COURT OF APPEAL FOR BRITISH COLUMBIA  
Citation:  
Nissan Canada Inc. v. Mueller,  
2022 BCCA 338  
Date: 20221005  
Docket: CA47358  
Between:  
Nissan Canada Inc. and Nissan North America, Inc.  
Appellants  
(Defendants)  
And  
Tobias Mueller  
Respondent  
(Plaintiff)  
FILE SEALED IN PART  
Before:  
The Honourable Justice Griffin  
The Honourable Madam Justice DeWitt-Van Oosten  
The Honourable Mr. Justice Voith  
On appeal from: An order of the Supreme Court of British Columbia, dated  
March 1, 2021 (Mueller v. Nissan Canada Inc., 2021 BCSC 338,  
New Westminster Docket S195075).  
Counsel for the Appellants:  
A. Borrell  
A. Mitretodis  
Counsel for the Respondent:  
E.F.A. Merchant, K.C.  
S.J. Roxborough  
(via videoconference)  
J. Sayce  
B. Kolenda  
A. Ziaie  
Place and Date of Hearing:  
Place and Date of Judgment:  
Vancouver, British Columbia  
April 8, 2022  
Vancouver, British Columbia  
October 5, 2022  
Nissan Canada Inc. v. Mueller  
Page 2  
Written Reasons by:  
The Honourable Justice Griffin  
Concurred in by:  
The Honourable Madam Justice DeWitt-Van Oosten  
The Honourable Mr. Justice Voith  
Nissan Canada Inc. v. Mueller  
Summary:  
Page 3  
The respondent Mr. Mueller obtained an order certifying a class action against the  
Nissan appellants based on allegations that Nissan negligently designed,  
manufactured, and sold a dangerous defective part in their motor vehicles, also  
breaching warranties, amongst other things. Nissan appeals on the basis that the  
causes of action in the claim were bound to fail, and on the basis that there was  
insufficient evidence to establish the common issues, especially regarding the  
defect. Held: Appeal allowed in part in two respects. The judge ought not to have  
certified common issues in respect of the express warranty claim and in respect of  
the claim in unjust enrichment, and so his order in those respects is set aside.  
However, there was otherwise sufficient evidence to establish a basis in fact for the  
allegation of a common defect and the other common issues.  
Reasons for Judgment of the Honourable Justice Griffin:  
Introduction  
[1]  
The appellants, who I will collectively refer to as Nissan, appeal from a  
decision certifying this action against them as a class proceeding under the Class  
Proceedings Act, R.S.B.C. 1996, c. 50 [CPA]. The underlying claim by the  
respondent, Mr. Mueller, alleges that Nissan designed and manufactured certain  
vehicles, in the time frame of 20042009, with defective primary and secondary  
timing chain systems in the engines. There are approximately 64,000 affected  
vehicles within the proposed class.  
[2]  
Nissan attacks Mr. Mueller’s pleading as well as his evidence in support of  
certification.  
[3]  
Nissan argues that the judge erred in concluding that Mr. Mueller had pleaded  
any viable causes of action.  
[4]  
Nissan further argues that the judge erred in finding that the proposed action  
gave rise to common issues respecting alleged negligence and the existence of an  
alleged common defect. Nissan submits that Mr. Mueller had not shown some basis  
in fact for the assertion that the class vehicles showed a common defect, or that the  
defect was dangerous. Nissan submits that this makes the claim a collection of  
individual tort claims for unrecoverable pure economic loss.  
Nissan Canada Inc. v. Mueller  
Page 4  
[5]  
For background, I will turn to the evidence and the judge’s findings, indexed  
as 2021 BCSC 338 [Certification Decision].  
[6]  
I will then address the judge’s findings in respect of Nissan’s arguments that  
each of the causes of action pleaded by Mr. Mueller were bound to fail. These  
arguments are repeated on appeal.  
[7]  
Finally, I will address Nissan’s arguments that the evidence fell short of the  
evidentiary threshold necessary for certification, which has been described as  
requiring “some basis in fact”.  
Certification Judgment  
The Evidence of the Defect  
[8]  
The judge summarized the role of the timing chain mechanism as follows:  
[11] Internal combustion engines use a timing chain mechanism which  
synchronizes the rotation of the crankshaft with the camshaft so that the  
engines’ valves open and close at the correct times. When a timing chain is  
off-sync, the valves will open and close at the wrong time, allowing gasoline  
and air into the cylinder at the wrong part of the piston’s cycle. At first, this  
mistiming will result in a knocking or whirring sound from the engine. If left  
uncorrected, the plaintiff alleges, an off-sync timing chain can lead to  
destruction of the timing chain and catastrophic engine failure. The plaintiff  
alleges that such failure could lead to personal injury.  
[9]  
The evidence is that in the time frame covered by the proposed class, Nissan  
vehicles experienced higher than expected warranty claims related to the timing  
chain mechanisms (at paras. 1415), and that it issued a series of Technical Service  
Bulletins (TSBs) to dealerships, qualified technicians and Transport Canada,  
addressing issues with the timing chain mechanisms (at para. 18). These TSBs were  
a key piece of evidence relied upon by the judge.  
[10] As set out by the judge, the TSBs indicate that noise in the engine is a  
symptom of the timing chain mechanism failure, requiring replacement of the part:  
[163] In this case, the evidence includes two TSBs issued by Nissan.  
[164] Service Bulletin NTB07-042d, dated May 28, 2010, indicates that if  
there is a “buzzing/whining noise” coming from the secondary timing chain  
Nissan Canada Inc. v. Mueller  
Page 5  
system, then both secondary timing chains and both secondary timing chain  
tensioners shoes should be replaced. It informs the service technician to  
submit a “Primary Failed Part” claim to Nissan, using a specific code. It  
relates to the following vehicles:  
2004 2008 Maxima (A34)  
2004 2008 Altima (L31) with VQ35 engine ONLY  
2004 2009 Quest (V42)  
[165] Service Bulletin NTB09-128a, dated May 28, 2010, contains the same  
wording as the prior TSB regarding diagnosis, repair, and replacement of  
parts. It provides a different “Primary Failed Part” code. It relates to the  
following vehicles:  
2005 2010 Pathfinder (R51) VQ40 engine ONLY  
2005 2010 Xterra (N50)  
2005 2010 Frontier (D40) VQ40 engine ONLY  
[11] Mr. Mueller gave evidence regarding his experience with his Nissan vehicle.  
Mr. Mueller deposed that after purchasing his used Nissan vehicle, he had a  
problem with engine noise several years later. He took the vehicle to a Nissan  
dealership for service, and was told that it was a timing chain issue. He was told to  
come back when the problem got worse, which happened. At that time, he was told  
the vehicle required immediate repair or it could risk damage to the engine. He paid  
$2,579.31 to have the vehicle repaired.  
[12] Mr. Mohan, another Nissan purchaser, gave evidence of a similar experience.  
After purchasing a used Nissan vehicle, Mr. Mohan was alerted to a problem by a  
noise in the engine that became louder over time. He took his vehicle to a Nissan  
dealership and was told that the timing chain had failed and needed immediate  
fixing, as major engine damage could be caused if it was left unfixed. He paid  
$1,747.58 to have the vehicle repaired.  
[13] Mr. Mueller also tendered the expert opinion and affidavit of Curtis Wong, a  
certified automotive service technician and automotive shop foreman who has  
worked in the automotive service industry for 13 years. His affidavit included the  
following evidence:  
Nissan Canada Inc. v. Mueller  
Page 6  
10.  
Timing chain is an integral component of an internal combustion  
engine. It is responsible for synchronizing the rotation of the crankshaft and  
the camshafts so that the engines valves open and close at the proper times.  
11.  
A properly tensioned chain is critical to maintaining the timing  
between the pistons and the valves. If a timing chain loosens, it leads first to  
engine noise, and then to progressively worsening problems - misfiring,  
issues with accelerating and - eventually - catastrophic engine failure.  
12.  
In my experience, a properly designed and properly maintained timing  
chain tensioning system should last the lifetime of an engine, which is often  
roughly defined as approximately 250,000 km.  
