Julien v. General Motors of Canada Ltd.
(1991), 116 N.B.R. (2d) 80
New Brunswick Court of Queen's Bench
Trial Division
Judicial District of Moncton
McLellan, J.
May 30, 1991.
Gérard J. Julien (plaintiff) v. General Motors of Canada Ltd. (defendant)
(M/SC/90-1113)
Reproduced with permission of Maritime Law Book Ltd.,
which claims copyright in the headnote and indexing.
Maritime Law Book Ltd. Summary:
A consumer purchased a new vehicle. Subsequently he was required to repair the vehicle's engine. General Motors declined to cover the cost of repairs under its warranty because the damage was a consequence of alterations made to the engine. The consumer sued for the cost of the repairs under the small claim procedure.
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The New Brunswick Court of Queen's Bench, Trial Division, gave judgment for the consumer.
Practice -- Topic 7037
Costs -- Party and party costs -- Entitlement to party and party costs -- Factors or circumstances reducing settlement -- Small claims limit -- A consumer sued a manufacturer for enforcement of a warranty provision -- The consumer commenced the suit under the small claim procedure -- The claim was for $2,777.58 -- The consumer was successful and was awarded costs -- While the usual interest for one year at 12% would be $360, the New Brunswick Court of Queen's Bench, Trial Division, could only award $222.42 because it was bound by the small claim procedure limit of $3,000 -- See paragraph 14.
Sale of Goods -- Topic 4060
Conditions and warranties -- Warranties -- Express warranty of materials and workmanship -- Julien purchased a new truck from a General Motors dealer -- Julian [sic] later added a turbo-charger to the truck's diesel engine -- Subsequently, a piece of steal [sic] lodged in one of the engine's cylinders -- Julien paid $2,777.58 for repairs -- Julien submitted that the repairs were covered by the vehicle's warranty -- General Motors claimed that the damage was caused by the turbo-charger and that the warranty did not extend to alterations -- The New Brunswick Court of Queen's Bench, Trial Division, held that the repairs were covered by the warranty.
Sale of Goods -- Topic 4060
Conditions and warranties -- Warranties --
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Express warranty as to material and workmanship -- Motor vehicle -- Exceptions -- A consumer sued General Motors on the ground that the new vehicle warranty covered the costs of certain engine repairs -- General Motors submitted that the warranty did not cover repairs that were a consequence of alterations to the vehicle -- The New Brunswick Court of Queen's Bench, Trial Division, stated that the burden of proving that an exemption provision was applicable lay with the insurer (i.e., General Motors) - See paragraph 11.
Cases Noticed
Dalton Cartage Company Ltd. v. Continental Insurance Co. and St. Paul Fire and Marine Insurance Co., [1982] 1 S.C.R. 164; 40 N.R. 135, appld. [para. 11].
Counsel
Gérard J. Julien, for the plaintiff;
Dale T. Briggs, for the defendant.
This matter was heard on May 23, 1991, by McLellan, J., of the New Brunswick Court of Queen's Bench, Trial Division, in Moncton, who delivered the following decision on May 30, 1991.
[1] McLellan, J.: This is a warranty dispute between a consumer and a vehicle manufacturer. The key questions are how did a small piece of "foreign material" (a steel screw or other small piece of steel) come to be inside a cylinder in an engine and who bears the burden of proving an exception to the warranty.
[2] In May 1989 the plaintiff Gérard J. Julien of Dieppe bought a new 1989 Chevrolet 3/4 ton with a 6.2 litre diesel engine from a dealer in Shediac of the de-
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fendant General Motors of Canada Limited. Mr. Julien found that the diesel lacked power and had no reserve of power for passing other vehicles. He took the vehicle into GM dealers to have them address that problem without any real success. The GM mechanic who testified says that in 1991 GM introduced a 6.5 litre engine "to address low power complaints" about the 6.2.
[3] Mr. Julien has a business hauling vacation trailers back and forth between Canada and Florida. He specifically bought the 3/4 ton chev with a diesel for that business use. When GM dealers could not solve the problem of low power, then under the Consumer Product Warranty and Liability Act, S.N.B. 1978, c. C-18.1, it could be argued that he could have rescinded the purchase, returned the vehicle and demanded his money back. He did not do that.
[4] Mr. Julien decided to fix the problem himself by having a garage (not a GM dealer) in Florida add a Banks turbo-charger to the engine in November 1989 at a cost of $2,900 U.S. The installation was guaranteed for one year. At that point the vehicle had been driven about 35,000 km.
[5] A turbo-charger compresses fresh air into the air intake manifold of an engine. That increases the amount of oxygen available to accelerate the combustion of the fuel compared to relying on just normal atmospheric pressure to add oxygen.
[6] After the installation of the turbo-charger the engine worked well (and has continued to work well), except for a problem of engine noise in May 1990 at about
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56,000 km. The repair of that problem at a GM dealer cost Mr. Julien $2,777.58 in May 1990.
[7] By this action under the small claim procedure Mr. Julien wants to recover those repair costs of $2,777.58 and interest from GM under the warranty. GM denies liability and says the engine noise was not their fault but was caused by the alteration of the vehicle by the addition of the turbo-charger. GM points to the warranty book where damage caused by alterations is not covered.
[8] The evidence is clear that the cause of the engine noise was that a piece of "foreign material", a steel screw or other small piece of steel, was inside a cylinder. The piece of steel did the damage. Part of it is still embedded in the piston head that was removed and is an exhibit.
[9] Mr. Julien says the piece of steel might have been inside the cylinder from the day the engine was built or have shaken loose from the original GM parts of the engine. If that is so, then the damage was not caused by the alteration. GM says the piece of steel might have fallen into the engine when the turbo-charger was installed or have shaken loose from the turbo-charger assembly. If that is so, then the damage was caused by the alteration.
[10] It is impossible to say on the evidence before me whether the damage was caused by the alteration of the addition of the turbo-charger. Because the vehicle was driven some 20,000 km over a period of about six months after the installation of the turbo-charger before the noise was noticed then I do not see an obvious connection between the addition and the damage. Nor do I see any link between damage by a piece of foreign material in a cylinder and GM's Tac Tip 192 dated June 30, 1989 (which Mr.
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Julien did not know about) recommending against the addition of a turbo-charger to the 6.2 diesel engine.
[11] The Supreme Court of Canada has recognized that: "A long-standing line of authorities require an insurer, seeking solace in an exclusion from otherwise unlimited liability, to show that the exclusion applies." Continental Insurance Co. v. Dalton Cartage Co., [1982] 1 S.C.R. 164; 40 N.R. 135, at p. 167.
[12] Here GM gave Mr. Julien a "Total 3-year/80,000 kilometre warranty" subject to various exceptions. In my view during that warranty period GM bears the burden of proving that damage is not covered because of an exception. GM has not discharged that burden of proof.
[13] Damage to the engine having been proven during the warranty period and GM not having proven that the damage was caused by the alteration of the addition of the turbo-charger, the claim must succeed.
[14] Mr. Julien also claims for interest on his claim of $2,777.58. The small claim procedure limit is $3,000. Interest for one year at 12% would exceed that limit. Thus I can allow interest of only $222.42.
[15] There will be judgment for the plaintiff Gérard J. Julien against the defendant General Motors of Canada Limited in the amount of $3,000 plus the filing fee of $35.
Order accordingly.
Editor: Reginald W. Curtis
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