CITATION: Levin v. A-Protect Warranty Corporation 2019 ONSC 2993
DIVISIONAL COURT FILE NO.: 619/18
DATE: 20190517
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
Richard Adam Levin
Plaintiff/Appellant
– and –
A-Protect Warranty Corporation
Defendant/Respondent
Plaintiff/Appellant-self-represented
Alexander Soutter, for the Defendant/ Respondent
HEARD at Toronto: May 16, 2019
Backhouse J.
[1] Mr. Levin appeals from the Small Claims Court Judgment of Deputy Judge L.B. Wheatly dated September 10, 2018 which dismissed his case with costs.
[2] A-Protect sells after-market warranties for used vehicles. Mr. Levin approached A-Protect to buy such a warranty for a 2005 Volvo S6OR with over 100,000 kilometers in mileage. The parties exchanged emails. Mr. Levin wanted a full warranty that gave him peace of mind. He negotiated a three year warranty contract from February 11, 2014 to February 11, 2017 with A-Protect.
[3] The contract contained a clause that provides:
Final price:$1999+GST for 3 years or 60,000KM-This warranty IS renewable after three years and is fully transferable to a new owner if the car is sold.
[4] There was previous litigation on the contract because every claim that Mr. Levin made under the warranty was denied. A-Protect’s position was that the Extended Limited Warranty Application excluded the claims. Deputy Judge Twohig in SC-15-7863 on January 21, 2016 found that there was a contract for a warranty on the vehicle and the contract was as set out in the email exchange of February 11, 2014. He held that the Extended Limited Warranty Application which was sent to Mr. Levin one month later could not be relied upon by A-Protect because Mr. Levin had not been advised of the terms and conditions therein and had therefore not agreed to them.
[5] Mr. Levin sought to renew the warranty at the end of the term. The vehicle was then 12 years old and had over 125,000 kilometers in mileage. A-Protect refused to renew, on the basis that it had the right to accept or reject any renewal application at its sole discretion. Mr. Levin then sued for damages of $7500 on account of repairs plus aggravated and punitive damages.
[6] At trial, Deputy Judge Wheatly found:
- The price and term of the renewal warranty would have to be decided by mutual agreement. The warranty was not renewable automatically at the customer’s option.
- It does not make common sense that the price of a renewal warranty would be the same price as the original warranty three years later on an older vehicle with more mileage.
- As there was a lack of certainty about specific contractual terms, the renewal provision is not enforceable.
- There was no basis to award aggravated or punitive damages.
[7] Mr. Levin submits that Deputy Judge Wheatley erred:
a) in failing to read the renewal clause in light of the agreement as a whole which Deputy Judge Twohig had found provided coverage without limitations;
b) in failing to find that the contract was renewable automatically at the customer’s option on the same terms as the original warranty, particularly given A-Protect’s admission in its amended amended statement of defence that there was nothing ambiguous about the renewal provision;
c) in finding that the warranty provision was unenforceable when A-Protect’s basis for declining to renew the warranty was that it had the right to accept or reject any renewal;
d) by accepting the parol evidence of Irene Bromberg, the CEO of A-Protect, that a warranty for the vehicle from February 11, 2017 would not be at the same cost as the warranty in place from February 11, 2014; and
e) in failing to apply the doctrine of contra proferentem against A-Protect in interpreting the renewal provision.
Standard of Review
[8] The parties agree that the standard of review is reasonableness absent an extricable question of law. Mr. Levin submits that there are 2 extricable errors of law, failing to apply the doctrine of contra proferentem and accepting parol evidence.
Analysis
[9] Deputy Judge Wheatly rejected Mr. Levin’s submission that Deputy Judge Twohig found that the contract was renewable as of right. Rather, she found that Deputy Judge Twohig found that there was a contract for a warranty on the vehicle between the parties and the contract was as set out in in the email exchange of February 11, 2014. One of the terms of this contract was a renewal provision but Deputy Judge Wheatly did not make any finding with respect to that specific term of the contract, except that it did form part of the contract and would therefore not be limited by any of the terms and conditions in the Extended Limited Warranty Application. Deputy Judge Wheatly agreed with that and found that what she was required to determine was what the effect of the renewal provision was. I find nothing unreasonable in this.
[10] I do not agree with Mr. Levin’s submission that Deputy Judge Wheatly erred in taking it upon herself to interpret the renewal term that neither party considered ambiguous. While Paragraph 19 of the amended amended statement of defence states that there is nothing ambiguous about the renewal provision, it goes on to pleads that it required mutual agreement which was contrary to Mr. Levin’s position.
