Prebushewski v. Dodge City Auto (1984) Ltd., 2005 SCC 28, [2005] 1 SCR 649

                                                 SUPREME COURT OF CANADA

Between:

Shawna Prebushewski

Appellant

v.

Dodge City Auto (1984) Ltd. and Chrysler Canada Ltd.

Respondents

Coram: Major, Bastarache, LeBel, Deschamps, Fish, Abella and Charron JJ.

Appeal heard and judgment rendered:  March 9, 2005

Reasons delivered:  May 19, 2005

______________________________

Prebushewski v. Dodge City Auto (1984) Ltd., [2005] 1 S.C.R. 649, 2005 SCC 28

Shawna Prebushewski                                                                                      Appellant

v.

Dodge City Auto (1984) Ltd. and Chrysler Canada Ltd.                           Respondents

Indexed as:  Prebushewski v. Dodge City Auto (1984) Ltd.

Neutral citation:  2005 SCC 28.

File No.:  30189.

2005:  March 9; 2005:  May 19.

Present:  Major, Bastarache, LeBel, Deschamps, Fish, Abella and Charron JJ.

on appeal from the court of appeal for saskatchewan

Sale of goods — Statutory warranties — Breach of warranties — Truck bursting into flames and destroyed due to manufacturing defect — Consumer successfully suing car manufacturer and dealer for breach of statutory warranties pursuant to consumer protection legislation — Whether violation of consumer protection legislation justified award of exemplary damages — Whether violation was “wilful” — Consumer Protection Act, S.S. 1996, c. C‑30.1, s. 65.

Damages — Exemplary damages — Consumer protection — Truck bursting into flames and destroyed due to manufacturing defect — Consumer successfully suing car manufacturer and dealer for breach of statutory warranties pursuant to consumer protection legislation — Trial judge awarding exemplary damages against car manufacturer and dealer — Whether violation of consumer protection legislation justified award of exemplary damages — Whether exemplary damages provision merely codified common law test for awarding such damages — Consumer Protection Act, S.S. 1996, c. C‑30.1, s. 65.

Costs — Party‑and‑party costs — Consumer protection — Consumer successfully suing car manufacturer and dealer for breach of statutory warranties pursuant to consumer protection legislation — Court of Appeal affirming award of costs to consumer at trial but awarding costs against her on appeal because manufacturer and dealer achieved substantial success — Consumer protection legislation provides that costs may not be awarded against consumer bringing suit against a manufacturer or retail seller for breach of warranty unless suit is frivolous or vexatious — Whether Court of Appeal had jurisdiction to award costs against consumer — Whether protective scope of costs provision limited to proceedings at trials — Consumer Protection Act, S.S. 1996, c. C‑30.1, s. 66.

Because of a manufacturing defect in the daytime running light module, P’s truck burst into flames and was destroyed.  Both the manufacturer and the dealer which sold the truck to P denied liability.  They refused to provide any assistance and referred P to her insurer.  At trial, the manufacturer’s representative testified that the manufacturer had known for several years that there were problems with the module and had not informed its customers or ordered a recall.  The trial judge found the manufacturer and the dealer responsible for breaching statutory warranties under the Saskatchewan Consumer Protection Act.  P was awarded general and exemplary damages.  The Court of Appeal overturned the exemplary damages award and awarded costs against P. 

Held:  The appeal should be allowed.

The trial judge’s award of exemplary damages should be restored.  The test for exemplary damages set out in s. 65 of the Consumer Protection Act is not a codification of the common law test.  Rather, s. 65 creates a distinct regime designed to enhance consumer protection.  By providing that “wilful” violations of the Act are sufficient to trigger a judge’s discretion to award exemplary damages, the legislature has signalled in s. 65 an intention to lower the threshold and grant easier access to that remedy.  A “wilful” act is voluntary, intentional, or deliberate.  In this case, there was no basis to interfere with the trial judge’s conclusion that the violation of the Act by the manufacturer and the dealer was wilful and that exemplary damages were warranted. [23-28] [37-39]

The award of costs against P must be set aside.  Section 66 provides that costs shall not be awarded against a consumer who brings an action against a manufacturer or retail seller for breach of warranty unless the action is frivolous or vexatious.  The prohibition against ordering costs against the consumer applies whether or not the consumer is successful.  The protective scope of s. 66 is not limited to proceedings at trials.  Since both the trial court and the appeal court held that P was entitled to damages in the amount of the purchase price of the truck, and since there was no suggestion by either the manufacturer or the dealer that this action was frivolous or vexatious, there was no basis for an award of costs against P by the Court of Appeal. [41-44]

Cases Cited

Referred to:  Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., [2002] 1 S.C.R. 678, 2002 SCC 19; Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, 2002 SCC 18; Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130; Norberg v. Wynrib, [1992] 2 S.C.R. 226.

