Hall, J. THE PROVINCIAL COURT FOR SASKATCHEWAN NORTH BATTLEFORD IN THE MATTER OF THE SMALL CLAIMS ACT, 1997 Citation No: 2003 SKPC 44 S. C.: N.B.141-02 BETWEEN: RALPH FINCH AND RAYMOND RUSSELL, RONALD RUSSELL and ROD RUSSELL, operating as TRIPLE AUTO REPAIR DEFENDANTS The Plaintiff, for himself Lionel Russell, for the Defendants JUDGMENT KAISER P.C.J. February 28, 2003 [1] This issues in this case largely involve Part III of The Consumer Protection Act, S.S. c.-30.1, and inter alia, the question of whether or not a consignee is a “retail seller” as defined in that Part. [2] The Defendants are the members of partnership that operates an auto repair business in North Battleford. During portion of 2002, Mr. Lionel Russell, who is not partner in Triple Auto Repair (hereinafter referred to as “Triple R”), was engaged in the business of consignment auto sales upon the business premises of Triple R, with Triple R’s knowledge and consent. The sole financial benefit for this activity was to go to Lionel Russell. The only benefit that Triple received was the opportunity to perform repair work for reward upon the consigned vehicles. There was no sign or other indication that Lionel Russell was operating business that was independent of the Defendant’s business upon the location. he consignment agreement used in the present case showed the dealer to be “Triple Auto Repair Sales and Consignment”. It is noted that in the ordinary course of events, purchaser would not see the consignment agreement. consumer doing business in this situation would certainly expect that Mr. Lionel Russell was representative of Triple and that he was dealing with Triple R. In my view, in the circumstances, the actions of Mr. Lionel Russell must be considered the actions of Triple R. [3] On April 16, 2002 Mr. Dan Oborowsky brought 1991 Ford Tempo to Mr. Russell at the Triple premises and entered into written agreement (C-1) entitled “Automobile Consignment Agreement between Triple Auto Repair Sales and Consignment and Dan Oborowsky.” This agreement provided that Triple will try to sell the vehicle upon Mr. Oborowsky’s behalf. The remuneration to Triple is not set out on the document, but am satisfied that it was to be 10% of the selling price. Mr. Russell described this as “lot fee.” Regardless of the label applied, it is compensation for finding buyer and showing the vehicle. This is the essence of consignment relationship. [4] On or about May 23, 2002, the Plaintiff went to Triple looking for car for his adult daughter to drive. He had previously purchased truck at this business. He made known to Mr. Lionel Russell the purpose of the proposed transaction. They looked at the Ford Tempo. Mr. Russell passed on to Mr. Finch the information that had been provided to him by Mr. Oborowsky and generally represented that it seemed to be in decent condition. At that point the odometer indicated that the vehicle had traveled 212,584 kilometres. am satisfied that Mr. Russell told Mr. Finch that the vehicle was consigned vehicle. They settled on price of $1,600. The sales agreement indicates that the vehicle was “Sold as is”. [5] The next day, Mr. Finch or his daughter, Ms. Cindy Lamoureux brought the car back to Triple because of minor problem with seat belt, because of vibration or pulsation that seemed to be coming from the brakes, and because the “check engine soon” light had come on. It was determined that certain of the sensors had to be replaced, that the brake rotors had to be turned and that there was something stuck in the seat belt receptacle. These items were repaired. The cost of the sensor replacement, being $146.30, was born by Mr. Finch. he other costs were absorbed by Triple or Mr. Oborowsky. Mr Finch was unhappy about having to pay for the replacement of the sensors. Mr. Russell indicated that he could return the car and have his money back if he wished. Mr. Finch declined to take up this offer. [6] However, Ms. Lamoureux continued to have problems with the car and in particular, with constant vibration that was present. She endeavoured to get the vehicle into Triple to have them look at it. Her evidence was that on number of occasions she made arrangements with the Defendants that the Defendants would pick the car up from her place of employment. They were to look at the car while she was at work. The Defendants never picked up the car. Finally, in early August, she had person that she described as “back yard” mechanic look at it. He advised her that there were serious problems with the car. In particular, there were problems with the lower ball joints, the exhaust system, and especially the motor mounts. There were also problems with the steering system. list, marked as D-2, was prepared outlining these problems. [7] On August 12, 2002, Mr. Finch took this list to Triple and gave it to Lionel Russell. Mr. Russell’s response was to the effect that the problem was Mr. Oborowsky’s and that he would see if Mr. Oborowsky would do anything about