COURT FILE NO.: 10-CV-404742CP

DATE: August 16, 2012

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Vijay Arora, Stacey Jacobs, and Kathleen Oliver

Plaintiffs

• and -

Whirlpool Canada LP and Whirlpool Corporation

Defendants

Proceeding Under the Class Proceedings Act, 1992

COUNSEL:

• Harvin D. Pitch, Colin P. Stevenson, and Bruce W. Lemer for the Plaintiffs
• Tim Buckley, S. Gordon McKee, and Cheryl M. Woodin for the Defendants

HEARING DATES: July 24, 25, and 26, 2012

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION AND OVERVIEW

[1] This is a certification motion under s. 5 (1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 in a proposed product liability class action against a manufacturer for pure economic losses. The action is based on concurrent liability in contract, breach of statute, negligence, and waiver of tort.

[2] The Plaintiffs, Vijay Arora, Stacey Jacobs, and Kathleen Oliver, owned front-loading washing machines manufactured by Whirlpool Canada LP and Whirlpool Corporation (collectively "Whirlpool"). The Plaintiffs bring their action on behalf of Canadian residents, excluding Québec, who owned a 2001 to 2008 Whirlpool front-loading washing machine or who previously owned the machine. A companion Québec action is proceeding, and a companion action in British Columbia is on hold.

[3] The Plaintiffs allege that Whirlpool negligently designed the washing machines and negligently failed to warn of the design defects and the need to take remedial action. The Plaintiffs allege that Whirlpool breached a warranty that the machines are fit for their intended purpose. The Plaintiffs allege that Whirlpool's failure to disclose the defects is a misrepresentation contrary to s. 52 of the Competition Act, R.S.C. 1985, c. C-34.

[4] In the reasons that follow, it will be very important to keep in mind that although a few class members might have claims for damage to property or for personal injuries, the class action is a product liability claim for pure economic losses for an allegedly negligently designed non-dangerous product.

[5] The critical allegations in the class action are that: (a) Whirlpool's washing machines are negligently designed because they do not adequately self-clean and thus are prone to biofilm buildup; i.e., to mould, mildew, and bacteria growing on inaccessible internal parts of the machine; (b) Whirlpool knew about the proclivity of the front-loading washing machines to biofilm buildup but failed to design for an efficient self-cleaning mechanism; (c) the biofilm is odoriferous and sometimes a health hazard and these defects depreciate the fitness and the value of the machine; (d) Whirlpool's proposed design changes were ineffective and did not solve the odour problem; and (e) Whirlpool's proposed remedies were ineffective, but Whirlpool used them as a source of income that unjustly enriched Whirlpool.

[6] In the run-up to the certification motion, there was a great deal of evidence about the health hazards of bacteria and mould, and this evidence was necessary to understand why the washing machines were allegedly negligently designed and of diminished value, but the health hazards are not the raison d'être of this proposed class action, and thus, for instance, class membership is defined by ownership of the washing machines not by use of or exposure to the machines. Although the epidemiological evidence was relevant to the factual background for the claims, it was conceded during argument that this proposed class action is not a class action about a dangerous product or about exposure to disease or illness; it is about a shoddy consumer appliance.

[7] Whirlpool resists certification, and it submits that all five criteria for certification under the Class Proceedings Act, 1992, S.O. 1992, c.6 are not satisfied; visualize:

• First, Whirlpool submits that it is plain and obvious that the plaintiffs do not have a tenable cause of action. (This indeed is the major battlefield for this certification motion.)
• Second, Whirlpool challenges the class definition as overbroad and unconnected to a tenable cause of action.
• Third, Whirlpool submits that the proposed common issues want for commonality. It submits that the allegation of a design defect has no commonality because during the class period, there were 14 design configurations, differences in instructions to users, changes in washing detergents, and changes in state of knowledge, all of which negate commonality. Because of the numerous models and associated changes, there is, to use counsel's metaphor, no "golden thread of commonality."
• Fourth, Whirlpool submits that the proposed class action is not the preferable procedure. It submits that a class action adjudicating the design issues would be unmanageable and unproductive for class members and leave any class members interested in pursuing individual claims with disproportionately complex individual issues, including contributory negligence, causation, damages, and limitation periods.
• Fifth, Whirlpool submits that the representative plaintiffs do not have claims and do not qualify to be representative plaintiffs and their proposed litigation plan is deficient. Thus, Whirlpool submits that the fifth criterion is also not satisfied.

[8] For the reasons that follow, I dismiss the certification motion.

[9] In my opinion, although contractual or statutory claims would support a claim for purely economic losses, in the case at bar, it is plain and obvious that there is no tenable contractual or statutory claim to underpin the Plaintiffs' claims of economic losses. Further, it is plain and obvious that a negligence claim for pure economic losses for a non-dangerous, negligently-designed consumer product is untenable. Therefore, the Plaintiffs have no cause of action in contract, breach of statute, or tort. And assuming that waiver of tort is a cause of action, there is also no predicate wrongdoing, so the waiver of tort claim is also untenable. Thus, the Plaintiffs have not shown a reasonable cause of action, and their proposed class action should not be certified.

[10] Because, there may be an appeal, and on the assumption that I am wrong about the first criterion for certification (the cause of action criterion), for the reasons that follow, assuming there are causes of action, my conclusions about the remaining criteria for certification are: (1) the class definition criterion is satisfied; (2) the common issue criterion is satisfied, but some proposed questions are not certifiable, and some proposed questions require revision or substitution; (3) the preferable procedure criterion is not satisfied for some proposed common questions because of unmanageability, but the preferability criterion is satisfied for the questions that remain; and (4) the representative plaintiff and litigation plan criterion is satisfied, although improvements should be made to the plan.

[11] Thus, in addition to the absence of a tenable cause of action against Whirlpool, depending on the configuration of the action, there are other reasons to dismiss this certification motion.

B. METHODOLOGY

[12] In order to explain my reasons, I shall move back and forth from factual issues, legal issues, and issues of mixed fact and law. I shall draw legal conclusions bearing on certification throughout these reasons.

[13] I shall address the cause of action criterion at some length including a detailed discussion about how the court should go about determining whether this criterion has been satisfied.

[14] I shall organize these Reasons for Decision under the following headings.

• Introduction and Overview
• Methodology
• Evidentiary Background and Dramatis Personae
• The Washing Machines
  • The Operation of Front-End Loading Washing Machines
  • Whirlpool's Front-End Loading Washing Machines
  • User and Care Guides and Warranties
• Biofilm (Mould, Mildew, and Bacteria)
  • Introduction – The Nature of Biofilm
  • Dr. Wilson's and Dr. Yang's Evidence about Biofilm
  • Dr. Bot's Evidence about Biofilm
• Complaints, Whirlpool's Biofilm Investigation and Troubleshooting
  • Troubleshooting Odour from Front-End Loading Machines
  • The Crosspiece Changes
• Background to the Proposed Class Action
• Evidentiary Findings and the Certification Criterion
• Certification
  • Introduction
  • Cause of Action Criterion
    • The Plain and Obvious Test
    • The Position of the Parties
    • Contractual Causes of Action
    • Statutory Causes of Action
    • Negligence
      • Introduction
      • Negligence and Pure Economic Loss
      • Duty of Care Analysis - Design Negligence
    • Waiver of Tort
  • Identifiable Class
  • Common Issues
    • Introduction – Common Issues
    • Common Issues – Analysis
      • Background or General Questions
      • Negligence Questions
      • Breach of Contract Questions
      • Competition Act and Misrepresentation Questions
      • Remedies Questions
  • Preferable Procedure
    • Introduction – Preferable Procedure
    • Analysis – Preferable Procedure
  • Representative Plaintiff and Litigation Plan
• Conclusion

C. EVIDENTIARY BACKGROUND AND DRAMATIS PERSONAE

[15] The Plaintiffs are Vijay Arora, Stacey Jacobs, and Kathleen Oliver.

[16] The Plaintiffs' lawyers of record and proposed Class Counsel are the law firms of Stevensons LLP and Bruce W. Lemer Law Corporation, which is counsel in the companion British Columbia class action.

[17] "Class" and "Class Members" mean persons resident in Canada other than Québec who own or previously owned a Washing Machine. "Washing Machine" means Whirlpool Front-Loaders defined in the Statement of Claim. The Amended Amended Amended Statement of Claim identifies Whirlpool's Duet, Duet HT, and Duet Sport washers, Kenmore washers (HE2, HE2t, HE3, HE3t, HE4t, HE5t) and Maytag Front-Loading Automatic Washers.

[18] The Defendants are Whirlpool Canada LP and Whirlpool Corporation (collectively "Whirlpool").

[19] The Defendants' lawyers of record are the law firms of Borden Ladner Gervais LLP and Blake, Cassels & Graydon.

[20] The Plaintiffs supported their certification motion with affidavits and reports from Vijay Arora, Stacey Jacobs, Jennifer Lake, Kathleen Oliver, Dr. Raymond Gary Wilson, and Dr. Chin S. Yang, as follows:

• The plaintiff Vijay Arora of Brampton, Ontario is an electrical engineer. His affidavits are dated January 6, 2011 and May 6, 2011. He was cross-examined.
• The plaintiff Stacey Jacobs of Toronto, Ontario is a private school teacher. Her affidavits are dated January 4, 2011 and April 26, 2011. She was cross-examined.
• Jennifer Lake of Oakville, Ontario is an associate with Teplitsky, Colson LLP, counsel for the Plaintiffs. Her affidavits are dated January 6, 2011 and May 18, 2011.
• The plaintiff Kathleen Oliver of Burlington, Ontario is a hospital social worker. Her affidavits are dated January 4, 2011 and April 20, 2011. She was cross-examined.
• Dr. Raymond Gary Wilson, Ph.D., P.E. of Clover, South Carolina is a professional engineer, who is on the engineering faculty at the University of North Carolina at Charlotte and a consultant under the company name RGW Research and Engineering. He is a former employee of Whirlpool. He was retained by the plaintiffs to provide an expert opinion with respect to front-loading washing machines that were manufactured by Whirlpool. He delivered reports dated December 21, 2010 and November 25, 2011. His affidavits are dated December 23, 2010, May 18, 2011, and November 25, 2011. Dr. Wilson was cross-examined.
• Dr. Chin S. Yang of Cherry Hill Township, New Jersey is a microbiologist with a specialty in mycology, who is employed as a Scientific and Technical Advisor and Senior Consulting Scientist at Prestige EnviroMicrobiology, Inc. He was retained to provide an expert opinion about biofilm formation. His affidavits are dated December 10, 2010 and December 2, 2011. He delivered a report dated December 9, 2010 and a report dated November 28, 2011. He was cross-examined.

[21] Whirlpool resisted the certification motion with affidavits and reports from Richard Conrad, Charles R. Cravens, Warrington Ellacott, Ronald E. Gots, Anthony H. Hardaway, K. Deanna Moore, and Paul M. Taylor, as follows:

• Richard J. Conrad of Stevensville, Michigan is the Senior Director, Top Load Laundry, Product Management at Whirlpool Corporation. His affidavit is dated April 7, 2011.
• Charles R. Cravens of St. Joseph, Michigan is the Senior Engineering Manager, Materials and Color Laboratory, Fabric Care for Whirlpool Corporation. His affidavit is dated October 13, 2011.
• Warrington Ellacott of Orangeville, Ontario is the Senior Manager of Government Relations, North American Region for Whirlpool Canada LP. His affidavit is dated April 8, 2011.
• Ronald E. Gots of Rockville, Maryland is a physician and toxicologist with a doctorate in pharmacology, whose speciality is the causality of illness arising from environmental exposures. His affidavit is dated November 7, 2011.
• Anthony H. Hardaway of Stevensville, Michigan, now retired, was the Lead Engineer, Advanced Chemistry Technology at Whirlpool Corporation. His affidavit is dated April 8, 2011. Mr. Hardaway was cross-examined.
• K. Deanna Moore of Cleveland, Tennessee is a Senior Project Analyst at Whirlpool Corporation. Her affidavit is dated April 8, 2011.
• Paul M. Taylor of Menlo Park, California is a professional engineer with a Ph.D. in mechanical engineering. He is the Principal Engineer employed by Exponent, an engineering and scientific consulting firm. His affidavit is dated November 1, 2011.

