At a trial of the Queen's Bench in Saskatchewan, a judge hears the following evidence:

On October14, 1997 the plaintiffs attended at the defendant's residence to inquire about the truck which they had seen advertised in the paper for sale. It is commonly acknowledged by all that the advertisement referred to a 1992 Dodge Dakota with approximately 58,000 kilometres on it. The actual reading on the odometer on October14, 1997 was 57,167 kilometres. The plaintiffs took the vehicle for a test drive. Afterwards, according to the plaintiffs, they asked the defendant what repairs had been done and he replied the only repair was the replacement of the fuel pump. They asked if the truck had given him trouble and he replied "no". They asked if the truck had been smashed up and he replied it had not. The defendant, on the other hand, says he had only a general conversation with the plaintiffs about 1992 Dodge Dakota trucks and the plaintiffs indicated they had previously owned one. The defendant volunteered he had spent $500 on a fuel pump which he felt was expensive. The plaintiffs agreed and said they had had the same experience. The plaintiffs then asked whether the defendant thought it was a good truck and he replied "Yes. You've driven it, what do you think?" The defendant said he made no other representations and, after the fact, was surprised by how little the plaintiffs had asked. Not unexpectedly, Mrs. Defendant supports her husband's version of events and Mrs. Plaintiff supports her husband's recollections. There is some disagreement as to whether Mrs. Defendant left the room for a period of time to check a water problem.

The plaintiffs agreed to purchase the vehicle for $12,400. They asked the defendant for the registration so they could use the transfer of ownership form. The defendant did not have the registration form with him, because the truck and registration were normally kept at the home of his in-laws for some unknown reason. He testified that, in any event, he prefers to write a bill of sale so there is room to include all of the terms. The bill of sale he drew up referred to the sale of the vehicle "as is" a term he says he uses on the sale of all his used vehicles. The defendant agreed to let the plaintiffs drive the truck home with his license plates and he would delay cashing the cheque until the next day. The following day, October15, 1997, the plaintiffs had the registration for the vehicle but failed to notice the endorsement on the registration which stated "previous total loss vehicle". They did not arrange for any inspection of the vehicle. The defendant assumed they would use the time period to perform any necessary inspections and satisfy themselves as to the condition of the truck. The plaintiffs returned the defendant's license plates and because the plaintiff, Mrs. Plaintiff, was an employee of the bank where the defendant's account was held, she made a direct deposit of the purchase price into his account.

The plaintiffs did not use the vehicle much in the next couple of months. In May of 1998 they noticed the engine was making noise and on May 7, 1998 had it checked out at Heritage Sales and Service in Cudworth. Believing that the truck was still under factory warranty due to the low mileage, the plaintiffs took the truck to Auto Clearing in Saskatoon to have the engine repaired. They were advised the serial numbers on the vehicle and the engine did not match, that this was not the original engine and therefore there was no warranty. The plaintiffs returned the vehicle to Heritage Sales and Service and had the engine replaced at a cost of $2,465.60. The odometer reading at this time was 60,515 kilometres.

On June2, 1998 the transmission failed. The truck was taken to another service outlet, Triple Seven Chrysler, where the plaintiff, Mr. Plaintiff, was initially told the replacement of the transmission would be covered under warranty. He was subsequently advised that there was no warranty and the transmission was repaired at a cost of $3,500. To investigate why there was no warranty, the plaintiffs contacted SGI and learned the vehicle was previously a total loss vehicle. SGI provided the plaintiffs with a copy of an inspection certificate dated August16, 1996 by Heritage Sales and Service in Cudworth. Mr. Plaintiff spoke to a representative at Heritage Sales who revealed the truck had been owned by a Tim Demong of Cudworth. Mr. Plaintiff contacted Mr. Demong who informed him the truck had been assembled from three different vehicles, more specifically, according to Mr. Demong, the body and sheet metal were from one Dodge Dakota with approximately 30,000 kilometres which had been fire damaged. The frame, suspension and rear differential were from a second Dodge Dakota truck, also fire damaged, which had approximately 20,000 kilometres. The engine and transmission were from a third vehicle of unknown mileage. The odometer was installed from yet another vehicle and read between 50,000 and 60,000 kilometres. Mr. Demong stated to the plaintiffs that the defendant was aware of these facts when he purchased the vehicle on August26, 1996 for $12,250.

The defendant says it was his understanding when he purchased the truck from Mr. Demong that it was assembled from two vehicles, rather than three, and that the body, chassis, transmission and rear end had a mileage of only 20,000 kilometres and that the engine was a sound, undamaged engine from another total loss vehicle "with comparable mileage to the odometer from the body of the vehicle." He says he was also satisfied the body of the truck was an original 1992 Dodge Dakota. Mr. Demong advised him a ticking noise made by the truck was normal. The defendant said he made the following repairs in the following amounts after he purchased the truck:

1.June 26, 1997 - changed oil filter, replaced lifters, valve cover gaskets, rocker arms, push rods and gaskets - $486.85 (labour), $497.99 (parts);

2.June 30, 1997 - fuel pump relay replaced - $57.26;

3.July2, 1997 - replaced fuel pump - $549.14;

4.August, 1997 - repaired catalytic converter - $163.77; and

5.September 12, 1997 - new muffler, repaired exhaust pipe - $75.03 and $112.81.

He said in October, 1997 he decided to list the truck for sale because he needed the money to pay for a new combine. He acknowledged that the fact a vehicle was previously a total loss with serial numbers that do not match is important information for a buyer to possess, but said the onus is on the buyer to check.

On or about July3, 1998 the plaintiffs advertised the truck for sale for $12,900. Most callers were interested in paying up to $12,000 until learning the truck was previously a total loss vehicle. The plaintiffs received separate offers of $4,500 from one caller and $6,000 from another. In July, 1998 the truck developed a leak. The plaintiffs replaced the power steering rack at a cost of $527.27. On July10, 1998 the plaintiffs traded the vehicle to Discovery Ford in Humboldt, receiving a trade-in allowance of $8,000. The odometer showed 61,500 kilometres at the time of trade-in, a difference of 4,333 kilometres from when the plaintiffs purchased the vehicle. The plaintiffs say they would not have purchased the vehicle for $12,400 had they known its true history. On September14, 1998, they commenced the within action under Part 40, the Simplified Procedure Rules.

The issues are:

1.Whether, in the circumstances, the principle "caveat emptor" applies or whether it is ousted by fraudulent misrepresentation on the part of the defendant;

2.Whether the description of the truck as a 1992 Dodge Dakota with approximately 58,000 kilometres was, in itself, a misrepresentation that induced the plaintiffs into believing the factory warranty would be in place; and

3.What damages result in the event the plaintiffs are successful on either ground?

How should the judge rule on these three issues?

Include in your answer:

-How the Sale of Goods Act could be applied.

-How the Consumer Protection Act could be applied.

-The Plaintiff's inspection of the truck prior to purchasing it.

-How warranties and conditions in the contract could be applied, particularly with respect to the truck being formerly listed as a "total loss" and, was there was a "meeting of the minds" at the time of the contract?

What impact would the term "as is" have on contract?

If you feel that the plaintiffs are entitled to damages, explain what damages they are entitled to?