Missing the Mark: Contractor’s Use of Products in Violation of Code was Evidence of Negligence

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By: Shaun A. Hashim, Litigation Associate


Even for those who purchase and install products, compliance with statutory regulation is a must. In Taylor v. Great Gulf (Whitby) Ltd.,[1] a contractor who purchased and installed materials which were improperly labelled learned an important lesson in negligence law: although a breach of statutory authority does not alone give rise to civil liability, such breaches can be evidence of negligence. In deciding that there was a serious issue to be tried, the court took a broad view of causation and decided that it would be open to trier of fact to find that the defendant’s breach of code was substantially connected to the plaintiff’s injury. 

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In Taylor, the defendant, I/Land Plumbing, was hired by the co-defendant, Gulf View Contracting Limited, to install a series of plumbing fixtures in residential homes. One of those residences was owned by the plaintiff. As part of its contractual duties, I/Land installed a toilet using a particular flex hose. Five years after installation, a flood occurred which caused damage to the plaintiff’s residence.

The plaintiff sued the defendant contractors, and I/Land moved for summary judgment alleging that there was no evidence of negligence on its part.

The Canadian Standards Association’s (“CSA”) standards, as well as provisions of the Ontario Building Code,[2] were central to the motion for summary judgment. The CSA requires that plumbing supply fittings be marked with particular certification information, while the Building Code states that products lacking these markings “shall be regarded as proof, in the absence of evidence to the contrary, that no certification exists”.[3] The hose installed by I/Land was in violation of the Building Code as it had not been certified by the CSA and did not have the requisite markings.

In its motion for summary judgment, I/Land argued that the mere absence of CSA certification was not the cause of the damage. The defendant pointed out that, according to expert evidence, both CSA-certified hoses and non-certified hoses had failings that would lead to failures after a period of time. Thus, I/Land claimed that the absence of a CSA certification is not the cause of the loss.

The Court stated that I/Land’s argument amounted to “the proposition that there is no evidence of negligence because there is no evidence of causation.” The Court rejected this argument, stating that “the mere breach of a statutory authority or code does not, of itself, automatically give rise to civil liability. However, failure to observe the requirements set out by regulatory authorities is evidence of negligence”.[4] The Court also pointed to other allegations of negligence that were confirmed by the discovery of I/Land’s witness, and were sufficient to show that there was a sufficient issue requiring a trial.

The Court also rejected I/Land’s causation argument that the expert evidence showed that even CSA-approved hoses had failed, so the mere absence of CSA approval could not have “caused” the hose to fail. The Court noted that the fact that CSA-approved hoses failed does not have any bearing on the question of whether I/Land was negligent in selecting a defective hose. In addition, the Court relied on Supreme Court jurisprudence which states that causation is not a simple “join the dots” exercise,[5] the Court held that the test for causation is whether there is “a substantial connection between the injury and the defendant’s conduct”.[6] The Court concluded that it was open to the trier of fact to determine that there was a substantial connection between I/Land’s selection and fitting of a defective hose and the damage. Accordingly, the summary judgment motion was dismissed.

Ultimately this case reaffirms that, although an otherwise innocuous breach of code (such as the failure to stamp a flex hose) may not in itself give rise to civil liability, a breach of code is nevertheless evidence of negligence. Given the court’s broad view of causation, an act of non-compliance with code can support a “substantial connection” capable of establishing causation in tort.

Footnotes

[1] Taylor v. Great Gulf (Whitby) Ltd., 2015 ONSC 6891 [Taylor].

[2] O. Reg 332/12.

[3] Ibid, s. 7.2.1.3(3).

[4] Taylor at para. 19. See also Ryan v. Victoria (City), [1999] 1 S.C.R. 201 (S.C.C.).

[5] Clements (Litigation Guardian of) v. Clements, 2012 SCC 32.

[6] Hanke v. Resurface Corp., 2007 SCC 7.

