Kane v FCA US LLC | Mar 16, 2022

QUEEN’S BENCH FOR SASKATCHEWAN

Citation: 2022 SKQB 69

Date:

2022 03 16

Docket:

Judicial Centre:

QBG 1756 of 2015

Regina

BETWEEN:

CORINNE KANE,

PLAINTIFF

- and -

FCA US LLC and FCA CANADA INC.,

DEFENDANTS

Counsel:

E.F.A. Merchant, Q.C., and Anthony A. Tibbs

for the plaintiff

Jason W. Mohrbutter, Glenn M. Zakaib,

R. Bevan Brooksbank and Sunny Kim

for the defendants

___________________________________________________________________________

FIAT

ELSON J.

March 16, 2022

___________________________________________________________________________

Introduction

[1]

The proposed representative plaintiff, Corinne Kane, issued this putative

class action in 2015. In it, she alleges that the defendants, FCA US LLC [FCA US] and

FCA Canada Inc. [FCA Canada], collectively described as [FCA] designed,

manufactured and distributed vehicles with certain safety defects, all of which were

identified in regulatory proceedings in the United States and Canada.

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[2]

At the outset, it is noteworthy that the plaintiff relies heavily on the

issuance of notices of defect with respect to the vehicles in question, commonly known

as recall notices or recalls. The plaintiff’s claim, as well as her evidence, suggests there

were 24 recall notices [Recalls] affecting more than 900,000 vehicles in Canada. For

several Recalls, there are no material facts pleaded and no evidence led that any

proposed class members experienced problems or sustained damage from the defects

described in those Recalls. Instead, the Recalls, themselves, stand as the only support

for both the viability of the asserted causes of action and the evidence-based

certification criteria.

[3]

The plaintiff now applies for certification on behalf of the proposed class,

consisting of owners of the vehicles that were the subject of the Recalls. FCA opposes

the application for a variety of reasons. At the same time, it brings an application for

summary judgment to dismiss the action, whether certified or not.

Regulatory Framework for a Motor Vehicle Recall

[4]

Given the importance that the plaintiff attaches to the existence of the

Recalls in this case, it may be helpful to review the regulatory framework for recalls,

particularly as the framework applies to defect notices for motor vehicles. In this way,

the discussion about the plaintiff’s claim, the pleaded causes of action and the

certification requirements will have appropriate context.

[5]

Recalls of manufactured, processed and packaged products have become

a fact of life in Canada and many other jurisdictions worldwide. In Canada, recalls (also

known as “campaigns”) have served as a means by which industries and regulatory

agencies try to ensure compliance with required or expected standards. A wide range

of products and manufactured items may become subject of a recall. Aside from motor

vehicles, recalls can apply to tires, food, pharmaceuticals and medical devices, to name

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a few. The required or expected standards may pertain to potential safety or

environmental problems. They may also pertain simply to whether there are

performance or consumer satisfaction issues.

[6]

In Canada, the required standards, particularly related to potential safety

and environmental concerns, are governed by the relevant statutes and regulations. The

administration and oversight of a particular regulatory process is carried out by the

appropriate government ministry or agency. For example, Health Canada oversees

issues related to food, pharmaceuticals and medical devices while Environmental and

Climate Change Canada oversees issues of an environmental nature, such as emissions

standards. In the context of the present case, Transport Canada oversees issues related

to products used for the transportation of goods and people.

[7]

Transport Canada’s oversight of defects and related concerns in motor

vehicles is conducted under the authority of the Motor Vehicle Safety Act, SC 1993,

c 16 [MVSA]. The recall or “notice of defect” requirements are set out in s. 10 of the

MVSA, which reads as follows:

10(1) A company that applies a national safety mark to any vehicle

or equipment, sells any vehicle or equipment to which a national safety

mark has been applied or imports any vehicle or equipment of a class

for which standards are prescribed shall, as provided for in the

regulations, give notice of any defect in the design, manufacture or

functioning of the vehicle or equipment that affects or is likely to

affect the safety of any person to

(a) the Minister, on becoming aware of the defect; and

(b) the current owner and any other prescribed person, within the

period provided for in the regulations.

(2) A company is not required to give notice of a defect

(a) for which notice has already been given by another company

that manufactured, sold or imported the vehicle or equipment; or

(b) for which a notice of non-compliance has been given under

section 10.1.

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(2.1) If the Minister determines that a defect has not been corrected

in an adequate number of vehicles or equipment for which notice was

given under subsection (1), the Minister may, by order, require the

company to provide, in accordance with any conditions specified in

the order, a subsequent notice to those persons who have not had the

defect corrected. In making this determination, the Minister shall take

into consideration, among other things,

(a) the nature of the defect;

(b) the safety risk arising from it; and

(c) the total number of vehicles or equipment affected.

(3) If the Minister is satisfied that the current owner of a vehicle or

equipment cannot reasonably be determined by a company,

(a) the company shall give notice in any other manner that is

acceptable to the Minister; or

(b) the Minister may exempt the company from the requirement

to give notice to the current owner.

(4) The Minister may, by order, require any company that applies a

national safety mark to any vehicle or equipment, sells any vehicle or

equipment to which a national safety mark has been applied or imports

any vehicle or equipment of a class for which standards are prescribed

to give notice of a defect in the manner specified in the order, if the

Minister considers that it is in the interest of safety.

(4.1) The Statutory Instruments Act [RSC 1985, c S-22] does not

apply to an order made under subsection (2.1) or (4).

(5)

Forthwith on receiving any notice under subsection (1), the

Minister shall forward full particulars of the notice to the minister or

other officer responsible for motor vehicle administration in each

province.

[8]

The procedural requirements for giving a notice of defect are set out in

s. 15 of the Motor Vehicle Safety Regulations, CRC, c 1038 (1978) [MVSR]. For the

purposes of this fiat, it is not necessary to recite s. 15 of the MVSR in full. It is sufficient

simply to note the requirements for: (1) the contents of a notice; (2) timelines for the

notice to be given to current owners and prescribed persons (60 days); and (3) the

specific form of the notice. As for the form of notice, it is notable that s. 15(8) of the

MVSR stipulates that the words “SAFETY” and “RECALL” must be clearly visible.

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[9]

While there is a time limit for the notice, there is no time limit for the

vehicle manufacturer to remedy a defect. If a remedy is not available within 60 days of

the notice of defect, the vehicle manufacturer is obliged to issue an interim notice

which, among other things, informs the recipient that a further notice will be sent when

a remedy is available. When the remedy becomes available, the final notice is given,

including instructions on how the remedy can be carried out.

[10]

Transport Canada maintains information about recalls on its Motor

Vehicles Safety Recalls Database [Database], available to the public through the

agency’s website. In maintaining this information, Transport Canada makes it clear that

a safety recall may identify an entire vehicle model and model year even when only a

particular part is implicated. This qualification is explained on the website through the

following disclaimer:

Please note that not all vehicles in a certain make, model and model

year group are subject to a given safety related recall. This is because

the problem may have been corrected in production before the vehicle

in question was manufactured, or, the vehicle may have a different

engine/powertrain configuration/optional equipment, or it may have

been manufactured in a different plant, as examples. Not all vehicles

within a specified Vehicle Identification Number (VIN) range may be

involved. Thus the description of the problem detailed on the Motor

Vehicle Safety Recalls Database generally starts with the words: “On

certain vehicles…” It is recommended that owners contact the

manufacturer or their local dealer to verify whether or not their vehicle

is involved in a specific recall.

[11]

It is also important to note that not all recalls in the Database are “safety

recalls”. Some are described as “service campaigns”. Service campaigns are voluntary

notifications typically initiated by the manufacturer to address concerns that have come

to its attention, but which are not safety related. Based on evidence presented in these

applications, I understood that Transport Canada typically permits service campaigns

to be included in the Database with a recall number. Presumably, this is done to aid

public awareness of all issues raised by the manufacturer. In the case of FCA Canada,

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it describes its service campaigns as a “customer satisfaction notifications” [CSN].

The Claim: Third Amended Statement of Claim

[12]

The plaintiff in this action originally issued her statement of claim out of

this Court on July 30, 2015. She has since amended her claim on three occasions, such

that it is now her third amended statement of claim. For the sake of brevity, I will simply

refer to it as the “claim”.

[13]

The plaintiff advances this claim on behalf of the proposed class [Class],

consisting of all persons, corporations and other entities that own, lease or otherwise

possess one or more vehicles designed, manufactured and distributed by FCA [Class

Vehicles]. The Class Vehicles are identified in the claim as follows:

 1993-1998; 2002-2008; 2011-2014 model years Jeep Grand

Cherokee;

 2014-2015 model years Jeep Cherokee;

 2009; 2011-2014 model years Dodge Durango;

 2005-2006; 2008-2012 model years Dodge Ram;

 2008-2012 model years Dodge Ram 1500;

 2008-2014 model years Dodge Ram 2500;

 2008-2014 model years Dodge Ram 3500;

 2008-2015 model years Dodge Ram 4500;

 2008-2015 model years Dodge Ram 5500;

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 2009 model year Chrysler Aspen;

 2006; 2009-2010 model years Dodge Dakota;

 2002-2007 model years Jeep Liberty;

 2008-2010 model years Chrysler Town and Country;

 2008-2010 model years Dodge Grand Caravan;

 2009-2010 model years Dodge Journey;

 2006-2008 model years Jeep Commander;

 2008 model year Dodge Magnum;

 2015 model year Chrysler 200;

 2008; 2011-2014 model years Chrysler 300;

 2011-2015 model years Dodge Challenger;

 2008; 2011-2015 model years Dodge Charger; and

 2003-2004; 2013-2014 model years Dodge Viper.

The claim’s premise begins with a description of proceedings conducted

[14]

and/or overseen by the US National Highway Traffic Safety Administration [NHTSA].

According to the claim, these proceedings pertained to 23 recall notices for safety

defects in vehicles designed, manufactured and distributed by FCA US. The claim

further asserts that the NHTSA imposed a fine of US$105 million against FCA US for

having failed to adequately remedy defective vehicles within a reasonable time. The

plaintiff also pleads that FCA US admitted to the failure and further admitted that they

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failed to notify vehicle owners of the existence of any defects in a timely and

appropriate manner. Notably, there is nothing in the claim to describe how the FCA US

admission impacted circumstances in Canada.

[15]

Following the pleaded reference to the NHTSA proceedings, the

plaintiff’s claim asserts that FCA filed 24 Recalls with Transport Canada related to the

same safety defects. These Recalls pertained to the Class Vehicles. There are 11

generically described safety defects identified in the claim. A description of the alleged

safety defects, and the vehicles to which they are said to pertain, appear in the next

several paragraphs.

[16]

Ignition Switch Defect – The plaintiff alleges that five Recalls identified

three ignition switch defects. The Recalls were #2011-096 on March 2, 2011; #2014-

404 on September 18, 2014; #2015-250 on June 14, 2015; #2014-261 on July 2, 2014

and #2014-312 on July 23, 2014. The Class Vehicles affected included: the 2008

Chrysler 300, 2008 Dodge Charger, 2008 Dodge Magnum, 2008-2010 Chrysler Town

and Country, 2008-2010 Dodge Grand Caravan, 2009-2010 Dodge Journey, 2006-2008

Jeep Commander and 2005-2008 Jeep Grand Cherokee.

[17]

Based on these Recalls, the claim asserts three ignition switch defects.

One alleged defect involves a potential slip of the ignition key from the “run” to the

“accessory” positions while the vehicle is moving, which is said to disable the power

steering, power brakes, air bags and seat belt pre-tensioners. The second alleged defect

involves a failure of the ignition key to return fully to the run position from the start

position when the key is released after the vehicle is started. This is said to affect various

electrical functions and increase the potential of the engine stalling. The third alleged

defect involves an inadvertent slip of the ignition key from the “on” to the “accessory”

positions while driving. This is said to result in the engine shutting off which, in turn,

affects power steering, brakes and other features, such as air bags.

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[18]

Braking Defects – The plaintiff alleges that two Recalls identified two

braking defects. The Recalls were #2014-112 on April 2, 2014 and #2015-069 on

February 17, 2015. The Class Vehicles affected included: the 2015 Chrysler 200, 2011-

2014 Dodge Durango, and 2011-2014 Jeep Grand Cherokee.

[19]

Based on these Recalls, the claim asserts two specific braking defects.

One defect is said to result in the “possibility” of the parking pawl to fail, which, when

coupled with the non-use of the parking brake, allows the vehicle to roll away after the

brake pedal is released.

[20]

As for the other defect, the claim alleges that the shell of the brake booster

“may corrode”. This could result in water getting inside and possibly freezing. In turn,

this would result in increased stopping distances and inadequate braking.

[21]

Alternator Defect – The plaintiff alleges that one Recall identified faulty

alternators. That recall was #2014-446 on October 9, 2014. The Class Vehicles affected

included: the 2011-2014 Chrysler 300, 2011-2014 Dodge Challenger, 2011-2014

Dodge Charger, 2011-2014 Dodge Durango and 2012-2014 Jeep Grand Cherokee.

[22]

As for the nature of the fault or defect in the alternators, the claim simply

says that the alternators were “faulty”, resulting in engine stalling and loss of power. It

also says that the fault can increase the “risk of causing a fire.”

[23]

Rear Axle Pinion Nut Defect – The plaintiff alleges that two Recalls

identified one rear axle pinion nut defect. The Recalls were #2013-044 on February 6,

2013 and #2014-582 on December 19, 2014. The Class Vehicles affected included: the

2009 Chrysler Aspen, 2009-2010 Dodge Dakota, 2009 Dodge Durango, 2005, 2009-

2010 Dodge Ram, 2011-2012 Dodge Ram 1500.

[24]

The claim asserts one defect related to rear axle pinion nuts coming loose

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or detaching completely. This is said to cause the rear wheels to lock and loss of vehicle

control, increasing danger to drivers and pedestrians.

[25]

Fuel Tank Defect – The plaintiff alleges that four Recalls identified one

fuel tank defect. The Recalls were #2014-449 on October 29, 2014; #2015-086 on

February 26, 2015; #2015-085 on February 26, 2015; and #2013-220 on June 26, 2013.

The Class Vehicles affected included: the 2010-2014 Dodge Ram, 2010-2014 Dodge

Ram 2500, 2010-2014 Dodge Ram 3500, 2010-2014 Dodge Ram 4500, 2010-2014

Dodge Ram 5500; 2015 Dodge Challenger, 2015 Dodge Charger, 2012-2013 Dodge

Durango, 2012-2013 Jeep Grand Cherokee, 1993-1998 Jeep Grand Cherokee and 2002-

2007 Jeep Liberty.

[26]

The claim asserts one defect related to the location of the fuel tank.

Specifically, the plaintiff alleges that, in certain Class Vehicles, FCA installed the fuel

tank behind the rear axle as opposed to the “safe zone” which is to the front of the rear

axle. This is said to create a greater likelihood of the fuel tank rupturing in a collision

from the rear which, in turn, increases the likelihood of fire.

[27]

The plaintiff also alleges that FCA wrongfully and inadequately installed

trailer hitches on certain of the Class Vehicles in a failed effort to remedy the design

defect. She goes on to assert that FCA “egregiously understated” the seriousness of the

defect by characterizing one of the Recalls as a “voluntary customer satisfaction

campaign”.

[28]

Tie Rod Defect – The plaintiff alleges that two Recalls identified one tie

rod defect. The two Recalls were #2013-396 and #2013-397, both on November 7,

2013. The Class Vehicles affected included: the 2008-2012 Dodge Ram, 2008-2012

Dodge Ram 4500, 2008-2012 Dodge Ram 5500, 2008-2012 Dodge Ram 1500 and

2008-2012 Dodge Ram 2500.

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[29]

The claim asserts a tie rod defect but does not plead any particulars of the

defect. The plaintiff simply pleads that the defect can lead to a total loss of vehicle

control.

[30]

Mirror Wiring Defect – The plaintiff alleges that one Recall identified a

mirror wiring defect. The Recall was #2014-275 on July 3, 2014. The Class Vehicles

affected included: the 2011-2014 Dodge Durango and 2011-2014 Jeep Grand

Cherokee.