Statutes and Regulations Cited

Bills of Exchange Act, R.S.C. 1952, c. 15, Part V [ad. S.C. 1969‑70, c. 48, s. 2].

Consumer Packaging and Labelling Act , S.C. 1970‑71‑72, c. 41.

Consumer Products Warranties Act, 1977, S.S. 1976‑77, c. 15.

Consumer Protection Act, S.S. 1996, c. C‑30.1, ss. 3(c), 16, 40(1), 57(1), 65, 66.

Department of Consumer and Corporate Affairs Act, S.C. 1967‑68, c. 16.

Food and Drugs Act, S.C. 1952‑53, c. 38.

Hazardous Products Act, S.C. 1968‑69, c. 42.

Motor Vehicle Safety Act, S.C. 1969‑70, c. 30.

Textile Labelling Act, S.C. 1969‑70, c. 34.

Weights and Measures Act , S.C. 1970‑71‑72, c. 36.

Authors Cited

Black’s Law Dictionary, 7th ed.  St. Paul, Minn.:  West Group, 1999, “willful”.

Ontario.  Law Reform Commission.  Report on Consumer Warranties and Guarantees in the Sale of Goods.  Toronto: Department of Justice, 1972.

APPEAL from a judgment of the Saskatchewan Court of Appeal (Tallis, Sherstobitoff and Lane JJ.A.), [2004] 4 W.W.R. 42, 241 Sask. R. 22, 313 W.A.C. 22, 40 B.L.R. (3d) 90, [2003] S.J. No. 856 (QL), 2003 SKCA 133, affirming in part a decision of Rothery J., [2002] 4 W.W.R. 321, 214 Sask. R. 135, 19 B.L.R. (3d) 304, [2001] S.J. No. 739 (QL), 2001 SKQB 537.  Appeal allowed.

Ronald J. Balacko and Darren Grindle, for the appellant.

Kenneth A. Ready, Q.C., and Tamara R. Prince, for the respondents.

The judgment of the Court was delivered by

1                                Abella J. — Shawna Prebushewski bought a truck manufactured by Chrysler Canada Ltd. (“Chrysler”) from Dodge City Auto (1984) Ltd. (“Dodge City”). Because of a manufacturing defect, the truck burst into flames and was destroyed.  At trial, Chrysler and Dodge City were held responsible for breaching statutory warranties under The Consumer Protection Act, S.S. 1996, c. C-30.1. Ms. Prebushewski was awarded both general and exemplary, or punitive, damages. The Saskatchewan Court of Appeal overturned the exemplary damages award and awarded costs against her.  Ms. Prebushewski’s appeal to this Court centres primarily on the interpretation of exemplary damages under the Act.

I. Background

2                                On December 17, 1996, Ms. Prebushewski and her husband bought a new, top of the line Dodge Ram 4x4 one-half ton truck from Dodge City.  Chrysler manufactured the truck and Dodge City was one of its Saskatchewan dealers.  The Prebushewskis paid an additional $1,145 for an extended warranty from Chrysler.  The entire purchase price, including taxes and extended warranty, was financed.  The Prebushewskis borrowed $43,198.80 and, starting in January 1997, were required to make monthly payments of $721.23. For over a year and approximately 31,000 kilometres, Ms. Prebushewski and her husband drove the truck without incident.

3                                At the end of April 1998, Mr. Prebushewski drove to work and parked the truck on the street outside his workplace.  At about 9:00 p.m., he noticed that a vehicle on the street had its headlights on.  Shortly afterwards, his employer noticed a fire.  When Mr. Prebushewski and his employer went outside to see what was burning, they discovered that the front end of the Prebushewski truck was engulfed in flames.  The truck was damaged beyond repair despite the rapid response of the fire department.   

4                                Ms. Prebushewski and her husband reported the loss to their insurer, Saskatchewan Government Insurance (“SGI”).  After investigating the fire, SGI determined that there was a defect in the daytime running light module which had caused it to short-circuit. 