Shaun Hashim is an associate at Theall Group LLP and maintains a broad commercial litigation practice. Prior to joining Theall Group LLP, Shaun summered and articled at the Toronto office of a prominent national law firm, gaining commercial litigation experience in a wide range of disputes involving fraud, breach of fiduciary duties, employment law, and the oppression remedy. Shaun graduated from the University of Windsor’s Faculty of Law in 2014 and was called to the Ontario Bar in 2015. Shaun is an editor for the Insurance chapter to be published in Bullen & Leake & Jacob’s 3rd Edition of Canadian Precedents of Pleadings in 2017.

For more information, visit http://www.theallgroup.com/

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Pure Economic Loss Claim Applies To Patent Defects That Are Not Imminently Dangerous

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By: Jeffrey A. Brown, Partner


The Manitoba Court of Appeal has held that a defendants’ motion for summary judgment should be dismissed, rejecting their argument that claims for pure economic loss for patent defects that are not imminently dangerous should not proceed to trial. This is yet another in a long line of cases interpreting the seminal Supreme Court of Canada decision in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co.,[1] where the Court held a defendant liable for a dangerous defect even though there had been no damage to persons or property (i.e. a pure economic loss claim).

In Winnipeg Condominium Corp. No. 613 v. Raymond S.C. Wan Architect Inc.,[2] the defendant architectural firm and its principal had provided architectural services for the design and construction of a condominium. The condominium suffered from defects including water pooling in the lower levels of the building’s parkade. The plaintiff’s expert opined that the parkade was not in danger of imminent collapse, and that it might take decades before it would be in danger of collapse. Moreover, there would be indications of a pending collapse before it occurred.

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The defendant architects stated that there were two principles arising out of the Bird Construction[3] case referred to above. First, that the reasoning in that case only applies to latent defects. Second, that recovery is limited to situations where the defect causes a real and substantial danger to persons or other property, or the imminent possibility of danger. They argued that the defect in the case at bar is patent, not latent, and that any potential danger arising out of the defect was years away from becoming dangerous, if at all.

The motion was heard by a Master at first instance.[4] The Master determined that although there was a latent defect at issue in Bird Construction, there is no mention of a latency requirement in the rest of the decision. Moreover, the Court referred to another decision of the Manitoba Court of Appeal[5] that permitted a claim for pure economic loss to proceed to trial even though it involved a patent defect (although the issue of a patent vs. latent defect was not argued before that court). With respect to the claim of an imminency requirement, the Court noted that this issue had been mentioned in Bird Construction and litigated in other decisions, and the courts have regularly permitted claims for non-imminent dangerous defects to proceed to trial. The Court noted that it would encourage reckless and hazardous behaviour if a defect was allowed to develop into an imminent defect before it could be the subject of a claim. It was more appropriate to permit the plaintiff to take steps to repair the defect before it cause injury. Thus, the Court denied the defendants’ motion and permitted the claim to proceed to trial.

This case was appealed to a judge in an unreported decision who adopted the Master’s decision and dismissed the appeal in a short endorsement. The defendants appealed to the Manitoba Court of Appeal, which dismissed the appeal. The Court agreed that since the law on liability for pure economic losses was still developing, it would be inappropriate to dismiss the claim before trial.

This case is an accurate statement of the law of pure economic loss, and protects the advances made in the Bird Construction decision. It makes little sense to require that a defect be imminently dangerous and/or a latent defect before a plaintiff could be entitled to claim for pure economic loss. We expect that if and when these issues are ultimately determined at trial, the Court will agree with the reasoning of the Court herein.