[31]

The claim asserts one mirror wiring defect in the sun visor vanity mirrors.

Beyond this, no particulars are given about the defect other than that it could cause a

fire.

[32]

Clutch Interlock Switch Defect – The plaintiff alleges that one recall

identified a clutch interlock switch defect. The Recall was #2014-583 on December 19,

2014. The Class Vehicles affected included: the 2006 Dodge Dakota and 2006 Dodge

Ram.

[33]

The claim asserts a clutch interlock switch defect but does not plead any

particulars of the defect. The plaintiff simply pleads that the defect can lead to

unintended vehicle movement.

[34]

Airbag Defect – The plaintiff alleges four Recalls identified an airbag

defect. The Recalls were #2012-378 on November 9, 2012; #2013-046 on February 7,

2013; #2015-039 on January 28, 2015 and #2015-040 also on January 28, 2015. The

Class Vehicles affected included: the 2002-2004 Jeep Grand Cherokee, 2002-2003 Jeep

Liberty and 2003-2004 Dodge Viper.

[35]

The claim asserts an airbag defect but does not describe particulars of the

defect other than the allegation that it causes airbags to deploy suddenly and for no

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reason, leading to serious injury and damage.

[36]

Door Switch Defect – The plaintiff alleges that one Recall identified a

door switch defect. This Recall was on March 25, 2015. The only Class Vehicle affected

was the 2013-2014 Dodge Viper.

[37]

The claim asserts a door switch defect but does not assert any particulars

of the defect other than to say that it causes failure in the door closing mechanism. It is

said that this can result in doors opening unexpectedly.

[38]

Tire Defect – The plaintiff pleads that the tire defect resulted in one Recall

on May 14, 2015. The Class Vehicles affected included: the 2014-2015 Dodge Ram

4500 and 2014-2015 Dodge Ram 5500.

[39]

The claim asserts a tire defect but describes no particulars of that defect

other than to say that the installed tires were inadequate and could result in failure.

[40]

For each of the 11 pleaded defects, the claim alleges the potential for

physical injury or death or property damage because of the defect. In describing this

potential, the plaintiff employs such phrases as “increasing the risk of injury or death”;

“significantly increasing the likelihood of serious injury or death”; “could cause a fire”;

“can lead to unintended vehicle movement”; “can lead to serious injury and damage”;

or “increasing risk of crash, injury and property damage”. In addition to the potential

for physical injury or property damage, the claim asserts that the defects, as identified

in the Recalls, result in “negative stigma” associated with the affected vehicles. This is

said to result in decreased resale value.

[41]

The essence of the plaintiff’s allegations on these defects is captured in

the portion of the claim described as the “overview” of the Recalls. There, at paragraphs

71 and 72 of the claim, the plaintiff pleads the following:

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71. The defects in the Class Vehicles render them dangerous to

operate, and subjects owners, passengers, and third parties, to an

increased risk of an accident leading to personal injury and death.

72. Each of the models of Class Vehicles have a common but not

identical number of the same defects and all Class Members share

danger and loss of value of their Class Vehicle due to the defects

of their Class Vehicle.

[42]

As will become apparent later in this fiat, it is significant that the plaintiff

does not plead the assertion, or material facts to support the assertion, that the defects

represented a “real, substantial and imminent” danger of physical injury or property

damage.

[43]

In terms of remedy, the plaintiff pleads that each Class member is

justified in claiming at least one or more of the following:

a. termination of the sale or lease of the Class Vehicle in question and

reimbursement of the purchase price or lease amounts paid, including

taxes, licence and registration fees, security deposit and down

payment; or, alternatively, damages for the diminished value of the

Class Vehicle;

b. damages for the costs associated with the defect or repairs to the

Class Vehicles;

c. damages for loss of use and enjoyment of their Class Vehicles;

d. damages for trouble, inconvenience and loss of time;

e. damages for anxiety and fear; and

f. punitive and/or exemplary damages.

[44]

The causes of action pleaded in the claim include:

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a. negligence in the design, manufacture and marketing of the Class

Vehicles, the particulars of which are:

i. failure to properly and adequately design, develop and test the

Class Vehicles;

ii. failure to notify Class Members and safety authorities of the

defective Class Vehicles as well as failure to properly and

adequately warn of the dangers attended upon use of the Class

Vehicles;

iii. failure to utilize other feasible and safer design alternatives in their

design of the Class Vehicles;

b. breach of express and implied warranties that the Class Vehicles

were safe for use;

c. violation of s. 52 of the Competition Act, RSC 1985, c C-34, by the

use of false and misleading representations or omissions of material

fact in connection with the marketing, promotion and sale of the

defective Class Vehicles;

d. violation of federal and provincial consumer protection legislation,

including The Consumer Protection and Business Practices Act,

SS 2013, c C-30.2; and

e. unjust enrichment in that FCA retained funds paid by the Class

Members, such that the purchase price for each Class Vehicle should

be disgorged and distributed to Class Members on a Class wide

aggregate basis.

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[45]

In the certification application, the plaintiff asks the Court to certify 17

questions as common issues. Paraphrased somewhat from the wording in her

application, these questions are as follows:

1. Do some or all of the proposed Class Vehicles contain the defects as

outlined in the Recalls? If so, which ones?

2. If the answer to Issue No. 1 is “yes”, when did or should the defendants

have known of the defect?

3. Are there defects in the proposed Class Vehicles as outlined in the Recalls

that affect or are likely to affect the safety of any person?

4. Did the defendants provide adequate warnings as to the fitness of the

proposed Class Vehicles?

5. Did the defendants knowingly, recklessly or negligently breach a duty to

warn the plaintiff and other Class Members of the risks associated with

the proposed Class Vehicles?

6. Did the defendants knowingly, recklessly or negligently breach a duty of

care in their manner of handling the Recalls?

7. Did the defendants knowingly, recklessly or negligently breach any

statutory obligations in their manner of handling the Recalls?

8. Did the defendants breach a duty of care owed to the plaintiff and other

Class Members and, if so, when and how?

9. Did the defendants breach a duty of care owed to Class Members by

designing, developing or manufacturing proposed Class Vehicles with

the defect?

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10. Did the defendants breach express or implied warranties by selling the

proposed Class Vehicles with the defect?

11. Did the defendant’s breach statutory warranties pursuant to s. 16 or s. 19

of The Consumer Protection and Business Practices Act or similar

legislation in other provinces or territories by selling proposed Class

Vehicles with the defect?

12. Did the defendants breach s. 52 of the Competition Act by selling

proposed Class Vehicles with the defect?

13. Whether the defendants have been unjustly enriched by the receipt of

revenues from the proposed Class Vehicles?

14. Whether the Class Members suffered a corresponding deprivation by

paying for the proposed Class Vehicles?

15. Whether there is any juristic reason justifying retention by the defendants,

of some or all of the revenues from the sale of the proposed Class

Vehicles?

16. Whether the defendants should be required to disgorge the revenues they

received from the sale of the proposed Class Vehicles to the plaintiff and

other Class Members and, if so, how much and should this disgorgement

be made in the aggregate or how should this disgorgement be distributed

among Class Members?

17. If one or more of the above common issues are answered affirmatively,

can the amount of damages payable by the defendants be determined on

an aggregate basis? If so, in what amount and who should pay such

damages to the Class Members?

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Evidence

[46]

Under this heading, I will describe the evidence received by the Court

with respect to both the certification application and the defence application for

summary judgment. While each application provides a somewhat different context for

the Court’s consideration of the evidence, I am satisfied that little purpose would be

served in a separate description of the evidence for each application.

[47]

In all, the Court received 11 affidavits, eight affidavits presented on

behalf of the plaintiff and three affidavits presented on behalf of FCA Canada. Five

members of the proposed Class deposed to their experience with their vehicles. These

members include the plaintiff, Travis Brassington, Wade Ramsum, Laura Medeiros and

Brad Winder.

[48]

In addition to these proposed Class Members, the plaintiff also presented

affidavit evidence from Michael Peerless and Stephen D. Kertzman, who deposed two

affidavits. Mr. Peerless is an Ontario lawyer serving as co-counsel for the plaintiff.

Mr. Kertzman is a chartered business valuator from Toronto. He was retained by the

plaintiff’s counsel to present an opinion about the losses claimed to have been

experienced by members of the proposed Class and the consistency, or commonality,

of the loss.

[49]

Before turning to the defence evidence, I think it important to note that,

outside of the actual Recalls, the plaintiff presented no independent evidence about the

nature or quality of the defects referenced in the Recalls. In particular, the plaintiff

presented no expert evidence about: (1) the severity of the risks associated with the

defects; (2) the standard of care expected of a vehicle manufacturer in the design of

motor vehicles; or (3) the manner in which a defect could result in damage to the vehicle

or other operational problems that is likely to cause property damage or personal injury.

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[50]

The three affidavits presented by FCA Canada were deposed by Stuart

Shaw (two affidavits) and H. Christopher Nobes. Mr. Shaw is the Manager of Vehicle

Safety and Regulatory Compliance for FCA Canada. Mr. Nobes is a chartered business

valuator and chartered professional accountant. FCA retained him to provide an opinion

or critique of the loss analysis presented on behalf of the plaintiff.

Michael J. Peerless

[51]

Mr. Peerless is a partner in the London, Ontario firm of McKenzie Lake

Lawyers LLP. His firm is working with another Ontario law firm and the plaintiff’s

counsel in pursuing this proposed class action. A similar proceeding in Ontario has been

stayed pending the outcome of these applications.

[52]

In his affidavit, Mr. Peerless identified the Recalls the plaintiff relies on

in her claim. With two exceptions, the affidavit’s description of the Recalls is

reasonably consistent with the claim’s allegations. A notable exception relates to the

Recall for the alleged fuel tank defect. Contrary to the claim’s allegations, which

pertained to the location of the fuel tank relative to the rear axle, three of the Recalls

identified in Mr. Peerless’s affidavit did not address that issue. Rather, they pertained

to a fuel heater issue for diesel powered engines, a fuel pump issue and a defect in the

fuel rail crossover hose.

[53]

Another arguable exception is the Recall for the alleged tire defect.

Contrary to the suggested allegation in the claim, this Recall did not identify a defect

in the tires, per se. Rather, the Recall stated that the speed rating for the installed tires

was less than the maximum speed configured for the vehicles configured with a 6.4L

gasoline engine.

[54]

Aside from identifying the specific Recalls, Mr. Peerless also referenced

the NHTSA proceedings in the United States and the consent order, dated July 24, 2015,

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in which FCA US admitted its failure to remedy defects in a timely manner. Mr.

Peerless also deposed to his understanding that a class action has been commenced in

California, which sought relief regarding the tie rod defect in the Dodge Ram vehicles.

That action was settled on March 23, 2017.

[55]

A copy of the consent order was exhibited to Mr. Peerless’s affidavit.

Although Mr. Peerless does not comment on the specific terms of the consent order,

there are two noteworthy features in the document. The first is that the consent order

does not specifically address fault or responsibility for any defect. Rather, the consent

order solely pertains to the assertion that FCA US had not complied with the

administrative processes and timelines established by the NHTSA. At this point I pause

to note that there is no similar circumstance in Canada. Specifically, there is no evidence

that Transport Canada raised any concern about FCA Canada having failed to meet any

of its timelines.

[56]

The second noteworthy feature is that the consent order says nothing

about the responsibilities of FCA Canada. Indeed, as defence counsel is quick to point

out, FCA Canada is not a party to the consent order and had no obligation to do anything

under its terms. Moreover, there is no evidence that the consent order informed any

expectations Transport Canada may have had of FCA Canada.

Stephen D. Kertzman

[57]

In his affidavit evidence, Mr. Kertzman presented opinion evidence as to

possible methodologies for determining whether proposed Class Members experienced

financial loss from the safety defects identified in the Recalls, as well as the impact of

that loss on a class wide basis. Although Mr. Kertzman acknowledged the need for

other means of determining damages related to personal injury, he confined his opinion

to methodologies for measuring the depreciation of the resale value of the Class

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Vehicles. He identified this concept as “Resale Value Loss”.

[58]

For reasons that will become evident from my analysis of the first

certification criterion, I find it is not necessary for me to review Mr. Kertzman’s opinion

in detail. At this stage, it is simply sufficient to note his opinion that Resale Value Loss

could be estimated for the Class Vehicles and that such losses could be calculated on a

class wide basis.

Evidence of the Five Proposed Class Members

[59]

The plaintiff resides in Swift Current, Saskatchewan. In her affidavit, she

deposed that she purchased a 2007 Jeep Liberty in 2011. The exhibited bill of sale

indicates that the before-tax purchase price of the vehicle was $6,095. It also disclosed

an odometer reading of 56,080 km at the time of sale.

[60]

The plaintiff deposed that she became aware of a Recall for her vehicle

in August 2014. The Recall pertained to the location of the fuel tank. Based on the

affidavit of Mr. Peerless, this would be Recall #2013-220 issued by Transport Canada

on June 26, 2013. After becoming aware of the Recall, the plaintiff took her vehicle in

for repairs. As I understand her evidence, the repair consisted of the installation of a

trailer hitch on the back of her vehicle. The plaintiff deposed that the mechanic who

installed the hitch told her that it could not be used for towing and that it was only

installed to prevent serious damage to the gas tank and a possible fire.

[61]

According to the plaintiff, she was extremely concerned about the

circumstances of the Recall and the subsequent repairs. She specifically deposed to her

worry about resale value of her vehicle and the “stigma” associated with a recall for a

“serious safety defect”. On August 4, 2015, she traded in her vehicle. Although she

describes the trade in as a “loss”, the exhibited trade-in invoice describes a trade-in

value of $6,700. It is also noteworthy that the vehicle she purchased in 2015 was a 2011

- 21 -

Jeep Liberty.

[62]

Before leaving the description of the plaintiff’s evidence, it should be

noted that, in the cross-examination of Mr. Kertzman, he acknowledged that the Recall

in respect of the plaintiff’s vehicle was not a safety recall. Rather, it is recorded in the

Database as a voluntary service campaign or, as labelled by FCA Canada, a CSN.

[63]

The second proposed Class member, Mr. Brassington, resides in

Cochrane, Alberta. He deposed that, in March 2009, he purchased a 2008 Jeep Grand

Cherokee in Edmonton for a purchase price of $41,799.50. Mr. Brassington received

two Recalls with respect to his vehicle. One Recall, relating to a drive controller, is not

considered part of this action. The second Recall related to the ignition switch of his

vehicle. Based on Mr. Peerless’s affidavit, this would have been Recall #2014-404,

issued on September 18, 2014. He became aware of the Recall in November 2014 and

the issue was eventually repaired in December 2015. Mr. Brassington deposed that he

had been told the delay in addressing the issue resulted from FCA Canada not having a

“suitable engineering fix” until late 2015.

[64]

Mr. Brassington deposed to his dissatisfaction with the way FCA Canada

handled both Recalls. He also expressed concern about the “negative stigma” associated

with Recalls. It is noteworthy that Mr. Brassington does not depose to having sold his

vehicle since the repairs were done. Even so, he expresses concern about the potential

loss in resale value.

[65]

The third proposed Class member, Mr. Ramsum, resides in Calgary,

Alberta. He deposed that, in October 2009, he purchased a 2009 Dodge Ram 3500 in

Calgary for a purchase price of $59,055. In 2011, the vehicle demonstrated “front end

shaking” and a “lot of play”. He took the vehicle in for repair on three occasions. In his

view, the first two repairs were ineffective. The third repair, which Mr. Ramsum paid

- 22 -

for, seems to have improved the situation, but not entirely. Mr. Ramsum deposed that

he does not know when the severity of the problem will resurface.

[66]

In his affidavit, Mr. Ramsum did not reference any specific Recall. That

said, in counsel’s certification brief, it is argued that this vehicle was subject to Recall

#2013-397, which pertained to the tie rod defect. According to Mr. Peerless’s affidavit,

this Recall was issued on November 7, 2013.