[22] Dr. Wilson and Dr. Yang were deponents in a class action in Ohio against Whirlpool. Mr. Hardaway and Mr. Conrad were deponents for Whirlpool in the American proceedings. All were cross-examined. On consent, the cross-examinations from the American proceedings were filed in the Ontario action.

D. THE WASHING MACHINES

1. The Operation of Front-End Loading Washing Machines

[23] All clothes washing machines clean through a combination of thermal energy (hot water), mechanical energy (agitation or tumbling), and chemical energy (detergent and other laundry additives such as chlorine bleach).

[24] Front-loading washing machines are different from conventional top-loading washing machines. A conventional clothes washer uses a top-loading, deep-water wash basket or "drum" that uses up to 159 liters of water and rotates on a vertical axis to create the washing action (agitation) with a spin speed of up to 640 rpm. It has a capacity up to approximately 6.5 kilograms of clothes. The main energy consumption is the use of hot water. The average energy consumption in kilowatt hours per year is 708kWh.

[25] A front-loading washing machine uses a front-loading wash drum that uses approximately 64 liters of water and rotates on a horizontal axis to create the washing action (tumbling) with a spin speed of up to 1,200 rpm. It has a capacity of approximately 10.0 kilograms of clothes. A front-loading machine should be used with a concentrated low suds or high-efficiency detergent ("HE detergent") because of the reduced water volume. HE detergents have, higher levels of soil-suspending agents, and dye inhibitors, and suds suppressors.

[26] The washing technique of the top-loading and the front-loading have some similarities and some differences. The major difference is that in a top-loading machine, the soiled clothes are submerged under a mix of water and detergent in the tub and then agitated as the tub moves horizontally (around a vertical axis), while in a front-loading machine, the soiled clothes tumble in-and out of the mix of water and detergent as the tub moves vertically like a wheel (around a horizontal axis). After the wash cycle, there is a horizontal drain and spin cycle in a top-loading machine and a vertical drain and spin cycle in a front-loading machine.

[27] The design of a front-loading washer makes it substantially more water-efficient and gentler on laundry than a top-loading washer. The front-loading washer is also more energy-efficient because less water is used and heated and because the faster maximum spin speeds pull more moisture out of fabrics, which, in turn, reduces the time and energy needed to dry a load of laundry in a clothes dryer. The average energy consumption for a front-loading machine in kilowatt hours per year is 296kWh.

[28] For the purpose of the products liability claims against Whirlpool, a very important point to note is that the design and operation of front-end loading machines means that the self-cleaning capability of the washing machine is less robust and less effective than the self-cleaning capabilities of a top-loading machine.

[29] The Plaintiffs submit that, unlike conventional top loading washers that self-clean well, the Whirlpool Machines were negligently designed and do not effectively self-clean. The lesser self-cleaning capacity can be explained in part by the fact that less of the tub is filled with water during the wash cycle of a front-loading washer.

[30] The Plaintiffs submit that Whirlpool's solutions to the biofilm problem associated with the less robust self-clean capability, which include a regular maintenance program and the use of a special chemical tablet called Affresh®, are not solutions and what is required is a design change to enable the Whirlpool washer to adequately self-clean.

2. Whirlpool's Front-End Loading Washing Machines

[31] In late 1998, Whirlpool began to develop the front-end loading technology that became the "Access," "Horizon" and "Sierra" platforms of its washing machines.

[32] In the period 2001 through 2008 Whirlpool Corporation's foreign subsidiaries, Whirlpool Mexico and Bauknecht Hausgerate GmbH manufactured front-loading washers for distribution and sale to consumers in North America. It is estimated that about 400,000 front-loading washing machines were sold in Canada.

[33] The brand names for the machines were Amana^®^, Kenmore^®^, Kenmore Elite^®^, KitchenAid^®^, Maytag^®^, and Whirlpool^®^. The Kenmore^®^ and Kenmore Elite^®^-brand were manufactured exclusively for Sears Holdings Corporation and its subsidiary Sears, Roebuck and Co. and its affiliate Sears Canada Inc. for resale to customers under Sears' private brand names. Whirlpool did not manufacture and sell any Amana-brand or Maytag-brand washing machines until it acquired Maytag Corporation in March 2006.

[34] In June 2001, Whirlpool began manufacturing and exporting to North America front-loading washing machines to Sears under Sears' private Kenmore Elite® brand name.

[35] In September 2001, Whirlpool began manufacturing front-loading washing machines under the Whirlpool-brand name for its trade customers, which include nationwide and regional retailers, as well as local retailers, builders, contractors and other distributors of Whirlpool-brand appliances. After March 2006, Whirlpool also began manufacturing Maytag®-brand washing machines after it acquired Maytag.

[36] For the purposes of the legal analysis that will follow, it is important to note that save for its employees, Whirlpool does not sell washing machines directly to consumers.

[37] Whirlpool front-loading washing machines may have different features and designs. The Horizon platform has a smaller capacity, and unlike the Access and Sierra platforms, its wash basket is not horizontal and rather has a 10-degree tilt for easier loading. During the class period, the crosspiece within the models was redesigned and its metallurgy changed to a stronger and more impermeable aluminum with less copper content. In the later years of the class period, the "ribs" (structural reinforcements) to the tub were moved from the inside to the outside of the tub.

[38] Some models included a Sanitary Cycle feature that utilizes a built-in heater to increase water temperatures to kill 99.9% of the biofilm found on the inside of the machine. Some models were programed to include a Maintenance Cycle, and other models included a Clean Washer Cycle to maintain the machine with the advantage over the Maintenance Cycle of the cycle being selectable on the control panel of the machine. Some models had a steam feature to enhance sanitization of the clothes and to enhance the Clean Washer cycle.

[39] In the early years of the class period the User and Care Guides recommended the use of a HE detergent and provided cleaning instructions for the washer door. In 2004, the guide was revised to direct owners to use only HE detergent and the guide included a warning that using regular detergent may result in component failures or noticeable mould or mildew. The Sears guide directed owners to clean the interior of the washer at least once per month by running a cycle with bleach, to reduce or prevent any accumulation of mould or mildew odours and to leave the washer door open between cycles to allow the interior to dry out.

[40] The guides gave troubleshooting instructions for odour problems, including instructions to perform the monthly cleaning procedure with bleach to reduce or prevent the accumulation of mould or mildew odours. With the introduction of the pre-programmed Maintenance Cycle, the guides were amended to provide instructions and provided troubleshooting instructions for odour problems including performing the Monthly Maintenance Cycle and leaving the door to the machine open. Additional instructions were added to the guide with the introduction of the Clean Washer Cycle and with the introduction of the steam feature.

[41] The following chart describes the front-loading washing machines manufactured by Whirlpool from 2001 to 2008.

Washer Models Manufactured by Whirlpool 2001-2008

Model

Engineering Platform

Features

1.Duet

Kenmore Elite HE3

Access

10° tilt in wash basket axis

2. Duet HT

Kenmore Elite HE3t

Kenmore Elite HE4t,

Access

10° tilt in wash basket axis

Sanitary Cycle

3. Duet

Kenmore Elite HE3

Access

10° tilt in wash basket axis

New crosspiece material

4. Duet HT

Kenmore Elite HE3t

Kenmore Elite HE4t

Access

10° tilt in wash basket axis

Sanitary Cycle

New crosspiece material

5. Duet HT

Kenmore Elite HE3t

Kenmore Elite HE4t

Access

10° tilt in wash basket axis

Sanitary Cycle

New crosspiece material

Maintenance Cycle

6. Duet

Kenmore Elite HE3

Access

10° tilt in wash basket axis

New crosspiece material

Maintenance Cycle

7. Duet Sport

Kenmore HE2

Kenmore HE2Plus

Horizon

Horizontal wash basket axis

Improved tub drainage

New crosspiece material and shape

Clean Washer Cycle

8. Duet Sport HT

Kenmore HE2t

Horizon

Horizontal wash basket axis

Sanitary Cycle

Improved Tub Drainage

New crosspiece material and shape

Clean Washer Cycle

9. Duet

Kenmore Elite HE3

Access

10° tilt in wash basket axis

New crosspiece material

Clean Washer Cycle

10. Duet HT

Kenmore Elite HE5t

Access

10° tilt in wash basket axis

Sanitary Cycle

New crosspiece material

Clean Washer Cycle

11. Duet Steam

Kenmore Elite HE3t

Kenmore Elite HE5t Steam

Access

10° tilt in wash basket axis

New crosspiece material

Sanitize water temperature

Clean washer cycle with steam

Steam

12. Duet

Sierra

10° tilt in wash basket axis

New rear tub design

New crosspiece shape

Clean Washer Cycle

13. Duet HT

Sierra

10° tilt in wash basket axis

New rear tub design

New crosspiece shape

Sanitary Cycle

Clean Washer Cycle

14. Duet Steam

Sierra

New rear tub design

Sanitize water temperature

Clean washer cycle with stam

Steam

[42] From September 1, 2001 through December 31, 2008, Whirlpool sold approximately 246,786 Whirlpool Access-platform washers to trade customers. From 2006 through 2008, Whirlpool sold approximately 24,494 Maytag Access-platform washers.

[43] From March 1, 2006, through December 31, 2008, Whirlpool sold approximately 132,952 Whirlpool Horizon-platform washers to trade customers. During the period 2007 and 2008, Whirlpool sold approximately 19,895 Maytag Horizon-platform washers to trade customers.

[44] From May 1, 2007, through December 31, 2008, Whirlpool sold approximately 12,184 Sierra-platform washers to trade customers. In 2008, Whirlpool sold approximately 4,932 Maytag Sierra-platform washers to trade customers.

3. User and Care Guides and Warranties

[45] Sears and Sears Canada provide the written warranties for the Kenmore-brand appliances. Sears and Sears Canada are not parties to this action.

[46] During the period from 2001 to 2008, Whirlpool included a warranty in the User and Care Guides provided with the washing machine. There were four versions of the warranty. There were three Whirlpool warranties and the Maytag warranty.

[47] The first Whirlpool warranty was used from 2001 to 2006. The second version was used from 2006 to 2008. The third version was used from 2007 to 2008. Thus, the first Whirlpool warranty was used from 2001 to 2005. The first and second warranties were used in 2006 depending on what model was purchased, and the second and third warranties were used in 2007 and 2008 depending on what model was purchased. The Maytag warranty was used from 2006 to 2008.

[48] The first Whirlpool is perhaps the most favourable for consumers, but it is a quite limited warranty. The "One-Year Full Warranty" applied only when the washer was operated and maintained according to instructions, and Whirlpool agreed only to pay for replacement parts and repair labour costs to correct defects in materials or workmanship with the service provided by a Whirlpool designated service company. There was a second year limited warranty on electronic control boards. There was a second through fifth year limited warranty for the top, drive system belt, and pulleys, if defective in materials or workmanship. There was a lifetime limited warranty for the stainless steel wash drum if defective in materials or workmanship. The warranty provided that Whirlpool was not liable for incidental or consequential damages but noted that some provinces do not allow the exclusion or limitation of incidental or consequential damages.

[49] The second and third warranty was a limited one year warranty as follows, with the underlined words in the second but not the third version:

For one year from the date of purchase, when this washer is operated and maintained according to instructions attached to or furnished with the product, Whirlpool Corporation or Whirlpool Canada LP (hereafter "Whirlpool") will pay for Factory Specified Parts and repair labor to correct defects in materials or workmanship. Service must be provided by a Whirlpool designated service company. This limited warranty applies only when the major appliance is used in the country in which it was purchased.

