Name Peggy Villeneuve Claimant Name Nick Scott Sypher Defendant Editorial Notice: Addresses v. phone numbers have been removed from this electronic version of the judgment., 2014 NSSM 70

IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Cite as: Villeneuve v. Sypher, 2014 NSSM 70 Claim No: SCCH 424894 BETWEEN: Name Peggy Villeneuve Claimant Name Nick Scott Sypher Defendant Editorial Notice: Addresses and phone numbers have been removed from this electronic version of the judgment. Peggy Villeneuve – Self Represented Nick Scott Sypher – Self Represented DECISION This claim follows the purchase of a vehicle by the Claimant from the Defendant. For the most part, the facts are not seriously in dispute.

On January 19, 2014, the Claimant, Peggy Villeneuve, answered an advertisement in Kijiji placed by the Defendant, Nick Sypher. The ad was not tendered into evidence but a string of correspondence sent through Kijiji was tendered as an exhibit. Mr. Sypher acknowledged the ad was placed. Originally, the ad provided the vehicle was a 2003 Suburu Forester with approximately 135,000 km and “no rust”. Ms. Villeneuve accepted the offer and provided a deposit of $300. A contract was signed containing the provision, "as is, where is". This was followed by several key discoveries by Ms.

Villeneuve once she received the registration. Upon closer inspection, it was discovered that the vehicle was in fact a 2002 model with 148,325 km on it. The parties renegotiated the price to $4000. When Ms. Villeneuve went to register the vehicle, the registration was still in the name of the previous owners, Carla Rioux and Patrick Bell. She contacted the RCMP to ensure the vehicle was not stolen. She concluded the vehicle was not stolen, and paid the balance of the funds to Mr. Sypher. She spoke with Mr. Bell and was advised that the couple had sold the vehicle to Mr. Sypher for $700 before they moved away.

It was in need of major repairs. The couple apparently attempted to void the registration after Ms. Villeneuve’s call. Ms. Villeneuve tendered into evidence a sworn affidavit from Ms. Rioux and Mr. Bell but neither of them testified in court. She initially demanded a refund from Mr. Sypher, but was refused. Eventually, the registration was transferred on February 1, 2014. Ms. Villeneuve drove the car for approximately two weeks and found it shook when driven. She contacted Michael Parker to determine if the vehicle was safe to drive. Mr.

Parker attended to her house for pictures and advised her of a broken control arm assembly underneath the vehicle. Mr. Parker told her the vehicle was “undriveable”. She was given a rejection sticker effectively voiding the initial motor vehicle inspection. She took the vehicle to Canadian Tire to determine the cost of repairing the vehicle. She tendered into evidence a quote for $2031.91. On cross examination, she acknowledged that she had the vehicle for approximately two months. She signed the contract for the purchase of the vehicle and took it away without any further conditions.

She further described the shaking when the car exceeded 70

km/hour. She took the vehicle to Canadian Tire and found the control arm was broken. The car had been driving very wobbly. Michael John Parker is a Motor Vehicle Inspector employed by Service Nova Scotia. He entered into evidence the Motor VehicleInspection reports related to the vehicle, the first dated January 20, 2014 when the car was owned by the Bells and the second time when it was owned by Ms. Villeneuve. The first inspectionwas dated January 27, 2014. The vehicle had been driven an additional 235 km. The first certificate showed the vehicle passed theinspection, while the second was failed.

He inspected the vehicle himself on February 5, 2014. He took a number of photographs. Thecertificates and photos were entered into evidence as Exhibit #2. He noted several concerns with the vehicle especially around thesteering linkages and the tires. Specifically, the left control arm was rusted through, there were holes in the rear frame near the mountingholes and the exhaust was rusted through. In his opinion, this would cause the car to appear “wobbly” when driven. Charles Patrick McNamara is the common-law spouse of Ms. Villeneuve.

He looked at the vehicle when it was purchased and noted norust on the body, or as he stated “it looked fine”. Nick Scott Sypher purchased the car from Ms. Rioux and Mr. Bell on January 10, 2014. It was a quick sale for $700.00. According toSypher, “they wanted it gone”. He had the vehicle inspected at Oulton’s Auto Shop and it passed its Motor Vehicle Inspection. Heacknowledged the registration was not transferred. He was approached by Ms. Villeneuve for the purchase of the vehicle.

