Floorco Flooring Inc v Blackwell and Ootsa Lake, 2014 BCPC 248 (CanLII)
Citation: Floorco Flooring Inc v Blackwell and Date: 20141024
Ootsa Lake File No: 1343856
2014 BCPC 0248 Registry: Prince George
IN THE PROVINCIAL COURT OF BRITISH COLUMBIA
BETWEEN:
FLOORCO FLOORING INC
CLAIMANT
AND:
DEREK BLACKWELL
and
OOTSA LAKE OUTFITTING
DEFENDANT
REASONS FOR JUDGMENT
OF THE
HONOURABLE REGIONAL ADMINISTRATIVE
JUDGE M. J. BRECKNELL
Appearing for the Claimant: W.C.R. Schafer
Appearing for the Defendants: D. Blackwell and J. Blackwell
Place of Hearing: Prince George, B.C.
Date of Hearing: June 5, 2014
Date of Judgment: October 24, 2014
INTRODUCTION
[1] The Claimant, Floorco Flooring Inc. (Floorco), as represented by its president, W.C.R. Schafer (Mr. Schafer), sues the Defendants for damages arising from the sale of a 2010 Chevrolet Express 8 Passenger all-wheel drive van (the Van) by the Defendants to Floorco.
[2] The Defendants, Derek Blackwell (Mr. Blackwell) and his proprietorship Ootsa Lake Outfitting (Ootsa), deny responsibility for any damages claimed arising from the sale of the Van. In support of that position they rely on the sale documents that describe the Van as being sold “as is, where is” and the legal maximum of caveat emptor, commonly referred to as buyer beware.
PARTIES AND WITNESSES
Claimant
[3] Floorco is a B.C. registered limited company which has been owned and operated by Mr. Schafer for many years. Floorco, at various times, sold flooring, leisure boats, snowmobiles and all-terrain vehicles.
[4] Mr. Schafer is a 70 year old widower with several health challenges. He resides in Vernon B.C. During his working career he was at various times a school teacher and principal, an off-road vehicle manufacturer and salesperson, a General Motors salesman, lot manager and service coordinator, a territory manager for a snowmobile manufacturer, a service station owner/operator, the owner of Floorco and a home renovator. He acknowledged being mechanically inclined and that he had bought and sold used vehicles before, including GM vehicles.
[5] Mr. Schafer relied on the Affidavits of the following people in support of Floorco’s claim:
a) John Harold Hunter concerning Mr. Schafer’s character and honesty;
b) Jacob Delange, car dealership owner, and Del Johnson, “Auto Trader” employee concerning the interpretation of the terms “very (extra) clean, clean, average and rough” in the automotive sales industry. Mr. Johnson also described Mr. Schafer as fair and honest;
c) William Bevan, automotive frame alignment specialist, concerning damage to the Van he observed and the repairs he effected. He also commented on Mr. Schafer being a recognized businessman in his community;
d) Douglas Frizell, mechanic, concerning damage to the Van he observed and the repairs he effected. He described Mr. Schafer as a fair and honest man;
e) Harold Kober, auto electric expert, concerning the damage to the Van he observed and the repairs he effected. He described Mr. Schafer as fair and honest.
[6] Mr. Blackwell is a guide outfitter who resides near Burns Lake B.C. He is the owner of Ootsa which he operates as a proprietorship. He is not a mechanic.
[7] Jennifer Blackwell (Ms. Blackwell) is Mr. Blackwell’s wife and a stay-at-home mother caring for three young children. She has never been involved in the business of used vehicle sales. She was the person, acting as Mr. Blackwell’s agent, who had most of the dealings with Mr. Schafer.
DEFENDANT’S PURCHASE OF THE VAN
[8] Mr. Blackwell purchased the Van at the Ritchie Brothers Auctioneers (Canada) Ltd. auction in Prince George on October 18, 2012 for $13,000.00 plus administrative fees and taxes for a total of $14,924.00.
[9] The vendor was Action Motors (1999) Ltd. who had purchased the Van from a Richmond B.C. based private leasing company a short time before. The sale of the Van to Mr. Blackwell at the auction was on a “as is, where is” basis.
[10] Mr. Blackwell said that he purchased the Van because he thought it would be useful in his business and large enough for his family.
DEFENDANT’S USE OF THE VAN
[11] After the purchase of the Van at the auction Mr. Blackwell drove it to his home in Burns Lake.