[67]

The fourth proposed Class member, Ms. Medeiros, resides in Kingston,

Ontario. She deposed that, in August 2003, she purchased a 2003 Jeep Liberty in

Kingston for the before-tax purchase price of $32,409. Although she did not describe

any problems she experienced with the vehicle, Ms. Medeiros said that, in 2016, she

became aware of an issue with the location of the fuel tank. This was brought to her

attention by the dealership, following which a retrofit tow kit was installed in June of

that year. She deposed to her understanding that this installation was designed to

prevent the fuel tank from exploding if the vehicle became involved in a rear end

collision. In her affidavit, Ms. Medeiros expressed the view that this was a poor solution

to a serious problem. She believes that she is still left with a dangerous vehicle.

[68]

Although Ms. Medeiros does not specifically reference a Recall in her

affidavit, Mr. Peerless’s affidavit would suggest that her vehicle was subject to the same

recall as the plaintiff’s vehicle, namely, Recall #2013-220 issued on June 26, 2013.

[69]

The fifth proposed Class member, Mr. Winder, resides in Hay Lakes,

Alberta. He deposed that, in May 2015, he purchased a 2010 Dodge Ram 3500 in

St. Albert, Alberta for a purchase price of $22,000. He deposed to his belief, based on

advice from the plaintiff’s counsel, that his vehicle was subject to Recall #2013-397,

which related to the tie rod defect. This is the same Recall that pertained to

Mr. Ramsum’s vehicle, which was issued on November 7, 2013. Mr. Winder deposed

- 23 -

that he began having issues with his vehicle in September 2015. At that time, he began

experiencing something he described as a “death wobble”. He said that, when this

occurs, it feels as if the front tires are trying to go in opposite directions simultaneously.

He also said that the steering wheel would shake violently to the point that the truck

would become uncontrollable.

[70]

Although Mr. Winder took his vehicle for an assessment at an Alberta

dealership, he decided to perform the repairs, himself. He is a certified automotive

mechanic with his own shop and hoist. Since the repair, the wobble is still present,

although not as severe as it once was. The repair cost Mr. Winder some time and money

for the parts which were required.

[71]

There is no evidence of any proposed Class member experiencing

specific problems with the other Recall related defects described in the claim, namely,

the braking defects, alternator defect, rear axle pinion nut defect, mirror wiring defect,

clutch interlock defect, airbag defect, door switch defect or tire defect. Moreover, there

is no evidence of any personal injury or property damage caused by or associated with

any Recall related defect.

H. Christopher Nobes

[72]

Mr. Nobes deposed that he was asked to opine on the methodologies

identified by Mr. Kertzman in measuring Resale Value Loss. As in the case of my

description of Mr. Kertzman’s opinion, I do not intend to review Mr. Nobes’ analysis

in any detail. Suffice it to say that he regarded three of Mr. Kertzman’s methodologies

as unworkable and unreliable in identifying diminished value of the Class Vehicles that

would be attributable to the Recalls.

- 24 -

Stuart Shaw

[73]

In his affidavits, Mr. Shaw deposed to several subjects. They included:

(1) the absence of any connection between FCA Canada and FCA US; (2) the recall

process in Canada, which I have already addressed early on in this fiat; (3) the

circumstances of the Recalls, including the vehicles involved and the outcome of each

Recall; (4) circumstances relating to the vehicles owned by the five proposed Class

Members who deposed affidavits; and (5) Mr. Shaw’s opinion on the data considered

by Mr. Kertzman. Under this heading, I believe it necessary only to review the first and

third of these subjects.

[74]

Regarding the connection between the two named defendants, Mr. Shaw

deposed that FCA Canada is a subsidiary of FCA Ontario Holdings Limited, which, in

turn, is a subsidiary of FCA US. Despite the intercorporate connection, he states that

there is no operational connection. In this regard, Mr. Shaw deposed that FCA US has

never conducted business in Canada, has no offices in Canada and did not participate

in any of the Canadian Recalls.

[75]

With respect to the Recalls, Mr. Shaw reviewed the circumstances of each

of them in considerable detail. That detail need not be restated here. Having said this, I

will summarize his evidence and do so in the context of each of the alleged defects.

[76]

Ignition Switch Defects: Mr. Shaw deposed that the five Recalls for these

defects pertained to three unique vehicle populations and addressed two unrelated

issues. In all but one of the five Recalls, final notices were mailed out, some with

interim notices and some without. In the one case where the final notice was not mailed,

the Recall was superseded before the final notice was mailed. Three Recalls were

resolved in less than a year and the other two within 15 months. The last Recall resolved

on October 15, 2015. According to Mr. Shaw, some of the issues related to the defects

- 25 -

were attributable to a third-party supplier.

[77] Braking Defect: Mr. Shaw deposed that the two Recalls for this defect

addressed two unrelated issues in two unique vehicle populations. Final notices were

mailed within three months and two months of the respective Recalls. One of the

Recalls arose from parts manufactured by a third-party supplier.

[78]

Alternator Defect: Mr. Shaw deposed that the one Recall for this defect

eventually required replacement of the alternator assembly. An interim notice was

mailed within two months of the recall and a final notice was mailed within five months.

FCA Canada determined that the problem was attributable to a design issue with the

third-party supplier.

[79]

Rear Axle Pinion Nut Defect: Mr. Shaw deposed that the two Recalls for

this defect addressed issues in two unique vehicle populations. In each case, interim

notices were mailed approximately two months after the Recalls and final notices were

mailed within eight months and seven months, respectively. In one case, it was felt

necessary to mail a further notice 14 months later.

[80]

Fuel Tank Defect: Mr. Shaw deposed that the Recalls described in the

plaintiff’s claim were not safety defects related to fuel tanks. Recall #2014-449

pertained to a diesel fuel heater electrical connector. An interim notice was mailed

within two months of the Recall and the final notice was mailed within seven months.

Recall #2015-086 pertained to a fuel rail crossover hose. A final notice on this issue

was mailed within two months of the Recall. Recall #2015-085 pertained to a fuel pump

relay designed by a third-party supplier. An interim notice was issued within two

months of the Recall, followed by a final notice mailed less than four months later.

[81]

Mr. Shaw pointed out that the alleged fuel tank defect, as described in the

plaintiff’s claim, was unrelated to the safety defects in the above described Recalls.

- 26 -

Further, he deposed that this issue was not regarded as a safety defect and FCA Canada

was not required to submit a notice to Transport Canada. Rather, it was addressed

through a CSN. A remedy for the issue described in the CSN was available in August

2014 and a follow-up notice was mailed in October 2015.

[82]

Tie Rod Defect: Mr. Shaw deposed that the two Recalls for this defect

addressed one issue related to the potential misalignment within the steering linkage.

In the case of one Recall, an interim notice was mailed approximately six weeks after

the Recall and a final notice was mailed approximately a year and a half after that. In

the case of the other Recall, the final notice was mailed approximately six weeks after

the Recall, with a follow-up notice mailed approximately 20 months later.

[83]

Mirror Wiring Defect: Mr. Shaw deposed that the one Recall for this

defect pertained to the reassembly of the sun visor following a service repair. This

caused the excess wire length to be damaged which posed the risk of a short. The final

notice was mailed approximately two months after the Recall.

[84]

Clutch Interlock Switch Defect: Mr. Shaw deposed that the one Recall

for this defect addressed an issue with the part manufactured by a third-party supplier.

As I understand Mr. Shaw’s evidence, this issue pertained only to Class Vehicles with

manual transmission. Specifically, he said that defect could allow a driver to start the

engine without depressing the clutch pedal, which could result in unintended vehicle

movement. An interim notice was mailed within two months of the Recall and a final

notice issued approximately six weeks later.

[85]

Airbag Defect: Mr. Shaw deposed that the four Recalls for this defect

addressed two unrelated issues affecting two unique vehicle populations for two of the

Recalls within two months of their respective issue. The final notice was not issued

until three years later. As I read Mr. Shaw’s affidavit, the delay appears to have been

- 27 -

attributable to an initial remedy having been superseded by the third Recall, thereby

requiring a different remedy. The fourth Recall, pertaining to a separate airbag issue,

was resolved through a final notice mailed less than two months after the Recall.

[86]

Door Switch Defect: Mr. Shaw deposed that the one Recall for this defect

pertained to the potential for moisture to intrude inside the door and causing a short in

the door switch. This increased the risk of the door opening at low speed. An interim

notice was mailed approximately three months after the Recall, with the final notice

mailed five weeks later.

[87]

Tire Defect: Mr. Shaw deposed that the one Recall for this defect

pertained simply to the programmed maximum speed limit exceeding the maximum

tire speed rating. He also deposed that the remedy was to program the powertrain

control module with a revised maximum speed limit. The final notice was mailed

approximately a month after the Recall.

[88]

In summarizing the Recalls, Mr. Shaw noted that, if the plaintiff’s action

is certified, it would encompass a total of 130 different combinations of models and

model years of FCA vehicles. He further deposed that he was not aware of any

connection or commonality among the defects identified in the Recalls.

Law and Analysis – Certification

The Class Actions Act – s. 6(1)

[89]

The requirements for certification of a class action are well known. In

Saskatchewan, they are set out in s. 6(1) of The Class Actions Act, SS 2001, c C-12.01

[CAA], which reads as follows:

6(1) Subject to subsections (2) and (3), the court shall certify an action

as a class action on an application pursuant to section 4 or 5 if the court

is satisfied that:

- 28 -

(a) the pleadings disclose a cause of action;

(b) there is an identifiable class;

(c) the claims of the class members raise common issues, whether

or not the common issues predominate over other issues affecting

individual members;

(d) a class action would be the preferable procedure for the

resolution of the common issues; and

(e) there is a person willing to be appointed as a representative

plaintiff who:

(i) would fairly and adequately represent the interests of the

class;

(ii) has produced a plan for the class action that sets out a

workable method of advancing the action on behalf of the

class and of notifying class members of the action; and

(iii) does not have, on the common issues, an interest that is

in conflict with the interests of other class members.

[90]

As articulated in numerous authorities, a certification contest is not a test

of the action’s merits. Rather, the requirements are to be considered in the context of

the three accepted goals of class proceedings (judicial economy, access to justice and

behaviour modification). The certification requirements provide a framework that

allows for the meaningful realization of the three goals on a class basis. Within this

framework the designated judge is to assess whether the action is appropriately

prosecuted as a class action. See Hollick v Toronto (City), 2001 SCC 68 at para 16,

[2001] 3 SCR 158 [Hollick].

[91]

The focus on the form of a proposed class action defines and informs the

plaintiff’s burden to establish the certification requirements. Because certification is not

a test of the merits, the burden is not unduly onerous, an observation discussed in

Hollick at para 25. The plaintiff need only show “some basis in fact” to establish the

four evidence-based requirements in s. 6(1)(b) - (e). Of course, the cause of action

- 29 -

requirement in s. 6(1)(a) is not evidenced-based. It will be met if it is not “plain and

obvious” that the claim fails to disclose a cause of action.

[92]

In the aftermath of Hollick, the “some basis in fact” standard for the

assessment of the evidence-based requirements has been a source of considerable

argument and debate. The controlling authority on the application of that standard is

the Supreme Court of Canada judgment in Pro-Sys Consultants Ltd. v Microsoft

Corporation, 2013 SCC 57, [2013] 3 SCR 477 [Pro-Sys]. In Pro-Sys, the Court rejected

the defence submission that “some basis in fact” was synonymous with proof on the

balance of probabilities. In doing so, Rothstein J. revisited the discussion in Hollick and

characterized the “some basis in fact” standard as a “meaningful screening device”.

While not synonymous with proof on the balance of probabilities, Rothstein J.

articulated the view that something more than “symbolic scrutiny” is required.

Specifically, Rothstein J. said the following at paras. 103-104:

103 … it has been well over a decade since Hollick was decided, and

it is worth reaffirming the importance of certification as a meaningful

screening device. The standard for assessing evidence at certification

does not give rise to “a determination of the merits of the proceeding”

(CPA, s. 5(7) [Class Proceedings Act, RSBC 1996, c 50]); nor does it

involve such a superficial level of analysis into the sufficiency of the

evidence that it would amount to nothing more than symbolic scrutiny.

104 In any event, in my respectful opinion, there is limited utility in

attempting to define “some basis in fact” in the abstract. Each case

must be decided on its own facts. There must be sufficient facts to

satisfy the applications judge that the conditions for certification have

been met to a degree that should allow the matter to proceed on a class

basis without foundering at the merits stage by reason of the

requirements of s. 4(1) of the CPA not having been met.

[93]

The analysis in Pro-Sys has been considered in several Saskatchewan

authorities. These include such relatively recent cases as Pederson v Saskatchewan

(Minister of Social Services), 2016 SKCA 142 at paras 28-29, 408 DLR (4th) 661

[Pederson]; G.C. v Merck Canada Inc., 2019 SKQB 42 at para 33; MacInnis v Bayer

- 30 -

Inc. 2020 SKQB 307 at para 104; and Kish v Facebook Canada Ltd., 2021 SKQB 198

at para 12.

[94]

In discussing the certification requirements and their application to the

matter before the Court, I do not intend to address them in the order they appear in

s. 6(1) of the CAA. Given the nature and character of this claim, I think it preferable to

begin the discussion with the two most significant requirements. In my view, they are

the disclosed cause of action and common issues requirements, respectively set out in

ss. 6(1)(a) and (c) of the CAA.

Cause of Action – s. 6(1)(a)

Relevant principles

[95]

The certification requirement in s. 6(1)(a) of the CAA is the only element

for which evidence is neither helpful nor admissible. It is strictly a pleadings-based

stipulation, grounded on whether the plaintiff’s claim, as worded, discloses a cause of

action.

[96]

With the 2015 amendments to the CAA, and some clarifying comments

in Pederson, it is now well settled that the test engaged by s. 6(1)(a) is the so-called

“plain and obvious test”. This is the longstanding test primarily employed in

applications to strike pleadings for failing to disclose a reasonable claim or defence,

under what is now Rule 7-9(2)(a) of The Queen’s Bench Rules. Simply stated, the test

requires the chambers judge to determine whether the alleged facts, if proven to be true,

are sufficient to establish the elements of the asserted cause of action. See Venture

Construction Inc. v Saskatchewan (Ministry of Highways and Infrastructure), 2015

SKQB 70 at para 7, [2015] 10 WWR 467 [Venture] and Reisinger v J.C. Akin Architect

Ltd., 2017 SKCA 11 at para 20, 411 DLR (4th) 687.

- 31 -

[97]

In Venture, this Court summarized the five essential principles to be

considered in a Rule 7-9(2)(a) application:

a. the claim should be struck where, assuming the plaintiff proves

everything alleged in the claim there is no reasonable chance of

success;

b. the jurisdiction to strike a claim should only be exercised in plain and

obvious cases where the matter is beyond doubt;

c. the Court may consider only the claim, particulars furnished pursuant

to a demand and any document referred to in the claim upon which

the plaintiff must rely to establish its case;

d. the Court can strike all, or a portion of the claim;

e. the plaintiff must state sufficient facts to establish the requisite legal

elements for a cause of action.

[98]

While properly particularized pleadings are obviously important, it must

be understood that, in the context of s. 6(1)(a), a claim’s technical failings will rarely

defeat certification. This understanding is reflected in a number of authorities, including

Sorotski v CNH Global N.V., 2007 SKCA 104, [2008] 1 WWR 386, where the Court

concluded that a case management judge should read a statement of claim “with a view

to accommodating inadequacies arising due to ‘drafting deficiencies’”. Similarly, in

Evans v General Motors of Canada Co., 2019 SKQB 98, [2019] 10 WWR 725 [Evans],

a decision of Barrington Foote J.A. (ex officio), the Court accepted that a cause of action

may be disclosed despite the presence of “serious technical flaws”.

- 32 -

Application to the Pleaded Causes of Action

[99]

Under this heading I will separately address each of the causes of action

pleaded in the plaintiff’s claim.

