Burr v. Tecumseh | Jan 21, 2022

CITATION: Burr v. Tecumseh, 2022 ONSC 0412

COURT FILE NO.: CV-14-831

DATE: 2022 01 21

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

)

Leroy Burr and Joan Callister

Robert Dowhan, Danielle Marks, and

Matthew McMahon, Counsel for the

Plaintiffs

– and –

Tecumseh Products of Canada,

Limited, Tecumseh Products

Company, and Venmar Ventilation

Inc.

Thomas Curry, Dena Varah, and

Sarah Bittman, Counsel for the

Defendants Tecumseh Products of

Canada, Limited and Tecumseh

Products Company

Defendants

Gosia Bawolska and Kara Denny,

Counsel for the Defendant, Venmar

Ventilation Inc.

) HEARD: May 10 to 14, 17- 21, 24 –

27,31, June 1 – 4, 7-9,21, August 23-

26, 2021

JUSTICE G.D. LEMON

REASONS FOR JUDGMENT

Page: 2

Contents

REASONS FOR JUDGMENT ............................................................................... 1

Introduction............................................................................................................ 4

The Parties............................................................................................................ 6

The HRV and the Motor ........................................................................................ 7

The Unit ............................................................................................................. 7

The Thermal Protector....................................................................................... 7

Attended and Unattended Uses......................................................................... 9

Knowledge of the Parties................................................................................... 9

The House and Fire............................................................................................. 10

The Cause of the Fire...................................................................................... 15

The Evidence, Credibility and Reliability ......................................................... 18

The Losses from the Fire................................................................................. 19

Evidence of the Plaintiffs ................................................................................. 22

Evidence of Charlene Ferris ............................................................................ 26

Venmar’s Voir Dire Ruling................................................................................... 28

Evidence of Bart Beauchamp .......................................................................... 28

Analysis on the Voir Dire ................................................................................. 30

Analysis and Decision on the Damages Claim ................................................... 33

Venmar’s Estoppel Motion .................................................................................. 37

Analysis ........................................................................................................... 42

Liability ................................................................................................................ 47

Positions of the Parties.................................................................................... 47

Relevant Legal Principles.................................................................................... 48

Was Venmar negligent in its design and manufacture of its HRV?..................... 53

Applicable Standard in the Industry................................................................. 53

Venmar’s Evidence ............................................................................................. 58

Evidence of Daniel Forest................................................................................ 58

Production and Manufacturing ..................................................................... 58

Problems Arise............................................................................................. 62

Solution Found............................................................................................. 64

Page: 3

Evidence of Normand Juneau ......................................................................... 66

Evidence of Mark Joseph ................................................................................ 69

Evidence of Michael Rowen ............................................................................ 73

Was Fasco negligent in its manufacture or design of the motor? ....................... 74

Fasco’s Evidence ................................................................................................ 75

Evidence of Maurice Goldin............................................................................. 75

Evidence of Karyn Manley............................................................................... 78

Evidence of Gary Alexander............................................................................ 84

Evidence of Beth Anderson ............................................................................. 89

Evidence of Michael Flynn............................................................................... 95

Liability of the Defendants................................................................................... 98

Analysis............................................................................................................... 99

Venmar’s Liability............................................................................................. 99

Fasco’s Liability ............................................................................................. 107

Did Venmar take Sufficient Steps to Notify Customers?................................... 116

Overview........................................................................................................ 116

Evidence of Daniel Forest.............................................................................. 123

Evidence of Mr. Juneau................................................................................. 125

Evidence of Daniel Pellerin............................................................................ 126

Evidence of Marie-Soleil Anger ..................................................................... 127

Evidence of James Bennett........................................................................... 130

Responding Evidence.................................................................................... 132

Evidence of Michael Flynn............................................................................. 132

Analysis and Decision.................................................................................... 133

Did Fasco take Sufficient Steps to Notify Customers?...................................... 137

What were the terms of the Contract Between Venmar and Fasco?................ 140

Overview........................................................................................................ 140

Evidence of Daniel Forest.............................................................................. 141

Evidence of Daniel Pellerin............................................................................ 142

Evidence of Lynda Gaudreau ........................................................................ 143

Evidence of Gary Alexander.......................................................................... 145

Page: 4

Fact Finding................................................................................................... 145

Evidence of Michelle Corrigan Erikson.......................................................... 147

Evidence of Amy Schmitz.............................................................................. 149

Analysis and Decision.................................................................................... 151

Decision............................................................................................................. 155

Costs ................................................................................................................. 157

Introduction

[1] On November 5, 2012, the plaintiffs' house was heavily damaged by fire.

They were unable to return to live in it until July of the following year. They say that

either or both defendants, Venmar and Tecumseh, are liable to them for their

damages. Venmar disputes the damages claimed by the plaintiffs.

[2] There is no dispute that the fire originated in the heat recovery ventilator in

the plaintiffs’ home. I will refer to that product as the HRV or the unit. In particular,

the fire originated in the motor of the unit. Venmar manufactured the HRV;

Tecumseh manufactured the motor. Venmar and Tecumseh blame each other for

the fire.

[3] The problems with Venmar’s HRV has generated litigation throughout

Canada and the United States of America. I am asked to determine whether liability

between Venmar and Tecumseh has already been determined by a previous case

in Desjardins Assurances Générales Inc. c. Venmar Ventilation Inc., 2014 QCCS

Page: 5

3653. Venmar and Tecumseh dispute what principles of Quebec law applicable in

that case apply to this case.

[4] Venmar became aware of a risk of fire in its HRV’s in 2006. It then

commenced a program to alert purchasers of the risk of fire and provide a way to

reduce that risk. The plaintiffs did not become aware of that risk and solution until

after the fire. The plaintiffs and Tecumseh say that Venmar did not do enough to

warn the plaintiffs and other consumers of that risk of fire.

[5] Venmar and Tecumseh regularly carried on business by way of purchase

orders from Venmar to Tecumseh and corresponding confirmations and invoices

from Tecumseh to Venmar. That practice raises issues with respect to the

contractual terms between them. Tecumseh says that those terms require Venmar

to indemnify Tecumseh from the plaintiffs’ claims. Those terms may have to be

determined in accord with the law of Missouri. Tecumseh and Venmar dispute the

applicable principles of Missouri law.

[6] For the following reasons, I find that the plaintiffs’ damages are fixed in the

amount of $1,133,739.00 and Venmar is liable to the plaintiffs for those losses

because of Venmar’s negligent design of the HRV. The claim against Tecumseh

is dismissed. If I am wrong with respect to Tecumseh’s liability, Venmar is required

to indemnify Tecumseh pursuant to their contractual agreement. On this evidence,

I cannot find that Venmar is liable for failure to warn the plaintiffs of the risk that

Page: 6

materialized. However, I do find that Tecumseh had no obligation to warn the

plaintiffs.

The Parties

[7] The motor installed in the HRV in the plaintiff’s home was manufactured by

Tecumseh Industries Inc. By the time that this action was commenced, Tecumseh

had been purchased by Fasco Products Company. Presently, the parties agree

that the proper defendant is “Von Weis USA Inc., formerly known as Fasco

Industries Inc.” Von Weis accepts responsibility for any damages found against it.

The defendant, Tecumseh Products Canada is removed from the claim and

replaced by Von Weis USA Inc., formerly known as Fasco Industries Inc. As the

parties did through out the litigation, this defendant will be referred to as “Fasco.”

On consent, the claim against Tecumseh Canada is dismissed.

[8] Mr. Burr and Ms. Callister were insured by The Co-Operators General

Insurance Company of Canada. The bulk of the damages relates to Co-Operators’

subrogated claim for what they paid the plaintiffs pursuant to their insurance

contract. Mr. Burr and Ms. Callister have been paid most of their losses by Co-

Operators, but the couple have some other personal losses claimed in this action.

They also seek general damages for the upset to their lives caused by the fire.

Page: 7

The HRV and the Motor

The Unit

[9] A heat recovery ventilator is a metal box about 2’ by 2’ by 3’ in dimension. An

HRV transfers warm, stale air inside of a building and exchanges it for fresh, cooler

air from the outside. Although not part of a furnace, an HRV is usually located near

the furnace and uses the same ductwork. In that location, the unit would not be

regularly monitored by the homeowner.

[10] HRVs have several components: An insulated housing box; two blowers (for

air flow in and air flow out) which are driven by an electric motor; a heat recovery

module; electronic controls; and a defrost mechanism.

[11] HRVs are intended to operate on demand, depending on the setting selected

by the homeowner. They are also designed to be operated continuously, 24-hours

a day, and 365 days a year, if so required by the homeowner.

[12] As said, the exchange of air requires a fan, which requires a motor. In this

case, the motor was manufactured and supplied by Fasco. Simply put, Venmar

ordered and purchased the motor from Fasco.

The Thermal Protector

[13] As one can imagine, the electric motor also generates heat. Within Fasco’s

motor there was a thermal protector to prevent over heating. In this case, the

thermal protector was a “cycling thermal protector.” This means that if the motor

Page: 8

became too hot (over 130 degrees Celsius), the thermal protector should cut off

the flow of electricity to the motor causing it to shut down. Once the motor cools

down, the thermal protector allows the flow of electricity and the motor runs again.

In that way, it is expected that the flow of heat or electricity cycles through the unit

without finally stopping. These thermal protectors are also referred to as auto reset

thermal protectors.

[14] However, like all things, including HRV’s and motors, thermal protectors have

a life span. When the thermal protector comes to its end, it might do so while

allowing the electric current to flow or while interrupting it. If the thermal protector

fails when the current is interrupted, the motor will stop running. If the thermal

protector fails while allowing current, the motor will continue to run and could run

in an overheated condition; that is, exceeding130 degrees Celsius. If so, that could

lead to a fire as wiring insulation degraded. A failure of the insulation can lead to a

short and sparks. Sparks, with fuel, could lead to a fire.

[15] There are also “one shot” or “thermal cut off” thermal protectors; also referred

to as TCO’s. This kind of thermal protector cuts the flow of electricity as soon as

the motor overheats by permanently opening the electrical circuit and does not

allow any further flow of electricity. While a TCO is an effective thermal protector,

it is not usually used because it effectively brings the motor to the end of its life

when it first overheats, while a recycle would allow the appliance to continue to be

Page: 9

useful. As well, TCO’s may trip in error or prematurely and bring the appliance to

an early and unnecessary end of life.

Attended and Unattended Uses

[16] TCO’s are commonly used in what are called “unattended appliances.” These

appliances, such as attic fans, operate where the consumer cannot be expected

to know when the motor had stopped working or was overheating. “Attended

appliances,” such as toasters and hot water kettles, are those that the consumer

will immediately know if the appliance is not working. Attended appliances might

also include furnaces or air conditioners, as the consumer would immediately know

that the house was hot or cold when the opposite was needed. One of the issues

in this litigation is whether this HRV was an attended or unattended appliance and

which of the defendants should have known that.

Knowledge of the Parties

[17] When the plaintiff’s HRV unit was manufactured in 1998, Venmar knew of

overheating problems in the motor, but it was not until 2001 or 2002 that Venmar

found out that the overheating could lead to such a fire. Overheating in the unit

was one thing; an open flame leading to a house fire was another. Fasco had

known of fires in other motors that it manufactured since at least 1985.

Page: 10

[18] As one can imagine, this field of manufacturing is heavily regulated both with

respect to the final appliance and the motor within it. I will refer to those regulations

within this judgment.

[19] It is agreed that Venmar produced 232,000 units and put them into the market

in Canada. A further 75,000 were produced for the U.S. market. As of the time of

trial, approximately 112 house fires were caused by the units.

The House and Fire

[20] The plaintiffs’ evidence relating to the fire was not challenged in any

significant way. Some of the following was conceded in argument.

[21] At the time of the fire, Mr. Burr, Ms. Callister, and their son, Joshua, lived at

8545 Twiss Road in Campbellville.

[22] In 1987, the couple found and purchased the then vacant land. That year,

they cleared the property and formed the driveway. Construction of the home

commenced in 1988. Although the plaintiffs hired a contractor to lay the foundation

and subcontracted the plumbing and drywall work, the couple did the rest. They

moved into the home April 1989.

