CITATION: Hatcher v. Sheikhan, 2019 ONSC 3890
COURT FILE NO.: DC-17-125
DATE: 20190621
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
B E T W E E N:
CHRISTOPHER DAVID HATCHER
Appellant/Plaintiff
- and -
DANIEL SHEIKHAN
Respondent/Defendant
COUNSEL:
R.H. Thomson, for the Plaintiff/Appellant
Emilio Bisceglia, for the Defendant/Respondent
HEARD: March 22, 2019 at Brampton
REASONS FOR JUDGMENT
Fowler Byrne J.
[1] This is an appeal from the judgment of Deputy Judge Fellman of November 1, 2017.
Background
[2] The Appellant David Hatcher maintains that on July 23, 2016, he met with the Respondent Daniel Sheikhan, and purchased a 2009 Audi A4 2.0L Turbo ("the Vehicle") from the Respondent's father, Majid Sheikhan, for $11,500. The Appellant claimed he purchased the Vehicle as a result of an advertisement for the Vehicle in Auto Trader, which indicated that the Vehicle had a "new 2011 engine" or "a new 2011 Audi Factory Engine", which advertisement was placed by the Respondent. On or about November 3, 2016, the engine failed. The Appellant paid the sum of $8,338 in order to the repair the engine. The Appellant provided a receipt from his auto mechanic who indicated that the engine was not new. The Appellant seeks the cost of repair from the Respondent.
[3] After hearing this trial in the small claims court, Deputy Judge R.A. Fellman dismiss the plaintiff's claim and no cost were awarded.
[4] The Appellant appeals this judgment, stating that the Deputy Judge made a number of errors in law and in fact. I will address each ground of appeal in turn.
[5] The Appellant alleges that the Deputy Judge made the following errors in law:
a) he failed to correctly apply the common-law test for caveat emptor by disregarding that fraud defeats caveat emptor;
b) he failed to consider, acknowledge or apply s. 14(2) of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A, which describes the impropriety of using the word "new" in advertisements or sale if an item is used or reconditioned;
c) he failed to consider, acknowledge or apply s. 18(2) of the Consumer Protection Act, which expressly states that all persons engaged in an unfair practice are liable jointly and severally with people who entered into the agreement with the consumer notwithstanding it was cited numerous times in the hearing;
d) he placed too heavy an emphasis on the fact that the Respondent's father was the registered owner of the vehicle at the time of the sale when that fact was rendered irrelevant by s. 18(2);
e) he dismissed a number of exhibits that clearly support the plaintiff as being mere "window dressing"; and
f) he did not consider that the Respondent made prior inconsistent statements and providing evasive answers.
Standard of Review
[6] The appellant has claimed errors in both fact and law. On a pure question of law, the standard of review is one of the correctness. Where an error of law is found, the appellate court is free to replace the opinion of the trial judge with its own: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para 8.
[7] The standard of review for errors of fact is such that an appeal will not be granted unless it can be established that the trial judge made a palpable and overriding error. Absent such a finding, deference is given to the trier of fact who was able to observe witnesses and hear the evidence first hand: Housen, at para. 10.
[8] Questions of mixed fact and law involve applying a legal standard to a set of facts: Housen, at para. 26. If it is alleged that the trier of fact incorrectly applied the facts to the law, then an appeal will only be successful if an overriding and palpable error is found. If, on the other hand, it is alleged that the trier applied the law incorrectly to the facts, then the standard is one of correctness: Housen, at paras. 26-27.
Errors of Law
[9] The appellant has claimed that the Deputy Judge made a number of errors in law.
i. Fraudulent Misrepresentation
[10] The Appellant alleges that the Deputy Judge erred in law by failing to consider, acknowledge or apply the common law test for fraudulent misrepresentation.
[11] The Appellant claims that Respondent "knowingly or through wilful blindness or recklessly misrepresented the truth surrounding the state and history of the Vehicle's engine."
[12] It is conceded that the Deputy Judge did not specifically address the issue of fraudulent misrepresentation, but he did make the necessary factual findings to determine whether any misrepresentation occurred.
[13] In order to make a finding of fraudulent misrepresentation, it must be shown that the defendant made a false representation of fact, knowing it was false and with the intention that it be acted on. The plaintiff must act on that representation and must have done so to their detriment: Woodbine Truck Centre Ltd. v. Jantar Building Systems; [1997] O.J. No. 1555 (Gen. Div.), at para. 10.
[14] The words in the Auto Trader ad are clear. If that was all the evidence with respect to the Vehicle, Mr. Hatcher may have been successful on this point. However, the facts as found by the Deputy Judge establish that further discussions took place regarding the newness of the engine. Whether the engine had 40,000 km when put into Vehicle, or whether it was new when installed and then Mr. Sheikhan put 40,000 km on it, it was clear to Mr. Hatcher when he purchased the Vehicle that the engine was not exactly new, and that it had been subjected to some use. While Mr. Hatcher attempted to show the engine was anything but new through his mechanic's invoice, this is insufficient proof that the statements by Mr. Sheikhan were actually and knowingly false.