[50] The second and third warranty contained a disclaimer of implied warranties and limitation of remedies as follows:

DISCLAIMER OF IMPLIED WARRANTIES; LIMITATION OF REMEDIES

Customer's sole and exclusive remedy under this limited warranty shall be product repair as provided herein. Implied warranties, including warranties of merchantability or fitness for a particular purpose are limited to one year or the shortest period allowed by law. Whirlpool shall not be liable for incidental or consequential damages. Some states and provinces do not allow the exclusion or limitation of incidental or consequential damages or limitations on the duration of implied warranties or merchantability or fitness, so these exclusions or limitation may not apply to you. This Warranty gives you specific legal rights and you may also have other rights, which vary from state to state or province to province.

E. BIOFILM (MOULD, MILDEW, AND BACTERIA)

1. Introduction – The Nature of Biofilm

[51] "Biofilm" are thin sheets of microorganisms including bacteria and sometimes mould. "Scrud" refers to the collection of various types of debris including possible microbial growth.

[52] Bacteria are microorganisms that are ubiquitous. Bacteria are found throughout homes, transported by humans and pets. Bacteria grow on many surfaces, such as cutting boards, and in sink traps, showers, air conditioner condensate pans, automobile air conditioners, humidifiers, and dehumidifiers, etc., and they may grow in well water and supplied public water.

[53] Some bacteria are good and essential for life; for example, billions of bacteria are in the intestinal tract and are needed for digestion of food and the absorption of nutrients. Some bacteria are bad and cause illness and disease some of them being fatal diseases. Among the notorious infectious bacteria are tuberculosis, salmonella, listeria monocyctogenes, and legionella pneumophila.

[54] "Fungi," which include moulds, yeasts, and mushrooms, are microorganisms that brake down other organic material. Like bacteria, some fungi are good and others are bad. Some are used to make foodstuffs including cheese and beer. Some fungi are health hazards.

[55] A fungus has a nucleus, it requires nitrogen and carbon, and it reproduces by means of spores. It is estimated that there may be 1.5 million fungal species that exist naturally in air, soil, and water. Without intentionally sterilizing and sealing an environment, a "mould-free" indoor environment is not possible.

[56] All moulds detected indoors have an outdoor source, and the level and type of mould depends on climate, geography, and favourable growth conditions, which indoors include elevated humility, water, and an available nutrient source. Moulds are introduced into the indoor environment through windows and doors, ventilation systems, by shoes and clothing, and by pets. Concentrations of moulds and mould spores may be floating about in the indoor ambient air and settle in the dust. Activities such as cleaning, dusting, vacuuming, vegetable peeling, the presence of plants and pets all influence mould levels.

[57] Moulds can cause allergic reactions, mild irritant effects to the eyes or nose, rarely infections in immune-compromised individuals, and toxicological effects, which are associated with ingestion of mould-contaminated materials. Allergic effects are primarily respiratory, including asthma, and in very rare cases, hypersensitivity pneumonitis.

[58] The Plaintiffs' proposed class action is built on the proposition that the Whirlpool front-end loading washing machines have a design defect that makes the machines unnecessarily prone to biofilm buildup.

[59] Whirlpool denies any design defect. It would attribute the presence of biofilm in its front-loading washing machines to individual circumstances where consumers do not operate the washing machines as recommended. Whirlpool also asserts that it addressed any biofilm problems by several design changes and that any remaining problems with biofilm buildup are idiosyncratic and not common problems.

2. Dr. Wilson's and Dr. Yang's Evidence about Biofilm

[60] Dr. Wilson took apart and analyzed some Whirlpool washing machines built between 2002 and 2008. He also examined reports from the examination of the machines of the Plaintiffs and that of another proposed class member.

[61] Dr. Wilson opines that biofilm (mould, mildew and bacteria) in the Whirlpool front-loading washing machines is present because of a fundamental design defect; namely, the front-loading machines were not designed to adequately self-clean by the end of a wash cycle. To quote excerpts from Dr. Wilson's Expert Report on Whirlpool Front-Loading Washer, December 21, 2010:

In the case of the ACCESS and HORIZON products that were evaluated … they uniformly fail to self-clean which often leads to severe odour not only from the washer itself but also from the clothes and towels that have been washed in the machines.

Since the ACCESS and HORIZON do not adequately self-clean, the by-products from the wash process (lint, suds, fabric softener, soils of all types, and flakes of skin, body oils, and hair) remain trapped in the washer. The warm moist environment inside the washer along with the debris mentioned above provide an ideal environment for the growth of mould and bacteria which feed on the debris and produce Biofilm and a foul odour.

The odour is a symptom of the actual problem which is, the machines uniformly fail to self-clean. Therefore bacteria and mould begin to feed on the by-products of the washing machine process producing Biofilm which eventually produces the offensive odour.

[T]he ACCESS and HORIZON do not adequately clean or rinse the following components and areas: the tub walls, especially the back of the tub; the aluminum bracket that attaches to the basket; the sump area; the pump strainer and drain hose; the door gasket area; the air vent duct; the detergent dispenser duct.

The deep cavities and ribs [of the water tub] all help to strengthen the tub so that it can support the basket. However, the cavities and structure are on the water side and in locations where rinse water cannot adequately reach the cavities to flush them out. … The design of deep cavities on the water side of the tub is, in my opinion, a gross technical design error and should never have gone into production but once in production should have been given the highest priority for redesign.

The heavy cast aluminum bracket (or cross brace) that is attached to the back of the basket has cavities which cannot be rinsed out to prevent the collection of material similar to that of the back wall of the tub. Even with the spinning motion of the bracket severe amounts of debris still collect on it. … This in combination with doses of chlorine bleach may create the potential for structural failure in the forms of cracks in the cross brace. …. It is my opinion that Whirlpool should have known from the beginning that the bracket would be a severe collection point for the by-products of the wash process and that the build-up of Biofilm would result in foul odours and could also result in potential structural failure of the bracket.

Uniformly inherent in the design of these machines are areas, such as the cavities in the tub back wall and the basket bracket, where rinse water cannot adequately reach. These are design features that are manufactured into every ACCESS and HORIZON … and therefore the problem is systemic and applies to all of the machines that were produced from 2002 to 2008.

Newer models of the ACCESS and HORIZON have some design modifications, such as ribs and cavities on the ACCESS tub which have moved to the back side of the tub out of contact with the wash water. The basket brackets of the ACCESS and HORIZON have been redesigned to reduce collection points. In addition, consumer instructions for cleaning processes and special cleaning cycles have been added to the washers. Whirlpool has also made special cleaning tablets available. It is in my opinion that consumers with ACCESS or HORIZON models from the time period that was evaluated (2002) do not have solutions available to resolve or eliminate the containments and the resulting odour.

[62] Doctors Wilson and Yang opine that chemical washes such as bleach and specialized washing machine cleaners, such as Whirlpool's, Affresh®, might remove some of the residue and buildup of biofilm, but the remainder will rapidly repopulate the machine. They opined that because of the front-loading machines' design the chemical cleaner would not reach all of the affected portions of the machine and thus there was no way to permanently or completely eliminate the problem of biofilm without a design change.

[63] The Plaintiffs closed the class in 2008 because it was Dr. Wilson's opinion that adequate design changes to address the biofilm problem were finally implemented at that time.

3. Dr. Bot's Evidence about Biofilm

[64] Dr. Got's opinion was that since only five percent of the general population are allergic to moulds, it is unlikely that mould exposure connected to the Whirlpool washing machine would have any significant effect and certainly not across the class. Similarly, it was his opinion that infections from moulds are very rare and limited to immunity-compromised individuals. It was his opinion that toxicological effects would not occur from the presence of mould in washing machines.

[65] It was Dr. Got's opinion that chemicals arising from microbials in the indoor environment may produce some odours, but they have never been shown to produce toxicity. There is no precedent for chemicals produced by bacteria or mould in biofilms to cause physical illness and there would be absolutely no commonality from one washing machine to another. It was his opinion that bacteria can cause infections, but bacterial infections caused by the growth in an indoor biofilm would be extraordinary and improbable and an intense individual investigation would be needed to determine the susceptibility of the sufferer and to identify the cause of the infection.

[66] Dr. Got deposed that odour, as such, is not a health hazard. Some dangerous things smell; others are odourless. There is no direct relationship between smell and toxicology.

[67] Dr. Got saw little likelihood of any actual exposure to biological agents by the user because the biofilm, if any, would be located in the interior of the washing machine. The smell might escape but not the biological agents.

[68] It was Dr. Got's opinion that the nature and intensity of odour from fungi will depend on what fungi is growing, how much is growing, how long it has been growing, where it is growing, and what its food sources are. Some biofilms are odourless.

[69] In Dr. Got's opinion, neither the amount, if any, nor nature of the organisms in biofilm growing in a washing machine will be common from machine to machine. The nature and amount of biofilm, if any, would depend upon the model and design of the machine, the frequency of use, what is washed, whether or not bleach is used and how frequently, water temperature, whether or not disinfectant tablets are used, whether or not the door remains open after use, and the location of the machine.

F. COMPLAINTS, WHIRLPOOL'S BIOFILM INVESTIGATION AND TROUBLESHOOTING

1. Troubleshooting Odour from Front-End Loading Washing Machines

[70] From the introduction of its front-end loading machines, Whirlpool's Use and Care Guides, which came with the washers, instructed consumers about the use and care of the washers, including the use of low-sudsing, high-efficiency detergent ("HE detergent") and the need to periodically clean the washing machines.

[71] Beginning in September 2003, Whirlpool began to receive complaints associated with service calls about odour, mould, or mildew. In late 2003 and early 2004, Whirlpool's Customer Experience Center began to receive an average of two to three North American customer complaints per day about musty odours or mould in Whirlpool Access washers. This was a complaint rate of less than two-tenths of one percent, but Whirlpool decided to investigate the matter.

[72] In 2004, Whirlpool received information from consumers, service technicians, trade customers, and other sources, such as The Procter & Gamble Company that some consumers were not using HE detergent in their Access washers.

[73] In response to this situation, Whirlpool prepared a one-page "Leave Behind Sheet" for consumers and sales associates emphasizing why "Customers Should use High Efficiency Detergents for Calypso and Duet washers," to obtain the best cleaning performance and to avoid performance problems with the washers. The "Leave Behind Sheet" emphasized that HE detergent should be used by the consumer to avoid performance problems in Duet washers, including "[d]etergent residues" and "[m]achine odour due to residues."

[74] In April 2004, Mr. Hardaway was asked to lead an engineering project team of 13 personnel, which became known as the "Biofilm Project Team," to investigate and identify the causes of the mould and malodour complaints, and to recommend machine design, manufacturing, literature, or service protocol changes that Whirlpool could implement to reduce the complaints.

[75] By December 2004, the Biofilm Project identified several factors that could contribute to possible mould or malodours including owners' use of regular detergents; using too much detergent; increasing use of cold-water washes; use of liquid fabric softener; decreasing use of chlorine bleach; keeping the washer door closed between uses; failing to remove and clean the detergent dispenser periodically; and failing to inspect and clean the rubber door seal periodically. There also were environmental factors in some consumers' homes, such as soft water, pre-existing mould colonies in a basement laundry area, and a relatively warm and humid climate.

[76] In December 2004, Whirlpool and Sears added new HE detergent instructions, as well as the "HE detergent" logo to the User and Care Guides' cover page. The following instruction was repeated several times in the revised guides:

Using regular detergent will likely result in washer errors, longer cycle times, reduced rinsing performance, and may result in component failures and noticeable Mould or mildew. HE detergents are made to produce the right amount of suds for the best performance. Follow the manufacturer's instructions to determine the amount of detergent to use.

[77] In February 2005, as a result of a letter that Mr. Conrad of Whirlpool had written in November 2004, to Consumers Union, the publisher of Consumer Reports. Consumer Reports Canada printed an article that stressed the importance of using HE detergent and stated that "[n]umerous readers have reported that their front-loading washers developed mould or a musty smell. Using chlorine bleach occasionally and leaving the door ajar should help."

[78] In July 2005, Whirlpool changed the design of its Access washers to include a pre-programmed washer "Maintenance Cycle" or "Cleaning Cycle" that enabled consumers to clean the inside of their Access washers, using chlorine bleach, no laundry, a higher water volume, and more mechanical action than the machines used in a normal wash cycle. When Sears launched its Kenmore Horizon models in 2005, all of these machines also included the pre-programmed washer Maintenance Cycle.