[23] The home is a two-story Cape Cod style of 2000 square feet. There were

three bedrooms and a finished basement that included four rooms. It also had a

Page: 11

two-car garage. From the evidence, I conclude that the family had a beautiful,

remote home in the country. Emotionally, it was irreplaceable.

[24] The house was heated with an electric forced air furnace and heat pump. The

home had moisture buildup on the windows, and the couple was advised that an

HRV would solve that problem. In December of 1994, the plaintiffs purchased the

HRV unit from, and had it installed by, Terry Rowley. The unit hung from the floor

joists beside the furnace in the basement but was not part of the furnace.

[25] Terry Rowley is the founder and principal of TRM Inc. Mr. Rowley is certified

in Ontario as a journeyperson in the heating, ventilation, and air conditioning trade.

Mr. Rowley holds a master plumber's license, a master heating technician licence,

a refrigeration licence, two electrician licences, and a gas one licence. Any claim

against Mr. Rowley was dismissed prior to trial.

[26] Mr. Rowley purchased and installed Venmar’s Flair Compact 3055 HRV in

December of 1994. The total cost of the HRV to the plaintiffs was $1,455.12

[27] The HRV had an instruction booklet in a pocket on the side of the unit which

provided instructions on the operation and cleaning of the unit. Mr. Burr

occasionally adjusted the settings on the HRV based on the season. Maintenance

involved a simple vacuuming of the unit which Mr. Burr did about one or two times

per year. When Mr. Burr maintained the HRV, he could not see the motor.

Page: 12

[28] On Thursday, November 1, 2012, Mr. Burr noticed a burning smell in the

house and became very concerned. He described it as "predominant" and

"unusual" and said that it was unlike anything he had smelled in the house before.

He went to the basement to look at the furnace and the unit; "all seemed to be

okay." Mr. Burr immediately called Mr. Rowley and arranged for a technician to

attend for an inspection.

[29] Mr. Rowley's son, Robert, a heating ventilation and air conditioning

technician, came to the plaintiffs’ home on November 2, 2012. At the time, Robert

Rowley had been employed by TRM Inc. for approximately ten years. When Mr.

Rowley arrived, Mr. Burr led him to the furnace. Mr. Burr complained that there

was not enough heat coming from the furnace and reported the burning smell

through the ductwork.

[30] On inspection of the furnace, Mr. Rowley determined that two of the

sequencers, or relays, in the furnace were not functioning properly. Mr. Rowley did

not detect any burning smell. He did not check for any other sources of the burning

smell. Mr. Rowley advised that potential sources of a burning smell include a

furnace motor that had burned out or the presence of foreign substances on a

furnace element. Mr. Rowley did not investigate or inspect the HRV.

Page: 13

[31] Mr. Burr recalls cleaning out the HRV while Mr. Rowley was present. Mr. Burr

could not see the motor, but it seemed to be operating. There was no smell of

smoke when he opened the HRV.

[32] On Monday, November 5, 2012, at about 9:30 pm, Ms. Callister arrived home

after a groceries-trip. She set the groceries on the island in the kitchen and told

Mr. Burr that she smelled something. She went into the living room where the

plaintiffs had a fireplace. Ms. Callister asked Mr. Burr to check to ensure that there

was no chimney fire. Ms. Callister went upstairs to check for any source of the

smoke smell and found nothing. At the same time, their son Joshua was in the

bathroom; he yelled out that there was smoke coming from the registers.

[33] Mr. Burr ran downstairs to the furnace room. There was smoke and fire

coming from the HRV. Mr. Burr opened the HRV and "it was blazing." He ran

upstairs to get a fire extinguisher but could not find it. He grabbed a pot, filled it

with water and ran back downstairs. By the time he got back to the basement, the

plastic parts of the HRV had melted and were dripping on the floor. The house was

filling with black smoke. He ran back upstairs and screamed at Ms. Callister and

Joshua to "get out."

[34] Ms. Callister said that she looked in the upstairs bathroom and saw nothing

but “pure black smoke” coming out of the vents that accumulated below the ceiling

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where it descended like “wall of smoke.”. Ms. Callister called 911. She grabbed

her camera bag and ran down the stairs and outside.

[35] Joshua brought their coats and the dog. Mr. Burr took both his and his wife's

computers. By that point, the house was filled with a black toxic smoke; they could

hardly see as they left the home.

[36] There is a fire station located about three kilometres from the home. The

volunteer members were engaged in a training session that evening, so they

arrived almost immediately. Several firetrucks arrived and the firemen went into

the house with hoses. They stayed to put out the fire until two or three in the

morning.

[37] When the fire department left, Mr. Burr went into the house and saw that the

kitchen floor had given way. It was dark and he was only using a flashlight, but

when he looked around there was black soot everywhere and something like a

“black syrup dripping down the walls.” The basement appeared to be flooded and

the drywall had been opened by the firemen to fight the fire behind it. Shelving was

turned over and windows were smashed out.

[38] Ms. Callister went into the house the following day. Although the house was

still standing, the interior was destroyed by both the fire and the water damage

from the firefighters. The walls were covered in soot and there was an "outrageous"

Page: 15

smoke smell. There was an oily black film dripping down her artwork on the walls.

There was black smoke damage above the vents and any light fixtures were black.

The Cause of the Fire

[39] At the outset of argument, the parties agreed that the fire was caused by the

failure of the Fasco motor in the HRV. The motor was in “locked rotor condition”

and had overheated for a prolonged period of time before the fire. The motor

eventually ignited the plastic material around the blower and then other

combustibles in the HRV. The thermal protector must have failed in a ‘closed

position’ which allowed the electric current to continue flowing through the motor

and allow it to overheat, causing the fire.

[40] The plaintiffs’ expert, Mazen Habash, examined the fire scene on November

7 and 12, 2012. He conducted a detailed forensic examination of the HRV at his

laboratory on December 12, 2012. The forensic examination was completed in the

presence of representatives of Venmar and Fasco. Mr. Habash was acknowledged

by all parties to be qualified to provide evidence in forensic electrical engineering

and fire investigation. His resume and report were filed in evidence on consent. I

agree with counsel that Mr. Habash is well qualified to render his opinions in this

matter.

[41] After completing his examination, Mr. Habash found "that the blower fan

motor has sustained an internal failure or malfunction and that this failure or

Page: 16

malfunction was an indication of the motor overheating and eventually igniting,

causing the fire initially within the HRV unit and then within the home itself."

[42] Mr. Habash opined:

Based on my observations, I identified no other potential sources of

ignition for this fire given the physical evidence recovered at the site,

not only in terms of damage sustained by the building and its contents

but also based on the physical evidence noted with obvious

indications of failures and/ore malfunctions within the motor housing

along its windings.

In my opinion, the fire that occurred within this home on November 5,

2012, as a direct result of a failure or malfunction of a blower motor

within the HRV unit.

Based on physical evidence observed during my examination of the

scene, as well as on available information, I have come to the

conclusion that the fire which occurred in this home on November 5,

2012, originated within a heat recovery ventilator (HRV). The HRV unit

was fastened to the underside of the basement ceiling in a utility room

located along the north end. It is further my opinion that the fire was a

result of an internal failure or malfunction of the HRV unit and in

particular of its blower motor. My opinion is that this motor overheated,

resulting in the ignition of combustibles within the motor and within the

HRV in general.

[43] At trial, Mr. Habash said that the automatic resetting thermal protector was

badly damaged. He explained that a forensic examination of the thermal protector

showed how the motor had operated historically. The more times that the motor

overheated, the more the thermal protector was activated and called upon to

interrupt power to the motor. The surface of this thermal protector was "deformed"

because every time the thermal protector separates the contacts, it degrades or

slightly melts the contacts. With repeated operation, the surfaces of the contacts

Page: 17

erode. On forensic examination, Mr. Habash concluded that the surfaces were

"heavily impacted by operation." Mr. Habash opined that the thermal protector was

called upon to operate numerous times due to the motor overheating. However,

he could not tell how long it was in a locked condition prior to the fire, but it was

weeks or months.

[44] Ultimately, according to Mr. Habash, the motor was in locked rotor condition

and was overheating for a prolonged period. Eventually the motor ignited the

plastic material around the blower, and then other combustibles in the HRV. The

fire escaped from the HRV, and once that happened, it was able to extend into

the utility room and through the home.

[45] Mr. Habash agreed on cross-examination that the most probable cause of the

failure of this motor is natural “end of life” of the appliance.

[46] Venmar’s expert, Michael Rowen, agreed with the essence of Mr. Habash’s

opinion. That is to say that “the fire started due to the catastrophic failure of the

ventilation motor” within the HRV.

[47] On the evidence, I find that the fire was caused by end of life failure of Fasco’s

motor within the Venmar HRV.

Page: 18

The Evidence, Credibility and Reliability

[48] The plaintiffs called four witnesses: Mr. Burr, Ms. Callister, the Co-Operators

adjuster Ms. Ferris, and Mr. Habash. All were accepted by the parties as truthful

witnesses. Much of their evidence was included in agreed statements of fact or

admitted in argument.

[49] Venmar called eight witnesses including three experts. On consent, those

experts’ opinions were filed in evidence subject to any weight that I might give to

those opinions, considering all of the evidence and the arguments of the parties.

[50] Fasco called seven witnesses including three experts. Those experts’

opinions were also filed in evidence on consent subject to any weight that I might

give to those opinions. I will consider those expert witnesses as their evidence

becomes relevant to the issue under determination in these reasons. Although the

parties consented to the admissibility of the expert evidence, I remained the gate

keeper of that opinion evidence. See: Parliament v. Conley 2021 ONCA 261. As

such, for reasons set out below, some of that evidence was not properly before

me.

[51] The lay witnesses for both defendants gave evidence about matters that had

occurred many years before these events. Frequently, it appeared that their best

recollection benefitted only their employer or the party who called them. I must be

cautious about their recollected evidence. Fortunately, there is substantial

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agreement on many of the facts and many objective documents were filed as

exhibits.

[52] In order to manage this trial during COVID, all counsel and their staff worked

collaboratively to have the trial completed efficiently, on time, and without

compromising the rights of their respective clients. Indeed, they appeared to work

co-operatively even when I sensed some friction that is expected in such high-

stakes litigation.

[53] The trial was carried out in the early days of Zoom litigation. A total of 169

exhibits were filed electronically and counsel were able to surmount substantial

technological hurdles.

[54] In the end, I have no doubt that I have received the evidence and argument

necessary to make my determinations. I am most grateful to counsel for their

exceptional work on this difficult undertaking.

The Losses from the Fire

[55] The plaintiffs claim a total of $1,041,758.73 for the subrogated interest paid

by Co-Operators. They also claim $31,980.28 for losses not covered by their

insurance policy. They seek $60,000.00 for general damages as a result of the

upset when they lost their residence for a period of time.

[56] Fasco does not dispute those damages.

Page: 20

[57] Venmar submits that the losses should be based on the actual cost value of

the losses calculated by depreciating some of the claims.

[58] The parties agreed that, for the purposes of this proceeding only, the following

facts were accepted as true.

[59] Co-operators, as the insurer for the plaintiffs, made payments on behalf of, or

to the plaintiffs in the total amount of $1,041,758.73, excluding litigation expenses.

The plaintiffs incurred direct out-of-pocket expenses in the total amount of

$31,980.28.

[60] In detail, Co-operators made twenty-one payments directly to the plaintiffs in

the total amount of $453,501.01 for contents replacement, additional living

expenses, out of pocket expenses, building costs, by-law expenses, and air quality

testing expenses.

[61] Co-operators made eight payments to Paul Davis Systems of KW Inc. in the

total amount of $432,845.55, for restoration services to the plaintiffs' home and its

contents.

[62] Co-operators made two payments to Brenton's Interiors in the total amount of

$28,425.15 for furniture refinishing services.

[63] Co-operators made three payments to Dsign Custom Artwork in the total

amount of $17,636.74 for artwork restoration services.

Page: 21

[64] Co-operators made one payment to EcoPure Cleaners Inc. on August 2,

2013, in the total amount of $20,000.00 for soft content cleaning services.

[65] Co-operators made eight payments to Homewood Suites by Hilton in the total

amount of $63,398.65 for the plaintiffs' lodging and living expenses.

[66] Co-operators made five payments to Biosense Environmental Inc. in the total

amount of $15,385.56, for treatment services to remove smoke odours from the

plaintiffs' home and the contents of the home including artwork.

