CASE STUDY

Review the case of Bintto v. Wozny and answer the questions that follow:

In the Provincial Court of Alberta

Citation: Bintto v Wozny, 2018 ABPC 230

Date: 20180927

Docket: P1890301356

Registry: Edmonton

Between:

Adahoman Bintto

Plaintiff

- and -

Michelle Karen Wozny and Blayne Albert Wozny

Defendants

Reasons for Decision of the Honourable Judge S.L. Corbett

INTRODUCTION

[1]This Action came before the Court for a one day Trial on September 10, 2018.

[2]The Plaintiff, Adahoman Bintto ("Mr. Bintto"), purchased a 2006 Mercedes Benz R350 motor vehicle ("the Vehicle") from the Defendants, Michelle and Blayne Wozny, on October 23, 2017 for the sum of $5,300.00.In February, 2018, Mr. Bintto discovered that the Vehicle required repairs to the engine head gasket estimated at $3,677.62 or $4,300.00.

[3]The Plaintiff alleges that the Defendants misrepresented the condition of the Vehicle at the time of sale, and in particular, that the Defendants failed to disclose that the engine head gasket needed repair.

[4]The Defendants allege that they disclosed that the engine head gasket would require repair in the future, and that the Vehicle was sold on an "as-is, where-is" basis without warranty.

FACTS

[5]Mr. Bintto and his wife have 4 children, and had to look for a new family vehicle after their family van was involved in a collision in September, 2017.

[6]Mr. Bintto answered a Kijiji advertisement placed by the Defendant, Michelle Wozny ("Mrs. Wozny"), to sell the Defendants' Vehicle for the sum of $7,500.00. The Kijiji advertisement was not produced at Trial despite the efforts of both parties to locate the same.In the advertisement, Mrs. Wozny highlighted the Vehicle's features including heated seats (front and rear), dual climate control, power steering, automatic locks, automatic windows, moon roof, Bluetooth, power driver's seat, third row, cargo room, hatchback and parking sensors.In the advertisement, she further described the Vehicle as "very clean" and "well kept", and that it was a "good car" in "good condition".

[7]Mrs. Wozny testified that she included that the Vehicle needed "minor engine work" in the Kijiji advertisement ("so it was clear that there was something to ask about").Mr. Bintto disagreed that the Kijiji advertisement made any mention of the Vehicle requiring any engine work whatsoever.

[8]Mr. Bintto communicated with Mrs. Wozny by email and text message on October 22 and 23, 2017.In total, the parties exchanged 21 emails and 12 text messages.Those communications were initially focused on the purchase price of the Vehicle.On October 22, 2017, Mr. Bintto told Mrs. Wozny that he "would come to view it this morning" if they could "agree on a price".Mrs. Wozny responded that the Plaintiff's proposed $5,000.00 "price would not include winter tires", and she directed Mr. Bintto to "bring cash or money order".Mr. Bintto asked how much more it would be to "get the winter tires", and Mrs. Wozny advised that would be $5,500.00, stating that was their "bottom line".Mr. Bintto offered $5,300.00 in response, and Mrs. Wozny replied "Fine. Cash".Mr. Bintto and Mrs. Wozny then made arrangements for Mr. Bintto to view the Vehicle on October 22, 2017, with Mrs. Wozny providing her home address to Mr. Bintto.

[9]Mrs. Wozny testified that the Defendants' "bottom line" price was between $5,000.00 and $5,500.00.

[10]Mrs. Wozny testified that she did not take Mr. Bintto's inquiries "seriously" when they first started to communicate, claiming she thought "it would be somebody looking to lowball the car".Mrs. Wozny did not mention any issue with the engine head gasket in the emails and text messages she exchanged with Mr. Bintto between October 22 and 23, 2017.Mrs. Wozny admitted that she did not disclose the engine head gasket issue to Mr. Bintto in their communications.When asked why she did not disclose that information to Mr. Bintto, Mrs. Wozny stated again that she did not take Mr. Bintto "seriously" - commenting that she was having coffee with her mother, and that Mr. Bintto impressed as someone "trying to negotiate a low ball cheap price".She reiterated that Mr. Bintto did not "appear to be a serious buyer", and that she "didn't engage with him".She didn't tell Mr. Bintto about the head gasket because she "didn't initially take you (ie. Mr. Bintto) seriously" - she reiterated a number of times that she didn't think Mr. Bintto was a "serious buyer".

[11]Mr. Bintto attended at the Defendants' home at approximately 6:00 pm on October 22, 2017 with his friend, Biguessan Tiesse.Mr. Tiesse gave evidence at the Trial.As noted, Mr. Tiesse is Mr. Bintto's friend and neighbor.They are not related to one another.

[12]Mr. Bintto and Mr. Tiesse were met by the Defendant, Blayne Wozny ("Mr. Wozny").Mrs. Wozny was not home when the test drive happened.Mr. Bintto test drove the Vehicle with Mr. Tiesse seated in the front passenger seat, and Mr. Wozny seated in the rear of the Vehicle.