it. Mr. Finch was not satisfied with this response and decided to contact the Department of Consumer Affairs of the Province of Saskatchewan. As result of the information received from them, he felt that the problem was indeed Triple R’s problem and that he was entitled to look to Triple R, rather than Mr. Oborowsky. Later on August 12th, Mr. Finch telephoned Mr. Russell and told him this. Mr. Russell disagreed and effective discussion came to an end. [8] On August 15th, Mr. Finch took the vehicle into Auto Centre in North Battleford. This business is an accredited SGI vehicle inspection centre. There the vehicle was inspected by Mr. Derry Dillabough who is an accredited technician. Mr. Dillabough, who testified at trial, found that there were very serious problems with the vehicle. Most notably, the engine and transmission mounts were in very bad condition. The rear mount that supports the back of the engine and the transmission had entirely detached from the vehicle frame. chain had been installed to hold up the engine and transmission. This defect meant that the vehicle had to be taken out of service because it was unsafe. Mr. Dillabough was uncertain as to whether this defect could be repaired at all. There were other problems of significance. The ball joints were defective and needed to be replaced. The rack and pinion steering system was also defective and needed to be replaced. Mr. Dillabough advised that the vehicle could only be driven very slowly and carefully and for only short distance for storage purposes. Mr. Finch carefully drove it to his farm. He obtained certificate from Auto Centre. Mr. Finch incurred cost of $96.05 for this inspection. Mr. Finch delivered copy of the certificate to Mr. Russell. Triple R’s position remained that it was Mr. Oborowsky’s problem, and not that of Triple R. [9] Mr. Finch applied for Small Claims Summons on August 27th. The Summons was issued on September 13th. The first appearance was October 24th. The file does not disclose the date of service, but obviously it was between August 27th and October 24th. At the first appearance, arrangements were made for Triple to inspect the vehicle. Mr. Rodney Russell, one of the partners in Triple R, inspected the vehicle in their shop. He confirmed Mr. Dillabough’s findings. In his evidence Mr. Rodney Russell expressed the opinion that $700 would make the vehicle roadworthy again. The vehicle remains on the premises of Triple R. The Plaintiff is not interested in having the vehicle repaired, even if it is possible, in that he has obtained different vehicle for his daughter. He seeks recovery of the purchase price and the costs that he has incurred for repair and inspection. [10] In the period between purchase on May 23, 2002, and notification on August 12th (a period of 82 days) the vehicle was driven slightly less than 5,000 kilometres. ISSUES AND ANALYSIS [11] The law of Contract clearly recognizes that there is contract (the consignment contract) between the consignor (Mr. Oborowsky) and the consignee (Triple R). There is also contract (the sales contract) between Mr. Oborowsky (the vendor) and Mr. Finch (the purchaser). There is no contract between Triple and Mr. Finch. [12] However, The Consumer Protection Act, (the Act modifies and moderates the law of Contract. In particular, it provides that retail seller is deemed to give certain warranties to consumer who purchases the retail product. [13] Is consignee “retail seller” within the meaning of The Consumer Protection Act? [14] Section 39 of the Act defines “retail seller” as follows: (l) “retail seller” means person who sells consumer products to consumers in the ordinary course of his or her business but, subject to subsection 50(1), does not include trustee in bankruptcy, receiver, liquidator, sheriff, auctioneer or person acting under an order of court; It is clear that Mr. Lionel Russell was engaging in the business of selling automobiles, which are, of course, consumer products to consumers, and that this was his ordinary business. As previously stated, find that this business is legally attributable to Triple R. [15] In my view consideration must be given to the exception provision at the end of the definition of “retail seller”. The kind of people included in the exception are people who either clearly do not own the goods in question or who have limited form of ownership. For example, an auctioneer does not own the goods he or she is selling. Nonetheless, the auctioneer is empowered to sell the goods and does so. Similarly, the consignee does not own the goods, but has the power to sell them. The auctioneer is included in the list of excepted persons, but the consignee is not. If it had been the intention of the Legislature in passing this legislation to exclude consignee, consignees would have been enumerated along with the other excluded categories of persons. [16] There is principle of construction, applicable to statutes, agreements and wills, known in Latin as