[67] Co-operators made three payments to Moser Landscape Group Inc. in the

total amount of $624.33 for ploughing services to clear the plaintiffs' driveway.

[68] Co-operators made four payments to Campbell's Portable Toilets in the total

amount of $819.25 for toilet rentals.

[69] Co-operators made three payments to RJ Burnside & Associates Limited in

the total amount of $7,035.38 for engineering repair services.

[70] Co-operators made one payment to Wendell Motor Sales Ltd. on June 14,

2013 in the amount of $65.54 for replacement keys to the plaintiffs' vehicle.

[71] Co-operators made one payment to Arctic Spas Kitchener on September 15,

2013 in the total amount of $1,546.97 for hot tub repair services.

Page: 22

[72] Co-operators made one payment to BJD Water Systems Ltd. on February 11,

2014 in the total amount of $474.60 for well pump repair services.

Evidence of the Plaintiffs

[73] While the out of pocket expenses are acknowledged, I need to review the

impact of the fire on the plaintiffs for the purposes of the general damage claim

and the depreciation issue.

[74] Mr. Burr testified that Ms. Callister worked in the Waterloo region and his son

was at the University of Guelph; the location of the home was ideal for them.

[75] On the night of the fire, they informed their insurance company of the fire and

stayed the night with neighbours. While with the neighbours, the entire family

started to have a cough.

[76] They met with the adjuster, Charlene Ferris, the next day. She told them about

the process to be followed and reviewed the terms of the insurance policy with

them. She had arranged a hotel for them and gave them a $6,000.00 check to pay

for expenses.

[77] Over the next three days, Ms. Ferris and Ms. Callister carried out a detailed,

room by room, examination of the house to see what could be salvaged. Their

personal effects had been bagged; she and Ms. Ferris went through them to see

what could be salvaged and what needed to be discarded. Those items which

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could not be salvaged had to be valued. Ms. Callister described it as an "endless

job."

[78] The family lived at the Homewood Suites in Cambridge from November 6,

2012 to July 9, 2013. This location was appropriate for them because other

potential locations in Milton or Kitchener were too far away to be useful for Ms.

Callister’s work, their son’s education, and their frequent trips to the site of the fire.

[79] The building repair was started after the plaintiffs selected the contractor on

November 6. The contractor provided a detailed quote for each room and they

discussed it with him. They understood that any upgrades were at their expense

and told him to go ahead. Ms. Ferris also approved the quotation.

[80] They attempted to restore clothing, furniture and photographs but lost

irreplaceable items such as antiques, handmade family quilts, and family furniture.

They lost all the photographs of the building process. Ms. Callister described losing

her handmade wedding dress, family quilts, her father's desk, and other antiques.

[81] All items were removed from the home and some were trashed. When the

restoration was under way, the cupboards, the electrical systems, ducts, and floor

joists were removed. They attempted to use the same materials as previous and

as agreed by the plaintiffs and Ms. Ferris. Although the plaintiffs were required to

pay for any extras, by the time the various credits were granted to them, they were

not required to pay anything further.

Page: 24

[82] Although the plaintiffs moved back into the home in July 2013, they had

problems immediately upon arrival because, to their mind, the house was not yet

ready for occupancy. There were items in the garage that were still contaminated

with smoke. There was “chaos,” as the home was still a construction site and still

smelled of smoke. They were unable to bring in all their clothes and furniture and

had to move out from time to time for further repairs. Twice, the smoke detector

went off in the night yelling "fire, fire."

[83] Although a number of efforts were made to solve the smell of smoke, it was

not solved until February 2014 when the exterior sheeting and siding was removed.

[84] Mr. Burr kept a log of the time that was spent by him, Ms. Callister, and Joshua

picking out items, arranging permits, attending site visits, and attend other

meetings due to the fire. Between them, they worked on this project for 2,000

hours.

[85] They were, as Ms. Callister said, "just existing." When the house was rebuilt,

she was the designer to make some design changes. She coordinated the

redesign and picked things out for the house. She agreed that about 2000 hours

was logged with endless decision-making.

[86] Mr. Burr’s regular employment required long hours on the job. With the

demands of this project, it was almost impossible to manage. Through April and

Page: 25

May, Ms. Callister was doing most of the work and it was overwhelming to her. Mr.

Burr, therefore, retired in June of 2013 to alleviate his wife’s work.

[87] Ms. Callister described the loss, grief, trauma, disappointment, and sadness

that occurred as a result of the fire. She "lost [her] joy after the fire." In order to

deal with reconstruction, she used up her holiday and sick time and finally took a

leave of absence. Eventually, she also retired in August 2013. She did not return

to her hobby art projects until 2016.

[88] Joshua lost his school computer and was embarrassed at living in the hotel.

His education was delayed because he lost his texts and his laptop. They were all

"busy trying to cope." He left the home and “went west” in 2014.

[89] To manage his efforts on the home, Mr. Burr had to give up his mentorship in

Big Brothers and competitive mountain biking. Because of the smell of smoke in

the house they were unable to host gatherings their social life suffered as a result.

[90] Mr. Burr said that they sold the property in 2016 because they no longer

wanted to deal with it, but it was upsetting to sell their dream home. Ms. Callister

said that they sold the house because they had too many bad memories attached

to it. They sold the property for $1 million and have resided in Guelph since April

2016.

Page: 26

[91] The plaintiff’s insurance policy set out that they would recover 80% of the

value of those items that were not salvaged. To calculate the depreciated items’

claim, Mr. Burr considered the six payments for non-salvageable items and he

received 80% of that. This related to contents such as Ms. Callister's art, the

homemade quilts, an antique vinyl record collection, and other items that they

thought were priceless. They negotiated the value of those items and then received

80% of that from their insurer. In addition to what was paid by Co-operators, the

plaintiffs therefore seek $31,980.28 for depreciation on items that was not paid on

unsalvageable items.

Evidence of Charlene Ferris

[92] Ms. Ferris is employed by Co-Operators insurance. At the time of the fire, she

was a regional property claims adjuster. In November 2012, her role involved

adjusting larger claims including house and farm fires. To that end, she worked

with insureds to see what belongings could be cleaned or refinished or needed to

be scrapped. She also dealt with the client's immediate needs such as housing

and safeguarding the property. She determined the value of the contents.

[93] Ms. Ferris was assigned to this claim the day after the fire. When she attended

and spoke with them, she allowed the plaintiffs to remove their valuables and

important papers and arranged for them to stay at Homewood Suites. She then

Page: 27

arranged for emergency security and removing the contents of the house for

storage and assessment.

[94] There was no place for the family to stay in Campbellville. They tried to find

another home for accommodation, but the location was important for Ms. Callister’s

work, their son's school, and to be close to the property for meetings. They

therefore decided to stay at Homewood suites.

[95] She then met with Ms. Callister to see what could be salvaged and to consider

pricing the various items. She determined the amount to be paid with respect to

contents by working it out with the client, her common shopping experience, and

online pricing. They then paid the actual cost value which was replacement cost.

When items were replaced, they attempted to replace them as close as possible

to an equivalent. If items were not replaced, the insured received 80% of the value.

If they lost such as a family quilt, a quote was obtained to replace it but if it was not

replaced, the plaintiffs received 80% of that value.

[96] She agreed that there was a "bit of a smoke odor" that was finally solved by

removing the siding and sheeting at the front of the house. She agreed that when

the plaintiffs moved in in July 2013 when an occupancy permit was obtained, there

was still “touch-up work” to be done around the house but that the clients were not

at the house for an excessive amount of time.

Page: 28

Venmar’s Voir Dire Ruling

[97] In defence of the damages claim, Venmar sought to have Mr. Bart

Beauchamp qualified to give opinion evidence “regarding the plaintiffs’ damages,

and more particularly, the actual cash value of those damages.” The plaintiffs

objected to this evidence.

[98] On consent, Mr. Beauchamp’s evidence was led in a blended hearing to

receive the evidence related to both his expertise and his evidence, if he was

qualified to give it. After hearing his evidence and the submissions of the parties, I

found that Mr. Beauchamp’s evidence was inadmissible for written reasons to

follow. These are those reasons.

Evidence of Bart Beauchamp

[99] Venmar submits that the plaintiffs are only entitled to the actual cash value of

their lost items and not the replacement value paid by Co-Operators under the

insurance policy. To lead evidence on that issue, Venmar sought to have Mr.

Beauchamp’s expert opinion on the actual cash value of the loss.

[100] Mr. Beauchamp was asked by Venmar to review the plaintiffs’ subrogated

claim. He reviewed Mr. Burr’s transcript of his examination for discovery along with

the affidavits of documents and all of the documentation in those affidavits. Mr.

Beauchamp’s report and resume were filed as exhibits on the voir dire.

Page: 29

[101] Mr. Beauchamp has been an adjuster for 28 years. He has, in the past, acted

for subrogated insurers. In that role, he has calculated depreciation of an insured’s

loss using online tables to determine the cash value of various items. He uses the

program, “Claims Pages" to determine the appropriate depreciation rate but also

relies on his experience as an adjuster. To do that, Mr. Beauchamp took various

values of what Co-Operators paid and input those figures into the on-line program

to determine the depreciation and the actual cash value of the item. He considered

the age and condition of the contents to determine what he "feels what would be

fair" to value the items in question.

[102] Mr. Beauchamp is a claims adjuster with Crawfords in Ottawa. Mr.

Beauchamp lives and works in Ottawa. He has not worked in the Milton or

Campbellville area, although Crawfords has offices in the Kitchener area. He

agreed that those individuals had greater contacts in the area with respect to local

contractors. However, Mr. Beauchamp did not feel that he was any less aware of

local differences.

[103] Mr. Beauchamp opined that Co-Operators paid too much when they allowed

the plaintiffs to live in a hotel in Cambridge rather than rent a property in Milton. To

provide that opinion, he did not examine vacancy rates except to review one

document provided by the plaintiffs that showed a rental property in Milton. Mr.

Beauchamp’s opinion was that $2,500 per month living expense was reasonable

Page: 30

because the four-bedroom house in that listing was $1,799 per month plus utilities

and he rounded that to $2500. He had no other evidence to support rental costs.

He thought that was sufficient evidence for his opinion.

[104] Mr. Beauchamp was retained in 2020 and did not see the house before or

after the fire. Mr. Beauchamp had no idea what the value of the house was before

or after the fire. He did not see the actual contents of the home other than to review

the photos that were produced by the parties. Therefore, he was unable to carry

out a qualitative analysis of the contents. He does not know when the items were

purchased. He also did not send out for quotes to others. He had no idea what the

value of the contents was prior to the fire.

[105] Mr. Beauchamp did not know where the information for the "Claims Pages"

website came from. He agreed that he used only that online information rather than

any of his own experience to come to the values set out in his opinion. He agreed

that such a process was not in line with his employer’s policy.

Analysis on the Voir Dire

[106] This motion was brought as a request to permit Venmar to call more than

three expert witnesses. By the time the motion was heard, Venmar had already

called three experts without dispute. While framed as a request to call more than

three witnesses, the submissions focussed more on Mr. Beauchamp’s

qualifications as an expert, the necessity of his evidence, and whether his evidence

Page: 31

was otherwise admissible. See: White Burgess Langille Inman v. Abbott and

Haliburton Co. 2015 SCC 23, [2015] 2 S.C.R. 182.

[107] If Mr. Beauchamp’s evidence was otherwise admissible, I am satisfied that

Venmar could have called this fourth expert. The three experts called to that point

in the trial were for other important issues; there was no duplication of evidence.

The plaintiffs had notice of Mr. Beauchamp’s evidence and had elected not to

obtain their own expert on this issue; there was no prejudice to the plaintiff to allow

Venmar to call this witness. The evidence of Mr. Beauchamp was brief; there was

little time spent on the issue.

[108] The reason I rejected Mr. Beauchamp’s evidence related to the nature of his

evidence and not that he was a fourth expert for Venmar.

[109] As is well known, in order for expert evidence to be called, the witness must

be able to give evidence that is relevant and necessary. The proposed expert must

be properly qualified and there must be no evidentiary rule in play to otherwise

exclude the evidence. I am satisfied that Mr. Beauchamp is qualified to give his

relevant evidence but is otherwise inadmissible.

