Court File and Parties

COURT FILE NO.: CV-14-120531 DATE: 20160607 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HALIBURTON FOREST & WILDLIFE RESERVE LTD. Plaintiff – and – TOROMONT INDUSTRIES LTD., TOROMONT CAT and CATERPILLAR INC. Defendants

Counsel: Harry Poch and Maxwell Steidman, for the Plaintiff/Responding Party Eric Sherkin, for Toromont Industries Ltd. and Toromont Cat, the Defendants/Moving Parties Nicole Henderson, for Caterpillar Inc., the Defendants/Moving Party

HEARD: April 25 and 26, 2016

REASONS FOR JUDGMENT

GILMORE J.:

OVERVIEW

[1] Both defendants seek summary judgment against the plaintiff, Haliburton Forest & Wildlife Reserve Limited (“Haliburton”).

[2] Haliburton commenced an action against both defendants, hereinafter “Toromont” and “Caterpillar”, for breach of contract, negligence and negligent misrepresentation. Haliburton seeks rescission of its sales agreements for two pieces of forestry equipment, a refund of the full purchase price paid and damages for reduced profits, increased operating costs and replacement costs for new equipment.

[3] Toromont moves for summary dismissal of the claim on the basis that the sales agreements contain an entire agreement clause (“EA clause”) and a limitation of liability clause (“LL clause”). Caterpillar moves for summary dismissal of the claim on the basis that it was not a party to the sales contracts between Haliburton and Toromont. The only contractual relationship between Caterpillar and Haliburton was a manufacturer’s limited warranty with respect to one piece of equipment, which excluded liability for all heads of damages sought by Haliburton.

[4] Haliburton defends on several grounds. First, it argues that the sales contracts are ambiguous on their face. Second, it claims that the EA and LL clauses are inoperable, due to the incorporation of extrinsic terms into the agreements, resulting from the pre- and post-contract factual matrices. Finally, it argues that it relied, to its detriment, on negligent assertions and representations made by the defendants.

[5] Haliburton’s claim for breach of contract damages is essentially an alternative one. It seeks rescission of the sales contracts and repayment of the cost of the machines, plus damages for reduced profits, diminished productivity, increased operating costs in 2013, the cost of having to buy additional logs for its sawmill and the replacement cost of the equipment. The total claim is in the range of $2.5 million. If it is not successful in obtaining rescission, it seeks damages for breach of contract, plus the same heads of damages as described above, as well as damages for negligent misrepresentation and loss of income suffered in reliance. That total claim is in the range of $6 to $7 million.

[6] The description of the claim in Haliburton’s factum is somewhat different than in its actual Statement of Claim. For the purposes of this motion, I do not believe that is a material issue.

BACKGROUND FACTS

[7] Caterpillar is a well-known world leader in the manufacture of heavy equipment. Toromont and Toromont Cat (collectively “Toromont”) is an authorized dealer of Caterpillar products.

[8] Haliburton is a corporation, which operates the largest managed forest in Ontario. On its 80,000 acre property near Algonquin Park, Ontario, it operates both a tourism and forestry/wood processing business. Its annual revenue is between $6 and $7 million, and 60 percent of its business is devoted to managed logging and wood processing.

[9] Dr. Peter Schleifenbaum is the President of Haliburton. There is no dispute that he was authorized to make decisions and sign contracts on behalf of Haliburton.

[10] Dirk Nielsen (“Nielsen”) was a marketing and sales territory representative for Caterpillar at the relevant time. Aaron Hopkins (“Hopkins”) was a sales representative for Toromont, Joe Martin (“Martin”) was the Regional Vice-President and Adam Miller (“Miller”) was a Branch Manager, who signed the sales contracts on behalf of Toromont at the relevant time.

[11] The chronology of events in this case is not in dispute. In June 2012, a representative from Haliburton was interested in a Caterpillar 510HD Harvester machine (the “Harvester”) that he saw at a trade show. A Harvester is a machine that cuts down trees, cuts them to length and leaves the cut logs at the roadside to be transported.

[12] Dr. Schleifenbaum and other potential clients were invited to a demonstration of the Harvester on July 11, 2012. Toromont and Caterpillar representatives were on hand to answer questions. Later in July 2012, a meeting was held at Haliburton’s on site office between Dr. Schleifenbaum, Hopkins and Nielsen, in which they discussed the types of forestry equipment that would suit Haliburton’s terrain and production needs.

[13] On July 17, 2012, Nielsen responded to issues that Dr. Schleifenbaum had raised in a July 13th email. Nielsen was Caterpillar’s eastern forest specialist. He provided Dr. Schleifenbaum with spreadsheets related to production and cost expectations, given Dr. Schleifenbaum’s targets of 300 trees cut per day. Dr. Schleifenbaum stated that the defendants’ representatives claimed on numerous occasions that the machines would be able to meet Dr. Schleifenbaum’s production and cost targets. While Dr. Schleifenbaum characterised the spreadsheets as the basis of all subsequent discussions and negotiations between the parties, Nielsen’s evidence was that the spreadsheet numbers were not a guarantee of performance. [1]

[14] By late August, Dr. Schleifenbaum, Toromont and Caterpillar had agreed that Haliburton could rent the Harvester on a trial basis to determine if it was suitable. Haliburton would also receive the free use of a used Caterpillar 574 Forwarder machine (the “Forwarder”) at the same time. A Forwarder is a machine used to transport logs. The parties agreed that this was a no obligation trial and that the machines could be returned if they did not suit Haliburton’s needs. The machines were delivered to Haliburton in September 2012.

[15] Haliburton’s initial assessment of the Harvester and Forwarder was that they did not meet its needs. [2] Further discussions took place between Dr. Schleifenbaum and Toromont’s representatives in October 2012, with respect to the recommended changes to the machines that would be required in order for them to meet Haliburton’s meets.