[13]Mr. Bintto asked Mr. Wozny if there were any problems with the Vehicle, and Mr. Wozny "cleared all their doubt" about the Vehicle, representing that the Vehicle was in good condition, and advising Mr. Bintto that the Defendants were selling the Vehicle as they no longer needed such a large vehicle as their children had grown up.

[14]Mr. Bintto checked the inside and outside of the Vehicle, noting that it looked "good".Mr. Tiesse confirmed that the Vehicle appeared to be in "good shape", and that he "liked this car on first view".

[15]There was a large crack on the front windshield that had not been mentioned in the Kijiji advertisement.Mr. Wozny told Mr. Bintto that he had a quote from a windshield repair shop, and that it would cost approximately $450.00 to replace the windshield.Mr. Bintto liked the Vehicle, and was prepared to go ahead with the purchase, noting that replacement of the windshield was "affordable".

[16]Mr. Bintto also realized that the Bluetooth in the Vehicle was not working during the test drive.He asked Mr. Wozny about the problem, and was told this was a small problem and could be fixed.Mr. Bintto noted he could drive the Vehicle without Bluetooth.Mrs. Wozny testified that she forgot the Bluetooth was not working in the Vehicle as she did not use the feature often.

[17]The test drive was quite short, approximately 5 minutes in the Defendants' neighbourhood.Mr. Bintto "really liked" the Vehicle, and Mr. Wozny kept representing that there was no major problem with the Vehicle. Mr. Bintto reiterated that he asked Mr. Wozny whether there was any issue with the Vehicle, and Mr. Wozny told Mr. Bintto again that the Vehicle was in good condition, and had no problems apart from the Bluetooth and cracked windshield.Mr. Bintto relied on Mr. Wozny's representations as to the Vehicle's condition during the test drive, and on the representations made by the Defendants in the Kijiji advertisement that the Vehicle was in "good" condition.Mr. Bintto told Mr. Wozny that he would purchase the Vehicle.

[18]Mr. Tiesse confirmed that Mr. Bintto asked Mr. Wozny if the Vehicle had any problems during the test drive, and he further confirmed that Mr. Wozny stated "No".The only issues that they were made aware of during the test drive were the issues with the windshield being cracked, and the Bluetooth not working.Mr. Wozny said nothing about the engine head gasket during the test drive.

[19]On cross examination, Mr. Bintto strongly denied that Mr. Wozny told him the engine head gasket would be a problem at some point in the future during the test drive on October 23, 2017.Mr. Bintto was adamant that the Defendants did not tell him anything about the engine head gasket issue at any time prior to his purchase of the Vehicle, and that he would not have purchased the Vehicle, had he known about the issue with the engine head gasket.

[20]Mr. Wozny confirmed that Mr. Bintto asked if there were "any known problems" with the Vehicle during the test drive.Mr. Wozny testified that he told Mr. Bintto, during the test drive, that they had been informed by the Defendants' mechanic that the engine head gasket would become an issue at some point in the future.Mr. Wozny suggested that this(ie. the test drive) was the only interaction that he and Mr. Bintto had, and was the only time he had an opportunity to tell Mr. Bintto about the engine head gasket issue.However, Mr. Wozny interacted with Mr. Bintto the day following the test drive at Mr. Bintto's home on October 23, 2017 before the deal closed.Mr. Bintto's wife, Marie Marthe Tano Epse Bintto("Mrs. Bintto"), and Mrs. Wozny were alone together in Mr. Bintto's home for approximately 30 minutes, while Mr. Bintto and Mr. Wozny conducted the "last walk around", and removed the Defendants' plates.

[21]Mr. Wozny suggested further that the Defendants' mechanic told them "it was not a large job", and was "not that extensive of a job".He testified that the issue was not "written down" in the sale document because the engine head gasket problem was "not an issue at that time".The "mechanic" that Mr. Wozny was referring to was either the owner of, orthe assistant manager of the Fountain Tire location where they had taken the Vehicle for servicing since they owned it.This conversation took place in July, 2017.During the Court's questioning of Mr. Wozny, an invoice was produced from Fountain Tire dated July 28, 2017 which set out an estimate to repair the engine head gasket in the sum of $3,218.98.This invoice/estimate was not in the maintenance records provided to Mr. Bintto (although Mr. Wozny "believed" that the Defendants gave Mr. Bintto copies of all service records at that time).

[22]The July 28, 2017 invoice set forth the following:

"These parts and services were recommended for replacement or repair.

Item Description:QtyUnit PriceNet amount

Exhaust System - Service3.10$130.00$403.00

Catalytic Converter2.00$605.54$1,211.08

F Sensor2.00$363.70$727.40

Oxygen Sensor2.00$177.71$355.42

Replace Valve Cover2.00$130.00$260.00

Spark Plug Boot6.00$15.86$95.16

Spark Plug6.00$27.82$166.92

Sub-Total$3,218.98

This estimate is valid for 30 days and excludes sales taxes."

[23]Mr. Wozny maintained that the repair work described in Paragraph 22 was not necessary at the time.Mrs. Wozny's handwriting appears on the July 28, 2017 invoice, as follows:"last service we requested" highlighting the 28/07/2017 date on the invoice, and "head gasket repair" in brackets across from the estimate referred to in Paragraph 22 of $3,218.98.