[14] The judge found the above aspects of Mr. Wong’s opinion to be helpful to  
Mr. Mueller, and noted that Nissan did not provide any contrary opinion evidence: at  
paras. 146, 158.  
[15] Nissan challenged the admissibility of other portions of Mr. Wong’s opinion.  
The judge agreed with some of the objections and accepted that certain portions of  
Mr. Wong’s opinion were inadmissible: at paras. 149, 157.  
[16] It is as yet unknown whether the defect arose from defective design or  
defective manufacturing, or some aspects of both. Mr. Wong was asked for his  
opinion on whether there was a method to determine if there was a design or  
manufacturing defect affecting the class vehicles. His answer was that either a  
mechanical engineer or a design engineer would be able to review the technical  
specifications of the engine and provide an opinion as to whether the defect was a  
result of unsound design, negligent manufacturing or the use of inferior materials for  
the timing chain tensioning system: at para. 155.  
[17] The judge found that the combination of Mr. Mueller and Mr. Mohan’s  
evidence regarding the problems they experienced with their vehicles, Mr. Wong’s  
evidence opining that those problems were related to the timing chain mechanisms,  
and the TSBs relating to the timing chain mechanisms of the proposed class  
vehicles provided sufficient evidence of an engine defect that would be common to  
all members of the proposed class: at paras. 166167.  
Nissan Canada Inc. v. Mueller  
Page 7  
Causes of Action  
[18] The judge considered each of Nissan’s arguments asserting that  
Mr. Mueller’s amended notice of civil claim (“ANOCC) did not properly plead causes  
of action against Nissan.  
[19] The judge considered the test that applies on certification regarding the  
sufficiency of pleadings, namely, whether the plaintiff has established that it is not  
“plain and obvious” that the ANOCC does not disclose a reasonable cause of action;  
or to put it another way, whether it is clear that the claim is bound to fail: at  
para. 38.  
[20] As an overall observation, the judge was not impressed with the lack of clarity  
in the ANOCC, especially the fact that elements of each cause of action were  
scattered through the document: at paras. 4143, 50, 54. However, he noted that  
the ANOCC should be read as a whole: at paras. 57, 67.  
[21] The judge found that the following causes of action as pleaded in the ANOCC  
survived the “bound to fail” test: misrepresentation, negligence and failure to warn,  
breach of express and implied warranty, breach of consumer protection legislation,  
and unjust enrichment (para. 113). I will return to the judge’s findings in this regard  
when I analyze the appellants’ arguments on appeal.  
Additional Findings Regarding the Sufficiency of the Evidence  
Supporting Each Cause of Action  
[22] As mentioned above, the judge found that there was sufficient evidence to  
provide “some basis in fact” of an engine defect that would be common to all  
members of the proposed class: at paras. 139167.  
[23] The judge then found there was sufficient evidence (i.e., some basis in fact),  
for 14 proposed common issues. The common issues that were certified by the  
judge are set out in Appendix A to these reasons.  
[24] On the question of the existence of an engine defect, the proposed common  
issues were as follows (at para. 173):  
Nissan Canada Inc. v. Mueller  
Page 8  
a) Did the class vehicles contain a design, development, or manufacturing  
defect (the “Defect”) affecting the timing chain tensioning system or its  
components that could cause or contribute to increased rates of  
premature timing chain failure, engine failure, engine damage,  
transmission failure, sudden loss of power, or other engine problems  
when driven as intended?  
b) If the answer to (a) is “yes”, when did or should the defendants have  
known of the defect?  
c) Did the Defect in the Class Vehicles cause, contribute, or increase the  
risk of and engine damage, personal injury, or death?  
[25] The judge found that there was evidence in support of these issues being  
common and therefore certified them as common issues: at paras. 174178.  
[26] The judge’s conclusions as to there being some basis in fact for the other  
common issues are as follows:  
a) Misrepresentation: There was some evidence that Nissan was aware of  
the problems and continued to market and sell the vehicles, supporting the  
common issue alleging that Nissan misrepresented the quality of the  
vehicles (at paras. 179184). This common issue is limited to purchasers  
of new vehicles (not used vehicles), and may require subclasses (at  
paras. 181184).  
b) Express and implied warranties: The claim for breach of express warranty  
applies across the class, to those owners who presented a claim during  
the term of the warranty (at para. 186). The claim for breach of implied  
warranties is limited to purchasers of new vehicles, and will require  
subclasses (at para. 187).  
c) Breach of consumer protection and competition legislation: There was  
some evidence to support these common issues, but there would be a  
need for subclasses to address the issue of different legislation in different  
provinces. These common issues are also limited to purchasers of new  
vehicles (at para. 190).  
Nissan Canada Inc. v. Mueller  
Page 9  
d) Failure to warn: There was some evidence in support of the failure to warn  
allegation, raising questions about the timing of Nissan’s knowledge of the  
defect and the continued sale of the vehicles (at para. 192). The existence  
and timing of a duty to warn owners applies across the class and is  
common (at para. 193).  
e) Negligence: The question of whether Nissan breached a duty of care  
owed to class members applies across the class (at para. 195), and there  
was some basis in fact for it (at para. 205).  
f) Unjust enrichment: The unjust enrichment claim is tied to the  
misrepresentation claims, for which there was some evidence in support  
(at para. 197). It appeared that the judge considered this claim limited to  
those members of the class who had a purchase contract with Nissan  
found to be void or illegal (at para. 198).  
[27] The judge found the question of whether Nissan should pay exemplary or  
punitive damages is also common to the class: at para. 202.  
[28] The claim under waiver of tort and the issue of individual damages were not  
common issues: at paras. 200, 204205.  
Other Elements Required for Certification  
[29] The judge found that: there was an identifiable class of two or more persons,  
and Mr. Mueller’s proposed class definition was acceptable (at paras. 130132); a  
class proceeding would be the preferable procedure (at para. 213); and Mr. Mueller  
was a suitable representative plaintiff (at para. 214). To the extent these conclusions  
do not turn on the other issues raised on appeal, Nissan does not challenge them.  
Issues on Appeal and Standard of Review  
[30] Nissan raises a multitude of arguments on appeal.  
[31] The appeal can be divided into arguments as to the sufficiency of the  
pleadings, and arguments as to the sufficiency of the evidence.  
Nissan Canada Inc. v. Mueller  
Page 10  
[32] Nissan submits that the judge erred in finding that the many causes of action  
were properly pleaded and not bound to fail.  
[33] The question of whether a plaintiff’s notice of civil claim discloses a cause of  
action is a question of law, for which the standard of review is correctness: Sharifi v.  
WestJet Airlines Ltd., 2022 BCCA 149 at para. 30; Jiang v. Peoples Trust Company,  
2017 BCCA 119 at paras. 3738.  
[34] Nissan also says that the judge erred in finding that there was sufficient  
evidence to conclude that the action gave rise to common issues relating to the  
alleged dangerous defect.  
[35] In response, Mr. Mueller submits that, in substance, this aspect of the appeal  
is a challenge to the judge’s exercise of discretion and findings of fact after weighing  
the evidence.  
[36] Certification decisions are discretionary and therefore “entitled to substantial  
deference”: 676083 B.C. Ltd. v. Revolution Resource Recovery Inc., 2021 BCCA 85  
at para. 30; Finkel v. Coast Capital Savings Credit Union, 2017 BCCA 361 at  
paras. 5556; AIC Limited v. Fischer, 2013 SCC 69 at para. 65. Deference is  
accorded to the certification judge’s assessment of the evidence, and this Court will  
not interfere with that assessment absent an error in principle or unless the  
certification judge made a palpable and overriding error: Jiang at para. 38;  
Revolution Resource Recovery at para. 30.  
Analysis  
Did the Certification Judge Err in Finding that the Causes of Action were  
Sufficiently Pleaded?  
[37] It is a requirement of certification under s. 4(1)(a) of the CPA that the  
pleadings disclose a cause of action. The question is, assuming all pleaded facts are  
true, whether it is “plain and obvious” that the claim cannot succeed: Trotman v.  