5                                On August 11, 1998, the insurance claim was settled.  SGI valued the truck at $27,340 at the time of loss, subtracted the $700 deductible, and gave Ms. Prebushewski $26,640.  She in turn gave the full amount to the bank under the terms of a security agreement.  Despite this payment, Ms. Prebushewski still owed the bank $11,383.65. Because the security for the loan was destroyed, the bank increased the annual interest rate on the remainder of the loan from 8 percent to 11 percent. Ms. Prebushewski was still making payments to the bank at the time of the trial.

6                                In addition to reporting the loss to their insurance company, the Prebushewskis also repeatedly tried to get assistance from Chrysler and Dodge City over a period of several months, primarily by phone. They were unsuccessful. Dodge City directed the Prebushewskis to Chrysler, and Chrysler directed them to their insurance company. 

7                                In May or June 1998, they also sent a letter to both Chrysler and Dodge City. In it they explained that the insurance company investigator had concluded that the loss was caused by an electrical fire but was not yet able to pinpoint the fire’s exact origin.  They also said that, based on conversations with work colleagues, family members and Transport Canada, they believed the fire was caused by a defect in the daytime running light module.  The letter also noted that, during a phone conversation with a Chrysler customer service representative, Mr. Prebushewski was told “that’s the way the cookie crumbles”.  

8                                Chrysler replied to the Prebushewskis by letter on June 13, 1998 expressing regrets, but stating that “we must refer you to your insurance company for review”.  The daytime running light module was not mentioned in Chrysler’s letter.

9                                Dodge City did not respond to the Prebushewski letter.

10                            On March 31, 1999, Ms. Prebushewski filed a statement of claim against both Chrysler and Dodge City alleging, among other things, breach of statutory warranties under the Act. In addition to general damages, she claimed exemplary damages pursuant to s. 65 of the Act.

11                            Chrysler and Dodge City denied liability.

12                            At trial, Ms. Prebushewski called uncontradicted expert evidence to establish that a manufacturing defect in the daytime running light module caused the fire. 

13                            Chrysler and Dodge City called no evidence at trial. Eric Durance, an electrical engineer at Chrysler, was, however, examined for discovery.  He was Chrysler’s “proper officer”, or authorized representative, and it was agreed that his answers were to be binding on it. His evidence revealed that Chrysler had known for several years that there were problems with the daytime running light module:

Q:        So this is what is known as the daytime running light module?

A:         The module is the device that performs that function.

Q:        They have been shorting out?

A:         Well, we have had various problems with them.

. . .

Q:        Mr. Durance, just so I can get this clear, Chrysler knew it was having problems with the daytime running light module prior to the Prebushewski fire on April 29, 1998?

A:         Yes. 

Q:        Did it take any steps whatsoever to advise Shawna Prebushewski or her husband that there was a problem with the daytime running light modules?

A:         No.

Q:        How many daytime running light modules are there?

A:         Every car has one since 1988.

Q:        Roughly?

A:         Well, more than a million I would say.

Q:        So I take it, to advise every owner of a vehicle with a daytime running light module and bring it in for inspection and perhaps replace it would be quite a costly process?

A:         Yes.

Q:        How much would it cost to call in a customer and inspect and replace the daytime running light module?

A:         I don’t know.

. . .

Q:        Give us a rough idea?

A:         Probably a couple of hundred dollars, $250.

Q:        So for a million — a million of them it would be $250,000,000; is that correct?

A:         Yes.

14                            The proper officer for Dodge City, comptroller Jim Wilkins, was also examined for discovery. He admitted that Dodge City had done nothing to investigate the fire or to compensate Ms. Prebushewski.

15                            The trial judge, Rothery J., found Chrysler and Dodge City jointly liable for breaching the statutory warranties provided for in the Act: (2001), 214 Sask. R. 135, 2001 SKQB 537. Section 57(1) provides that a consumer is entitled to recover damages from both the manufacturer and the “retail seller” for breaches of statutory warranties.

16                            The trial judge observed that s. 65(1) allows for the recovery of exemplary damages if there has been a “wilful violation” of the Act.  Relying on Black’s Law Dictionary (7th ed. 1999), at p. 1593, she defined “wilful” as “[v]oluntary and intentional, but not necessarily malicious.”  Based on this interpretation, she concluded that if Chrysler and Dodge City’s violation of the Act was intentional, exemplary damages were potentially appropriate. 