[24]Mrs. Wozny was asked how an estimate of $3,218.98 could be considered "minor engine work" as advertised, when they sold the vehicle to Mr. Bintto for $5,300.00.Mrs. Wozny responded that they were selling the Vehicle with two sets of expensive rims, and two sets of tires, and that it "wasn't so much that we were selling the car for that amount, we were selling the package for that amount".

[25]When they returned to the Defendants' home following the test drive, Mr. Bintto suggested that he pay a deposit of $1,000.00 and that he take the winter tires with him home.That was agreeable to the Defendants.Mr. Bintto was to pay the balance of the purchase price the following day on October 23, 2017.

[26]Mrs. Wozny claimed that she asked Mr. Wozny several times to confirm that he disclosed the engine head gasket issue during the test drive.Mrs. Wozny testified that she was "under the impression" that Mr. Bintto had been made aware of the issue by Mr. Wozny.

[27]On October 23, 2017, Mr. Bintto emailed and texted Mrs. Wozny to ask whether the Vehicle had previously been in an accident.Mrs. Wozny responded that they were not aware of the Vehicle having been in an accident.

[28]Mrs. Wozny then suggested that the Defendants could drop the vehicle off at Mr. Bintto's home (versus Mr. Bintto picking up the Vehicle from their home as previously arranged).This was agreeable to Mr. Bintto, and the parties met the morning of October 23, 2017 to finalize the sale of the Vehicle.

[29]The parties met at Mr. Bintto's home where they signed the sale paperwork, and Mr. Bintto took possession of the Vehicle and paid the Defendants the remaining amount agreed to.Mrs. Wozny produced the Vehicle's maintenance records for Mr. Bintto's review prior to Mr. Bintto paying the balance (excepting the July 28, 2017 invoice/estimate), and Mrs. Wozny claims that she told Mr. Bintto about all past repairs undertaken to the Vehicle.Mrs. Wozny did not mention any issue with the engine head gasket when she met with Mr. Bintto in his home.

[30]Mr. Bintto reviewed the Vehicle maintenance records prior to signing the sale paperwork and prior to paying the balance of the purchase price.The records cover the period May 23, 2013 to June 14, 2017.The maintenance records indicate the Vehicle was sold to the Defendants in approximately May, 2013.There is no mention of any issue with the engine head gasket in the maintenance records that were provided to Mr. Bintto before the sale was finalized.

[31]Mrs. Wozny confirmed that both she and Mr. Wozny were aware that there was an issue with the engine head gasket.In July, 2017, Mrs. Wozny testified that they "noticed something funny" about the Vehicle, and that it sounded like it was not running properly.They took the Vehicle to Fountain Tire to have the Vehicle looked at, and they then received the July 28, 2017 estimate from Fountain Tire regarding the head gasket repair.She testified they did not seek the "quote", but were provided it when they took the Vehicle in for servicing.Mrs. Wozny claimed that the engine head gasket repair was "recommended", but not "required" at the time (ie. as of July 28, 2017).

[32]The Bill of Sale is dated October 23, 2017, and is signed by the parties.Mrs. Wozny read the terms and conditions of the Bill of Sale aloud before the parties signed the same.On Page 2 of 2, Special Conditions of Sale are set out.Under Heading 4 "Special Conditions of Sale (if any)", the following appears:

"All known mechanical issues have been voluntarily disclosed at the time of sale.

This vehicle is sold as is, where is, with no guarantees or warranties - written or implied.

To the best of the sellers knowledge this car has not been in any accidents."

[33]Mrs. Bintto testified that she and Mr. Bintto were looking for a Vehicle suitable for their family and their 4 children.Mrs. Wozny told Mrs. Bintto that the Defendants were selling the Vehicle because their children were grown up, and she also told Mrs. Bintto that the Vehicle would be a "good deal" for them as their children were younger.Mrs. Bintto further testified that it has been "painful" for her as she wants to spent time with and go outside with their children, but she has been unable to do so as they do not have a car now.

[34]Mr. Bintto effected repairs to the Vehicle including having the oil changed on October 24, 2017 for the sum of $198.40, and replacing the cracked windshield on November 15, 2017 for the sum of $288.75.

[35]At the time Mr. Bintto purchased the Vehicle, he was working out of town 14 days, and in town 7 days so he did not have much opportunity to drive the vehicle until he was laid off at the end of December, 2017.

[36]Mr. Bintto started to experience issues with the Vehicle not starting in approximately November, 2017.He was surprised by this issue as the Defendants represented that they replaced the battery in June, 2017.The June 14, 2017 Fountain Tire invoice confirms that Fountain Tire charged the Defendants for a battery.Mr. Bintto had issues with Fountain Tire honouring the warranty on the battery the Defendants had purchased, and ultimately, he pulled the battery out of the Vehicle and discovered that the Vehicle still had its original Mercedes Benz battery (not the new Bosch battery the Defendants stated that Fountain Tire charged them for in June, 2017).Fountain Tire finally offered a replacement battery which Mr. Bintto refused to accept as the replacement battery was not a new battery.Instead, he purchased a new battery for the Vehicle from Walmart for the sum of $172.97 plus GST on December 29, 2017, and he installed the new battery himself.

