IN THE SMALL CLAIMS COURT OF NOVA SCOTIA
Cite as: Smith v. Gray, 2008 NSSM 24
2008 Claim No. 288847
BETWEEN:
Name: Perry Smith Claimant
- and -
Name: Paul E. Gray Defendant
Appearances:
Claimant: James J. White
Defendant: Moneesha Sinha
Hearing Date: March 4, 2008
Revised Decision: The text of the original decision has been revised to remove addresses of the parties on May 12, 2008. This decision replaces the previously distributed decision.
DECISION
[1] This claim arises from a trade of vehicles - the Claimant traded his 1979 Ford motor home to the Defendant in exchange for a 1995 Jeep. The transaction took place on November 4, 2007, and shortly thereafter the Claimant took the vehicle to a mechanic and learned that the frame was substantially rusted out and to such an extent that it was subsequently issued a “Reject” sticker by a motor vehicle inspector.
[2] The Claimant alleges a failure of consideration and that the Defendant fraudulently and negligently represented the condition of the Jeep as he ought to have known the condition of the vehicle.
[3] In his Defence, the Defendant, Paul Gray, denies that there was a failure of consideration and states that Claimant received what he purchased. He further denies that he fraudulently or negligently represented the condition of the 1995 Jeep. He states that the Claimant took the Jeep for a test drive, examined underneath the Jeep and examined the exterior frame of the Jeep. The Defendant further states that the vehicle had been safety inspected by Val Emberley on October 2, 2007, and was issued an inspection sticker. The Defendant states that he did not give any warranty or representation as to the Jeep’s condition but only indicated that the Jeep had passed the safety inspection. Finally, the Defendant states that the doctrine of caveat emptor applies and the risk of the purchase of a used vehicle is a risk the Claimant undertook.
Evidence
[4] The Claimant called Craig Caldwell, who is a motor vehicle inspector in the employ of Service Nova Scotia of the Province of Nova Scotia. He attended under subpoena. He testified that his job was to investigate complaints from the public regarding vehicle inspections and that in this case he was contacted by the Claimant, Mr. Smith, in respect of the vehicle in question and the inspection done by Val Emberley.
[5] Mr. Caldwell testified that the major issue related to the condition of the frame of the vehicle. There was a two inch rust hole in the left front frame at the steering box mount. The left frame was cracked at the transfer case cross member. The front track rod frame mount was broken. The rear cross member was rusted out and cracked at the gas tank mount. The left rear frame was rust damaged with holes at rear spring hanger attachment. The right rear upper shock mount was damaged with rust and a section was missing. The left and right rear body mount were detached. These items were all detailed in the motor vehicle inspection report he prepared on November 25, 2007, based on his inspection of November 23, 2007. Based on these items he issued a rejection sticker.
[6] Mr. Caldwell offered his opinion that this deterioration in the frame members would not have occurred in the approximate 44 days between the date of his inspection and the date of the inspection done by Val Emberley on October 2, 2007. He further testified that he met with Val Emberley and questioned him with respect to the frame and the response was that there was undercoating and that may have covered up some of the issues. Mr. Caldwell indicated that he did not see any evidence of undercoating at the time of his inspection. He was asked and answered that on a scale of one to ten from “safe to unsafe” he would rate the vehicle at an eight or a nine - ten being the most unsafe. He stated that it basically needs a new frame. He further offered the opinion that, given that it was a 1995 vehicle, it was probably questionable whether it was worth it to repair.
[7] He further testified that based on this matter, Mr. Emberley’s inspection privileges were suspended for six months pursuant to Section 17 of the Motor Vehicle Inspection Regulations.
[8] On cross examination Mr. Caldwell confirmed that the damage and deterioration would have been visible to the naked eye.
[9] The Claimant, Perry Smith, testified he first saw the Jeep on November 4th, which was the actual date of the transaction. He testified that the body looked good but he did not crawl under to check the undercarriage. Mr. Smith said that he took the word of the Defendant and that it had an inspection sticker. He did take it for a test drive, he noted that it did pull a little to one side. The Claimant testified the Defendant told him that this was normal for these vehicles. They did the deal that day.
