Wendell Suwinski - v. -, 2011 SKPC 21

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 021 Date: January 31, 2011 File: SC#217 of 2010 Location: Saskatoon _____________________________________________________________________________ Between: Wendell Suwinski - and - Peter Wiebe Self For the Plaintiff Glenn Ridler (Student-at-Law) For the Defendant _____________________________________________________________________________ JUDGMENT P.S. KOLENICK , J _____________________________________________________________________________ BACKGROUND [ 1 ] In September 2008, the Defendant had advertised for sale in the Western Producer a 1978, 1830 John Deere tractor,

indicating, among other things that it was in very good condition. The Plaintiff contacted the Defendant by telephone, who confirmed that it was in good condition. The parties arranged for the Plaintiff to attend at the Defendant’s place to examine the tractor. Having done so, the parties negotiated a sale of the tractor, on September 29, 2008, for the sum of $8,800.00. No written contract or bill of sale was signed by the parties. [ 2 ] The Plaintiff has claimed that between the date of purchase and when these proceedings were commenced, roughly twenty- one months later, the tractor had very light service.

In the interim, however, the Plaintiff had been required to spend $593.53 on the hydraulic cylinders. As well, in the spring of 2010, the tractor had been examined by a mechanic who confirmed that the rear of the engine block was cracked, and had been re-welded. As well there was a hole in the side of the engine block that had been patched by pieces of metal and covered up with silicone.

Further, the steering mechanism was such that it was too dangerous to drive. [ 3 ] Therefore the Plaintiff has claimed that the Defendant had engaged in misrepresentation of the mechanical condition of the tractor at the material time. He seeks recision of the contract, with a return to him of the purchase price and related expenses. Presumably the tractor would be returned to the Defendant if that scenario occurred. [ 4 ] Conversely, the Defendant has denied that he was aware of any mechanical problems with the tractor leading up to and culminating with the sale.

As well, he submits that the Plaintiff had ample opportunity to view and test drive the tractor before the sale was finalized. [ 5 ] The following issues, therefore must be considered: Is the Plaintiff able to establish on a balance of probabilities with credible evidence that the Defendant had misrepresented the mechanical condition of the tractor at the material time such that the Court should order recision of the contract? If not, do the principles of caveat emptor apply to the deal which the parties have made?

REVIEW OF EVIDENCE FOR THE PLAINTIFF Evidence of the Plaintiff [ 6 ] The Plaintiff testified that the damage in issue was readily apparent in the tractor.

Therefore, he took a series of photos which have been entered as an exhibit in these proceedings as part of the proof of his alleged claim. [ 7 ] Further, when they had been engaged in examining the tractor prior to sale, the Defendant had advised the Plaintiff that it had been purchased from an auction sale from an estate, so that the Plaintiff could not speak directly to any previous owner. [ 8 ] Before the deal was closed, the Plaintiff had driven the tractor in a small circle. While that was ongoing, the Defendant came over and lifted the basket lever.

That action suggested the tractor was having hydraulic system problems, as surmised by the Plaintiff in his testimony herein. [ 9 ] The Plaintiff also confirmed that although he has been a farmer for twenty-five years and used various tractors, he is not qualified as a mechanic. This tractor had been examined by a qualified experienced mechanic who does complete engine overhauls. However, he had not shown the photos to the mechanic, nor had he issued a subpoena to have him attend Court in order to offer his opinions as to the mechanical state of the tractor, as alleged by the Plaintiff.

[ 10 ] In cross-examination the Plaintiff confirmed that, prior to the purchase being completed, he had inspected the tractor somewhat. As well, he was not completely familiar with this particular type of engine because it was somewhat different than normal. [ 11 ] He did recall that there had been a bale spear attached to the bucket at the time. However, he had not taken a close look at the position of the bucket before the purchase was completed. He only noticed the problem with the bucket once he was back at home, because it was continually going down.

It was apparent to him that the front end was weak, and would not hold up the bucket. [ 12 ] The Plaintiff advised that he had only placed roughly twenty-two hours on the tractor after the purchase and it had not been used for any improper purpose. Regardless, he would not have purchased the tractor if he had noticed the damage on the side of the engine. David Friesen [ 13 ] Mr. Friesen confirmed that he is not a mechanic but does buy some tractors as a hobby and for income. He is familiar with the Defendant and farms a few miles away. In April 2007, Mr.