[16] On October 31, 2012, a meeting took place between Dr. Schleifenbaum, Hopkins and Martin. Dr. Schleifenbaum indicated he wished to buy the machines, so long as they included certain agreed upon modifications. It was at this meeting that Dr. Schleifenbaum alleged that Martin asserted that Toromont had a “fair treatment policy”, which he personally guaranteed and would be applied if any issue arose. Dr. Schleifenbaum and Martin shook hands at the end of the October 31, 2012 meeting because they had made a deal. According to Hopkins, he understood this to mean that Toromont would deal with the issues that Dr. Schleifenbaum had encountered during the trial and that the purchase of the Forwarder and the Harvester would meet Haliburton’s needs. [3]

[17] Following the October 31, 2012 meeting, Toromont prepared a draft sales contract for each machine and forwarded them to Dr. Schleifenbaum. He received the draft contracts on November 2, 2012. The first page of each contract contained the terms of payment, a description of the agreement and some warranty information. The second page, which formed part of the contract, contained Toromont’s terms and conditions of sale. Paragraph 10 of the second page contained the EA clause and paragraph 15 contained the LL clause. The draft contract for the Harvester noted that it came with a 7000 hour/5 year Extended Power Train Warranty (“EPTW”). The wording of the warranty (or lack thereof) for the Forwarder is in dispute. The defendants submit that it is clearly worded as an “As is/Where is” arrangement with no warranty because it was used equipment. Haliburton submits that the wording excludes the “no warranty” provision.

[18] The draft contracts were in Dr. Schleifenbaum’s possession for approximately six weeks. Dr. Schleifenbaum’s evidence was that he would have probably reviewed the terms and conditions. [4] Hopkins’ evidence was that Dr. Schleifenbaum read the terms and conditions out loud in their entirety while Hopkins was present. [5] Significant email and telephone communication between Dr. Schleifenbaum and Toromont took place during the six week negotiation period. Revised draft agreements were sent to Dr. Schleifenbaum on December 17, 2012. On December 18, 2012, Dr. Schleifenbaum emailed Miller indicating he was in general agreement with the contracts but raised four issues to be addressed.

[19] Dr. Schleifenbaum met with Miller on December 19, 2012 and signed final versions of both contracts. He stroked out certain provisions on both pages of both agreements. Dr. Schleifenbaum also signed the terms and conditions of sale page on each agreement. He did not have the draft agreements reviewed by legal counsel nor did he seek to change clauses 10 and 15 of the terms and conditions of sale. He paid the purchase price of $884,162.85, inclusive of HST, in cash.

[20] By December 2013, the Harvester was parked and no longer operable. Haliburton purchased replacement machinery, as Haliburton alleged the machines purchased from Toromont were mechanically unfit and did not perform as stipulated.

[21] While the defendants argue that the post-contractual facts are irrelevant for the purpose of this motion, Haliburton submits that certain items had been promised at the “handshake” meeting on October 31, 2012. It alleges that changes were made to the agreement despite the provision in the EA clause that no salesman or agent had any authority to make such changes. Based on the defendant’s representations regarding production, fuel consumption, repair expense, as well as post-contractual changes and agreements, Haliburton submits that the EA and LL clauses are inoperable. Toromont submits that that both clauses are binding and enforceable.

THE ISSUES AND THE LAW

Summary Judgment

[22] The test for summary judgment as set out in Rule 20 and articulated in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, is well known and frequently cited. Hryniak provides the court with enhanced fact-finding powers, reflecting the reality that the interests of justice dictate that a conventional trial need not be the default procedure for resolving disputes. Where appropriate, the ability to weigh evidence, draw inferences from the evidence, find facts and apply the law to the facts on a motion for summary judgment permits a timely, affordable and proportionate procedure.

[23] Summary judgment may be granted where the motion judge is satisfied that there is no genuine issue for trial. The motion judge may reach that conclusion based on a just determination on the merits, so long as such a determination is available from the process and evidence filed.

[24] In this case, it was not contested that the summary judgment procedure is the proper one. The evidence filed was comprehensive and extensive, including affidavits from key deponents and their cross-examination transcripts. Extensive case briefs were also filed by all counsel. It is this court’s view that it has the necessary evidence before it to make a determination as to whether there is a genuine issue requiring trial.

Toromont’s Arguments

[25] While the arguments of the defendants merge at certain points, it is necessary to deal with each of the defendant’s arguments separately, as each seeks summary judgment on different grounds.

Limitation of Liability and Entire Agreement Clauses

[26] The second page of each sales contract contained the same terms and conditions of sale, and was signed by Dr. Schleifenbaum. He also drew a line through paragraphs 3 and 14 on that page. There is no dispute that those clauses do not apply.

[27] The clauses in issue in this case are clauses 10 and 15. The EA clause at paragraph 10 provides as follows:

10. The terms and conditions herein contained constitute the complete agreement between the Vendor and the Purchaser, and the Purchaser acknowledges that no salesman or agent of the Vendor has any authority to make any others or alter the terms and conditions herein contained. Except as expressly stipulated herein, there are no representations or warranties by the Vendor with respect to the said goods or their fitness for the purpose or use of the Purchaser or their merchantability or otherwise. No amendment to this agreement shall be binding on the Vendor unless in writing and executed by an Executive Officer of the Vendor. In no event shall the Vendor be liable for any special, consequential, punitive, incidental, or indirect damages arising forma ny reason whatsoever, whether or not loss is based on contract, warranty, negligence, indemnity or otherwise.

[28] The LL clause at paragraph 15 provides as follows (it is reproduced in capital letters as in the actual sales agreement):

15. LIMITS OF LIABILITY – NEITHER THE VENDOR NOR PURCHASER IS LIABLE FOR ANY AGGRAVATED, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES, INCLUDING LOSS OF PROFITS OR LOSS OF ANTICIPATED PROFITS, HOWSOEVER ARISING AND SUSTAINED BY THE OTHER PARTY IN THE PERFORMANCE, PURPORTED PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT. THE MAXIMUM LIABILITY OF VENDOR FOR DAMAGES, IF ANY, UNDER OR PURSUANT TO THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNTS PAID BY THE PURCHASER TO THE VENDOR HEREUNDER.

[29] Toromont argues that these clauses cover all of the heads of damages claimed by Haliburton. The maximum they could claim, if successful, would be the purchase price of the machines, or approximately $884,000. These clauses appeared in every negotiated draft of the agreement from the time the first draft was sent to Dr. Schleifenbaum on November 2, 2012.

[30] Toromont argues that there is nothing in the sales agreements relating to fuel consumption, service and parts turnaround times or productivity. Haliburton cannot argue that any representations, assertions, advice, information, agreements or undertakings made outside of this agreement form a part thereof. The EA clause excludes all such representations.

[31] Haliburton argues that representations made to Dr. Schleifenbaum with respect to gas consumption, tire capability, productivity (both daily and annually), parts and service turnaround times and downtime for repairs were all key factors that led it to enter into the agreements. Dr. Schleifenbaum was told that the machines would perform in accordance with these representations, and he relied on them.

[32] Haliburton made specific reference to an email that Miller sent to Dr. Schleifenbaum on December 24, 2012, dealing with certain complaints Dr. Schleifenbaum had raised in an email of December 22, 2012. Miller offers a $50,000 holdback on the price of the machines in order to deal with Dr. Schleifenbaum’s grievances, and adds “We would very much like to have a meeting with you at your location or ours to solidify commercial terms and put aside any differences that we have encountered over the past several weeks.” [7]

[33] Haliburton, therefore, submits that the holdback and offer to “solidify commercial terms” meant the agreements were not complete and represented an amendment to the original agreements. Such an amendment takes the matter out of the test in Tercon (set out below), as the December 24th email is evidence that the December 19, 2012 agreements were not the entire agreements, and there were clearly future terms yet to be “solidified.”

[34] Toromont submits that this was a commercial contract between two sophisticated business entities. Dr. Schleifenbaum is knowledgeable and well-respected in the forestry industry. He had purchased ten pieces of forestry equipment in the decade prior to signing this agreement. He sought legal advice on commercial contracts in the past.

[35] When asked about the terms and conditions of sale page for the Harvester (which is exactly the same page for the Forwarder) on cross-examination, his response was:

…this was the skeleton agreement with all kinds of other arrangements that had been made prior and after, so to me this didn’t appear to be that important. …

…I mean a lot of this – this is a boilerplate terms and conditions. Most of these things don’t apply anyways. …

This is the small print that always goes with stuff where you just say well, you sign it but this is really not what the deal encompassed. There are a lot of side agreements, other parts of this deal that really constituted this sales agreement, and as I said, most of this was not applicable anyways. [8]

[36] When Dr. Schleifenbaum was asked about the entire agreement clause in the context of questioning as to why he signed the agreements if they did not contain the provisions he wanted, his evidence was that it was a “blank signature” and did not matter. [9]

[37] The sales contract for the Forwarder contains a provision in a box on page one that is in dispute. The heading “Used Equipment Warranty” is checked and signed by Dr. Schleifenbaum. Below the checked box is the following:

All used equipment is sold as is, where is with no warranty except as specified below. All other warranties, express or implied (including, without limitation, fitness or purpose of merchantability) are specifically excluded.

[38] Haliburton argues that the preamble excludes what is typed in under the words “warranty applicable” and therefore the words “no warranty on this unit” do not apply. Haliburton argues the wording is ambiguous at best, and, therefore, the court should consider the full factual matrix to determine the parties’ intentions.

[39] Toromont argues that the meaning of the provision is plain on its face, and there should be no confusion regarding its meaning. Toromont sold Haliburton a used piece of equipment on an as is/where is basis. There was no warranty. This provision did not change throughout the sales negotiations or during the time that Dr. Schleifenbaum had the draft agreements for review. This provision should be contrasted with the Harvester sales agreement, which specifies that there is a 7000 hour, five-year EPT warranty because it is a new machine.

Negligent Misrepresentation

[40] With respect to the alleged negligent misrepresentations, Dr. Schleifenbaum submits he would not have signed the agreements absent the promise that the machinery would meet his productivity requirements.

[41] Specifically, Haliburton points to an email dated July 18, 2012, which forwarded an email from Nielsen dated July 17, 2012. Nielsen provided specific responses to Dr. Schleifenbaum’s questions regarding production costs, and prepared and attached a spreadsheet that addressed issues such as machine days per year, fuel consumption and cost and hourly and yearly productivity. Dr. Schleifenbaum made it clear that he needed to be able to cut, delimb and process 300 trees per day. He needed equipment that could perform in the uneven terrain and extreme weather conditions of his forest and he needed support for repairs and maintenance on a 48-hour turnaround. Counsel pointed to email discussions between Dr. Schleifenbaum and representatives of Toromont and Caterpillar about all of these issues throughout the summer and fall of 2012 leading up to the signing of the agreements.

[42] Haliburton submits that the representations made in the summer and fall of 2012 culminated in the October 31, 2012 “handshake” meeting, and were the basis for the purchase terms. Dr. Schleifenbaum made his requirements clear in his emails, and the representatives from Toromont and Caterpillar assured him that their equipment would meet his needs.

[43] Haliburton relies on the test in Queen v. Cognos, [1993] 1 S.C.R. 87 for the elements required for a claim in negligent misrepresentation to succeed. Haliburton argues that the elements have been satisfied and that the “special relationship” required was established by the handshake meeting on October 31, 2012.

[44] Toromont submits that even if it had made negligent misrepresentations that induced Haliburton to enter into the agreements (which it denies), the claim fails based on the test in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69. The EA clause excludes reliance on outside representations, and the types of damages Haliburton seeks are specifically excluded by both the EA and LL clauses. Alternatively, any negligent misrepresentations that Haliburton alleges form part of the agreement are also excluded by the operation of the EA clause.

The Sale of Goods Act

[45] Haliburton submits that if a party wishes to exclude the statutory provisions of the Sale of Goods Act, R.S.O. 1990, c. S.1 [SGA], such exclusion must be done explicitly. That was not done here, and Toromont did not plead s. 53 of the SGA.

[46] Haliburton submits that even if Toromont is successful in enforcing the LL and EA clauses, there is no exclusion from the statutory implied condition of fitness under the SGA. It argues that claim should proceed as a breach of contract claim.

[47] Toromont concedes that the implied condition of fitness is not excluded based on the wording of the EA and LL clauses. However, if such a condition applies, the damages recoverable by Haliburton would be restricted to the cost of the equipment, and not the multiple heads of damages claimed by Haliburton.

THE LAW AND ANALYSIS – TOROMONT’S MOTION

The Entire Agreement and Limitation of Liability Clauses

[48] This case requires an examination of the test in Tercon. If the EA and LL clauses come within the test in that case, Haliburton is unlikely to succeed with the majority of its claims.

[49] The Tercon test is clear and has been applied in several cases since the 2010 Supreme Court decision. Tercon sets out the contemporary approach to the evaluation of the enforceability of LL clauses. Lower courts have also applied the Tercon test to EA clauses in cases such as 7326246 Canada Inc. v. Ajilon Consulting, 2014 ONSC 28, with respect to a party’s liability in tort for negligent misrepresentation.

[50] Tercon requires that the court first examine whether the exclusion clause applies to the circumstances. If it does apply, the court must go on to determine if the clause is unconscionable. Finally, the court must examine whether it should decline to enforce the otherwise valid exclusionary clause due to public policy considerations.

[51] Turning to the first part of the test in Tercon, this court must determine if the LL and EA clauses apply in these circumstances. A plain reading of the clauses makes it obvious that all of the heads of damages claimed by Haliburton are excluded by operation of the clauses. This court must then consider Haliburton’s position that the clauses do not apply because key components of the agreement were understood to be part of the agreement at the October 31, 2012 meeting. Therefore, the EA clause cannot apply because the agreement signed was not the entire agreement.

[52] This requires the court to determine whether a deal made on a handshake, where the written contract contains both an EA and LL clause, is enough to set aside the clear and strict parameters of Tercon and the cases that follow it. The answer to that question must be no, for several reasons:

a. I do not agree that the contents of the Miller email dated December 24, 2012, amended the agreements. The EA clause could not be clearer when it states “….no salesman or agent of the Vendor has any authority to make any others [agreements] or alter the terms or conditions herein contained.” I agree with Toromont’s submissions on this point: Miller’s offers in this email were meant to placate an unhappy customer and cannot be afforded the broad interpretation suggested by Haliburton that this email was meant to be an amendment to the sales agreement. b. I reject Haliburton’s arguments with respect to the evidence of Adam Miller. In any event, I do not rely solely on Miller’s evidence to make these conclusions of law. c. As per Soboczynski v. Beauchamp, 2015 ONCA 282, 125 O.R. (3d) 241, at para. 57, EA clauses deal with the situation at the time the agreement is signed. Post-contract dealings are more in the nature of after sales service, and I do not interpret them as reflective of any form of ongoing negotiation. d. The agreements were negotiated over a protracted period of time. If the agreements were concluded with the handshake on October 31, 2012, why did Dr. Schleifenbaum continue with negotiations until December 19, 2012? There was no evidence he was pressured into signing the agreements or that he was not given an opportunity to obtain legal or accounting advice or both. e. While is it clear that discussions regarding daily and yearly productivity, fuel consumption, tire capabilities and repair and parts turnaround times took place in the summer and fall of 2012, none of these items are articulated in the agreements. There is no evidence that Dr. Schleifenbaum asked that such amendments be made during the time he had the draft agreements in his possession (November 2 – December 19, 2012). He conceded that he did not ask Toromont to amend the agreements to include his stipulated requirements. [14]

[53] Turning to the second stage of the Tercon test, this court must determine if the clauses were unconscionable at the time the agreements were signed. The answer to this question must again be no, for the following reasons:

a. Dr. Schleifenbaum was a sophisticated purchaser with experience purchasing large equipment for logging. His sweeping remarks about a “blank signature” and that most of the sales terms and conditions did not apply to him ring hollow in the face of his education and his tenure in the forestry business. b. Dr. Schleifenbaum was afforded a trial period with the equipment with no obligation to buy. Indeed, at one point in the fall of 2012, Dr. Schleifenbaum threatened to return the equipment, as he was not satisfied that it met his needs. He told Toromont he had started to negotiate with a competitor. He could have walked away at that point if he chose. c. There is no evidence that Dr. Schleifenbaum experienced any duress during the negotiation period. On the contrary, there was ample evidence of telephone and email communication between the parties where both sides presented their points of view. d. The burden of proof on Haliburton to prove unconscionability is high. In Ajilon the court held that an entire agreement clause was unconscionable where it determined that one party was in a stronger “informational” position than the other and used that information to obtain a party’s consent to an improvident clause. The court was clear that unconscionability will negate enforceability of an EA clause “where one party has abused its negotiating power to take undue advantage of the other.” [16] I do not find that such circumstances existed in this case. Indeed, Dr. Schleifenbaum was very direct with Toromont representatives during the summer and fall of 2012 about his unhappiness with certain aspects of the equipment. For example, in his November 27, 2012 email to Miller, Dr. Schleifenbaum summarized over 20 points they had discussed in a telephone conversation the previous day. These are detailed points, ranging from timing, communication and repair turnaround to payment, delivery and trade-in negotiations. He starts the email by saying: i. Adam, I did not receive the note yesterday afternoon, which you said was forthcoming. I don’t know what that means. It is even these little things, that build or destroy trust. e. In his October 16, 2012 email to Hopkins, Dr. Schleifenbaum states, “…you being our main contact, but not knowing anything about forestry or equipment certainly does not help.” Again, he did not mince words. He did not hesitate to make his points known in a forceful and unadorned way. He cannot be said to have been in a weaker bargaining position than Toromont. f. Haliburton received what it bargained for: a Harvester and Forwarder with certain agreed upon modifications and at an agreed upon price. The equipment was purchased after protracted negotiations and a test period.

I find, therefore, that the agreements were “freely concluded”, as per the principle in Tercon (citing Hunter v. Syncrude) [17] and were not unconscionable.

[54] The third stage of the Tercon test requires the court to determine whether there is a public policy reason to refuse enforcement. The burden of proof at this stage of the test is again on the defending party.

[55] Haliburton pleaded that it may have to lay off workers because of the inadequate equipment, which would burden taxpayers. Haliburton also claims that the long term public interest in the environment would not be served if its sustainably managed forest was lost. Finally, it claims that the clauses were drafted by sophisticated vendors who knew the equipment would not perform as promised.

[56] There was no evidence that either of the circumstances pleaded by Haliburton have come to pass. Further, the possibility of financial losses resulting from a freely negotiated contract is a private commercial matter and not one that can be elevated to a public policy concern.

[57] Given all of the above, I find that the third stage of the Tercon test is satisfied and that both the EA and LL clauses in the sales agreements are enforceable and operate to exclude the heads of damages claimed by Haliburton, except with respect to the application of the SGA, which will be dealt with below.

Negligent Misrepresentation

[58] Haliburton relies on Toromont’s alleged negligent misrepresentations, which it says induced it to enter into the sales agreements. In short, Haliburton’s position is that the pre-contractual factual matrix comprised representations that formed the substance of the sales agreements, and the post-contractual factual matrix included changes and new agreements that effectively became amendments to the sales agreements.

[59] Haliburton argues that Toromont has not addressed the five required elements of negligent misrepresentation in Queen v. Cognos, [1993] 1 S.C.R. 87. Specifically, Haliburton relies on what it characterizes as the “special relationship” between the parties, which is independent of the agreements and forms the basis for the scope of Toromont’s duty of care. As a result of this relationship, pre-contractual negligent misrepresentations would not be affected by the subsequent contract.

[60] Haliburton characterizes the October 31, 2012 “handshake agreement” between Dr. Schleifenbaum and Martin as evidence of this special relationship. It states that this relationship formed at the culmination of their negotiations and was created by Haliburton’s reliance on the representations of Toromont’s experts’ assertions made during those negotiations.

[61] The representations upon which Haliburton claims it relied were numerous and ongoing throughout the negotiations. However, counsel singled out one example contained in the email of October 1, 2012 from Hopkins to Dr. Schleifenbaum, in which Hopkins says, “Going back to what we can both appreciate, Mechanical variables [,] the 501 [the Harvester] will not leave let you down, show up late, leave early or get hurt beyond repair when the mill has orders to fill.”

[62] Another example was contained in the email of December 24, 2012, from Miller to Dr. Schleifenbaum, in which he says “Not everything has gone smoothly, however, Toromont has continued to employ due diligence and good faith on each item that has arisen. All of these items will be resolved. That is our commitment.”

[63] According to Haliburton, the most important representations were the spreadsheets prepared by Nielsen and sent to Dr. Schleifenbaum on July 17, 2012. These spreadsheets were specific to Haliburton’s property and addressed Dr. Schleifenbaum’s cost and production expectations. Haliburton argues that all subsequent discussions and negotiations were based on those spreadsheets.

[64] Toromont argues that even if it made negligent misrepresentations that induced Haliburton to enter into the sales agreements, Haliburton is foreclosed from succeeding on its claims based on the current case law. I agree.

[65] The most salient case in this regard is McNeely v. Herbal Magic Inc., 2011 ONSC 4237, 89 B.L.R. (4th) 226. In that case, the plaintiff sought to buy an interest in the acquisition of the defendant company by another defendant corporation, and invested $2.5 million in the capital stock of the new company. He did so based on what he said were representations made by the defendant Belzberg (who controlled the corporate defendants) that the plaintiff would become president and chief executive officer of the new company with long-term employment prospects. Seven months after the acquisition, the plaintiff was fired. He sued for negligent misrepresentation. The defendants brought a motion for summary judgment on the grounds that the entire agreement clauses in the agreement signed by the plaintiff precluded him from relying on any pre-contractual statements.

[66] The court in McNeely rejected the argument that the interaction between EA clauses and negligent misrepresentation remains an unsettled area of the law that should not be “snuffed out” by way of a motion for summary judgment. [20] The court also found that both were sophisticated commercial parties. I concur with Hainey J.’s reasoning that “a commercially reasonable interpretation of the entire agreement clauses precludes a negligent misrepresentation claim based upon any pre-contractual discussions, including Mr. Belzberg’s statements to Mr. McNeely.” [21]

[67] The EA clauses in this case state that there are “no representations or warranties by the Vendor with respect to the said goods or their fitness for the purpose or use of the Purchaser or their merchantability or otherwise.” It is clear that the operation of EA clauses foreclose any claim for negligent misrepresentation. This area of the law is clear and not “unsettled”, as the court held in McNeely.

The As Is/Where Is Clause

[68] I accept Toromont’s argument that the explicit clause on the first page of the Forwarder agreement precludes any claims against Toromont with respect to the Forwarder.

[69] I reject Haliburton’s argument that the wording of the “no warranty” provision can be interpreted so that it is excluded. On any grammatical construction of that portion of the agreement, such a conclusion cannot be rationally founded. A plain reading of that provision makes it clear that the typed in addition of the words “No Warranty on this Unit” reinforces, rather than excludes, the provision.

[70] Taking Haliburton’s argument to its conclusion would mean that anything typed in after the words “Warranty Applicable” would be excluded, even actual warranties. With respect, that interpretation cannot stand.

[71] Based on this factual interpretation, the as is/where is provision negates any action in either tort or contract: see First Gulf Development Corporation v. Alfa Laval Inc., 18 B.L.R. (4th) 72, at paras. 15-17, 23.

The Sale of Goods Act, R.S.O. 1990 c.S1

[72] Haliburton relies on s. 15 of the SGA with respect to a statutory implied warranty or condition of fitness for a particular purpose. It is clear that any implied warranty can no longer be in issue, given my previous findings in this case. What remains is to deal with the implied condition of fitness. Haliburton argues that since Toromont has not moved to have the action dismissed on the basis of an SGA exclusion, even if Toromont is successful with its motion, that portion of Haliburton’s claim would survive.

[73] Section 15 of the SGA sets out as follows:

15. Subject to this Act and 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 the 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.

[74] Statutory conditions of fitness may be excluded, but that exclusion must be explicit. Haliburton submits that the EA clause as written is insufficient to exclude such implied condition.

[75] In IPEX Inc. v. Lubrizol Advanced Materials Canada Inc., 2012 ONSC 2717, 4 B.L.R. (5th) 148, at para. 40, the court held:

Clear and unambiguous language is required to oust an implied statutory condition whether in a consumer or commercial context. According to the Supreme Court, the following provision was sufficiently explicit to oust the statutorily-implied condition of fitness for purpose: “The provisions of this paragraph represent the only warranty of the seller and no other warranty or condition, statutory or otherwise, shall be implied.”

[76] The court held that since disclaimer provisions at issue in IPEX only referred to express and implied warranties, they were insufficient to exclude the statutorily-implied condition of fitness for purpose. [24]

[77] It is clear that the EA clause speaks of warranties and representations with respect to fitness for purpose, but there is no reference to an exclusion of condition of fitness for purpose. It is unclear as to why this was left out. Given the lack of specific exclusion of a condition of fitness for purpose, that claim by Haliburton must remain, although the damages would clearly be significantly reduced and relate only to the purchase price, as opposed to any other damages in tort or contract.

CATERPILLAR’S MOTION

[78] Caterpillar raises five issues on its motion for summary judgment:

1. The scope of the contractual relationship between Haliburton and Caterpillar;
2. The application of the SGA to Caterpillar;
3. Whether the Caterpillar Limited Warranty excludes the heads of damages claimed by Haliburton;
4. Whether Haliburton relied on the representations allegedly made by Caterpillar in deciding whether to purchase the equipment from Toromont; and
5. Whether Caterpillar had a duty of care to prevent economic loss.

1. Is Caterpillar a Party to the Sales Agreements?

[79] Caterpillar submits that it is clear on the face of the sales agreements that it is not a party. Haliburton is clearly identified as the Purchaser and Toromont as the Vendor. Caterpillar is a separate entity from Toromont and Toromont was not acting as Caterpillar’s agent when it executed the agreements.

[80] While Haliburton concedes that Caterpillar is not a party to either agreement, it argues that this means it cannot obtain the benefit of the LL or EA clauses or the as is/where is clause in the Forwarder agreement.

2. Does the Sale of Goods Act Apply to Caterpillar?

[81] Caterpillar relies on Arora v. Whirlpool, 2013 ONCA 657, 118 O.R. (3d) 113 for the proposition that any claims under the SGA must fail as a matter of law, since it was not the seller of the goods. In Arora, a motion to certify a class action against the defendant company failed, in part because the court determined that the plaintiff’s remedy was against the seller. The defendant was the manufacturer of the goods.

[82] Haliburton submits that Caterpillar acted as a seller when its representatives took on a significant role in negotiations leading up to the two agreements. Caterpillar’s representatives shared information with Dr. Schleifenbaum and paid 50 percent of the cost of the Harvester trial period rental to assist Dr. Schleifenbaum with his decision with respect to purchasing the equipment. As such, Caterpillar acted as a seller of goods within the meaning of s. 1 of the SGA, and Arora does not apply.

3. Are Haliburton’s Alleged Damages Excluded by the Limited Warranty?

[83] Haliburton purchased a one-year warranty for the Harvester from Caterpillar. The wording of the relevant parts of that warranty are set out below:

This warranty is expressly in lieu of any other warranties, express or implied, including any warranty of merchantability or fitness for a particular purpose…Caterpillar is not responsible for incidental or consequential damages. Caterpillar excludes all liability for or arising from any negligence on its part or on the part of its employees, agents or representatives in respect of the manufacture or supply of goods or the provision of services relating to the goods.

[84] Caterpillar submits that any damages related to the Forwarder are excluded by the limitations in the warranty. In that warranty (reproduced in Caterpillar’s motion compendium at pp’s. 12 and 13), Caterpillar’s liability is limited to the cost of parts and labour to remedy defects in material and workmanship during the 12-month period of the warranty. The warranty also excludes damages for incidental and consequential losses, which Caterpillar submits would include all the heads of damages claimed by Haliburton.

[85] The exclusion clauses in the warranty are clear and unambiguous, and are enforceable in accordance with terms in light of Tercon. The terms of the warranty are not unusual, improvident or unfair and could not be considered unconscionable under the Tercon test, as there was no bargaining power imbalance and Haliburton was a sophisticated buyer. There can be no argument that the exclusion clauses are contrary to public policy: Caterpillar did not attempt to hide the warranty or its implications from Haliburton, and there was nothing approaching criminality in its wording or context.

[86] Haliburton concedes that its claim in relation to the Harvester warranty is limited to the cost of parts and labour to remedy defects in materials and workmanship during the 12- month period. However, Haliburton submits that its claims in negligence and negligent misrepresentation, or any claim pursuant to the SGA in relation to the Harvester, are not excluded by the warranty.

4. Did Haliburton Reasonably Rely on Caterpillar’s Representations?

[87] Caterpillar insists that even if it made negligent representations to Haliburton (which is denies), Haliburton did not rely on those representations. Rather, Caterpillar claims Haliburton relied on its own expertise and evaluation of the equipment, particularly during the trial period.

[88] Further, Haliburton’s communications prior to the execution of the sale were primarily with Toromont. While Caterpillar did provide some information in the form of emails and a spreadsheet from Nielsen in July 2012, Dr. Schleifenbaum was clearly not prepared to rely on this information and insisted on a trial period to test the equipment.

[89] Finally, Caterpillar’s limited warranty for the Harvester specifically excluded all other warranties. Dr. Schleifenbaum reviewed this warranty before signing the sales agreement and was, therefore, aware that Caterpillar did not provide a warranty as to performance, capacity or Haliburton’s production needs.

[90] As for the Forwarder, no reasonable person would rely on any pre-contractual representations, given that it was sold without a warranty and in an “as is/where is” condition.

[91] Haliburton argues that while it is true that it was not satisfied with the equipment during the demonstration period, it was persuaded that the modifications and upgrades promised by Caterpillar’s representatives would result in the performance sought.

[92] It was reasonable for Haliburton to rely on Caterpillar’s representations in the circumstances because they were provided by Caterpillar’s forestry specialist and special quotes co-ordinator. Haliburton argues that these Caterpillar representatives had special expertise, upon which Haliburton relied. It had no long-term experience with the equipment, nor was it able to test it in severe winter conditions and so had no other source of information about the equipment’s performance.

5. Does Caterpillar Owe Haliburton a Duty of Care to Prevent Economic Loss?

[93] Caterpillar submits that Haliburton’s claims for economic loss must fail because such claims are not recoverable in negligence with limited exceptions, none of which apply in this case. Issues related to economic loss are the domain of property or contract law, where the risks are allocated by agreements freely negotiated by the parties.

[94] Caterpillar relies on Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, which dealt with the supply of allegedly shoddy goods. In that case, the court held that the defendant was liable in negligence only to the extent of damages to remedy dangerous defects in construction, and not for any further costs associated with improving the quality of the building. In the case at bar, there is no evidence that the equipment caused any damage to persons or property, nor is Haliburton making such an allegation.

[95] Caterpillar also relies on Arora with respect to the application of the test in Anns v. Merton London Borough Council, [1977] 2 All E.R. 492. Caterpillar takes the position that the two part Anns test is the correct test with respect to whether a duty of care exists in negligence. Even if the first part of the test is met and a “proximity” is found between the parties sufficient to justify the imposition of a duty of care, the second part of the test is not met, because countervailing policy considerations negate the duty. Again, the court determined that damages for economic loss are best regulated by contract and property law.

[96] Caterpillar argues that given the decisions in Arora and Winnipeg Condominium, Haliburton’s claim for negligent manufacture does not raise a genuine issue for trial.

[97] Haliburton agrees that the Anns test should apply, and further, that the first part of the test is easily met given the close relationship between the parties. With respect to the second part of the Anns test, Haliburton relies on Winnipeg Condominium. It argues that case should be read to establish that when dealing with the supply of dangerous products, policy considerations require courts to impose of a duty of care to protect bodily integrity and property interests. In the case at bar, Haliburton argues that its property interests are in issue because Dr. Schleifenbaum made it clear to Caterpillar that Haliburton’s unique business and its concern for responsible forest management were important considerations with respect its very specific requirements for the equipment it was looking to purchase.

[98] Haliburton further submits that since there is no privity of contract between Caterpillar and Haliburton, they have not allocated their risks by way of contract. First, Caterpillar’s Limited Warranty does not apply to the Forwarder, and second, the Limited Warranty that does apply to the Harvester does not exclude liability in negligence arising from representations given by its representatives or employees.

THE LAW AND ANALYSIS – CATERPILLAR’S MOTION

The Sale of Goods Act and Privity

[99] The main issue to be determined in this area is whether Caterpillar was a seller as defined by the SGA and the case law. Caterpillar argues it was not. As such, there is no privity between Caterpillar and Haliburton and the matter ends there with respect to any implied warranties under the SGA. Haliburton argues that Caterpillar’s significant involvement in the events leading up to the sale changes their role, so that both Caterpillar and Toromont are “sellers” under the SGA.

[100] I do not agree that Caterpillar’s involvement in pre-sale negotiations or discussions can attribute to it the role of a seller in these circumstances. Further, there does not appear to be any authority to support that proposition.

[101] Caterpillar’s motion specifically refers to the fact that the SGA does not apply because it is not a seller within the meaning of that Act. Caterpillar has not put into issue fitness for purpose under the SGA. As such, cases relied upon by Haliburton such as Cyr v. R.V. Warehouse Inc., 2015 ONSC 3285, are not applicable.

[102] The applicable case law is found in Arora. It is clear from that case that where a party does not sell directly to a consumer, the lack of privity will defeat a claim for damages as a result of an alleged breach of an implied warranty. [29] Caterpillar used its experienced personnel to assist Toromont in coming up with solutions for the appropriate equipment for Haliburton. This did not have the effect of creating any form of legal relationship between Caterpillar and Haliburton.

[103] In summary and based on the above, I find that Caterpillar was not a “seller” as defined in either the SGA or the caselaw, and therefore, no genuine issue is raised that would require a trial.

Tort Claims - Reliance on Representations Allegedly Made by Caterpillar

[104] The evidence in issue in this area are the emails exchanged in mid-July 2012 between Nielsen, Hopkins and Dr. Schleifenbaum, and more specifically, the “Owning and Operating Cost Estimate Worksheets” prepared by Nielsen. Haliburton submits that it relied on those cost estimates and the expertise of Caterpillar’s personnel and that such reliance was reasonable. The fact that Haliburton tested the equipment by way of a demonstration period does not prevent them from suing for negligent misrepresentation.

[105] I do not agree with Haliburton on this point and make the following findings:

a) Nielsen’s evidence, which I accept, was that the worksheets he generated were based in part on information provided by Haliburton. [30] b) Nielsen’s evidence was that worksheets he generated did not represent a performance guarantee and were not presented as such. [31] c) The demonstration period cannot be ignored. Dr. Schleifenbaum agreed in cross-examination that the purpose of the demonstration was to satisfy himself whether the equipment could meet his needs in terms of productivity and forestry conservation requirements. He was also aware that if he was not satisfied with the performance during the demonstration period, he was not obligated to buy the equipment. [32] I find that it would be unreasonable for Haliburton to have relied upon any pre-contractual representations by Caterpillar where it was in a position to make its own assessment of the equipment. d) I reject Haliburton’s argument that it had to rely on Caterpillar’s representations because it did not have operators with experience operating the equipment, it did not have mechanics to test mechanical fitness and the demonstration did not occur during the harshest winter conditions. All of these issues were ones which Haliburton had the opportunity to remedy, either on its own, or through further negotiations with Toromont. e) Finally, the Harvester was sold with a Limited Warranty. It is not contested that Dr. Schleifenbaum reviewed the Limited Warranty. As I have already found, Dr. Schleifenbaum was a sophisticated purchaser. In the circumstances, I find that he read and understood the Limited Warranty and, therefore, understood that Caterpillar was not providing a warranty as to performance or production requirements. f) With respect to the Forwarder, I find that no reasonable person would rely on any pre-contractual representations for used equipment, sold without a warranty, in an as is/where is condition.

[106] Given all of the above, I do not find that Caterpillar’s claims for negligent misrepresentation raise a genuine issue requiring a trial.

Economic Loss

[107] The question for the court to consider in this area is whether Caterpillar owes a duty of care to Haliburton for pure economic loss where there is no allegation of either personal injury or damage to property.

[108] Historically, economic loss has not been recoverable in negligence, although the caselaw recognizes some exceptions. In Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860, the court was concerned that allowing such claims would result in indeterminate liability and a multiplicity of inappropriate lawsuits. The court felt that such losses in a commercial context were best guarded against by insurance. [34]

[109] Where the allegation relates to the negligent supply of shoddy goods (as in this case), the test in Anns v. Merton London Borough Council (Anns) should be applied. In Winnipeg Condominium Corporation No. 36 v. Bird Construction (Winnipeg), [1995] 1 S.C.R. 85, the court was clear that the imposition of a duty of care will serve to protect only interests in bodily integrity and property. There must otherwise be a policy reason to justify tort liability in an area that is the domain of property and contract law.

[110] In Arora, the Ontario Court of Appeal held that a class action claim for a diminution in value for a negligently designed but non-dangerous product was not tenable. However, Haliburton relies on the court’s determination that recovery for economic loss for goods that are shoddy but non-dangerous should be left for another day. [36] As such, this court should perform an Anns test analysis (as in Arora) to determine if the duty of care asserted by Haliburton for economic raises a genuine issue requiring a trial.

[111] Caterpillar does not disagree that application of the Anns test is appropriate. Further, Caterpillar concedes that the first part of the test is met; that is, there is a sufficiently close relationship between the parties to justify the imposition of a duty of a care. The main issue to be determined relates to the second part of the test: whether there are policy considerations sufficient to “negative or limit the scope of the duty, the class of persons to whom it is owed or the damages to which breach may give rise?” [37]

[112] The decisions in Arora, Martel and Winnipeg militate against expanding the second part of the Anns test to the extent Haliburton seeks. While the Ontario Court of Appeal did not disagree that the decision in Winnipeg may have left open the possibility of an action in negligence for economic loss arising from the provision of non-dangerous goods, it declined to make such a finding.

[113] Therefore, I agree with Caterpillar that Canadian appellate courts have not allowed recovery in tort for the supply of an allegedly defective product that does not pose a real and substantial danger to persons or property. [38] I also agree that the case relied upon by Haliburton, Algoma Truck & Tractor Sales Ltd. v. Bert’s Auto Supply Ltd. et al., [1968] 2 O.R. 153 has been superseded by more recent appellate decisions, as indicated above.

[114] I reject Haliburton’s argument that it could not allocate its risk with respect to the equipment because there was no privity of contract between Haliburton and Caterpillar. I find that the risk was already allocated via Haliburton’s contracts with Toromont. Further, based on my findings regarding the as is/where is provision for the Forwarder, Haliburton assumed the risks associated with that used piece of equipment when it was purchased.

[115] In summary, Haliburton cannot claim in tort for unbargained-for warranties. The claim in negligence for pure economic loss does not pass the second part of the Anns test and raises no genuine issue for trial.

Orders

[116] Toromont shall have partial summary judgment against Haliburton. Haliburton’s only remaining claim shall be pursuant to s. 15 of the Sale of Goods Act and limited to the purchase price of the equipment. All other claims by Haliburton with respect to Toromont are hereby dismissed.

[117] Caterpillar shall have summary judgment for the relief sought. As such, all claims by Haliburton against Caterpillar are dismissed.

[118] Given the directives of the Supreme Court in Hryniak, I should be seized of this matter. In light of the complexity of the issues and background, which are now well known to me, efforts should be made to schedule the remaining trial before me.

Costs

[119] If the parties cannot agree on costs, I will receive written submissions on a seven day turnaround, commencing with the defendants/moving parties, followed by responding submissions and then reply submissions, commencing fourteen days from the date of release of this decision. Costs submissions shall be no more than three pages in length. If no submissions are received within 35 days from the date of this decision, the issue of costs will be deemed to have been settled as between the parties.

Madam Justice C. Gilmore Released: June 7, 2016

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: HALIBURTON FOREST & WILDLIFE RESERVE LTD. Plaintiff TOROMONT INDUSTRIES LTD., TOROMONT CAT and CATERPILLAR INC. Defendants REASONS FOR JUDGMENT Madam Justice C.A. Gilmore

Released: June 7, 2016

[1] Cross-examination Transcript of Dirk Nielsen, held April 1, 2016, at Q. 125. [2] Affidavit of Dr. Peter Schleifenbaum, sworn October 27, 2015, at para. 60. [3] Cross-examination Transcript of Aaron Hopkins, held April 7, 2016, at Q. 283-285 [Hopkins Cross]. [4] Cross-examination Transcript of Peter Schleifenbaum, held January 19, 2016, at Q. 198 [Schleifenbaum Cross]. [5] Hopkins Cross, at Q. 314. [6] Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87. [7] Email from Adam Miller to Dr. Schleifenbaum, sent December 24, 2012, Motion Compendium of Haliburton on the Summary Judgment Motion of Toromont, at. p. 24. [8] Schleifenbaum Cross, at Qs. 200-201. [9] Schleifenbaum Cross, at Q. 259. [10] Queen v. Cognos, [1993] 1 S.C.R. 87. [11] Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69, at paras. 121-123. [12] 7326246 Canada Inc. v. Ajilon Consulting, 2014 ONSC 28, at paras. 51 and 61. [13] Soboczynski v. Beauchamp, 2015 ONCA 282, 125 O.R. (3d) 241, at para. 57. [14] Schleifenbaum Cross, at Q. 225. [15] Ajilon, at para. 63. [16] Ajilon, at para. 63. [17] Tercon, at para. 131. [18] Queen v. Cognos, [1993] 1 S.C.R. 87. [19] McNeely v. Herbal Magic Inc., 2011 ONSC 4237, 89 B.L.R. (4th) 226. [20] McNeely, at para. 16. [21] McNeely, at para. 19. [22] First Gulf Development Corporation v. Alfa Laval Inc., 18 B.L.R. (4th) 72, at paras. 15-17, 23. [23] IPEX Inc. v. Lubrizol Advanced Materials Canada Inc., 2012 ONSC 2717, 4 B.L.R. (5th) 148, at para. 40. [24] IPEX, at para. 41. [25] Arora v. Whirlpool, 2013 ONCA 657, 118 O.R. (3d) 113, at paras. 31-33. [26] Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85. [27] Anns v. Merton London Borough Council, [1977] 2 All E.R. 492. [28] Cyr v. R.V. Warehouse Inc., 2015 ONSC 3285. [29] Arora, at paras. 31-33. [30] Reply Affidavit of Nielsen, sworn January 20, 2016, at para. 4 [Nielson Reply Affidavit]. [31] Nielson Reply Affidavit, at para 5. [32] Schleifenbaum Cross, at Qs. 57-58. [33] Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860. [34] Martel Building, at para. 37. [35] Winnipeg Condominium Corporation No. 36 v. Bird Construction, [1995] 1 S.C.R. 85. [36] Arora, at para. 83. [37] Design Services Ltd. v. R., 2008 SCC 22, [2008] 1 S.C.R. 737, at para. 46. [38] Factum of the Moving Party Caterpillar, at para. 62. [39] Algoma Truck & Tractor Sales Ltd. v. Bert’s Auto Supply Ltd. et al., [1968] 2 O.R. 153.