[10] Within a couple of days the Claimant had emailed the Defendant indicating that there were problems and then the Claimant took it to his mechanic and asked for a list of issues. He again went back to the Defendant to request him to reverse the trade which the Defendant refused to do. The Claimant stated that the registration was still in the Defendant’s name because he was unable to get it transferred.
[11] The Claimant testified that he believed it would cost $2,500.00 to $4,500.00 to have the vehicle repaired. He stated that he has been unable to have a body shop come over and do an inspection. He was looking either to do a re-trade or to receive $6,500.00 being the value of his vehicle and the Defendant could then have the Jeep back.
[12] On cross examination the Claimant indicated that he worked as a long haul truck driver and does work on his own personal vehicles. He has owned cars in the past and knows what he is looking for if he gets under the vehicle. He confirmed that he had taken the vehicle in question for a test drive and that he had looked at the front and sides. In answer to why he did not get under the vehicle, he stated that it was cold, approximately -20, and he could not get it in his garage. He stated that the vehicle had a new valid inspection sticker and as well, the fact that the Defendant had his family in the vehicle was also an indication of its roadworthiness. He stated that he relied on the information the Defendant gave to him. He confirmed that he did not ask to have the Jeep inspected by his mechanic prior to the transaction.
[13] The Claimant was specifically directed to one of the photographs which was in evidence which shows a cracked right rear body mount. When asked about that the Claimant stated that the crack was not there on the day of the trade. He did confirm that some of the other photos where rust was indicated was there on the day of the trade. He confirmed that the photographs were taken on December 6, 2007. The trade took place on November 4th, which was a Sunday. He took the vehicle to his mechanic on the following Wednesday. Also, on cross examination he confirmed that in his opinion it would be $2,500.00 - $4,500.00 to fix the vehicle to bring it up to a condition that would pass inspection.
[14] The Defendant, Paul Gray, gave evidence. He stated he has never sold cars for a living. He stated that he purchased the Jeep in September 2006 and had it inspected by Val Emberley who was someone who had done work for him previously and was recommended in the community. He stated the vehicle look good and drove well. The Defendant stated that contrary to Mr. Smith’s evidence, Mr. Smith had looked underneath the vehicle. He stated that he looked under the front and the rear. He took the vehicle for a 15 minute test drive. In respect of the photos and the apparent damage/deterioration to the frame, the Defendant stated that he had never himself crawled under the vehicle. He stated that it was a little cold the day of the trade but it was not -20. He stated that the vehicle drove fine and he did not make a statement that it pulled to the left. He stated that there were some repairs made at the time of the inspection in October 2007. He did recall saying it was a good vehicle when he had it.
[15] On cross examination Mr. Gray stated Mr. Emberley was just an acquaintance. He confirmed that he was not suing Mr. Emberley and that he had total faith in him.
[16] He then confirmed that Mr. Smith had indeed gone under the vehicle. He confirmed that the photos showing underneath the vehicle did not look like something that would be safe but, at the same time, he stated that they do not look like his vehicle. He stated he was totally honest and did not represent anything. He stated when he drove the vehicle after it was inspected it drove fine.
[17] Patricia Gray is the wife of the Defendant and she also gave evidence. She stated that they went to Mr. Emberley because of word-of-mouth at a coffee shop and he had a good reputation in the community. She stated she knew some people who had work done there. She also stated she had driven the vehicle and she had no problems with it. She was there on the Sunday and remembers giving Perry Smith the keys. She stated that he did go under the vehicle in two places as she recalled - in the front and in the back area. She does not recall him asking any questions. She also stated that the pictures in Exhibit 3 do not look like the Jeep.
Analysis
[18] The evidence establishes that the frame on this vehicle was in such a state of disrepair due to deterioration from rust that it failed a motor vehicle inspection in November 2007. This was only approximately 44 days after an inspection done on October 2nd by Val Emberley. It is apparent, and this is confirmed by the evidence of Mr. Caldwell, that the degree of deterioration evident at the time of the inspection done by Mr. Caldwell, would not have occurred in 44 days. It must have been present in early October 2007. This raises the question of how Mr. Emberley would have passed this vehicle at that time.