[12] He said he did not notice any issues with the Van while driving it at highway speed, such as the vibrations later complained about by Mr. Schafer, but did note that the ABS or Stabilitrak indicator light was on. He drove the Van a handful of times before it was sold to Floorco. Ms. Blackwell drove the Van one time. The Blackwell’s determined that the Van was too large for their needs and after a few days decided to sell it.
[13] During the time he owned the Van Mr. Blackwell did not have it mechanically inspected. He did remove the wheels to inspect the bearings and said he thought they looked tight.
[14] Under cross-examination, Mr. Blackwell acknowledged that in order to pull the wheels from the Van he had to use a jack and that while the wheels were off he did look briefly under the vehicle but could not recall seeing any mud or bent metal cross members. He also said that he did not see any leaking from the CV boot when the wheels were off and that he did not try the emergency brake.
ADVERTISING THE VAN
[15] Ms. Blackwell listed the Van for sale on Kijiji on October 21, 2012, three days after the purchase at the auction.
[16] The advertisement listed the year, make, model, drive wheel type, colour and fuel type for the Van. It also contain the following additional text:
REDUCED!!!! 2010 1500 AWG, white 8 passenger Van. This Van is very clean, has new studded winter tires. 61,000 km. $18,900 obo.
[17] Ms. Blackwell said that she used the term REDUCED because she had previously listed the Van for $21,000.00 but no evidence was presented about that listing.
[18] Mr. Schafer contacted Ms. Blackwell October 23, 2012 and expressed interest in the Van. Mr. Schafer had been looking for over two years in a variety of venues for a van of that type. He wanted a van for hauling construction materials, hauling boats generally and at launching locations, and hauling ATVs and snowmobiles. Mr. Schafer described such a van as being rare because only General Motors (GM) manufactured them and only in limited numbers.
THE SIGNIFICANCE AND MEANING OF “VERY CLEAN”
[19] Ms. Blackwell said she described the Van as “very clean” because she had washed it inside and out. Ms. Blackwell said she washed the outside of the Van with a pressure washer and washed the inside of the Van but not all of the windows and, as such, did not note any damage to any of the windows.
[20] She said she was not aware that “very clean” meant anything in the automotive sales industry because she had never paid any attention to any used vehicle advertising. She also said that she had never bought or sold vehicles over the Internet.
[21] Mr. Schafer said that terms such as “very clean” have a specific meaning in the used automobile sales industry. In support of that contention he placed in evidence various documents from the industry where the classification of used vehicles are discussed and defined. One of those was the Canadian Black Book which sets out “guidelines” to be considered for classification of used vehicles as follows:
1. Extra Clean - Like new for year model, perfect paint, no visible signs of wear, very low kilometers.
2. Clean - Very little interior or exterior wear, matching tires with good tread, mechanically sound.
3. Average - Visibly normal interior and exterior wear. Still a good vehicle with substantial service remaining.
4. Rough - A vehicle with a below average interior or exterior condition and/or one with excessive kilometrage. Limited serviceable life remaining.
[22] Mr. Schafer also placed in evidence information from the online service of the Motor Vehicle Sales Authority of British Columbia which governs automobile sales dealerships in British Columbia. A portion of that document reads as follows:
Dealer responsibilities (As is-Where is)
When buying from a licensed dealer, the dealer may try to sell an older model vehicle as is. As Is-Where Is or no warranties expressed or implied. That is, without undertaking any repairs and without any warranty. However, the dealer is still responsible for ensuring that the vehicle meets minimum vehicle safety standards. In addition, the dealer has a duty to disclose all material defects that exist at the time of the transaction.
Even if you are buying a vehicle with no representations as to condition or quality there is still an implied warranty under the Sale of Goods Act. The Act requires that the vehicle be safe and suitable for transportation and last for a reasonable period of time given the normal use of the vehicle in the circumstances of the sale (such as price, etc.).
[23] Based on those definitions, and his knowledge of the automotive industry from his involvement in it, Mr. Schafer said he made certain assumptions in relying on Ms. Blackwell’s assertions concerning the Van being “very clean”.
COMMUNICATIONS AND NEGOTIATIONS
[24] Mr. Schafer telephoned Ms. Blackwell and he said he was told by her that the Van was an excellent mechanical condition with no problems when driving but a few parking lot dings.