[110] Mr. Beauchamp’s evidence is arguably relevant for the defence as it related

to the damage claim brought by the plaintiffs. There are arguments for and against

the use of the evidence at the end of trial, but the evidence is relevant to Venmar’s

Page: 32

argument. Whether that argument has merit would have been decided later in the

trial and not at this admissibility stage.

[111] Mr. Beauchamp is a qualified insurance adjuster, even if he may not be as

qualified as Ms. Ferris. I agree with the plaintiffs that it seems odd to have the

opinion of someone who is not familiar with the geographical region of the claim

when another expert was apparently available. However, those factors relate to

the weighing of his evidence once admitted; they do not go to admissibility at my

gate keeping stage.

[112] With respect to Mr. Beauchamp’s opinion about the housing expense, I do

not see that his evidence is necessary. Mr. Beauchamp relied upon a single listing

for an unfurnished rental home in Milton. Had that document been placed in

evidence, I could rely on it along with the rest of the evidence at trial to make that

determination. Mr. Beauchamp does not appear to have applied any special

knowledge to render his opinion. His opinion of what should or should not have

been paid on that limited evidence will not help me with my determination of the

same question.

[113] Mr. Beauchamp testified that he could not give a complete opinion on the

claim related to the contents of the home because he did not have sufficient

evidence to render that opinion. I do not need an expert to tell me what evidence I

do not have; that is for counsel to submit in argument.

Page: 33

[114] With respect to his opinion on the depreciation on the home, Mr. Beauchamp

relied upon an online service without any knowledge of who prepared the

information or from whence it came. That is simply inadmissible hearsay from an

unproven website. It is unreliable and not the product of his independent judgment.

[115] I appreciate that an expert is entitled to rely on information that is widely

used, acknowledged as reliable within that field, and is employed as an accepted

means of making decisions within that area of expertise. R. v. Paszczenko, 2010

ONCA 615, 272 OAC 27. However, no such record was led to support the use and

reliability of Claims Pages. Indeed, Mr. Beauchamp acknowledged that such a

process was not Crawford’s policy. The evidence is therefore excluded by this rule

of admissibility.

[116] Accordingly, I dismissed the motion by Venmar; Mr. Beauchamp’s evidence

plays no role in my determinations.

Analysis and Decision on the Damages Claim

[117] With respect to the subrogated claim and the plaintiffs’ out of pocket

expense, for the following reasons, I find that those amounts are a reasonable

assessment of the damages and fix them accordingly.

[118] Many courts have concluded that damages may properly be fixed at the cost

to repair the deficiencies in a home or rebuild a home: Nan v. Black Pine, 55 BCLR

(2d) 241 (C.A.); Fors v. Overaker & Mallon, 2014 ONSC 3084; Galan v.

Page: 34

Finch, 2015 ONSC 2455,; Gemeinhardt v. Babic, 2016 ONSC 4707, 68 RPR (5th)

232, Jarbeau v. McLean, 2017 ONCA 115, 78 RPR (5th) 91.

[119] Here, the repairs have been completed and there is no evidence of a windfall

to the plaintiffs. The house was repaired but not demolished and rebuilt; the

exterior walls remained in place and the basement footprint was not changed.

Even if had I accepted Mr. Beauchamp’s evidence, Venmar’s position that the

plaintiffs are entitled to cash value and not replacement value is unreasonable.

See: Watt v. TD Insurance 2019 ONSC6454; Carter v. Intact Insurance 2016

ONCA 917.

[120] The funds as paid by Co-Operators are admitted. There is no evidence or

objection to the contractor’s bills as unnecessary or inflated.

[121] Even if I had accepted Mr. Beauchamp’s evidence with respect to the

accommodation expense, I am satisfied that the plaintiffs had good reason to

reside in the hotel for the duration. I have no reason to reject the testimony of the

plaintiffs that this was a reasonable solution to their housing needs. Indeed, their

evidence was that this was not an ideal arrangement for them but the best that

could be found to match their needs.

[122] With respect to the contents claim, Nan and the others set out above, only

apply to the loss of the building and not the contents. Pennefather v. Pike Estate,

Page: 35

[2004] O.J. No. 271 (S.C.) lends assistance with respect to contents. See also

Galan.

[123] In Pennefather, Justice Spence assessed the damages for a loss of contents

claim following a total loss fire. He held that the proper measure of damages for

lost contents was the replacement cost less 15% for depreciation. There, he said

at para. 34:

It is reasonable enough to allow a percentage reduction in respect of

the contents for depreciation. There is no scientific basis available to

determine the appropriate percentage. Based on the submissions and

on the cases referred to by counsel, it would be reasonable to apply

a factor of 15% against the replacement amount of $136,471.00.

Subject to that deduction, the amounts set out in the Summary of

Damages are satisfactory.

[124] In this case, I do not have sufficient detailed evidence to know what items

are to be depreciated or their values. Co-operators did not pay the full cost of items

that were not replaced but did pay full replacement value of those that were

replaced. On that basis, I do not know if the plaintiffs received more than

Pennefather supports.

[125] With respect to the items that were not replaced, I do not have any evidence

of an appropriate rate of depreciation on those items except that the plaintiffs’

insurance policy applied a 20% deduction. Perhaps some should have a reduction

of 15%; perhaps 50% for others. I do not know.

Page: 36

[126] The agreed statement of facts sets out amounts paid to the plaintiff for

contents, but those payments also include amounts paid for items such as

“contents and out of pocket expenses,” “contents and building costs,” and “others

combined with contents”. On that evidentiary record, I cannot determine what the

appropriate claim might be.

[127] However, the agreed statement of facts sets out that:

The plaintiffs incurred direct out-of-pocket expenses in the total

amount of $31,980.28.

[128] In argument with respect to Mr. Beauchamp’s evidence, counsel for Venmar

did not take issue with this uninsured part of the claim.

[129] Accordingly, I find that the plaintiffs suffered a loss of $1,073,739.00 being

the subrogated claim of $1,041,758.73 and the plaintiffs special damage claim of

$31,980.28.

[130] With respect to the general damages claim, there are few cases of

assistance. See: Ward v. Cariboo Regional District, 2021 BCSC 1495 - $35,000

for flooding; Weenen v. Biadi, 2017 ONCA 533 - $250,000 for flooding;

Gemeinhardt - $85,000 for loss of use and enjoyment. Most fire loss cases appear

to deal only with the subrogated losses without consideration of general damages.

Page: 37

Galan v. Finch, 2015 ONSC 4067; Birbank Farms v. Superior Propane Inc., [2002]

O.T.C. 235 (S.C.); Hansen v. Bellefeuille, 2011 SKQB 8,

[131] The plaintiffs lost the house they had dreamed of, built themselves, and lived

in. They lost sentimental items of irreplaceable value. They lived in cramped

circumstances for eight months. Even when they moved back into the property,

their life was difficult. Reconstruction had not been completed. They had to move

out from time to time. The fire alarm continued to go off. The strong smell of smoke

in the house continued until February of the following year. While the smell

lingered, guests were unable to remain in the home. Meetings and decisions

related to renovations and recovery were “endless.” These circumstances and their

tarnished memories drove them out of the property. For those loses, I find their

request as reasonable and assess $60,000 in general damages.

[132] On that basis, I assess the plaintiffs’ loss at $1,133,739.00. If I have made

an error of arithmetic, counsel may advise in writing.

Venmar’s Estoppel Motion

[133] At the end of evidence, Venmar sought a declaration that “Fasco is

estopped from re-litigating issues, facts, and/or findings of mixed fact and law

already adjudicated by the Québec Superior Court and the Québec Court of

Appeal in Desjardins Assurances générales inc. c. Venmar Ventilation inc., on the

basis of issue estoppel or abuse of process.”

Page: 38

[134] Venmar also asked that certain paragraphs of Fasco’s Defence be struck on

the basis that they ought to be barred by the operation of the doctrine of issue

estoppel and/or abuse of process and are frivolous, vexatious or otherwise an

abuse of the process of the Court.

[135] Generally speaking, the common law doctrines of cause of action estoppel,

issue estoppel, and abuse of process are designed to balance the finality of

litigation against the fairness to litigants. Duplicative litigation leading to potentially

inconsistent results, undue costs, and inconclusive proceedings are to be avoided.

[136] These principles are set out in Hoystead v. Commissioner of Taxation,

[1925] All ER 56 (H.L.), as adopted by the Supreme Court of Canada in Maynard

v. Maynard, [1951] S.C.R. 346, at page 359, as follows:

Parties are not permitted to begin fresh litigation because of new

views they may entertain of the law of the case, or new versions which

they present as to what should be a proper apprehension by the Court

of the legal result either of the construction of the documents or the

weight of certain circumstances. If this were permitted litigation would

have no end, except when legal ingenuity is exhausted. It is a principle

of law that this cannot be permitted, and there is abundant authority

reiterating that principle.

[137] To summarize the factual background of this application, I take substantially

from Venmar’s pleadings on the motion.

[138] On April 11, 2007, a fire occurred at the Québec City home of Tracey Martin

and Rejean Bouchard. The fire was determined to have started inside a Venmar

Page: 39

HRV installed in their home. Venmar’s HRVs, including the one in this action and

the Bouchard HRV were designed, manufactured, and assembled at Venmar’s

plant in Drummondville, Québec. Like the Burr HRV, the Bouchard HRV also

incorporated a Fasco motor.

[139] As a result of the April 11, 2007, fire Ms. Martin and Mr. Bouchard’s insurer,

Desjardins Assurances Générales, brought a subrogated action in the Québec

Superior Court against Venmar and Fasco.

[140] At the conclusion of trial, Justice Godbout of the Québec Superior Court held

that the fire started inside the Fasco motor as a result of overheating of the Fasco

motor and the failure of the thermal protection. The facts that Justice Godbout

noted in support of this finding included:

(a) The motor overheated on a number of occasions;

(b) The thermal protection did not function as it should have;

(c) The overheating motor and thermal protection resulted in the interior of

the motor catching fire;

(d) The failure of the thermal protection resulted in the circulation of electrical

current inside the motor despite the fire; and,

(e) A number of short-circuits on the windings and conductors inside the

motor demonstrated the presence of an electrical current at the time of the

fire.

Page: 40

[141] Justice Godbout held that, as the motor was manufactured by Fasco, and

the failure of the motor was the cause of the fire, Fasco should bear full

responsibility for the plaintiffs’ damages.

[142] On appeal, the Québec Court of Appeal held that, while Venmar might have

anticipated that the Fasco motor would reach the end of its life and stop operating,

the contention that Venmar should have expected the motor would overheat and

catch fire when it came to the end of its life was “unsupportable.”

[143] The Court of Appeal held that, while Justice Godbout ruling did not address

Fasco’s allegation that Venmar failed to inform consumers once Venmar became

aware of the Fasco overheating problems, Justice Godbout concluded that

Venmar had committed no fault after making the following findings:

(a) Toward the end of 1998, Venmar was informed that a few motors

installed in its HRVs were overheating.

(b) Venmar’s engineers contacted those of Fasco and an investigation

ensued to determine the cause or causes of that overheating.

(c) In 1999, the type of thermal protection installed in the motors was

changed.

(d) In cross-examination, Venmar admitted that by 2006, it knew that an

overheating problem could cause a fire in the Fasco Motor.

Page: 41

(e) In the second half of 2006, Daniel Forest caused a Fasco motor to

overheat and it then caught fire.

(f) According to Mr. Forest, different initiatives taken by Venmar to inform

the public and the measures put into effect pursuant to the 2006 Safety

Upgrade Program (including press releases and talks) resulted in eliminating

70% of the risk in Canada in 2013.

(g) The Safety Upgrade Program was particularly intended for sellers and

installers of the product, as well as building contactors and inspectors.

[144] Without determining whether the common law “learned intermediary” rule

applied in Québec Law, the Québec Court of Appeal held that it was of no

assistance to Fasco who had not established that Venmar’s knowledge

approximated that of Fasco’s which was required to make a finding that Fasco had

discharged its duty to the consumer.

[145] The Québec Court of Appeal held that, while it was necessary to find Venmar

and Fasco jointly and severally liable as neither defendant had rebutted the

presumption of liability established by Québec’s no fault products liability regime,

as between the two defendants Fasco was 100% liable for the plaintiff’s damages,

including interest.