[19] Unfortunately, Mr. Emberley was not called by either party to give evidence and therefore the reason for his passing this vehicle, which so clearly ought not to have passed, was not answered. The Court is left to speculate.
[20] The Claimant’s submission seem to allude to if not directly assert that there was collusion between Mr. Emberley and the Defendants. That is a rather serious allegation to make and in my opinion the evidence would have to be quite clear before I could make such a finding. I do not think the evidence satisfies the standard that the law would require to make such a standing. I therefore reject that proposition.
[21] Another potential explanation is that Mr. Emberley was simply negligent and was either in a rush or for some reason failed to perform a proper inspection of the frame. Possibly he never even put it on a hoist and raised the vehicle and looked at the undercarriage. I emphasize that this is mere speculation because, there is no evidence on it. However, it is at least equally plausible to what was referred to above. Perhaps there is some other explanation. Again, it was not in evidence in front of the Court.
[22] This part of the case is relevant because it goes to whether or not the Defendant fraudulently misrepresented the state of the condition of the vehicle. The knowledge of the Defendant is, in my opinion, a necessary finding in order to a case such as this. This was a private sale and as such, there are no warranties implied by law in such a circumstance. At most, Mr. Gray said it was a good vehicle while he owned it. I note in this regard that Mr. Smith took the vehicle for a test drive and while his evidence was that it pulled to one side somewhat (and this evidence was disputed), it was clearly not sufficiently bad to cause him to not do the deal. I think the fair inference from the fact that he concluded the deal was that it was, at most, a minor issue.
[23] The evidence does not establish that the Defendant had knowledge of the unsafe condition relating to the frame. I say it is unsafe because that was the evidence of Mr. Caldwell, who is the Provincial employee that inspects vehicles and deals with public complaints about the inspection process. As I have stated above, it was apparent that the inspection of October 2, 2007, should not have passed. Had the evidence demonstrated that Mr. Gray was aware of the significant deterioration to the frame at the time of the inspection and, as a result himself knew that the inspection ought not to have passed, there would likely be a case against Mr. Gray on those grounds. However, on the evidence and bearing in mind that the Claimant always bears the burden of proof, it has not been established. Therefore, on the basis of the misrepresentation claim, the case fails.
[24] I turn then to the other argument which is that there was a failure of consideration. In the law of contract this is known as fundamental breach. It allows a party to disavow a contract where, on the evidence, there has been a total failure of consideration or, to put that another way, where the innocent party has effectively received nothing in the bargain.
[25] On this basis, the evidence is somewhat lacking. That is to say, there was no independent evidence of what it would have cost to repair the vehicle to a state that would be approved at an inspection. Mr. Smith himself testified that he believed it would cost in the range of $2,500.00 - $4,500.00 to repair the vehicle. While that evidence seems self serving and would typically be discounted, I have no other evidence here to refer to. If I accept it as correct, then on his own evidence and, admittedly using the more conservative and lower figure, the question becomes whether a repair of $2,500.00 is so significant that it would constitute a total failure of consideration. By his own evidence, Mr. Smith asserts that the relative value of the vehicles were each in the $6,000.00 - $6,500.00 range. If that is correct, then the amount to repair the vehicle cannot be seen, in my view, as so substantial as to amount to a fundamental breach in the law.
[26] Accordingly, that part of the claim is also dismissed.
[27] While the claim will be dismissed I am compelled to remark that I certainly am not without sympathy for the position of the Claimant. It certainly does appear that he ended up with the bad end of the deal. Legally however, on the evidence here and based on the submissions made, I do not feel that the case is made out against the Defendant. And while Mr. Emberley was not in the Court and was not a party to the proceedings, it appears that he was the real culprit here.
[28] The case stands dismissed.
DATED at Halifax, Nova Scotia, this 5th day of May, 2008.
Michael J. O’Hara
Adjudicator
Original Court File
Copy Claimant(s)
Copy Defendant(s)