[25] Ms. Blackwell said that in that initial conversation and others, she told Mr. Schafer the following:
a) when and where they had purchased the Van;
b) the reason why they were selling the Van;
c) they had not taken the Van to a mechanic for an inspection;
d) neither she nor Mr. Blackwell were mechanics;
e) they had enjoyed driving the Van for the short time they owned it;
f) the ABS or Stabilitrak light was on and they hadn’t looked into it;
g) Mr. Blackwell thought the Van drove nice; and
h) Mr. Blackwell had checked the wheel bearings and they looked good and felt tight.
[26] Ms. Blackwell also said she provided the following information about the Van to Mr. Schafer upon his request:
a) the serial number;
b) the engine size;
c) there were no power door locks;
d) whether it was a 1500 or 2500;
e) whether there was any GM warranties remaining (she found out there may be and passed that information along);
f) whether there were any leaks;
g) whether there were any damage declarations;
h) whether there were any liens or encumbrances.
[27] After receiving that information from Ms. Blackwell and completing his due diligence, Mr. Schafer decided that he wanted to purchase the Van because although it was more expensive than he had planned, it was relatively new, had low kilometres, and was “very clean” and that Ms. Blackwell sounded like a trustworthy and honest person.
[28] Before making his offer to buy the Van Mr. Schafer said he confirmed with Ms. Blackwell:
a) that the Van was in satisfactory condition;
b) that it was roadworthy;
c) that there had been no mechanical inspection of the Van but it ran perfectly;
d) that Mr. Blackwell had removed the front wheels and checked the wheel bearings and brakes.
MR. SCHAFER’S DUE DILIGENCE
[29] In addition to the information he obtained from Ms. Blackwell, Mr. Schafer also conducted his own inquiries about the Van.
[30] He obtained a Carproof search which indicated the Van was accident free and had been on a lease through a Richmond, B.C. based leasing company. This led Mr. Schafer to erroneously assume that the Van had been used in the Lower Mainland and sold at a Vancouver area auction.
[31] Mr. Schafer also investigated the value of similar vans by referring to a number of online sources including the Canadian Black Book and VMR Canada.
[32] After taking all those steps Mr. Schafer offered a purchase price of $18,000.00 plus tax and after discussing the matter with Mr. Blackwell, Ms. Blackwell accepted the offer.
INSPECTION OF THE VAN
[33] Once the purchase had been arranged the Blackwell’s agreed to drive the Van to Prince George and meet Mr. Schafer to conclude the sale. They agreed to that arrangement so Mr. Schafer could fly to Prince George, conclude the sale and drive back to Vernon the same day.
[34] On October 27, 2012 Mr. Blackwell drove the Van from Burns Lake to Prince George and Ms. Blackwell and the children followed in another vehicle. Mr. Blackwell said he noted no issues with the Van during that drive of 225 km. The Blackwell’s parked their other vehicle in the parking lot of an insurance agency in Prince George and they drove to the airport in the Van to pick up Mr. Schafer.
[35] Once they had picked up Mr. Schafer, Mr. Blackwell drove the Van from the airport back to the insurance agency office parking lot. Mr. Schafer sat in the back seat during the drive. He said he was able to observe the “check engine” light was on and when he mentioned it both Mr. Blackwell and Ms. Blackwell assured him that it was not an indication of a major problem. Ms. Blackwell contested Mr. Schafer’s evidence that he made any mention of the “check engine” light during the drive.
[36] Mr. Blackwell said that on both the drive from Burns Lake to the airport and from the airport to the insurance agency he drove the Van at highway speed and did not notice any vibrations.
[37] Mr. Schafer denied ever being advised that the ABS light was on or ever seeing the ABS light come on while he was driving with the Blackwell’s from the airport to the insurance agency parking lot. He acknowledged that the check engine light came on during that brief trip.
[38] The weather on October 27, 2012 was slightly below zero with fresh snow resulting in dirty and wet road conditions. As a result the Van was covered in wet, dirty snow and road debris by the time they had returned to the insurance agency parking lot.
[39] Upon arriving at the parking lot Mr. Schafer said he did the following:
a) looked at the interior briefly and found no rips in the upholstery;
b) looked at the window glass which was covered in snow and mud and detected no flaws although one window appeared to have an unusual snow thaw pattern;
c) looked under the hood, found the engine to be clean, the belts not frayed, the brake fluid up, the oil up but dirty and no unusual smell from the transmission fluid;
d) noted the parking lot dings to the body were not easily visible with the exception of the passenger side barn door which could be easily felt;
e) he did not look under the Van because that would have required lying down in the mud and wet snow but he could make out nothing underneath the Van.