[146] The decision of the Québec Court of Appeal was rendered on November 25,

2016 and has not been appealed.

Page: 42

[147] Venmar seeks to rely upon the result in that case or, at least, the factual

findings to support its defence in this case. It submits that Fasco and the plaintiff

ought not be allowed to go behind those findings.

[148] Further, Venmar and Fasco are also named as defendants in the Hamilton,

Ontario, case of Dosen v. Meloche Monnex Financial Services Inc. (Security

National Insurance Company). In that action, on October 4, 2019, Venmar brought

a similar motion to strike Fasco’s defences to Venmar’s claims for contribution and

indemnity based on res judicata and abuse of process. While that motion was

successful, it was subsequently overturned by the Ontario Court of Appeal on

March 5, 2021, cited as 2021 ONCA 141.

[149] In allowing that appeal, the Court of Appeal specifically held that it was open

to a trial judge to strike portions of Fasco’s defence that sought to put specific facts

already litigated in the Desjardins action back in issue in the Ontario litigation as

that judge would be in a better position to define the factual issues in respect of

which issue estoppel may apply.

Analysis

[150] In Dosen, at paras 30 – 37, Justice Coroza summarized the law to be applied

as follows:

The law recognizes a number of doctrines to prevent the abuse of the

decision-making process. One of the doctrines is res judicata.

In Danyluk, Binnie J. described the doctrine, at para. 18, as follows:

Page: 43

The law rightly seeks a finality to litigation. To advance that objective,

it requires litigants to put their best foot forward to establish the truth

of their allegations when first called upon to do so. A litigant, to use

the vernacular, is only entitled to one bite at the cherry…. An issue,

once decided, should not generally be re-litigated to the benefit of the

losing party and the harassment of the winner. A person should only

be vexed once in the same cause. Duplicative litigation, potential

inconsistent results, undue costs, and inconclusive proceedings are

to be avoided.

Res judicata has two main branches: cause of action estoppel and

issue estoppel. Cause of action estoppel prohibits a litigant from

bringing an action against another party when that same cause of

action has been determined in earlier proceedings by a court of

competent jurisdiction. Cause of action estoppel also prevents a party

from re-litigating a claim that could have been raised in an earlier

proceeding.

Issue estoppel is narrower. It applies to prohibit the re-litigation of an

issue that has already been decided in an earlier proceeding, even

where the cause of action is different in the two proceedings.

The overall goal of the doctrine of res judicata, and therefore of both

cause of action estoppel and issue estoppel, is judicial finality.

The re-litigation of issues that have been before the courts in a

previous proceeding may create an abuse of process. That is because

re-litigation carries serious detrimental effects and should be avoided

unless the circumstances dictate that re-litigation is in fact necessary

to enhance the credibility and the effectiveness of the adjudicative

process as a whole.

The law seeks to avoid re-litigation primarily for two reasons: first, to

prevent overlap and wasting judicial resources; and second, to avoid

the risk of inconsistent findings.

A court may decline to apply res judicata or abuse of process where

its application would work an injustice. This might occur where the first

proceeding denied a party a full and fair hearing, even though that

party exercised reasonable diligence. Additionally, even if the first

proceeding was conducted with scrupulous fairness, it might still be

unfair to use the results of the first proceeding to preclude re-litigation

of an issue.

Page: 44

It may be appropriate to exercise discretion to decline to apply the

abuse of process doctrine when (1) the first proceeding is tainted by

fraud or dishonesty, (2) fresh, new evidence, previously unavailable,

conclusively impeaches the original results, or (3) fairness dictates

that the original result should not be binding in the new context. The

list of relevant factors to this discretion is not closed. The discretionary

factors for whether to decline to apply the abuse of process doctrine

may also apply in the context of deciding whether to apply the doctrine

of res judicata. [Citations removed].

[151] In this action of many issues, I can simplify my analysis on this issue by

moving directly to my exercise of discretion to dismiss this motion. Even if estoppel

can arise on this record, I dismiss this motion for the following reasons.

[152] This motion, for a variety of reasons, has only been brought at the end of

the case. The parties dispute whether that timing was on consent. In the end, that

does not matter; this is when Venmar brought its motion. Only now can I decide

the motion; it does not matter whether the parties agreed to that timing or not.

Adding this motion at the end of the evidence does not reduce the issues or the

time involved in the trial; it only adds to them. The record for the motion included

much of the Quebec trial transcript. Adding most of a first trial at the end of a

second trial to determine whether the first trial determined the second trial is not a

sign of judicial economy.

[153] I appreciate that Justice Coroza said “[t]he judge hearing the matter will be

in better position to define the factual issues in respect of which issue estoppel

Page: 45

may apply.” That may be correct in many cases; however, the process is

unworkable at this stage of the trial.

[154] Further Justice Coroza went on to say, at para. 74:

Similarly, in this case, the benefits of hearing and resolving Venmar’s

r.21.01(3) (d) motion, in terms of judicial economy or trial efficiency,

were marginal. It appears that much of the same evidence and similar

issues will nonetheless be considered at trial. For example, even if

Fasco’s defences were properly struck because the issue of Fasco

and Venmar’s relative fault was finally determined in the Quebec

Actions, a judge in the Ontario Actions would nonetheless have to

hear issues concerning Venmar’s potential liability for failure to warn

or negligence in assembly or testing of the HRV, in relation to the

Dosens and their insurer’s claims. The motion judge should have

considered this fact and looked at the litigation as a whole. In my

opinion, it should have weighed heavily in the analysis as to whether

the discretion to dismiss the motion or to refuse to apply the doctrines

should been exercised. [Emphasis added].

[155] The circumstances in Dosens is very similar to this case and I have placed

similar weight on the principle of trial efficiency.

[156] The Quebec Civil Code applied to the Bouchard action. It is “not plain and

obvious” that those legal principals would not result in a different determination to

this action. The Quebec Court of Appeal applied Québec’s no-fault products

liability regime to find Fasco 100% liable for the plaintiff’s damages. Ontario does

not use no fault liability in this area.

[157] Applying the findings in the Quebec action will not determine the issues of

Venmar’s duty to warn, or the contractual issues between the defendants here.

Page: 46

[158] Removing Venmar at this stage of the litigation will result in an injustice to

the plaintiffs; they were not parties to the Quebec action. They may be unable to

continue against Venmar and will have spent many days in trial awaiting the

dispute between the defendants on their issues.

[159] Many of the factual findings in the Quebec action are not in dispute here.

The Quebec action was related to whether the fire was caused by the capacitor or

the motor. As set out above, in this action, there is no dispute that the fire started

in Fasco’s motor which led to the fire in the house. That is only the start of the

analysis here.

[160] The claim of an abuse of process cannot succeed. The Supreme Court of

Canada explained that doctrine in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC

63, [2003] 3 SCR 77, at para. 53 as follows:

The discretionary factors that apply to prevent the doctrine of issue

estoppel from operating in an unjust or unfair way are equally

available to prevent the doctrine of abuse of process from achieving

a similar undesirable result. There are many circumstances in which

the bar against relitigation, either through the doctrine of res

judicata or that of abuse of process, would create unfairness. If, for

instance, the stakes in the original proceeding were too minor to

generate a full and robust response, while the subsequent stakes

were considerable, fairness would dictate that the administration of

justice would be better served by permitting the second proceeding to

go forward than by insisting that finality should prevail. An inadequate

incentive to defend, the discovery of new evidence in appropriate

circumstances, or a tainted original process may all overcome the

interest in maintaining the finality of the original decision. [Citations

removed].

Page: 47

[161] The Quebec action was about a $86,000 claim. Here, the claim exceeds

$1,000,000. Accordingly, the stakes in the original proceeding were such that they

did not generate a full and robust response, while the subsequent stakes here are

considerable. Fairness dictates that the administration of justice is better served

by permitting this second proceeding to go forward than by insisting that finality

should prevail.

[162] Given the vast difference between the two actions in the parties, the issues,

and the amount in dispute, I find that it would, in fact, be an abuse to grant the

motion for Venmar.

[163] For those reasons, the motion was dismissed.

Liability

Positions of the Parties

[164] In brief, the plaintiffs submit that Venmar was negligent in its design of the

HRV. While the motor chosen was not defective, it was the wrong motor for the

purpose. They say that Venmar should have been aware of the fire risk at the end

of the life of the thermal protector.

[165] Further, the plaintiffs say that Fasco should have known of the use the motor

was to be put and should have warned Venmar that it needed a different motor

and thermal protector. Between the two defendants, they should have realized that

Page: 48

the unit was an unattended use that required one shot thermal protection.

Accordingly, liability should be divided between them.

[166] Venmar submits that the plaintiff purchased the unit in 1994 and Venmar

was not aware of the potential fire risk until 2006. Venmar decided against

establishing an “expertise” in motors for its HRV and relied on Fasco to tell Venmar

of that risk. Venmar says that it was reasonable to use the auto reset thermal

protector and that they knew of no other failing in its HRV. Venmar submits that

they did not put their mind to an attended or unattended use and relied on Fasco

to properly advise them of the importance of the difference.

[167] Fasco submits that it supplied an appropriate motor without defect as

requested by Venmar. It was up to Venmar to understand the motor and thermal

protection it needed for its appliance. Venmar’s failure to design and manufacture

a safe appliance is the failure of Venmar, not Fasco.

Relevant Legal Principles

[168] The onus of proof is on the plaintiff to prove negligence on a balance of

probabilities. Res ipsa loquitor does not supplant that basic principle See: Fontaine

v. British Columbia (Official Administrator), [1998] 1 S.C.R. 424; El Dali v.

Panjalingam, 2013 ONCA 24. The simple fact of the fire does not prove

negligence.

Page: 49

[169] In Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, [2008] 2 S.C.R. 114

the Supreme Court of Canada confirmed that to be successful in negligence, Mr.

Burr and Ms. Callister must demonstrate on a balance of probabilities (1) that the

defendants or one of them owed the plaintiffs a duty of care; (2) that the

defendants’ behaviour breached that standard of care; (3) that the plaintiffs

sustained damage; and (4) that the damage was caused, in fact and in law, by the

defendants’ breach.

[170] There is no dispute that Venmar owed the plaintiffs a duty of care and that

the plaintiffs sustained damages. Fasco disputes a duty of care to the plaintiffs and

I will deal with that below.

[171] For the defendants to be liable, the damage that was caused must be

foreseeable. Mustapha confirms, at para. 14, that:

[T]he law of tort imposes an obligation to compensate for any harm

done on the basis of reasonable foresight, not as insurance. The law

of negligence seeks to impose a result that is fair to both plaintiffs and

defendants, and that is socially useful. In this quest, it draws the line

for compensability of damage, not at perfection, but at reasonable

foreseeability. [Citations removed].

[172] In Ryan v. Victoria (City), [1999] 1 S.C.R. 201, it is said:

28

Conduct is negligent if it creates an objectively unreasonable

risk of harm. To avoid liability, a person must exercise the standard of

care that would be expected of an ordinary, reasonable and prudent

person in the same circumstances. The measure of what is

reasonable depends on the facts of each case, including the likelihood

of a known or foreseeable harm, the gravity of that harm, and the

Page: 50

burden or cost which would be incurred to prevent the injury. In

addition, one may look to external indicators of reasonable conduct,

such as custom, industry practice, and statutory or regulatory

standards.

29 Legislative standards are relevant to the common law standard of

care, but the two are not necessarily co-extensive. The fact that a

statute prescribes or prohibits certain activities may constitute

evidence of reasonable conduct in a given situation, but it does not

extinguish the underlying obligation of reasonableness. Thus, a

statutory breach does not automatically give rise to civil liability; it is

merely some evidence of negligence. By the same token, mere

compliance with a statute does not, in and of itself, preclude a finding

of civil liability. Statutory standards can, however, be highly relevant

to the assessment of reasonable conduct in a particular case, and in

fact may render reasonable an act or omission which would otherwise

appear to be negligent. . . .

[173] In Farro v. Nutone Electrical Ltd. (1990), 68 D.L.R. (4^th) 268 (Ont. C.A.), the

Ontario Court of Appeal confirmed at p. 271 that:

A manufacturer has a duty to take reasonable care in the

manufacture of his product, including all its component parts, and

failure to take such reasonable care can result in liability to the

ultimate user or consumer.