[79] With the introduction of the Cleaning Cycle, the Users' Guides were revised. The troubleshooting sections of the guides included instructions for avoiding and remediating "washer odour," including use of HE detergent and leaving "the door open to allow the washer to dry between uses."

[80] All Whirlpool and Maytag Horizon models, from 2006 and all of the Whirlpool Sierra models from 2007 included a Clean Washer cycle on the control panel and the User and Care Guide instructed the consumer about the use of the cycle. Whirlpool also explained the new Clean Washer cycle in its marketing literature that was made available to consumers.

[81] In September 2007, Whirlpool launched its Access washers with a steam feature to enhance the Clean Washer cycle. The control panels for the steam washers include a "Clean Washer Reminder" light that illuminates after 30 wash cycles to remind the consumer to run the Clean Washer cycle.

[82] Also in September 2007, Whirlpool began selling Affresh® Washer Cleaner. This product was specifically designed to clean residues from surfaces inside of washing machines. Whirlpool included one free sample of Affresh® in new washers.

[83] Whirlpool modified its guides for Whirlpool and Maytag Access, Sierra, and Horizon washers to instruct consumers to run a monthly Clean Washer cycle with either one Affresh® tablet or with liquid chlorine bleach. Affresh® costs between $5.99 and $9.99 for a three-month supply.

[84] Since at least October 2007, Whirlpool's North American website for consumers, www.whirlpool.com, has included information about the potential for mould and associated odours to develop in washing machines, including Whirlpool's front-loading washing machines. The information indicates that odours may develop if consumers do not follow proper use and care procedures, including using only HE detergent, leaving the door open between uses, and regularly cleaning and maintaining the washer.

[85] The Plaintiffs submit that consumers were never adequately informed about the biofilm problem. They submit that the owner's User and Care Guides are unpacked after delivery of the washer and although the manuals were revised to include reference to the cleanout cycle, they never refer to the mould, mildew and bacteria problems as being the explanation for the need for the Clean Washer cycle. In addition, they submit that a consumer was not told that the wash cycle would not reach inaccessible areas within the washing machine and therefore, the machines did not effectively self-clean.

[86] In August 2008, Whirlpool launched a new Affresh® Washer Cleaner Kit. Its marketing information included statements about the potential for residue, mould, and associated odours to develop in HE washers, as well as, the steps consumers could take to prevent the accumulation of odour-causing residues.

[87] Whirlpool also worked with the detergent manufacturers and their industry association, The Soap and Detergent Association, to develop and publish both a written and electronic brochure for consumers. The Association's brochure informed consumers that excess suds can lead to residue buildup since they are not as easily rinsed away - and over time, this buildup could lead to unpleasant odours, potential machine malfunctions, or damage. The brochure indicated that over time soils may accumulate in the HE washer and lead to the growth of bacteria and mould - and create odours in the washer and that these potential problems can usually be avoided by using an HE detergent and by running a regular maintenance cycle.

[88] Whirlpool deposed that several of its design changes were implemented for the specific purpose of controlling the development of biofilm, and it asserted that the available empirical data from the field show that those design changes were effective in reducing the rate of biofilm-related complaints and service calls.

[89] Whirlpool admitted that the following design changes were made to address the mould, mildew, bacteria and odour concerns: (a) late 2004 to July 2005, the ribs in the Horizon platform were tilted at an angle to reduce water pooling; (b) late 2004 and early 2005, copper content of the cross piece in the new Horizon model was reduced and the piece was redesigned to reduce the risk and rate of corrosion by eliminating water pooling areas; (c) 2005, copper content of the Access platform aluminum cross piece was reduced; (d) July 2005, Access platform machines introduced the Clean Washer cycle; (e) 2006, Clean Washer cycle added to control panel; (f) September, 2007, a steam feature was added to the Access machine; and (g) 2009, Access machines were modified to eliminate water pooling sites.

[90] Dr. Wilson's opinion was that none of the designed changes were adequate to address the design deficiency which was that the front-loading machines do not adequately self-clean.

2. The Crosspiece Changes

[91] In 2004, as part of Whirlpool's biofilm engineering investigation, it examined Access-platform washers that were subject to an odour complaint. A very small number of these washers had aluminum crosspieces that exhibited biofilm-related intergranular corrosion. Whirlpool concluded that it was possible, though very unlikely, for very heavy biofilm contamination to build-up on an Access washer's crosspiece under certain rare usage conditions, especially the use of regular detergents, the use of mostly cold-water wash cycles, and leaving the washer's door closed between wash cycles, which prevented the machine from drying out between uses. This contamination could cause biologically-induced intergranular corrosion of type 383 aluminum alloy.

[92] Whirlpool's investigations indicated that crosspiece cracking, including cracking due to potential intergranular-corrosion-induced failure of the type 383 alloy crosspiece, did not present a safety hazard or danger to consumers. A crosspiece cracking failure would cause the machine to stop working without posing a threat of personal injury.

[93] In June 2005, Whirlpool made a design change to the Access-platform's crosspiece to change the material to the new 413 alloy. This change reduced the likelihood of biologically-induced intergranular corrosion, as well as, other types of corrosion. The 413 alloy was used in all future front-loading washer models that Whirlpool sold in North America. It was Mr. Craven's opinion that that the material change was effective in significantly reducing or possibly eliminating the miniscule risk of biologically-induced intergranular corrosion that existed for the 383 alloy components.

[94] Whirlpool also changed the geometric design of the crosspieces in the Access-platform washers and used different geometric designs for the Horizon-platform and Sierra-platform washers. The Sierra crosspiece has a different shape than the Horizon crosspiece. The Horizon and Sierra crosspieces shapes, as compared to the original Access platform's crosspiece, have reduced surface areas where moisture or residue could accumulate. The Horizon and Sierra crosspiece designs increase water flow and improve rinsing of the crosspiece, and they further limit the growth of biofilm and odour-causing residue on the crosspiece itself.

[95] There are no confirmed report of biofilm-related intergranular corrosion in any Access-platform washer that was built after the 2005 design change, nor any reports of intergranular corrosion of any Horizon or Sierra washer.

G. BACKGROUND TO THE PROPOSED CLASS ACTION

[96] Mr. Aurora has owned a Whirlpool washing machine since 2004, and in late 2006 he began to notice an odour from the machine. He tried the Clean Wash cycle without success. In 2010, he contacted Whirlpool, and they advised him to use the Affresh® tablets, but since he read on the web that the tablets did not work, he did not use the tablets.

[97] In 2007, Mrs. Jacobs purchased her house with a Whirlpool front-loader washing machine. She used HE detergent. In 2007 or early 2008, she noticed an odour from the machine, and took steps to eliminate it, including using Affresh® tablets.The efforts were unsuccessful. She says her clothes were damaged by the odour. In 2010, she replaced the Whirlpool machine with a Miele clothes washing machine.

[98] In 2007, Mrs. Oliver purchased a Whirlpool front-loader in 2007. In 2008, she noticed an odour from the machine. She attempted to eliminate the problem including following the recommendations in the manual and hiring a plumber. These efforts were unsuccessful. She says her health was affected, and she had symptoms such as sore throat, runny nose, and headache. In 2010, she replaced the Whirlpool machine with a Samsung washing machine.

[99] On June 10, 2010, Mr. Arora commenced an action against Whirlpool pleading alleged design deficiencies in front loading washing machines for model years 2001 through 2008. The Statement of Claim makes an unjust enrichment or waiver of tort claim for $200 million. In the alternative, it claims damages for out-of-pocket expenses to repair the washing machines and the fair replacement value of the machines or the diminution in value of the washing machines. Punitive damages in the amount of $10 million are claimed.

[100] In the first iteration of his Statement of Claim, Mr. Arora sued in negligence for defective design and failure to warn, breach of the Consumer Protection Act and the Competition Act, and waiver of tort for the cost of identifying and repairing the alleged design deficiencies or for the cost of replacing the Whirlpool Front Loaders.

[101] In the first version of the Statement of Claim, Mr. Arora alleged that the washing machines were not designed properly to direct water to clean all the surfaces exposed to the water, soap, softener, dirt, and debris and to provide air circulation to allow these surfaces to dry once a wash had ended.

[102] In the first version of the Statement of Claim, Mr. Arora did not allege that the washing machines posed a danger to the health and safety of the plaintiffs and the proposed class did not he seek personal injury damages.

[103] On December 12, 2010, the Statement of Claim was amended to add Stacey Jacobs and Kathleen Oliver as Plaintiffs.

[104] On August 16, 2011, the Statement of Claim was further amended to plead breach of an express contractual or implied warranty at common law or under the Sale of Goods Act to supply the Whirlpool Front Loaders free from material defects and fit for their intended use.

[105] On August 26, 2011, the Statement of Claim was amended to insert an allegation that the Whirlpool Front Loaders pose a "substantial danger to the health and safety" of the Plaintiffs and the class members, and for the first time the Plaintiffs pleaded "personal injury damages". Paragraph 13 of the pleading alleges: "The corrosion and the scrud create a real and substantial risk to the health and safety of consumers because parts spinning at high speed may break and/or consumers will be exposed to toxins and allergens."

[106] The Plaintiffs plead that they have suffered damages as a result of the defendants' conduct and the design deficiencies, including out-of-pocket expenses for repairs and replacement parts and the diminution of value of the Whirlpool Front-Loaders. The Plaintiffs submit that damages, being either the "value of the loss of their bargains or the cost of maintenance", can be assessed either on the basis of documents or through a statistical approach.

[107] Shortly before the certification motion, Whirlpool delivered a Statement of Defence.

H. EVIDENTIARY FINDINGS AND THE CERTIFICATION CRITERION

[108] For certification, the plaintiff in a proposed class proceeding must show "some basis in fact" for each of the certification requirements, other than the requirement that the pleading discloses a cause of action: Hollick v. Toronto (City), 2001 SCC 68 at para. 25; Taub v. Manufacturers Life Insurance Co., 1998 14853 (ON SC), 40 O.R. (3d) 379 (Gen. Div.), aff'd (1999), 1999 19922 (ON SC), 42 O.R. (3d) 576 (Div. Ct.); Ernewein v. General Motors of Canada Ltd., 2005 BCCA 540, [2005] B.C.J. No. 2370 (C.A.), leave to appeal to S.C.C. ref'd, [2005] S.C.C.A. No. 545.

[109] The class representative must come forward with sufficient evidence to support certification, and the opposing party may respond with evidence of its own to challenge certification: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at para. 22. Certification will be denied if there is an insufficient evidentiary basis for the facts on which the claims of the class members depend: Williams v. Canon Canada Inc., 2011 ONSC 6571; Chadha v. Bayer Inc., 2003 35843 (ON CA), 63 O.R. (3d) 22 (C.A.), leave to appeal to S.C.C. ref'd [2003] S.C.C.A. No. 106; Ernewein v. General Motors of Canada Ltd., supra; Taub v. Manufacturers Life Insurance Co., supra.

[110] On a certification motion, evidence directed at the merits may be admissible if it also bears on the requirements for certification but, in such cases, the issues are not decided on the basis of a balance of probabilities but rather on that of the applicable much less stringent test of "some basis in fact": Hollick v. Toronto (City), supra at paras. 16-26; Cloud v. Canada, 2004 45444 (ON CA), [2004] O.J. No. 4924 (C.A.), at para. 50.

[111] The evidence on a motion for certification must meet the usual standards for admissibility: Martin v. Astrazeneca Pharmaceuticals PLC, 2012 ONSC 2744; Williams v. Canon Canada Inc., supra; Ernewein v. General Motors of Canada Ltd., supra; Schick v. Boehringer Ingelheim (Canada) Ltd., 2011 ONSC 63 at para.13.