[37]Mr. Bintto also discovered an issue with the rear pneumatic suspension on the Vehicle - he did not tell the Defendants about this issue as he was prepared to fix this issue on his own at some later point.

[38]Mr. Bintto had noticed that there was white smoke coming out of the exhaust; however, he thought that was due to the winter (ie . normal exhaust fumes in cold weather).He did not suspect an engine head gasket problem as the coolant temperature display was normal.

[39]On February 19, 2018, the Vehicle would not start, and Mr. Bintto had to have it towed to Action Muffler (on February 22, 2018).He took the Vehicle home, and shortly thereafter, noted that there was both white and blue smoke coming from the exhaust (and it was not cold that day).He took the car back to the mechanic, only to learn that the Vehicle had a malfunctioning engine head gasket.He paid $420.00 on February 23, 2018 and $136.50 on February 24, 2018 to try to get the Vehicle running again.

[40]Mr. Bintto both texted and called Mrs. Wozny on February 26, 2018.Mrs. Wozny did not reply to Mr. Bintto's text messages.The text messages make it evident that Mr. Bintto had just learned about the engine head gasket issue.Mrs. Wozny blocked Mr. Bintto's number, noting that she "does that quite regularly with things she sells on Kijiji".

[41]Mr. Bintto did speak to Mrs. Wozny on the telephone in February, 2018 after learning that the Vehicle had the engine head gasket issue.Mr. Bintto asked Mrs. Wozny whether she knew about any engine issue with the Vehicle that the Defendants had sold him.Mrs. Wozny replied that Mr. Wozny told Mr. Bintto that the engine head gasket was "going to be an issue", and further told Mr. Bintto that the Kijiji advertisement said the Vehicle needed "minor engine work".

[42]The Bill of Sale indicates the Vehicle had 257,434 km at the time of sale on October 23, 2017.Mr. Bintto provided a photograph of the odometer reading in June, 2018.The same reads 259,881 km.Mr. Bintto drove the Vehicle 2,447 kms between October, 2017 and February, 2018.Mr. Bintto took the insurance off the Vehicle and stopped driving it in February, 2018.

[43]Mr. Bintto obtained two estimates to repair the Vehicle.The first is from Action Muffler in the sum of $3,677.62 and the second is from Mercedes-Benz Edmonton in the sum of $4,300.00.

[44]Mr. Bintto is not interested in repairing the Vehicle.He wants the money he paid for the Vehicle returned, he wants the money he expended to repair the Vehicle returned, and he wants the Defendants to take the Vehicle back.Mr. Bintto would not have purchased the Vehicle, had he known that it had an engine head gasket issue.

PLAINTIFF'S SUBMISSIONS

[45]The Plaintiff submitted that the Defendants failed to disclose the issue with the engine head gasket to him, and that the same was a major mechanical issue.The Plaintiff submitted further that both Defendants were aware that the Vehicle had this issue, and hid the issue from him because the Defendants did not think he was a "serious buyer".

[46]The Plaintiff argued that the "deal" ought to be cancelled, that his purchase price ought to be refunded, and that the Defendants ought to take their Vehicle back.

DEFENDANTS' SUBMISSIONS

[47]The Defendants submitted that they disclosed that the issue with the head gasket would be a problem in the future, and that the Plaintiff had the Vehicle for 4 months before the head gasket did become an issue.

ANALYSIS

Applicability of Sale of Goods Act, RSA 2000, c. S-2

[48]I have reviewed the provisions of the Sale of Goods Act, RSA 2000, c. S-2, as amended, to determine whether any statutory implied warranty or condition is applicable.Section 16(2) sets forth that the same are applicable to goods "in the course of the seller's business to supply".As noted in Parsons v. Ploen, 2009 ABPC 3 (CanLII), at paragraph 14, this was a private sale, and the Defendants were not in the "business" of selling used vehicles.Accordingly, this transaction falls outside the scope ofany implied warranties or conditions pursuant to the Sale of Goods Act, RSA 2000, c. S-2.

Applicability of Consumer Protection Act, RSA 2000, c. 26.3

[49]I have further reviewed the provisions of the Consumer Protection Act, RSA 2000, c. 26.3, as amended, to determine its applicability.Section 1(l) defines a "supplier" as a "person, who in the course of the person's business" provides goods and services to consumers.Again, this was a private sale, and the Defendants were not in the "business" of selling used vehicles.This transaction, therefore, falls outside the scope of the Consumer Protection Act, RSA 2000, c. S-2.

General Principles of Contractual Interpretation

[50]In Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (CanLII), the Supreme Court of Canada described the modern approach to contractual interpretation at paragraph 47:

"....the interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction.The overriding concern is to determine "the intent of the parties and the scope of their understanding"....To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract.Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have immutable or absolute meaning."

[51]In Sattva, the Court noted further at paragraph 48:

"The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement".