[174] With respect to negligent design, I have found the summary of the necessary

principles set out in St Isidore Co-Op Limited v AG Growth International Inc, 2019

ABQB 763, to be helpful. There, at paras. 35 – 44, Justice Friesen confirmed that

manufacturers have a duty of care to avoid safety risks and to make products that

are reasonably safe for their intended purposes. A manufacturer cannot make an

inherently dangerous article when a method exists of manufacturing the same

article without risk of harm.

Page: 51

[175] To prove negligent design, the plaintiff must identify a design defect,

establish that the defect created a substantial likelihood of harm, and establish that

an alternative design exists that is both safer and economically feasible to

manufacture.

[176] Industry standards can be relevant in determining the question of whether a

particular product is “reasonably safe.” Even so, in assessing whether a design

defect exists, the mere fact that a manufacturer could have used a safer design

does not automatically result in liability. The law does not require products to be

“accident proof” so as to turn manufacturers into insurers: absent statutory

provisions to the contrary, Canadian product liability law is based in negligence,

not strict liability.

[177] In considering whether a design is negligent due to alleged safety defects,

the court may undertake a risk-utility analysis which weighs the risks of the

impugned design against the ease, cost, risk, and loss of utility of a proposed safer

design.

[178] In Rentway Canada Ltd/Ltée v Laidlaw Transport Ltd (1989), 49 C.C.L.T.

150(Ont. H.C.), at para. 55 Justice Granger found that the court may, in balancing

a product’s risks against its utility and cost, consider factors including:

(a) the utility of the product to the public and the individual user;

Page: 52

(b) the likelihood that the product will cause injury;

(c) availability of a safer design;

(d) potential for designing the product so that it is safer but remains

functional and reasonably priced;

(e) ability of the plaintiff to have avoided injury by careful use of the

product;

(f) degree of awareness of the product’s potential danger that can be

attributed to the plaintiff; and,

(g) the manufacturer’s ability to spread out any costs related to improving

the safety of the design.

[179] A failure to take precautions against harms that are not foreseeable will not

be a breach of the standard of care. A manufacturer can only be held liable if the

product in question had a design defect based on a safety risk the manufacturer

either knew, or ought to have known about at the time the product was

manufactured, or which came to its attention afterwards, and it failed to address

that risk.

[180] In determining what the manufacturer knew or ought to have known, the

Court will consider the state of knowledge and technology at the time the product

Page: 53

was manufactured in assessing negligence in design so as not to fall into the trap

of assessing the issue with the wisdom of hindsight.

[181] That said, it is logical that a manufacturer of a product should be held to the

same level of knowledge and expertise as an expert in the field. Furthermore, a

manufacturer must take into consideration not just the intended use of its product,

but also the environment in which the product will be utilized. See also Enslev v.

Challenges Unlimited Inc. 2007 CanLII 45408 (Ont. S.C.) at paras. 65 – 69.

[182] With those principles in mind, for the reasons set out below, I find that the

plaintiffs have proven Venmar is liable to them as a result of Venmar’s negligent

design of the HRV. However, that negligent design is Venmar’s failure. I find that

Fasco has not been shown to be negligent in any manner with respect to the design

of the HRV. I now consider the evidence at trial.

Was Venmar negligent in its design and manufacture of its HRV?

Applicable Standard in the Industry

[183] The unit, the motor, and the TCO could not be sold in Canada or the United

States without certification by the Canadian Standards Association (“CSA”) or

Underwriters Laboratory (“UL”) respectively. Those standards are quite similar.

There are separate standards for the motor and for the HRV. It is agreed that the

thermal protector, motor and HRV met the required certification. To understand

some of the evidence from witnesses to follow, it is important to know the standards

Page: 54

in play at the relevant times. It should be remembered that Venmar’s HRV’s were

first put on the market in the late 1980’s or as late as 1991. The plaintiffs’ unit was

purchased in 2004 and likely manufactured the same year. The fire was in 2012.

[184] The certification standards for thermal protection in the motor are set by

regulation UL 211159 and CSA 77. These standards require that the motor

undergo ‘locked-rotor’ testing such that the motor and thermal protection will cycle

for a minimum of 18 days in a locked rotor condition. Mr. Habash’ evidence was

that the Fasco motor in issue appears to have cycled many times longer than that;

it could have been weeks or months. The Ontario Fire Marshall suggested

something in the area of three months.

[185] The standards applicable to Venmar’s HRV are CSA 113 and UL 1812. The

CSA 113 standard applicable to air exchangers and heat recovery ventilators

applied as early as 1984. It referred specifically to the locked rotor tests required

for motors with auto-reset thermal protection with the same 18-day requirement.

[186] The UL standard applicable to an HRV is UL 1812. Prior to the manufacture

of the Plaintiffs’ HRV in 1994, it had provisions referring to locked rotor testing, “or

motor overload tests” that were required to continue for 72 hours.

[187] Although there was evidence about UL 507, that standard did not apply to

the HRV. Rather, UL 507 applied only to built-in electric fans, which included

rangehoods and air-to-air exchangers (without heat recovery).

Page: 55

[188] Beginning in 1985, an ad hoc committee was formed made up of

manufacturers and representatives of industry participants associated with

appliances certified under UL 507 standard. Its mandate was to address concerns

relating to fires arsing from bathroom fans and other appliances using similar

motors as the one in question. Fasco had a representative on that committee.

[189] The committee was to determine how to ensure a safer appliance standard

for fans built into walls and ceilings. The purpose of the committee was “to discuss

and advise UL on the proposal that burnout be allowed on motors in permanently

installed fans and blowers.” All representatives agreed that a motor in locked rotor

condition could result in flames.

[190] Some of the members were concerned that the 18-day test period was too

short and that solutions such as one-shot thermal protectors were needed for fire

safety. Appliance manufacturers were concerned about “premature failures”

associated with one-shot thermal protection. They did not want the added expense

of unnecessary failures. In the end, there was no consensus about how the UL

507 standards should be revised to address the concerns at that time.

[191] However, the UL 507 standard was eventually modified to address the

industry concern for fire risk in bathrooms and other fans in 1992, to become

effective in 1994. That standard is entitled Fans for Use in Unattended Areas. The

relevant wording required that:

Page: 56

[…] for motors used in fan products which are built into or within the

building structure, and which are likely to operate unattended or in

situations in which the operator may not detect a locked rotor condition.

Examples include: wall-insert fans, in-wall fans, ceiling-insert fans, attic

exhaust fans, whole house fans, and duct fans. Rangehoods and

ceiling-suspended fans are not included.

Exception: These requirements do not apply to thermally protected

motors employing a thermal cutoff or a manual reset protector if the

device opens during the normal locked rotor testing in accordance with

the Standard of Thermal Protectors for Motors, UL 547.

[192] This meant that for unattended fans in such as in-wall fixtures, a one-shot

thermal protector was a proper solution rather than a cycling thermal protector.

[193] At the time the changes were made to UL 507 in 1994, no change was made

to any other standard, including UL 1812 and CSA 113, which applied to the

Venmar HRV. Which is to say that, as of 1994, the Venmar HRV did not require

one-shot thermal protection; a cycling thermal protector was satisfactory.

[194] What I primarily take from this evidence is that those in the motor and fan

industry were aware, or should have been aware, of these certification

requirements and issues related to those requirements. That includes both Venmar

and Fasco.

[195] Fasco’s “Field Facts” provided to its sales representatives included

references to this concern even before the 1992 amendment. I will discuss this

later in these reasons.

Page: 57

[196] Fasco’s 1995 replacement products catalogue included a warning with

respect to unattended uses. Even though this document was to be used by

individuals purchasing parts rather than for OEMs such as Venmar, it clearly shows

Fasco’s knowledge of the issue.

[197] The evidence is also clear that Venmar was or should have been aware of

these issues. Mr. Juneau, a Venmar electrical engineer, agreed that Venmar was

certifying range hood products pursuant to UL 507 prior to his arrival at Venmar in

1993. Mr. Forest, Venmar’s project engineer in the mid 1980’s, testified that his

responsibilities included strategies for ventilating attics and carried on to air

exchangers and HRV’s. Mr. Joseph, Venmar’s expert witness, agreed that both

UL and CSA make changes known to the industry with "plenty of notice.". He

expected that Venmar should know of the change to the 507 UL standard.

[198] Despite Venmar’s evidence (referred to below) I find that Venmar knew, or

aught to have known, of single-shot thermal protectors before the plaintiffs’ unit

was built and sold.

[199] Since UL 507 was amended in 1992 to be effective in 1994, I find that those

in the industry were alive to the issues of attended or unattended uses, types of

thermal protectors and related risks and requirements. Long before that, Venmar

was manufacturing their products with a UL 507 certification.

Page: 58

[200] However, I also find that the industry standard did not require one-shot

thermal protectors in HRV’s as those in issue here. To the extent that the

certification requirements applied to the thermal protector in question, the HRV in

issue was provided with far more than the UL and CSA standard required. Instead

of 18 days, it protected the plaintiffs for weeks or months.

Venmar’s Evidence

Evidence of Daniel Forest

[201] Mr. Forest was employed by Venmar as a mechanical engineer from 1983

until his retirement on January 1, 2020. Mr. Forest started with Venmar as a project

engineer and eventually ended his career as Global Vice President for engineering

kitchen ventilation products. He was a shareholder of Venmar from 1991 to 1995

but has had no direct contact with the company since he retired.

Production and Manufacturing

[202] When he started at Venmar, he was the only engineer but by the 1990s he

headed a team of four mechanical and electrical engineers.

[203] Venmar hired consultants to assist with the design of its appliances and

usually outsourced that work, although when it did so, Venmar oversaw that work.

He agreed that Venmar needed to make sure that the unit was safe, effective, and

compatible. Sometimes, Venmar did some of its own certifications but usually hired

contractors to do the work or approached the CSA to certify its products.

Page: 59

[204] Mr. Forest testified that he expected that the design team would understand

the basics of the components of the motor. However, Venmar would rely on

suppliers where it did not have the necessary competency to understand the

motors themselves. This had been Venmar's policy for decades. The CSA would

then ensure that the final appliance met its standards.

[205] The HRV was one of Mr. Forest’s special projects starting in 1985 or 1986.

He had also worked with air exchangers in 1983 and 1985. The only difference

between the two is that there is heat transfer with heat recovery ventilators and not

with air exchangers. Both used blowers from Fasco that were thermally protected.

[206] Venmar has never manufactured motors for any of its appliances. Mr.

Forest’s team knew little about motors. Although some members were electrical

engineers, none had any specialization with electric motors.

[207] In 1983 through to 1987, Mr. Forest met with representatives from Fasco

who visited Venmar three to four times a year to see the research and development

department, the assembly line, and other locations to consider what Venmar was

manufacturing. The Fasco representatives also answered Venmar’s calls and

faxes in respect to questions or needs. The Fasco representatives were members

of its sales department. Although Mr. Forest is not sure whether they were

engineers, he believed that they all had good technical backgrounds.

Page: 60

[208] When Fasco's representatives came to Venmar's facilities, they were given

full access to the plant. Mr. Forest believes that they saw the motors being installed

in the HRV before 1984.

[209] In 1987 or 1988, Venmar sent an HRV and an air exchanger to Fasco's

facility in Missouri to show how the motors were used and to “fine tune” the motors.

This was to assess the possibility of developing more quiet air exchangers but not

in relation to the HRV. Mr. Forest also went to Missouri on a two-day trip to speak

with its representatives.

[210] The design process for the HRV took five steps and about 18 months to

complete. That process included the time to source and manufacture components

for the unit. In this case, Fasco only provided the motor for the unit and not the

blower or the capacitor.

[211] Fasco initially provided motors as requested by Venmar from Fasco’s

catalogue. The requested motor may have been in stock on occasion but more

often it was a custom motor. The prototype was ‘off the shelf’ and then tailored to

Venmar's needs. Venmar tested its choice and then told Fasco if there were gaps

in its needs and Fasco made corrections. Venmar then integrated the motor into

its unit.

[212] Fasco’s sales representatives also came to Venmar's offices in

Drummondville. Mr. Forest did not know if any of them were engineers and did not

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know who they spoke to at Fasco when they returned. The sales representatives

had suggestions to solve any problems, but they were not “hands-on solvers.”

[213] The reason that Fasco's representatives came to Venmar was to see how

Venmar was using the motor and to inspect rejected motors for reimbursements.