She told him she needed to get insurance on the vehicle beforetaking it, so she left a security deposit of $300 and the price was set at $4500. She called him later and indicated she could not get theregistration transferred, she had bought a new car and wanted her money back. He advised her, the sale was on an “as is, where is” basis.He testified that Ms. Villeneuve called him about 400 times and threatened him 23 times. Daniel Gibson is a friend of the Defendant. He works on cars as a hobby which he estimates he has done for 20 years.

He described thevehicle as being in good shape for a 2002 car with approximately 150,000 km. The Law This transaction is a private sale. Mr. Sypher is not in the business of selling automobiles and thus, none of the warranties found in theConsumer Protection Act and Sale of Goods Act apply. “As is, where is” The law respecting the sale of used vehicles differs significantly from the sale of new vehicles. This principle has been addressed in thecourts of Nova Scotia. An excellent review of the law was provided in the Small Claims Court case of Robinson v. Atkinson 2004 NSSM31.

In that case, Adjudicator MacDonald (now Justice Beryl A. MacDonald of the Nova Scotia Supreme Court Family Division), statedthe following: “35. A seller can give an express warranty to a buyer that the item sold will for example, continue to operate for a specific period of time.There was no express warranty given by Atkinson to Robinson when Robinson purchased this truck. 36.

The motor vehicle inspection certificate issued in respect to the truck is not a document that in any way guarantees, or purports toguarantee, that the truck, examined at the time of the inspection, will continue to work for any period of time after the date of theinspection. 37. The truck purchased by Robinson from Atkinson was purchased second hand and was a 1988 model. Therefore it was approximately16 years old and this would be obvious to Robinson.

Atkinson did tell Robinson that the truck was in good condition but I do not acceptthat this was given in the nature of a warranty of fitness or to imply that the truck would continue to work for any particular period oftime before repairs would be needed. I accept that Atkinson, by placing the words "as is where is " on the receipt given to Robinson didso to clearly indicate he was giving no warranties nor making any representations as to the continued operation of the vehicle. The truckwas working on the day of sale and there were no defects known to Atkinson that he attempted to hide from Robinson.

I accept theevidence that the clutch in the truck had been installed approximately a year ago and that a clutch may fail without warning. 38. There are few reported cases involving sales of used vehicles between individuals. However, in Keefe v. Ford, 27 N.S.R.(2d) at page361, Justice Pace quoted from Peters v. Parkway Mercury Sales Limited (1975), (NB CA), 58 D.L.R. (3d) 128 atpp.134-135: "In my opinion, there is a substantial distinction between the implied condition of fitness in the case of the sale of a second hand car andthat which is implied in the sale of a new car.

Persons who purchase used cars, especially older models with substantial mileage, mustexpect defects in such cars will come to light at any time. In the present case the insistence of the plaintiff on the benefit of a used carguarantee and the reluctance of the vendor to give such a guarantee, clearly indicate that the parties realized the possibility that the car

was not likely to be free of defects and that some defects might come to light even within the first 30 days following the sale. In my view,they entered into the contract of sale and purchase on that basis. In Godsoe v. Beatty (1959), (NB CA), 19 D.L.R.(2d)265 ......., Ritchie, J.A., quoted with approval (at p. 267) a passage from 77 Corp. Jr. Sec., at p. 1199 containing the following statement: ‘A used car dealer is not an insurer of the cars he sells and is not required to inspect them for latent defects.

Where a second hand motorvehicle will run, the fact that frequent repairs are necessary does not establish a failure of consideration...’" 39. Justice Pace continued in his decision to quote from the decision of Lord Denning in Bartlett v. Sidney Marcus, Ltd., [1965] to ALLE.R. 753, at p. 755: "It means that, on a sale of a second hand car, it is merchantable if it is in usable condition, even though not perfect. This is very similarto the position under s. 14(1).

