Marcil v. Eastview Chevrolet Pontiac Buick GMC Ltd., 2016 ONSC 3594

CITATION: Marcil v. Eastview Chevrolet Pontiac Buick GMC Ltd., 2016 ONSC 3594

DIVISIONAL COURT FILE NO.: 913-12

DATE: 20160705

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Gauthier J.

BETWEEN:

André Marcil

Appellant

– and –

Eastview Chevrolet Pontiac Buick GMC Ltd.

Respondent

Ronald F. Caza, for the Appellant

André C. Lehoux, for the Respondent

HEARD: May 19, 2016

DECISION ON APPEAL

The Proceeding

[1] On May 19, 2016, I heard the Appeal by Andre Marcil (“Marcil”) from the Judgment of Deputy Judge Kim Cogar (“ the Judge”) rendered on May 17, 2012, in the Small Claims Court in Kapuskasing. The Judge dismissed Marcil’s action.

Facts

[2] I have borrowed liberally from the Appellant’s Factum as, by and large, the facts are not in dispute.

[3] On April 5, 2010, Marcil purchased a new 2009 GMC Sierra Duramax truck, having a value of approximately $70,736. The vehicle is described as luxurious, with additional options, for increased comfort and safety.

[4] On November 10, 2010, Marcil was on a hunting trip in Northwestern Ontario and was attempting to re-enter his own lane after having passed another vehicle. His vehicle began to accelerate (“auto-accelerate”), although Marcil was attempting to decelerate and was applying the brakes. The vehicle attained a speed of 150 km per hour before it finally began to slow down. It was jumping on the road, and there was much noise, smoke, and the smell of something burning.

[5] Marcil had attempted several manoeuvers to slow the speed of the vehicle, involving the use of much force. He and his passenger both believed that their life was in danger. The passenger jumped out of the vehicle while it was still in motion, sustaining significant injuries.

[6] After the vehicle came to a complete stop on the shoulder of the road, Marcil exited the vehicle and never again made any use of it.

[7] The vehicle was towed to Dominion Motors in Thunder Bay and was inspected by Dan Frenette, the Service Manager and Shop Foreman, who found no problems with the vehicle. I will have more to say about the inspection and the inspector’s conclusion, later in these Reasons.

[8] The vehicle was then towed back to Eastview Motors in Kapuskasing for another inspection. No one there was able to identify a problem with the vehicle.

[9] As Marcil was not prepared to resume the use of the vehicle given the events of November 10, 2010, the parties agreed that the vehicle would be exchanged for another. Unfortunately, it proved impossible to locate another truck of the same year. Marcil was offered a 2011 truck, for which he paid the sum of $17,141.59. The new vehicle did not have all the accessories that the 2009 vehicle had. The cost of those additional options was estimated to be $2,500.

[10] The trial was heard in Kapuskasing on March 7, 2012. Judgment was rendered on May 17, 2012, dismissing the Claim.

The Judge’s Reasons

[11] The Judge began her reasons by stating that she “must consider the facts of the alleged incident and who should bear responsibility for same.”

[12] She reviewed Dan Frenette’s evidence that he had conducted several tests, including a road test, and had been unable to duplicate the condition that Marcil had found himself in on November 10, 2010. The judge noted Frenette’s evidence that the vehicle’s “operation was in perfect condition” and that he had found “No other explanation for the alleged malfunction.”

[13] The Judge found that there was no evidence of defect in the vehicle. At page 3 of her Reasons, she said this:

I find it difficult to conclude that there existed a defect in the truck and that there was a breach of an implied warranty pursuant to the Sale of Goods Act. I agree that there is no evidence of any defect whatsoever. The mechanic, who, by Plaintiff’s counsel’s own argument, was a third party who had nothing to gain in this matter, testified by affidavit that he himself test drove the vehicle and found no defect. Computer tests conducted immediately after the incident did not reveal any defects. This is the best evidence before the court.

[14] Still dealing with Frenette’s evidence, the judge said this:

He concludes that the anomaly was not caused by the carpets in the vehicle or anything within the immediate surroundings. This evidence was contradicted by Eastview who provided evidence that there were marks on the carpet. The Court concludes that it not clear what impact the carpets had on the alleged “anomaly” and that this fact in and of itself does not sway the court one way or the other.

The Plaintiff chose to purchase another vehicle. While the Court appreciates that his intention was to purchase the same vehicle and its’ lack of availability in Kapuskasing left the Plaintiff to purchase a newer model, this was his decision and I fail to see how the Defendant can be held responsible for this. Certainly, the Plaintiff will receive some additional benefit from the newer model.

Marcil’s Position

[15] Although the judge recognized that what occurred on November 10, 2010, was an “anomaly”, she concluded that there was no defect.

[16] The judge concluded that the vehicle did not contain a defect because there was no evidence to explain why the events of November 10, 2010, occurred. This was a palpable and overriding error.

[17] The Judge committed a palpable and overriding error of fact and law in concluding, on the evidence, that there was no defect.

[18] On all of the evidence, there was no other logical or reasonable conclusion to reach, than that there was a defect in the vehicle which caused the events of November 10, 2010.

[19] The Judge erred in her interpretation of the words “defect” and “defective”. She failed to apply a general and flexible test, and to recognize that “the concept of defect cannot be defined except in terms of what it was reasonable to expect of the product, in all of the circumstances.” See Holt v. PPG Industries Canada Ltd [1983] CarswellAlta 704 (Alta QB).

[20] The evidence of Frenette recognizes that there was a defect, but could not find the cause. The words “We found no explanation for the…malfunction” are an acknowledgment of the existence of a defect. Paul Lavoie, who was Eastview’s representative at the trial indicated that General Motors should be liable for the malfunction, not Eastview.

[21] At all times Eastview acknowledged that the incident of November 10, 2010, did actually occur.

[22] It acknowledged that a problem with the accelerator had occurred on November 10, 2010, and it attempted, without success, to find the cause.

[23] Marcil maintains that an "anomaly" such as the one that was evidenced on November 10, 2010, is indeed a defect. There was both a breach of the implied warranty of fitness for purpose and of the implied warranty of merchantable quality, under the Sale of Goods Act, R.S.O. 1990, c. S. 1.

[24] Marcil did the only thing he could in mitigating his damages, which was to work with Eastview to attempt to find an equivalent truck. He should be reimbursed for the difference in price he had to pay due to the unavailability of another 2009 GMC Sierra Duramax truck, and for the costs of the options which were not included in the replacement vehicle.

Eastview’s Position

[25] The vehicle did not have a defect, and the existence of a defect was not established on the evidence.

[26] The facts of the one time occurrence of the events of November 10, 2010, reflect an "anomaly", but that does not, at law, constitute a defect. An unexpected and unexplained anomaly does not equate with a defect. To quote the Respondent's Factum:

The incident of November 10, 2010, did not establish that the subject vehicle had a defect. There was no or insufficient evidence on which the trial Judge could have inferred a defect. An anomaly does not a defect make.

[27] Marcil failed to adduce evidence of either the existence of a defect, or evidence that no other explanation was possible. Therefore, the Sales of Goods Act does not apply.

[28] Eastview argues that the trial Judge was entitled to conclude that there was no defect, and to therefore dismiss the Claim.

[29] The anomaly occurred seven months after the purchase of the vehicle, and, after Marcil had driven 15,000 kilometers with the vehicle.

[30] There was no evidence of any servicing of the vehicle during Marcil's period of ownership, nor of any actions of the driver that could eliminate other probable causes for the anomaly. Put another way, no evidence was led by Marcil to show that other causes were not likely responsible for the anomaly.

[31] Eastview quoted the following statement from Mr. Justice Landreville in Phillips v. Chrysler Corporation of Canada Ltd. 1962 218 (Ont. H.C.): "it is a sophism to believe that because an accident has happened someone is liable."

[32] Essentially, Marcil failed to establish, as he was required to do, that there was a defect which existed when the truck was delivered to him, or within a reasonable time thereafter.

[33] Sale of Goods Act:

15. Subject to this Act and any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:

16. Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description that it is in the course of the seller’s business to supply (whether the seller is the manufacturer or not), there is an implied condition that the goods will be reasonably fit for such purpose, but in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose.

17. Where goods are bought by description from a seller who deals in goods of that description (whether the seller is the manufacturer or not), there is an implied condition that the goods will be of merchantable quality, but if the buyer has examined the goods, there is no implied condition as regards defects that such examination ought to have revealed.

18. An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.

19. An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith. R.S.O. 1990, c. S.1, s. 15.

Issues

(a) Was there evidence of a defect in the vehicle?

(b) If so, was there evidence to establish that the defect existed when the truck was purchased, or within a reasonable time thereafter?

(c) If so, was there evidence eliminating other probable causes of the unusual and unexpected auto-acceleration of the vehicle on November 10, 2010?

Standard of Review

[34] Both parties agree that the applicable test in this case is whether the trial judge made a palpable and overriding error in reaching her conclusion that no defect in the truck had been proven, thus disentitling Marcil to a Judgment in his favour.

[35] Findings of fact and matters of mixed law and fact will only be reversed on appeal if they disclose palpable and overriding error. Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235.

296 The “palpable and overriding” standard addresses both the nature of the factual error and its impact on the result. A “palpable” error is one that is obvious, plain to see or clear: Housen at 246. Examples of “palpable” factual errors include findings made in the complete absence of evidence, findings made in conflict with accepted evidence, findings based on a misapprehension of evidence and findings of fact drawn from primary facts that are the result of speculation rather than inference.

297 An “overriding” error is an error that is sufficiently significant to vitiate the challenged finding of fact. Where the challenged finding of fact is based on a constellation of findings, the conclusion that one or more of those findings is founded on a “palpable” error does not automatically mean that the error is also “overriding”. The appellant must demonstrate that the error goes to the root of the challenged finding of fact such that the fact cannot safely stand in the face of that error: Schwartz v. Canada, 1996 217 (SCC), [1996] 1 S.C.R. 254 at 281.

[36] Inferences drawn from the facts are also reviewed for palpable and overriding error.

[37] If the inference drawn by the trial judge is reasonable, a reviewing court will not intervene, even if other inferences could also have been reasonably drawn. H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 SCR 401.

[38] Put another way, and in particular with regard to breach of contract (breach of Sale of Goods Act warranties), a trial judge is entitled to draw an inference of defect from the premature failure of the product, or failure of the product during its ordinary use, but is not required to do so. Again, the fact that such an inference might have been available on the record does not disclose a palpable and overriding error. Ultimately, whether to draw the inference is within the mandate of the trial Judge. The Judge is not compelled to do so. Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 11 (SCC).

General Principles Applicable in Breach of Warranty (Defect) Cases

[39] A Plaintiff bears the burden of proving every element of its cause of action.

[40] Where the rights of the plaintiff depend on a "defect", that defect must be proven, on a balance of probabilities. This can be done by proving the cause of the emergence of the defect, or, where the cause of the emergence of the defect is simply unknown, the Plaintiff may be able to meet the burden of proof by inference.

In order to establish a platform for that inference, the buyer may have to show that there was no misuse of the equipment prior to the failure.

See Grafikom Speedfast Ltd. v. Heidelberg Canada Graphic Equipment Ltd., 2013 ABCA 104, [2013] A.J. No. 226, at para. 21.

[41] The law was concisely encapsulated by the Alberta Court of Appeal in The city of Edmonton v. Westinghouse Canada Inc., 2000 ABCA 80, [2000] A.J. No. 252:

The law is clear that if the City is relying on the Sale of Goods Act, the onus is on it to show that the transformer was defective and that the defect, latent or patent, existed when the transformer was delivered by Westinghouse. The City could discharge this burden on it by showing that the defect probably existed at the time of delivery and by producing evidence to exclude other probable reasons for the emergence of the defect: See Schreiber, supra [Schreiber Brothers Ltd. v. Currie Products Ltd. (1980), 1980 11 (SCC), 108 D.L.R. (3d) 1 (S.C.C.)] and Smythe, supra [Smythe Clark Inc. v. Eurobags (Canada) Inc. (June 28, 1991), Doc. 24281/87 (Ont. Gen. Div.)]. However, the City is under no obligation to disprove all possible reasons for the emergence of the defect, but rather only those which are probable causes: Farmer v. Canada Packers Ltd., 1956 140 (ON SC), [1956] O.R. 657 (Ont. S.C.). Once this has been done, the evidentiary burden shifts to Westinghouse to disprove that the explosion was caused by a defect in the transformer.

Defect

[42] The test to determine whether any defect exists was described in the following manner at page 13 of the Ontario law Reform Commission Report on Products Liability:

For there to be liability under Lord Atkin's statement, (from Donoghue v. Stevenson, 1932 S.C. (H.L.) 31) it is clear that a product must fall short in some way of what it ought to be; a product, in other words, must be defective. Some test of the concept of "defect", therefore, is required. This must be a general and flexible test; and, it would seem that the concept cannot be defined except in terms of what is reasonable to expect of the product in all the circumstances.

[43] A buyer must establish that the defect existed at the time of the delivery of the product or revealed itself within a reasonable amount of time thereafter. McCann v. Sears Canada Ltd., 1998 14812 (ON SC).

Analysis

[44] I begin by distinguishing certain of the cases relied upon by Eastview.

[45] In Grafikom Speedfast Ltd., the trial judge found as a fact that poor maintenance of the product by the plaintiff was the cause of the fire which damaged the product. It was in this context that the judge was not prepared to draw an inference of defect from the very fact of the fire. His refusal to draw that inference, although it might have been available on the record, did not disclose a reviewable error.

[46] The refusal to draw the inference of defect in 527353 Alberta Ltd v. Stedelbauer Chevrolet Oldsmobile (1975) Ltd., 2001 ABQB 909, [2001] A.J. No. 1377, was based on evidence of misuse of the product.

[47] In McCann v. Sears Canada Ltd, 1998 14812 an inordinate amount of time had passed since the purchase of the product and the event giving rise to the litigation: 15 years. There was evidence that the life expectancy of the product was ten years.

[48] In Phillips v. Chrysler Corporation of Canada Ltd. and Roxburg Motors, 1962 218 (Ont H.C.) there was evidence that the vehicle had been taken to at least one other garage (other than the defendant) for repairs, and the plaintiff could not eliminate the possibility of possible tampering with the vehicle. It was in this context that the trial judge said "It is a sophism to believe that because an accident has happened someone is liable."

[49] Turning now to the facts that were before the trial judge, Marcil had purchased a new, luxurious vehicle, having paid a considerable amount of money for it.

[50] He and his wife had decided to purchase the GMC Sierra Duramax as a long term investment in their retirement. They planned to use the vehicle for a long time.

[51] At the time of the incident, it had 15,000 kilometers on it, such mileage having been accumulated during the course of seven months.

[52] The unexpected event of November 10, 2010, was a terrifying experience for Marcil and his passenger. Marcil's refusal to ever use the vehicle again was reasonable in all of the circumstances.

[53] There has been no explanation for the event which occurred on November 10, 2010. The trial judge did not have the benefit of expert evidence, save and except the evidence of Daniel Frenette, and of Eastview that, upon a complete inspection of the vehicle, no explanation for the auto-acceleration that occurred on November 10, 2010, could be provided. Indeed, the vehicle was found to be in excellent condition.

[54] Portions of that evidence bear repeating:

On or about November 10, 2010, the 2009 GM Sierra Duramax (Sierra VIN 1GTHK43679F165204) owned by Andre Marcil was towed to Dominion Motors by GM Roadside Assistance for a reported engine malfunction near Thunder Bay. The main complaint from the owner was that the throttle of the vehicle got stuck while driving, making it impossible to brake or control the speed of the vehicle. The customer indicated that the engine continued revving high even after being put in neutral.

During the inspection, both Steve Grassia (assigned technician, 6295) and I checked the carpets and the immediate surroundings of the accelerator pedal to ensure nothing in that area could have caused the pedal to stick to the floor.

We were unable to find any sign that the carpets had been moved or that they had been stuck under the pedal. The carpets had no marks or tears. Further, we concluded that nothing else around the pedal had caused the accelerator pedal to stick to the floor.

We are satisfied that the anomaly experienced by Mr. Marcil was not caused by the carpets in the vehicle, or anything within the immediate surroundings of the gas pedal.

After the inspection, I personally conducted a 30-minute road test on the vehicle to try to duplicate the condition experienced by Mr. Marcil but was unsuccessful. The vehicle’s operation was in perfect condition. We found no other explanation for the engine’s malfunction.

[55] This particular evidence is of benefit to Eastview, in the sense that the vehicle was found to be in good condition. The evidence is also of benefit to Marcil, as it establishes no indication of abuse of the vehicle itself, or any other probable cause for the problem experienced on November 10, 2010, and, more importantly, it eliminates the probability of the accelerator pedal sticking because of anything within its immediate surroundings, including the carpet.

[56] In the circumstances, I conclude that Marcil discharged his burden of disproving abuse, neglect, or poor maintenance of the vehicle. It was a new vehicle, with relatively few miles on it. It was, as I have already indicated, intended to be a long term investment. The inference which could be drawn from that fact is that Marcil would not likely do anything that would negatively affect the operation of the vehicle, particularly anything affecting its safety. In fact, the evidence of Daniel Frenette establishes that there was nothing to account for the event of November 10, 2010, that he could determine. There is also the evidence of Alain Gendron that..."the vehicle was, in my opinion, 100 percent. I took it for a test drive. It drove fantastic multiple times." (page 79 of transcript).

[57] The only reasonable conclusion to be drawn from the evidence is that, although there was no evidence of the cause of the defect, the event of November 10, 2010, which I have referred to as the auto-acceleration of the vehicle could only have occurred as a result of a defect in the vehicle. That is the only reasonable inference which could be drawn from the whole of the evidence.

[58] To describe the auto-acceleration as an "anomaly" or a "malfunction" does not reflect the fact that the auto-acceleration was not an event that it was reasonable to expect to occur, in the circumstances (the test for “defect”). As such, it occurred as a result of a "defect", whether the cause of that defect could be determined or not.

[59] The defect emerged in the course of the ordinary use of the vehicle. It also emerged when the vehicle was still quite new. And there was no conduct on the part of Marcil that could account for the event of November 10, 2010. See Schreiber Brothers Ltd.

[60] In that case, like in the case at bar, there was a one-time event, which resulted in the failure of a product. The Supreme Court of Canada, in confirming that once a plaintiff had eliminated other probable causes, it was not necessary to show that the defect could be accounted for by a credible theory, reinstated the trial judgment. In the concluding reasons of that trial judgment, the judge said this:

In my opinion therefore, I am left with the probability that the fault lay with the product. I do not overlook the evidence that no such defect was experienced with Gulf's Type 3 BUR before or since. That is a formidable record and I take it into account. However, on a common sense and practical view of the all of the evidence I am constrained to find on the balance of probabilities that the failure of the roof was caused by a latent defect in the Type 3 asphalt and that that defect could not be detected by a prior inspection. It is not necessary to identify precisely in chemical terms what that defect was and I do not attempt to do so. It is sufficient that, however it is identified, it caused the asphalt to behave in such a way that it was useless for the purpose of constructing the built-up roof in question.

[61] On all the evidence, the only reasonable conclusion the trial judge could have reached was that the vehicle had a defect that caused the auto-acceleration experienced on November 10, 2010. A vital and primordial function, implicating the safety of normal, everyday operation of the still new vehicle failed, during ordinary use. The failure was not a fleeting, unimportant event; rather, it jeopardized the very life and safety of the vehicle’s occupants. At the moment of the emergence of the defect, the vehicle could not be used safely. The emergence of the defect created a very dangerous and potentially fatal situation. That meets the more general and flexible test to be applied in such cases. It appears the trial judge did not apply such a general and flexible test when assessing the evidence before her.

[62] Her reasons demonstrate some conflation between the concept of "defect" as already defined, and evidence of the defect. At page 3 of her Reasons, while distinguishing certain of the cases relied upon by Marcil, the trial judge said:

I note, however, that in the case of Muskoka Fuels and Hassan Steel Fabricators Ltd, 2011 ONCA 355, [2011] 334 D.L.R. (4th) 69 the court was asked to look at damages caused by a hole in the tank caused by an unknown explanation. The damage was clear. The hole was evident.

[63] In the instant case, the auto-acceleration of the vehicle to a speed of 150 kilometers per hour, was also unchallenged and "evident".

[64] It is of note as well, that the judge's Reasons make reference to "alleged accident""alleged anomaly", and "alleged malfunction." There is no doubt whatsoever that there was a malfunction and that malfunction amounted to a defect, in law.

[65] Therefore, I conclude that the judge did commit a palpable and overriding error, in failing to apply the proper test to determine if there was a "defect", and in coming to the unreasonable conclusion that there was no evidence of the defect. There was evidence of a defect, but there was no evidence as to the cause. In that circumstance, her judgment must be set aside.

[66] Turning now to the damages, Marcil seeks judgment in the amount of $19,641.59, which reflects the sum of $17,141.59 paid to Eastview for the replacement vehicle, plus the sum of $2,500 for the value of options not included in the replacement vehicle. That value was agreed upon by Eastview's own evidence at the trial.

[67] While I recognize that there may well be an element of betterment involved, given that the replacement vehicle was a 2011, to replace a 2009, there was no evidence regarding the value of such betterment, and, on the evidence, Marcil did not request a 2011 vehicle. He asked to be placed in the same position as he was in before, that is, to receive an identical vehicle to that he had before. None was available. Thus he had no alternative but to accept the 2011.

Conclusion

[68] Having concluded that the trial judge erred in failing to draw the inference of defect from the evidence before her, and having concluded that there was a breach of the implied warranties under the Sale of Goods Act, I am setting aside the Judgment of May 25, 2012, dismissing Marcil's claim.

[69] Judgment shall issue in favour of Marcil, in the amount of $19,641.59.

[70] In the event that the parties are unable to agree on costs, they may file written submissions of no more than three pages, double-spaced. Such submissions to be forwarded to 155 Elm Street, Sudbury, Ontario, to my attention. If no submissions are received within 30 days, the parties will be deemed to have settled the issue between themselves.

The Honourable Madam Justice Louise L. Gauthier

Released: July 5, 2016