Footnotes

[1] [1995] 1 S.C.R. 85

[2] 2015 MBCA 49

[3] [1995] 1 S.C.R. 85

[4] 2014 MBQB 13

[5] Brett-Young Seeds Ltd. v. K.B.A. Consultants Inc., 2008 MBCA 36

Jeffrey A. Brown is a partner at Theall Group LLP. He is engaged in all aspects of the defence and trial of civil matters, including insurance law, commercial litigation, product liability and enforcement of secured transactions. Jeff has appeared as counsel at the Ontario Superior Court of Justice, Divisional Court and Court of Appeal. He was admitted to the Ontario Bar in 1999 after having completed his articles as a law clerk at the Federal Court of Canada for the Honourable Mr. Justice Teitelbaum. Jeff is co-author of the annually updated loose-leaf text, Product Liability: Canadian Law and Practice (Canada Law Book)

For more information, visit http://www.theallgroup.com/

Photo credit: kennymatic via Visual hunt / CC BY

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A Cautionary Tale: The Party That Imposes Specifications For Methods And Materials Is Responsible For Its Defects

Jeff

By: Jeffrey A. Brown, Partner


The Ontario Court of Appeal has held that where a plaintiff has imposed the methods and materials that the defendant must use to complete a project, the defendant is absolved of responsibility if the project proves to be defective, as the risk has been allocated to the plaintiff. Although this decision is not a typical products case, the considerations are similar to those that a court reviews in a case involving the implied warranty of fitness under the provincial Sale of Goods acts.

In Bruell Contracting Ltd. v. J. & P. Leveque Bros. Haulage Ltd.,[1] the Ontario Ministry of Transportation (“MTO”) awarded a contract to Leveque Bros. Haulage Ltd. (“Leveque”) to resurface 17.9 kilometers of road. The contract imposed certain specifications regarding the methods that Leveque was required to use. Shortly after Leveque completed the work, the road deteriorated for a number of reasons. As a result, MTO insisted that Leveque remove the defective surface and reapply a new one. After the road was repaired, MTO refused to compensate Leveque for the additional work and Leveque brought an action against MTO for breach of contract.

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MTO’s position is that there was an implied term in the contract that the binder and aggregate (which are the main components of the surface treatment) would be compatible and Leveque was obligated to test them to ensure their compatibility. It appears that the binder and aggregate required the addition of an anti-stripping additive to be compatible; however, the aggregate and binder were tested by MTO and met all tests required by the specifications. Leveque claimed that the road surface deterioration was caused, in part, by excessive application of the binder, as directed by MTO, and heavy truck traffic permitted by MTO before the road surface had cured.

The trial judge’s decision turned on the designation of the type of contract between MTO and Leveque: i) Performance Specification Contact; or ii) Method Specification Contract. In a Performance Specification Contract, the contractor must carry out the terms of the contract and adequately perform the task. If the contract is to resurface a road, the road must be resurfaced properly without defects. The contractor takes on a “performance” risk and, as a result, charges a higher price. In a Method Specification Contract, one party specifies the methods and materials that will be used in the project. These contracts place less risk on the contractor because the methods and materials are already specified, and the contractor is only required to follow the specifications. In these contracts, the contractor/expert takes on less risk and charges a lower price.

The trial judge accepted the evidence of the contractor’s expert who opined that the specified tools, emulsion, aggregate, equipment and instructions for surface preparation were controlled by MTO. Moreover, in comparison with other MTO contracts, there was no specific warranty, no requirement for compatibility testing, and no performance specifications. The trial judge accepted that this made the contract more consistent with a method specification contract.

The Ontario Court of Appeal affirmed the trial judge’s decision, finding no error in the characterization of the contract. The Court stated that since Leveque used the materials specified and applied them in accordance with the contract specifications, the responsibility rested with MTO.

This decision illustrates that the court will not imply performance requirements into a contract where the contract does not impose performance criteria. A contractor is entitled to simply follow the specifications and methods mandated in the contract, and take consolation in the assurance that a court will protect them if the resulting product is defective.

Note the relationship between the issues in this case and those involving products that are subject to the implied warranties in provincial Sale of Goods acts. The implied warranty of fitness set out in Sale of Goods acts implies a warranty on the seller that the product will be fit for its purpose unless it can be shown that the buyer did not rely on the expertise of the seller. In other words, the seller is not responsible if the buyer relies on its own expertise. The method specification contract vs. performance specification contract dichotomy in the case at bar is similar and is a way for the parties to appropriately allocate the risk of defect.