[11] I also do not agree with Mr. Levin’s submission that this was a clear breach of contract case and that Deputy Judge Wheatly erred in interpreting the renewal term as an invitation to renew or agreement to agree when A-Protect had not based its refusal to renew on this basis. Paragraph 19 of A-Protect’s amended amended statement of defence pleads in the alternative that the renewal provision is an agreement to agree or to negotiate and is therefore unenforceable. Deputy Judge Wheatly did not err in considering A-Protect’s alternative argument.
[12] Deputy Judge Wheatly considered the cases of UniprixInc. V. Gestion Gosselin et Berube Inc.,[2017] 2 SCR 59, 2017 SCC 43 and Mapleview-Veterans Drive Investments Inc. v. Papa Kerollus VI Inc.(Mr. Sub), 2016 ONCA 93 which both deal with renewal provisions in contracts. She found the renewal provision in Uniprix was specific and detailed, clear and unambiguous and the true intention of the parties can be determined. She found that the renewal clause in Mapleview was also clear and unambiguous and set out an objective standard to determine the renewal price.
[13] In Mapleview, the Court held at paras.27-29 that if the length of the renewal term and the amount to be paid are not set out in the contract, the requisite certainty may be only found where the terms are determinable according to,
a. a formula or other objective standard set out in the contract, or,
b. a defined mechanism in the event of disagreement (eg.arbitration).
In Mapleview, the renewal clause provided for renewal “on the same terms and conditions as herein contained, save as to the rental rate which shall be the then current rate.” The Court of Appeal held at para 28 that the “then current rate” was a formula or other objective standard for establishing the rate, and therefore the provision was sufficiently certain.
[14] Deputy Judge Wheatly contrasted the renewal provisions in Uniprix and Mapleview with the renewal clause in this matter. She rejected Mr. Levin’s submission that it was clear and unambiguous. She found that it was silent on particulars such as price and length of term and this is what creates the ambiguity. She found there is no formula or other objective standard to determine the renewal price and that it is not possible to determine the common intention of the parties.
[15] I do not agree with Mr. Levin’s submission that the cases relied upon by Deputy Judge Wheatly are not applicable to the renewal provision in this case because this was not a standardized contract or a commercial lease. I find that she correctly extracted the legal principles from the cases she relied upon which are generally applicable rules of contract interpretation.
[16] Deputy Judge Wheatly’s interpretation of the contract that it was merely capable of being renewed is reasonable. There is nothing in the contract to support an interpretation that it may be renewed solely at Mr. Levin’s option on the same terms. Deputy Justice Wheatly concluded that:
“As there was a lack of certainty about specific contractual terms, the renewal provision is not enforceable.”
Deputy Judge Wheatly found that the court cannot impose terms that do not reflect the true intention of the parties. These findings were reasonable and I agree with them.
[17] It was not an error for Deputy Judge Wheatly not to apply the contra proferentum rule. This is not a case where Mr. Levin had no opportunity to modify the contract’s wording. The contra proferentum principle is an interpretive tool of last resort, when all other tools of construction are insufficient to resolve an ambiguity.
[18] I do not find it unreasonable for Deputy Judge Wheatly to rely on common sense and commercial realities in considering the effect of the renewal provision. Ms. Bromberg’s evidence was consistent with what Deputy Judge Wheatly otherwise found was common sense. In any event she found that the renewal provision was unenforceable because it was silent on price and term with which I agree.
[19] I do not agree that Deputy Judge Wheatly’s decision is inconsistent with Deputy Judge Twohig’s decision. Deputy Judge Twohig was dealing with the three year contract, not the renewal clause. He found that the renewal clause was not limited by the terms and conditions in the Extended Limited Warranty Application but did not consider and made no findings with respect to whether the renewal clause was ambiguous. It does not follow that because the renewal clause was not limited by terms and conditions in the Extended Limited Warranty Application that its price and term were the same as for the original warranty on which it is silent.
[20] There being no underlying damages awarded at trial, A-Protect cannot be ordered to pay punitive damages.(Pinks v. Bhatia, 2017 ONSC 3742 at para 31(Div Ct)).
Conclusion
[21] In the result, the appeal is dismissed.
[22] Both parties submitted bills of costs:
Mr. Levin: $4,231.70 partial, $5,731.70 actual
A-Protect: $3000
[23] Mr. Levin conceded that A-Protect’s costs were reasonable. Costs are assessed at $3000 against Mr. Levin.
___________________________ Backhouse J.
Released: May 17, 2019
CITATION: Levin v. A-Protect Warranty Corporation 2019 ONSC 2993
DIVISIONAL COURT FILE NO.: 619/18
DATE: 20190517
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Richard Adam Levin
Plaintiff/Appellant
– and –
A-Protect Warranty Corporation
Defendant/Respondent
REASONS FOR DECISION
Backhouse J.
Released: May 17, 2019