Wriggles, Coho and Chum operated a guiding business in which they took hunters on week long sports, fishing and hunting tours to the interior of BC.  The three had made an equal investment in the business and shared the net profits equally. Chum was not active and did not take any wages. Wriggles and Coho took wages of $1,500 a month, which was agreeable to Chum.  He did not know that they also kept for themselves tips, which amounted to $5,000 in the last year and also kept any cash payments for day trips which were not entered into the books and amounted to $15,000 in the last year.

Wriggles saw a brochure published by a car dealership (D. Ltd.) showing a photograph of a 1989 Model F Van going up a steep paved incline, and he decided that it would be ideal for his guiding business.  He purchased a 1989 Model E Van from D. Ltd., the terms of which provided for $3,000 down and payments of $400 a month for the next 36 months.  

The debt was secured by a security agreement with the vehicle as collateral.  The contract further provided that all "implied warranties" are expressly excluded, "the seller is not responsible for incidental damages" and "there was a one-year parts and labour guarantee".  

Prior to purchasing the vehicle, Wriggles mentioned to the salesperson that he was operating a hunting and guiding business, but they did not discuss that each trip involved over 150 miles driving on rough gravel roads.  D. Ltd. then transferred the security contract to Finco (Finance Company) who registered it in the appropriate registry.  Wriggles insured the van for "pleasure use only" with I.C.B.C.

The van had mechanical problems after the first month of use, and over the next year, it was in the garage for repairs 8 times.  Thirteen months later, the entire front end collapsed while going down an incline, and the van slipped off the road injuring the 3 hunters.  

The expert evidence at trial stated that the van had normal springs and shock absorbers, which were totally unsuitable for off terrain vehicles.  Further, the springs had been made from defective iron that rusted much quicker than treated iron.  

The manufacturer was aware of this problem from several other accidents, and had sent out notices to all owners of vehicles advising them that the springs should be inspected annually, but the notice did not say why there should be an inspection.  Wriggles had received this notice, but ignored it.  

The accident took place on a day trip in which Wriggles and Coho were taking the hunters to a location to hunt for mountain goats, which were out of season and the trip was paid for in cash and was not put through the business account.

As a result of the accident, Wriggles, Coho and Chum closed down their business, which resulted in a loss of $50,000 profit of advanced bookings.  

They stopped making payments to Finco.  

The three hunters sued them and claimed damages totalling $100,000.  After the accident, but before the trial, Wriggles transferred his one half interest in the family residence ($50,000 value) to his wife for $15,000. He then took the $15,000 and paid off the loan he owed to his brother-in-law, and then declared bankruptcy.  

The business had only $10,000 worth of assets.  Coho began working as a cowboy for 108 Mile Ranch. Chum denied that he was in anyway responsible.

 

Discuss all claims, defence, counterclaims, remedies, and methods by which any or all the parties might seek to enforce their judgement.

Answer rating: 100% (QA)

Answer Wriggles moved the interes in the property to spouse which is before preliminary holding g... View the full answer