Friesen came into possession of the tractor in issue, having taken it from an estate for partial payment of a debt left owing by the estate. [ 14 ] The Defendant was interested in the tractor and a deal was struck between them, in the summer of 2007. It was sold “as is” and Mr. Friesen had regarded it as a good tractor. The Defendant had not called later, complaining of any problems. [ 15 ] Mr. Friesen also confirmed when examining some of the engine work in the photos placed in evidence that it appeared to have been done roughshod.

He had not done those repairs, but happened to have spray painted in the area of some of the work. Despite that, he agreed there was no fresh paint on those parts, in the photos. Regardless, he could not comment on the alleged damage because he is not a mechanic and had no knowledge of it. He had only used the tractor very little before selling it to the Defendant. [ 16 ] In cross-examination, Mr. Friesen confirmed that he had driven it enough to try out the steering. The Defendant had told him the steering was different, but did not mention any other concerns.

EVIDENCE FOR THE DEFENCE Peter Wiebe - The Defendant [ 17 ] The Defendant confirmed the general contents of his Dispute Note on the record. The tractor had been sold “as it was”. He had sold the tractor because he was purchasing a Bobcat as part of his business. In the meantime, it had worked very well for his purposes, including feeding cattle with the front-end loader. There had been no problem with the steering, nor had he been required to do any steering repairs. [ 18 ] He confirmed also that when he was inspecting the tractor with the Plaintiff prior to the sale, the front-end loader had touched

the ground, during the test drive, on a low part of the yard. Therefore he had touched the lever to raise it somewhat, and avoid creatingany rut in the yard. [19] In cross-examination he repeated that the tractor was fine when he bought it from David Friesen. He had used it to feedfifteen cattle with hay bales, but could not recall how long he had owned it. [20] He confirmed as well that the ad in the Western Producer had stated that it was “in very good condition” and had run verywell for him. He had not needed to do any repairs on the tractor, and knew nothing about a hole in the engine.

Although some of thephotos showed an oil leak, he had never noticed that nature of a problem with it. Further, he denied putting silicone on the engine andhad no knowledge of that occurring. As well, the steering had worked fine. [21] Mr. Wiebe also confirmed that he had not been prepared to take the tractor back roughly one and one-half years after thepurchase. [22] Further, he could not recall having told the Plaintiff that the tractor had been purchased from an estate, rather than DavidFriesen, thereby precluding the Plaintiff from speaking to someone still alive who had knowledge of its condition.

Regardless, it wasgood when he sold it, and could not remember exactly what he said at the time. ANALYSIS Is the Plaintiff able to establish on a balance of probabilities with credible evidence that the Defendant had misrepresented themechanical condition of the tractor at the material time such that the Court should order recision of the contract? If not, do theprinciples of caveat emptor apply to the deal which the parties have made? [23] The Defendant has filed a Brief of Law, which is greatly appreciated.

The general principles applied to the circumstancesand the evidence herein are set forth as follows, commencing at para. 10: LAW 10. As the case at bar involves a transaction between private individuals, the law applicable to situations of this nature is constricted tosection 15 of The Sale of Goods Act, R.S.S. 1978, c.S-1 and the common law principles of “caveat emptor” and “misrepresentation”. 11.

Although the remedies available have been discussed under each heading below, it is essential to draw attention to the mandatoryrequirements a plaintiff must prove to be successful in litigating a matter of this nature. First, it is necessary that a plaintiff prove theamount of damage suffered. Secondly, that the damage suffered flowed from a breach or misrepresentation. These requirements werestated by Gerwing J.A in the head note of Regina Motor Products

(1970) Ltd. v. Flaman, (SK CA), [1991] 5 W.W.R.557 (Sask. C.A.) as follows:…The onus is on the buyer not only to show the amount of damages, but also to show that all the damages itseeks flow causally from the breach… Caveat Emptor & Fraudulent Misrepresentation 12. In Saskatchewan, the law applicable to private transactions of second hand goods was canvassed by Madam Justice Wilkinson ofthe Court of Queen’s Bench in Frey v. Sarvajc (2000), 2000 SKQB 281 , 194 Sask. R. 249, [2000] 8 W.W.R. 74 (Sask. Q.B.). Wilkinson J. discussed the principles applicable to transactions between private individuals as follows:

[10] This was a transaction between private individuals. As a result, the plaintiffs gain no protection either from The ConsumerProtection Act, S.S. 1996, c. C-30.1 or from the implied conditions as to quality and fitness under s. 16 of The Sale of Goods Act, R.S.S.1978, c.S-1. The defendant was not in the business of selling used vehicles. [11] The oft-quoted authority in transactions of this kind is Bartlett v. Sydney Marcus Ltd., [1965] 2 All E.R. 753 (Eng. C.A.) at page 775where Lord Denning, M.R. stated: ...

A buyer should realize that, when he buys a second hand car, defects may appear sooner or later; and, in the absence of an expresswarranty, he has no redress. … 13. The statement quoted at paragraph 11 by Wilkinson J. in Frey, supra, is a general expression of the maxim caveat emptor. Theprinciple of caveat emptor was articulated in Kinch v. Sharbell (1999), (PE SCTD), 173 Nfld. & P.E.I.R. 336 (P.E.I.T.D.) and quoted in Frey, supra, by Wilkinson J. at paragraph 16 as follows: [16] In the Rowsell, supra [Rowsell v. Auto Source Inc. (2000), 187 Nfld. & P.E.I.R. 95 (Nfld. Prov.

Ct.)], case, Handrigan P.C.J. refersto Kinch v. Sharbell (1999), (PE SCTD), 173 Nfld. & P.E.I.R. 336 (P.E.I. T.D.) and the following statement ofprinciple: Under common law, where there is no evidence of fraud, the purchaser of a product may not complain of defects in a product that thepurchaser has had an opportunity to inspect before purchase. This is referred to as the maxim caveat emptor. It is expected that if thevendor has not been fraudulent in the sale of the product, it is the responsibility of the purchaser to have obtained a warranty on the itembefore agreeing to buy it.

The definition attributed to caveat emptor in Black’s Law Dictionary is “let the buyer beware”. … 14. In Frey, supra, Madam Justice Wilkinson addressed the issue of caveat emptor in relation to the sale of a used vehicle andsummarized the principles which apply as follows: [17] The application of these principles to the sale of used cars is summarized in the comments of Gow J. in Rusak v. Henneken [1986]B.C.J. No. 3072 (S.C.) where he states: At common law in the absence of a fiduciary relationship or analogous relationship, there is not as between negotiating parties any dutyof disclosure.

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 todisclose them to a potential buyer, unless there has been on his part active concealment, that is, he has done something to the car with theintent to prevent the defect from being discovered. Leeson v. Darlow, (ON CA), [1926] 4 D.L.R. 415 at p. 432; Allan v.McCutheon (1979), (BC SC), 10 B.C.L.R. 149. Sorenson v. Kay Holdings Ltd. (1979), (BC CA), 14B.C.L.R. 204 per Lambert J.A. at p. 235. The common law rule is caveat emptor.

The underlying philosophy of the law of contract isthat “a party is expected to look out for himself, and make his own bargains. If he has done so foolishly, this is his own fault and he isleft to his own devices.” [18] The distinction between patent and latent defects is described in Halsbury’s Laws of England (3d ed.) Vol. 34, page 211, para. 353as follows: Defects of quality may be either patent or latent.

Patent defects are such as are discoverable by inspection and ordinary vigilance on thepart of the purchaser; latent defects are such as would not be revealed by any inquiry which a purchaser is in a position to make beforeentering into the contract for purchase. As regards patent defects, the vendor is not bound to call attention to them; the rule is caveatemptor; a purchaser should make inspection and inquiry as to that which he is proposing to buy. 15. In Wong v. Wruck (2008), 2008 SKPC 116, 2008 CarswellSask 544 (Sask. Prov. Ct.), D.C. Scott Prov.