[40] Ms. Blackwell said that in addition to the steps Mr. Schafer said he took, he revved the engine and grabbed the wheels and gave each of them a shake. He also commented that there was no spare tire. She also said that Mr. Schafer did get down onto his hands and knees and look under the Van on both sides and upon getting up brushed the snow from his pant legs.
[41] Mr. Schafer said that he once again he asked if the Van was roadworthy and in “very clean” condition. He said the Blackwell’s assured him the Van was good and that they had driven it to their home in Burns Lake and back without any problems.
[42] Mr. Schafer said he elected not to attempt to find a service facility to inspect the Van for the following reasons:
a) the Blackwell’s repeatedly assured him it was in good condition and they gave every indication of being trustworthy and honest people;
b) Mr. Blackwell was a logger and hunting and fishing guide living in a rural area. He had removed the wheels and tires to inspect the wheel bearings and breaks and this required some equipment and training;
c) he assumed that as Mr. Blackwell was a logger he worked with equipment, chainsaws, skidders and heavy trucks;
d) when Mr. Blackwell spoke of the condition of the Van he did so with authority and assertiveness;
e) he was recovering from the loss of his wife in 2011 and his own health problems and did not want to remain overnight in Prince George and find an inspection facility on a Sunday;
f) the Blackwell’s indicated that their children were growing restless and they had to meet other people in a short time;
g) he had the assurance that the sale would be “as is where is”; the “as is” being in roadworthy and sound mechanical condition and the “where is” being in the insurance agency parking lot.
[43] Ms. Blackwell said that the drive from the airport to the insurance agency parking lot took them past several car dealerships and mechanic shops. She also stated that Mr. Schafer did not request to test drive the Van or request to take it to a mechanic for an inspection. Mr. Schafer said that the Blackwell’s did not offer to let him take the Van for an inspection.
CONCLUDING THE SALE
[44] Mr. Schafer and the Blackwell’s went into the insurance agency office to conclude the sale. Ms. Blackwell provided a Bill of Sale to Mr. Schafer. He reviewed it and in turn presented a bank draft for $20,160.00 being the purchase price of $18,000.00 plus taxes of $2,160.00.
[45] Mr. Schafer and the Blackwell’s each signed the Bill of Sale, the salient portions of which read as follows:
Description of following item “as is” and “where is” as per our terms of sale PRICE $(CAD)
2010 Chevrolet Express AWD 8 Passenger Van, white, Gasoline 18,000.00.
[46] Once the bank draft and the Bill of Sale had been exchanged Mr. Schafer and the Blackwell’s went their separate ways.
PROBLEMS WITH THE VAN
[47] On the drive back to Vernon Mr. Schafer observed the following problems with the Van:
a) as soon has he brought the Van up to the highway speed he noticed of vibration and thrumming noise. He stopped in a location where he could look under the Van to see if anything was hanging loose but nothing was. He concluded the vibration to be potentially out of balance or bent driveshaft which in his view would have been noticed by anybody driving the Van at highway speeds. To alleviate the problem he drove at below the speed limit;
b) at various times three dashboard indicator lights came on;
c) the emergency brake did not work but there was no excessive heat from any of the wheels so he suspected faulty wheel sensors;
d) the low beam headlights did not work.
[48] The next morning Mr. Schafer drove the Van onto ramps in order to observe the underside. When he did he said he found the following:
a) the underside of the Van was completely packed with hard mud that seem to be impregnated with a water resistant goo. The mud engulfed the bell housing, the transmission, the transfer case and the frame as was the cavities above the frame spaces above the gas tank and muffler and driveshaft;
b) with the wheels off mud could be seen piled on top of the frame and suspension components such that no wire harnesses, brake lines, emergency brake cable housings, gas or hydraulic lines were visible;
c) he spent five hours power washing the worst of the mud from the undercarriage to reveal further damage.
[49] Once the Van was cleaned Mr. Schafer said the following damage became evident:
a) the frame cross members were bent and distorted pushing various drivetrain components out of place and causing the driveshaft to bind generating vibration when operated;
b) various wiring, transmission, electrical and breaking components were compressed, dented, damaged or destroyed;
c) the driver’s side CV boot was holed and leaking leaving a grease trail over the front left wheel well and the right front axle and suspension components have been replaced as a result of previous damage;
d) there was extensive body damage to various parts of the Van some of which had been repaired haphazardly;
e) all the glass on the vehicle was scratched by abrasive dirt and mud and one window had damage to the laminated layers;
f) much of the weather stripping on the passenger side barn door was missing;
g) mud was impregnated under the interior floor mats, the wall and door panels and the rear heating core.