[15] In addition, the Deputy Judge found, despite Mr. Hatcher's evidence, that Mr. Hatcher was given the opportunity to have his own mechanic inspect the car. Accordingly, it cannot be said that the representation made about the engine was made with the intention to induce the sale, as they provided Mr. Hatcher with an opportunity to withdraw from the sale on at least two occasions.
[16] Accordingly, the facts, as found by the Deputy Judge, do not support a finding of fraudulent misrepresentation, so this ground of appeal must fail.
ii. Caveat Emptor
[17] The Appellant has claimed that the Deputy Judge failed to correctly apply the common law test for caveat emptor by disregarding that fraud defeats caveat emptor.
[18] As indicated above, no finding of fraud was made by the Deputy Judge, and the facts do not support a finding of fraud. Accordingly, there is no error in law in applying the principle of caveat emptor.
iii. [Consumer Protection Act, 2002](https://www.canlii.org/en/on/laws/stat/so-2002-c-30-sch-a/latest/so-2002-c-30-sch-a.html)
[19] The Appellant has alleged the Deputy Judge made a number of legal errors in his application of the Consumer Protection Act, 2002.
[20] I agree that the Deputy Judge did not address the issue of the Consumer Protection Act, 2002. However, this is not an error in law as the Consumer Protection Act, 2002 does not apply to this transaction.
[21] Section 2(1) of the Act states that subject to this section, the Act applies in respect of all consumer transactions if the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place.
[22] The following definitions in s.1 of the Act are applicable:
"consumer agreement" means an agreement between a supplier and a consumer in which,
(a) the supplier agrees to supply goods or services for payment, or
(b) the supplier agrees to provide rewards points to the consumer, on the supplier's own behalf or on behalf of another supplier, when the consumer purchases goods or services or otherwise acts in a manner specified in the agreement; ("convention de consommation")
"consumer transaction" means any act or instance of conducting business or other dealings with a consumer, including a consumer agreement; ("opération de consommation")
"supplier" means a person who is in the business of selling, leasing or trading in goods or services or is otherwise in the business of supplying goods or services, including the supply of rewards points, and includes an agent of the supplier and a person who holds themself out to be a supplier or an agent of the supplier; ("fournisseur")
[23] While a narrow reading of the definitions may lead to the conclusion that the Act applies to any transaction involving a consumer in Ontario, a further reading of the Act in its entirety shows that the focus of the Act is to protect the consumer when dealing with a business, and not a transaction between two private individuals. It is agreed neither the Respondent nor his father Majid Sheikhan are in the used car business.
[24] This principle of statutory interpretation is supported by Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26:
In Elmer Driedger's definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983):
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
[25] The interpretation of the Consumer Protection Act, 2002 as not applicable to transactions between non-business entities is also supported in the case of Ramdath v. George Brown College of Applied Arts and Technology, 2012 ONSC 6173. Belobaba J. presided over a trial of a number of issues arising out of a class action. Students of the International Business Management program claimed that the college course calendar misrepresented the benefits of program and falsely stated that the course would enable them to obtain three industry designations in addition to their college certificate. The students claimed that this is not the case. One of the issues before the court was whether the students were protected under the Consumer Protection Act, 2002. In concluding that they were, Belobaba J. reviewed the principles associated with the Act at para. 36:
The main objective of consumer protection legislation, such as the CPA, is to protect consumers. As the Supreme Court noted when discussing the Quebec equivalent:
The C.P.A.'s first objective is to restore the balance in the contractual relationship between merchants and consumers . . . This rebalancing is necessary because the bargaining power of consumers is weaker than that of merchants both when they enter into contracts and when problems arise in the course of their contractual relationships. It is also necessary because of the risk of informational vulnerability consumers face at every step in their relations with merchants. In sum, the obligations imposed on merchants and the formal requirements for contracts to which the Act applies are intended to restore the balance between the respective contractual powers of merchants and consumers.
[26] This issue has also been considered by the Alberta Queen's Bench. In the case of Bintto v. Wozny, 2018 ABPC 230, Mr. Bintto purchased a Mercedes Benz motor vehicle from the defendants. Approximately four months later, the car required repairs to the engine that cost approximately $4,000. The plaintiff alleged that the defendant misrepresented the condition of the vehicle and failed to disclose that the engine gasket needed repair. The court specifically dealt with the applicability of the Consumer Protection Act in Alberta at para. 49:
I have further reviewed the provisions of the Consumer Protection Act, RSA 2000, c. 26.3, as amended, to determine its ability. Section 1(1) defines a "supplier" had a "person, who in the course of person 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.
[27] In the case before Deputy Judge Fellman, the parties were of equal bargaining power. Both were private individuals who conducted a transaction of the type that neither were in the business of conducting. A review of legislation in its entirety and the principles enunciated in the Ramdath case support the interpretation of the Act that it does not to apply to private transactions between individuals.