Footnote

[1] 2015 ONCA 273

Jeffrey A. Brown is a partner at Theall Group LLP. He is engaged in all aspects of the defence and trial of civil matters, including insurance law, commercial litigation, product liability and enforcement of secured transactions. Jeff has appeared as counsel at the Ontario Superior Court of Justice, Divisional Court and Court of Appeal. He was admitted to the Ontario Bar in 1999 after having completed his articles as a law clerk at the Federal Court of Canada for the Honourable Mr. Justice Teitelbaum. Jeff is co-author of the annually updated loose-leaf text, Product Liability: Canadian Law and Practice (Canada Law Book)

For more information, visit http://www.theallgroup.com/

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Manufacturer Fails To Set Aside Jury Decision Imposing Liability For Failure To Warn

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By: Jeffrey A. Brown, Partner


A recent decision by the Ontario Court of Appeal, illustrates the difficulties faced by companies that try to challenge a jury’s findings. In Stillwell v. World Kitchen Inc.,[1] the plaintiff was injured when a Dutch oven he was washing broke into four large pieces, severely lacerating his wrist. The jury awarded damages of $1.1 million less 25% for the plaintiff’s contributory fault. The jury did not find that there was a manufacturing or design defect, but instead found that the defendants failed to adequately warn the plaintiffs. The warning that the product was prone to break if dropped or subjected to a hard impact was not found on the outside of the box or in the warning section of the manual, but was instead in the “Remember” section of the manual.

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The jury provided the following answers with respect to the particulars of its negligence findings: a) the product’s warnings did not clearly state the difference between deep versus minor scratches; b) the warnings did not identify what constitutes a deep scratch and when the consumer should contact the manufacturer; and c) that the warning regarding accidental breakage from impact and subsequent potential injury should have been further emphasized in the manual and that warning should have been placed on the exterior of the box.

The defendants appealed on a number of grounds, including that there was no evidence to support the finding that the failure to warn caused or contributed to the accident. The defendants argued that since there was no evidence of scratches on the pot, a warning to discontinue use of the pot if it was scratched would have had no effect. They further argued that a more comprehensive warning would not have affected the injured plaintiff’s wife’s behavior, as she was already extremely safety conscious, nor would it have affected the injured plaintiff’s behavior as he never read the warnings.

The Court began its analysis by noting that the standard of review of jury verdicts is “exceptionally high” and that a jury’s verdict is entitled to a “fair and liberal interpretation in light of the evidence and of the circumstances”. It then noted that there was expert evidence that a deep scratch could cause, or be a sign of, internal stress, and that it appeared that the jury concluded that the breakage occurred due to a combination of an internal flaw and a physical impact to the Dutch oven caused by the injured plaintiff’s actions. The Court also found that even though no one noticed a deep scratch on the Dutch oven, it was open to the jury to find that the deep scratch could have been present and contributed to the internal stress.

The Court also accepted the appellant’s submission that there was no direct evidence about how the plaintiffs would have acted if an adequate warning had been provided, but still held that the jury was entitled to infer that the injured plaintiff’s wife would not have purchased the cookware if she had been adequately warned. Given that she was extremely cautious in her use and care of the product, the Court held that it was open to the jury to infer that she would not have purchased it had she been warned that the combination of internal stress and an impact could cause it to break and cause injury. The Court held that this finding was not plainly unreasonable and unjust, and the jury was acting judicially. Therefore, the appeal was dismissed.

This case illustrates the high hurdle that an appellant must scale in order to set aside a jury decision. Where there was no evidence of a “deep scratch”, it is unclear how a warning on the side of the box regarding the risk of product breakage in the presence of a deep scratch would have made a difference to the plaintiff’s actions. However, it is arguable that an “extremely cautious” person might not have purchased the cookware if that person was aware of the possibility of breakage as a result of a hard impact and internal stresses. It shows the permissible inferences that a jury can make are quite broad, given that there was no evidence about what the plaintiff’s wife would have done if faced with that particular warning.