Negligence

[100]

The plea in negligence is set out in paras. 77-80 of the claim, and reads

as follows:

77. The Defendants have a duty to design, manufacture, and market

vehicles that are reasonably safe for their intended uses, and to

provide true and accurate information to the public to prevent

undue risks arising from the foreseeable use of its products.

78. The Defendants were negligent, and breached the duty they

owed to the Plaintiff and Class.

79. The following acts and omissions by the Defendants were

negligent:

(a) Failure to properly and adequately design, develop, and

test Class Vehicles;

(b) The failure to notify the Class Members and safety

authorities of the defective vehicles; failure to properly

and adequately warn of the dangers attendant upon use of

Class Vehicles.

(c) Prior to and during the design, manufacturing, marketing,

and sale of the subject vehicles and thereafter, the

Defendants knew, or in the exercise of reasonable care

should have known, that other feasible and safer design

alternatives were available to them which would have

significantly reduced the risk posed to Class Members by

the Class Vehicles. The Defendants negligently failed to

utilize such other and feasible safer designs in their design

of the Class Vehicles.

80. As a result of the foregoing, the Plaintiff and the Class have

suffered economic damages in an amount to be proven at trial,

members of the Class have suffered personal injury, and

members of the Class have been endangered.

[101]

When considering the plaintiff’s claim in negligence, it must include

- 33 -

material facts pertaining to the tort’s five essential elements. They are: (1) a duty of

care owed by the defendant to the plaintiff; (2) a failure by the defendant to meet the

standard of care required by the duty; (3) compensable damages sustained by the

plaintiff; (4) the compensable damages were caused in fact by the defendant’s breach;

and (5) the compensable damages are not too remote in law.

[102]

At the outset, I do not have concerns about the plea in negligence related

to the first two essential elements. The duty of care said to have been owed by a

manufacturer can be reasonably inferred from the pleaded material facts. Further, I do

not quarrel with the plaintiff’s submission that, by pleading the Recalls, she has pleaded

material facts to support the conclusion that FCA breached the requisite standard of

care. While the Recalls, by themselves, do not amount to proof of substandard conduct,

I am satisfied that, given the legal framework in the MVSA and the MVSR, pleading

their existence is probably sufficient to disclose a cause of action, albeit barely so.

[103]

The elements relating to compensable damages present a more significant

problem. This is because the claim in negligence, whether pleaded as negligent design,

failure to warn or failure to consider safer design alternatives, asserts entitlement to

“economic damages” and damages for personal injury. While damages for negligently

caused personal injury and property loss are clearly compensable, the claim for

“economic damages” is more problematic. As pleaded, the economic damages are said

to take the form of repair/replacement costs and diminished resale value of some Class

Vehicles. In the legal vernacular, these are claims for “pure economic loss”, which

conceptually differ from claims in negligence premised on actual personal injury and/or

damage to property.

[104]

The most recent pronouncement from the Supreme Court of Canada on

claims in negligence for pure economic loss is the judgment in 1688782 Ontario Inc. v

Maple Leaf Foods Inc., 2020 SCC 35, 450 DLR (4th) 181 [Maple Leaf]. Maple Leaf is

- 34 -

the latest in an evolution of judgments on pure economic loss, following earlier

decisions in Rivtow Marine Ltd. v Washington Iron Works, [1974] SCR 1189; Winnipeg

Condominium Corporation No. 36 v Bird Construction Co., [1995] 1 SCR 85

[Winnipeg Condominium]; Martel Building Ltd. v Canada., 2000 SCC 60, [2000] 2

SCR 860; and Deloitte & Touche v Livent Inc. (Receiver of), 2017 SCC 63, [2017] 2

SCR 855 [Livent].

[105]

An understanding of the decision in Maple Leaf is assisted by a brief

review of the facts. The plaintiffs commenced a proposed class action on behalf of

restaurant franchisees over a listeria outbreak at the defendant’s factory. Under their

franchise agreements, the franchisees were obliged to acquire specific meat products

from the defendant. These acquisitions did not occur through a direct contractual

relationship. Rather, orders were placed with a distributor who would, in turn, order

from the defendant. The listeria outbreak forced the defendant to recall the products,

causing the franchisees to experience shortages for six to eight weeks. In the proposed

class action, the franchisees sought compensation for lost past and future sales, past and

future profits, capital value of their franchises and goodwill.

[106]

The defendant brought a motion for summary judgment, positing that it

did not owe the franchisees a duty of care. At first instance, the motion failed. It was

subsequently reversed by the Ontario Court of Appeal.

[107]

In a 5-4 split decision, the Supreme Court of Canada dismissed the appeal.

Two central issues factored in the Court’s decision. First, the majority judgment, jointly

penned by Brown and Martin JJ, found that the defendant did not owe a duty of care in

tort to the plaintiffs. In this regard, the Court reaffirmed its earlier view, expressed in

such authorities as Livent, that the existence of a duty of care depends on the existence

of a sufficiently relevant proximate relationship between the parties and the

foreseeability of injury. Both the majority and dissenting judgments agreed that the

- 35 -

proximity of the relationship remained a “controlling concept” and a “foundation of the

modern law of negligence” (para. 21). While the dissenting justices were prepared to

accept the existence of a duty of care, the majority did not. On the facts of the case in

Maple Leaf, the majority expressed a degree of discomfort about permitting a party to

use tort law to circumvent the kind of multipartite allocation of risk that existed in the

arrangements between the defendant, the franchisor and the franchisees.

[108]

The second issue that factored in Maple Leaf surrounded the Court’s

decision to revisit the liability analysis for the negligent supply of shoddy goods and

structures. Its earlier analysis is reflected in Winnipeg Condominium, where the Court

found that the builder of a condominium property owed a duty of care to a subsequent

purchaser for defective exterior cladding. The cladding had broken off and fallen nine

storeys. As the majority in Maple Leaf observed at para. 43, the duty of care analysis in

that case, articulated by La Forest J., premised itself on the presence of danger in the

form of reasonable foreseeability of injury to persons or property:

43

On that question, and for the Court, La Forest J. recognized a

duty of care based on the reasonable foreseeability of injury to “other

persons and property in the community” (para. 21). In doing so, he

posited that the presence of danger was the linchpin of the analysis.

As he emphasized, the building structure in this case was “not merely

shoddy; it was dangerous” (para. 12 (emphasis added)). Further, he

added that “the degree of danger to persons and other property”

created by the negligent construction is “a cornerstone” of the analysis

that must be undertaken in determining whether the cost of repair is

recoverable in tort (ibid. (emphasis added)). As opposed to merely

substandard construction, only those defects that posed “a real and

substantial danger to the occupants of the building” and had “the

capacity to cause serious damage to other persons and property in the

community” were actionable (para. 21). Returning to this point later

in his reasons, he reiterated:

[T]he facts of the present case ... fall squarely within the category

of what I would define as a “real and substantial danger”. It is clear

from the available facts that the masonry work ... was in a

sufficiently poor state to constitute a real and substantial danger to

inhabitants of the building and to passers-by. The piece of

cladding that fell from the building was a storey high, was made

- 36 -

of 4” thick Tyndall stone, and dropped nine storeys. Had this

cladding landed on a person or on other property, it would

unquestionably have caused serious injury or damage. [Emphasis

added; para. 38.]

Given the “reasonable likelihood that a defect in a building will cause

injury to its inhabitants ... if it poses a real and substantial danger”, the

Court held that a builder owed a duty to take reasonable care in the

design or construction of building structures to avoid creating a real

and substantial danger to health and safety (para. 36).

[109]

Following this observation, the majority in Maple Leaf went on to address

the nature of the plaintiff’s endangered right that will inform the existence of a duty of

care – a right measured in proportion to the threat of harm. Aside from the real and

substantial character of the threat, the measure also includes an “imminent” threat. In

this regard, the majority wrote the following at paras. 44-46:

44

At first glance, the liability rule in Winnipeg Condominium

Corp. No. 36 may appear curious, since it appears as though liability

is imposed not in respect of damage that has occurred to the plaintiff’s

rights, but in respect of a real and substantial danger thereto. As a

general principle, there is no liability for negligence “in the air”, for

“[t]here is no right to be free from the prospect of damage” but “only

a right not to suffer damage that results from exposure to unreasonable

risk” (Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, at para.

33 (emphasis in original); Clements (Litigation Guardian of) v.

Clements, 2012 SCC 32, [2012] 2 S.C.R. 181, at para. 16; Ratych v.

Bloomer, [1990] 1 S.C.R. 940, at p. 964).

45

We maintain, however, that, properly understood, the liability

rule in Winnipeg Condominium Corp. No. 36 is consonant with that

principle. In that case, the Court was clear about the source of the right

to which the duty of care corresponds: the plaintiff’s rights in person

or property (paras. 21, 36 and 42). Where a design or construction

defect poses a real and substantial danger — that is, what Fraser C.J.A.

and Côté J.A. described in Blacklaws v. 470433 Alberta Ltd., 2000

ABCA 175 (Alta. C.A.), at para. 62, as “imminent risk” of “physical

harm to the plaintiffs or their chattels” or property — and the danger

“would unquestionably have caused serious injury or damage” if

realized, given the “reasonable likelihood that a defect ... will cause

injury to its inhabitants”, it makes little difference whether the plaintiff

recovers for an injury actually suffered or for expenditures incurred in

preventing the injury from occurring (Winnipeg Condominium Corp.

No. 36, at paras. 36 and 38; see also Morrison Steamship Co. v.

- 37 -

“Greystoke Castle” (The) (1946), [1947] A.C. 265 (U.K. H.L.), at p.

280; Murphy v. Brentwood District Council (1990), [1991] 1 A.C. 398

(U.K. H.L.), at p. 488, per Lord Oliver of Aylmerton). Thus, the

economic loss incurred to avert the danger “is analogized to physical

injury to the plaintiff’s person or property” (P. Benson, “The Basis for

Excluding Liability for Economic Loss in Tort Law”, in D. G. Owen,

ed., Philosophical Foundations of Tort Law (1995), 427, at p. 429).

The point is that the law views the plaintiff as having sustained actual

injury to its right in person or property because of the necessity of

taking measures to put itself or its other property “outside the ambit of

perceived danger” (ibid, at p. 440; see also Aktieselskabet Cuzco v.

Sucarseco, 294 U.S. 394 (U.S. Sup. Ct. 1935), at p. 404).

46

As we see it, then, recovery for the economic loss sustained in

Winnipeg Condominium Corp. No. 36 was founded upon the idea that,

in the eyes of the law, the defendant negligently interfered with rights

in person or property. We see this as having been La Forest J.’s point

in Winnipeg Condominium Corp. No. 36 where he explained:

If a contractor can be held liable in tort where he or she constructs

a building negligently and, as a result of that negligence, the

building causes damage to persons or property, it follows that the

contractor should also be held liable in cases where the dangerous

defect is discovered and the owner of the building wishes to

mitigate the danger .... In both cases, the duty in tort serves to

protect the bodily integrity and property interests of the

inhabitants of the building. [Emphasis added; para. 36.]

In our view, this normative basis for the duty’s recognition — that it

protects a right to be free from injury to one’s person or property —

also delimits its scope. This is because this basis vanishes where the

defect presents no imminent threat.

[Emphasis added]

[110]

Application of the above analysis to product liability claims for pure

economic loss is obvious. An illustration of this is well reflected in Carter v Ford Motor

Company of Canada, 2021 ONSC 4138 [Carter]. In Carter, the plaintiffs alleged that

the defendant manufactured certain vehicles with defective water pumps, which had

resulted, and could result, in catastrophic damage to the engine. The claim further

alleged that the damage could lead to dangerous situations for drivers and passengers.

Although the plaintiffs claimed that the defect presented a “real and substantial danger”,

they did not plead that it presented an imminent danger. The claim also included pleas

- 38 -

for remedies based on negligent manufacturing, failure to warn, as well as claims

sounding in contract, unjust enrichment and disgorgement.

[111]

The Court certified the claim but only for negligent design. It refused to

certify the other causes of action. In his consideration of the claim in negligence,

Perell J. grouped the proposed class members in three groups relative to the nature of

their product liability claims. Personal injury claimants consisted of proposed class

members who experienced water pump failure and suffered a resulting personal injury.

Property damage claimants consisted of proposed class members who experienced

water pump failure which resulted in damage to the subject vehicle. The third group,

described as Group “C” or the “risk of personal or property damage claimants”,

consisted of proposed class members who had not experienced water pump failure but

had become aware of dangers inherent in the use of their vehicles because of the defect.

[112]

After observing that the plaintiffs had properly pleaded negligent design,

but not negligent manufacturing, Perell J. went on to address the state of the law arising

from the judgment in Maple Leaf. Before discussing the details of the analysis in Maple

Leaf, he began by discussing the impact of that analysis on the circumstances of the

case before him. This discussion, at paras. 98-100, reads as follows (footnotes omitted):

98

As discussed further below, 1688782 Ontario Inc. v. Maple

Leaf Foods Inc., holds that defects in goods that do not present

imminent threats are not compensable under tort law and are properly

only the subject of contract law. In my opinion, Ford Motor Co. is

correct that the pure economic products liability claims for Group “C”

fail to disclose a cause of action because the Plaintiffs do not and

cannot plead material facts capable of establishing a real and

substantial danger to the putative Class Members. In the immediate

case, the pure economic loss claim is not legally tenable, and it is

precluded by the current state of the law. An implication of this

conclusion is that the putative Class Members who constitute Group

“C” must be excluded from the class definition.

99

Pure economic loss is economic loss that is unconnected to

injury to the plaintiff’s person, or to physical damage to property. The

- 39 -

putative Class Members of Group “C” have an allegedly shoddy

product. However, the established case law is that there is no recovery

in negligence for a shoddy product other than for the cost of repairing

a shoddy and dangerous product that presents an imminent real and

substantial danger. The putative Class Members in Group “C,” which

would appear to be the largest sized component of the class, have not

yet suffered any personal or property loss, and their only claim is

therefore a pure economic loss claim.

100 For Group “C” claimants, the Plaintiffs are confronted with the

problems of what in law counts for a product that presents an imminent

real and substantial danger. The Plaintiffs are confronted with the

ironical problem that they appear to be seeking compensation for

repairing an allegedly dangerous product by replacing it with the same

product, and this is ironic because the case law establishes that the

public policy for allowing a pure economic loss claim in negligence

and not leaving the parties to their contractual remedies is to take the

dangerous product out of circulation not to continue its use by

purchasing the same product. The Plaintiffs are confronted with the

problem that apart from claiming the pure economic loss of repairing

an allegedly defective and dangerous product, they are precluded from

other economic losses such as the diminution in value of their vehicle,

which would, in any event, be a difficult claim to prove since the

vehicles will have depreciated in value over many years of purposeful

non-defective use.

Perell J. then summarized the analysis from Maple Leaf at para 103:

103

In their explanation of the law, Justice Brown and Martin

explain that the liability rule from Winnipeg Condominium Corp No.

36 v. Bird Construction Co., which would compensate a person for the

cost of repairing goods was only rationalizable with the general legal

principle that there is no compensation for damages that have not yet

occurred by recognizing a legal right not to suffer damages from the

exposure to an imminent threat to a person’s person or property.

Justices Brown and Martin noted that the liability rule in Winnipeg

Condominium protects a right to be free of a negligently caused real

and substantial danger and does not provide a right to the continued

use of goods. In other words, it is a predicate for recovery for the pure

economic loss that the goods present an imminent real and substantial

danger to health and safety.

[Emphasis added]

[113]

I am persuaded that the analysis in Carter applies here. In her assertion

that Class Members were endangered, the plaintiff has simply pleaded the existence of

- 40 -

danger, without any averment as to the nature or quality of the danger. Importantly, she

does not plead any material facts to support a “real and substantial” danger. More

importantly, she pleads nothing to suggest the “imminent threat” of danger. While

pleading the existence of the Recalls is barely sufficient to disclose a plea of

substandard care, it is not sufficient, by itself, to support a plea of “imminent real and

substantial danger”. Put another way, pleading the Recalls simply to support the

existence of potentially dangerous defects, says nothing about the nature, quality or

imminence of the danger.