WestJet Airlines Ltd., 2022 BCCA 22 at paras. 42, 46; Alberta v. Elder Advocates of  
Nissan Canada Inc. v. Mueller  
Page 11  
Alberta Society, 2011 SCC 24 at para. 20; Hunt v. Carey Canada Inc., [1990] 2  
S.C.R. 959.  
[38] Nissan takes a narrow view of the pleadings and impermissibly relies on  
evidence to refute the allegations. However, the pleadings are to be analyzed  
liberally, and without consideration of the evidence.  
[39] A problem with reading the ANOCC is that Mr. Mueller makes use of  
headings that are descriptive of causes of action, but paragraphs of the pleading that  
may support that cause of action are found throughout the pleading and are not all  
gathered or cross-referenced under the relevant heading. This drafting technique is  
presumably meant to avoid repetition because many material facts may support  
more than one cause of action, and an element of one cause of action may be an  
element of another cause of action. It is important to read the ANOCC as a whole  
when analyzing whether it is plain and obvious the claims are bound to fail.  
Negligent Design and Manufacture and Failure to Warn  
[40] In summary, Nissan submits that the claims involving negligencenegligent  
design and manufacture and failure to warnmust necessarily fail because there is  
no pleading that the danger created by the product was “sufficiently imminent”.  
Simply put, Nissan says that the claims are for pure economic loss for an alleged  
shoddy product, which is not recoverable in tort unless the defect poses an imminent  
risk of personal injury or property damage. Nissan relies on 1688782 Ontario Inc. v.  
Maple Leaf Foods Inc., 2020 SCC 35 [Maple Leaf Foods].  
[41] In Maple Leaf Foods the Supreme Court of Canada affirmed that there is no  
general right in tort protecting against negligent or intentional infliction of pure  
economic loss, and pure economic loss may only be recoverable in certain  
circumstances: at para. 19. Pure economic loss is economic loss that is not  
connected to a physical or mental injury to a person, or to physical damage to  
property: at para. 17. There are currently three recognized categories of pure  
economic loss: negligent misrepresentation or performance of a service; negligent  
supply of shoddy goods or structures; and relational economic loss: at para. 21. A  
Nissan Canada Inc. v. Mueller  
Page 12  
claim for pure economic loss arising from the negligent supply of shoddy goods may  
arise where the defect poses a “real and substantial danger” that it could cause  
personal injury or property damage: at paras. 4156, citing Winnipeg Condominium  
Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85. A “real and  
substantial danger” is “imminent risk” of “physical harm” to persons or property: at  
para. 45. The Court declined to extend tort liability to non-dangerous products, and  
commented that those claims are “better channelled through the law of contract,  
which is the typical vehicle for allocating risks where the only complaint is of  
defective quality: at para. 47.  
[42] Nissan’s argument that the ANOCC does not plead a sufficiently imminent  
danger to trigger a duty of care in tort ignores the fact that the ANOCC is replete with  
allegations that the defect was dangerous and created safety problems and risks  
that were imminent. The ANOCC expressly pleads that the defect was one that was  
dangerous, because it could cause a sudden engine failure, loss of control of the  
vehicle, exposing occupants to accidents because of an inability to maintain an  
appropriate speed on the road, and thus creating a safety hazard and extreme risk  
of severe personal injury or death to the occupants of the vehicles and class  
members: ANOCC at paras. 13, 23, 2526, 3637, 52(b), 52(g), amongst other  
paragraphs.  
[43] To better appreciate what may constitute a “sufficiently imminent” danger  
created by a defective product, I turn to the facts of Winnipeg Condominium and  
Maple Leaf Foods.  
[44] In Winnipeg Condominium, a piece of cladding fell from the ninth floor of the  
building, but it fell in the middle of the night and no one was injured. A subsequent  
inspection revealed that the entire cladding was defective. The condominium  
corporation, which was a subsequent purchaser, sued the general contractor in  
negligence for the cost of repair and replacement of the entire cladding.  
[45] The Supreme Court of Canada found that there was a duty of care to  
subsequent purchasers of the building, supporting a claim to recover the costs of  
Nissan Canada Inc. v. Mueller  
Page 13  
repair and putting the building back into a non-dangerous state, where the defect  
was discovered prior to any injury but posed a real and substantial danger: at  
paras. 36, 42. The cost of repairs to simply improve the quality, and not the safety of  
the building, were not recoverable: para. 42.  
[46] The key to understanding the duty of care in Winnipeg Condominium was that  
the building defect posed an imminent riskof physical harm to persons or their  
property. This is what created a sufficiently proximate relationship to give rise to a  
duty of care, even though the claim was for pure economic loss: Maple Leaf Foods  
at paras. 4546.  
[47] Maple Leaf Foods did not involve a claim by consumers of a dangerous  
defective product. The claim in that case was by commercial franchisees. The facts  
involved a recall of meat products due to a listeria outbreak. The franchisees were  
required by their franchise agreements to purchase meat products exclusively  
provided by Maple Leaf, but they had no direct contractual relationship with Maple  
Leaf. The franchisees brought a negligence claim against Maple Leaf alleging that  
they suffered economic loss as a result of the meat recall, because of a shortage of  
product and reputational damage affecting sales. However, the franchisees did not  
claim that they were at a risk of personal injury or property damage as a result of the  
product recall.  
[48] The Supreme Court of Canada in Maple Leaf Foods noted that any danger  
posed by the products was only to the ultimate consumer, not to the franchisees,  
and that danger was resolved when the products were recalled and destroyed: at  
paras. 5758. The Court concluded there was no relationship of proximity between  
the franchisees and Maple Leaf comparable to that in Winnipeg Condominium, and  
so no duty of care in negligence was owed by Maple Leaf to the franchisees.  
[49] I return to the context of claims by consumers. It is not uncommon for class  
actions to be brought on behalf of consumers against motor vehicle manufacturers  
after the discovery of a defect affecting a number of similar vehicles, where the  
defect could cause engine failure, allegedly making the defect dangerous. These  
Nissan Canada Inc. v. Mueller  
Page 14  
claims have been found to satisfy the test of pleading a cause of action, and the  
question of whether or not the defect does in fact pose such a danger has been  
found to be a common issue.  
[50] For example, in N&C Transportation Ltd. v. Navistar International  
Corporation, 2016 BCSC 2129, rev’d in part 2018 BCCA 312, leave to appeal to  
SCC refused, 38327 (28 March 2019) [Navistar], a class action was certified against  
a truck manufacturer in relation to alleged defects in the exhaust control systems.  
This Court dismissed the appeal of the certification order and rejected the argument  
that there was no basis in fact to support the contention that the defect was such  
that it rendered the trucks dangerous or unfit. At the same time, this Court allowed a  
cross-appeal in part, ordering the addition of certain common issues relating to a  
misrepresentation claim.  
[51] The certification judge in the present case found at paras. 8586 that the  
allegations in this case align it with the “dangerous products cases”, similar to  
Navistar, as opposed to cases where the claim simply relates to the sale of a poor  
quality product”, such as Arora v. Whirlpool Canada LP, 2012 ONSC 4642, aff’d  
2013 ONCA 657, leave to appeal to SCC refused, 35661 (13 March 2014).  
[52] Another example where a class action was certified against a motor vehicle  
manufacturer, involving defects that could result in a dangerous situation of engine  
failure or stalling, is Panacci v. Volkswagen, 2018 ONSC 6312, also involving the  
timing chain mechanism. See also Bhangu v. Honda Canada Inc., 2021 BCSC 794.  
[53] It is not a universally held view that every defect that could cause sudden  
vehicle engine failure is an imminently dangerous defect. In Carter v. Ford Motor  
Company of Canada, 2021 ONSC 4138, the plaintiff pleaded that the defect in a  
vehicle’s water pump could lead to “immediate catastrophic engine failure” and that  
this could occur without warning (para. 38 of the pleading, cited at para. 13 of the  
reasons). The certification judge found that the plaintiff’s theory that “the water  
pumps at some indeterminate time in the future will degradedid not create an  
Nissan Canada Inc. v. Mueller  
Page 15  
imminent risk: at para. 106. He concluded that the defect was more about durability,  
rather than inevitability of danger: at para. 109.  