Footnote

[1] 2014 ONCA 770.

Jeffrey A. Brown is a partner at Theall Group LLP. He is engaged in all aspects of the defence and trial of civil matters, including insurance law, commercial litigation, product liability and enforcement of secured transactions. Jeff has appeared as counsel at the Ontario Superior Court of Justice, Divisional Court and Court of Appeal. He was admitted to the Ontario Bar in 1999 after having completed his articles as a law clerk at the Federal Court of Canada for the Honourable Mr. Justice Teitelbaum. Jeff is co-author of the annually updated loose-leaf text, Product Liability: Canadian Law and Practice (Canada Law Book)

For more information, visit http://www.theallgroup.com/

Photo credit: Steve Snodgrass via Visual hunt / CC BY

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What Killed The Bunnies? The Importance Of Causation

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By: Melissa A. Wright, Litigation Associate


A commercial rabbit farmer found out that the implied warranty of merchantability under Ontario’s Sale of Goods Act provides no protection where causation is not proven and the contractual documents provided no basis to determine the acceptable level of toxins and other contaminants in rabbit feed.

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In Jones Feed Mills Ltd. v. Raivio,[1] a commercial rabbit farmer, Raivio, began purchasing standard rabbit feed from a manufacturer and supplier of commercial animal feed, Jones Feed Mills Ltd (“Jones Feed”). From May to August 2005, while using the standard mix provided by Jones Feed, Raivio experienced an average of 21.7 dead rabbits per day. Then, in August 2005, Raivio and Jones Feed entered into a Customer Formula Feed Agreement whereby Jones Feed agreed to provide Raivio with custom feed made according to specifications developed and provided by Raivio. The Customer Formula Feed Agreement did not provide for an acceptable level of toxins or other contaminants in the feed and contained no express warranty of fitness or merchantability.

During the fall, while using the custom feed formula, Raivio experienced high levels of mortality in his herd with 4,567 deaths in September, 3,100 in October and 2,300 in November. Raivio discontinued purchasing feed from Jones Feed in November 2005, and refused to pay outstanding invoices for the feed. Jones Feed sued Raivio, who counterclaimed on the basis that the feed was contaminated with an increased level of mycotoxins resulting in high levels of mortality in his herd, and that Jones Feed was liable for negligence and/or breach of contract.

At trial, Raivio’s expert did not persuade the trial judge that the increased mortality rate in his herd was caused by an increased level of mycotoxins in the custom feed supplied by Jones Feed. Jones Feed’s expert opined that it was difficult to conclude that feed contamination caused the massive losses suffered by the plaintiff, given findings from an experimental study on rabbits that suggested that rabbits were less sensitive than other species to mycotoxins. The trial judge noted that Raivio’s expert did not take into account the experimental study, even though he was part of the advisory committee for the study, nor did he provide a reply expert report to respond to Jones Feed’s expert report that considered the study. Moreover, on cross-examination, Raivio’s expert was forced to retreat from his position that rabbits were “sensitive” to mycotoxins.

With respect to the claim that Jones Feed breached the implied condition of merchantability under Ontario’s Sale of Goods Act,[2] Raivio argued that there were unacceptable levels of mortality in the rabbit herd, and that alone demonstrated that the feed was not merchantable. Given the Court’s findings with respect to causation, the Court rejected that argument.

In making this finding, the Court referred to a similar case, Clarence Kloosterhof’s Farm Services Ltd., v. Longley,[3] where the court held that there was a breach of the implied warranty of merchantability under the Sale of Goods Act because the feed was in excess of Agriculture Canada’s published tolerance level for vomitoxin. This finding was made despite a lack of medical evidence establishing a link between the impurities in the feed and problems in the herd. In contrast, in Raivio there was no established tolerance level for rabbit feed, so the implied condition of merchantability was not breached.