17                            Rothery J. then made a number of factual findings to support the exercise of her discretion to award exemplary damages: Chrysler knew about the defect in the daytime running light module before the fire, but did not advise Ms. Prebushewski or any other consumer about the defect; Chrysler made a business decision not to advise its customers of the defect or to recall the vehicles; and neither Chrysler nor Dodge City made any effort to investigate the fire or to compensate Ms. Prebushewski.

18                            She awarded Ms. Prebushewski $25,000 in exemplary damages in addition to $41,969.83 in general damages.

19                            On appeal to the Saskatchewan Court of Appeal, Tallis J.A., writing for a unanimous court (Sherstobitoff and Lane JJ.A.), upheld the general damages award but set aside the exemplary damages award: (2003), 241 Sask. R. 22, 2003 SKCA 133.  In his view, the trial judge had unduly focused on Chrysler and Dodge City’s failure to compensate Ms. Prebushewski.  Tallis J.A. held that this was insufficient to support an award of exemplary damages because the defendants had not acted in bad faith when they took the position that the loss was essentially an insurance claim. 

20                            Tallis J.A. also disagreed with Rothery J.’s condemnation of Chrysler’s corporate policy and, despite her express finding to the contrary, was of the view that, before the Prebushewskis’ truck burned, there was no indication that the daytime running light module defect caused fires.  In his words:

There was no evidence that Chrysler knew of, or should have expected a fire loss of this magnitude before the occurrence of this loss. Furthermore, there was no evidence adduced of any corporate policy of placing profits before the potential danger to its customer’s safety. . . .

In light of the evidence, we find no rational purpose in the award of exemplary damages in this case . . . . [paras. 50-51]

21                            There was no explicit analysis of what the applicable test for an award of exemplary damages was under the Act, but the Court of Appeal appears to have accepted Chrysler and Dodge City’s argument that the common law test prevailed.

22                            In addition to setting aside the award of exemplary damages, the Court of Appeal awarded Chrysler and Dodge City their costs of the appeal. Ms. Prebushewski appealed both conclusions. 

II.  Analysis

A.  Exemplary Damages

23                            The primary issue in this appeal is whether the violation of the Act in this case gave rise to exemplary damages under s. 65 of the Act.  This requires a determination of whether s. 65 articulates a discrete test for exemplary damages, or should be interpreted as merely codifying the common law. Section 65 is found in Part III of The Consumer Protection Act dealing with consumer product warranties:

65(1)  In addition to any other remedy provided by this Part or any other law in force in the province, a consumer or a person mentioned in subsection 41(1) or in section 64 may recover exemplary damages from any manufacturer, retail seller or warrantor who has committed a wilful violation of this Part.

(2)        In an action in which exemplary damages are claimed, evidence respecting the existence of similar conduct in transactions between the manufacturer, retail seller or warrantor and other consumers is admissible for the purposes of proving that violation of this Part was wilful or of proving the degree of wilfulness of the violation.

24                            At common law, exemplary or punitive damages are awarded only in exceptional cases to meet the goals of retribution, deterrence and denunciation in cases of “malicious, oppressive and high-handed” conduct that “offends the court’s sense of decency”. The test limits the award to “misconduct that represents a marked departure from ordinary standards of decent behaviour”; Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., [2002] 1 S.C.R. 678, 2002 SCC 19, at para. 79; Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, 2002 SCC 18, at para. 36; Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, at para. 199; and Norberg v. Wynrib, [1992] 2 S.C.R. 226, at p. 267.

25                             In my view a different test for exemplary damages is anticipated by s. 65(1).  The language of s. 65(1) is clear and unambiguous: once a wilful — or deliberate — violation has been found, the trial judge has a discretion to award exemplary damages. Had the legislature intended that the common law — and more exacting — test apply, it could easily have used words affiliated with the traditional approach to exemplary damages, such as “malicious” or “oppressive”. By designating instead that “wilful” violations of the Act are sufficient to trigger a judge’s discretion, the legislature has signalled an intention to lower the threshold and grant easier access to the remedy of exemplary damages.

26                            This intention to override existing law, such as the common law test, is reinforced by the introductory words to s. 65, which state:

In addition to any other remedy provided by this Part or any other law in force in the province, a consumer . . . may recover exemplary damages . . . .