[54] A similar approach was followed in Kane v. FCA US LLC, 2022 SKQB 69  
regarding claims for pure economic loss arising from a number of motor vehicle  
defects for which there were recall and service notices. The plaintiff alleged that the  
defects in the class vehicles rendered them dangerous and subjected persons to  
increased risk of an accident leading to personal injury and death. However, the  
certification judge noted that the plaintiff’s pleading did not disclose material facts to  
support a plea of “imminent real and substantial danger”, and refused to certify the  
claims for pure economic loss: at paras. 113115.  
[55] I note that a distinguishing fact in Carter was that six of the vehicle owners  
who swore affidavits in support of certification continued to use their vehicles after  
the failed water pump system was replaced with the same type of system, and  
continued to drive their vehicles: at paras. 39(k), 4045. This understandably  
contributed to the judge’s conclusion that the defect in the water pump system was  
not dangerous.  
[56] The certification judge in Carter relied on Maple Leaf Foods and held that  
there was no duty of care to warn a consumer that the manufacturer’s goods might  
be shoddy, absent the goods posing an imminent danger, and so he refused to  
certify a claim for those purchasers who owned vehicles in which the water pump  
had not yet failed. He only certified a class action in negligence for those class  
members who had vehicles in which the water pump had actually failed and caused  
damage to the vehicle or personal injury to the class member: at paras. 88, 114,  
117. The judge in Carter also adopted the analysis in Maple Leaf Foods concerning  
the limits of a damages claim where there is an ability to discard, rather than repair,  
defective goods: at para. 112.  
[57]  
In this regard, the Court in Maple Leaf Foods held that a breach of the duty  
not to expose persons or property to imminent danger exposes the defendant to  
liability for the cost of averting the danger, not necessarily the cost of repairing a  
Nissan Canada Inc. v. Mueller  
Page 16  
defect per se: at para. 51. Where the danger posed by the good can be reasonably  
addressed by simply discarding it rather than repairing it, the only available remedy  
might be the associated costs of discarding the product, if any: at para. 54.  
[58] Nissan places considerable weight on the “imminent” characterization of the  
danger necessary to support a claim for pure economic loss for defective products,  
relying on Carter to argue that the danger here could not have been imminent if the  
part took years to fail. In Carter, the judge described the danger as one “that may  
happen in the future a yet to be borne danger and one that may never be borne”:  
at para. 111.  
[59] Further, Nissan submits that this Court should adopt the analysis of the  
certification judge in Carter, who considered that given the passage of timebefore  
the alleged defect would result in a potential engine failure, it would be “feasible and  
reasonable [for many putative class members] to simply discard the vehicle, rather  
than have it repaired”: at para. 112.  
[60] Nissan points out that Mr. Mueller’s car was approximately ten years old and  
had been driven more than 110,000 kilometers when the timing chain was repaired:  
Certification Decision at para. 24. Mr. Mohan’s second-hand vehicle had problems  
with the timing chain when it was approximately nine years old, and was repaired at  
just over 100,000 kilometers: at para. 25.  
[61] I take Nissan’s point to be that if the timing chain fails, owners could simply  
discard their vehicles, rather than incur the cost of replacing it, given that the  
vehicles will have significantly depreciated over the time it might take for the timing  
chain to fail.  
[62] I note that Maple Leaf Foods dealt with recalled prepared meat products,  
which, in the hands of a consumer, could readily be discarded.  
[63] Respectfully, in the present case I do not think it can be said, as a matter of  
law when reviewing the pleadings, that it is plain and obvious the class members’  
claims will fail because they could reasonably avoid their damages by simply  
Nissan Canada Inc. v. Mueller  
Page 17  
discarding their automobiles. This aspect of Nissan’s argument is grounded in a  
questionable speculative assumption as to the financial means of class members.  
[64] Unlike Maple Leaf Foods and Kane, there was no product recall here and so  
the consumers have not been offered the choice of discarding the defective part.  
Here, the essence of the claim is that the defective part has failed or will likely fail  
before the expected lifetime of the product, and failure of the part could result in  
significant harm to persons or property. The claim pleads that the timing chain is an  
“integral part” and an “essential component” of the vehicles. The pleadings support  
the claim that the defective part must be replaced to avoid the risk of potential harm.  
[65] In my view, the question of what would be a reasonable way of dealing with  
the defect, including the scope of a remedy, is going to require evidence and  
findings of fact at trial.  
[66] I also consider that Nissan’s argument significantly underplays the special  
nature of the product it manufactures. It is well known that automobiles are complex,  
heavy machines, often operated at a fast speed in the midst of other fast-moving  
traffic, and sometimes in conditions of limited visibility. It seems to me quite  
reasonable to conclude that if, due to a defective part, an automobile engine failed  
unexpectedly, it could lead to a tragic accident and serious personal injuries, and  
that if it is possible to replace a defective part so as to avoid this result, that is the  
reasonable course rather than waiting for it to fail and then discarding the entire  
vehicle.  
[67] One needs to be cautious in finely parsing the characterization of danger at  
the certification stage in such a way as to deny a plaintiff an opportunity to proceed  
with a product liability class action and to prove the details and context of the danger  
at trial. Many products take years to manifest a dangerous defect. It is worth  
remembering that the danger in Winnipeg Condominium only became apparent  
several years after the building was constructed. I am not convinced that the mere  
fact that it may take a long time for the part to fail makes the danger posed by the  
defectunexpected and immediate engine failurenon-imminent. If that was the  
Nissan Canada Inc. v. Mueller  
Page 18  
case, then the claim to repair the rest of the not-as-yet-failed cladding in Winnipeg  
Condominium could not stand.  
[68] Further, requiring too much specificity in the pleading regarding the danger  
posed by a product is not only contrary to the generally liberal approach to  
interpreting pleadings and to the rule against pleading evidence, it is contrary to the  
purposes of the CPA itself. The legislative history of class proceedings legislation  
supports a liberal interpretation of pleadings alleging a dangerous defect in a mass-  
produced good. The goals of class proceedings legislation include addressing  
wrongs arising from mass production of goods, and thereby also modifying the  
behaviour of potential wrongdoers: Hollick v. Toronto (City), 2001 SCC 68 at  
paras. 1415.  
[69] It will be up to the trial judge to determine on the evidence at trial whether in  
fact the defect was dangerous such that it meets the standard for a consumer to  
recover in negligence for pure economic loss, consistent with Winnipeg  
Condominium and as explained in Maple Leaf Foods.  
[70] I am satisfied that Mr. Mueller pleaded a real and substantial danger, in the  
sense of an imminent risk of physical harm to persons or property.  
[71] I therefore agree with the certification judge that the ANOCC properly pleaded  
the elements of the negligence-based causes of action (negligent design and  
manufacture and failure to warn), including that the defect posed a danger of  
significant harm to persons in the vehicles. It is not plain and obvious that those  
claims will fail.  
Misrepresentation  
[72] Mr. Mueller asserts that the ANOCC alleges two types of misrepresentation:  
a) misrepresentation by active concealment, based on allegations that  
Nissan actively concealed its knowledge of the defect; and,  
Nissan Canada Inc. v. Mueller  
Page 19  
b) negligent misrepresentation, namely, misrepresentation that the vehicles  
were safe, reliable and fit for their intended use.  
[73] Among other arguments, Nissan asserts on appeal that Mr. Mueller’s  
misrepresentation claim is really a claim of failure to warn, which is not properly  
pleaded because it only arises if the product poses a risk of personal injury or  
property damage. This argument repeats Nissan’s argument that the ANOCC does  
not sufficiently allege that the product poses a danger. I have already disposed of  
this argument in respect of the claims of negligence.  
[74] Nissan also argues that the ANOCC failed to set out particulars of the alleged  
negligent misrepresentations of safety and fitnessa requirement of R. 3-7(18) of  
the Supreme Court Civil Rulesnor does the ANOCC plead that the plaintiff relied  
on the representations.  