FURTHER COMMUNICATION
[50] Once he had thoroughly observed the Van Mr. Schafer emailed the Blackwell’s detailing what he had found in the way of damage. In that email he also said the following:
I do not believe you folks knew how bad the condition was of the van because it could not be seen under the thick mud that had accumulated under the unit over time. It must have been used in a mining or oil enterprise.
Needless to say I would like some accommodation for the condition of the van as it was advertised as “clean”, a term indicating in good condition. Once I get my mechanic to look at it closely we will have a good idea of just how bad it is. As it now stands the van is unsafe for highway travel and should’ve been sold as salvage, or in need of major repairs. As such I would not have purchased it.
[51] During the trial Mr. Schafer expanded on the sentiments set out in the first paragraph quoted above saying that he believed the Blackwell’s were nice people and would not mislead him.
[52] The Blackwell’s replied by email the next day in which they detailed their view of the matter and, in addition, said the following;
Also we stated clearly in Bold lettering “as is” and “where is” on the bill of sale.
We are terribly sorry the van wasn’t up to your standards that we honestly told you as much as we knew about the van. It is up to the buyer to look further into the mechanics of the vehicle, by getting it into a shop so they can completely go over the van, just like by the sounds of it you did, the only problem is you did it after purchasing. We were never aware of the undercarriage/subframe problems, or the exhaust of the other problems, we told you about the small dents on the one side, which you have looked at before you bought it, as far as we knew the van ran great and handled nice on the road.
We unfortunately for you do not want the van back nor can we afford to pay for the damages that are on the van, those damages should have been looked at before purchasing the van. Sorry for the inconvenience.
[53] At some point after raising the issue of receiving some compensation from the Blackwell’s surrounding the Van sale, Mr. Schafer says he was told by Ms. Blackwell that they had sold the Van to him for what they purchased it for. Later Mr. Schafer determined that Mr. Blackwell had purchased the Van for $13,000.00 whereas he had paid $18,000.00 to them. When confronted on that point during the trial Ms. Blackwell acknowledged that she may have said that and that what she described as a $3,000.00-$4,000.00 difference was close to what they paid and that they incurred costs in coming to Prince George to buy the Van and then returning to Prince George to deliver it to Mr. Schafer.
DAMAGES CLAIM
[54] When the Notice of Claim was filed on March 18, 2013 damages claimed for repairs to the Van were set at the amount of $6,171.32 plus filing and service fees.
[55] Subsequently, the Notice of Claim was amended to claim damages for repairs already performed and estimates for repairs yet required to the Van in the amount of $12,075.51 plus filing and service fees.
[56] In support of the damages claim, Floorco presented numerous labelled photographs, summaries of the work done by Mr. Schafer, third-party repair receipts and estimates for work yet to be done. That information completely substantiates the claims advanced by Floorco if the Defendants' liability for such damages can be established.
SUBMISSIONS
Claimant
[57] Mr. Schafer’s submissions on behalf of the Floorco can be summarized as follows:
a) Mr. Blackwell must have some mechanical ability that enabled him to pull the wheels off to inspect the bearings and he must have seen the mud;
b) he was never told about the warning lights for the ABS, which is easily fixed, or the Stabilitrac, which is expensive to repair;
c) paint flaws to the body of the Van are easily observable from close up;
d) his ability to inspect the Van was affected by his health challenges and the inclement weather;
e) Ms. Blackwell lied to him about the price they had paid for the Van. He has suffered a loss of the use of the Van and the expensive to repair it but has tried to make the repairs as cheaply as possible;
f) he paid $18,000.00 for the Van and will have to make a total of $12,000.00 in repairs for a total price of $30,000.00 when the Van is worth between $13,000.00 and $15,000.00.
