2012 QCCQ 4543, 2012 QCCQ 4543

Rehmat c. Centre-Ville Volkswagen 2012 QCCQ 4543 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-32-120235-090 DATE: May 31, 2012 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ MICHAEL REHMAT [...] Côte-St-Luc, Quebec [...] Plaintiff v.

CENTRE-VILLE VOLKSWAGEN 324 Peel Street Montreal, Quebec H3C 2G8 -and- VOLKSWAGEN CANADA 777 Bayly Street West Ajax, Ontario L1S 7G7 Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Mr Michael Rehmat, who purchased in 2007 a Volkswagen Jetta (2003 model) for a price of $18,573.85 sues the seller, the Defendant Centre-Ville Volkswagen inc. ("Centre-Ville") and the manufacturer as the term is defined in the Consumer Protection Act ,

article 1 (

g) ii [1] , the Defendant Volkswagen Canada ("Volkswagen"). [ 2 ] Mr Rehmat alleges that excessive rust developed on certain parts of the car in the summer of 2009.

Seeking to have the problem repaired under the warranty, he obtained advice from the Volkswagen dealer where he normally serviced the vehicle, Volkswagen Des Sources, that the rear passenger-side body panel was rusting because of peeling paint and that the paint thickness was indicative of this area of the car having been repainted. [ 3 ] Because of these repair works, he was told that the warranty would not apply. [ 4 ] Mr Rehmat holds Centre-Ville responsible as seller, alleging that when he purchased the Volkswagen, he was told that it had undergone a thorough inspection and that it had not been involved in any previous accident. [ 5 ] He, therefore, claims from Centre-Ville the estimated costs of repairing the vehicle, initially alleged in his letter of demand (P-2) in September 2009 at $2,989.77. [ 6 ] He also put Volkswagen in default as manufacturer. [ 7 ] During the hearing, Mr Rehmat stated that he had not yet had any repairs done to the car and showed photographs indicating that the rust had progressed greatly such that he has no longer sure that he can adequately repair the vehicle. [ 8 ] He sought to amend his claim to the maximum limit of the Small-Claims Division alleging that the car would normally have a value of approximately $7,000 or $8,000 and that it is now beyond repair.

[ 9 ] Centre-Ville Volkswagen contests, raising two arguments: firstly, that when it sold the vehicle it acted diligently, carrying out all the necessary verifications and, secondly, that the claim, made two years after the sale, was not made quickly enough. [ 10 ] Volkswagen raises a number of issues in its written contestation but essentially it distances itself from the legal relationship between the dealership and the purchaser, asserting that this is not a manufacturer's liability.

ISSUES [ 11 ] The Court must determine whether the Defendants are responsible for the premature rusting of the vehicle either on the basis of the seller's warranty, the manufacturer's warranty in the case of Volkswagen and, in the case of Centre-Ville, on the specific representation made that the car had suffered no previous accidents and had not been repainted. FACTS [ 12 ] The evidence establishes that when Mr Rehmat purchased the vehicle, he had obtained from Centre-Ville's representative an assurance that the car had been in no previous accidents and had not been repainted.

It was sold as a certified vehicle with a very thorough inspection carried out. [ 13 ] In the summer of 2009, Mr Rehmat discovered rust that appeared to be abnormal and he brought the matter up with the dealership that services the car, Volkswagen Des Sources. [ 14 ] As indicated in the invoice (P-7), this was a problem that would not be repaired under any warranty because a measurement of the paint thicknesses revealed that the vehicle had been repainted in the area where there was excessive rust. [ 15 ] This repainting had not been done by Mr Rehmat. [ 16 ] He had two occurrences of repair in 2011 as revealed by a "Car proof vehicle history report" obtained in May 2012 (D-5) but the car proof does not reveal any previous accident. [ 17 ] The fact that the representation was made that no previous accident had occurred and that the vehicle had not been repainted is not challenged by the Defendants and it is corroborated by a witness who was present during the discussions leading to the sale, whose testimony the Court found to be straightforward and clear. [ 18 ] Mr Rehmat obtained two estimates for repairing the rust damage, one from Auto Bugatti Inc. of Dorval, Quebec, for a total, taxes included, of $2,989.77, the estimate (P-3) is dated August 19, 2009. [ 19 ] His next step was to confront Centre-Ville with the problem with a formal letter of demand dated September 9, 2009.

Centre- Ville replied September 17 th , stating that it could not accept the estimate nor the conclusion arrived at, having not seen the car itself. [ 20 ] Mr Rehmat made an appointment and received an estimate (P-4) from Centre-Ville on October 5 th , 2007.

The estimate is in three parts totalling approximately $3,170.34. [ 21 ] Volkswagen became aware of the claim at the same time as Centre-Ville, having received a copy of the letter dated September 9 th (P-2). [ 22 ] Mr Rehmat brought the matter up with Volkswagen Customer Service and received acknowledgment of the complaint but no acknowledgement of liability on September 21 st , 2009 (P-6).

ANALYSIS [ 23 ] Based on the testimony of Mr Carrier, Centre-Ville's representative, the Court concludes that Centre-Ville did what it could to inspect the vehicle and made the usual inquiries with the seller which happened to be the financial institution that provides loans to Volkswagen purchasers, VW Credit Canada Inc. [ 24 ] The AGREEMENT OF PURCHASE AND SALE (D-1) dated May 7 th , gives a report of the condition of the vehicle.