[75] The judge noted these arguments at para. 51. Nonetheless, he found that the  
allegations of misrepresentation were scattered throughout the ANOCC and that  
these allegations were not “bound to fail”: at paras. 50, 57–59.  
[76] It is clear that Mr. Mueller’s misrepresentation claims overlap with the breach  
of warranty and negligence claims in the ANOCC. In my view, while poorly pleaded,  
the logic of the entire ANOCC does give notice to Nissan that the plaintiff is claiming  
that, by not warning of the defects, Nissan misrepresented that the vehicles were  
safe for use as transportation, and that the owners would not have purchased the  
vehicles but for this misrepresentation.  
[77] It is important to note that the judge only certified the claim for  
misrepresentation in relation to purchasers of new vehicles: at para. 184. He  
implicitly recognized that second-hand purchasers would not have purchased their  
vehicles from Nissan relying on Nissan representations.  
[78] I accept that further particulars may be demanded and required for the claim  
of misrepresentation. But this is not the relief sought by Nissan. In my view, the  
Nissan Canada Inc. v. Mueller  
Page 20  
judge did not err in finding that the allegations of misrepresentation were not bound  
to fail.  
Breach of Express Warranty  
[79] The ANOCC alleges that the timing chain in the vehicles was defective and  
prone to premature failure, and that Nissan knew this and concealed or refused to  
disclose this to consumers, knowing that the warranty period on the vehicles would  
expire before consumers knew about the defect, transferring the cost of repair of this  
latent dangerous defect to consumers. Had consumers known about the defect they  
would have required Nissan to replace the part within the warranty period. By  
marketing and distributing vehicles with the defects, while misrepresenting or failing  
to report the dangers to the public, Nissan created and breached both express and  
implied warranties that the vehicles were safe for use as transportation, causing  
damages. Further, the ANOCC alleges that Nissan breached express warranties by  
representing the vehicles as being safe and reliable, when in fact they were  
defective: ANOCC at paras. 1220, 27, 58, 63.  
[80] Nissan says that by pleading the express warranty, Mr. Mueller incorporated  
the warranty documents into the pleading, and that the judge ought to have reviewed  
the content of the warranty. Nissan relies on Ahamed v. The Great Canadian  
Landscaping Company Ltd., 2021 BCSC 197 at paras. 3033; and Gomel v. Live  
Nation Entertainment, Inc., 2021 BCSC 699 at para. 54.  
[81] It is true that the judge did not, in his reasons, review the express warranty in  
detail. However, I do not see that it was necessary to do so. The judge noted:  
[78]  
While the defendants deny the possibility of any implied warranty,  
they acknowledge that the Proposed Class Vehicles had an express  
warranty. The problems with the vehicles owned by Mr. Mueller and  
Mr. Mohan developed outside of the terms of the express warranty.  
[79]  
With the allegation in the ANOCC in mind, the defendants  
acknowledge that a theoretical class of plaintiffs could exist: owners who  
presented warranty claims that Nissan did not accept. Nissan acknowledges  
that, in theory, it might have denied an express warranty claim if it determined  
that the damage was caused by inadequate maintenance or repair.  
Nissan Canada Inc. v. Mueller  
Page 21  
[80]  
As a result, I find that the claim for breach of express warranty is not  
bound to fail.  
[Emphasis added.]  
[82] The judges findings excluded a broad express warranty claim from  
certification. The judge only certified a claim for breach of express warranty for those  
owners who presented a claim during the term of the express warranty (five  
years/100,000 kms).  
[83] Mr. Mueller argues on appeal that there is a broader warranty claim pleaded,  
namely, that based on its knowledge of the defect, Nissan was required to repair  
vehicles within the warranty period even absent a claim. However, the judge did not  
certify this aspect of the claim and no cross-appeal is brought.  
[84] The real complaint on appeal is that the ANOCC did not specifically plead that  
any class member had made a warranty claim during the warranty period in relation  
to the alleged defective part, or that any such warranty claim was then improperly  
denied, and no evidence was filed to suggest this had ever happened.  
[85] I agree with Nissan that the concession by it at the certification hearingthat  
in theory express warranty claims could have been presented and denied, which  
could give rise to a theoretical class of plaintiffswas not a concession that such a  
claim was properly pleaded. There was also no evidence that a potential member of  
the class had presented and been wrongly denied an express warranty claim in  
relation to the defect.  
[86] In my view, it was implicit in the judge’s findings in relation to the express  
warranty claim, that the plaintiff should only be permitted to advance a claim for  
some members of the class, namely purchasers of new vehicles who presented  
warranty claims within the warranty period in relation to the defective part, and  
whose claims were denied. This claim would be limited to a claim that the express  
warranty was breached by Nissan’s denial of the warranty claims.  
Nissan Canada Inc. v. Mueller  
Page 22  
[87] The judge’s conclusions regarding the express warranty claim were  
premature. No such claim was ready for certification, as it was too broadly and  
generally pleaded and there was no evidence supporting a conclusion that there was  
some basis in fact for the theory that express warranty claims had been presented  
and wrongly denied. It may be that Mr. Mueller will seek to amend and to file  
evidence to support such a claim, but that remains to be seen and determined.  
[88] I would therefore set aside the judge’s order certifying common issues in  
respect of the express warranty claim.  
Breach of Implied Warranty  
[89] As for implied warranties, the ANOCC alleged, similarly to the  
misrepresentation claim, that Nissan implicitly warranted that the vehicles were safe  
for use when they were not, and that this breached implied warranties: ANOCC at  
para. 58. This aspect of the claim does not allege any statutory implied warranty.  
[90] On appeal, Nissan submits that the pleadings do not support a claim for an  
implied warranty, because the express warranty itself precluded implied warranty  
claims. Nissan refers to the following language of its new vehicle warranty:  
The written warranties are the only express warranties provided by Nissan  
and NISSAN does not authorize any person to create or assume for it any  
other warranty obligation or liability in connection with this vehicle. Any  
implied warranty of merchantability or fitness for a particular purpose shall be  
limited to the duration of the warranty covering defects in vehicle components  
other than perforation from corrosion.  
[91] I do not see that it is plain and obvious that the express warranty precluded  
implied warranties. An available argument is that the warranty limited but did not  
exclude implied warranties. The question of the interpretation of the warranty is a  
triable issue.  
[92] Nissan also argues that the ANOCC did not plead any contractual relationship  
sufficient to found an implied warranty. Respectfully, I read the ANOCC and the  
judge’s findings to the contrary.  
Nissan Canada Inc. v. Mueller  
Page 23  
[93] The pleadings allege that the Nissan entities acted in concert and each is  
vicariously liable for the actions of others, and that the Nissan entities were part of a  
common enterprise (ANOCC at para. 5), and that they designed, manufactured,  
distributed and sold the subject vehicles. Mr. Mueller alleges that Nissan continued  
to market and sell the vehicles knowing of the defect.  
[94] It is clear from Nissan’s challenge to the unjust enrichment claim that Nissan  
understood the ANOCC to plead a contractual relationship between some owners  
and Nissan. Nissan relies on the existence of a valid contract to argue that the unjust  
enrichment claim is bound to fail.  
[95] I understand the judge to have read the pleading of an implied warranty of  
fitness as implicitly based on there being a contract between a purchaser of a new  
vehicle and Nissan, as seller.  
[96] The judge noted that the ANOCC treated all Nissan entities as vicariously  
liable for each other’s actions. He acknowledged that Nissan denied that it was a  
vendor of the vehicles: Certification Decision at paras. 8182.  
[97] The judge only certified a claim for breach of implied warranty in relation to  
purchasers of new vehicles: at para. 187. He found that the claim was tied to the  
allegations of misrepresentations, namely, that Nissan represented that the vehicles  
were of good merchantable quality and fit and safe for their ordinary intended use,  
but knowing of the defect with the timing chain mechanisms: at paras. 179180.  
