Citation: Steeves v. Arsenault & Keough Date: 20010606 PESCTD 55 Docket: SCC- 22677 Registry: Charlottetown PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - TRIAL DIVISION BETWEEN AND ALEXIS ROSS-STEEVES and TIMOTHY STEEVES PLAINTIFFS RHEAL ARSENAULT, DC AUTO SALES, WAYNE KEOUGH and SHERBROOKE AUTO DEFENDANTS BEFORE: THE HONOURABLE MADAM JUSTICE JACQUELINE R. MATHESON R. Scott Peacock Solicitor for Rheal Arsenault Mr.& Mrs. Steeves Present on their own Behalf Mr. Keough Present on his own Behalf Place and Date of Hearing Place and Date of Judgment Charlottetown, Prince Edward island February 16, 2001 Charlottetown, Prince Edward Island June 6, 2001
Citation: Steeves v. Arsenault & Keough Date: 20010606 PESCTD 55 Docket: SCC- 22677 Registry: Charlottetown BETWEEN AND ALEXIS ROSS-STEEVES and TIMOTHY STEEVES PLAINTIFFS RHEAL ARSENAULT, DC AUTO SALES, WAYNE KEOUGH and SHERBROOKE AUTO DEFENDANTS Supreme Court of Prince Edward Island - Trial Division Matheson J. Date Heard: February 16, 2001 Date of Judgment: June 6, 2001 (4 pages) Statutes Considered: Highway Traffic Act, R.S.P.E.I. 1988, Cap H-5 R. Scott Peacock Solicitor for Rheal Arsenault Mr.& Mrs. Steeves Present on their own Behalf Mr. Keough Present on his own Behalf
Matheson J.: [1] This is a claim for $8,000 arising from the purchase of a motor vehicle. The plaintiffs claim that prior to purchasing a Chrysler Neon, the defendant, Wayne Keough, had stated the vehicle had not been in a serious accident, when in fact it had been in an accident and had been written off. They also allege odometer fraud. [2] The defendant, Keough, had placed an ad in the Journal-Pioneer newspaper to the effect that he could arrange credit for vehicle purchases. He had some cars on his lot and when the plaintiff, Mr. Steeves, called, Keough mentioned a Neon Sport. Mr. Steeves asked if this car had been repaired or was a write-off and Keough told him that it hadn t been. He said he bought it at a Chrysler auction in Quebec. Steeves looked at the car, took it for a drive and it seemed to work fine, but he could not check the air conditioning because it was too cold. [3] The plaintiffs agreed on a purchase price of $7,095, plus tax and Keough arranged the purchase through Albion Auto in Amherst, to allow the plaintiffs to obtain financing. A conditional sales contract was arranged for a cash selling price of $7,095, plus taxes, for a total of $8,350. With the financing charges, the total amount payable was $13,613.76 with payments of $283.62 a month, commencing May 29, 1999. Before picking up the vehicle, the plaintiff went back to the lot and spoke to the defendant, Rheal Arsenault, who was working on another item. The plaintiff asked him if he could take the car for a drive and Arsenault said he did not have anything to do with the vehicle, his business only used the bay. This is the only conversation the plaintiff had with Arsenault prior to purchasing the car. [4] When the plaintiff took delivery of the car on May 3, 1999, there was a driving light still not repaired, but except for this he was satisfied with the condition of the car at that time. The mileage at the time of purchase was shown as 139,167 kilometres on the conditional sales contract. The sales agreement between Auto Transit, the auction house where the car had originally been purchased, and DC Auto Sales, the original purchaser, showed the mileage to be 140,034 kilometres. [5] Mr. Steeves testified he bought the vehicle from Keough and Sherbrooke Auto. The transaction was complete before he ever spoke to Arsenault and he has