[112] That the plaintiff has shown that there is some basis in fact for a criterion for certification does not end the analysis. The some basis in fact test is applied as a necessary but a sufficient condition for certification. In so far as a criterion is factual, the plaintiff is more favourably treated than is the defendant by the some basis in fact standard. However, all the criteria are issues of mixed fact and law, and the legal and policy side of the class definition, commonality, preferability, and the adequacy of the representative plaintiff are matters of argument and not just facts, although there must be a factual basis for the arguments: McCracken v. Canadian National Railway 2010 ONSC 4520 at paras. 283-301, rev'd on other grounds, 2012 ONCA 445.

[113] In the case at bar, despite Whirlpool's vociferous attacks on the credibility, reliability, and cogency of the Plaintiffs' witnesses and their evidence, subject to one important caveat or clarification, I am satisfied that there is some basis in fact for each of the certification requirements, other than the requirement that the pleading discloses a cause of action, which requirement is based on assuming that the facts set out in the statement of claim are true.

[114] The caveat is that the action that the Plaintiffs ultimately sought to certify as a class action was a product liability action for a non-dangerous product. There is no basis in fact for a class action based on a dangerous product. Indeed, it was conceded during the argument of the certification motion that this motion is about whether a product liability action against the manufacturer of a shoddy non-dangerous product is certifiable as a class action.

[115] On the run-up to the certification motion, however, and in their argument in the factum, the Plaintiffs submitted that there was evidence that biofilm presents a health risk making the machines dangerous. They also submitted that there was evidence that the accumulation of biofilm could corrode and crack the aluminum crosspiece, once again, making the washing machine dangerous.

[116] However, given the concession made during argument, strictly speaking, it is not necessary to rule on these hotly contested evidentiary disputes between the parties that concern the dangers of biofilm. It is also not necessary to rule on whether there is some basis in fact for the certification of this action on the basis of Whirlpool manufacturing a dangerous product.

[117] That said, given the extent of the debate leading to the certification motion, I will briefly say that Whirlpool met the high evidentiary standard of showing that the possible cracking of the crosspiece did not pose a danger. If the crosspiece broke, the washing machine simply would stop functioning. There is no basis in fact that the design of the crosspiece made the machine dangerous.

[118] As for whether biofilm was potentially dangerous, I have no doubt that it is. I also have no doubt that all of the Whirlpool machines, and all washing machines for that matter, have the potential of being the sites for biofilm growth. However, it does not follow that all Whirlpool machines are actually dangerous. In the main, in washing machines, biofilm is odoriferous and unpleasant but not harmful, and often biofilm is neither odoriferous nor pathogenic, and if pathogenic, biofilm only infrequently causes harm because of the idiosyncratic circumstances of the persons exposed to pathogens.

[119] Because the case at bar ultimately is about an allegedly shoddy but non-dangerous consumer product, it is not necessary to analyze the certification criteria from the perspective of a proposed class action about a dangerous product. For present purposes, I can simply say that it is doubtful that the case at bar would have been certifiable if it had been advanced as a case about a dangerous product. It was thus sensible for the Plaintiffs ultimately to concede that the case at bar was different from the dangerous goods product liability actions.

I. CERTIFICATION

1. Introduction

[120] Pursuant to s. 5(1) of the Class Proceedings Act, 1992, the court shall certify a proceeding as a class proceeding if: (a) the pleadings disclose a cause of action; (b) there is an identifiable class; (c) the claims of the class members raise common issues of fact or law; (d) a class proceeding would be the preferable procedure; and (e) there is a representative plaintiff who would adequately represent the interests of the class without conflict of interest and who has produced a workable litigation plan.

[121] For an action to be certified as a class proceeding, there must be a cause of action shared by an identifiable class from which common issues arise that can be resolved in a fair, efficient, and manageable way that will advance the proceeding and achieve access to justice, judicial economy, and the modification of behaviour of wrongdoers: Sauer v. Canada (Attorney General), 2008 43774 (ON SC), [2008] O.J. No. 3419 (S.C.J.) at para. 14, leave to appeal to Div. Ct. refused, 2009 2924 (ON SCDC), [2009] O.J. No. 402 (Div. Ct.).

[122] On a certification motion, the question is not whether the plaintiff's claims are likely to succeed on the merits, but whether the claims can appropriately be prosecuted as a class proceeding: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at para. 16.

[123] The test for certification is to be applied in a purposive and generous manner, to give effect to the important goals of class actions -- providing access to justice for litigants; promoting the efficient use of judicial resources; and sanctioning wrongdoers to encourage behaviour modification: Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534 at paras. 26 to 29; Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at paras. 15 and 16.

[124] The purpose of a certification motion is to determine how the litigation is to proceed and not to address the merits of the plaintiff's claim; there is to be no preliminary review of the merits of the claim: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at paras. 28 to 29.

[125] In the case at bar, Whirlpool submitted that all the certification criteria have not been satisfied. Its major challenges were about the cause of action criterion, the common issues criterion, and the preferable procedure criterion. Of these challenges, the most critical issue is whether the Plaintiffs satisfied the cause of action criterion.

2. Cause of Action Criterion

I. The Plain and Obvious Test

[126] The first criterion for certification is whether the plaintiff's pleading discloses a cause of action. The "plain and obvious" test for disclosing a cause of action from Hunt v. Carey Canada, 1990 90 (SCC), [1990] 2 S.C.R. 959 is used to determine whether a proposed class proceeding discloses a cause of action for the purposes of s. 5 (1) (a) of the Class Proceedings Act, 1992: Anderson v. Wilson (1999), 1999 3753 (ON CA), 44 O.R. (3rd) 673 (C.A.) at p. 679, leave to appeal to S.C.C. ref'd, [1999] S.C.C.A. No. 476; 176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada Ltd. (2002), 2002 6199 (ON SC), 62 O.R. (3d) 535 (S.C.J.) at para. 19, leave to appeal granted, 2003 36393 (ON SCDC), 64 O.R. (3d) 42 (S.C.J.), aff'd (2004), 2004 16620 (ON SCDC), 70 O.R. (3d) 182 (Div. Ct.).

[127] The plain and obvious test derived from what historically was known as a demurrer pleading and what in Ontario was rule 126 of the former Rules of Practice and what is now rule 21.01 (1)(b) of the Rules of Civil Procedure, which states:

21.01 (1) A party may move before a judge, …

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,

and the judge may make an order or grant judgment accordingly.

[128] Where a defendant submits that the plaintiff's pleading does not disclose a reasonable cause or action, to succeed in having the action dismissed, the defendant must show that it is plain, obvious, and beyond doubt that the plaintiff cannot succeed in the claim: Dawson v. Rexcraft Storage & Warehouse Inc. (1998), 1998 4831 (ON CA), 164 D.L.R. (4^th^) 257 (Ont. C.A.). Matters of law that are not fully settled should not be disposed of on a motion to strike: Dawson v. Rexcraft Storage & Warehouse Inc., supra, and the court's power to strike a claim is exercised only in the clearest cases: Temelini v. Ontario Provincial Police (Commissioner) (1990), 1990 7000 (ON CA), 73 O.R. (2d) 664 (C.A.).

[129] In assessing the cause of action or the defence, no evidence is admissible and the court accepts the pleaded allegations of fact as proven, unless they are patently ridiculous or incapable of proof; A-G. Canada v. Inuit Tapirisat of Canada, 1980 21 (SCC), [1980] 2 S.C.R. 735; Canada v. Operation Dismantle Inc., 1985 74 (SCC), [1985] 1 S.C.R. 441; Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1 (C.A.); Folland v. Ontario (2003), 2003 52139 (ON CA), 64 O.R. (3d) 89 (C.A.); Canadian Pacific International Freight Services Ltd. v. Starber International Inc. (1992), 1992 15412 (ON SC), 44 C.P.R. (3d) 17 (Ont. Gen. Div.) at para. 9.

[130] The law must be allowed to evolve, and the novelty of a claim will not militate against a plaintiff: Johnson v. Adamson (1981), 1981 1667 (ON CA), 34 O.R. (2d) 236 (C.A.), leave to appeal to the S.C.C. refused (1982), 35 O.R. (2d) 64n. However, a novel claim must have some elements of a cause of action recognized in law and be a reasonably logical and arguable extension of established law: Silver v. Imax Corp., 2009 72334 (ON SC), [2009] O.J. No. 5585 (S.C.J.) at para. 20; Silver v. DDJ Canadian High Yield Fund, 2006 21058 (ON SC), [2006] O.J. No. 2503 (S.C.J.).

[131] Generally speaking, the case law imposes a very low standard for the demonstration of a cause of action, which is to say that, conversely, it is very difficult for a defendant to show that it is plain, obvious, and beyond doubt that the plaintiff cannot succeed with the claim.

[132] The low standard to disclose a reasonable cause of action is emphasized by numerous directives from appellate court that issues that are novel, complex, and important should normally be decided on a full factual record after trial: Leek v. Vaidyanathan, 2011 ONCA 46, [2011] O.J. No. 200 (C.A.), para. 3; Haskett v. Equifax Canada Inc. et al., 2003 32896 (ON CA), [2003] O.J. No. 771 (C.A.), para. 24; PDC 3 Limited v. Bregman + Hamann Architects, 2001 38745 (ON CA), [2001] O.J. No. 422 (C.A.), paras. 7-12; Anger v. Berkshire Investment Group Inc., 2001 24141 (ON CA), [2001] O.J. No. 379 (C.A.).

[133] Thus, in the case at bar, the Plaintiffs were fervent in arguing that the issue of recovery of pure economic losses in negligence required the full evidentiary record of a trial or at a minimum the record for a summary judgment motion. The Plaintiffs argued that I should not even undertake a duty of care analysis, which should be done with the evidence of a trial or a motion for summary judgment.

[134] However, Whirlpool was equally fervent in arguing that the Plaintiffs' claim was not novel, that the Canadian law in this area of negligence had been settled, and the Plaintiffs' arguments about the need for a more fulsome factual record and about how the law should be allowed to develop and change could not get around the inevitability of the Plaintiffs' defeat based on the pleaded allegations. Whirlpool argued that the Plaintiffs' pleadings did not disclose a reasonable cause of action.

[135] I found these competing arguments about whether I should even bother to do an analysis of the Plaintiffs' negligence claim troublesome.

[136] I have no difficulty understanding and applying the principle that an action should only be dismissed in the very clearest of cases and that the novelty of a claim should not militate against the plaintiff; however, I find the argument that complex and important issues should only be decided on a full record after trial problematic and an invitation to shirk the court's obligation under s. 5 (1) (a) of the Class Proceedings Act, 1992.

[137] Following the directive complex and important cases of leaving to trial the legal issue of whether the plaintiff has disclosed a reasonable cause of action is problematic because an examination of the cases decided by appellate courts reveals that in motions to strike pleadings for not disclosing a reasonable cause of action, there are three different types of outcome - all reached without a full evidentiary record; namely: (1) the appellate court concludes that it is not plain and obvious that the plaintiff will not succeed in establishing a cause of action at trial; (2), the appellate court concludes that there is a cause of action and the plaintiff may succeed at trial; and (3), the appellate court concludes that it is plain and obvious that the plaintiff has not disclosed a reasonable cause of action.

[138] Examples of the first category, the neutral category, where the court defers to trial the determination of whether the test for a duty of care has been satisfied, include the following. In Anger v. Berkshire Investment Group Inc., supra, the Court of Appeal held that it was not plain and obvious that compliance officers at an investment planning firm did not have a duty of care to ensure that the sales force complied with Securities Act regulations. In Sauer v. Canada (Attorney General), 2007 ONCA 454, leave to appeal to the S.C.C. refused [2007] SCCA No. 454, the Court of Appeal held that it was not plain and obvious that the Government of Canada did not have a duty of care to the cattle industry for negligent regulation of the cattle industry. In Taylor v. Canada (Attorney General), 2012 ONCA 479, the Ontario Court of Appeal held that the proximity analysis of a duty of care was fact specific and it was not plain and obvious that the Government of Canada did not have a duty of care in carrying out its duties in regulating manufacturers of medical devices.