[114]

Accordingly, while I find that the claim barely discloses a cause of action

for negligence, it can only be certified to the extent the negligence can be said to have

caused proposed Class Members to suffer a personal injury. Unlike the situation in

Carter, this claim does not allege, or even hint, that any Class Members experienced

property damage arising from an identified defect.

[115]

Accordingly, I find that the claim discloses a cause of action in

negligence, but only to the extent that such negligence caused personal injury.

Breach of Express and Implied Warranty

[116]

The plea that there was a breach of an express or implied warranty is set

out in paras. 81-82 of the claim, and reads as follows:

81. By marketing, advertising, distributing, and selling defective

products, while misrepresenting or failing to report the dangers

of such products to the public, the Defendants created and

breached both express and implied warranties that the Class

Vehicles were safe for use as public transportation, when in fact,

they were not.

82. As a result of the foregoing, the Plaintiff and the Class have

suffered economic damages in an amount to be proven at trial,

members of the Class have suffered personal injury, and

members of the Class have been endangered.

- 41 -

[117]

It is noteworthy that this excerpt from the claim does not plead any

material facts to identify the basis in law for an express or implied warranty claim. It is

trite law that, other than a manufacturer’s warranty, the existence of an express or

implied warranty can only exist by statute or contract. In the present case, there are no

pleaded material facts to establish the existence of any express or implied warranty. It

necessarily follows that no cause of action is disclosed.

[118]

Before leaving this alleged cause of action, I should note that the

plaintiff’s argument on this point relied on two Ontario decisions, Panacci v

Volkswagen, 2018 ONSC 6312 and Romeo v Ford Motor Co., 2018 ONSC 6772.

Reliance on these authorities is misplaced. In both cases, the plaintiffs had pleaded and

relied on the manufacturer’s new vehicle warranty, which were expressly referenced in

both decisions. That is not the circumstance in the application before this Court.

Violations of the Competition Act

[119]

The plaintiff pleads that FCA breached s. 52 of the Competition Act,

thereby giving rise to a cause of action. This part of the claim is set out in paras. 83-85,

which read as follows:

83. At all times relevant, the Defendants violated section 52 of the

Competition Act, R.S., 1985, c. C-34, by the use of false and

misleading representations or omissions of material fact in

connection with the marketing, promotion and sale of the

defective Class Vehicles. The Defendants communicated the

purported benefits of vehicles they knew were defective, with

the intent that consumers, like the Plaintiff, would purchase a

defective vehicle.

84. As a result of violating the Competition Act, the Defendants

caused the Plaintiff to purchase a Jeep Liberty, and caused other

members of the Class to purchase vehicles from FCA which are

subject to the same and other dangerous defects.

85. As a result of the foregoing, the Plaintiff and the Class have

suffered economic damages in an amount to be proven at trial,

- 42 -

members of the Class have suffered personal injury, and

members of the Class have been endangered.

[120]

The plaintiff’s claim for a cause of action under the Competition Act

engages two provisions of the statute, ss. 36 and 52. While s. 52 sets out specific

obligations of a representor, violations of those obligations can only amount to a cause

of action by the operation of s. 36. The relevant parts of ss. 36 and 52 read as follows:

Recovery of damages

36 (1) Any person who has suffered loss or damage as a result of

(a) conduct that is contrary to any provision of Part VI, or

(b) the failure of any person to comply with an order of the

Tribunal or another court under this Act,

may, in any court of competent jurisdiction, sue for and recover from

the person who engaged in the conduct or failed to comply with the

order an amount equal to the loss or damage proved to have been

suffered by him, together with any additional amount that the court

may allow not exceeding the full cost to him of any investigation in

connection with the matter and of proceedings under this section.

…

False or misleading representations

52 (1) No person shall, for the purpose of promoting, directly or

indirectly, the supply or use of a product or for the purpose of

promoting, directly or indirectly, any business interest, by any means

whatever, knowingly or recklessly make a representation to the public

that is false or misleading in a material respect.

Proof of certain matters not required

(1.1) For greater certainty, in establishing that subsection (1) was

contravened, it is not necessary to prove that

(a) any person was deceived or misled;

(b) any member of the public to whom the representation was

made was within Canada; or

(c) the representation was made in a place to which the public had

access.

[121]

The application of ss. 52(1) and (1.1) in combination with s. 36(1) was

- 43 -

addressed in Singer v Schering-Plough Canada Inc., 2010 ONSC 42, 87 CPC (6th) 276.

In discussing the application of the provisions, Strathy J. (as he then was) emphasized

that, while reliance on the subject representation is not an essential element of a

violation of s. 52(1), causation remains a central requirement. Stated more directly, a

plaintiff must plead and prove a causal connection between the breach and discernible

loss sustained by the plaintiff. A theoretical or abstract loss is insufficient. In this regard,

Strathy J. wrote the following at paras. 107-108:

107 As I have noted, s. 52(1) does not create a cause of action. The

cause of action, or right of action, is created by s. 36. The plain

language of that section makes it clear, as the defendants assert, that

the plaintiff must show both a breach of s. 52 and loss or damage

suffered by him or her as a result of that breach. That can only be done

if there is a causal connection between the breach (the materially false

or misleading representation to the public) and the damages suffered

by the plaintiff. A consumer of sunscreen products cannot recover

damages, in the abstract, simply by proving that the manufacturer

made a false and misleading representation to the public. The failure

of the plaintiff to plead a causal link is fatal to this claim.

108

Section 52(1.1) only removes the requirement of proving

reliance for the purpose of establishing the contravention of s. 52(1).

The separate cause of action, created by s. 36 in Part IV of the

Competition Act, contains its own requirement that the plaintiff must

have suffered loss or damage “as a result” of the defendant’s conduct

contrary to Part VI. It is not enough to plead the conclusory statement

that the plaintiff suffered damages as a result of the defendant’s

conduct. The plaintiff must plead a causal connection between the

breach of the statute and his damages. In my view, this can only be

done by pleading that the misrepresentation caused him to do

something — i.e., that he relied on it to his detriment.

[122]

In the context of product liability cases, a discernible loss can include

circumstances where plaintiffs plead that they acquired a product with less value than

they expected to acquire. This was the case in Rebuck v Ford Motor Company, 2018

ONSC 7405 [Rebuck], where Morgan J. certified a cause of action under the

Competition Act based on the allegation that the defendant misrepresented the fuel

efficiency ratings of certain of its vehicles. At para. 35, Morgan J. concluded that the

- 44 -

plaintiff had properly pleaded loss in the sense that he acquired less value than expected

“—to spend more on gas than he thought he would spend when he purchased the

Vehicle”.

[123]

The alleged misrepresentation in Rebuck involved an alleged act of

commission, namely, the active communication of inaccurate information. In the

context of class actions, such a misrepresentation is often described as a “common

express misrepresentation”. Different considerations apply where a plaintiff alleges that

an act of omission, such as the failure to disclose allegedly material information,

amounts to an implied misrepresentation. One of the first authorities to address this

point is the decision of Strathy J. in Williams v Canon Canada Inc., 2011 ONSC 6571

[Williams]. In Williams, the Court held, at para. 227, that the failure to disclose an

alleged defect or “design deficiency” in a camera did not amount to a misrepresentation

of the kind addressed by s. 52. In this regard, Strathy J. wrote the following:

227

Section 52 requires that there be a “representation.” The failure to

disclose the alleged defect cannot be a “representation.” Nor would it be a

“representation” if one could infer from the warranty that Canon knew of

no inherent defects in the Cameras — an inference that cannot reasonably

be drawn in any event. Finally, what the plaintiffs claim is a “slogan” —

“You always get your shot” — which is not pleaded with any particularity,

is nothing more than puffery and not an actionable representation:

see Telus Communications Co. v. Bell Mobility Inc., 2007 BCSC

518 (B.C. S.C. [In Chambers]) at para. 19 (“on the most powerful network

in Western Canada”); Stone v. Galaxy Motors Inc., [1991] B.C.J. No.

334 (B.C. S.C.) (“best car on the lot”). I am simply unable to find that any

of the pleaded misrepresentations is capable of sustaining a cause of

action.

[124]

Williams was followed in Arora v Whirlpool Canada LP, 2012 ONSC

4642, 24 CPC (7th) 68, aff’d 2013 ONCA 657, 44 CPC (7th) 223, leave to appeal denied

2014 CarswellOnt 3031, 473 NR 387 (note). In that case, the claim for a proposed class

action alleged defects in the self-cleaning mechanism of washing machines

manufactured by the defendant. The claim alleged that the defects resulted in the growth

- 45 -

of mold, mildew and bacteria on inaccessible parts inside the machines. The plaintiffs

asserted a breach of s. 52(1), arguing that the defendant’s failure to advise consumers

of the defect amounted to a misrepresentation by omission. Perell J. rejected the

argument and found it plain and obvious there could be no cause of action under s. 52.

Relying in part on the decision in Williams, Perell J. concluded that the manufacturer

“was not under an obligation to disparage its own product and disclose the alleged

design defect” (para. 197). When this conclusion was affirmed by the Ontario Court of

Appeal, Hoy J.A. expressly adopted the comments of Strathy J. in Williams. He also

noted that, unlike certain other statutes, the Competition Act did not impose a general

duty of disclosure. In this regard, he said the following at para. 50:

50

I agree that where, as here, there is no common express

representation pleaded which could convert an omission into a

misrepresentation by implication, and there is no duty to disclose, it is

plain and obvious that a claim for breach of s. 52 cannot

succeed. Section 52 of the Competition Act does prohibit "material"

false or misleading representations. However, unlike statutes such as

provincial securities legislation, which require the provision of "full,

true and plain disclosure of all material facts" (see e.g. Securities Act,

R.S.O. 1990, c. S-5, s. 56(1)), the Competition Act does not impose a

general duty of disclosure.

[125]

In the present case the plaintiff does not plead anything close to a

common express misrepresentation. Aside from the improper reliance on “omissions of

material fact”, the other references to misrepresentations are deliberately vague and

non-specific. In the context of the claim, read as a whole, I am satisfied that these

references can only be construed as asserting misrepresentations based on failure to

disclose the issues raised in the Recalls. This is insufficient to disclose a cause of action

and I so find.

Violations of Consumer Protection Legislation

[126]

The plea that FCA breached consumer protection legislation, thereby

- 46 -

giving rise to a cause of action, is set out in paras. 86-91 but only with respect to

residents of Saskatchewan. These allegations read as follows:

86. Pursuant to s. 21(1) of The Consumer Protection and Business

Practices Act, SS 2014, c C-30.2 (“The CPA”), FCA is deemed

to give the Plaintiff and Class Members residing in

Saskatchewan the same statutory warranties respecting the

Class Vehicles as a retail seller is deemed to have given

pursuant to s. 19(b) to (h) of The CPA.

87. s. 19(d) of The CPA imposes statutory warranties on FCA to

ensure that the Class Vehicles are of acceptable quality.

88. s. 19(e) of The CPA imposes statutory warranties on FCA to

ensure that the Class Vehicles are fit for their intended purposes

as motor vehicles.

89. s.19(g) of The CPA imposes statutory warranties on FCA to

ensure that the Class Vehicles and all its components are to be

durable for a reasonable period.

90. FCA breached statutory warranties contrary to s. 19(d)-(e) and

(g) of The CPA by selling Class Vehicles with defects subject to

Recall, which are:

(a) of unacceptable quality;

(b) are unfit for their intended purposes as motor vehicles; and

(c) containing defective components are not durable for a

reasonable period.

91. Pursuant to s. 28(1) of The CPA, Class Members who are

Saskatchewan residents are entitled to make a claim for

damages against FCA for breach of statutory warranties.

[127]

In Saskatchewan, the applicable consumer protection legislation is the

CPBPA. It should first be noted that, under the definitions in the CPBPA, FCA Canada

would be a “manufacturer” within the applicable definition. As the plaintiff’s claim

suggests, this has significance in the application of the statutory warranties under s. 19

of the statute. In this regard, ss. 19 and 21 of the CPBPA read as follows:

- 47 -

Statutory warranties

19 If a consumer product is sold by a retail seller, the following

warranties are deemed to be given by the retail seller to the consumer:

(a) that the retail seller has a right to sell the consumer product;

(b) that:

(i) at the time of delivery to the consumer, the consumer

product is and will remain free from any security interest, lien,

charge or encumbrance not expressly disclosed or actually

known to the consumer before the sale is made; and

(ii) the consumer will enjoy quiet possession of the consumer

product except to the extent that it may be disturbed by any

person entitled to any security interest, lien, charge or

encumbrance disclosed or actually known to the consumer

before the sale is made;

(c) if the sale of the consumer product is a sale by description, that

the consumer product corresponds with the description;

(d) that the consumer product supplied under the contract is of

acceptable quality, except that this warranty is deemed not to be

given:

(i) respecting defects specifically drawn to the consumer’s

attention before the contract is made; or

(ii) if the consumer examines the consumer product before the

contract is made, respecting defects that the examination

ought to have revealed;

(e) if the consumer expressly or by implication makes known to

the retail seller any particular purpose for which the consumer

product is being bought, that the consumer product supplied under

the contract is reasonably fit for that purpose, whether or not that

is a purpose for which the consumer product is commonly

supplied, except that this warranty is deemed not to be given if the

circumstances show that:

(i) the consumer does not rely on the retail seller’s skill or

judgment; or

(ii) it is unreasonable for the consumer to rely on the retail

seller’s skill or judgment;

(f) if the sale of the consumer product is a sale by sample:

- 48 -

(i) that the bulk of the consumer product corresponds in

quality with the sample;

(ii) that the consumer is to have a reasonable opportunity to

compare the bulk of the consumer product with the sample;

(iii) that the consumer product is free from any defect that

renders it not of acceptable quality and that would not be

apparent on reasonable examination of the sample;

(g) that the consumer product and all its components are to be

durable for a reasonable period, having regard to all the relevant

circumstances of the sale, including:

(i) the description and nature of the consumer product;

(ii) the purchase price;

(iii) the express warranties of the retail seller or manufacturer;

and

(iv) the necessary maintenance the consumer product

normally requires and the manner in which it has been used;

(h) if the consumer product normally requires repairs, that spare

parts and repair facilities will be reasonably available for a

reasonable period after the date of sale of the consumer product.

…

Manufacturers deemed to give statutory warranties

21(1) For the purposes of subsection (2), “retail seller” includes those

persons who are excluded from the definition of retail seller in clause

10(1)(k).

(2) Subject to subsection (3), the manufacturer of consumer products

is deemed to give to consumers of those consumer products the same

statutory warranties respecting those consumer products as the retail

seller is deemed to have given pursuant to clauses 19(b) to (h).

(3) A manufacturer of consumer products is liable only for the

manufacturer’s own breach of the statutory warranties or of any

express or additional written warranties that the manufacturer has

given to consumers and, without limiting the generality of the

foregoing, the application of subsection (2) is subject to the following:

(a) no provision of clause 19(b) applies respecting any security

interest that is not created by the manufacturer or any lien, charge

or encumbrance not arising as the result of any act or default on

the manufacturer’s part;

- 49 -

(b) no manufacturer is bound by any description applied by the

retail seller to the consumer products without the authority or

consent of the manufacturer;

(c) for the purposes of clause 19(d), the consumer is deemed to

have notice of a defect if disclosure of the defect was made

directly or indirectly to the retail seller and was intended by the

manufacturer to reach the consumer and in the normal course of

events could reasonably be expected by the manufacturer to reach

the consumer;

(d) no provision of clause 19(e) applies if, without the consent of

the manufacturer, any consumer product:

(i) is sold by a retail seller to a consumer as being fit for a

purpose that is not the ordinary purpose of the product; or

(ii) at the time of sale, is in a state, age or condition that makes

it unreasonable for the consumer to conclude that the

consumer product is fit for the purpose for which it is

commonly supplied.

