Court File and Parties
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
1515471 Ontario Inc.
Plaintiff (Appellant in Appeal)
– and –
Leah J. Davidson
Defendant (Respondent in Appeal)
Counsel:
Luigi DeLisio - Counsel for the Appellant
Michael Vanoostveen - Counsel for the Respondent
HEARD: November 18, 2016
BEFORE: The Honourable Justice James W. Sloan
REASONS FOR JUDGMENT
Jurisdiction and Standard of Review
1An appeal lies to the Divisional Court from a final order of the Small Claims Court. Such appeal is to be heard by a single judge: ss. 31 and 21(2)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Section 2 of the Small Claims Court Jurisdiction and Appeal Limit, O. Reg. 626/00, provides that the Divisional Court has jurisdiction to hear appeals from final orders of the Small Claims Court in excess of $2,500. As the judgment awarded damages in the amount of $7,964, the appeal is properly brought before this Court.
2The standard of review in an appeal of an order of a Judge is set out in Housen v. Nikolaisen, 2002 SCC 33. On questions of law, the standard is correctness. On questions of fact, the standard is palpable and overriding error. On questions of mixed fact and law, there is a spectrum. However, with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error.
3The concept of palpable and overriding errors was discussed by the Ontario Court of Appeal in Waxman v. Waxman (2004), 2004 39040 (ON CA), 186 O.A.C. 201, at paras. 296-297:
The “palpable and overriding” standard addresses both the nature of the factual error and its impact on the result. A “palpable” error is one that is obvious, plain to see or clear: Housen at 246. Examples of “palpable” factual errors include findings made in the complete absence of evidence, findings made in conflict with accepted evidence, findings based on a misapprehension of evidence and findings of fact drawn from primary facts that are the result of speculation rather than inference.
An “overriding” error is an error that is sufficiently significant to vitiate the challenged finding of fact. Where the challenged finding of fact is based on a constellation of findings, the conclusion that one or more of those findings is founded on a “palpable” error does not automatically mean that the error is also “overriding”. The appellant must demonstrate that the error goes to the root of the challenged finding of fact such that the fact cannot safely stand in the face of that error: Schwartz v. Canada, 1996 217 (SCC), [1996] 1 S.C.R. 254 at 281.
4This is an appeal from the Judgment of the Deputy Judge David Black dated January 25, 2015.
5The trial took place on July 31 and November 6, 2014.
6At the end of the trial the Deputy Judge granted rescission of the agreement to purchase the motor vehicle, ordered the appellant to pay to the respondent the $7,964 which she had paid towards the purchase of the automobile, and ordered the respondent to return the motor vehicle to the appellant.
7Unfortunately, since the judgment on January 25, 2015, nothing has been done with respect to the vehicle. It has sat in storage unused, and is still registered in the respondent’s name.
8Two issues are raised on this appeal, one being whether or not this was a consumer purchase as defined by the Consumer Protection Act, 2002, S. O. 2002, c. 30 (CPA), and the other being whether or not the appellant made a false, misleading or deceptive representation pursuant to section 14 of the CPA.
9There is ample evidence to support the Deputy Judge’s finding that this was a consumer purchase, particularly that the vehicle was registered in the respondent’s personal name and was used extensively for personal/family purposes, in addition to her using it in her business.
10Section 14 of the CPA, under the heading “Part III: Unfair Practices”, reads as follows:
False, misleading or deceptive representation
- (1) It is an unfair practice for a person to make a false, misleading or deceptive representation. 2002, c. 30, Sched. A, s. 14 (1).
Examples of false, misleading or deceptive representations
(2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:
A representation that the goods or services have sponsorship, approval, performance characteristics, accessories, uses, ingredients, benefits or qualities they do not have.
A representation that the person who is to supply the goods or services has sponsorship, approval, status, affiliation or connection the person does not have.
A representation that the goods or services are of a particular standard, quality, grade, style or model, if they are not.
A representation that the goods are new, or unused, if they are not or are reconditioned or reclaimed, but the reasonable use of goods to enable the person to service, prepare, test and deliver the goods does not result in the goods being deemed to be used for the purposes of this paragraph.
A representation that the goods have been used to an extent that is materially different from the fact.
A representation that the goods or services are available for a reason that does not exist.
A representation that the goods or services have been supplied in accordance with a previous representation, if they have not.
A representation that the goods or services or any part of them are available or can be delivered or performed when the person making the representation knows or ought to know they are not available or cannot be delivered or performed.
A representation that the goods or services or any part of them will be available or can be delivered or performed by a specified time when the person making the representation knows or ought to know they will not be available or cannot be delivered or performed by the specified time.
A representation that a service, part, replacement or repair is needed or advisable, if it is not.
A representation that a specific price advantage exists, if it does not.
A representation that misrepresents the authority of a salesperson, representative, employee or agent to negotiate the final terms of the agreement.
A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive.
A representation using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if such use or failure deceives or tends to deceive.
A representation that misrepresents the purpose or intent of any solicitation of or any communication with a consumer.
A representation that misrepresents the purpose of any charge or proposed charge.
A representation that misrepresents or exaggerates the benefits that are likely to flow to a consumer if the consumer helps a person obtain new or potential customers.