Expressio Unius Est Exclusio Alterius. It means that when certain persons or things are specified in law an intention to exclude all others from its operation may be inferred. It is my view that it is applicable in the present situation. If the Legislature had intended that consignees were not to be considered retail sellers, it would have listed them in the excluded group. [17] find support for the notion that persons may be considered retail sellers even though they have no contractual relationship to the purchaser in section 55 of the Act, which provides: In any action brought pursuant to this Part against manufacturer, retail seller or warrantor for breach of statutory, express or additional written warranty, lack of privity of contract between the person bringing the action and the retail seller, manufacturer or warrantor is not defence, and the retail seller, manufacturer or warrantor is conclusively presumed to have received consideration. [18] I conclude that a consignee is a retail seller within the meaning of the Act and accordingly that Triple R is deemed to have given to Mr. Finch the warranties set out in the Act. [19] Is the consignee retail seller in breach of any of the warranties provided in the Act? [20] Section 48 of the Act provides that the retail seller is deemed to have given ceratin warranties to the consumer. Most of the deemed warranties are not relevant to the present matter. The portions of section 48 that are relevant are as follows: 48 Where consumer product is sold by retail seller, the following warranties are deemed to be given by the retail seller to the consumer: (d) that the product supplied under the contract is of acceptable quality, except that this warranty is deemed not to be given: (i) respecting defects specifically drawn to the consumer’s attention before the contract is made; or (ii) where the consumer examines the product before the contract is made, respecting defects that examination ought to have revealed; (e) where the consumer expressly or by implication makes known to the retail seller any particular purpose for which the product is being bought, that the product supplied under the contract is reasonably fit for that purpose, whether or not that is purpose for which the product is commonly supplied, except that this warranty is deemed not to be given where the circumstances show that: (i) the consumer does not rely on the retail seller’s skill or judgment; or (ii) it is unreasonable for the consumer to rely on the retail seller’s skill or judgment; (g) that the product and all its components are to be durable for reasonable period, having regard to all the relevant circumstances of the sale, including: (i) the description and nature of the product; (ii) the purchase price; (iii) the express warranties of the retail seller or manufacturer; and (iv) the necessary maintenance the product normally requires and the manner in which it has been used; [21] am satisfied that the engine and transmission mounts of this vehicle were in the same condition on the date of sale as there were in on August 15th, being the date upon which Mr. Dillabough inspected the vehicle. am further satisfied that this problem made this vehicle unsafe to drive, and that accordingly, on the date of the sale, it was unsafe. It is probable that the problems with certain of the other components were there at the time of sale though they further deteriorated with use due to the engine and transmission mount problem. [22] As to warranty (d), Section 39 defines “acceptable quality” as follows: (a) “acceptable quality” means the characteristics and the quality of consumer product that consumers can reasonably expect the product to have, having regard to all the relevant circumstances of the sale of the product, including: (i) the description of the product; (ii) its purchase price; and (iii) the express warranties of the retail seller or manufacturer of the product; and includes merchantable quality within the meaning of The Sale of Goods Act; While the Plaintiff did not pay large sum of money for this vehicle, he could still reasonably expect this vehicle to be safe to drive, as it left the Defendant’s property. It was not safe to drive and accordingly was not of acceptable quality. In my view, the retail seller bears the burden of establishing the exceptions enumerated in the statutory warranty and has failed to do so. [23] As to warranty (e), the purchaser did make known the purpose for which this vehicle was required. That purpose was to provide transportation for his daughter and her children. Again, the vehicle was unsafe from the outset and accordingly cannot be considered suitable for this purpose. Again the retail seller has not established the exceptions. [24] Warranty (g) requires that the product and its components be durable for reasonable period of time. In the case of older used cars sold at low price, the reasonable period is very short. Given my findings as to warranties (d) and (e), it is