[128]

These provisions were considered in Evans. There the plaintiffs alleged

that a particular vehicle model had a defect that resulted in the leak of coolant which,

in turn, resulted in other issues, including performance problems. Barrington-Foote J.A.

concluded that, by the operation of ss. 19 and 21 of the CPBPA, a cause of action existed

and that it had been properly pleaded. In describing the combined operation of ss. 19

and 21 of the CPBPA, Barrington-Foote J.A. wrote the following at para. 47:

[47]

The statement of claim also alleges the defendants breached

statutory warranties pursuant to s. 19, as the Cruze had the defect. That

section deems that certain warranties are given by retail sellers.

Although the statement of claim does not allege that GM is a retail

seller, s. 21 provides that a manufacturer of consumer products is

deemed to give the warranties specified in s. 19(b)-(h). Those

warranties include a warranty the consumer product is of acceptable

quality and, if the consumer makes known the purpose for which the

consumer product is being bought, that it is fit for that purpose. There

is also a warranty that “the consumer product and all its components

are to be durable for a reasonable period”. In my view, the statement

of claim discloses a cause of action for breach of warranties of

acceptable quality and fitness for the purpose imposed by s. 19 of

the CPBPA.

- 50 -

It is noteworthy that, in Evans, Barrington-Foote J.A. was not satisfied that the claim

established causes of action under consumer protection legislation in other provinces.

Accordingly, he granted the plaintiff leave to amend the statement of claim to identify

the breaches of consumer protection legislation in other jurisdictions.

[129]

The most obvious difference between the application in Evans and the

application before this Court is the number of alleged defects and the number of

vehicles affected. A common issues trial pertaining to only one defect for one particular

model of vehicle would clearly be much easier to conduct. That said, the issue here

does not pertain to the difficulty and the conduct of such a trial. Rather, the issue here

is simply whether the statement of claim, as pleaded, discloses a cause of action under

the statutory warranty provisions of the CPBPA. As cumbersome as it may be to

conduct a common issues trial based on this cause of action, I am satisfied that the cause

of action is, at the very least, disclosed in the pleading, but only for claims in

Saskatchewan.

[130]

While I find there is a disclosed cause of action under the CPBPA, I think

it important to note that the remedies for a breach of the relevant warranties are set out

in s. 28 of the legislation. These statutory remedies, which are in addition to other

remedies to which a consumer may be entitled, depend on whether the breach is

remediable and of a substantial character. Where a breach is remediable and not of a

substantial character, the responsible party is required to “make good the breach free of

charge”. If this is not done within a reasonable time, the consumer is entitled to recover

all reasonable costs incurred in having the breach remedied elsewhere. Further, the

consumer is also entitled to recover damages for reasonably foreseeable losses arising

from the breach.

[131]

Conversely, where the breach is of a substantial character or is not

remediable, the consumer is entitled to reject the consumer product and recover the

- 51 -

purchase price from the responsible party. In addition, the consumer may also recover

damages for reasonably foreseeable losses arising from the breach.

[132]

As for claims under similar legislation in other provinces, it is not

sufficiently pleaded in the claim. Accordingly, and following the approach in Evans,

leave is granted to amend the claim to address application of the legislation in other

jurisdictions.

Unjust Enrichment

[133]

The plea alleging unjust enrichment is set out in paras. 99-101 of the

claim, and reads as follows:

99. The Plaintiff and Class unknowingly conferred a benefit upon

the Defendants by paying for a vehicle which was in fact,

unreasonably defective and dangerous for use as a vehicle.

100. The circumstances, as described in this Statement of Claim are

such that allowing the Defendants to retain the money paid by

the Plaintiff and Class would be inequitable.

101. The Defendants have been unjustly enriched at the expense of

the Plaintiff and the Class and, as a matter of equity, the

Defendants should be required to make them whole by

disgorging the purchase price of each vehicle which should be

ordered disgorged and distributed on a Class wide aggregate

basis.

[134]

In the class action jurisprudence, involving product liability claims,

courts have certified causes of action for unjust enrichment. The decisions of this Court

in such authorities as Evans and Thorpe v Honda Canada Inc., 2011 SKQB 72, 373

Sask R 71, are examples of such findings. In my view, these authorities have now been

overtaken by the Supreme Court of Canada judgment in Atlantic Lottery Corporation

Inc. v Babstock 2020 SCC 19, 447 DLR (4th) 543 [Atlantic Lottery]. I am persuaded

that Atlantic Lottery, along with a very recent decision of the Alberta Court of Appeal,

has shone a new light on the concept of restitution for unjust enrichment – one that

- 52 -

fundamentally alters its application to class actions for product liability cases. I will

explain.

[135]

In Atlantic Lottery, the Supreme Court of Canada recognized the

existence of two forms of gain-based remedies, namely, “restitution” and

“disgorgement”. In doing so, the Court noted, at paras. 23-24, the substantive

distinction between the two. According to the majority judgment, written by Brown J.,

restitution applies in “circumstances where a benefit moves from a plaintiff to a

defendant, and the defendant is compelled to restore that benefit”. Conversely,

disgorgement refers to “awards that are calculated exclusively by reference to the

defendant’s wrongful gain”, irrespective of damage suffered by the plaintiff (para. 23).

Articulated more directly at para. 24, Brown J. wrote the following:

24 In sum, then, restitution for unjust enrichment and disgorgement

for wrongdoing are two types of gain-based remedies… Each is

distinct from the other: disgorgement requires only that the defendant

gained a benefit (with no proof of deprivation to the plaintiff required),

while restitution is awarded in response to the causative event of

unjust enrichment…where there is correspondence between the

defendant’s gain and the plaintiff’s deprivation … .

[136]

The Court expressly rejected the notion that disgorgement amounted to

an independent cause of action. Rather, it held that disgorgement should be viewed as

an alternative remedy for certain forms of wrongful conduct. Where the alleged

wrongful conduct amounts to negligence, Brown J. concluded that disgorgement

without proof of damage is inconsistent with such an allegation. The inconsistency is

reflected in the fact that proof of damage is, as already discussed, an essential element

of liability in negligence. At paras. 32-33, Brown J. described this inconsistency as

follows:

32 I acknowledge that disgorgement is available for some forms of

wrongdoing without proof of damage (for example, breach of

fiduciary duty). But it is a far leap to find that disgorgement without

proof of damage is available as a general proposition in response to a

defendant’s negligent conduct. Determining the appropriate remedy

- 53 -

for negligence, where liability for negligence has not already been

established, is futile and even nonsensical since doing so allows “the

remedy tail [to] wag the liability dog” (Haida Nation v. British

Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511,

at para. 55). This observation applies with no less force to the plaintiff

who seeks disgorgement, since the availability of gain-based relief lies

in “aligning the remedy with the injustice it corrects” (E. J. Weinrib,

“Restitutionary Damages as Corrective Justice” (2000), 1 Theor. Inq.

L. 1, at p. 23 (emphasis added)).

33

It is therefore important to consider what it is that makes a

defendant’s negligent conduct wrongful. As this Court has

maintained, “[a] defendant in an action in negligence is not a

wrongdoer at large: he is a wrongdoer only in respect of the damage

which he actually causes to the plaintiff” (Clements (Litigation

Guardian of) v. Clements, 2012 SCC 32, [2012] 2 S.C.R. 181, at para.

16). There is no right to be free from the prospect of damage; there is

only a right not to suffer damage that results from exposure to

unreasonable risk (E. J. Weinrib, The Idea of Private Law (rev. ed.

2012), at pp. 153 and 157-58; R. Stevens, Torts and Rights (2007), at

pp. 44-45 and 99). In other words, negligence “in the air” — the mere

creation of risk — is not wrongful conduct. Granting disgorgement for

negligence without proof of damage would result in a remedy “arising

out of legal nothingness” (Weber, at p. 424). It would be a radical and

uncharted development, “[giving] birth to a new tort over night”

(Barton, Hines and Therien, at p. 147).

[137]

The potential impact of Atlantic Lottery on class actions for product

liability became clear in Spring v Goodyear Canada Inc., 2021 ABCA 182, 459 DLR

(4th) 315 [Spring]. The claim in Spring centred on a 2012 recall notice pertaining to six

types of tires that the defendant manufactured at one of its plants within a defined

period. The recall warned that the defect could result in tread separation. Although the

representative plaintiff received the notice, he subsequently learned that his tires were

manufactured outside the recall period. Three days later, one of his tires failed.

[138]

In the claim issued on behalf of the proposed class, the representative

plaintiff’s allegations went well beyond the recalled tires. Instead, the plaintiff alleged

potential manufacturing defects in 51 types of tires. The case management judge

certified the claim as a class action, finding that it disclosed causes of action for

- 54 -

negligence in the design and manufacture of the tires, breach of the duty to warn of the

dangerous product, unjust enrichment and waiver of tort.

[139]

In a per curiam judgment of the Alberta Court of Appeal, the certification

order was set aside. There were two central reasons for the Court’s decision. One of the

reasons articulated by the Court pertained to the issue of commonality, a matter I will

address later in this fiat.

[140]

The other central reason pertained to the claim for unjust enrichment. In

this regard, the Court noted that the plaintiff sought both restitution for unjust

enrichment and disgorgement of the defendant’s profits. After referencing the

distinction between restitution and disgorgement, as discussed in Atlantic Lottery, the

Court held that the allegations of negligent manufacture or design, if proved, could not

support the three essential elements of an unjust enrichment claim, namely (1)

enrichment of the defendant; (2) a corresponding deprivation of the plaintiff; and (3)

the absence of any juristic reason for the enrichment. Addressing the deprivation

element, the Court held that the class members acquisition of a set of tires negated any

suggestion they were deprived. As for the absence of juristic reason for the defendant’s

enrichment from the sale of the tires, the Court found that such a notion was inconsistent

with the acquisition of a benefit pursuant to a valid contract. The Court’s reasons in this

respect are articulated in paras. 51-52:

51

Even though there was no direct contractual link between

Goodyear and the class members, there is no principled reason to limit

the “juristic reason” for benefits to those derived from a direct contract

between the plaintiff and the defendant. Just as products liability tort

law accepts that there is a duty owing from the manufacturer to the

ultimate consumer despite the absence of a direct contract, so the

benefit obtained by the manufacturer is the same despite the absence

of that contractual link. If the ultimate consumer gets the product he

or she paid for, the manufacturer’s duty in tort has been satisfied. The

whole premise of manufacturer’s products liability is that if a

manufacturer delivers a defective product to the end consumer, the

manufacturer is liable. It is inconsistent to say that if the manufacturer

- 55 -

delivers a properly manufactured product to the end consumer, there

is no juristic reason for the manufacturer’s gain. There is a juristic

reason for the benefit (profit) that accrues to the manufacturer:

Williams v Canon Canada [2011 ONSC 6571] at para. 232.

52

The claim for restitution can provide no incremental benefit to

members of the class:

(a) Class members who received a set of tires that did not fail,

notwithstanding any latent defect, would have suffered no

detriment. Mere “risk” is not a legally recognized detriment.

(b) Class members who received a set of tires that prematurely

became unusable because they suffered tread separation would

be entitled to the residual replacement value of those tires.

(c) Class members, like the representative plaintiff, who

suffered personal injury or property damage as a result of tread

separation would have a claim for damages, including a claim

for the replacement cost of the tires.

If the class members can prove negligent manufacture or design of

their tires, they will have an adequate remedy in tort. As pointed out

in Atlantic Lottery at para. 68, a class action to pursue a “hollow cause

of action” would not further the goals of class actions: judicial

economy, behavior modification, and access to justice. Resolving

questions of law by striking claims that have no reasonable chance of

success is consistent with the objective of “timely and affordable

access to the civil justice system”: Atlantic Lottery at para. 18.

[141]

As for disgorgement, the Court was not satisfied that the representative

plaintiff’s pleadings established any legal ground for the remedy, rooted either in

negligence or breach of contract. Moreover, if available on either basis, the remedy

would be limited to the value of each class member’s tires.

[142]

In the present case, it must first be noted that the remedy sought for unjust

enrichment is “disgorgement of the purchase price of each vehicle”, followed by

distribution of the disgorged amounts on a Class wide aggregate basis. The plaintiff

does not seek restitution as part of the unjust enrichment claim. This is clearly

inconsistent with the decision in Atlantic Lottery. If there is merit to any claim of unjust

enrichment, the only meaningful remedy is restitution, not disgorgement of any

- 56 -

amounts received by FCA.

[143] Secondly, and more importantly, the plaintiff’s pleaded allegations do not

disclose the required elements of an unjust enrichment claim. Following the analysis

articulated in Spring, the proposed class members could not be said to have sustained a

deprivation when they purchased a class vehicle. Instead of the tires acquired in Spring,

the class members received vehicles. The fact that one or more of the vehicles may have

had safety defects, for which another remedy may be available, does not create the kind

of deprivation contemplated in a claim for unjust enrichment. Moreover, any

enrichment FCA may have contractually received from the sale of a class vehicle,

whether defective or not, cannot be said to have occurred in the absence of juristic

reason.

[144]

For the same reasons identified in Spring, I am satisfied that the plaintiff’s

action for unjust enrichment is doomed to fail and cannot be certified.

Common Issues – s. 6(1)(c)

Relevant principles

[145]

Section 6(1)(c) of the CAA requires that the claims of the class members

raise common issues. As disjunctively defined in s. 2 of the CAA, “common issues” are

either: (a) common but not necessarily identical issues of fact; or (b) common but not

necessarily identical issues of law that arise from common but not necessarily identical

facts. From this definition, it is also notable that s. 6(1)(c) includes the stipulation that

such common issues need not predominate over issues which are particular to

individual class members.

[146]

Canadian courts have long understood that the common issues

requirement is at the heart of class action certification proceedings. The most recent

- 57 -

reaffirmation of this understanding by the Supreme Court of Canada is in Pro-Sys.

There, at para. 106, Rothstein J. described the commonality requirement as the “central

notion of a class proceeding”. In the same passage, he went on to recognize the wisdom

of common litigation concerns being resolved in a central proceeding as opposed to “an

inefficient multitude of repetitive proceedings”.

[147]

When considering the common issues criterion, case management judges

have frequently observed the general propositions which Strathy J. (as he then was)

summarized in Singer v Schering-Plough Canada Inc., 2010 ONSC 42, 87 CPC (6th)

276 [Singer]. These non-exhaustive propositions, drawn from the then leading

authorities, have been directly or indirectly adopted by appellate courts across Canada,

including the Saskatchewan Court of Appeal in Pederson. As recited from para. 140 of

Singer, the summary reads as follows (citations omitted):

140

The following general propositions, which are by no means

exhaustive, are supported by the authorities:

A: The underlying foundation of a common issue is whether

its resolution will avoid duplication of fact-finding or legal

analysis: …

B: The common issue criterion is not a high legal hurdle, and

an issue can be a common issue even if it makes up a very

limited aspect of the liability question and even though many

individual issues remain to be decided after its resolution: …

C: There must be a basis in the evidence before the court to

establish the existence of common issues: … As Cullity J.

stated in Dumoulin v. Ontario [[2005] O.J. No. 3961], at para.

27, the plaintiff is required to establish “a sufficient evidential

basis for the existence of the common issues” in the sense that

there is some factual basis for the claims made by the plaintiff

and to which the common issues relate.

D: In considering whether there are common issues, the court

must have in mind the proposed identifiable class. There must

be a rational relationship between the class identified by the

Plaintiff and the proposed common issues: …

E: The proposed common issue must be a substantial

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ingredient of each class member’s claim and its resolution

must be necessary to the resolution of that claim: …

F: A common issue need not dispose of the litigation; it is

sufficient if it is an issue of fact or law common to all claims

and its resolution will advance the litigation for (or against)

the class: …

G: With regard to the common issues, “success for one

member must mean success for all. All members of the class

must benefit from the successful prosecution of the action,

although not necessarily to the same extent.” That is, the

answer to a question raised by a common issue for the plaintiff

must be capable of extrapolation, in the same manner, to each

member of the class: …

H: A common issue cannot be dependent upon individual

findings of fact that have to be made with respect to each

individual claimant: …

I: Where questions relating to causation or damages are

proposed as common issues, the plaintiff must demonstrate

(with supporting evidence) that there is a workable

methodology for determining such issues on a class-wide

basis: …

J: Common issues should not be framed in overly broad terms:

“It would not serve the ends of either fairness or efficiency to

certify an action on the basis of issues that are common only

when stated in the most general terms. Inevitably such an

action would ultimately break down into individual

proceedings. That the suit had initially been certified as a class

action could only make the proceeding less fair and less

efficient”: …

[148]

To establish the common issues criterion, the plaintiff must meet a two-

part evidentiary test. The test requires some basis in fact to show: (1) that the proposed

common issues actually exist; and (2) that they can be answered across the entire class.