[98] Reading the judge’s conclusions as a whole, the judge found that it is  
possible that purchasers of new Nissan vehicles could have relied on a  
representation by Nissan, as seller of the vehicles, that amounts to a contractual  
implied warranty: at paras. 88, 103, 187. I do not see that the judge erred in  
determining that a claim for breach of implied warranty was not bound to fail, so long  
as it is limited to a subclass of purchasers of new vehicles. The fact that there could  
be defences to such a claim does not mean that there was no cause of action  
pleaded.  
Nissan Canada Inc. v. Mueller  
Page 24  
Breach of Consumer Protection Legislation  
[99] I turn to the judge’s findings that the ANOCC pleaded causes of action based  
on breach of consumer legislation, namely, both the Competition Act, R.S.C. 1985,  
c. C-34, and the Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2  
[BPCPA].  
[100] Nissan submits that claims under these statutes are not actionable, where the  
misrepresentation alleged is failure to disclose a defect.  
[101] Mr. Mueller submits that at law, an omission can support claims under both  
statutes, especially where, as in the ANOCC, it is pleaded that the defendant failed  
to disclose a dangerous defect. He points out that even Nissan concedes that an  
exception lies where the undisclosed fact relates to a hidden danger in the product  
that, if disclosed, would allow consumers to use the product more safely. See  
Cantlie v. Canadian Heating Products Inc., 2017 BCSC 286 at para. 240, in relation  
to the BCPCA; and Williamson v. Johnson & Johnson, 2020 BCSC 1746 at  
paras. 138140, in relation to the Competition Act.  
[102] In summary, the ANOCC alleges that the class members could have used the  
vehicles more safely had Nissan disclosed the defect to them, including by  
demanding that Nissan replace the defective part (if within the warranty period), or  
by not purchasing the vehicles.  
[103] I am of the view that the judge did not err in concluding that these statutory  
claims were not bound to fail.  
Unjust Enrichment  
[104] Mr. Mueller pleads the three elements of a cause of action in unjust  
enrichment: (1) enrichment of the defendant, Nissan, through profits from sales; (2)  
corresponding deprivation and losses of the plaintiff and class members; and (3) the  
lack of any juristic reason for the same: ANOCC at para. 69; see also Garland v.  
ConsumersGas Co., 2004 SCC 25 at para. 30.  
Nissan Canada Inc. v. Mueller  
Page 25  
[105] Nissan argues on appeal that the claim in unjust enrichment is not properly  
pleaded, as it is missing material facts in support of two elements:  
a) The ANOCC does not properly plead the material facts to establish that  
class members suffered any deprivation and that there was a  
corresponding enrichment by Nissan. Instead, the facts pleaded amount to  
the class members having paid for an automobile and received it.  
b) Even if there is a deprivation, the ANOCC does not plead the facts in  
support of the allegation of a lack of a juristic reason for any enrichment.  
The ANOCC asserts (or implies) the class members had contracts to  
purchase the vehicles, and these would provide the juristic reason for the  
payments made. The ANOCC does not plead that the contracts to  
purchase were void or voidable.  
[106] The judge noted that the allegation of unjust enrichment was based on the  
theory that Nissan was unjustly enriched by marketing and selling products of poor  
quality, while pricing the products as products of higher quality: at para. 100.  
[107] Further, the judge noted that a possible outcome of the breach of consumer  
legislation claims was a declaration that the contracts to purchase the vehicles were  
not valid or legal, and if this was the result, then there would be no juristic reason for  
the payments to Nissan. In this regard, the judge analogized the claim to that  
advanced in Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 [Pro-  
Sys].  
[108] In Pro-Sys, the Supreme Court of Canada held that the question of whether  
the contracts provided a juristic reason, or were illegal because of a violation of anti-  
trust or competition law, could not be resolved at the pleadings stage, only at trial,  
and so it could not be said that the unjust enrichment claim was bound to fail: Pro-  
Sys at paras. 8889, cited in Certification Decision at paras. 95, 106.  
[109] I am of the view that a careful review of the history of Pro-Sys serves to  
defeat this aspect of the claim, rather than support it.  
Nissan Canada Inc. v. Mueller  
Page 26  
[110] Early in the Pro-Sys proceedings, the defendant, Microsoft, brought an  
application to strike the claims by Pro-Sys as not disclosing causes of action. The  
judge hearing the application, Justice Tysoe (as he then was), concluded that there  
was no properly pleaded cause of action in unjust enrichment: 2006 BCSC 1047.  
This is because the plaintiff relied on certain contracts to support other aspects of  
the claim, and the contracts provided a juristic reason for any alleged deprivation  
and enrichment. The plaintiff did not allege that the contracts were void: at para. 75.  
[111] Later, Tysoe J. allowed amendments by Pro-Sys to support the claim of  
unjust enrichment: 2006 BCSC 1738. These amendments alleged that the contracts  
in question were void and unenforceable. Justice Tysoe would not allow  
amendments that alleged that even if the contracts were valid, there is no juridical  
reason to allow the defendants to retain overcharges because they were guilty of  
illegal conduct.  
[112] Thus, when the claim in Pro-Sys eventually made its way to the Supreme  
Court of Canada, the pleadings had changed and the plaintiff did allege that the  
contracts in question were void or illegal. The Court agreed with Tysoe J.’s second  
decision that the claim disclosed a cause of action in unjust enrichment. In doing so,  
the Court noted that the question of whether the contracts were in fact illegal and  
void should not be resolved at the pleadings stage, but must be left to the trial judge:  
at para. 88.  
[113] It is inconsistent for Mr. Mueller to advance claims based on contract (the  
warranty claims), and to then allege there is no juristic reason for the payments  
made for the vehicles. Mr. Mueller does not plead in the alternative that these  
contracts are void and give rise to a claim in unjust enrichment. As in Atlantic Lottery  
Corporation Inc. v. Babstock, 2020 SCC 19 [Atlantic Lottery], the unjust enrichment  
claim cannot survive.  
[114] Had I not found a defect in this pleading of the cause of action, I would move  
on to take a closer look at the question of whether there is some basis in fact to  
support there being common issues in respect of the unjust enrichment claim. I find  
Nissan Canada Inc. v. Mueller  
Page 27  
it unnecessary to do so, but this is not to suggest that I accept that Mr. Mueller  
provided sufficient evidence in this regard.  
[115] I also question the practical benefits of pleading unjust enrichment in a case  
such as this, as did the Alberta Court of Appeal in Spring v. Goodyear Canada Inc.,  
2021 ABCA 182 at paras. 4852. Should Mr. Mueller be able to establish his claims  
in negligence, it is difficult to conclude that Mr. Mueller has anything to be gained  
from an unjust enrichment claim layered on top.  
[116] I have concluded that the judge was in error in finding that Mr. Mueller’s claim  
for unjust enrichment was not bound to fail. This would also result in setting aside  
the judge’s order certifying common issues in respect of the unjust enrichment claim.  
Conclusion on Sufficiency of Pleadings  
[117] For the most part, Nissan has not shown that the judge made an error in his  
interpretation of the pleadings or understanding of the legal elements of the causes  
of action pleaded. However, I have found that the judge erred in two ways.  
[118] For the reasons I have given, the judge ought not to have certified common  
issues in respect of the claim based on breach of express warranty, and his order in  
this regard should be set aside. It remains up to the plaintiff to decide whether to  
seek to amend and to file some evidence supporting a claim for breach of express  
warranty on behalf of purchasers of new vehicles who presented warranty claims  
and the claims were refused.  
[119] Further, I am of the view that the judge ought to have concluded that the  
claim in unjust enrichment, as pleaded, was bound to fail. This conclusion means  
that the judge ought not to have certified any common issues in respect of unjust  
enrichment, and his order in this regard should be set aside.  
[120] I turn next to the question of the sufficiency of the evidence.  
Nissan Canada Inc. v. Mueller  
Page 28  
Did the Certification Judge Make a Palpable and Overriding Error in  
Finding That the Evidence was Sufficient to Support a Common Issue as  
to the Existence of a Common Dangerous Defect?  
[121] It is first necessary to review the principles applicable to the evidentiary  
threshold necessary to support certification of a class action.  