[139] There are, however, examples of the second category, the positive category, where without a full evidentiary trial record, appellate courts have decided there is a cause of action and the plaintiff may succeed at trial. Thus, in Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 146 (SCC), [1995] 1 S.C.R. 85, much discussed below, the Supreme Court of Canada declared that there was a product liability claim in negligence for the pure economic loss of the cost of repairing a defective product that posed a danger.

[140] There are other examples of the second category. In Nelles v. Ontario, 1989 77 (SCC), [1989] 2 S.C.R. 170, reversing the Ontario Court of Appeal, on a motion to have an action dismissed on the ground that the pleadings disclosed no reasonable cause of action, the Supreme Court of Canada held that the Attorney General (but not the Crown) was not immune from an action for malicious prosecution. In Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, rev'g (2001), 2000 17007 (ON CA), 52 O.R. (3d) 181 (C.A.), which varied [1998] O.J. No. 5426 (Gen. Div.), a person fleeing from a bank robbery was fatally shot by police officers, and the Supreme Court of Canada reversed the Court of Appeal's decision and held that the tort of misfeasance in public office includes breach of duty and thus the estate of the deceased had a viable action against the police officers who did not co-operate with the Special Investigation Unit's investigation and the Chief of Police, who under the Police Services Act is required to ensure that members of the police force carry out their duties in accordance with the provisions of the Act.

[141] And, of course, there is the most famous positive category example of all, Donoghue v. Stevenson, 1932 536 (FOREP), [1932] A.C. 562 (H.L.), which is the seminal case of the modern law of negligence, which was decided on a pleadings motion.

[142] In my opinion, Haskett v. Equifax Canada Inc. supra, is another example of the second category, where the appellate court actually decides that the pleaded cause of action is tenable. The Plaintiffs, however, relied on this case only for the proposition that issues that are novel, complex, and important should normally be decided on a full factual record after trial.

[143] In Haskett, Mr. Haskett brought a proposed class action on behalf of a class of persons who had been denied credit because of the practice of the defendant credit reporting agencies improperly including inaccurate information in credit reports. Reversing the motions judge, who had held that there was no cause of action in negligence, the Court of Appeal concluded that it was not plain and obvious that the plaintiff had no cause of action.

[144] However, it appears to me that in Haskett, the Court actually went further and made affirmative conclusions that there was a viable cause of action. Based solely on an analysis of the pleadings, Justice Feldman for the Court concluded that Mr. Haskett had satisfied the first stage of the test for a duty of care. Then, Justice Feldman went on to the second stage of the analysis and addressed the two policy issues that the credit agencies had advanced to negate a prima facie duty of care; namely, first, the spectre of indeterminate liability and second, the factor that there was a statutory alternative to a tort action. On these two policy issues, she emphatically rejected that there was any problem of indeterminate liability, and then, for four reasons, she concluded that the recourse to alternative legal remedies did not preclude a negligence claim. It was only when she reached the third and fourth reasons that she said that a court should be reluctant to dismiss a claim as disclosing no reasonable cause of action based on policy reasons at the motion stage with a full evidentiary record.

[145] There are numerous examples of the third category, the negative category, where without waiting for a trial record, appellate courts have declared that it is plain and obvious that a cause of action does not exist.

[146] Thus, for example, in Hughes v. Sunbeam, (2002), 2002 45051 (ON CA), 61 O.R. (3d) 433 (C.A.), leave to appeal to SCC refused, [2002] S.C.C.A. No. 446, a case that I will discuss further below, there is the phenomena that on the one hand the Court of Appeal declared that it was not plain and obvious that the claim was untenable as against the manufacturers of the smoke alarms, and on the other hand, the Court of Appeal simultaneously declared that it was plain and obvious that there was no cause of action for pure economic losses against the Underwriters' Laboratories of Canada ("ULC"), which had certified an allegedly ineffective and unreliable smoke alarm.

[147] There are other examples of an appellate court declaring that there is no cause of action without having the full factual record developed for a motion for summary judgment or at a trial. In Seneca College of Applied Arts and Technology v. Bhadauria, 1981 29 (SCC), [1981] S.C.J. No. 76, reversing the Ontario Court of Appeal, on a motion to have an action dismissed on the ground that the pleadings disclosed no reasonable cause of action, the Supreme Court of Canada held that there was no common law action for racial discrimination in employment opportunity. In Operation Dismantle Inc. v. Canada, 1985 74 (SCC), [1985] 1 S.C.R. 441, on a motion to strike out a statement of claim for not showing a reasonable cause of action, the Supreme Court of Canada struck out a claim for damages, declaratory relief, and an injunction to enjoin the federal government's alleged violation of the Charter of Rights and Freedoms by allowing the United States to test cruise missiles in Canadian air space. In Nelles v. Ontario, 1989 77 (SCC), [1989] 2 S.C.R. 170, affirming the Ontario Court of Appeal, on a motion to have an action dismissed on the ground that the pleadings disclosed no reasonable cause of action, the Supreme Court of Canada held that the Crown (but not the Attorney General) was immune from an action for malicious prosecution. In Edwards v. Law Society of Upper Canada, 2001 SCC 80, affirming a decision of the Ontario Court of Appeal on a motion to strike, the Supreme Court held that the Law Society as the regulator of the legal profession had no private law duty of care to a lawyer's client to investigate that the lawyer did not misuse his trust account. In Drady v. Canada (Minister of Health), 2008 ONCA 659, leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 492, and Attis v. Canada (Minister of Health), 2008 ONCA 660, leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 491, the Ontario Court of Appeal held that pleadings did not allege a reasonable cause of action in that they did not contain facts capable of establishing that the federal government regulator owed a private law duty of care to the recipients of a medical device. (See also: Eliopoulos (Litigation Trustee of) v. Ontario (Minister of Health and Long-Term Care) (2006), 2006 37121 (ON CA), 82 O.R. (3d) 321 leave to appeal to S.C.C. ref'd [2006] S.C.C.A. No. 514 and Williams v. Canada (Attorney General) 2009 ONCA 378. (infectious disease control measures).) In Harris v. GlaxoSmithKline Inc., 2010 ONCA 872, leave to appeal to the S.C.C. refused [2011] S.C.C.A. No. 85, on the appeal of the certification motion, the Court of Appeal upheld the dismissal of a proposed class action against a pharmaceutical company that had initiated regulatory patent proceedings for the alleged wrongful purpose of delaying the entry of a competitor's generic drugs into the marketplace for failing to show a reasonable cause of action in tort. In R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, the Supreme Court of Canada held that tobacco companies did not have a cause of action against the federal government for negligent misrepresentation, failure to warn, and negligent design with respect to the development, manufacturer, and supply of low-tar tobacco products to consumers that caused tobacco-related illnesses and health care costs. In Koubi v. Mazda Canada Inc., 2012 BCCA 310, the British Columbia Court of Appeal decertified a class action and held that a claim for waiver of tort based on the wrongdoing of breaching the Business Practices and Consumer Protection Act or the Sale of Goods Act did not disclose a reasonable cause of action.

[148] In Syl Apps Secure Treatment Centre v. B.D., 2007 SCC 38, [2007] 3 S.C.R. 83, the motions judge had decided that it was not necessary to have a full evidentiary record and that it was plain and obvious that social workers at a treatment centre for children did not have a duty of care to the child's parents but only to the child. With Justice Sharpe dissenting, the Ontario Court of Appeal reversed the motion judgment and held that a social worker might owe a legal duty of care to the family of the child and, therefore, the matter should proceed to trial. In dissent, Justice Sharpe held that there was no need for a case-specific factual inquiry into the policy issues that negated a duty of care. The Supreme Court restored the motion judge's decision and agreed with Justice Sharpe's dissent. In the Supreme Court, writing for the Court, Justice Abella stated at paragraphs 19-21:

19. Both the majority and dissenting reasons acknowledged that imposing such a duty of care would represent a novel duty at law. The benefit of making a determination on a Rule 21 motion about whether such a duty should be recognized, is obvious. If there is no legally recognized duty of care to the family owed by the defendants, there is no legal justification for a protracted and expensive trial. If, on the other hand, such a duty is accepted, a trial is necessary to determine whether, on the facts of this case, that duty has been breached.

20. For the reasons that follow, I agree with the motions judge and with Sharpe J.A. that to recognize such a legal duty to the family of a child in their care, would pose a real risk that a secure treatment centre and its employees would have to compromise their overriding duty to the child. I also agree with Sharpe J.A. that "the duty of care pertaining to the relationship between children in need of protection and those who are charged with their care should be clearly defined on a categorical basis, rather than being left in a fluid state to be resolved on a case-by-case basis" (para. 74).

21. I would not, as a result, recognize such a new legal duty. It follows that, in my view it is "plain and obvious" that the statement of claim discloses no reasonable cause of action against these defendants.

[149] A review of all three categories of cases reveals that in complex and important cases, appellate courts, on pleadings motions, frequently decide whether a cause of action does or does not exist without waiting for a full trial record.

[150] The directive or argument that complex and important issues should only be decided on a full record after trial is also troublesome because depending on the legal and policy issues associated with assessing whether a plaintiff has disclosed a reasonable cause of action, the court might not need the assistance of a fuller factual record. In this regard, see Andersen v. St. Jude Medical, Inc., 2012 ONSC 3660. That was a products liability class action, in which Justice Lax indicated at paragraphs 576-594 of her reasons that her experience presiding at the trial suggested that resolving the legal issue of whether waiver of tort is a cause of action does not necessarily require a trial. On this point, see also Koubi v. Mazda Canada Inc., at para. 39; Parker v. Pfizer Canada Inc., 2012 ONSC 3681 at paras. 108-12.

[151] Perhaps the most problematic aspect of the directive from appellate courts that complex and important issues should only be decided on a full record after trial is that it may conflate the operation of a motion to strike for failure to disclose a reasonable cause of action under rule 21.01 (b) with a motion to dismiss under rule 21.01 (a). Rule 21.01 (a) states:

21.01 (1) A party may move before a judge,

(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or …

and the judge may make an order or grant judgment accordingly.

[152] Some of the cases that direct that complex and important issues should only be decided on a full record after trial are cases about rule 21.01(a), where evidence is admissible on consent or with leave, and not necessarily about rule 21.01 (b), where evidence is not admissible.

[153] In R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at paras. 17-25, Chief Justice McLachlin discussed the dynamic that the facts as pleaded are the basis for the examination of whether the plaintiff has disclosed a reasonable cause of action. A motion under rule 21.01 (1)(b) or under s. 5 (1) (a) of the Class Proceedings Act, 1992 is based on assuming the pleaded facts are true and not speculating that the evidence from a trial would elucidate the elements of a cause of action or a defence. In contrast, a motion under rule 21.01 (1)(a) may sometimes be supported by evidence.

[154] In Imperial Tobacco, the defendant tobacco manufacturers brought third party claims against the Government of Canada, all of which were eventually dismissed for the failure to show a reasonable cause of action. In the Supreme Court of Canada, the tobacco companies argued that the motion to strike should take into account, not only the facts pleaded, but the possibility that as the case progressed, the evidence would reveal more about Canada's conduct. At paragraph 23 of her Reasons, The Chief Justice rejected this argument and stated:

23. …. This fundamentally misunderstands what a motion to strike is about. It is not about evidence, but the pleadings. The facts pleaded are taken as true. Whether the evidence substantiates the pleaded facts, now or at some future date, is irrelevant to the motion to strike. The judge on the motion to strike cannot consider what evidence adduced in the future might or might not show. To require the judge to do so would be to gut the motion to strike of its logic and ultimately render it useless.

[155] In R. v. Imperial Tobacco, the British Columbia Court of Appeal in refusing to dismiss the claim against Canada concluded that evidence was required to establish whether Canada's alleged misrepresentation was made pursuant to government policy. In the Supreme Court, the tobacco companies argued that it should be allowed to lead evidence at a trial to show that the government was engaged in operational activities and exposed to liability in negligence. At paragraph 70 of her judgment, Chief Justice McLachlin said that the approach of the British Columbia Court of Appeal and the arguments made by Canada and by the tobacco companies misunderstood the nature of a motion to strike, which by its very nature was not dependent on evidence. She said that the question for the court was assuming the fact pleaded as true, was it plain and obvious that any duty of care would be defeated on the ground that the conduct grounding the alleged misrepresentation is a matter of government policy and hence not capable of giving rise to liability in tort.