It is only in this way that the Court can assess whether the resolution of the issue will

advance the litigation as a class action. See Kuiper v Cook (Canada) Inc., 2018 ONSC

6487 at paras 98-99.

[149]

Typically, the two-part evidentiary test will be met where the

- 59 -

representative plaintiff shows some basis in fact for the existence of a “credible or

plausible methodology” by which a proposed common issue can be tried. See Pro-Sys

Consultants Ltd. v Infineon Technologies AG, 2009 BCCA 503, 312 DLR (4th) 419. As

I read the authorities, such a methodology is expected to show two things. First, it

should involve evidence of “a plausible claim that is capable of being pursued”; see

Miller v Merck Frosst Canada Ltd., 2013 BCSC 544 at para 166, 100 CCLT (3d) 208,

aff’d 2015 BCCA 353, 81 BCLR (5th) 33. Secondly, the methodology should offer a

realistic prospect of establishing the basis for loss or damage on a class-wide basis. See

Pro-Sys at para 118 (in SCC). While not mandatory, it is common for a case

management judge to receive expert opinion to assist in assessing the value of any such

methodology.

[150]

In the present case, FCA Canada has focused much of its submission on

the principle that a proposed common issue should not be framed in overly broad terms.

This principle is premised on the concern that a vague and generally worded common

issue will inevitably break down into unfair and inefficient individual proceedings. See

Rumley v British Columbia, 2001 SCC 69 at para 29, [2001] 3 SCR 184.

[151]

In the context of proposed class actions for alleged defects in motor

vehicles, FCA Canada commends the Court’s attention to a number of authorities where

the claim focused on a single alleged defect, as opposed to the scenario of multiple

defects in multiple models as reflected in the present claim. Included among the cited

authorities are decisions in Ernewein v General Motors of Canada Ltd., 2005 BCCA

540, 260 DLR (4th) 488 [Ernewein]; Poulin v Ford Motor Co. of Canada Ltd. (2006),

35 CPC (6^th) 264 (Ont Sup Ct); Reid v Ford Motor Co., 2003 BCSC 1632 [Reid]; Koubi

v Mazda Canada Inc., 2012 BCCA 310, 352 DLR (4th) 245; Thorpe v Honda Canada,

Inc., 2011 SKQB 72, 9 CPC (7th) 163; and Evans v General Motors of Canada Co.,

2019 SKQB 98, [2019] 10 WWR 725.

- 60 -

[152]

Two of these authorities deserve comment. In Ernewein, the proposed

class action alleged that the defendant negligently designed certain pickup trucks by

placing the fuel tanks outside the frame rails. The plaintiffs asserted that this amounted

to a design defect that increased the risk of death or injury from side impact collisions.

A lawyer in the firm representing the plaintiffs deposed an affidavit that exhibited a

copy of a 1994 report from the then US Secretary of Transportation that contained

conclusions said to have supported the plaintiffs’ assertions. At first instance, the

certification judge correctly concluded that the exhibited report was not admissible

evidence. Nonetheless, she went on to address commonality on the presumption that

the information in the report was true.

[153]

On appeal, certification of the proposed action was set aside. The British

Columbia Court of Appeal, speaking through Newbury J.A., concluded that there was

no proper basis in fact for the proposition that the fuel tank design raised a question

common to all the plaintiffs such that it would significantly advance the litigation. In

doing so, the Court noted, among other things, that for a proposed question to be

common its resolution must be applicable to all who are bound by it. The Court

addressed the commonly held assumption that product liability claims are particularly

suited to class action proceedings. In the view of Newbury J.A., this assumption is too

simplistic, particularly in the formulation of common questions, which are to be

determined contextually. In this regard, she wrote the following at para. 33:

33 …. Since earlier cases such as Chace v. Crane Canada Inc., 44

B.C.L.R. (3d) 264 (B.C. C.A.) and Campbell v. Flexwatt Corp., 44

B.C.L.R. (3d) 343 (B.C. C.A.), experience has shown that not all

product liability cases lend themselves to certification. In some, the

complexities inherent in problems of proof of the applicable duty of

care over a long period of time, changing manufacturing techniques,

or multi-party involvement in the product delivery chain, have made

the formulation of a common question problematic: see Bittner v.

Louisiana-Pacific Corp. (1997), 43 B.C.L.R. (3d) 324 (B.C. S.C. [In

Chambers]), Caputo, supra, and Gariepy v. Shell Oil Co. (2002), 23

C.P.C. (5th) 360 (Ont. S.C.J.), aff’d (Ont. S.C.J.)). In each instance,

- 61 -

the question must be determined “contextually” — i.e., not on the

basis of a blanket assumption regarding product liability cases but in

light of all the evidence concerning the specific case before the court.

In the case at bar, the plaintiffs failed to establish an evidentiary basis;

i.e., to adduce admissible evidence, for the proposition that the

determination of the real common issues — whether the fuel system

design(s) employed by the defendants breached the applicable

standard(s) of care and created an unreasonable risk of harm to the

plaintiffs — would advance the litigation in a meaningful way. I

conclude that the certification order must therefore be set aside.

[154]

The other decision that deserves comment is Reid. In that case, the

proposed class action alleged that certain of the defendant’s vehicles were equipped

with defective thick film ignition [TFI] modules which could cause the vehicles to stall

without warning. Bearing in mind that the decision predated the judgment in Maple

Leaf, one of the proposed common issues pertained to whether the TFI modules posed

a real and substantial danger. The defendant, who had not yet filed its statement of

defence, resisted certification of this issue on the basis that it was premature because of

the argument that there were other factors which may have played a role in the failure

rate of the TFI modules. Gerow J. disagreed. She was satisfied that, by narrowing the

issue appropriately to questions surrounding the TFI modules, the plaintiff had

presented a proper common issue, which was not overly broad. Although not expressly

said in the decision, I am left with the impression that a claim based on more than one

identifiable defect would have led to a different outcome.

Analysis

[155]

I now turn back to the 17 common issues proposed by the plaintiff. In this

discussion, it is probably helpful to repeat the list here. As advanced by the plaintiff and

her counsel, the proposed common issues are as follows:

1. Do some or all of the proposed Class Vehicles contain the defects as outlined

in the Recalls? If so, which ones?

- 62 -

2. If the answer to Issue No. 1 is “yes”, when did or should the defendants

have known of the defect?

3. Are there defects in the proposed Class Vehicles as outlined in the Recalls

that affect or are likely to affect the safety of any person?

4. Did the defendants provide adequate warnings as to the fitness of the

proposed Class Vehicles?

5. Did the defendants knowingly, recklessly or negligently breach a duty to

warn the plaintiff and other Class Members of the risks associated with

the proposed Class Vehicles?

6. Did the defendants knowingly, recklessly or negligently breach a duty of

care in their manner of handling the Recalls?

7. Did the defendants knowingly, recklessly or negligently breach any

statutory obligations in their manner of handling the Recalls?

8. Did the defendants breach a duty of care owed to the plaintiff and other

Class Members and, if so, when and how?

9. Did the defendants breach a duty of care owed to Class Members by

designing, developing or manufacturing proposed Class Vehicles with

the defect?

10. Did the defendants breach express or implied warranties by selling the

proposed Class Vehicles with the defect?

11. Did the defendant’s breach statutory warranties pursuant to s. 16 or s. 19

of The Consumer Protection and Business Practices Act or similar

- 63 -

legislation in other provinces or territories by selling proposed Class

Vehicles with the defect?

12. Did the defendants breach s. 52 of the Competition Act by selling

proposed Class Vehicles with the defect?

13. Whether the defendants have been unjustly enriched by the receipt of

revenues from the proposed Class Vehicles?

14. Whether the Class Members suffered a corresponding deprivation by

paying for the proposed Class Vehicles?

15. Whether there is any juristic reason justifying retention by the defendants,

of some or all of the revenues from the sale of the proposed Class

Vehicles?

16. Whether the defendants should be required to disgorge the revenues they

received from the sale of the proposed Class Vehicles to the plaintiff and

other Class Members and, if so, how much and should this disgorgement

be made in the aggregate or how should this disgorgement be distributed

among Class Members?

17. If one or more of the above common issues are answered affirmatively,

can the amount of damages payable by the defendants be determined on

an aggregate basis? If so, in what amount and who should pay such

damages to the Class Members?

[156]

At the outset, it must be noted that the Court’s conclusion on the claims

for breach of the Competition Act and unjust enrichment clearly preclude certification

of proposed common issues 12 to 16. The Court has found that these are not plausible

claims that can be pursued on the basis of the pleaded allegations.

- 64 -

[157]

As for the remaining proposed common issues, I find they are framed in

terms that are so broad they would inevitably prevent the litigation from being

conducted, as a class action, in a fair and efficient manner. The only common thread

running through these proposed common issues is that the Class Vehicles were subject

to the Recalls. This common thread says nothing about the disparate nature and

circumstances associated with the safety defects to which the Recalls pertain. It must

be remembered that the Recalls covered 11 safety defects, involving 22 different Class

Vehicles with different model years. In this context, it cannot be said that this common

thread demonstrates any common issues that will help to resolve the claim.

[158]

It is difficult, if not impossible, to meaningfully connect the

circumstances associated with one recalled defect to those of another. For example, a

finding that negligent design led to a mirror wiring defect in a 2013 Jeep Grand

Cherokee will not help in determining whether negligent design also led to tie rod

defects in a 2012 Dodge Ram. Similarly, the circumstances associated with a possible

failure to warn about braking defects in a 2015 Chrysler 200 says nothing about an

alleged failure to warn about airbag defects in a 2003 Jeep Liberty. The comparison

between defects becomes even more troublesome where the defect is singularly

attributable to the actions of a third-party supplier.

[159]

Turning to another aspect of commonality, I note that the plaintiff also

relied, at least in part, on the order of the NHTSA to support her contention on the

proposed common issues. As I understood this submission, the plaintiff suggested that

the consent order between the NHTSA and FCA US amounted to some basis in fact for

commonality – a submission with which FCA strenuously disagreed.

[160]

In my view, the plaintiff’s argument on this point is so absurd that it

borders on the risible. As I observed in the recital of evidence, the consent order in the

United States has no probative value for any of the certification requirements in this

- 65 -

action. The order did not assign any fault or make any liability findings for the presence

of the defects noticed in the NHTSA recalls. While it is true that FCA US admitted fault

for its failure to comply with the applicable timelines in effecting repairs, there is no

similar assignment of blame or admission of fault for the Recalls in Canada. As such,

the consent order has no significance to this action, either in the certification

requirements or on the merits of the action itself.

[161]

In the result, I am not satisfied that any of the proposed common issues

can be certified under s. 6(1)(c) of the CAA. In saying this, I accept that the Court has

found that the plaintiff’s claim discloses two causes of action, namely, for negligence

leading to personal injury and breach of the CPBPA. Based on these two causes of

action, it is conceivable that proper common issues could be proposed, but only if they

pertain to a single defect that caused personal injury or supported a claim for damages

under s. 28 of the CPBPA, or an equivalent provision of another consumer protection

statute. No such common issue has been proposed and I think it would be inappropriate

for the Court, on its own accord, to propose one.

Remaining Certification Requirements – ss. 6(1)(b), (d) and (e)

[162]

In light of my finding that this proposed class action does not raise

common issues, as required by s. 6(1)(c) of the CAA, it is clear that this action cannot

be certified. As such, little purpose is served in a detailed analysis of the other

certification requirements. Instead, I will address these requirements very briefly.

Identifiable Class and Preferable Procedure

[163]

The lack of a common issue with reasonable breadth precludes

certification of the class proposed by the plaintiff. That said, if a properly limited

common issue had been put forward, such as an issue premised on one defect or one

allegedly defective model of vehicle, I think an identifiable class could have been

- 66 -

found. Again, given the two certified causes of action, such a class would necessarily

be limited to persons pursuing personal injury claims or compensable damages under

s. 28 of the CPBPA or an equivalent provision of another consumer protection statute

in another province.

[164]

I also acknowledge that the premises that would support an identifiable

class, as described above, would also support a finding that a class action would be the

preferable procedure for the resolution of properly articulated common issues. In this

regard, I am mindful of the comments of Cromwell J. in AIC Limited v Fischer, 2013

SCC 69, [2013] 3 SCR 949, and the series of questions engaged by such an inquiry,

which he articulated in paras. 27-38. In a better framed action, with reasonably narrow

common issues, I think the answers to these questions would likely favour a class action

as the preferable procedure.

Representative Plaintiff

[165]

At the outset, it must be noted that, even if one or more of the proposed

common issues could be certified, the named plaintiff in this action could not be a

member of any identifiable class. Setting aside the fact that the defect she identified

was not the subject of a formal Recall, the evidence does not disclose that the defect led

to a personal injury or to a loss that would be compensable under a provision similar to

s. 28 of the CPBPA. Given the nature of the two certified causes of action, this would

preclude the representative plaintiff from membership in an identifiable class.

[166]

While lack of membership in the identifiable class is not necessarily

determinative of the issue, the circumstances of this case are such that it is clear the

plaintiff would have no meaningful common interest with any other members of the

class. As such, she could not continue as the action’s representative plaintiff.

- 67 -

Law and Analysis – Summary Judgment

Applicable Law

[167]

On July 1, 2013, the present version of The Queen’s Bench Rules came

into force. Of the new Rules, some of the most significant are those pertaining to

applications for summary judgment, namely, Rules 7-2 to 7-8. These rules were largely

based on the summary judgment rules set out in the Ontario Rules of Civil Procedure,

which have also informed the introduction of similar rules in jurisdictions across

Canada. It would not be unfair to say that the application of summary judgment rules

has fundamentally changed the face of civil litigation in this country. Not surprisingly,

its impact is now felt in class action proceedings.

[168]

Rule 7-2 provides for a party to apply for summary judgment on all or

some of the issues raised in the pleadings, and to do so at any time after the statement

of defence has been filed but before the time and place for a trial has been set. The

criteria to be considered in a summary judgment application is set out in Rule 7-5, which

reads as follows:

7-5(1) The Court may grant summary judgment if:

(a) the Court is satisfied that there is no genuine issue requiring

a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined

by summary judgment and the Court is satisfied that it is

appropriate to grant summary judgment.

(2) In determining pursuant to clause (1)(a) whether there is a

genuine issue requiring a trial, the Court:

(a) shall consider the evidence submitted by the parties; and

(b) may exercise any of the following powers for the purpose,

unless it is in the interest of justice for those powers to be

exercised only at a trial:

(i) weighing the evidence;

- 68 -

(ii) evaluating the credibility of a deponent;

(iii)drawing any reasonable inference from the evidence.

(3) For the purposes of exercising any of the powers set out in

subrule (2), a judge may order that oral evidence be presented by one

or more parties, with or without time limits on its presentation.

(4) If the Court is satisfied that the only genuine issue is a question

of law, the Court may determine the question and grant judgment

accordingly.

(5) If the Court is satisfied that the only genuine issue is the amount

to which the applicant is entitled, the Court may order a trial of that

issue or grant judgment with a reference or an accounting to determine

the amount.

(6) If the Court is satisfied there are one or more genuine issues

requiring a trial, the Court may nevertheless grant summary judgment

with respect to any matters or issues the Court decides can and should

be decided without further evidence.