Defendants
[58] Mr. Blackwell submissions can be summarized as follows:
a) there were no representations made by him or Ms. Blackwell concerning the road worthiness, safety or mechanical condition of the Van;
b) they owned the Van for a total of nine days and drove from Prince George to Burns Lake and return with no mechanical issues noted;
c) neither he or Ms. Blackwell are mechanics and Mr. Schafer was made well aware of that fact;
d) they performed no mechanical inspection on the Van and they made Mr. Schafer aware of that fact;
d) the words “Very clean” is not a term of art that was known to Ms. Blackwell. The Canadian Black Book is not for general public use. It is more available to automotive dealers and financial institutions;
e) Mr. Schafer has stated on more than one occasion that he accepts that the Blackwell’s could not have known about the extent of the damage to the vehicle when it was sold to him;
f) there is no proof that the damages complained of by Mr. Schafer affected the mechanical safety or operational ability of the Van.
ISSUES TO BE DECIDED
[59] The issues to be decided in this matter are:
1) Did Mr. or Ms. Blackwell misrepresent the condition of the vehicle?
2) Does the principle of caveat emptor apply in these circumstances?
THE LAW
[60] Submissions made by Mr. Schafer in support of his claim give rise to an allegation that the Blackwell’s misrepresented the condition of the Van in order to induce him to purchase it. If they did in fact make such misrepresentations, the principle of caveat emptor will not apply and the Defendants may be liable for damages.
[61] The circumstances here are somewhat analogous to that in M&P Logging Ltd. v. Carrier Lumber Ltd., [1999] B.C.J. No. 35. In M&P Logging Ltd., the plaintiff was told by the defendant prior to contracting for the sale of a tractor that it had been completely rebuilt and used for 300 hours following the repairs. The plaintiff purchased the tractor on an “as is where is” basis. While the tractor in question had been used for 300 hours since undergoing repairs to its engine, it had actually been used for 800 - 1000 hours since its transmission had undergone any repairs. After being purchased and used for one full day by the plaintiff, the tractor required significant repairs. Sigurdson J. concluded, based on the evidence, that the plaintiff would not have purchased the tractor but for the misrepresentation of the defendant as to the recentness of the repairs.
[62] At paragraph 54, Sigurdson J. stated the applicable law as follows:
54. Notwithstanding that the parties have subsequently entered into a contract, there may still be liability for negligent misstatements made during the pre-contractual discussions if the elements of the negligent misstatement are proven. In Canadian Tort Law, 5th ed. (Toronto: Butterworths, 1993) at 426, Linden discusses pre-contractual negligent misrepresentation.... [in Esso Petroleum Co. v. Mardon, a petroleum company].
….
In affirming this decision Denning M.R. declared:
If a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another - be it advice, information or opinion - with the intention of inducing him to enter into a contract with him, he is under a duty to use a reasonable care to see that the representation is correct, and the advice, information or opinion is reliable. If he negligently gives unsound advice or misleading information or expressed an erroneous opinion, and thereby induces the other side to enter into a contract with him, he is liable in damages.
[63] The test for negligent misrepresentation is set out in Hedley Byrne & Co. v. Heller & Partners Ltd. [1964] AC 465. The elements of the Hedley Byrne test have summarized in Kingu v. Walmar Ventures Ltd. (1986) 1986 CanLII 142 (BC CA), 10 B.C.L.R. (2d) 15 (B.C.C.A.) as follows:
1) A false statement negligently made;
2) A duty of care on the person making the statement to the recipient. A duty of care does not arise unless:
a. the person making the statement is possessed of special skill or knowledge of the matter in question, and
b. the circumstances establish that a reasonable person making that statement would know that the recipient is relying upon his skill or judgment;
3) Reasonable reliance on the statement by its recipient;
4) Loss suffered as a consequence of the reliance.
[64] The Blackwell’s were not in the business of selling used vehicles. As such the Mr. Schafer cannot rely on the implied conditions of quality or fitness under section 18(a) or (c) of the Sale of Goods Act which reads as follows:
Implied conditions as to quality or fitness
18 Subject to this and any other Act, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale or lease, except as follows:
(a) if the buyer or lessee, expressly or by implication, makes known to the seller or lessor the particular purpose for which the goods are required, so as to show that the buyer or lessee relies on the seller's or lessor's skill or judgment, and the goods are of a description that it is in the course of the seller's or lessor's business to supply, whether the seller or lessor is the manufacturer or not, there is an implied condition that the goods are reasonably fit for that purpose; except that in the case of a contract for the sale or lease of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose;
(c) there is an implied condition that the goods will be durable for a reasonable period of time having regard to the use to which they would normally be put and to all the surrounding circumstances of the sale or lease;
[65] Nor can Mr. Schafer rely on the Business Practices and Consumer Protection Act, S.B.C. 2004, Chapter 2 as it does not apply to the type of transaction at issue here.