[156] Apart from accepting that the juridical tool of a motion to strike must be used with care and recognizing that the law is not static and unchanging, there does not appear to be any red-line or litmus test for following the directive that a judge should not decide a complex and important issue without the benefit of a developed factual record.

[157] I believe that the case at bar is one of those cases where the legal issues can be decided based on the jurisprudence and assuming the facts pleaded in the statement of claim have been proven.

II. The Position of the Parties

[158] For the purposes of their motion for certification, the Plaintiffs assert four causes of action; namely: (1) contractual causes of action; (2) statutory causes of action; (3) negligence; and (4) waiver of tort.

[159] Reserving its right to challenge waiver of tort at a subsequent hearing, Whirlpool submits that it is plain and obvious that the Plaintiffs have not disclosed a reasonable cause of action.

[160] Whirlpool would have challenged the waiver of tort claim as not satisfying the cause of action criterion, but it thought the challenge was not open to it, given the existing case law. See Peter v. Medtronic, [2007] O.J. No. 4828 (S.C.J.), leave to appeal ref'd 2008 22910 (ON SCDC), [2008] O.J. No. 1916 (Div. Ct.); LeFrancois v. Guidant Corp., [2008] O.J. No. 1397 (S.C.J.) and [2008] O.J. No. 3459 (S.C.J.), leave to appeal ref'd 2009 76 (ON SCDC), [2009] O.J. No. 36 (Div. Ct.) and Lambert v. Guidant Corp., 2009 23379 (ON SC), [2009] O.J. No. 1910 (S.C.J.), leave to appeal ref'd [2009] O.J. No. 4464 (S.C.J.); Heward v. Eli Lilly & Co., 2007 2651 (ON SC), [2007] O.J. No. 404 (S.C.J.), aff'd 2008 32303 (ON SCDC), [2008] O.J. No. 2610 (Div. Ct.); Robinson v. Medtronic, Inc., 2009 56746 (ON SC), [2009] O.J. No. 4366 (S.C.J.); Serhan v. Johnson & Johnson (2004), 2004 1533 (ON SC), 72 O.R. (3d) 296 (S.C.J.), leave to appeal granted [2004] O.J. No. 4580 (S.C.J.), aff'd (2006), 2006 20322 (ON SCDC), 85 O.R. (3d) 665 (Div. Ct.), leave to appeal to C.A. ref'd Oct. 16, 2006, leave to appeal to S.C.C. ref'd [2006] S.C.C.A. No. 494.

[161] Thus, Whirlpool prepared for the certification motion knowing that the convention has been to certify waiver of tort claims, on the basis that it is not plain and obvious that the claim is untenable. However, after Whirlpool's preparation, I released my decision in Parker v. Pfizer Canada Inc. 2012 ONSC 3681, where I certified waiver of tort without prejudice to Pfizer Canada bringing a motion to decertify the waiver of tort question. Whirlpool asked that the same approach be applied to the case at bar subject to its arguments that waiver of tort should not be certified on the basis that the claim did not satisfy the other certification criteria.

[162] As I will explain in the next following sections of these Reasons for Decision, it is my opinion that the Plaintiffs have not shown a reasonable cause of action on any basis, including waiver of tort.

III. Contractual Causes of Action

[163] The Plaintiffs allege that Whirlpool has breached an express warranty or an implied warranty to supply goods free from material defects and fit for their intended use at common law or under the Sale of Goods Act or equivalent legislation in other provinces. This claim and the particulars of it are found in paragraphs 31A and of the Amended Amended Amended Statement of Claim, which state:

31A. Further, the defendants were subject to an express warranty and/or an implied warranty at common law or under the Sale of Goods Act, R.S.O. 1990, c. S.1 or equivalent in other provinces) to supply the Whirlpool Front-loaders free from material defects and fit for their intended use.

38A. The defendants breached their express or implied warranty (pleaded in para. 31A) when they supplied the Whirlpool front-loaders because, as pleaded above, these machines were not free from material defects or fit for their intended use.

[164] Whirlpool's argument was three-pronged. First, it submitted that the Plaintiffs had pleaded only a bald allegation of breach of contract and no express warranty was actually pleaded, and, therefore, it was plain and obvious that a breach of contract claim was untenable.

[165] The Plaintiffs' response was that although not expressly pleaded, there were user's guides that came with the washing machines that contained express warranties.

[166] Second, relying on Scruttons Ltd. v. Midland Silicones Ltd., [1962] A.C. 446 (H.L.), Schick v. Boehringer Ingelheim (Canada) Ltd., 2011 ONSC 1942, [2011] O.J. No. 1381 (S.C.J.) Whirlpool argued that there was no contract or sale or any privity of contract between Whirlpool and purchasers of Whirlpool machines, and, therefore, there could be no express or implied contractual warranties and no foundation for a claim under the Sales of Goods Act upon which to base a claim for an implied warranty.

[167] Whirlpool submitted that although the Supreme Court had held in Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd., 1999 654 (SCC), [1999] 3 S.C.R. 108 and London Drugs Ltd. v. Kuehne & Nagel International Ltd., 1992 41 (SCC), [1992] 3 S.C.R. 299 that there could be new common law exceptions to the doctrine of privity, the change to the law sought in the case at bar went too far and was a matter for the Legislature. Whirlpool submitted that the case at bar was not like Murray v. Sperry Rand Corp., [1979] O.J. No. 4088 (H.C.J), where a breach of warranty claim was allowed against a manufacturer because, unlike the manufacturer in that case, no representations were made by Whirlpool.

[168] Relying on Caputo v. Imperial Tobacco Ltd., 2004 24753 (ON SC), [2004] O.J. No. 299 (S.C.J.), the Plaintiffs' response was that it was not plain and obvious that the doctrine of privity would not be relaxed.

[169] Third, and this argument was first made during the hearing of the certification motion, Whirlpool submitted that if there was a warranty, it was plain and obvious that it did not cover design defects and was a limited warranty that precluded inconsistent terms being applied. Whirlpool's third argument was that as a matter of contract interpretation, it was plain and obvious that the warranty in the user's guide did not support the Plaintiffs' claim.

[170] The Plaintiffs' response was that it was not plain and obvious that Whirlpool's interpretation of the warranty was correct.

[171] My analysis of these competing arguments begins with the observation that there is no expressed warranty at all by Whirlpool to owners of Kenmore washing machines purchased from Sears. These purchasers would have contractual claims against Sears not Whirlpool. Many Kenmore purchasers would not know who manufactured the machine. In my opinion, it is plain and obvious that there are no contractual claims by these class members against Whirlpool.

[172] Turning to the purchasers of Whirlpool washing machines, the next observation is that they did receive an express warranty in the user's guides accompanying the machines. The limited Whirlpool warranty is described above. In my opinion, it is a mere technicality that the Plaintiffs' pleading of breach of express and implied warranty is bald. I, therefore, do not agree with the first prong of Whirlpool's argument. The provisions of the express warranty are available to be interpreted.

[173] I also do not agree with Whirlpool's second argument. In my opinion, although Murray v. Sperry Rand Corp. ultimately is quite helpful to Whirlpool's third argument, it does not support Whirlpool's second argument; rather, it refutes it.

[174] In Murray v. Sperry Rand Corp., Mr. Murray purchased from a dealer in farm machinery a forage harvester that had been manufactured by Sperry Rand. Before purchasing the machine, Mr. Murray carefully read the Sperry Brand brochure and met with a Sperry Rand representative who visited Mr. Murray's farm. The harvester did not operate at anything like the representations contained in the brochure, and Mr. Murray successfully sued the distributer and also Sperry Rand for breach of contract and for breach of the implied warranties of fitness for purpose and merchantability found in the Sale of Goods Act.

[175] Relying on the classic cases of Heilbut, Symons & Co. v. Buckleton, [1913] A.C. 30; Dick Bentley Productions Ltd. et al. v. Harold Smith (Motors), Ltd., [1965] 2 All E.R. 65; Oscar Chess, Ltd. v. Williams, [1957] 1 All E.R. 325, and Esso Petroleum Co. Ltd. v. Mardon, [1976] 2 All E.R. 5, Justice Reid held that an affirmation made with the intention of inducing contractual relations is a collateral warranty and Sperry Reid was liable for damages. Then, applying the doctrine of fundamental breach, Justice Reid held that the express warranty, which stipulated that the seller made no warranty other than the harvester was free from defects in material and workmanship and which express warranty limited the seller's obligation to repairing or replacing parts, did not apply to exculpate Sperry Rand from liability.

[176] For present purposes, I think it can safely be assumed that all purchasers of the Whirlpool washing machines anticipated that there would be a manufacturer's warranty of some sort. Although, once again, poorly pleaded, the statement of claim, in my opinion, is sufficient to establish there is privity between those class members who purchased a Whirlpool machine (but not those who purchased a Kenmore machine) upon which to base a claim for breach of an express or implied warranty. The User and Care Guides would be sufficient to bring the case in line with the collateral contract or collateral warranty cases cited in Murray v. Sperry Rand Corp. Thus, Whirlpool's second argument fails.

[177] This brings the analysis to Whirlpool's third argument, which is supported by Murray v. Sperry Rand Corp. In Murray, after Justice Reid held that there was privity between Mr. Murray and Sperry Rand, he reasoned that this finding made it necessary to examine the contract terms, because the contract contained a disclaimer clause. The issue then became a question of the enforcement of exculpatory clauses, but Murray v. Sperry Rand Corp. was decided in 1979, when the so-called doctrine of fundamental breach was used to negate exculpatory provisions in a contract.

[178] Nowadays, we know that the doctrine of fundamental breach is dead in so far as it would regulate the interpretation of contract terms. See: Tercon Contractors Ltd. v. British Columbia (Transportation and Highway, 2010 SCC 4, [2010] 1 S.C.R. 69; Hunter Engineering Co. v. Syncrude Canada Ltd., 1989 129 (SCC), [1989] 1 S.C.R. 426.

[179] Under Tercon Contractors Ltd., the approach to the enforcement of exculpatory provisions involves a three-stage analysis. In the first stage, the court asks whether, as a matter of interpretation, the clause applies to the circumstances. If the exclusion clause does apply, then, in the second stage, the court asks whether the exclusion clause was unconscionable at the time the contract was made. If the exclusion clause is held to be valid and applicable, in the third stage, the court asks whether the court should refuse to enforce the valid exclusion clause because of the existence of an overriding public policy (proof of which lies on the party seeking to avoid enforcement of the clause) that outweighs the very strong public interest in the enforcement of contracts.

[180] Under its warranty in the User and Care Guide, Whirlpool does not cover design defects and it limited its liability to pay for parts and to correct defects in materials or workmanship, and it excluded consequential damages. The second and third versions of the warranty expressly excluded implied warranties.

[181] The Plaintiffs do not sue to correct defects in materials or workmanship. They sue because they allege that the Whirlpool machines have a defective design. As a matter of contract interpretation, it is plain and obvious to me that their claim is not covered by the express warranty, that their claim is exculpated by the disclaimer language in the warranty, and there is no overriding public policy reasons (as there might be for a dangerous product) for not enforcing the express terms of the Whirlpool warranty.

[182] It is equally plain and obvious that the Plaintiffs cannot imply a term inconsistent with the express terms of the contract. A term will not be implied, if the term would be inconsistent with the existing wording of the contract; the implied term must fit with the existing contract: G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), 1983 1719 (ON CA), 43 O.R. (2d) 401 (C.A.); Fort Frances (Town) v. Boise Cascade Can. Ltd.; Boise Cascade Can. Ltd. v. Ontario, 1983 47 (SCC), [1983] 1 S.C.R. 171; Catre Industries Ltd. v. Alberta (1989), 1989 ABCA 243, 63 D.L.R. (4th) 74 (Alta. C.A.), leave to appeal to the S.C.C. refused 65 D.L.R. (4th) vii; M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., 1999 677 (SCC), [1999] 1 S.C.R. 619.