11The Deputy Judge found, at paragraphs 63, 64 and 65, and in particular paragraph 65, of his judgment, that the appellant had engaged in an unfair practice under the CPA because (a) it failed to provide a bill of sale at the time of purchase and (b) it failed to provide complete details of the financing including the total cost of borrowing and rate of interest.
Appellant’s Position
12Failing to provide a bill of sale or legislated financing disclosure does not fit into the genus of what amounts to a false, misleading or deceptive representation under section 14 of the CPA.
13Section 14 of the CPA essentially speaks of inducement, and there was nothing in the Deputy Judge’s that addressed inducement.
14Although the bill of sale and financing document may not have been given to the appellant at the appropriate time and may technically contain some errors, the parties agreed to the purchase price of the car. The appellant has never sought more than what it agreed to.
Respondent’s Position
15The respondent submits that, where the CPA mandates disclosure and there is silence or a failure to disclose, that in itself amounts to false, misleading or deceptive representation as defined by the CPA.
16In addition to not receiving the financing statement on time, the Deputy Judge found that when it was received, the respondent’s signature had been forged and the down payment was understated by $548. Therefore the balance owing, was overstated by the same amount.
17The respondent directed the court’s attention to the definition of representation in section 1 of the CPA:
“representation” means a representation, claim, statement, offer, request or proposal that is or purports to be, (a) made respecting or with the view to the supplying of goods or services to consumers, or (b) made for the purpose of receiving payment for goods or services supplied or purporting to be supplied to consumers;
18The respondent also relies on section 25 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which reads:
The Small Claims Court shall hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience.
19Neither party was able to find any court decisions to assist the Court in determining whether the facts of this case, as found by the Deputy Judge, would come within the ambit of section 14 of the CPA.
20Both parties represented themselves in Small Claims Court. While there seems to be evidence in the transcripts that the car was a “lemon”, (see ex. 2) there is no finding by the Small Claims Court Judge that would fit neatly into one of the categories under section 14(2), such as subsection 3 being a representation that the goods or services are of a particular standard quality, grade, style or model if they are not.
Findings
21In the absence of authority to the contrary, the Deputy Judge was entitled to find that the dealership’s promise to Ms. Davidson, that it would provide a bill of sale amounted to a “representation,” as broadly defined by the CPA. In finding a “representation,” the Deputy Judge applied the law to the facts, and that finding is accordingly entitled to deference. Where there has been no palpable and overriding error in that application, the Deputy Judge’s ruling must stand.
22The language of section 14 is broad enough to encompass the types of representation the dealership made when it promised Ms. Davidson a bill of sale. Section 14(2) lists 17 examples of what may constitute a representation, but explicitly states the list is not closed: “Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included …”
23A bill of sale was required by law, under the Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30 (MVDA), and its minimum contents were also prescribed by that statute. A purchaser of a motor vehicle is thus entitled to expect a bill of sale to detail the history and condition of the car.
24However the Deputy Judge’s findings went further. Not only was Ms. Davidson reasonably entitled to expect a bill of sale, as mandated by the MVDA, the dealership actively represented to her that she would receive one: “the dealership represented to Ms. Davidson it would provide her with a bill of sale that complied with all legal requirements under the laws of the Province of Ontario” (trial judgment, para. 64). The Deputy Judge found, further, that the dealership failed to provide that bill of sale, notwithstanding Ms. Davidson’s repeated attempts to follow up. The dealership further neglected to provide critical details of the financing arrangement, as it was required to do under the MVDA.
Was there a “representation”?
25It is logical that a promise to provide a bill of sale is a representation. It is an undertaking, made by a seller to a buyer, to provide a detailed record of a sales transaction. This conceptualization is consistent with the statutory definition of “representation” in section 1 of the CPA. The promise that a bill of sale would be provided (and necessarily outline important details of the financing and purchase agreement) was made (a) with the view to supplying a vehicle (a good), and (b) for the purpose of receiving payment for that vehicle, to borrow the language of that provision.
26The absence of a bill of sale or late provision of one, then, constitutes a breach by the seller of what was promised to the buyer. That breach is an unfair sales practice, as defined by section 14 of the CPA, and the remedy of rescission properly flows to the buyer.
27The Deputy Judge made factual findings, which are entitled to deference. He found, as a fact, that the dealership promised Ms. Davidson a bill of sale. When it failed to provide Ms. Davidson with one, as it had promised to do, that failure amounted to a “false, misleading or deceptive representation.” Ms. Davidson is thus entitled to rescind the purchase agreement.
28The appeal is therefore dismissed with the costs of this appeal payable by the Appellant, 1515471 Ontario Inc., to the Respondent Leah J. Davidson fixed in the amount of $2,312, inclusive of disbursements and HST.
James W. Sloan
Released: December 6, 2016
COURT FILE NO.: 55684/15
DATE: 2016-12-06
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1515471 Ontario Inc.
Plaintiff (Appellant in Appeal)
- and –
Leah J. Davidson
Defendant (Respondent in Appeal)
REASONS FOR JUDGMENT
J.W. Sloan J.
Released: December 6, 2016