[52]While the focus will be on the written language of the contract and the objective meaning of the terminology used, a court, in interpreting a contract, may consider the surrounding circumstances.In Sattva, the Court noted at paragraphs 57 and 58:

"While the surrounding circumstances will be considered in interpreting the contract, they must never be allowed to overwhelm the words of that agreement.The goal of examining such evidence is to deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract.The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract.While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement.

The nature of the evidence that can be relied upon under the rubric of "surrounding circumstances" will necessarily vary from case to case.It does, however, have its limits.It should consist only of objective evidence of the background facts at the time of execution of the contract, that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting.Subject to these requirements and the parol evidence rule .... this includes ... "absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man".Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact."

Application

[53]The Plaintiff and the Defendants entered into a contract, evidenced by a Bill of Sale (the "Contract"), whereby the Plaintiff purchased a 2006 Mercedes Benz R350 from the Defendants on October 23, 2017 for the sum of $5,300.00.

[54]The Bill of Sale is dated October 23, 2017, and is signed by both parties.On Page 2 of 2, Special Conditions of Sale are set out.Under Heading 4 "Special Conditions of Sale (if any)", the following appears:

"All known mechanical issues have been voluntarily disclosed at the time of sale.

This vehicle is sold as is, where is, with no guarantees or warranties - written or implied.

To the best of the sellers knowledge this car has not been in any accidents."

[55]The Defendants rely on the Condition that the Vehicle was "sold as is, where is, with no guarantees or warranties - written or implied" to refute the Plaintiff's claim against them.The Plaintiff argues that the Defendant failed to disclose that the Vehicle required engine head gasket repair, and refers to the Condition that stipulated that "all known mechanical issues have been voluntarily disclosed at the time of sale".

[56]Having regard to Sattva, I am required to determine the intentions of the parties and the scope of their understanding by reading the Contract as a whole, giving the words their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of the formation of the contract.I am further guided by Sattva's direction that the meaning of words is often derived from contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement.

[57]"As is where is" contractual provisions have been the subject of consideration by the Alberta Courts (see, for example,Gafco Enterprises Ltd. v. Schofield, 1983 ABCA 100 (CanLII); Feucht v. Paccar of Canada, 1985 CanLII 1309 (ABQB); Handjiev v. Aviscar Inc., 2003 ABPC 170 (CanLII); Moldenhauer v. Alberta Powersports Inc., 2009 ABPC 118 (CanLII); and Parsons v. Ploen, 2009 ABPC 3 (CanLII)).

[58]In Handjiev v. Aviscar Inc., 2003 ABPC 170 (CanLII), the plaintiff purchased 2 vehicles from the defendant, and sued for material misrepresentation on the basis that the defendant failed to disclose that the vehicles had been written off (as a result of their involvement in prior accidents).The vehicles were sold to the plaintiff without representations or warranties on an "as is" basis.The Court noted at paragraph 15, as follows:

"Generally, under the law of contract, in the absence of an express, implied or statutory term, condition or warranty, and in the absence of fraud by representation, omission or concealment, there is no general duty on the part of a vendor to disclose defects in property to a purchaser, other than matters of title or danger to persons or property.The common law of contract under which non-fraudulent non-disclosure is not actionable and the well-known maxim of caveat emptor are deeply entrenched in the law.

[59]It is evident from the Defendants' submissions that they rely on the maxim of caveat emptor to refute the Plaintiff's claim.

[60]The "as is where is" cases referred to in Paragraph 57 do not make reference to Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (CanLII), and in my view, the cases must be read in light of Sattva and the decision of the Supreme Court of Canada in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 (CanLII).

[61]In Tercon, the Court addressed the issue of fundamental breach in relation to exclusion clauses noting, at paragraph 62, that "the time has come to lay this doctrine to rest".The analytical approach that is to be followed when tackling an issue relating to the applicability of an exclusion clause is, as follows (at paragraphs 122 and 123):

"The first issue....is whether as a matter of interpretation the exclusion clause even applies to the circumstances established in evidence.This will depend on the Court's assessment of the intention of the parties as expressed in the contract.If the exclusion clause does not apply, there is obviously no need to proceed further with this analysis.If the exclusion clause applies, the second issue is whether the exclusion clause was unconscionable at the time the contract was made, "as might arise from situations of unequal bargaining power between the parties"... This second issue has to do with contract formation, not breach.

If the exclusion clause is held to be valid and applicable, the Court may undertake a third enquiry, namely, whether the Court should nevertheless refuse to enforce a valid exclusion clause because of the existence of an overriding public policy, proof of which lies on the party seeking to avoid enforcement of the clause, that outweighs the very strong public interest in the enforcement of contracts."

[62]Based on Sattva and Tercon, I am required to determine whether the "as is where is" exclusion clause relied upon by the Defendants applies to the circumstances established in the evidence.This requires assessment of the intentions of the parties as expressed in the contract.

[63]As noted at Paragraph 54, the "as is where is" exclusion clause here is preceded by the following: "All known mechanical issues have been voluntarily disclosed at the time of sale".The application of the "as is where is" exclusion clause depends on the interpretation of the disclosure clause.

[64]Mechanical" is defined as "relating to machines and engines, and the way they work" (Collins Dictionary), "relating to machines or machinery" (Oxford Dictionary), and as "the working parts of a machine, especially a car"."Issues" is defined as "concerns or problems" (Merriam-Webster Dictionary) and "problems or difficulties" (Oxford Dictionary).

[65]In terms of the surrounding circumstances, the Vehicle was advertised for sale by Mrs. Wozny, and the parties agreed that the advertisement represented that the Vehicle was (a) in "good" condition; (b) that it had a new battery; (c) that maintenance records would be produced to confirm the "good condition" of the Vehicle; and (d) that the Vehicle had working Bluetooth.

[66]Mr. and Mrs. Bintto made it clear to the Defendants that they were looking for a family vehicle as they have 4 children.Mr. and Mrs. Wozny represented that the Vehicle would be a good vehicle for a family, and that they were selling the Vehicle as they no longer needed such a large vehicle as their children were grown up.

[67]During her initial communications with Mr. Bintto, which were extensive, Mrs. Wozny failed to disclose that the Vehicle required repairs to the engine head gasket.Mrs. Wozny claims that she did not take Mr. Bintto's inquiries "seriously" during their initial communications, suggesting that Mr. Bintto was trying to "lowball" the Vehicle.Mrs. Wozny's suggestion that Mr. Bintto was trying to "lowball" the Vehicle is not substantiated.Mr. Bintto's first offer was $5,000.00, which was in the range of the Defendants' "bottom-line" between $5,000.00 and $5,500.00.

[68]Mrs. Wozny continued to assert that she did not take Mr. Bintto "seriously", and that she did not think Mr. Bintto was a "serious buyer" to excuse her failure to disclose the engine head gasket issue to Mr. Bintto.I did not find Mrs. Wozny's evidence on this point to be credible or reliable. Mrs. Wozny provided her home address so Mr. Bintto could test drive the vehicle.They agreed to a purchase price.A deposit was accepted.A test drive took place. The extra set of tires was provided to Mr. Bintto.A $1,000.00 deposit was accepted. Mrs. Wozny and her husband drove the Vehicle to Mr. Bintto's home.She drafted the Bill of Sale.She read the terms and conditions of the Bill of Sale aloud before the parties signed the same.At some point, Mrs. Wozny clearly realized that Mr. Bintto was indeed a "serious buyer", and yet, she never disclosed the engine head gasket issue.

[69]Mr. Bintto and Mr. Tiesse test drove the Vehicle on October 22, 2017 with Mr. Wozny.They discovered that the Bluetooth was not working as advertised.Mrs. Wozny "forgot" that the Bluetooth was not working, despite advertising Bluetooth as a feature of the Vehicle in the advertisement.The front windshield further required replacement.Mr. Bintto was prepared to purchase the Vehicle, despite the Bluetooth and windshield issues.Mr. Wozny represented that the Vehicle was in "good condition" during the test drive, and denied there were any issues or problems with the Vehicle at the time.

[70]In fact, both Mr. and Mrs. Wozny were aware, at the time of sale, that the Vehicle required repair to the engine head gasket.Specifically, the Defendants "noticed something funny" about the Vehicle, and it was not running properly in July, 2017.The Defendants took the Vehicle to Fountain Tire to have it looked at.On July 28, 2017, the Defendants received an estimate from Fountain Tire to repair the engine head gasket in the sum of $3,218.98.

[71]Mr. Wozny testified that he told Mr. Bintto, during the test drive, that the engine head gasket would become an issue at some point in the future.Both Mr. Bintto and Mr. Tiesse testified that Mr. Wozny made no mention whatsoever of the engine head gasket issue.I accept Mr. Bintto and Mr. Tiesse's evidence, and find that Mr. Wozny made no mention of the engine head gasket issue during the test drive.

[72]Even if I had accepted that Mr. Wozny disclosed the engine head gasket issue during the test drive, Mr. Wozny's evidence was that he told Mr. Bintto and Mr. Tiesse that the engine head gasket would become an issue at some point in the future.Both Mr. and Mrs. Wozny attempted to minimize the extent of the engine repair required to the Vehicle, suggesting it was not a large or extensive job.Both suggested that the engine work was "recommended", but not "required".I have difficulty accepting this evidence when it is clear that the estimate resulted from the Defendants taking their Vehicle in for servicing as it was not running properly.

[73]Neither Mr. nor Mrs. Wozny disclosed the engine head gasket issue to Mr. Bintto when they attended at his home on October 23, 2017 to close the deal.Mr. Wozny had an opportunity to do so when he and Mr. Bintto conducted the "last walk around", and removed the Defendants' plates.Mrs. Woznyalso had an opportunity to disclose the engine head gasket issue to Mr. Bintto on October 23, 2017, but failed to do so claiming she was "under the impression" that Mr. Bintto had been made aware of the issue by Mr. Wozny.Mrs. Wozny testified that she asked Mr. Wozny several times to confirm he had disclosed the engine head gasket issue during the test drive.If Mrs. Wozny was so concerned about disclosure of the engine head gasket issue, one has to ask why she did not disclose it herself to Mr. Bintto when she met with him in his home the following day.I do not find Mrs. Wozny's evidence on this point to be either credible or reliable.

[74]During the October 23, 2017 meeting, Mrs. Wozny purportedly provided all of the Vehicle's maintenance records for Mr. Bintto's review.The July 28, 2017 Fountain Tire estimate disclosing that the Vehicle required $3,218.98 in engine repair was not provided to Mr. Bintto.I find that the engine head gasket issue was not disclosed to Mr. Bintto at the time of sale.

[75]Mrs. Wozny alleged that the advertisement disclosed that the Vehicle needed "minor engine work".Mr. Bintto testified that the advertisement made no mention of the Vehicle needing any engine work whatsoever.Even if I accept that the advertisement stated that the Vehicle needed "minor engine work", I find that the descriptor "minor engine work" misrepresented the extent of the work that the Vehicle's engine required.The sale price was $5,300.00, and the Defendants failed to disclose the Vehicle required $3,218.98 in engine repairs.Mrs. Wozny justified this misrepresentation by suggesting she was selling a "package" (ie. the Vehicle in addition to two sets of rims and two sets of tires" for that amount as opposed to the Vehicle alone.I did not find Mrs. Wozny's evidence on this point to be persuasive.She advertised a Vehicle for sale, not rims and tires, and she was aware that Mr. Bintto was looking to purchase a new Vehicle for his family's use (not rims and tires).

[76]Mrs. Wozny's evidence on this issue is also inconsistent with her emailed communications with Mr. Bintto, when she advised Mr. Bintto that the Vehicle would not include the winter tires at a proposed purchase price of $5,000.00.She countered at a price of $5,500.00 inclusive of the winter tires.

[77]Having regard to the definitions outlined in Paragraph 64, I am of the view that the engine head gasket issue was "mechanical" in that it related to "machines and engines and the way they work" and/or "the working parts of a machine".I am further of the view that the engine head gasket was an "issue" - ie. a "concern or problem" at the time the Vehicle was sold to the Plaintiff.The evidence is clear that the Defendants knew about the concern or problem with the engine head gasket, and they did not tell the Plaintiff about the same at any point in their interactions with him.Based on that finding, I do not find the "as is where is" exclusion clause to be applicable to the circumstances established in the evidence as the disclosure clause was not complied with.

[78]Mr. Bintto testified that the battery in the Vehicle was the original one manufactured by Mercedes, and that it was not new as represented by the Defendants.The Defendants believed that the battery was new as they had been charged for installation of a new battery in June 14, 2017 by Fountain Tire.If the Defendants misrepresented that the battery was new, they did so innocently, believing that Fountain Tire had changed the battery as set out on the June 14, 2017 Fountain Tire invoice they were provided.I do not find the battery to be a "known" mechanical issue as the Defendants did not know that Fountain Tire had not replaced the battery in June, 2017.I would further be hard-pressed to find that the battery issue falls within within the definition of "mechanical" that I have delineated in this decision.In my view, the "as is where is" exclusion clause does apply to the battery, and I do not find the same to be unconscionable as contemplated in Tercon, and there was no evidence of any public policy that outweighed enforcement of the "as is where is" exclusion clause with respect to the battery.

[79]The Defendants' failure to disclose the issue with the engine head gasket is in breach of the Contract, and in breach of the Condition that "all known mechanical issues have been voluntarily disclosed at the time of sale".The Defendants are not entitled to rely on the "as is where is" exclusion clause set out in the Contract as outlined in Paragraph 77 herein.

[80]Based on my interpretation of the Contract, and my finding that the Defendants breached the Contract, I do not need to analyze whether the Defendants' misrepresentations were fraudulent or negligent.

Damages

[81]Having found that the Defendants breached the Contract, the next question relates to the appropriate damages to be awarded to the Plaintiff for such breach.

[82]The Plaintiff seeks rescission of the Contract (ie. the Plaintiff requests a refund of the money he paid for the Vehicle, he wants the money he expended to repair the Vehicle returned, and he wants the Defendants to take the Vehicle back).The remedy of rescission is equitable and discretionary, and will be denied if there are equitable grounds for refusing the remedy including: (a) lack of prompt action by the plaintiff; (b) the acquisition of rights by innocent third parties; and (c) the impossibility of restoring the parties to their pre-contractual position (The Law of Contract in Canada, G.H.L. Fridman, Sixth Edition, at page 769).

[83]Mr. Bintto drove the Vehicle 2,447 kms between October, 2017 and February, 2018.He replaced the front windshield and the battery.He also had the oil changed.All of those steps make it impossible to return the parties to their pre-contractual position as the Vehicle is not the same as it was on October 23, 2017.I am not, therefore, able to rescind the Contract.