unnecessary to make finding with respect to warranty (g) and decline to do so. [25] Is the breach of substantial character? [26] breach of substantial character leads to wider array of possible remedies than does regular breach. Section 39 provides as follows: (c) “breach of substantial character” means: (i) that consumer product, or the level of performance of the retail seller or manufacturer of consumer product, departs substantially from what consumers can reasonably expect, having regard to all the relevant circumstances of the sale of the product, including: (A) the description of the product; (B) its purchase price; (C) the statutory warranties and express warranties of the retail seller or the manufacturer of the product; or (ii) that consumer product is totally or substantially unfit for all the usual purposes of such product or for any particular purpose for which, to the knowledge of the retail seller, the product is being bought; I am satisfied that this automobile was substantially unfit for all the usual purposes for which, to the knowledge of the retail seller, it was being bought, and accordingly that the breach was of a substantial character. [27] What remedies are available to the purchaser? [28] Section 57 of the Act provides: 57(1) Where there is breach by manufacturer or retail seller of statutory warranty mentioned in section 48 or of an express warranty mentioned in section 45: (a) and where the breach is remediable and not of substantial character: (i) the party in breach shall, within reasonable period, make good the breach free of charge to the consumer but, where the breach has not been remedied within reasonable period, the consumer shall be entitled to have the breach remedied elsewhere and to recover from the party in breach all reasonable costs incurred in having the breach remedied; and (ii) the consumer is entitled to recover damages for losses that he or she has suffered and that were reasonably foreseeable as liable to result from the breach regardless of whether the breach is remedied; (b) and where the breach is of substantial character or is not remediable, the consumer, at his or her option, may exercise the remedies pursuant to clause (a) or, subject to subsections (2) and (3), the consumer may: (i) reject the consumer product; and (ii) if he or she exercises his or her right to reject, he or she is entitled to recover the purchase price from the party in breach and to recover damages for any other losses that he or she has suffered and that were reasonably foreseeable as liable to result from the breach. (2) The consumer shall exercise his or her right to reject the consumer product pursuant to clause (1)(b) within reasonable period pursuant to subsection (3), except where the consumer delays the exercise of his or her right to reject because he or she has relied on assurances made by the party in breach or the party’s agent that the breach would be remedied and the breach was not remedied. (3) For the purposes of subsection (2), regardless of whether the right to reject is being exercised by the consumer or person mentioned in subsection 41(1), reasonable period: (a) runs from the time of delivery of the product to the consumer; and (b) consists of period sufficient to permit any testing, trial or examination of the consumer product that may be normally required by consumers of that product and as may be appropriate considering the nature of the product, for the purpose of determining the conformity of the product to the obligations imposed pursuant to this Part on the party in breach. 1996, c. C-30.1, s.57. [29] The remedies that the Plaintiff seeks are those set out in subparagraph 57(1)(b). In order to obtain these remedies, the consumer must reject the consumer product and do so within reasonable period. At no time did the Plaintiff expressly state to the Defendants that he rejected the car. However, it was clear that he was very unhappy with it. Communication broke down over the issue of whether Triple had any responsibility in the situation. He did commence the action claiming the purchase price as quickly as was reasonably possible after learning of the significance of the mechanical problems and there does not seem to have been any unnecessary delay in service of the claim upon the Defendants. The car was not used after the Plaintiff learned of its very serious problems. am treating the commencement of the present action as the rejection of the product. [30] Did the Plaintiff reject the product within reasonable period? This issue is to be determined pursuant to subsections (2) and (3) of section 57. Subsection (2) contains an exception that seems to address the situation of delay in rejection arising from undertakings to repair defect followed by failure to do so. This vehicle had vibration problem from the outset. In my view this problem arose by reason because of drive train alignment problems associated with the missing engine mount. The Defendants endeavoured to