Edited by Amanda Kostek and Kristen Hansen
Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Murray v Windsor Brunello Ltd, 2024 ABKB 281
Product liability Trial | Pure Economic Loss | Whether ACV appropriate for damages assessment
Norris v Vomacka, 2024 ABKB 312
Experts permitted at Trial | Interpretation of Section 558.1
Plante v Administrator of the Motor Vehicle Accident Claims Act, 2024 ABCA 156
Use and Operation of a Motor Vehicle | Injuries caused by pedestrian leaving accident scene on foot
Murray v Windsor Brunello Ltd, 2024 ABKB 281
Murray v Windsor Brunello Ltd, 2024 ABKB 281 was a Trial decision successfully defended by Damian Shepherd of CBM Lawyers, who acted on behalf of Luxus Haus Imports Ltd., a Defendant and Third Party importer of windows and doors installed in a high end residential home. The Plaintiffs were successful in their contractual claim against the Defendant project manager and construction manager. The litigation arose out of the failure of high end custom made sliding doors in the Plaintiffs’ great room and master bedroom. The sliding doors worked as designed immediately after installation but stopped functioning a few months later. The Court concluded that the sliding doors in the master bedroom stopped functioning due to deflection in the cantilever beam above and the great room doors failed for a variety of factors including deflection in the steel beam above and a lack of stiffness in the guide track. The failure of the doors was coincident with the installation of exterior stone cladding which added dead weight to the structural beams. It was alleged by the plaintiffs that their builder failed to design a functioning system and the various door related entities failed to provide a product that worked as intended, made a variety of misrepresentations and breached the Sale of Goods Act.
In addressing damages, the Court concluded that this loss fell into the category of pure economic loss for negligent supply of goods or structures. The Court concluded that the doors and windows were high quality, but they did not perform or function as intended. However, as the state of the doors was not inherently dangerous the Plaintiffs ultimately only suffered inconvenience:
[339] Since Winnipeg Condominium, the law has been clear that repair to defective products and structures was a type of pure economic loss and only recoverable where it is proven that there is an imminent danger arising from a dangerous defect. There was no dangerous defect alleged or proven in relation to the Murray Residence. The Murrays have been inconvenienced by the non-functioning Great Room Sliding Doors and Master Bedroom Sliding Doors.
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[374] The Murrays and WBL submit that this is not a case of pure economic loss. I disagree. This is a case where the damages are unconnected to a personal injury or injury to property. The claim in this case is the cost of repair to correct the Great Room Structural Steel and the KAPO Windows and Doors so that the Great Room Sliding Doors and Master Bedroom Sliding Rooms will function properly. That is pure economic loss.
The Court went on to indicate that when a claim is for building defects, the contract is the proper avenue for recovery as opposed to suing in negligence for shoddy supply:
[342] As noted, there was no evidence of any imminent danger in relation to the Murray Residence and no allegation that any poor-quality materials were used; in fact, the evidence was that the Murray Residence is a very well-constructed high-end residence, except for the issues raised in this action. …
[343] When a claim relates to building defects, and there is a contract between the parties, the contract is the appropriate method of recovery. This point was made by the majority in Maple Leaf, at para 47:
… But merely shoddy products, as opposed to dangerous products, raise different questions pertaining to issues such as implied conditions and warranties as to quality and fitness for purpose, and not of real and substantial threats to person or property … In our view, 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 … Further, and even more fundamentally, such concerns do not implicate a right protected under tort law. As Laskin J.A. explained in Hughes v. Sunbeam Corp. … , in identifying the limits of the duty, “compensation to repair a defective but not dangerous product will improve the product’s quality but not its safety”. Again, we observe that, absent a contractual or statutory entitlement, there is no right to the quality of a bargain.
Ultimately, the Court dismissed all negligence claims supply portions of the claim on the basis that they amounted to pure economic loss and the relationships were not of sufficient proximity to ground a duty in tort. The Court even applied this analysis to the builder who had a direct relationship with the plaintiffs.
[346] In the result, the damages claimed by the Murrays in tort against the defendants relating to supply of shoddy goods or structures are for pure economic loss. In a defective building case, there can be no claim for pure economic loss unless it is proven that there is an imminent danger. This was neither pleaded nor proved. As a result, all of the Murrays for defects in the KAPO Windows and Doors, or the construction of the Murray Residence, against all of the defendants must fail.
The Plaintiffs also alleged that Luxus had a duty to provide installation instructions in English. This was dismissed on the basis that this was really another way of framing a claim for provision of shoddy goods, the drawings contained a notation, in German, that there was to be no weight placed on the sliding doors, there was no evidence of confusion related to the initial shop drawings, and the Plaintiffs’ agent signed the drawings. Similarly, the claim for negligent misrepresentation was also dismissed as there was no evidence that Luxus made any representations that the product supplied was fit for its intended purposes.