This case illustrates the importance of ensuring that your expert evidence can prove that the product caused the loss. Raivio was not only unable to provide sufficient expert evidence to prove the feed killed his rabbits, but in the absence of express warranties setting out an acceptable level of toxins or other contaminants in the feed, or a warranty of fitness, he had to pay for the feed as well. We feel bad for the bunnies. HAPPY EASTER!

Footnotes

[1] 2014 ONSC 4298, 2014 CarswellOnt 9979.

[2] Given that there was no evidence that Raivio relied on Jones Feed, Raivio did not pursue a claim for breach of the implied warranty of fitness.

[3] (2000) 186 N.S.R. (2d) 131 (N.S. S.C.)

Melissa A. Wright is an associate at Theall Group LLP and maintains a broad commercial litigation practice. Prior to joining Theall Group LLP, Melissa summered, articled and practiced at the Toronto offices of a prominent business law firm gaining corporate tax, dispute resolution and commercial litigation experience. Melissa graduated from the University of Windsor’s Faculty of Law in 2011 and was called to the Ontario Bar in 2012.

For more information, visit http://www.theallgroup.com/

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Supplier And Manufacturer Of Copper Piping Liable For Failure To Meet City’s Watermain Sterilization Process

Jeff

By: Jeffrey A. Brown, Partner


The Ontario Superior Court of Justice rendered a decision[1] involving a product liability claim that considered new legislation and guidelines arising from the Walkerton water crisis. This case suggests that even if there has been no specific discussion about a product between the buyer and seller, a Court might still find that the buyer has relied on the seller regarding the suitability of a product if the seller had previously provided advice. The decision also suggests that if a supplier knows that a product will be used for an application that has to meet specific local standards, the supplier needs to make an inquiry of the manufacturer to ensure that it meets those standards.

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In this case, the plaintiff, Brantford Engineering and Construction Ltd. (“Brantford Engineering”), was hired by an engineering firm to install watermains in the City of Brantford (“the City”). The specifications for the project called for the use of copper tubing in the watermain system. Brantford Engineering retained Underground Specialties Cambridge Incorporated (“the Supplier”) to obtain the copper piping to be used in the project. The Supplier hired Wolverine Tube (Canada) Inc. (“the Manufacturer”) to manufacture the copper tubing.

As a result of the Walkerton water crisis in 2000, the Ontario government instituted the Safe Drinking Water Act, 2002 (“the Act”), which established minimum water standards throughout Ontario, including the necessity of maintaining a chlorine residual at all times in the water system. Chlorine is used as a disinfectant to eliminate pathogens that can lead to sickness and death. Pursuant to the Act, municipalities were permitted to establish higher standards than those set out in the Act. The City chose to do so, and required a two-step sterilization procedure involving a chlorination test and a chlorine residual test, which had to be met prior to the connection of the watermain to the municipal water system.

Although the copper piping met the chlorination test, it repeatedly failed the chlorine residual test. The Manufacturer did investigations and obtained a report which suggested that the copper’s protective layer was attacked during the “superchlorination process” during the first part of the City’s sterilization test, which caused the copper to corrode and dissolve and have a negative impact on the chlorine residual level (the second part of the sterilization test). The Manufacturer failed to disclose this report to Brantford Engineering, the Supplier and the City.

Ultimately, Brantford Engineering ordered plastic pipe from the Supplier which was installed as a replacement watermain and passed all tests. Brantford Engineering brought a claim against the Supplier for breach of contract under the implied warranties of the Sale of Goods Act (“the SGA”) and against the Manufacturer for negligence, for the losses it incurred to replace the pipe and incidental costs.

Liability of Supplier for Breach of the Implied Warranties

In order to find a breach of the implied warranty, it is crucial to find that the buyer relied on the seller’s skill or judgment. The Court found that Brantford Engineering’s expertise was in the installation of watermains, but the Supplier was knowledgeable about the material it supplies on watermain projects, and the Supplier’s general manager (“GM”) knew that the City required that the watermain pass the sterilization process before it could be connected to the water distribution system. The Court also found that the Supplier’s GM knew of the special purpose of the copper pipe and would be “applying his knowledge” to the City’s requirements.