repair the vibration problem by turning the brake rotors when the vehicle was returned to them on May 24th. This did not solve it. The Plaintiff, through his daughter sought to have the problem resolved by having the Defendant pick up the vehicle and work on it. find that the Defendant did agree to this arrangement but failed to pick up the vehicle. my view the bulk of the delay was occasioned by the Defendants Further, find that the Plaintiff relied on the Defendants agreement to look at the vehicle, with the implication that this would involve repair, and hence did not take other steps to have the problem dealt with. Once the Plaintiff became aware of the seriousness of the problems, particularly with the engine mount, he proceeded with dispatch. I find that in the circumstances, the Plaintiff did reject the goods within a reasonable period. [31] Pursuant to subparagraph 57(1)(b)(ii) the Plaintiff is entitled to recover the purchase price of $1600 plus foreseeable damages. The costs incurred for repairs and inspection, being $146.30 and $96.05, respectively, and totalling $242.35 were foreseeable and are properly recoverable. Therefore the Plaintiff’s total recovery would ordinarily be $1842.35. [32] However, the vehicle was driven almost 5,000 kilometres before the seriousness of the problem was discovered. Subsection 60(c) contemplates compensation to the vendor for same. It provides: 60 Where consumer rejects consumer product pursuant to clause 57(1)(b): (c) the party in breach is entitled to recover from the consumer, or set off against the refund of the purchase price of the product, an amount that is equitable for the use of the product, provided that in determining the amount no regard is to be taken of the depreciation of the product unless it is otherwise provided for by the regulations; In my view an equitable amount is $.06 per kilometre, amounting to $300. Accordingly, the Plaintiff’s judgment is reduced by this sum, such that the final figure is $1542.35. [33] Upon payment of this sum, the Plaintiff will execute such bill of sale in respect of this vehicle in favour of the Defendant. [34] The Plaintiff will have his costs of this matter which set at $20. SUMMARY [35] The Plaintiff will have judgment against the Defendant in the sum of $1542.35 plus costs of $20 for a total of $1563.35. Once the judgment has been paid in full, the Plaintiff will execute bill of sale in respect of the subject vehicle in favour of the Defendant. [36] Dated this 28th day of February, 2003. David J. Kaiser, P.C.J.
The plaintiff sought to recover the purchase price and repair and inspection costs of a used vehicle pursuant to the Consumer Protection Act s.57(1)(b). Mr. Russell sold the vehicle under consignment to the plaintiff for $1,600. The sales agreement indicated the vehicle was sold 'as is'. The purchaser returned the vehicle the next day because of a problem with the seat belt, a vibration or pulsation from the brakes and the 'check engine soon light' had come on. The plaintiff paid for the sensor replacement. Triple R absorbed the other costs of repair. The plaintiff's daughter continued to have problems with the car including with lower ball joints, exhaust system and motor mounts. At issue was whether or not a consignee is a 'retail seller' as defined in the Consumer Protection Act. HELD: The plaintiff was entitled to recover the $1,600 purchase price plus foreseeable damages which included costs of repairs and inspection totalling $242.35 and costs of $20 less a reduction of $1,542.35 for the 5,000 km it was driven. 1)A consignee is a retail seller within the meaning of the CPA and accordingly Triple R was deemed to have given the warranties set out in the CPA. If the legislature had intended that consignees were not to be considered retail sellers, it would have listed them in the excluded group. Persons may be considered retail sellers even though they have no contractual relationship to the purchaser in s.55. 2)While the plaintiff did not pay a large sum of money, he could still expect this vehicle to be safe to drive. It was not safe and accordingly was not of acceptable quality. The retail seller bears the burden of establishing the exceptions enumerated in the statutory warranty and failed to do so. The vehicle was unsafe from the outset and could not be considered suitable for the purpose of providing transportation. It was unnecessary to make a finding with respect to warranty s. 48(g) (durable for a reasonable period of time). 3)This auto was substantially unfit for all the usual purposes for which, to the knowledge of the retail seller, it was being bought and accordingly the breach was of a substantial character. 4)The plaintiff rejected the goods within a reasonable period. The commencement of the present action was treated as the rejection of the product. The bulk of delay was caused by the defendant's failure to pick up and look at the vehicle (and implication this would involve repair) as agreed.