27                            Similarly, an intention that it be interpreted as charting a different remedial course from the common law can be found in s. 40(1), which, like s. 65, is found in Part III of the Act:

40(1)    The rights and remedies provided in this Part are in addition to any other rights or remedies under any other law in force in Saskatchewan unless a right or remedy under that law is expressly or impliedly contradicted by this Part.

28                            This provision, which explicitly acknowledges that the Act takes precedence over existing law, would be inoperable if s. 65(1) were interpreted in accordance with common law precepts rather than as reflecting an intention to replace them by creating a distinct regime designed to enhance consumer protection.

29                            Each of these two sections signals the distinctiveness of the approach to exemplary or punitive damages in the legislative scheme; together, they trumpet it.

30                            One can find additional support for the view that s. 65(1) represents a departure from the common law test for exemplary damages from the way such damages are referred to in s. 16, contained in Part II of the Act. Part II addresses unfair marketplace practices. Section 16(1)(b) provides that when a court finds that a supplier has committed an unfair practice, it may

award the consumer damages in the amount of any loss suffered because of the unfair practice, including punitive or exemplary damages;

31                            Section 16(1)(b), by referring to “punitive or exemplary” damages without any limiting modifiers, can be seen as alluding to a different test for exemplary damages than the one set out in s. 65(1). The use of different language in s. 16 and s. 65 must be presumed to be meaningful.

32                            The conclusion that the s. 65(1) test for exemplary damages replaces the common law approach also emerges from an analysis of the historical context and legislative history of Saskatchewan’s consumer protection legislation.

33                            Part III of the Act, in which s. 65 is found, was originally enacted in 1977 as The Consumer Products Warranties Act, 1977, S.S. 1976-77, c. 15. It was part of an emerging legislative pattern in North America designed to equitably reconfigure the imbalance in bargaining power between consumers and those who manufacture and sell products. In order to inform consumers and protect them from unsafe products and fraudulent or deceptive practices, legislation was introduced to rectify consumer vulnerability resulting from such common law principles as caveat emptor.

34                            In Canada, the federal government enacted the Department of Consumer and Corporate Affairs Act, S.C. 1967-68, c. 16. A new Department of Consumer and Corporate Affairs was given responsibility for coordinating the enforcement of a number of federal consumer protection statutes.  Other significant federal enactments included the Food and Drugs Act, S.C. 1952-53, c. 38, the Hazardous Products Act, S.C. 1968-69, c. 42, the Motor Vehicle Safety Act, S.C. 1969-70, c. 30, the Textile Labelling Act, S.C. 1969-70, c. 34, the consumer notes provisions of the Bills of Exchange Act, R.S.C. 1952, c. 15, Part V (added by S.C. 1969-70, c. 48, s. 2), the Weights and Measures Act , S.C. 1970-71-72, c. 36, and the Consumer Packaging and Labelling Act , S.C. 1970-71-72, c. 41.

35                            Provincial governments, through their jurisdiction over property and civil rights, also began to enact legislation designed to improve protection for consumers and enhance their remedial options. One such statute was Saskatchewan’s Consumer Products Warranties Act, 1977. 

36                            When this statute was introduced in the Saskatchewan legislature, the then Minister of Consumer Affairs referred to a 1972 Ontario Law Reform Commission Report on Consumer Warranties and Guarantees in the Sale of Goods (1972), to explain why similar Saskatchewan warranty law was inadequate to meet the needs of consumers.  The Minister quoted the following passage from p. 23 of the report:

[Ontario’s Sale of Goods Act] proceeds from the fictitious premise that the parties are bargaining from positions of equal strength and sophistication . . . . Especially serious is the Act’s preoccupation with the bilateral relationship between the seller and the buyer, which totally ignores the powerful position of the manufacturer in today’s marketing structure. . . .  [O]ur sales law is private law and it has failed to provide any meaningful machinery for the redress of consumer grievances. This last weakness is perhaps the most serious of all weaknesses, for as has been frequently observed, a right is only as strong as the remedy available to enforce it. [Emphasis added.]

37                            In my view, the combined effect of the statute’s language, history and purpose leads inexorably to the trial judge’s conclusion that the s. 65 test for exemplary damages is different from the common law approach.  A “wilful” act is voluntary, intentional or deliberate.  The words embraced by the concept of wilfulness under the Act represent a less onerous entry point than the words acting as gatekeepers to an award of exemplary damages at common law, and fulfil the legislature’s intention to enhance the accessibility of the remedy. There is no basis for imputing the common law test into a provision so clearly designed to replace it.