The research and development team at Venmar relied on Fasco for its expertise

in respect to the motor. There was ongoing dialogue and question-and-answer

between them.

[214] Venmar bought sheet-metal to make the HRV box and assembled the

pieces and components inside it. At the end of the assembly line, each unit was

operated to make sure that it was functioning. The unit was then boxed and

shipped.

[215] The life expectancy of the unit was to be 15 years and ought to require only

one major repair, such as the replacement of the motor. After an investigation and

based on their experience, Venmar chose a Fasco motor that was expected to last

60,000 hours or roughly seven years. Venmar could not find a better or longer

lasting motor and was satisfied with this arrangement. The selected motor was

certified by CSA and UL.

[216] When Venmar tested the lifespan of the unit, it assumed that the unit would

eventually simply stop running. Only in 2006, did they realize that the unit could

remain in an energized condition when the motor failed and then catch fire. They

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did not carry out ‘end of life’ testing in the 1990s. There were no visual alerts on

the units themselves to give notice of malfunction, although there was sometimes

a visual alert on the wall operating panel. There were no audio alarms on the unit

if the unit malfunctioned.

[217] Generally speaking, Venmar expected that owners would notice almost

immediately if the unit stopped working when condensation formed on their

windows. For example, an owner might smell something from the unit or notice

that the wheels were not turning during maintenance. Alternatively, the owner

might hear a noise like electrical humming or no noise at all if the rotor was locked.

[218] The automatic reset thermal protection used in the 1990s was the industry

standard in motors at the time. The first production was in the spring of 1991.

Problems Arise

[219] Mr. Forest said that towards the end of the 1990s through 2006, Venmar

started to have difficulties with the unit; they began to overheat.

[220] Because of problems in 1994, Venmar tested the product for end-of-life.

They found problems with spot welding and the manner in which wires were

connected to the capacitor and Fasco was able to fix those. However, there were

other problems in the late 1990s.

Page: 63

[221] In August of 1998, Venmar wrote to Fasco about concerns with respect to

those overheating concerns and asked for help to understand what was going on.

At that point, Venmar thought that it was a "public safety matter.” However, there

were no house fires at that time, only internal damage to the unit from overheating.

[222] Venmar did not test the life span of the HRV’s thermal protector. Prior to

1998, Venmar was not aware of the types of thermal protectors. Mr. Forest was

not aware of whether other Venmar staff knew about them, but he was not aware

that the reset protectors could fail.

[223] In 1998, Venmar sent some burnt out motors to Fasco for its investigation

but did not send the complete unit. At that time, Fasco suggested that Venmar

could solve the overheating by adding a fuse to the unit but not what kind of fuse.

Fasco also did not tell Venmar that the unit could catch fire. Venmar did not think

that Fasco’s solution would prevent overheating and proceeded with its own

solution, contrary to Fasco’s advice.

[224] After 2000, Venmar continued to investigate the cause of the overheating.

Mr. Forest denied that Venmar was not being cooperative with Fasco. He was not

aware that Fasco was using an employee's personal Venmar unit to test.

[225] In 2001, Fasco then installed a one-shot thermal protector at Venmar’s

request. As of August 2001, Venmar used a one-shot or "self-hold" for temperature

protection. The self-hold method required human intervention by unplugging the

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unit and then plugging it back in. Mr. Forest denied being advised by Fasco of the

availability of one-shot thermal protectors as far back as 1986. If he had received

that information, “actions would have been taken” by Venmar.

[226] Venmar first became aware of a motor fire in its HRV in 2002, in Yellowknife.

However, that fire occurred because of the manner that the unit was installed

rather than this equipment failure.

[227] Venmar was told of other fires in its HRV’s after that, but the cause of the

fires was not clear. For instance, one was in a machine shop rather than the

expected and required residential use. Venmar did not understand the cause in

some other cases between 2002 and 2006 but they were advised of 17 home fires

in Canada and the US. Venmar then conducted its own forensic examination to

figure out the cause of the fire.

Solution Found

[228] Venmar was finally able to make a unit catch fire in its laboratory in the fall

of 2006. They found that when the rotor locked, the thermal protector might turn

on and off around 130°C. At that point, the thermal protector could fail. If it failed

with the system open, more heat would be produced. That would lead to the

windings deteriorating which could lead to short circuit and result in a fire. At that

point, Venmar started a safety upgrade program. The details of that process are

set out below.

Page: 65

[229] The solution that Venmar created was for an external plug to be added to

eliminate the fire risk. The “power plug adapter” could be manufactured quickly,

cheaply, and did not require a technician to install it. This solution was developed

by Venmar's engineers, but the plug was manufactured by another company.

[230] Mr. Forest was of the view that it was Fasco's obligation to warn Venmar of

the potential problem; if Venmar had known, it would have used another thermal

cut-off method, or it could have used other methods such as an enclosed motor to

avoid fires.

[231] When Venmar’s fuse solution was attached to units starting in 2009, that

solved most of the problems unless the fuse was attached improperly. Mr. Forest

agreed that Fasco had recommended such a fuse but not any particular fuse or

other matter of selecting one. He agreed that if the unit had an in-line fuse, as

recommended by Fasco, that would have prevented the fire as well as Venmar’s

power plug adapter. While a TCO reduced the risk of fire, there were also fires

when the single shot was not properly wired. The fuse or second overcurrent

protector stopped the fires.

[232] Mr. Forest agreed that there was other litigation between Venmar and other

motor manufacturers.

Page: 66

Evidence of Normand Juneau

[233] Mr. Juneau is now a forensic engineer but was employed by Venmar from

1993 to September 2009. He is a professional engineer in the province of Québec.

He is trained as an electrical engineer but knows nothing about small motors or

thermal protection. During his career, he learned about short-circuits in large

motors but not small motors. It was not until his second year at Venmar that he

became aware that motors were thermally protected.

[234] In 1993, he started with product development for electronic controls on

range hoods for ovens, HRV's, and air exchangers. He was involved in the

electronics for fan speed controls and defrost controls. From 1993 to 1998 he was

involved with more advanced controls and during the time between 1995 and 1996,

he worked on range hood controls. Until 2009, there were no other electrical

engineers at Venmar.

[235] Mr. Juneau reported to Mr. Forest who was the director of research and

development. When Mr. Juneau started with Fasco, he knew nothing about HRV's.

[236] Between 1993 and 1998, Venmar outsourced motors to Fasco and other

companies. The motors were designed before Mr. Juneau arrived at Venmar. In

that period of time, he did not examine a motor, nor did he know about thermal

protection other than what was on the product name plate. Before 1998, he

“probably” knew the type of thermal protector that was in the motors. Before 1998,

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Venmar did not know what would happen if the motor failed. Venmar did not

question the motor or type of thermal protector that was provided.

[237] Mr. Juneau agreed that Venmar was certifying range hood products under

UL 507 standards prior to his arrival at Venmar in 1993.

[238] Around 1998, Mr. Juneau became aware that the HRV motors could

overheat because its units came back from the field with extreme overheat damage

in 1990: “They were almost charred.” He believes that the motors were returned to

Fasco but cannot remember how they looked from overheat damage and he does

not remember seeing the unit itself.

[239] In 1998, Mr. Juneau wrote to Fasco, trying to draw Fasco's attention to the

problem and to understand the cause. He needed to understand what had

happened in order to apply the proper corrective action. At the same time, he sent

a burned-out motor to Fasco. Fasco examined it but could not determine the root

cause of the fire. Venmar pushed Fasco for solutions. In his view, it was Fasco's

motor and its problem. At the time he was not afraid of a fire occurring but was

concerned as to why the unit was overheating.

[240] Mr. Juneau suggested to change the circuits because that was the cause

that he could see - it was his "best guess." He felt strongly about that, however,

Fasco’s representatives thought that a temperature sensitive device would not

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solve the current sensitive problems. Mr. Juneau did not think that changing the

location for the heat protector would necessarily solve the problem.

[241] Correspondence in evidence sets out Fasco’s proposals and Venmar’s

rejections of the them. In Mr. Juneau’s view at the time, a fast-acting fuse would

not solve the problem but would shut down the motor. He wanted to know how to

solve the problem in the first place. Although Fasco had suggested a fuse, they

did not say what kind of fuse. He wanted a thermal protector that would work in the

motor rather than a plug to stop the motor. Eventually, Fasco made the changes

that Venmar requested, despite Fasco’s reservations.

[242] Although this was the only change, Venmar was concerned that it still did

not know the root cause of the overheating and Mr. Juneau still wished to find out

the exact cause. Despite that concern, Venmar conducted no failure tests, no end

of life tests, did not send the unit for third party testing, and made no public warning.

It also did not add an alarm if the motor overheated. Mr. Juneau said that Venmar

made no public warning because he was still guessing about the cause and did

not have enough information to come to a definite conclusion.

[243] In the fall of 1999, Mr. Juneau met again with representatives of Fasco. At

that time, the Fasco team proposed a one-shot thermal protector for the first time;

there was no explanation why Venmar had not been told about such a thermal cut

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off previously. In April 2000, Venmar changed the thermal protection to a one-shot

but there was still no indication from Fasco that the motors could catch fire.

[244] In 2001, there was a fire in the Northwest Territories and Venmar first

became aware of the potential for a fire. Mr. Juneau saw the burned HRV but

cannot remember the details as to the cause of the fire within that unit.

[245] After that, Mr. Juneau examined several units that were involved in house

fires. He cannot remember the details of those examinations. Venmar’s

management did not receive a formal report of the cause of the fires.

[246] Mr. Juneau was able to determine the cause of overheating after testing

several units between the spring and December 2006. He examined three different

types of Fasco motors and finally found a fuse that would solve the problem.

Evidence of Mark Joseph

[247] Mr. Joseph gave evidence for Venmar. The parties agreed that he was able

to give expert opinion evidence on design and manufacturing standards, and

product development in the small electrical motor industry in the 1970, 1980’s, and

1990’s.

[248] In Mr. Joseph’s opinion, a one-shot thermal protector was the correct

thermal protector for appliances with an unattended use. Further, he opined that it

was the responsibility of Fasco to know the use to which its motor would be put. In

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his view, Fasco had the obligation to ensure that a one-shot thermal protector was

used by Venmar for its HRVs.

[249] Mr. Joseph has been involved with the building of similar small motors since

the late 1970s. His experience convinced him that a one-shot thermal cut off must

be used in motors for some unattended applications. Even though he was

convinced of that, he testified that there was a reluctance among many of his

customers to use single-shot thermal protectors because of the possibility that the

motor would be brought to the end of its life by premature or what he called “infant”

openings. In the early 80s, Mr. Joseph formed a company to sell TCO’s and he

was the principal and technical director of that company until 2011.

[250] Mr. Joseph agreed that Fasco used a Texas instrument cycling thermal

protector and that it was state-of-the-art thermal protector at the time.

[251] Because of his experience, he joined the above-mentioned UL 507

subcommittee hoping to change the certification standards. As he said, “I

continued to advocate for the TCO as the safest and most practical solution.”

Although he was eventually successful and the UL 507 standard changed, Mr.

Joseph did not get involved with changing the CSA standards. Further, he agreed

that HRV's and air exchangers were not part of his consideration as he did not sell

motors to the manufacturers of such products.

Page: 71

[252] Mr. Joseph agreed that the UL and CSA standards in place at the time of

the production of this unit did not specify what should occur after the 18 days of

locked rotor duration. In his view, UL and CSA standards must only be considered

as minimum safety standards.

[253] In particular, Mr. Joseph stated (grammar and spelling as in the original):

The Fasco motor in question probably had a well designed bearing

system, and with a reasonable total running temperature would result

in long life. This long life [10, 20, 30,000 hours or more] resulted in a

long time lag between the time this product was put in the field and a

large enough number of motors developed bearing system failure to

provide Venmar and Fasco with what was going to develop.

A TCO safely takes the motor permanently and safely off the line during

a locked rotor events, whereas a motor protected with a recycling type

thermal protector cycles until the winding insulation fails or the protector

fails closed and the winding temperature goes up until the winding

insulation fails. Winding insulation failures cause fires.

The existing UL and CSA standards at the time for motors and motor

operated appliances did not address winding failures or what happens

after 18 days in a locked rotor condition.