The Court found that the Supplier had breached the warranty of reasonable fitness. In reaching this conclusion, the Court made three curious statements:

  1. The court noted that the Supplier’s GM had “provided advice and recommendations in the past”. However, it is unclear why prior recommendations would have any bearing on the question of whether Brantford Engineering had relied on the Supplier for this specific project. The Court noted that there had been “no specific discussions” regarding the piping used for this project.
  2. The Court stated that it is of no consequence that the type of copper tubing was specified by the engineering firm that had retained Brantford Engineering. Apparently, the Court believed that the Supplier was under an obligation to tell Brantford Engineering that copper tubing would not meet the City’s sterilization procedure.
  3. The Court held that the seller is obliged to be diligent in acquiring information, and cannot simply rely on the manufacturer. In this regard, the Court stated that it had “long been known a chemical reaction can occur when copper comes in contact with chlorine, particularly when chlorine is of a high concentration”, and that the Manufacturer had this information.

Although not strictly necessary, the Court also found that the copper piping was not of merchantable quality, and therefore the Supplier also breached the implied warranty of merchantable quality under the SGA. However, merchantability is a question of whether a good is generally saleable in the market, and it is not clear that the copper piping would not have been saleable for use in other watermains that were not subject to the City’s more stringent requirements.

Finally, the Court held that the exclusion under the Supplier’s limited warranty did not exclude the implied warranties under the SGA, because the warranty did not use explicit language to exclude “statutory conditions” of fitness or merchantability, which a long line of cases have said is necessary to exclude the implied warranties under the SGA. Interestingly, the Court considered the limited warranty even though it was not in the contract documents, but was solely contained in subsequent documents (i.e. packing slips, invoices) after the contract was signed. The Court said that because prior dealings between Brantford Engineering and the Supplier contained the limited warranty, the post-contractual documents would be considered even though the impact of the warranty stated therein was unclear.

Liability of Manufacturer in Tort

The liability of the Manufacturer in tort also raises some interesting questions. The Court rejected the Manufacturer’s argument that the pipe only had to meet ASTM standards, given that the Manufacturer knew the product was going to be used in watermains. The manufacturer was unaware of the City’s requirements. Indeed, on cross-examination, when the Manufacturer’s witness was asked if they made any inquiries into municipal sterilization specifications following the Walkerton crisis and the legislation that followed, the witness responded “Why would we?”

The Court found that the Manufacturer had a “due diligence obligation” to ensure that its product met regulatory and municipal standards, and that it should have made inquiries after the introduction of the Act. This ruling suggests that a manufacturer can be found liable if its product is sold in municipalities where it does not meet local standards, even if the product would meet standards elsewhere.

The Court also found that the Manufacturer had breached its duty to warn given that it failed to disclose the report that set out the reasons why the copper piping was failing.

Footnote

[1] Brantford Engineering and Construction Ltd. v. Underground Specialties Cambridge Inc., 2014 ONSC 4726, 2014 CarswellOnt 11423.

Jeffrey A. Brown is a partner at Theall Group LLP. He is engaged in all aspects of the defence and trial of civil matters, including insurance law, commercial litigation, product liability and enforcement of secured transactions. Jeff has appeared as counsel at the Ontario Superior Court of Justice, Divisional Court and Court of Appeal. He was admitted to the Ontario Bar in 1999 after having completed his articles as a law clerk at the Federal Court of Canada for the Honourable Mr. Justice Teitelbaum. Jeff is co-author of the annually updated loose-leaf text, Product Liability: Canadian Law and Practice (Canada Law Book)

For more information, visit http://www.theallgroup.com/

Photo credit: r.nial.bradshaw via VisualHunt / CC BY

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