Evidentiary Threshold for Certification: Some Basis in Fact  
[122] Once it has been found that the plaintiff’s pleadings disclose a cause of  
action, the plaintiff must show “some basis in fact” to support the other certification  
requirements under s. 4(1) of the CPA (Finkel at para. 19):  
a) that there is an identifiable class of two or more persons;  
b) that the claims of the class members raise common issues;  
c) that a class proceeding would be the preferable procedure; and  
d) that there is a suitable representative plaintiff.  
[123] The parties disagree as to the proper analytical framework for the “some  
basis in fact” requirement, in relation to the question of whether the claims of the  
class members raise common issues.  
Positions on Appeal Regarding Evidentiary Threshold  
[124] On appeal, Nissan submits that the judge erred in finding that Mr. Mueller had  
shown some basis in fact that the claims of the class members raise common  
issues, pursuant to s. 4(1)(c) of the CPA.  
[125] Nissan argues that there are two steps to the “some basis in fact” test under  
the “common issues” requirement: the plaintiff must show (1) some basis in fact that  
the common issue actually exists, and (2) some basis in fact that the issue is  
common for the entire class.  
[126] In the context of a claim based on an alleged dangerously defective product,  
Nissan submits that the two-step test requires the plaintiff to show (1) some basis in  
Nissan Canada Inc. v. Mueller  
Page 29  
fact that the product actually has a dangerous defect, and (2) some basis in fact that  
the dangerous defect is common to the products owned or purchased by the entire  
class.  
[127] On the first step, Nissan submits that any defect in the class vehicles is not  
dangerous, and therefore the alleged dangerous defect does not actually exist.  
Nissan points to the following:  
a) the TSBs advised technicians on how to repair “buzzing/whining noise”  
from the engine, but did not suggest that the issue represented a danger  
to drivers or passengers;  
b) Transport Canada did not issue any recall or other regulatory action in  
respect of the TSBs, which suggests that defects alleged in the TSBs are  
not dangerous;  
c) the only suggestion that the engine noise may be dangerous came from  
the plaintiff’s expert Mr. Wong, but Mr. Wong provided no evidence of  
personal experience of “engine failures” in the class vehicles and no third  
party sources in support;  
d) there is no evidence that other members of the class suffered similar  
issues with their vehicles as Mr. Mueller encountered; and  
e) there is no evidence that actual engine failure has occurred in the class  
vehicles.  
[128] On the second step, Nissan submits that the alleged defect is not common to  
the class. Nissan’s argument, in essence, is that the primary and secondary timing  
chain systems underwent significant changes during the period that the class  
vehicles were being manufactured, with the result being that instead of there being a  
single identical timing chain mechanism in each of the class vehicles, there are  
multiple different timing chain mechanisms. Nissan says the certification judge erred  
in relying on Panacci to find that commonality exists because all of the class vehicles  
Nissan Canada Inc. v. Mueller  
Page 30  
were identified on the TSBs. Nissan says Panacci should be distinguished because  
the defendant in Panacci adduced no evidence, and did not seek to argue, that the  
timing chain systems in the class vehicles were not identical. Nissan argues that  
TSBs may cast a broad net and include a number of vehicles with different features  
because they may be issued by the manufacturer out of an abundance of caution,  
and may be part of the manufacturer’s process to determine whether or not there  
was a defect, and if so, in which products.  
[129] In response, Mr. Mueller submits that the “some basis in fact” test is a one-  
step testthe only question is whether the claim is common for the class.  
Mr. Mueller argues that a two-step test would import a merits inquiry into the  
certification stage, and the question of the alleged defect’s “dangerousness” is a  
merits question that is not suitable for determination at the certification stage.  
[130] Mr. Mueller’s position is that the “some basis in fact” test has a low threshold,  
particularly in product liability cases, because the defendant manufacturer has a  
significant informational advantage over the plaintiff: at the certification stage, the  
plaintiff has no discovery of matters exclusively within the defendant’s specialized  
knowledge. Mr. Mueller says that the certification judge properly exercised his  
discretion:  
a) the judge found that a combination of four different pieces of evidence  
provided some basis in fact for the alleged defect’s commonality:  
(a) Mr. Mueller’s affidavit evidence; (b) Mr. Mohan’s affidavit evidence;  
(c) Mr. Wong’s expert opinion on the problems related to timing chain  
mechanisms; and (d) the TSBs (Certification Decision at para. 166);  
b) the TSBs admit the existence of the defect and are direct evidence of the  
common issues;  
c) it is within judge’s discretion to accept Mr. Wong’s evidence that a  
mechanical or design engineer would be able to opine on whether the  
defect is by design or manufacture; and  
Nissan Canada Inc. v. Mueller  
Page 31  
d) Nissan cannot recast the TSBs on appeal as part of the manufacturer’s  
broader process to find defects, when that was not raised before the  
judge.  
[131] In the alternative, even if Mr. Mueller was required to provide evidence that  
the defect is dangerous, Mr. Mueller says that requirement was satisfied by  
Mr. Wong’s expert evidence.  
Analysis of Evidentiary Threshold  
[132] I do not agree with Nissan that the test as to whether there is evidentiary  
support for a common issue in a claim of alleged dangerous product liability requires  
two distinct categories of evidence: some evidence that there is a common defect;  
and some evidence that the alleged defect is dangerous.  
[133] In analyzing whether there is some basis in fact for a common issue, the court  
must consider the language of the common issue that is proposed, and whether  
there is some evidence that supports the argument that it is a common issue across  
members of the class.  
[134] This is a low threshold. The purpose of the requirement is to ensure there is a  
minimum evidentiary foundation to support the certification order: Hollick at para. 24;  
Atlantic Lottery at para. 138. Because the standard is simply to ensure that the  
action is suited to a class proceeding, it does not entail a robust analysis of the  
merits of the claim: Atlantic Lottery at para. 138; Pro-Sys at paras. 103, 105.  
However, the court must undertake more than superficial scrutiny of the sufficiency  
of the evidence: ProSys at para. 103; Sharp v. Royal Mutual Funds Inc., 2021  
BCCA 307 at para. 27, leave to appeal to SCC refused, 39882 (17 March 2022).  
This standard requires “an evidentiary basis” to show the plaintiff has met the  
certification requirements: Hollick at para. 25. Such evidence does not have to be  
conclusive or satisfy the civil standard of a balance of probabilities, and the particular  
level of evidence that is sufficient is highly factspecific: Sharp at para. 27.  
Nissan Canada Inc. v. Mueller  
Page 32  
[135] The question of how high is the evidentiary threshold was considered in Ewert  
v. Nippon Yusen Kabushiki Kaisha, 2019 BCCA 187, leave to appeal to SCC  
refused, 38784 (19 December 2019). That was a case alleging price fixing, and a  
proposed common issue included whether damages could be determined on an  
aggregate class-wide basis. The defendant argued that the plaintiff was required to  
show not only that there was a realistic methodology to establish loss on a class-  
wide basis, but also that there was data available to which the methodology could be  
applied. This two-step evidentiary requirement was rejected by the Court.  
[136] Justice Hunter in Ewert helpfully explained that the “some basis in fact”  
requirement is better understood as being in contrast to no basis in fact. He noted  
that the evidentiary requirement must be considered in context of the CPA scheme,  
which envisions applications for certification being brought at a very early stage of  
the proceeding. This is consistent with a legislative intention to not impose a high  
evidentiary burden on the certification applicant: at paras. 100104.  
[137] In the result, in Ewert this Court found the certification judge had imposed too  
high an evidentiary burden by requiring that the plaintiff not only show that there was  
a credible or plausible methodology for determining loss on a class-wide basis, but  
also that there was available data to use the methodology effectively: at para. 111.  
[138] Turning to the present case, the early stage of a certification application is  
particularly constraining on a plaintiff’s ability to prove a case involving an alleged  
product defect, where the product is a complicated machine and much of the key  
evidence supporting liability may lie in the defendant’s possession and knowledge. If  
the evidentiary burden is set too high in a claim involving mass-produced defective  
goods, it could reward and encourage defendants to be secretive about defects in  
their products affecting large numbers of people, which is contrary to the goals of  
class action legislation.  
