Montreal car dealer ordered to pay damages for selling fake vintage

The 1969 ZL1 Camaro is a legendary muscle car. It is a beast of a car, raw, powerful and quick, and was actually designed for drag racing, capable of exceeding 500 horsepower. Only 69 were made, and it’s worth a fortune, with collectors paying as much as US$1 million.

Brad Kyle thought he got his hand on one of these rare vintage automobiles, number 48 of 69. In February 2014 the head of Town & Country Chrysler Ltd., a new and used car dealer that occasionally sells exotic sports cars, purchased the car for $395,000 (plus tax) from Rolls-Royce Motor Cars Limité, a Montreal car dealership specializing in the sale of exotic and luxury cars.

As part of the deal, Kyle was supposed to receive documents, including the build sheet, the original bill of sale, servicing bills and warranty paper work, to establish the authenticity of the car.

Several months later, in October 2014, despite the fact that Town & Country still had not received any of the required documents, it sold the car to John Scotti Auto for US$500,000, conditional on receiving the paperwork and on an inspection by Jerry MacNeish, a certified appraiser and renowned authority on Camaros.

Kyle and Scotti Auto, never received the documents. Scotti Auto cancelled the sale, and Town & Country sued, basing its cause of action on Rolls-Royce’s failure to follow through its obligation to deliver, under article 1736 of the Civil Code. Kyle also sought damages, claiming compensation for the loss of profit following the cancellation of the subsequent sale of the car to John Scotti.

An undisputed and uncontradicted expert report by MacNeish concluded the car he inspected was not number 48 of the 69 Camaros produced. Indeed, it was not even a ZL1, worth no more than US$70,000. MacNeish found evidence that there were efforts to hide the car’s true nature, and that it was a “bad rebody.”

“This car should be investigated to locate all past owners. A serious investigation should take place to find out who tried to recreate this 1969 Camaro into one of the very rare 69 ZL-1 Camaros built at the Norwood, Ohio plant. There may be serious fraud issues due to the misrepresentation of this vehicle to potential buyers,” said MacNeish.

In Town & Country Chrysler Ltd. c. Rolls-Royce Motor Cars Québec limité, 2022 QCCS 850, Quebec Superior Court Justice André Roy concluded that Kyle was entitled to “resolution of the sale” and to damages because Rolls-Royce breached its obligation to deliver.

[106] The contract of sale expressly stipulates that Town & Country will receive the 48th 1969 Camaro ZL1.  No waiver of legal warranty could excuse Rolls-Royce from its obligation to deliver this specific car promised in the contract.

Justice Roy annulled the sales contract, ordered Rolls-Royce Motor Cars to pay $424,750 within 30 days of the judgment, and damages amounting to $175,491.

[129] In light of the circumstances of the case at hand, Town & Country has established that the damages it sustained were an immediate and direct consequence of Rolls-Royce’s default and that they are certain and assessable.

[130] The direct and certain result of Rolls-Royce’s failure to deliver a Camaro ZL1, number 48 of the 50 Gibb cars, was that Town & Country could not resell the car to Scotti Auto.

[131] Since the sale price was established between Town & Country and Scotti Auto, it follows that the damages in the form of loss of profit are certain and assessable.

[132] As for the criterion of forseeability, it is hard to imagine anything more foreseeable than a car dealership selling cars for profit.

[133] Thus, on November 4, 2014, when Scotti « cancelled the deal », Town & Country was deprived of a profit it had rightfully earned.

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