There are some minor scratches but nothing that would cause a purchaser to be alarmed. [ 25 ] In assuming ownership of the vehicle and selling it to a member of the public who is a consumer, Volkswagen assumed the risk that if the car had a defect that it could not detect, it would be responsible for that defect towards the consumer. [ 26 ] Moreover, Centre-Ville made the clear statement to the consumer that the car had been in a previous accident nor repainted, something that is important for certain purchasers and certainly for Mr Rehmat who made the point of asking the question specifically. [ 27 ] Based on the Court's discussion with Mr Carrier and the representative of Volkswagen, Julie Zayac, it seems to be more probably a case of an improperly carried out repainting of damaged surfaces, causing the premature rusting as opposed to an inherent defect relating to the fabrication of the vehicle at the plant. [ 28 ] The Court accepts Mr Carrier's sincerity that he did not detect the fact that the car had been repainted, so there is no question of bad faith.

[ 29 ] The law is clear, however, in cases such as this one, that the professional seller is presumed to be aware of the defect, even if he is not actually aware of it, because this is obviously a case where the property has deteriorated prematurely in comparison with similar items. There is no evidence of improper use by the buyer. [2] 1728. If the seller was aware or could not have been unaware of the latent defect, he is bound not only to restore the price, but to pay all damages suffered by the buyer. 1729.

A defect is presumed to have existed at the time of a sale by a professional seller if the property malfunctions or deteriorates prematurely in comparison with identical items of property or items of the same type; such a presumption is not made, however, where the defect is due to improper use of the property by the buyer. [ 30 ] Because it is likely that this defect has nothing to do with the manufacturer, the Courts sees no liability for Volkswagen [3] . 1730.

The manufacturer, any person who distributes the property under his name or as his own, and any supplier of the property, in particular the wholesaler and the importer, are also bound to warrant the buyer in the same manner as the seller. [ 31 ] Similarly, under the Consumer Protection Act [4] , the merchant, Centre-Ville is liable under articles 40 and 42 because of the description given and the specific statement concerning no prior damage and also because of the warranties of fitness for purpose and durability under articles 37 and 38: 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 of 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. 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. [ 32 ] If seen as a classic case of latent defect, it is important for the purchaser to have notified the vendor in a timely manner of the defect once it is detected. [ 33 ] In this case, Mr Rehmat noticed the rust in the summer of 2009, attempted it to have it repaired under the warranty, July 29, 2009, obtained an estimate of the damages in August and put Centre-Ville on notice in early September. [ 34 ] Given that car dealerships require several weeks to book an appointment, it is not unusual that Centre-Ville only saw the car in October. [ 35 ] The Court is of the view that Mr Rehmat's notice in writing to Centre-Ville was given within a reasonable time after he discovered it. [ 36 ] Rust appears gradually and it was only went he obtained his advice from Volkswagen Des Sources that it can be said that he could have suspected the seriousness and extent of the defect arising from an undisclosed paintjob to repair an accident. [ 37 ] As well, Centre-Ville, as seller, may not invoke tardy notice because it is presumed legally to have known of the defect pursuant to articles 1728 and 1729 C.C.Q. as discussed earlier. 1739.

A buyer who ascertains that the property is defective may give notice in writing of the defect to the seller only within a reasonable time after discovering it. The time begins to run, where the defect appears gradually, on the day that the buyer could have suspected the seriousness and extent of the defect. The seller may not invoke tardy notice from the buyer if he was aware of the defect or could not have been unaware of it. [5] [ 38 ] It is clear, therefore, that Centre-Ville must assume liability for the premature rusting. [ 39 ] Two questions arise concerning the quantification of the loss.

Firstly, the Defendants argue correctly that a Plaintiff must mitigate his damages and, in this case, the rust has caused further deterioration from the time it was discovered until the present. [ 40 ] Centre-Ville's liability must be established at the costs of making the necessary repairs at the time they were put on notice to do so.

Mr Rehmat argues that the subsequent deterioration should be to the account of the Defendants because they failed to act according to their responsibilities. [ 41 ] While his argument is attractive, the law clearly establishes that when a Plaintiff can do so, he must mitigate his damages because he has control over the situation. [ 42 ] There are exceptional cases where a Plaintiff does not have the means to mitigate and is relieved of the duty to do so but, in this case, Mr Rehmat has the financial capacity and could have assumed the costs, thereby limiting the future effects of the damages. [ 43 ] The other problem concerning the quantification of the damages relates to the inclusion in the estimates of items that would not appear to be related to the problem of the previous paintjob but rather to damages to the vehicle that had occurred as normal wear and tear and not repaired by Mr Rehmat. [ 44 ] Bugatti's estimate (P-3) contains several elements regarding the hood where there was damage caused by a stone that was not present at the time of the sale.

[ 45 ] Centre-Ville's estimates are easier to interpret because there are three separate estimates, one is for the problem that is in issue here, in the amount of $1,809,99.

There is a separate invoice that includes the damages for the stone (« impact de roche ») $1,036 and a small invoice for repair relating to ice damage for $324,14. [ 46 ] The Court's arbitration of the damages starts with the invoice of $1,809.99. [ 47 ] The Court adds another amount of approximately $200 for loss of time and inconvenience rounding the Plaintiff's claim to $2,000. [ 48 ] No costs will be awarded in the dismissal of the action against Volkswagen because the presence of this Defendant was really necessary to help to establish the difference between the manufacturer's responsibility and that of the retailer. [ 49 ] Although, the case against the manufacturer is dismissed, the Plaintiff did the right thing by bringing it into the case as a party, for a complete resolution of the issues.

FOR THESE REASONS, THE COURT: CONDEMNS the Defendant, Centre-Ville Volkswagen, to pay, to the Plaintiff the sum of $2,000, 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 September 9 th , 2009; CONDEMNS the Defendant, Centre-Ville Volkswagen, to pay, to the Plaintiff, judicial costs in the amount of $127; DISMISSES , without costs, the action against Volkswagen Canada. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: May 15, 2012