38                            As previously indicated, the trial judge made a number of factual findings underpinning her conclusion that the violation was wilful and that exemplary damages were warranted.  She stated:

. . . the admissions of Eric Durance on behalf of Chrysler clearly show that not only did Chrysler know about the problems of the defective daytime running light modules, it did not advise the plaintiff of this. It simply chose to ignore the plaintiff’s requests for compensation and told her to seek recovery from her insurance company. Chrysler . . . made a business decision to neither advise its customers of the problem nor to recall the vehicles to replace the modules. . . . Chrysler was not prepared to spend $250 million even though it knew what the defective module might do.

Mr. Durance admits that there is no other explanation for the fire in the plaintiff’s truck. There is no indication that the plaintiff did anything to the truck to cause the fire. Jim Wilkins, the proper officer for Dodge, admitted that Dodge has done nothing to find out why the truck burned. Mr. Wilkins admits that Dodge has done nothing to compensate the plaintiff.

Counsel for the defendants argues that this matter had to be resolved by litigation because the plaintiff and the defendants simply had a difference of opinion on whether the plaintiff should be compensated by the defendants. Had the defendants [had] some dispute as to the cause of the fire, that may have been sufficient to prove that they had not wilfully violated this Part of the Act. They did not. They knew about the defective daytime running light module.  They did nothing to replace the burned truck for the plaintiff. They offered the plaintiff no compensation for her loss. Counsels’ position that the definition of the return of the purchase price is an arguable point is not sufficient to negate the defendants’ violation of this Part of the Act.  I find the violation of the defendants to be wilful. Thus, I find that exemplary damages are appropriate on the facts of this case. [paras. 42-44]

39                            Her factual findings were available on the record.  I see no basis for interfering either with them or her conclusion that they represent a “wilful” violation of the Act attracting exemplary damages. Since the quantum of those damages is not at issue, I would restore the trial judge’s award of exemplary damages in the amount of $25,000. 

B.  Costs

40                            In the Court of Appeal, costs were awarded against Ms. Prebushewski, an award she submits the Court of Appeal had no jurisdiction to make.

41                            Unless the action is frivolous or vexatious, s. 66 of the Act provides that costs “shall” not be awarded against a consumer who brings an action against a manufacturer or retail seller for breach of warranty, whether or not the consumer is successful:

66(1)  No costs shall be awarded against a consumer, a person mentioned in subsection 41(1) who derives his or her property or interest in a consumer product from or through a consumer, or a person mentioned in section 64, who:

(a)  brings an action against a manufacturer, retail seller or warrantor for breach of a warranty pursuant to this Part;

. . .

(2)  Subsection (1) applies regardless of whether the consumer or other person is successful in his or her action, defence or counterclaim unless, in the opinion of the court, the action, defence or counterclaim was frivolous or vexatious.

42                            Chrysler and Dodge City argue that this provision’s protective scope is limited to proceedings in the Court of Queen’s Bench.  They rely on s. 3(c) of the Act which defines “court” as “Court of Queen’s Bench”.  I see nothing in the language of s. 66 that either expressly or implicitly limits its application to the first stage in the natural progression of legal proceedings.  Section 66(1), which stipulates that no costs should be awarded against a consumer, is clearly the defining provision in s. 66.  It does not mention the word “court”. The presence of that word in s. 66(2), a modifying provision, should not be read in a way that detracts from the clear purpose articulated in s. 66(1). 

43                            The spirit of s. 66 is to protect consumers who start legitimate lawsuits from the disincentive of potentially onerous costs awards against them. Its intent is to encourage the lawful pursuit of such claims. Limiting the application of such costs protection to the trial level would have the opposite effect, given the likelihood that unsuccessful defendants may, as they have a right to do, seek to appeal.

44                            Since both the trial and the appeal court held that Ms. Prebushewski was entitled to damages in the amount of the purchase price of the truck, and since there is no suggestion by either Chrysler or Dodge City that this action is frivolous or vexatious, there was no basis for an award of costs against her in the Court of Appeal.

45                            I would allow the appeal with costs throughout and restore the decision of the trial judge. 

Appeal allowed with costs. 

Solicitors for the appellant:  Rusnak Balacko Kachur Rusnak, Yorkton, Saskatchewan.

Solicitors for the respondents:  McDougall Gauley, Regina.