[66] Therefore, as the Van was sold by Mr. Blackwell to Mr. Schafer on an “as is where is” basis, if negligent misrepresentation is not found the principle of caveat emptor would apply.
[67] The terms "as is, where is" and caveat emptor have been discussed in various court decisions in a variety of jurisdictions across Canada. With regard to the terms "as is, where is” the Newfoundland District Court in Allen v. Allen 1976 Carswell Nfld. 151 had the following comments at paragraph 70:
70. However, I do not feel that the finding that there was a bill of sale containing the expression "as is, where is," is a critical finding of fact. That term is in common usage in such private transactions though its legal significance is somewhat dubious. The expression however is not without some significance in that it surely indicates an understanding between the seller and the buyer that the seller is making no representations and giving no warranties or guarantees and that the buyer takes the chattel with all its defects-both latent and patent. I rather suspect that it is the layman's way of expressing the maxim caveat emptor.
[68] The term caveat emptor has been discussed by a number of courts in various jurisdictions across Canada. One of the leading cases on the point is the decision of Rushak v. Henneken [1986] B.C.J. No. 3072 (B.C.S.C.) affirmed 1991 CanLII 178 (BC CA), [1991] 59 B.C.L.R. (2d) 250 (B.C.C.A.) which has been referred to and followed in several subsequent decisions.
[69] In Rushak the court dealt with the term caveat emptor at paragraph 167 when it said (citations excluded):
167.… At common-law in the absence of a fiduciary or analogous relationship, there is not as between negotiating parties any duty of disclosure. Almost always the seller of a used car those of its defects, or at least some of them, but is not under any duty to disclose them to a potential buyer, unless there has been on his part active concealment, that is, he is done something to the car with intent to prevent defect from being discovered. The common- law rule is caveat emptor. The underlying philosophy of the law of contract is that ‘a party is expected to look out for himself, and make his own bargains. If he has done foolishly, this is his own fault and he is left to his own devices’ Fridman, The Law of Contract page 113.
DISCUSSION
[70] Mr. Schafer alleges that the misrepresentations made by the Blackwells in relation to the Van are several, and that his reliance on these misrepresentations has resulted in a significant financial loss.
[71] The alleged misrepresentations fall into three categories: the physical appearance of the vehicle; the roadworthiness, safety and mechanical condition of the vehicle; and the sales history of the vehicle.
Physical Appearance of the Van
[72] Mr. Schafer noted the mud and paint flaws covering the Van were not consistent with his understanding of the term “very clean”; the term used by Ms. Blackwell to describe the physical appearance of the vehicle by during pre-contract communications.
[73] However, the Blackwells were not licensed automotive dealers and therefore would not have been aware that the term “very clean” was an industry term of art from the Canadian Black Book. Instead, Ms. Blackwell’s understanding of the term “clean” came from washing of the vehicle. It is clear that the statement made in the context of pre-contract negotiations was not a false statement negligently made by Ms. Blackwell.
[74] Ms. Blackwell did not owe a duty of care to Mr. Schafer. She did not possess special skills or knowledge relating to used car sales, and the circumstances surrounding the sale of the vehicle did not establish that Ms. Blackwell would know that Mr. Schafer was going to rely upon her judgment as he did. If anything, Mr. Schafer was the person possessed of special skills and knowledge based on his years of experience in the automobile and other related industries.
[75] When the vehicle was brought to the parking lot in Prince George where the transaction took place, it was less clean than it was when Ms. Blackwell told Mr. Schafer that the vehicle was “very clean”. The Van had made the journey from Burns Lake to Prince George in snowy, dirty and wet road conditions which contributed its diminished cleanliness. However, Mr. Schafer was, at this point, able to observe the vehicle, making any reliance on the previous statement of Ms. Blackwell about the cleanliness of the Van unreasonable because he was able to view the Van before paying the purchase price.
[76] Though Mr. Schafer suffered a financial loss by having to pay for repairs to the vehicle’s physical appearance, the loss is a consequence of Mr. Schafer’s own failure to properly inspect the vehicle prior to purchase, and not on his reliance on misrepresentations, if any, by the Blackwells.
Roadworthiness, Safety and Mechanical Condition of the Van
[77] Mr. Schafer said that he was not told by the Defendants that the warning lights for the ABS or the StabiliTrak for the vehicle were in need of repair. It is also clear from the evidence regarding the pre-contract discussions that the Blackwells did not disclose any information to Mr. Schafer regarding the damage that was eventually found by him to be hidden beneath the mud at various locations in the vehicle.