In effect, the Plaintiffs were provided with the doors and windows they ordered, but Luxus did not provide assurances that the windows and doors were fit for their intended purposes. Further, the Plaintiff was warned, through the drawings, that weight could not be placed on the sliding doors.
In terms of damages, the Court rejected any reduction for depreciation on the basis that the Plaintiffs have been precluded from using the sliding doors in windows since they moved in:
[509] Mr. Shrivastava provided no explanation for discounting the damages for “depreciated cost value” in 2023. If the KAPO Windows and Doors are replaced with windows and doors that are newer than the remainder of the Murray Residence, the replacement cost is set at the date when the new windows and doors are supplied and installed. The replacement cost does not change even if the 10-year-old KAPO Windows and Doors are worth less at the date of replacement than when they were new.
[510] In any event, I find that the Murrays have not been able to use the Great Room Sliding Doors and the Master Bedroom Sliding Doors since they moved into the Murray Residence in 2014, except for a short period of time after the Turnbuckles were installed. As a result, the Murrays have not had the use of the Great Room Sliding Doors and the Master Bedroom Sliding Doors for almost the entire period of time starting from when they moved into the Murray Residence to the date of trial.
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[512] There is no principled basis for reducing the damages for “depreciated cost value” and I reject such a deduction.
The Court also concluded that it was not unreasonable for the Plaintiffs to delay undertaking remedial work until liability was sorted out at Trial.
Norris v Vomacka, 2024 ABKB 312
In Norris v Vomacka, 2024 ABKB 312 the Plaintiff sought leave pursuant to Section 558.1 of the Insurance Act to tender 2 additional expert reports. Section 558.1 precludes a party in a motor vehicle accident from calling more than 3 experts on motor vehicle claims where injuries exceed $100,000. Where damages are less than $100,000 a party is precluded from calling more than 1 expert. In Norris, the Plaintiff already had a report from a physiatrist, functional capacity evaluator, and economist. He sought to obtain an expert report in neuropsychology and an ENT. The Court granted the application on the basis that the experts retained to date could not provide an expert opinion on post-concussive effects or disequilibrium. Weighing the prejudice to each party, the Court concluded that the prejudice to the Plaintiff outweighed concerns related complexity and costs.
Plante v Administrator of the Motor Vehicle Accident Claims Act, 2024 ABCA 156
In Plante v Administrator of the Motor Vehicle Accident Claims Act, 2024 ABCA 156 the Defendant, Verna Baptiste, ran out of gas on a rural road, tried to wave down a passerby, and was struck and killed by another vehicle. She was intoxicated at the time and had no insurance. The Plaintiff claimed psychological injury for striking Verna. At a Summary Trial, the Court concluded that the injuries arose out of Ms. Baptiste’s use and operation of a motor vehicle. The Administrator appealed on the basis that Ms. Baptiste was not in her vehicle when the collision occurred. The Court of Appeal dismissed the appeal and was not prepared to interfere with the Trial Justice finding that there was an unbroken chain of causation between Ms. Baptiste’s use and operation of her vehicle and the subsequent activities that resulted in the collision. The Court left open whether the passage of time after leaving a vehicle can disentitle a claim in other circumstances:
[12] As reasonably found by the trial judge, there was a clear chain of causation between Ms. Baptiste’s ordinary use of her vehicle to transport herself to the accident scene and her actions when she exited the vehicle. More specifically, we agree with the trial judge’s finding at paragraph 29 of the Decision that:
. . . there was an unbroken chain of causation between Ms. Baptiste’s normal use of her vehicle and her subsequent activities which led to the accident. Motorists looking for assistance after running out of fuel are within the expectation of users of a highway. This can be seen by Mr. Plante’s reducing speed and looking for pedestrians when he saw the parked vehicle, with hazard flashers, on a shoulder of the highway. Further, clearly Ms. Baptiste had not abandoned the use of her vehicle, evidenced by activating her hazard lights, leaving a passenger in the vehicle and being found about forty metres from her vehicle. She was doing what was necessary to continue the use of her vehicle, namely, precuring [sic] assistance to get fuel.
[13] While the Administrator proposes that the passage of a certain amount of time after leaving a vehicle or travelling a certain distance from a vehicle can disentitle a claimant to coverage, we decline to draw any bright lines relating to time or distance. While the passage of time after exiting a vehicle or the distance removed from a vehicle might be relevant, depending on the circumstances, the inquiry remains focused on the chain of causation linking a plaintiff’s injuries to the ordinary use and operation of the vehicle. In the particular facts in this matter, the chain of causation was unbroken.