Page: 2 no idea what the relationship is between Arsenault and Keough. The registration of the vehicle was transferred from DC Auto directly to Mrs. Steeves, although Keough arranged for the transfer. At the time of the purchase, DC Auto Sales, owned by Arsenault, and Sherbrooke Auto Sales, owned by Keough s son, shared the same premises. [6] The day after the vehicle was purchased the plaintiff drove it to Fredericton but the air conditioner would not work. On returning from Fredericton the car stopped, as the fuel pump was overheating. The next morning the plaintiffs went to see Keough about the defects and he said he had to talk to Arsenault about it. Words ensued and Arsenault refused to do anything. The plaintiffs had to replace the fuel pump which they purchased for $250, installed. Mr. Steeves does not have a receipt for this. The cost of repair to the air conditioner was $444.53. In September, 1999, the rear brakes were repaired at a cost of $171.27. On November 11, 1999 the plaintiffs put four winter tires on the car at a cost of $410.60 and they remained on the car when it was returned. The car was repainted, and the engine bonnet replaced because of rust at a cost of $2,217.88. On April 10, 2000, the head gasket was leaking. This is a common occurrence in this vehicle and Chrysler had goodwill warranties on this problem. However, when the plaintiffs tried to obtain the goodwill warranty they received a fax from Chrysler noting the vehicle had been written off. [7] The plaintiffs immediately called their lender and were told the vehicle had to be returned to the dealer, because the lender did not finance write-offs. The dealer had to buy out the conditional sales contract or the finance company would repossess it. Mr. Steeves called Keough and told him the car was a writeoff. Keough asked him how much it would take for him to keep the car and offered $2,500-$3,000, but did not want him to tell the finance company about it. The plaintiffs returned the vehicle to Albion Auto in Amherst on May 30, 2000 on instructions of the finance company. Keough picked up the car and paid out the conditional sales contract. The plaintiffs purchased another vehicle. [8] The plaintiffs are seeking the return of their down payment of $1,000; $2,277.88 in parts and repairs; $3,119.82 in payments (11 months); $410.60 for tires; $444.53 for air conditioning repairs; $250 for a fuel pump; $171.27 for rear brakes and.25 a kilometre for a 2,290 kilometre roll back ($572.00), for a total claim of $8,246.10.
Page: 3 [9] Once the plaintiffs commenced this action, Keough maintained that he was a commission salesman of DC Auto, but Mr. Steeves said there was no indication prior to this that Keough worked for DC Auto. As far as he knew, Arsenault was just renting a bay. Mr. Steeves states he added Arsenault as a party because the registration was originally transferred from DC Auto to Mrs. Steeves. [10] Keough testified that he shared rent with DC Auto and was selling cars on a commission for DC Auto. Keough argued that the plaintiffs did ask if the car had been in an accident and repaired and Keough told them no. Keough says he didn t hear from them except for the light problem and the recharge of the air conditioner until eleven months after they had purchased the car, when they found out it had been written off. He is required by the finance company to purchase back the vehicle if it is written off, and he did so. When the car was returned he had to replace the fuel pump. [11] Keough says that he worked for Sherbrooke Auto. He has no documents to show his status as a commissioned salesman for DC Auto. Keough arranges financing for purchasers. The finance company does not make their arrangements with DC Auto Sales and Arsenault and DC Auto Sales were not part of the negotiations with the Steeves. Keough delivered the registration to the Steeves. Sherbrooke Auto paid DC Auto Sales for the vehicle after the financing was completed, because DC Auto Sales had originally purchased the vehicle from the auction in Quebec. The finance company funded Albion Auto Centre and Albion Auto Centre funded Sherbrooke Auto Sales (Keough) and he paid DC Auto for the vehicle. [12] Arsenault confirmed that he bought the Neon at Transit Auto in Quebec City, which sells vehicles to dealers across the country. It is the vendor s responsibility to tell Transit Auto if there are declarations about the vehicle and this particular dealer did not so. He had no knowledge when he purchased the car that it was an insurance write-off. [13] Arsenault testified that the building he was operating out of had a DC Auto Sales sign and he decided to share the building with Sherbrooke Auto. If he was away, Keough could have sold vehicles for him on commission. The vehicle in question, the Neon, was sold to Sherbrooke Auto. Arsenault did not sell it to the plaintiffs. He was paid $7,072 for the sale of the 95 Neon to
Page: 4 Sherbrooke Auto Sales on May 10, 1999, without any commission being deducted. He did not recall registering this particular vehicle, but he provided the registration to Keough and Sherbrooke Auto. If he was selling a vehicle to another dealer, this dealer would take care of the registration from then on. Arsenault provided blank registration forms signed by himself to Sherbrooke Auto. He had no dealings with the Steeves prior to their purchase of the car. Arsenault said he did not fill in the purchase price on the motor vehicle dealer receipt. [14] Arsenault and DC Auto Sales state that the privity of contract is between the plaintiff and Keough and Sherbrooke Auto and, not between the plaintiff and DC Auto Sales and Arsenault. They state there is no evidence that either defendant had knowledge that the vehicle was a write-off and they were entitled to rely on the declaration made to the auctioneer. The only evidence relating to selling a previously written-off vehicle relates to Sherbrooke Auto and Keough, not DC Auto. [15] The evidence indicates that DC Auto Sales purchased this vehicle at an auction in Quebec, without knowledge it had been written off. After Keough and Sherbrooke Auto Sales arranged financing for the plaintiffs, they purchased the vehicle from DC Auto Sales and resold it to the plaintiffs. The plaintiffs have not established that Keough was aware the vehicle had been previously written off. However, he did warrant to the plaintiffs that the vehicle had not been repaired or written off, without actual knowledge of whether or not this was true. I find he was negligent in doing so. While the plaintiffs have established that the odometer readings at the time of purchase were different from the odometer readings at the time of the auction sale, they have not established who was responsible for this change. Arsenault and DC Auto Sales were not part of the sale to the plaintiffs. The registration was transferred to Mrs. Steeves through Keough. [16] I find that Keough misled the plaintiffs as to the nature of the vehicle s history and state of repair prior to their purchase and was negligent in doing so. At the time he was an agent of Sherbrooke Auto Sales. The vehicle was turned over to the finance company, at its request, in an improved condition. However, the plaintiffs have not proven the brake repairs are not part of the normal wear on a vehicle.
Page: 5 [17] The plaintiffs claim 25 cents/kilometre for a 2,290 kilometre roll back. However, they have not established who was responsible for the roll back. They have also claimed the return of eleven months of payments on the vehicle. As Keough has paid out the balance of their financing contract and they had the use of the vehicle for eleven months, judgment for this amount would over compensate the plaintiffs for their out of pocket losses. I find their damages arising from Keough s negligence are as follows: $1,000.00 down payment on motor vehicle 250.00 new fuel pump 444.53 air conditioning repairs 410.60 new tires 2,217.88 general body and paint repairs Total $4,323.01 Accordingly, the plaintiffs are awarded judgment against the defendants Keough and Sherbrooke Auto Sales in the amount of $4,323.01. [18] The plaintiffs request that the judgment be attached to Keough s bond as a licensed dealer. However, Keough testified that at the time of the sale he was not licensed as a dealer. There is no evidence before the Court that either Keough or Sherbrooke Auto Sales had a security bond as contemplated by s-s. 36(6)-(9) of the Highway Traffic Act, R.S.P.E.I. 1988, Cap H-5, at the time of this transaction. However, the plaintiffs may wish to explore this further with the Registrar of Motor Vehicles. [19] The claim against Rheal Arsenault and DC Auto Sales is dismissed. However, given the evidence of the transfer of registration and Wayne Keough s statements that he was a commissioned salesman for DC Auto, it was not unreasonable to join DC Auto Sales and Arsenault as parties. [20] Each party shall bear its own costs. June 6, 2001 Matheson J.