In my opinion, there is no way that Fasco could not have known about

the operation and use of an HRV by the end user, and the fact that it

was an unattended product. […] this was the wrong place to use an

automatically resetting thermal protector.

Considering it took some years for the fires to occur, a switch to a TCO

for lock rotor protection should have occurred as soon as the first motor

fires were examined.

[254] Given Mr. Joseph’s apparent experience, I accepted the parties’ agreement

and allowed him to provide his opinion, however, upon hearing his evidence, I am

not persuaded that I should rely on his evidence.

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[255] As set out above, expert evidence, to be admissible, must be relevant,

necessary, and not subject to an exclusionary rule. However, the evidence also

needs to be proffered by an expert who is impartial, independent, and unbiased.

See: White Burgess and Parliament.

[256] Mr. Joseph was not an unbiased expert; he was a well-meaning advocate

for the use of TCO’s; an industry where he had spent most of his career. In 1982,

he formed a company to sell a particular brand of TCO’s. He testified that sales of

those TCO’s went from 5000 pieces per month to over a million per month within

a few years. He was on the UL subcommittee proposing the use of TCO’s. His

view was ahead of his time on that committee and, until the early 1990’s, he was

apparently in the minority. He agreed that he was “passionate” about thermal

protectors, and on a “crusade" to change UL 507. As such, he is not of great

assistance to me.

[257] Further, Mr. Joseph has given his opinion on what Fasco knew or did not

know about the Venmar HRV and which entity had the responsibility for the loss in

this case. However, he was not provided with any history of the relationship

between Fasco and Venmar. Those are matters of my domain and not of an expert

witness. As such, much of his evidence was unnecessary for me to consider.

[258] However, Mr. Joseph’s evidence is helpful to determine what was known in

the small motor industry from the 1980’s forward. I find that a manufacturer of an

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HRV in Venmar’s position should have been aware of the need to consider whether

the unit was attended or unattended and what type of thermal protector was best

for its product. Both then and now, Venmar cannot hand that responsibility to

Fasco.

Evidence of Michael Rowen

[259] Venmar called expert Michael Rowen. He was qualified on consent to opine

on evidence on forensic electrical engineering and fire investigation.

[260] Fasco relies on White, Burgess and alleges that Mr. Rowen lacks impartiality

as he has carried out many such investigations for Venmar and because he now

employs Mr. Juneau through his firm. That may have been an issue if Mr. Rowan

gave evidence that was contradictory to any other evidence that I heard from other

sources. However, he repeated Mr. Habash’s evidence which was conceded by

the end of trial and gave some evidence that was helpful to all parties. I did not find

Mr. Rowen to be unfairly biased in his evidence towards Venmar.

[261] Mr. Rowan agreed that the unit in issue in this action was manufactured in

1994 and that none of its component parts had been replaced. The life expectancy

was 8 to 10 years and this motor operated as expected. By 2012, it was therefore

already beyond its life expectancy. He agreed that the motor was chosen by

Venmar.

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[262] When the motor eventually overheated, it was not due to a defect. This was

an end-of-life motor event. Mr. Rowan agreed that there was nothing in the owner's

manual about end-of-life events nor an alarm on the unit to warn the consumer of

such an event and the need to replace the motor.

[263] Mr. Rowen was familiar with attended and unattended appliances. He does

not know how Venmar classified the appliance, but in his mind, the customer would

not normally see the HRV and therefore could not know if it was working properly.

working. However, the customer could know when it was not working at all by

moisture accumulating on the windows. Therefore, if the rotor was locked, that is

the fan was not running, the owner would notice the problem when condensation

appeared on the owner’s windows.

Was Fasco negligent in its manufacture or design of the motor?

[264] The issue between Fasco and Venmar turns on which company has the

ultimate responsibility for the selection of the motor used in the HRV. For the

following reasons, I find that Venmar bears that responsibility.

[265] Some of the facts are not in contention:

1) Venmar’s HRVs had fires with other motors and with single shot

thermal protectors.

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2) The motor in question was not defective and Fasco was not negligent

in its production of that motor. The complaint is that it was the wrong

motor for Venmar’s use;

3) No one alleges that the thermal protector was defective in any way; it

was the “best product” available at the time;

4) In 1998, Venmar rejected Fasco’s proposal to fix the problem and

Fasco’s suggestion to use a fuse turned out to be a correct answer;

5) The relationship between Venmar and Fasco was, as Venmar

specifically stated, “always a clear-cut customer, supplier

relationship.” Venmar was a purchaser and Fasco delivered what was

ordered.

Fasco’s Evidence

Evidence of Maurice Goldin

[266] Mr. Goldin was employed by Fasco since 1963 and retired in 2006. In 1998,

he was employed as product safety coordinator. All of Fasco’s motors were UL

and CSA certified and Mr. Goldin was tasked to ensure that the motors were

following UL and CSA certification. Fasco had more than 100 model types. Mr.

Goldin interacted with both engineers and sales representatives to be sure that the

certification was not affected by customers requests to modify the motors. If there

were any modifications to the motor, it could change the certification.

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[267] In the early 1990s, there were 800 UL standards for the components and a

similar amount for appliances. The CSA standards were fewer or about three

quarters of the American standards.

[268] In 1990, Fasco sold millions of motors to their customers per year and 90%

of those had automatic reset thermal protection.

[269] Venmar became a customer in the early 80s. It asked for UL recognized and

CSA certified motors. It did not ask for one-shot thermal protectors.

[270] In Mr. Goldin’s view, it was up to Venmar to review its mechanical and

electrical requirements. Once Fasco’s plans were accepted and returned signed

to Fasco, a bill of materials was prepared along with a production schedule. That

would take 4 to 6 weeks for delivery.

[271] Mr. Goldin was involved in training external salespeople. There were

approximately 30 at the time. That training including spending time at each Fasco

plant, on the floor, in the quality control and inspection area, and meeting with

engineering specialists.

[272] “Fasco Field Facts” were pamphlets used by salesmen to speak with

customers. There were more than 250 of those documents and they could be given

to customers by sales agents. Mr. Goldin authored some of them.

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[273] Mr. Goldin acknowledged that he knew that thermal protectors could fail

after too many interruptions and that they could fail in an open or in a closed

position. Fasco made its own thermal protectors from 1952 onwards and was

aware in the 1950’s or 1960’s of overheating problems if the thermal protector

failed. Fasco did not relay that information to manufacturers.

[274] In his view, appliance customers would tell Fasco what they needed, and

Fasco would respond to those requests. As a result of the amended UL, Fasco

changed some of its motors; however, there was no change to the Venmar HRV

because this change did not relate to the motor in that unit.

[275] The Fasco 1995 replacement products catalogue referred to the need for

one-shot thermal protectors, but that catalogue was for individuals who wanted

new parts for old motors; it did not target large manufacturers. Manufacturers were

expected to know what they were purchasing. Therefore, while labels were

required to be on packaged motors for distributors, they were not on the motors

sold to manufacturers because the manufacturers would be conversant with the

appropriate UL standard.

[276] In Mr. Goldin’s view, it was the responsibility of the manufacturer to be sure

what the motor could do and could not do. The testing would be carried out by the

appliance manufacturers after the motor was installed in the respective appliance.

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[277] Fasco did some sound and air testing of the Venmar unit, but Mr. Goldin

knew very little about the application of the HRV and relied on Venmar to know its

requirements. He knew that the unit was going to be installed in the basement or

some sort of utility room.

[278] When Fasco carried out sound testing, Venmar brought a unit but Mr. Goldin

remembers only one unit. Fasco was successful in reducing the sound, but it did

no safety testing at the time. The unit was at the Fasco plant for a couple of days

and he did not receive any design documents with the unit; he cannot remember

any other discussions. The unit was returned to Venmar at the completion of the

testing.

[279] He next spoke with representatives of Venmar with respect to overheating

problems and the CSA and UL certification. He agreed that in 1998, there was

correspondence about an overheating problem. However, it was Fasco’s view at

that point that the electrical protection did not need to change.

Evidence of Karyn Manley

[280] Ms. Manley has a degree in electrical engineering from Washington

University and was an electronic intelligence officer with US Air Force from 1986

to 1991. She was employed by Fasco as a senior motor design engineer from

1995 until 2000. After she left Fasco, she had two other periods of employment

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making similar motors for two other companies. In 2005, she started with Ford

Motor Corporation in Kentucky as a wiring engineer.

[281] In Ms. Manley’s role at Fasco, she applied customer requests to Fasco

motors, created motor samples, created and reviewed production prints, and

helped out on the floor in Ozark, Missouri. At that time, there were three or four

application engineers at the Ozark plant.

[282] Before Ms. Manley started at Fasco, she knew generally about electrical

mechanical devices and how they worked. She understood that motors could

overheat and could catch fire. She knew about thermal protectors but not how they

worked. When she started, she had a very basic understanding of thermal

protectors. In effect, she learned about thermal protectors on the job. She

understood that thermal protectors could fail in an open or closed state, but only

after she had started working with Fasco.

[283] When she started with Fasco in 1995, Ul 507 was either already in force or

became effective shortly thereafter.

[284] Ms. Manley was not aware of the commercial history between Fasco and

Venmar, except that it had been going on for a long time. She was not aware of

what information had been passed between the two companies about the

products.

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[285] She had no specific training about Venmar’s products. Fasco had too many

customers to allow her to focus on one client and Fasco was not geared to know

the applications for thousands of customers. She was not expected to know all of

the applications. She was not usually involved with a customer directly. Rather,

sales representatives were to be the conduit for information to Fasco’s engineering

department. Some of the salespeople, like Mr. Alexander, knew UL’s but some did

not. Mr. Alexander’s role will be referred to below.

[286] When Ms. Manley first started as an application engineer at Fasco, she

worked on sample motors as they came to be developed but was not assigned to

any particular customer. At a later point, she was assigned to a particular inside

sales representative who had particular customers. Those customers, including

Venmar were typically appliance manufacturers.

[287] As part of the design process, she knew as much about the customer as she

was provided by the sales representative or what she could obtain from the

“sample data sheets” forms that she received from the customer by way of the

sales representative. Typically, Ms. Manley might be told about the unit to be

manufactured, but she usually took her information from the data sheets provided

by the customer. It was rare for her to look at the product itself.

[288] When the sample motor was created, the sales representative followed up

with the customer. Thermocouples were attached to at least one sample motor to

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allow the manufacturer to test and record the temperature of the motor while

running it in its own product. The motor would then be ordered by the manufacturer

or it might request that further changes be made. Once the motor was approved

by the manufacturer, Fasco would then build it.

[289] Between 1995 and 2000, the majority of Fasco motors had an auto reset

thermal protectors which was the industry standard at that time. Fasco had a

blanket certification to install auto resets in its motors.

[290] In 1995, Ms. Manley knew that a motor in an unattended location would

possibly have to meet UL 507 certification, but she expected to be advised of that

requirement from the customer. If the motor was subject to UL 507 certification,

that changed the type of thermal protector from an auto reset to a one-shot. In

1996, less than 5% of the motors had one shot protection. These were for attic

fans or other uses that required a UL 507 certification. No one from Venmar told

her that it had to meet the UL 507 requirements.

[291] Mr. Alexander was the outside sales representative for Venmar, and so it

became a customer of Ms. Manley in the late 1990’s. She was aware that at the

time Fasco produced four or five different motors for Venmar. She knew that

Venmar manufactured an HRV but did not know where that would be kept in the

home. As Fasco did not have nondisclosure agreements with Venmar, Ms. Manley

knew only what Venmar told her or from Venmar’s response to her questions. Ms.

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Manley found out that the unit was for residential use during the later discussions

about the motor overheating. However, she did not know the details of the HRV,

or its attended or unattended use. She only knew that Venmar wanted the same

motor with requested changes.

[292] Ms. Manley was aware that there were phone calls and letters from and to

Mr. Alexander concerning overheating Venmar motors. She acknowledged that

she was provided with a burned-out motor from Venmar. Although she could

confirm that it had overheated, she could not determine why it had done so as

there was no evidence of a locked rotor in this motor. Ms. Manley asked for more

burnt out motors, but she did not receive any. She also did not receive a complete

HRV.

[293] She was aware that, as of July 3, 1998, Venmar’s concern was that the auto

reset was not wired in the correct position. From what she had examined, it was