[139] The requirement that there be some basis in fact to support the proposed  
common issues is there to provide the certification judge with some level of  
confidence that certification will be of practical benefit when, in the future, the claims  
Nissan Canada Inc. v. Mueller  
Page 33  
reach trial, as opposed to being simply a procedural complication for claims that are  
not truly common. It also helps the judge determine if a class proceeding is in fact a  
preferable procedure.  
Application of Evidentiary Threshold  
[140] The question here, then, is whether the judge made a palpable and overriding  
error in finding that there was sufficient evidence to support the common issues  
related to whether there was an engine defect. For ease of reference, I will repeat  
the judge’s findings:  
[173] On the issue of the existence of an engine defect:  
a) Did the class vehicles contain a design, development, or  
manufacturing defect (the “Defect”) affecting the timing chain  
tensioning system or its components that could cause or  
contribute to increased rates of premature timing chain failure,  
engine failure, engine damage, transmission failure, sudden  
loss of power, or other engine problems when driven as  
intended?  
b) If the answer to (a) is “yes”, when did or should the defendants  
have known of the defect?  
c) Did the Defect in the Class Vehicles cause, contribute, or  
increase the risk of and engine damage, personal injury, or  
death?  
[174] As noted above, there is some evidence of the existence of a defect.  
[175] In my opinion, the resolution of these questions are common to the  
class. If the matter proceeds to a hearing on the issue of the existence of a  
defect, the answer will, I expect, be “yes” or “no”. If the answer is “no”, then  
all claims are dismissed. If the answer is “yes”, then the remaining issues (to  
the extent they apply to the class) will become common.  
[176] Because the timing of Nissan’s knowledge may inform the claims in  
relation to consumer protection legislation and misrepresentation, question  
“b” would then become common to all members, or a subclass of purchasers  
of new vehicles.  
[177] Question “c” is simply an extension of the effect of the alleged defect  
to the class in terms of damages.  
[178] These questions are certified as common issues.  
[141] I would note that question (c) as framed by the judge did not just relate to  
damages, but also to recoverability in tort for negligent design and manufacture.  
Nissan Canada Inc. v. Mueller  
Page 34  
[142] I cannot conclude that the judge made a palpable and overriding error in  
finding that there was some basis in the evidence to support these issues being  
common to the class.  
[143] In this regard, the judge reviewed and gave weight to the evidence of  
Mr. Mueller and Mr. Mohan regarding the problems they experienced with their  
vehicles, Mr. Wong’s affidavit regarding these problems being related to the timing  
chain mechanisms and the possibility these could cause catastrophic engine failure,  
and the TSBs relating to the timing chain mechanisms.  
[144] Nissan complains that the judge did not deal with the fact that some changes  
to the timing chain mechanism were made over the time period in question, and so it  
could not be said that there was a single timing chain mechanism across all of the  
class vehicles. Also, Nissan says its evidence suggests that the changes that were  
made solved some of the problems. However, Nissan’s arguments go to the merits,  
which should be dealt with at trial.  
[145] It is to be remembered that the scope of the class covers approximately  
64,000 vehicles. If the evidence evolves to support subclasses because of  
differences in the timing chain mechanisms, that can be addressed later. The  
parameters of the class were determined by reference to the TSBs, all of which  
related to problems with the timing chain mechanisms. The TSBs were significant  
evidence which the judge was not wrong to consider.  
[146] There was also clearly a joined issue in the case as to whether the defect  
posed a danger or not. The plaintiff’s evidence and pleading alleged that the defect  
did pose a danger, but Nissan denied this. As can be seen from Nissan’s approach  
to the question of whether there is a cause of action in negligence, the implications  
of the timing chain defect and how it affects the engine and the risks it poses will be  
of importance to all class members. The common issues as framed, and as certified  
by the judge, will flesh out that dispute and the determination of these issues will  
benefit all class members.  
Nissan Canada Inc. v. Mueller  
Page 35  
[147] In short, I find no fault with the judge’s conclusion that there was sufficient  
evidence to support the common issues certified by the judge concerning the  
existence of an engine defect.  
Conclusion  
[148] I would allow the appeal in two respects:  
a) I would set aside the judge’s order certifying as a common issue the  
question of whether the defendants breached expressed warranties.  
b) I would set aside the judge’s order certifying any common issues in  
respect of the claim in unjust enrichment.  
[149] The above result would mean amending the common issue listed as (e) to  
take out the reference to express warranties, and striking out the common issues  
listed as (k), (l) and (m) on Appendix A.  
[150] It would be preferable for Mr. Mueller to amend the notice of civil claim to take  
into account these reasons, for example, by removing the claim based on unjust  
enrichment and either removing or amending the claim for breach of express  
warranty. However, that is a matter to be addressed by Mr. Mueller and by way of  
the case management by the trial court.  
[151] In my view this result does not impact the judge’s decision that a class  
proceeding is the preferred procedure. Determination of the remaining common  
issues will advance the litigation. As found by the judge, “the entire class will benefit  
(at least) from a determination of whether a defect existed”: para. 210. Further, there  
Nissan Canada Inc. v. Mueller  
Page 36  
is no alternative preferable procedure, as tens of thousands of individual actions in a  
claim of this nature would not be practical: paras. 211212.  
The Honourable Justice Griffin”  
I AGREE:  
The Honourable Madam Justice DeWitt-Van Oosten”  
I AGREE:  
“The Honourable Mr. Justice Voith”  
Nissan Canada Inc. v. Mueller  
Appendix A: Common Issues as Certified by Justice Ross  
Existence of an engine defect:  
(a) Did the Class Vehicles contain a design, development, or  
Page 37  
manufacturing defect (the “Defect”) affecting the timing chain tensioning  
system or its components that could cause or contribute to increased rates of  
premature timing chain failure, engine failure, engine damage, transmission  
failure, sudden loss of power, or other engine problems when driven as  
intended?  
(b)  
If the answer to (a) is “yes”, when did or should the defendants have  
known of the Defect?  
(c)  
Did the Defect in the Class Vehicles cause, contribute, or increase the  
risk of and engine damage, personal injury, or death?  
Misrepresentation:  
(d) Did the defendants, on a class-wide basis, misrepresent the Class  
Vehicles as being of good merchantable quality or being fit and safe for their  
ordinary intended use when, in fact, they were equipped with the Defect?  
Express and Implied Warranties:  
(e)  
Did the defendants breach express, or implied warranties, by selling  
the Class Vehicles with the defect?  
Breach of Consumer Protection and Competition Legislation:  
(f)  
Did the defendants violate competition legislation or consumer  
protection legislation by selling the Class Vehicles with the Defect?  
(g)  
Was it unreasonable or unlawful for the defendants to introduce the  
Class Vehicles with the defect into the Canadian stream of commerce?  
Failure to Warn:  
(h) Did the defendants provide adequate warnings as to the fitness of the  
Class Vehicles’ transmission systems or did the defendants misrepresent the  
fitness of Class Vehicles containing the Defect?  
(i)  
Did the defendants knowingly, recklessly, or negligently breach a duty  
to warn the plaintiff and the class of the risks associated with purchasing,  
owning, or operating a Class Vehicle with the Defect?  
Negligence:  
Nissan Canada Inc. v. Mueller  
Page 38  
(j)  
Did the defendants breach a duty of care owed to class members and,  
if so, when and how?  
Unjust Enrichment:  
(k)  
Were the defendants unjustly enriched by the receipt of revenues from  
the lease and sale of the Class Vehicles?  
(l)  
Did the plaintiff and the class suffer a corresponding deprivation by  
paying for the Class Vehicles?  
(m) Are there any juristic reasons justifying the defendantsenrichment  
from the sale of the Class Vehicles?  
Punitive or Exemplary Damages:  
(n)  
Should the defendants pay exemplary or punitive damages, and if so,  
how much, to whom, and how is it to be distributed?  
 [an error occurred while processing this directive]

© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission