CITATION: Kleiman v. 1788333 Ontario Inc. o/a BMW Toronto, 2020 ONSC 6470
COURT FILE NO.: 204/19 DATE: 20201023
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. CORBETT J.
B E T W E E N:
RONEN KLEIMAN Appellant
- and -
1788333 ONTARIO INC. o/a BMW TORONTO and BMW CANADA INC. Respondents
Counsel: Daniel Zacks, for the Appellant John A. Olah and Francesca D’Aquila-Kelly, for the Respondents
Heard at Toronto: January 17, 2020[^1]
REASONS FOR DECISION
D.L. Corbett J.:
Overview
[1] Mr Kleiman alleges that the respondents (collectively, “BMW”) misrepresented the range of BMW’s electric vehicle, the i3, inducing him to buy such a vehicle (the “Car”). It is alleged that the actual range experienced by Mr Kleiman was less than half the represented range. Mr Kleiman sued in the Small Claims Court for damages.
[2] A problem with the Car’s range presented to Mr Kleiman shortly after he acquired it, but he did not sue immediately. Instead he worked with BMW to try to rectify the problem. These efforts continued for many months, and then the range of the vehicle deteriorated further during the winter. Mr Kleiman reviewed the representations that had been made to him, as posted on BMW’s web site, but the information was not as he had remembered it. He also considered BMW’s position in their discussions that the range was an estimate, and therefore was subject to a tolerance of +/- 20%. It was only when Mr Kleiman learned that BMW had changed its web site to lower the range of the i3, that he decided to sue.
[3] The Deputy Judge found that Mr Kleiman knew of his claim by January 3, 2015. Mr Kleiman did not start his claim until August 9, 2017. Therefore, the claim was started too late, outside the two year limitation provided in the Limitations Act, and the Deputy Judge dismissed the claim on motion for summary judgment by BMW.
Issue on Appeal
[4] Mr Kleiman argues that the Deputy Judge erred in law in three respects. First, he argues that she misapprehended the fourth branch of the discoverability test: when was it first reasonable for Mr Kleiman to sue. Second, he argues that the Deputy Judge failed to consider the “tolling” provision in s.5(4) of the Limitations Act and the evidence that Mr Kleiman was misled by BMW about the representations it had made to him about the i3’s range. Third, he argues that the Deputy Judge erred in failing to apply the test for summary judgment: he argues that the limitation issues are, at minimum, triable issues.
[5] BMW argues that the Deputy Judge weighed the evidence before her and came to a reasonable conclusion that Mr Kleiman knew about his claim in January 2015. This is a finding of fact, for which there is some evidence, and ought to be upheld on appeal.
Standard of Review
[6] An “appellate standard of review” is used on an appeal to this court from the Small Claims Court. Questions of law are reviewed on a correctness standard. Questions of fact are reviewed on the “palpable and overriding error” standard. Mixed questions of fact and law are reviewed on a deferential standard, except for “extricable questions of law”, which are reviewed on a standard of correctness.
[7] Whether a limitation period has expired prior to commencement of a claim is a mixed question of fact and law, reviewable on a standard of “palpable and overriding error” except to the extent that there is an extricable error of law in stating and applying the applicable law. The proper statement and application of the test for granting summary judgment are questions of law, reviewable on a correctness standard.
Facts
[8] On June 3, 2014, Mr Kleiman entered into a lease for the Car.
[9] Prior to acquiring the Car, Mr Kleiman researched the Car’s performance. He looked at information on BMW’s web site where he learned that the “documented range” for the Car was between 160 km and 200 km, depending on the mode in which the Car was driven. “Range” refers to the distance the car may be driven on a full charge.
[10] Shortly after taking possession of the Car, Mr Kleiman noted a problem. He emailed BMW that “as soon as I get into the [C]ar after a full charge, the range is shown at approximately 128 km.” There was communication back and forth on this issue, and by December Mr Kleiman was still not satisfied. He emailed BMW again on December 3, 2014:
The Car is marketed as having ranges between 160-200 km in the different driving modes. I had mentioned to you in past emails that driving on a hot summer day, without having anything on in the [C]ar… allowed me to drive 160 km which is the max of the [C]ar. I can’t see how it would ever get the 200 km or in what condition…. This is a far cry from the 160-200 km I was expecting.
[11] On January 3, 2015, Mr Kleiman sent a further email to BMW as follows:
I got into the [C]ar yesterday after it was charging all night and it has an estimated 100 km on Eco. Pro…. This is a 60% drop over the 160 km that was marketed….
… the range is now officially a problem and needs resolution. To think that I’ll be getting an 80 km range if I want heat on in the winter is not acceptable and not what was advertised when I purchased the [C]ar.
[12] It was this email, in January 2015, that persuaded the Deputy Judge that Mr Kleiman knew he had a claim and marked the start of the limitation period.
BMW’s Statements about Range
[13] At the time Mr Kleiman acquired the Car, and as late as November 8, 2014, BMW was making the following statement on its web site about the range of the BMW i3 model:
In the sporty COMFORT setting, the range of a BMW i3 is 160 kilometers – depending on driving style, traffic and topographical features of the route. In the ECO PRO mode, which… demands less power, the possible distance traveled increases by up to 20 kilometers. The ECO PRO+ mode is specifically oriented for range. For this reason, the highest speed of the BMW i3 is reduced to 90 km/h in this mode, and consumers such as heating and air conditioning system are switched to energy-saving mode. Thus when compared to the COMFORT mode, the possible action radius is increased by up to 40 km.
[14] In late November or early December 2014, BMW revised its claims about the range of the i3 on its website:
In the sporty COMFORT setting, the range of a BMW i3 is 130 kilometers – depending on driving style, traffic and topographical features of the route. In the ECO PRO mode, which operates which… demands less power, the possible distance traveled increases by up to 30 kilometers. The ECO PRO+ mode is specifically oriented for range. For this reason, the highest speed of the BMW i3 is reduced to 90 km/h in this mode, and consumers such as heating and air conditioning system are switched to energy-saving mode. Thus when compared to the COMFORT mode, the possible action radius is increased by up to 20%. (emphasis added)
[15] During an exchange of communications between Mr Kleiman and BMW in early December 2014, BMW referenced the revised estimates set out above. BMW also advised Mr Kleiman in an email dated December 3, 2014, that the ranges set out in marketing materials were estimates only, and were, in BMW’s view, subject to +/- 20% because they were estimates.
[16] Based on this information, Mr Kleiman considered that the “bottom end” of the ranges BMW had promised, based on its statements to him, were within a 20% variation of the ranges set out above, which led to the following minimum expectations for ranges:
COMFORT mode: 104 km
ECO PRO mode: 128 km
ECO PRO+ mode: 124.8 km
[17] In its communications with Mr Kleiman in December 2014, BMW relied upon its modified range estimates and did not tell Mr Kleiman that the estimates had been reduced from the time he acquired the Car.
[18] In November 2016, Mr Kleiman’s vehicle ran out of power after going less than 113 km on a full charge, leaving Mr Kleiman stranded short of the nearest charging station with his three-year old son. Mr Kleiman was angered by this failure in performance. In speaking with a friend, he learned that it was possible to search the internet for prior versions of current websites, and through this process he uncovered the change that had been made to BMW’s range estimates. He then confronted BMW about the poor range performance of the Car and the changed range estimates. Mr Kleiman was not able to resolve his concerns with BMW, and commenced his claim in August 2017.
Applicable Limitations Law
[19] The applicable limitations period pursuant to s.4 of the Limitations Act, is two years from “the day on which the claim was discovered.”[^2]
[20] Section 5 of the Act sets out the test to determine when a claim is “discovered”:
5(1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was the act of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day on which the act or omission on which the claim is based took place, unless the contrary is proved.
[21] The tolling of the limitation period may be suspended in some circumstances. Subsection 5(4) of the Act provides:
The limitation period established by subsection (2) does not run during any time in which,
(c) the person against whom the claim is made,
(i) willfully conceals from the person with the claim the fact that injury, loss or damage has occurred, that was caused by or contributed to by an act or omission or that the act or omission was that of the person against whom the claim is made, or
(ii) willfully misleads the person with the claim as to the appropriateness of a proceeding as a means to remedying the injury, loss or damage.
[22] The limitations issue in this case turns on the application of ss.5(1)(a)(ii) and (iv) and s.5(2) in the following way. Mr Kleiman knew as early as July 2014 that it appeared that the Car was not performing within his expectations for range. As is reflected in the communications between Mr Kleiman and BMW, this issue had several factors involved in it:
(a) Was the range as reported by the Car accurate? (that is, perhaps the Car did have an appropriate range of operation, but through technical problems the actual range was being under-reported by the Car’s systems)?
(b) Was there a remediable defect in the battery?
(c) Was there a remediable defect in other aspects of the Car’s systems?
(d) Was the actual range within the expected range for the Car?
(e) Was the under-performance of the Car (if there was any) material enough that a proceeding “would be an appropriate means to seek to remedy it”?
[23] Layered on top of the issues set out above is the issue of possible tolling of the limitation period because of the changed ranges on BMW’s internet site. In particular, s.5(4)(c)(ii) may be in play as a result of the position taken by BMW in December 2014: that the bottom end of the range was 130 km (rather than 160 km) and was subject to a tolerance of +/- 20% because it was an estimate.
The Law of Summary Judgment in the Small Claims Court
[24] Limitations defences are often dealt with appropriately on motions for summary judgment. Such a defence may be a complete answer to claim and may be established on a clear written record. However, where there are issues of discoverability and potential tolling of the limitation period, as there are here, contested factual issues may be triable issues. This is such a case.
[25] On Mr Kleiman’s evidence, he was unhappy from the outset, but he communicated with BMW to try to resolve his issues. Mr Kleiman’s evidence is not that he believed, from the outset, that BMW’s range estimates were dishonest or negligent, but rather, perhaps there was something wrong with the Car that could be fixed. BMW responded on this basis, and also on the basis that, from its position, the Car was operating within estimated ranges. BMW’s position on this issue crystalized in December 2014 when it relied upon the reduced ranges and the 20% allowance for an “estimate” in taking the position that the Car was meeting range expectations.
[26] The plaintiff’s evidence is that he accepted BMW’s statement about its advertised ranges, because that is what he saw on the BMW web site – he did not realize that the estimates had been reduced, but rather thought that he might have misremembered what he had read while doing his due diligence before acquiring the Car. There is some evidence in the record that could be viewed as inconsistent with this position – in January 2015 he was still relying on a range of 160 km in an email to BMW – and that evidence could be fertile ground for cross-examination at trial. However, there is also evidence in the record that the plaintiff did seek out and find evidence on the internet that BMW had reduced its estimated ranges – after he acquired the Car – and that BMW relied on its reduced ranges in its discussions with him in December 2014, without telling him that the range estimates had been reduced.
[27] It may be open to a trial judge to conclude, as did the Deputy Judge, that Mr Kleiman knew about his claim and decided not to pursue it in litigation as early as January 2015. However, it would also be open to a trial judge to conclude that Mr Kleiman was disappointed, had expected a greater range for his vehicle, but was convinced by the reduced estimates on the BMW web site that he did not have a claim in misrepresentation – that although he recalled an estimated range between 160 and 200 km, BMW’s web site stated a range of 130-160 km that was subject to a 20% variation because it was an estimate. When Mr Kleiman discovered that the range had been changed after he acquired the Car, he felt he had been misled into believing that he did not have a viable claim. In my view, on the record before the Deputy Judge, there was a triable issue on the date of discoverability, and a triable issue on whether there was a tolling of the limitation period.
Legal Errors Below
[28] The Deputy Judge did not state and apply the test for summary judgment. She assessed the evidence as if this was a trial and drew her conclusions on the basis of the evidence before her, without asking herself if there was a triable issue in respect to the limitations defence.
[29] Second, in my view she misapprehended the purport of the change in BMW’s marketing information in late 2014. Her reasons read as if the plaintiff’s claim was based on a failure to meet the revised range estimates, rather than the original ones – perhaps a confusion resulting from the “top” of the revised range being equal to the “bottom” of the old range (160 km). I expect that this confusion would have been avoided if there had been oral evidence and the plaintiff had had an opportunity to explain in his own words – and be cross-examined – as to how he was misled by the change in information on the web site.
[30] Third, the Deputy Judge did not state and apply the tests set out in the applicable provisions of the Limitations Act. She read an email from Mr Kleiman, in which he says that the range is now “officially a problem” as effectively an admission that he is aware of a legal claim that he has against BMW. The email could be read in this way, but it is not the only way in which to read it. In selecting this date as the “most conservative” date of discoverability, the Deputy Judge gave no weight at all to BMW’s reliance on its reduced ranges to deflect Mr Kleiman’s complaints, an argument that would have put the date of discoverability into November 2016.
[31] The Small Claims Court is a court of equity. Deputy Judges deal with a high volume of cases, and are expected to give their decisions quickly, often orally. The experienced, highly respected Deputy Judge gave brief oral reasons for her decision, and those reasons are to be read with liberality on appeal in this court. The failure to cite the statutory tests in the Limitations Act and the test for summary judgment are not, in themselves, reversible errors. The Deputy Judge is taken to know the law and is not required to cite chapter and verse in every oral decision she gives. In this case, however, I am not satisfied that the underlying principles were applied properly. On the record it seems clear that there is a good arguable case here on the issues of discoverability and tolling of the limitation period, and these issues should have been sent to trial.
[32] For these reasons the appeal is allowed and the dismissal order is set aside.
Remedy
[33] Mr Kleiman asked that this court find that the claim is not barred by the Limitations Act. I am not prepared to do that. In my view the date of discoverability and the applicability of the tolling provisions in s.5(4) of the Act are triable issues. The case shall be sent back for trial.
Order
[34] The order dismissing the proceeding is set aside and the case is remitted to the Small Claims Court for trial before any judge. Mr Kleiman shall have his costs of the appeal from BMW in the agreed amount of $5,250, inclusive.
___________________________ D.L. Corbett J.
Date of Release: October 23, 2020
COURT FILE NO.: DC DATE: 20201023
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett J.
BETWEEN:
Ronen Kleiman Appellant
– and –
1788333 Ontario Inc. o/a BMW Toronto and BMW Canada Inc. Respondents
REASONS FOR DECISION
D.L. Corbett J.
Date of Release: October 23, 2020
[^1]: Release of this decision was delayed because of the impact of COVID-19 on court operations. [^2]: Limitations Act, 2002, SO 2002, c.24, Sched. B (the “Act”), s.4.