(7) If an application for summary judgment is dismissed, either in

whole or in part, a judge may order the action, or the issues in the

action not disposed of by summary judgment, to proceed to trial in the

ordinary way.

(8) If an application for summary judgment is dismissed, the

applicant may not make a further application pursuant to rule 7-2

without leave of the Court. 6

[169]

The primary inquiry raised by this rule is whether there is a genuine issue

requiring a trial under Rule 7-5(1)(a). To answer the inquiry, the Court must have regard

to both the mandatory and discretionary considerations set out in Rule 7-5(2). The

leading authority in Canada on this point is the Supreme Court of Canada judgment in

Hryniak v Maudlin, 2014 SCC 7, [2014] 1 SCR 87 [Hryniak]. In Hryniak,

Karakatsanis J., at para 66, summarized the approach a motion’s judge should follow

in addressing these considerations, referencing the Ontario equivalent to Rule 7-5(2):

66 On a motion for summary judgment under Rule 20.04, the judge

should first determine if there is a genuine issue requiring trial based

only on the evidence before her, without using the new fact-finding

powers. There will be no genuine issue requiring a trial if the summary

judgment process provides her with the evidence required to fairly and

justly adjudicate the dispute and is a timely, affordable and

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proportionate procedure, under Rule 20.04(2)(a). If there appears to

be a genuine issue requiring a trial, she should then determine if the

need for a trial can be avoided by using the new powers under

Rules 20.04(2.1) and (2.2). She may, at her discretion, use those

powers, provided that their use is not against the interest of justice.

Their use will not be against the interest of justice if they will lead to

a fair and just result and will serve the goals of timeliness, affordability

and proportionality in light of the litigation as a whole.

[170]

In Saskatchewan, the leading decision of this Court on the application of

Rule 7-5 is the judgment of Barrington-Foote J. (as he then was) in Tchozewski v

Lamontagne, 2014 SKQB 71, 440 Sask R 34 [Tchozewski]. In Tchozewski,

Barrington-Foote J. summarized the analysis in Hryniak and adapted the analysis to the

Saskatchewan scene. That adaptation is now generally well known, and has received

favourable consideration from various judgments of the Saskatchewan Court of Appeal,

including Deren v SaskPower, 2017 SKCA 104.

[171]

In the circumstances of this case, where the parties dispute the application

of Rule 7-5, it is worthwhile to recite the comprehensive analysis from para. 30 of

Tchozewski, where Barrington-Foote J. said the following:

30 The central question posed on a Rule 7-2 application,

accordingly, is whether summary judgment will achieve what

Karakatsanis J. calls (at para. 28) the "principal goal", and Popescul

C.J.Q.B calls "the overarching consideration" (at para. 49, Pervez

[2013 SKQB 377]): that is, a fair process that results in a just

adjudication of the dispute before the court. The answer to this

question calls for an analysis of the affidavit and other evidence

presented and the issues raised by the application, in the context of the

litigation as a whole. In Hyrniak, Karakatsanis J. breaks that analysis

down into discrete steps and key principles -- a "roadmap" -- based on

the various elements of the summary judgment rules. In brief, the key

elements of that roadmap, in the context of a Rule 7-2 application, are

as follows:

1. The court must first decide if there appears to be a genuine

issue requiring a trial within the meaning of Rule 7-5(1)(a)),

based solely on the evidence before the court, and without using

the powers provided by Rule 7-5(2)(b) to weigh the evidence,

evaluate credibility and draw inferences. (Hryniak, para. 66)

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2. There will be no genuine issue requiring a trial if the judge

is able to reach a fair and just determination on the merits based

on the affidavit and other evidence. That will be so if the

summary judgment process:

(a) allows the judge to make the necessary findings of fact;

(b) allows the judge to apply the law to the facts; and

(c) is a proportionate, more expeditious and less expensive

means to achieve a just result than going to trial. (Hryniak,

para. 49)

3. The issue is not whether the summary judgment process is as

thorough or the evidence is as complete as at trial. It is whether

the judge is confident he or she can find the facts and apply the

relevant legal principles so as to fairly resolve the dispute. If the

judge has that confidence, proceeding to trial is generally not

proportionate, timely or cost effective. A process that does not

give the judge confidence in his or her conclusions, on the other

hand, is never proportionate. (Hryniak, paras. 50 and 57)

4. If there appears to be a genuine issue requiring a trial, the

court should next determine if a trial can be avoided by using Rule

7-5(2)(b) powers to weigh evidence, evaluate credibility and draw

inferences, and whether it is in the interests of justice that those

powers be exercised only at trial. (Hryniak, para. 56)

5. In deciding whether there is a genuine issue requiring trial,

and whether it is in the interests of justice to use the powers

provided by Rule 7-5(2)(b) to avoid a trial, the court must consider

the nature of the evidence and issues. It must also consider

proportionality in the context of the litigation as a whole. The

relevant factors may include, but are not limited to:

(a) the complexity of the claim;

(b) the amount at issue;

(c) the importance of the issues;

(d) the relative cost and speed of a summary judgment

application, as compared to trial;

(e) whether better evidence will be available at trial than

on the application, and the nature and extent of the conflict

in the evidence, including:

(i) whether there is competing evidence from

multiple witnesses, the evaluation of which would

benefit from cross-examination;

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(ii) whether credibility determinations are at the heart

of the issues to be determined; and

(iii) whether credibility determinations are made

more difficult by the shortage of reliable documentary

yardsticks.

(f) whether the court is able to fairly evaluate the

evidence, including the extent to which it would assist the

court to have evidence presented by way of a trial narrative,

to hear and observe witnesses and to have the assistance of

counsel in reviewing the facts and the law within the

conventional trial process;

(g) whether summary judgment would resolve all claims

against all parties, or whether a trial will be necessary in any

event, raising, among other things, the possibility of

duplicative proceedings or inconsistent findings of fact; and

(h) whether the application could dispose of an important

claim against a key party, thereby reducing cost and delay.

(Rule 1-3, Hryniak, supra, paras. 58, 60 and 66, and Pervez,

para. 48)

6. The court also has the discretion to permit a party to present

oral evidence pursuant to Rule 7-5(3) if it would allow the court

to reach a fair and just adjudication on the merits and is the

proportionate course of action. (Hryniak, para. 63)

[172]

A more abbreviated description of the above analysis appears in another

decision of this Court. In Auchstaetter v Evolution Homes Ltd., 2016 SKQB 360,

Smith J. observed, at paras. 4 and 5, that the chambers judge must determine whether

the issues raised are sufficiently focused and the material is sufficiently detailed to

allow the Court to do four things: (1) make the necessary findings of fact; (2) apply the

law to those findings; (3) conclude that summary judgment is a proportionate, more

expeditious and less expensive means to achieve a just result; and (4) determine whether

there appears to be no genuine issue requiring a trial.

[173]

In short, Rule 7-5 requires application judges to ask themselves whether

they are comfortable in directing summary judgment based on all the circumstances

before them and the evidence presented. The case law also suggests that a degree of

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caution is required. As laudable as summary judgment disposition may be for many

cases, application judges should avoid overextending their enhanced fact-finding

powers under Rule 7-5(2)(b).

[174]

An example of this is reflected in Hoffart v Carteri, 2020 SKCA 50,

[2020] 7 WWR 34, a case in which one of my judgments was reversed in part. In that

case, the Court heard multiple applications for summary judgment involving fire

damage to a revenue property. The owners of the property brought one of those

applications against their former tenants, who were alleged to be responsible for the fire

damage. The Court concluded that the former tenants were liable for the loss and

assessed damages. In doing so, the Court found there was insufficient evidence to

support the claim for lost rental income but chose to assess property damages despite

the questionable nature of the evidence to support it. On appeal, the Saskatchewan

Court of Appeal set aside the assessment of damages, concluding (correctly I

acknowledge) that the lack of admissible evidence justified a genuine issue for trial. In

doing so, Richards, C.J.S., speaking for the Court, wrote the following at para. 58:

58

In the end, there was not enough admissible evidence to allow

the Chambers judge, on a summary basis, to reach a fair and just

conclusion about the damages that should be awarded in connection

with what the fire had done to the house. There was an issue requiring

a trial on this front and the same logic that led the Chambers judge to

direct a trial on the question of the damages arising from lost rental

income should have led him to direct a trial on the question of the

damages arising from the damage to the house. All of this, of course,

fits comfortably within the scope of Rule 7-5(5) which contemplates

that, when the only genuine issue is the amount to which an applicant

is entitled, a judge may order a trial of that issue.

[175]

An example of a case where the application judge demonstrated

appropriate caution is reflected in Chalupiak & Associates Accounting Services Inc. v

Piapot First Nation, 2018 SKQB 131, where this Court heard the plaintiff’s application

for summary judgment on a claim for the amount of unpaid invoices. Brown J. granted

judgment for part of the plaintiff’s claim, dismissed the claim for some of the other

- 73 -

invoices and directed the balance of the claim to be determined at trial. With respect to

the part of the claim to proceed to trial, he found that there were unresolvable matters

relating to the enforceability of these debts, including the application of possible

limitation periods. As such, he quite properly concluded that this part of the claim could

not be comfortably resolved in a summary fashion.

[176]

Consideration of summary judgment applications in class action

proceedings is a relatively new development, one that tends to provoke sequencing

issues relative to the timing and scheduling of certification applications. Prior to the

hearing of this certification application, the most significant decision on this matter was

in Piett v Global Learning Centre Inc., 2018 SKQB 144, 28 CPC (8th) 417 [Piett]. In

that case, Barrington- Foote J. (as he then was) implicitly observed that a designated

certification judge has the discretion to decide whether certain applications, such as

ones for summary judgment, will be heard before, at the same time as, or after the

certification hearing. While he recognized the general practice that certification

applications should be heard first, he noted that this was not a jurisdictional question.

Rather, the inquiry pertains to how the designated judge “should” sequence such

applications.

[177]

As a footnote to the observation in Piett, I think the decision must be

taken to support the view that designated certification judges are not governed by

Rule 4-9 of The Queen’s Bench Rules, which precludes case management judges from

hearing and deciding summary judgment applications. My reading of Rule 4-9 is that it

applies only to case management judges appointed pursuant to Rule 4-6, and not to

judges designated under s. 4 of the CAA.

[178]

An additional footnote will likely be forthcoming from a pending appeal

to the Saskatchewan Court of Appeal. In this regard, I reference the very recent

chambers decision in Hoedel v WestJet Airline Ltd. 2022 SKCA 27 [Hoedel]. In that

- 74 -

matter, Barrington-Foote J.A. granted leave to appeal from a decision by a designated

certification judge to hear the defendants’ summary judgment applications prior to the

certification application. It is noteworthy that leave to appeal was granted over the

strenuous objections of the defendants. In granting leave, Barrington-Foote J.A.

concluded that there were three issues that merited consideration by a panel of the

Court. The first issue pertained to the plaintiff’s argument that sequencing such

applications should account for the “unique characteristics” of a particular proposed

class action. The second issue pertained to whether questioning, cross-examinations

and document disclosure must be completed before summary judgment is heard and

decided. This was the approach followed by this Court in Churko v Merchant, 2019

SKQB 307, and Distinct Homes Inc. v Anindo, 2020 SKQB 158. Finally, the third issue

pertained to whether the designated judge, by holding that there was sufficient evidence

before the court to determine the issues raised by the summary judgment application,

had possibly predetermined the question whether the circumstances presented no

genuine issue for trial.

[179]

After identifying these issues, Barrington-Foote J.A. summarized his

analysis in paras. 34-36:

34 In my view, these issues are of sufficient merit to be considered

by this Court despite that the sequencing decision was discretionary.

They raise questions of law, or, in the language of Rimmer [2002

SKCA 12], questions as to the nature and proper application of the

criteria to be applied in the exercise of the discretionary power to

sequencing applications and, in particular, summary judgment and

certification applications.

35

These issues as to the sequencing of summary judgment

applications in class actions are of sufficient importance not only to

Mr. Hoedel’s action, but to the field of practice. Sequencing

applications are now common. As WestJet and Air Canada note, the

access to justice concerns which underpinned the decision in Hryniak

v Mauldin, 2014 SCC 7, [2014] 1 SCR 87, are of interest to both

defendants and proposed representative plaintiffs. Class actions serve

unique access to justice purposes. It is beyond question that

certification applications often languish, a factor that the designated

- 75 -

judge considered important in this case. She also made the point that

s. 44 of The Class Actions Act provides that The Queen’s Bench Rules

“apply to class actions to the extent that those rules are not in conflict

with this Act” and that disposing of unmeritorious claims is consistent

with the foundational rules.

36

This appeal would present an opportunity for a panel of this

Court to address the issues engaged by these considerations to the

extent it considers appropriate.

Analysis

[180]

At the outset of my analysis, I am compelled to observe that, based on the

evidence filed, FCA’s argument for summary judgment in its favour is very strong. To

put it simply, the evidence filed at this stage of the proceeding does not support a case

against FCA on the merits of the two causes of action found to be disclosed in the claim.

[181]

The most obvious problem with the case against FCA, as described, is

that it is entirely premised on the defects and service campaigns for which FCA gave

notice in the Recalls. On this point, I acknowledge plaintiff’s counsel vigorous

assertion, in oral argument, that the Recalls amounted to “indicia of negligence”. While

this may be so, such indicia do not amount to proof, on the balance of probabilities, that

FCA failed to observe the requisite standard of care in the manufacture and design of

its vehicles, or that it breached any of the applicable statutory warranties. The indicia

may amount to some basis in fact to support one of the evidence-based certification

requirements. Beyond that, I am not persuaded that the Recalls afford proof of liability.

[182]

Aside from liability, I also agree with FCA’s submission that there is

virtually no evidence of compensable damages for loss. With respect to the claim for

negligence, there is no evidence of personal injury and no evidence of property damage,

the latter of which was not even pleaded in the claim. Moreover, there is no evidence

of loss flowing from any alleged breach of an express or statutory warranty.

[183]

If I were to decide FCA’s application at this stage, I would have no

- 76 -

hesitation in granting it and dismissing the action.

[184]

Having said all of this, I am troubled by the fact that issues surrounding

the sequencing and combination of certification applications and summary judgment

applications remain unsettled. This is particularly reflected in the comments related to

the pending appeal in Hoedel. Applying those comments to the present case, I am

especially mindful of the fact that questioning and disclosure of documents, for the

specific purpose of addressing the summary judgment application, may not yet be

complete.

[185]

Finally, I am mindful of the Court’s findings in this decision about the

disclosed causes of action. These findings have fundamentally changed the nature and

character of this claim, or any part of it that might be pursued in a different form. The

findings may also suggest that the action is no longer worth pursuing.

[186]

Regardless of any appeal that might be taken from that decision, I have,

with palpable hesitation, come to the conclusion that a decision on summary judgment

should be deferred. Aside from anything else, this will provide time for the presently

named plaintiff, the proposed Class Members and their counsel to consider their

positions. Accordingly, I think it best for the Court to adjourn the summary judgment

application sine die.

Conclusion

[187]

In the result, the plaintiff’s application for certification is dismissed.

Although the plaintiff has met the cause of action requirement, albeit in a very limited

way, I am not satisfied that she has met any of the other requirements. In particular, I

do not find any of the proposed common issues can be certified based on the nature of

the claim and the evidence presented.

- 77 -

[188]

While the Court is dismissing the application for certification, it is not

foreclosing the possibility that it could be renewed through a substantially amended

claim that gives regard to the concerns and issues addressed in this decision. In my

view, it is not necessary for the Court to grant leave to renew the application. Rather,

the Court will simply address it, if and when the time comes for it to do so.

[189]

For the reasons referenced in this decision, I am not comfortable in

deciding FCA’s summary judgment application at this time. Accordingly, the summary

judgment application is adjourned sine die to be brought back to the Court for a case

management conference on no less than 30 days notice to the opposing counsel. At such

a conference, the Court will address a timetable for the application to be revisited.

[190]

The defendants shall have their costs in the certification application. The

amount of costs may be spoken to at the request of any of the parties.

J.

R.W. ELSON