[84]Mr. Bintto's Civil Claim seeks rescission of the Contract.I am not, as noted in Paragraph 82, able to grant the requested relief.Section 34(2) of the Provincial Court Act permits the court to amend the Civil Claim if sufficient cause is shown.The Plaintiff's evidence at Trial clearly identified an alternate claim for damages for the cost of repairs to the Vehicle.The Plaintiff's evidence at Trial also clearly identified a claim for damages for loss of use of the Vehicle as both Mr. and Mrs. Bintto gave evidence that they lost the use of the Vehicle from February, 2018 onwards to the date of Trial.The Defendants had an opportunity to cross examine both Mr. and Mrs. Bintto on the repair estimates and the loss of use issue at Trial.I am satisfied that there is sufficient cause shown to allow the Civil Claim to be amended to allow for damages to be measured by the estimated repair costs and to allow for damages for loss of use of the Vehicle to conform with the evidence led at trial.There is no prejudice to the Defendants in allowing this amendment.I therefore amend the Plaintiff's Civil Claim to allow for a claim against the Defendants for damages for the cost of repairs to the Vehicle and for damages for loss of use of the Vehicle.

[85]Mr. Bintto obtained two estimates for repair of the Vehicle - $3,677.62 and $4,300.00.The average of those two estimates is $3,988.81.

[86]Mr. Bintto sought recovery of monies expended to have the oil changed, the windshield replaced and a new battery installed.I do not find those expenses to be recoverable in this Action as Mr. Bintto admitted he was prepared to go ahead with the purchase as replacing the windshield was affordable, and the battery issue was not a known mechanical issue at the time of sale (as noted at Paragraph 78).The October 24, 2017 oil change likewise does not flow from the Defendants' breach of Contract.

[87]Mr. Bintto expended monies to try to get the Vehicle working in February, 2018 - specifically, $420.00 and $136.50.His efforts were unsuccessful, and in my view, were reasonable steps taken to attempt to mitigate his losses, and are recoverable.

[88]Mr. Bintto has not driven the Vehicle since February, 2018.Mr. Bintto and his family, therefore, have sustained damages as a result of loss of use of the same.Mr. Bintto drove 2,447 kms between October 24, 2017 and February 24, 2018 - a period of 124 days.This works out to an average of 19.7 km/day.There are 194 days between February 24, 2018 and September 10, 2018 (the date of Trial).If I use 19.7 km/day and multiply that by 194 days, Mr. Bintto has been deprived of using the Vehicle for approximately 3821.8 km.Using the government mileage rate of $0.505/km, and multiplying that by 3821.8 km, I arrive at $1,930.00 for the Plaintiff's loss of use of the Vehicle resulting from the Defendants' breach of Contract (see the Fees and Expenses for Witnesses and Interpreter Regulation, AR 123/1984).

CONCLUSION

[89]I assess the Plaintiff's damages, as follows:

$3,988.81 - to repair the engine head gasket issue;

$556.50 - for repairs the Plaintiff tried to effect to the Vehicle;

$1,930.00 - for the Plaintiff's loss of use of the Vehicle;

$6,475.31

[90]However, the Plaintiff's Civil Claim stipulates a Claim for $6,226.00.I am not able to award an amount greater than the amount set out in the Civil Claim, and accordingly, I award Judgment to the Plaintiff in the sum of $6,226.00 (which is $249.31 less that what I assessed the damages at).

[91]The Plaintiff is entitled to pre-Judgment interest on the amount of the Judgment from October 23, 2017 until the date of the Trial.

[92]The parties may speak to costs.

Heard on the 10^th day of September, 2018.

Dated at the City of Edmonton, Alberta this 27^th day of September, 2018.

S.L. Corbett

A Judge of the Provincial Court of Alberta

Appearances:

Adahoman Bintto

for the Plaintiff

Michelle Wozny and Blayne Wozny

for the Defendants

Provide comprihensive answers to below questions:

1)1. Contractual Formation

Review the facts set out in the case in terms of the process as to how the contract between the parties was formed. Discuss in detail the contractual formation process. In particular make sure to discuss the five essential elements required for a contract to be formed and point out the specific facts in the case that establish each of those elements.

2)2. Contractual Interpretation

The Judge discussed the leading Supreme Court of Canada case of Sattva Capital Corp v. Creston Moly Corp. and its description of the modern approach to contractual interpretation. Provide a critical analysis of the modern approach to contractual interpretation. How was the approach used by the judge to decide the case? Do you agree with that approach: Why or Why not?

3)3. Misrepresentation

As the judge found that the Defendants' breached a contractual term of the contract, he did not go into a discussion regarding the claim for fraudulent or negligent misrepresentation. Assuming the judge was incorrect regarding the breach of contract, please discuss the facts of the case and argue whether or not the Defendant's committed misrepresentation and if so, what kind?

4)4. Damages

Provide a critical analysis as to how the judge decided damages. Could the judge have determined the amount of damages differently? If so, how?

Please provide references as well for citation.

Thank you!

I AM GOING TO CITE EVERYTHING IF REFERENCES ARE PROVIDED BY TUTORS.

Please provide comprehensive answers before midnight tonight if possible. It'll be much appreciated.

I'm not going to submit the exact same answers of tutor's but will be using parts of it and everything will be cited if references are provided.

Thanks!

I don't know what is missing, I've provided you the whole case with questions.