[78] Even though the Blackwell’s communicated to Mr. Schafer on several different occasions during their pre-contract negotiations that:
a) the vehicle was enjoyable to drive during the short time they owned it;
b) Mr. Blackwell thought the vehicle drove nice;
c) Mr. Blackwell had checked the wheel bearings and that they looked good and felt tight;
d) the vehicle was in satisfactory condition;
e) the vehicle was roadworthy;
f) the vehicle ran perfectly;
g) Mr. Blackwell had removed the front wheels and checked the wheel bearings and breaks;
the Blackwell’s had also informed Mr. Schafer that:
h) they had not taken the vehicle in for a mechanic inspection;
i) neither of them were mechanics; and
j) the ABS or StabiliTrak light was on in the vehicle and they had not looked into it.
[79] It is reasonable to conclude that in light of the limited mechanical knowledge of the Blackwells, their statements to Mr. Schafer that the vehicle was in “satisfactory condition”, was “roadworthy” and “ran perfectly” were not false statements negligently made, but rather the honestly-held opinions of vehicle owners who knew very little about the Van they were driving.
[80] Mr. Blackwell did not owe a duty of care to Mr. Schafer. Neither Mr. nor Ms. Blackwell possessed special skills or knowledge relating to used car sales, and the circumstances surrounding the sale of the Van did not establish that the Blackwells would know that Mr. Schafer was going to rely upon their judgment regarding the mechanical state of the vehicle as he claims he did. Mr. Schafer made the assumption that Mr. Blackwell must have possessed some mechanical skills or knowledge because he was a logger, hunter and fishing guide who lived in a rural area, but this assumption was not borne out by the evidence.
[81] The statements made by the Blackwells to Mr. Schafer that neither were mechanics, and that the Van had not been taken in for a mechanical inspection, serve to make his claimed reliance on the Blackwell’s statements about the roadworthiness, safety, and mechanical condition of the vehicle untenable.
[82] Though Mr. Schafer suffered a financial loss by having to pay for mechanical improvements to the vehicle, the loss is a consequence of his own failure to properly inspect the Van himself, or to have it inspected by a qualified mechanic prior to deciding to complete the purchase, not on his reliance on the statements of the Blackwells.
Sales History of the Van
[83] Mr. Schafer alleged that Ms. Blackwell lied to him about the price that the Blackwells paid for the Van when they initially purchased it. Although Ms. Blackwell’s initial statement about the price paid for the vehicle by the Blackwells was both false and negligently made, Mr. Schafer received this information after he had purchased the Van. Therefore, Mr. Schafer could not have relied on the false statement made by Ms. Blackwell when entering into the contract for purchase of the Van.
Other Issues
[84] Positive statements made by Mr. Schafer as to the character and motivation of the Blackwells - such as the statements made by him in his email to the Blackwells and repeated in the trial - result in a finding that the misrepresentations, if any, that may have been made by the Blackwells were not negligent but innocent in nature. As discussed in Queen v. Cognos Inc. 1993 CanLII 146 (SCC), [1993] 1 S.C.R. 87 at paragraph 26, a misrepresentation can only be considered negligent if a “higher duty of care” exists on the part of the Defendant. In this matter, Mr. Schafer’s admission that he did “not believe you folks [the Blackwells] knew how bad the condition was of the van” supports a finding that he did not expect the Blackwells to have the requisite mechanical knowledge to accurately assess the condition of the Van. Therefore, the post-contract statements of Mr. Schafer about the Blackwells further leads to a finding of no misrepresentation negligent or otherwise.
DECISION AND ORDER
[85] Though the Blackwell’s may not have been entirely truthful or aware of certain aspects of the Van prior to selling it to Floorco (regarding the physical appearance of the vehicle, the roadworthiness, safety and mechanical condition of the vehicle, and the sales history of the vehicle) they did not negligently misrepresent the condition of the Van during the pre-contract negotiations or at the time of the sale.
[86] Mr. Schafer had the opportunity to insist on a pre-sale inspection of the Van but for his own reasons chose not to do so. As such, the principle of caveat emptor applies in the circumstances of this case.
[87] Floorco's claim for damages against Mr. Blackwell and Ootsa Lake Outfitting is dismissed.
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M. J. Brecknell
Regional Administrative Judge
Northern Region
Provincial Court of BC