A second hand car is ‘reasonably fit for the purpose’ if it is in a roadworthy condition, fit to be drivenalong the road in safety, even though not as perfect as a new car. Applying those tests here, the car was far from perfect. It required a good deal of work to be done on it; but so do many second handcars. A buyer should realize that, when he buys a second hand car, defects may appear sooner or later; and, in the absence of expresswarranty, he has no redress. Even when he buys from a dealer the most that he can require is that it should be reasonably fit for thepurpose of being driven along the road.

This car came up to that requirement. The plaintiff drove the car away himself. It seemed to berunning smoothly." 40. In the case of the situation relating to the truck sold by Atkinson to Robinson, I note that this truck was capable of being driven alongthe road and that on the day of sale, it appeared to be running smoothly and was driven to 23 Beacon Street as requested by Robinson. Robinson himself was later able to drive that truck further into the driveway located at 23 Beacon Street. 41. In Sheldon v.

Robinson (1997), (NS SC), 158 N.S.R. (2d) 359., the plaintiffs purchased, from the defendants, aneight year old used vehicle on an "as is where is" basis. This was a sale involving a seller of used cars. However, it does provide someguidance in respect to the issue relating to the sale of used cars. Shortly after purchase the plaintiffs in this case encountered enginetrouble requiring the expenditure of $829.00 for repair. The small claims court adjudicator allowed the plaintiff’s claim against thedefendant dealer on the basis of provisions of the Consumer Protection Act.

The Supreme Court Justice on review reversed this decision.Justice Palmeter stated at Paragraph 13, quoting from a previous decision he had made in Penney v. Brent (sic) Pontiac Buick GMC,(1989) (NS SC), 95 N.S.R. (2d) 321: "The vehicle was sold 'as is', which could mean that the vehicle could only be durable for a short period of time or perhaps not at all. Thepurchaser accepted the vehicle as is and in my opinion the definition of durability in this case must depend on that circumstance." 42.

Justice Palmeter stated at paragraph 18: “In this case the respondents purchased the motor vehicle in the face of clearly expressed conditions and disclaimers. They had everyopportunity to inspect the vehicle and they did assume a substantial risk. In my opinion any warranty, if at all, implied under the Act(Consumer Protection Act) would be minimal at best and not under the circumstances as found by the adjudicator.” 43.

Justice Palmeter reversed the decision of the Adjudicator and relieved the Defendant from the payment of any cost of repair to thePlaintiff having determined that the vehicle had operated for a sufficient period of time based on the circumstances of the facts beforehim. 44. At the time Atkinson purchased the truck it was running. He had an opportunity to take it for a test drive had he wished to do so. Hedid not ask to have it examined by a mechanic. He did little examination of the truck himself. The vehicle was capable of being drivenand was driven to 23 Beacon Street, Amherst, Nova Scotia.

Robinson knew he was purchasing an old used vehicle. He knew he waspurchasing the truck from a seller who was selling on the basis of an "as is where is" sale. Therefore, he knew or should have known thatthe seller was not providing an warranty in respect to the continued operation of the truck, irrespective of the comment by the buyer thatthe truck was in "good condition". As a result, I find that there was no misrepresentation by Atkinson. While this decision is not binding on me, I find it to be very persuasive and informative.

Findings Based on a review of the evidence, I find the Claimant purchased the vehicle on an “as is, where is” basis. The vehicle was 12 years oldand had approximately 148,000 kilometres driven on it. The vehicle had a rusty control arm but otherwise ran and was operable. I cannot help but take notice of the conduct of the Defendant throughout this matter. Mr. Sypher saw an opportunity to purchase aninexpensive vehicle and, with luck, sell it after short ownership for a profit. In preparing for the sale, his statements were inaccurate,namely, misstating the age of the vehicle and the mileage. This resulted in Ms.

Villeneuve insisting on a reduced price. He did not attendto the transfer of registration in his name. Ms. Villeneuve submits that it was to avoid the sales tax on registration. While that may be the

case, I am not satisfied on the evidence that he did, nor is it relevant as the registration was ultimately transferred to him and then to Ms. Villeneuve. Mr. Sypher will be liable for any unpaid sales tax or income tax consequences which may apply to the profit earned on the vehicle. It is clear from the review of the cases, the law in Nova Scotia places less onerous requirements on the seller of an used vehicle, particularly where the contract contains the provision, “as is, where is”. The Defendant urged me to consider that clause an absolute defence to a breach of contract. It is not, nor should it be.