[28] Accordingly, there is no error in law by failing to apply the Consumer Protection Act, 2002.
iv. Other Exhibits
[29] Finally, the Appellant has alleged that the Deputy Judge erred in law by dismissing a number of exhibits "as window dressing", exhibits which the Appellant claims clearly supports his case.
[30] This does not constitute an error in law. The trial judge is entitled to consider all the evidence, including the exhibits, and decide which to accept. As the facts were presented to the Deputy Judge, he deemed some exhibits more important to than others. Absent an overriding and palpable error, he is entitled to do so. I find no such error.
Errors of Fact
i. The Owner of the Vehicle
[31] The Appellant argues that the Deputy Judge made a palpable and overriding error when he found that the owner of the vehicle was not the Appellant. Upon the review of the transcript, and the exhibits relied on, I see no error on the part of the Deputy Judge. As stated in paras. 11, 13 and 14 of his reasons, the Deputy Judge rightly found that the only evidence of ownership presented at trial showed that it was the Appellant's father, Dr. Hatcher, who paid for the car and signed the bill of sale as the purchaser. No evidence of subsequent ownership, transfer of ownership or even a trust agreement was provided at trial. Accordingly, his conclusion is well supported by the evidence presented.
ii. Odometer Reading
[32] The Appellant has also alleged that the Deputy Judge made a palpable and overriding error in fact when he found that the engine in question had 228,674 km on it when it was sold to the Appellant on the basis of the odometer reading. This is an inaccurate description of the Deputy Judge's factual findings. In para. 19 of his reasons, the Deputy Judge stated, "The Bill of Sale disclosed an odometer reading of 228,674 km when the car was sold to Dr. Hatcher. Both Dr. Hatcher and Chris were, therefore, fully aware of this odometer reading when the sale of the car was closed." The Deputy Judge made a finding of fact of the odometer reading on the Bill of Sale. He did not find that the engine had that many kilometres on it.
iii. Presence of Appellant's Father
[33] Appellant has also alleged that the Deputy Judge made a palpable and overriding error when he found that the Appellant's father was present when the transaction was finalized. At trial, the Appellant stated that he went back to his girlfriend's house with the money draft obtained from his father. He also claimed that only he, the Respondent and the Respondent's father were present. In the evidence given by Majid Sheikhan, he stated that when he attended at the Appellant's girlfriend's home, he asked Dr. Hatcher to sign the bill of sale regarding the odometer reading and then gave the Appellant the Vehicle. Majid Sheikhan stated that Dr. Hatcher signed the bill of sale. The bill of sale is clearly signed by Dr. Hatcher. Dr. Hatcher was not called as a witness to verify whether he was in attendance were not. The facts at trial could support this conclusion.
[34] In any event, even if this was an error, I do not find that it was either palpable or overriding. A palpable error is one that is plainly seen: Housen, at paras. 5-6. An overriding error is one that is sufficiently significant to vitiate the challenged finding of fact. An appellant must demonstrate that the error goes to the root of the challenged finding of fact such that the fact cannot safely stand in light of the error: Allcock v. Larsen, 2013 ONSC 2591 (Div. Crt) at para. 20. Therefore the error must be clear and the fact must be material. Even if it was found that Dr. Hatcher was not in attendance when the funds were paid, and the Vehicle obtained, it does not affect the conclusion reached by the Deputy Judge.
iv. Finding of Credibility
[35] Finally, the Appellant has alleged that the Deputy Judge made a palpable and overriding error in preferring the evidence of the Respondent over that of the Appellant. I find no such error occurred. The very duty of a trial judge is to assess the credibility of all witnesses and determine the facts based on their credibility. These findings of fact are not subject to review unless they are the product of palpable and overriding error. If no such error is found, the trial judge's findings are accorded the appropriate deference. Accordingly, I find no merit in this ground of appeal.
Conclusion
[36] Accordingly, for the reasons indicated herein, I make the following orders:
a) the appeal is dismissed;
b) The parties are encouraged to settle the issue of costs themselves. If they are unable to do so, the Respondent shall serve and file his written submissions, restricted to two pages, single-sided and double-spaced, exclusive of costs outline and offers to settle, no later than 4:30 p.m. on July 5, 2019; the Appellant shall serve and file his responding submissions, with the same restrictions, no later than 4:30 p.m. on July 19, 2019. Any reply submissions shall be served and filed no later than 4:30 p.m. on July 26, 2019; if no submissions are received by the Respondent by July 5, 2019, there shall be no costs.
Fowler Byrne J.
Released: June 21, 2019
CITATION: Hatcher v. Sheikhan, 2019 ONSC 3890
COURT FILE NO.: DC-17-125
DATE: 20190621
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
CHRISTOPHER DAVID HATCHER
Appellant (Plaintiff)
- and -
DANIEL SHEIKHAN
Respondent (Defendant)
REASONS FOR JUDGMENT
Fowler Byrne J.
Released: June 21, 2019