMISSES , without costs, the action in respect of Martin Herzan and as against Laurent Rouleau personally. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: January 9, 2012