The provision can be thwarted by a finding of a fundamental breach of the contract, with the result being a clear failure of consideration, a finding of fraud or a breach of a collateral warranty. Based on the principles stated above, the car was approximately 12 years old at the time of purchase. It was clearly a used vehicle with substantial wear and tear and depreciation. Like the Defendants in the cases cited, Ms. Villeneuve did not take the car for a test drive, nor did she inquire about the possibility of the car being seen by a mechanic prior to accepting delivery of the vehicle. She accepted it on sight.

When she discovered the registration had not been signed to Mr. Sypher, he was uncooperative. She became understandably suspicious. However, her vigilance in this respect came only after she took delivery of the vehicle and paid Mr. Sypher. Based on the cases above, I find there to be no failure of consideration or fundamental breach. Further, there was no evidence of fraud. Collateral Warranty I turn now to the issue of collateral warranty, specifically, if the phrase “no rust” appearing in the Defendant’s Kijiji ad is a term of the contract or a collateral contract.

A collateral contract is defined by Fridman in the Sale of Goods in Canada as: “...a statement, on the strength of which a buyer enters into a contract of sale of goods, may not be a term of the eventual contract of sale, but may be treated as more than a “mere” representation. It will then give rise to an entirely separate contract, breach of which, for example, the failure of the goods to come up to the standard expressed in the statement, can give rise to liability on the part of the seller making the statement, even if the main contract purports to exclude his liability.

The statement in such cases is being treated as a variety of contractual promise, and not as a representation. The test of whether the statement is binding in this way would seem to be the intention and understanding of the parties in the light of all the surrounding circumstances.” In reviewing the facts of the case, it is clear from the evidence of both parties that a primary standard for the purchase of the vehicle was the absence of rust. Indeed, the Defendants’ witnesses made a point of stipulating that no rust was visible.

However, I accept the evidence of the Claimant's witnesses that the control arm was rusted at the time of purchase. That is clear from the photographs supplied in evidence. This rust caused the steering on the vehicle to fail. Thus, it cannot be said that the vehicle was free of rust. I find the absence of rust to have been a condition which triggered the contract in the first place. Accordingly, I find the phrase “no rust” to have been a collateral warranty as that term was intended and understood to be an accurate description of the vehicle. Clearly, it was not.

As a result, I find the term to have been breached and the Defendant is therefore liable to the Claimant. In assessing a remedy for breach of contract, the intent is to put the parties in the same position they would have been in had the contract been fulfilled. I find in the circumstances of this case the intention of the parties was for Ms. Villeneuve to have received a 2002 Subaru Forrester. The vehicle was to have been free of rust. It is not free of rust. Ms. Villeneuve is seeking a complete rescission of the contract. I do not think that appropriate in this case.

She has tendered into evidence an unrefuted estimate from Canadian Tire in Cole Harbour, namely, $2031.91. She also stated that another shop estimated approximately $1000 to repair the vehicle. I am satisfied on the evidence that the Canadian Tire work description is correct. However, it is only one estimate and not conclusive. I allow $1500 under this head of damages. I also allow general damages of $100.00. At the beginning of the hearing, I explained to Ms. Villeneuve that the items she sought in her claim were largely matters of costs (Court fees and gas mileage) or general damages (bother and upset).

The latter item is outside the jurisdiction of this Court as the limit for general damages is $100. Had Ms. Villeneuve been aware, she would have filed a claim for less than $5000. Thus, I do not feel it appropriate to award her the full filing fee which she has paid. It was necessary for Ms. Villeneuve to attempt to serve Mr. Sypher personally as he was unavailable for service. She seeks $62.00 in gas mileage, which I allow as an appropriate amount for service. As a result, the claim is allowed in part. The Claimant, Peggy Villeneuve shall have judgment against, Nick Sypher as follows:

Repairs $1500.00 General Damages $ 100.00 Costs $ 158.80 Total $1758.80 An order shall issue accordingly. Dated at Halifax, NS, on September 4, 2014. ______________________________ Gregg W. Knudsen, Adjudicator Original: Court File Copy: Claimant(

s) Copy: Defendant(s)