J. summarized theprinciples above and discussed the issue of active concealment and its impact on the principle caveat emptor as follows: [19] To summarize, a seller of a used car is under no duty to disclose its defects unless he has actively concealed them. The seller is notbound to call attention to defects the purchaser could observe through ordinary inspection and inquiry – the rule is “buyer beware.” [20] However, fraudulent misrepresentation on the part of the seller will have an impact on the principle of caveat emptor. Fraud may befound when the vendor has actively concealed a latent defect.

However, if the latent defect is unknown to the vendor, there will be noredress for the purchaser and the principle of caveat emptor or “buyer beware” will apply (McGrath v. MacLean (1979), (ON CA), 95 D.L.R. (3d) 144 (Ont. C.A.) at p. 150). [21] A fraudulent misrepresentation is a statement known to be false or made not caring whether it is true or false (Waddams, The Law of Contracts, 5th ed. para. 416; Peek v. Derry (1889), 14 A.C. 337 (U.K. H.L.).

Such a statement must be material to the decision of thepurchaser to enter the agreement and the misstatement must serve as an inducement to the making of that decision (McCamus, The Lawof Contracts, 2005, p. 326).

[24] Of course, the individual case authorities tend to be a product of their particular facts. In that regard I had a similar set ofcircumstances in a judgment of mine: Tutka v. Tanchak (2003), 2003 SKPC 37 , 230 Sask. R. 202 and applied the principles ofcaveat emptor in Frey v. Sarvjc, supra therein. The parties in that case had negotiated the purchase of a used motor vehicle for$1,500.00. When the buyer took it to a mechanic for a wheel alignment there were obvious corroded holes in the towers that support therear strut assembly, requiring $1,200.00 to repair.

I concluded that the seller had no prior knowledge of the corrosion in the strutassemblies. As well, the damage could have been fairly easily spotted by a qualified mechanic had the buyer opted to have the motorvehicle checked. As such the principle of caveat emptor was applied. CONCLUSION Misrepresentation and Rescission [25] The Court is required to determine whether the Plaintiff has established on a balance of probabilities that the contract shouldbe subject to an order of rescission.

The basis for that submission by the Plaintiff is the allegation of a combination of matters which hehad allegedly experienced with the tractor. Those included problems with the hydraulic cylinders, an engine block that had been crackedand re-welded, as well as a hole in the side of the engine that had been patched with pieces of metal and covered up with silicone. However, the Defendant denied any knowledge of the alleged state of the tractor engine nor had he made any repairs.

As well, theDefendant claimed that it was in good condition at the material time, and was not aware of any defects or problems with it either beforeor during the sale process. Thereafter, the tractor was in the Plaintiff’s possession and control for approximately a year and a half,without any concern being raised. The Plaintiff did offer some rationale for the delays, but regardless, he was entirely in control of thesituation, as matters unfolded. [26] In spring 2010, the Plaintiff took the tractor to a qualified mechanic, who apparently examined it.

As well, the Plaintiff hadtaken photos of the alleged problems which were entered as an exhibit. However, the Plaintiff opted not to issue a witness subpoena forthe qualified mechanic to attend as a witness. Without that nature of expertise on the court record to interpret the photos and offer someexpert opinion on the merits of what the Plaintiff has alleged, the Court cannot conclude that rescission of the contract is the appropriateremedy.

Therefore the Plaintiff was not able to establish on a balance of probabilities that the Defendant had engaged inmisrepresentation of the mechanical state of the tractor at the material time. Caveat Emptor [27] Having concluded that the Plaintiff was unable to establish the basis for the Court making an order of rescission of thecontract, that same result should apply to determination of caveat emptor. [28] The Defendant had advertised the tractor as being in “very good condition”, and maintained that position throughout hisdealings with the Plaintiff, and in his evidence.

It was not apparent that the Defendant had attempted to dissuade or discourage thePlaintiff from making whatever inspection or checks of the tractor’s condition as deemed appropriate. The Plaintiff did what he wishedin that regard. The parties were free to make their own bargain. The Defendant was not hiding any nature of defect or if he was, thePlaintiff failed to call expert evidence after the fact from the mechanic who examined the tractor to bring into doubt the credibility of theDefendant in making those claims. [29] The issue of caveat emptor is therefore resolved in favour of the Defendant as well.

The claim of the Plaintiff is dismissed inits entirety.

________________________ P.S. Kolenick, J