[183] I, therefore, conclude that it is plain and obvious that there is no express or implied contractual claim against Whirlpool.

IV. Statutory Causes of Action

[184] The Plaintiffs allege that Whirlpool breached s. 52 of the Competition Act because it made false and misleading representations. All the alleged misrepresentations are failures to disclose information. It is alleged that Whirlpool failed to disclose that the washing machines: (a) were not free of defects; (b) were not fit for the purpose intended; (c) were designed in a manner which under normal conditions, usage and applications would cause them to degrade prematurely; and (d) were manufactured in a manner which under normal conditions, usage and applications would cause them to degrade prematurely. It is the Plaintiffs' position that Whirlpool's failure to advise consumers of the washing machines' inability to adequately self-clean constitutes a misrepresentation by omission and that Whirlpool violated ss. 36 and 52 of the Competition Act.

[185] The Plaintiffs plead that they relied on the misrepresentation and, but for it, they would not have purchased their washing machines. The Plaintiffs submit that Whirlpool made the misrepresentations to the public and in so doing breached s. 52 of the Competition Act. Then, the Plaintiffs allege that pursuant to s. 36 of the Act, the defendants are liable to pay damages for the breach of s. 52. The Plaintiffs submit that they and the other Class Members are entitled to recover their full costs of investigation and substantial indemnity costs.

[186] Section 52, which is contained in part VI of the Competition Act (Offences in Relation to Competition) provides, in part:

52.(1) No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.

[187] Section 52 creates an offence, but it does not create a cause of action. A cause of action is created by s. 36(1), which provides:

36.(1) Any person who has suffered loss or damage as a result of

(a) conduct that is contrary to any provision of Part VI, or

(b) the failure of any person to comply with an order of the Tribunal or another court under this Act,

may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with the order an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section.

[188] It is significant to note that in the case at bar, there is no pleaded common express representation. The Plaintiffs, rather, rely upon a representation by omission.

[189] However, relying on Williams v. Canon Canada Inc., 2011 ONSC 6571, Matoni v. C.B.S. Interactive Multimedia Inc. (Canadian Business College), 2008 1539 (ON SC), [2008] O.J. No. 197 (S.C.J.) and Griffin v. Dell, 2009 3557 (ON SC), Whirlpool submits that a claim for misrepresentation by omission must be made in the context of some positive representation having been made and since there is none, they submit that there is no statutory claim. This argument is disputed by the Plaintiffs, who submit that the non-disclosure of material facts may by itself amount to a misrepresentation under the Competition Act.

[190] In submitting that silence or the failure to disclose can constitute a misrepresentation, the Plaintiffs rely on a bulletin from the Federal Government's Consumer and Corporate Affairs Department that is quoted in Young and Fraser, Canadian Advertising and Marketing Law, Carswell, looseleaf, page 16, footnote 53. The bulletin states:

A misleading representation may also result from the non-disclosure of material facts. A vendor is under no obligation generally to provide information about a product. In some instances, however, silence may be deemed to constitute a representation as to facts which a consumer would be entitled to assume in the absence of some information to the contrary. One example might be a failure to disclose that goods offered for sale in a retail establishment were used and not new.

[191] The Plaintiffs also rely on a summary of the elements of misrepresentation under s. 52 of the Competition Act set out by Facey and Assaf, Competition and Antitrust Law: Canada and the United States, (3rd ed.) at pp. 396-397. The authors state:

Aside from the issues of intent, whether actual harm is necessary, and who may be liable, the three main elements of the general offences are largely the same for Canada and the United States:

(1) there must be a representation, omission, or practice;

(2) the representation, omission or practice must have been likely to mislead the public- for which the test of the reasonable consumer is employed; and

(3) the representation, omission or practice must have been materially misleading…

A representation is a presentation of fact- either by words or by conduct- made to induce someone to act. An advertisement is capable of expressing many representations, all of which may seek to communicate a primary message in addition to several subsidiary messages. However, it should be noted that a representation need not always be in the form of a statement or other communication. A misrepresentation may be that certain facts are not stated (an omission of material facts).

[192] Finally, the Plaintiffs rely on in Queen v. Cognos, 1993 146 (SCC), [1993] S.C.J. No. 3 for the proposition that non-disclosure can be a misrepresentation.

[193] In their reply factum, the Plaintiffs make the rhetorical submission, (rhetorical because it alleges a different misrepresentation by omission than pleaded) that class members would reasonably expect as consumers that the Whirlpool washing machines would operate, as washing machines had operated for decades, without the propensity to develop biofilm scrud and without the need to pay for a maintenance product (Affresh®). The Plaintiffs submit that by selling its washing machines without warning consumers about new and previously unknown maintenance requirements, Whirlpool made a misrepresentation under section 52 of the Competition Act.

[194] In my opinion, the academic writers and Consumer and Corporate Affairs Department got in right and under the law of misrepresentation, in some instances silence may constitute a misrepresentation. Indeed, this is long established law. To be actionable, a representation need not be verbal; in addition to words, it may be expressed by gestures, or conduct. In Walters v. Morgan, 3 D.F. & J. 718, Chancellor Campbell, in a famous quote, stated that a nod, wink, shake of the head or smile could induce the belief in a non-existing fact.

[195] In some circumstances, silence is communicative of meaning, but as a general rule, however, silence is not a representation, unless there is a duty of care, a statutory duty to disclose, or a fiduciary duty to speak. There have been inroads to caveat emptor, particularly as a matter of statute and by the law of fraudulent and negligent misrepresentation, but as a rule, vendors are not obliged to disparage their own products and, as noted by Justices Iacobucci and Major in Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860 [2000] 2 S.C.R. 860 at para. 66, discussed below, "in many if not most commercial negotiations, an advantageous bargaining position is derived from the industrious generation of information not possessed by the opposite party."

[196] In the context of negotiating a contract, silence or the failure to disclose material facts will not ground an action for misrepresentation because there is no general duty of disclosure between negotiating parties: Peek v. Gurney (1873), L.R. 6 H.L. 377; Brownlie v. Campbell (1880), 5 App. Cas. 925 (H.L.); Bell v. Lever Bros. Ltd., [1932] A.C. 161 (H.L.); Sorenson v. Kaye Holdings Ltd., 1979 621 (BC CA), [1979] 6 W.W.R. 193 (B.C.C.A.); Gordelli Management Ltd. v. Turk (1991), 1991 7376 (ON SC), 6 O.R. (3d) 521 (Gen. Div.); Marathon Realty Co. Ltd. v. Ginsberg, (1981), 1980 1106 (AB KB), 18 R.P.R. 232 (Ont. H.C.), affd. 24 R.P.R. 155 (C.A.), leave to appeal to S.C.C. ref'd (1982), 42 N.R. 180 (S.C.C.).

[197] As I will discuss in the next section, since the alleged design defect in the washing machines did not make the machines dangerous, it is plain and obvious that Whirlpool was not under an obligation to disparage its own product and disclose the alleged design defect. In my opinion, it had no duty of care to disclose, no fiduciary duty to disclose, and no statutory duty to disclose. It was entitled to remain silent, and in my opinion, it is plain and obvious that it did not commit an offence under s. 52 of the Competition Act.

[198] I also agree that Whirlpool was right to rely on Williams v. Canon Canada Inc., 2011 ONSC 6571. This case, which I also rely on, supports Whirlpool's argument that it is plain and obvious that there is no viable cause of action pursuant to s. 52 of the Competition Act.

[199] In Williams, the plaintiffs brought a proposed class action on behalf of purchasers of a digital camera manufactured by Canon Canada. The plaintiffs alleged that the camera had a design defect that caused them to shut down. Among other causes of action, the plaintiffs pleaded breach of the Competition Act. They pleaded that Canon Canada had made express misrepresentations about the quality of the camera and also a misrepresentation by not disclosing the defect in the camera to consumers. Justice Strathy found that there was no misrepresentation and, accordingly, there was no claim under s. 52 of the Competition Act. At paragraph 227, Justice Strathy stated:

Section 52 requires that there be a "representation." The failure to disclose the alleged defect cannot be a "representation." Nor would it be a "representation" if one could infer from the warranty that Canon knew of no inherent defects in the Cameras - an inference that cannot reasonably be drawn in any event. Finally, what the plaintiffs claim is a "slogan" - "You always get your shot" - which is not pleaded with any particularity, is nothing more than puffery and not an actionable representation …. I am simply unable to find that any of the pleaded misrepresentations is capable of sustaining a cause of action.

[200] I conclude this section by noting that while I agree with Whirlpool's submission that there is no tenable cause of action pleaded for breach of the Competition Act, I did not find Matoni v. C.B.S. Interactive Multimedia Inc. (Canadian Business College), 2008 1539 (ON SC), [2008] O.J. No. 197 (S.C.J.) and Griffin v. Dell, 2009 3557 (ON SC), helpful because from a factual perspective, those cases involved more than silence and non-disclosure.

[201] In Matoni, Justice Hoy noted at paragraph 56 of her judgment that the plaintiffs conceded that their pleading of misrepresentation by omission was a subset of the tort of negligent misrepresentation, and thus there would have been a duty to disclose. In Griffin, the Competition Act claim was a bald allegation of misrepresentation lacking in particularity and deficient in material facts. Justice Lax concluded that it was plain and obvious that this claim could not succeed on the pleading, but she granted the plaintiffs leave to amend. I do not grant leave to amend in the case at bar as it would be purposeless.

V. Negligence

Introduction

[202] As I will explain in the next part of my Reasons for Decision, it is my opinion that it is plain and obvious that there is no product-liability negligence action for pure economic losses against a manufacturer for negligently designing a non-dangerous consumer product. There is settled law of the highest authority binding on this court that indicates that the pleading in this case does not show a reasonable cause of action.

[203] My conclusion about the non-recovery of pure economic losses in negligence is based on two mutually exclusive lines of argument. The first line of argument is purely jurisprudential, and, by this, I mean that I come to this conclusion by an examination of the case law that has already done the work of analyzing whether the claim is legally tenable. In my opinion, the case law is settled against the Plaintiffs' claim. If this law is bad law, then it is up to the Legislature or the Supreme Court of Canada to change it. Until that happens, I am bound to apply it.

[204] The second line of argument, which I will develop later in these Reasons, is based on applying first principles and determining whether a duty of care exists for negligent design of a non-dangerous product. In my opinion, applying the test for a duty of care, it is plain and obvious that a pure economic loss claim in negligence is not available for carelessly designing a non-dangerous product. For the purposes of this analysis, I will treat the Plaintiffs' claim as being a novel claim or a possible extension of the law. My precise conclusion is that there is a prima facie duty of care, but there are policy reasons that negate a duty of care.

[205] The second line of argument is not purely jurisprudential, and, by that, I mean that I come to the conclusion by applying the contemporary Canadian approach to determining whether there is a duty of care. This approach was developed by the Supreme Court of Canada in a series of decisions adapting the House of Lord's decision in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.).

[206] In the discussion below, I will address the Plaintiffs' counterarguments that there are cases where the court has held that it is not plain and obvious that a pure economic loss claim of the nature being advanced by them is untenable and that the law is unsettled and developing about the scope of pure economic loss claims in negligence. In this regard, the Plaintiffs relied on: Bondy v. Toshiba of Canada Ltd., [2007] O.J. No. 784 (S.C.J.); Sable Offshore Energy Inc. v. Ameron International Corp., 2007 NSCA 70; Griffin v. Dell Canada Inc., 2009 3557 (ON SC), [2009] O.J. No. 418 (S.C.J.), leave to appeal to Div. Ct. ref'd, [2009] O.J. No. 3438 (Div. Ct.); Barwin v. IKO Industries Ltd., 2012 ONSC 3969.

[207] I will discuss all of these cases, but my general response to the Plaintiffs' counterarguments is the cases relied on by them are distinguishable or not binding or wrong because they are inconsistent with higher binding authority.

Negligence and Pure Economic Loss

[208] A pure economic loss is a diminution of financial worth incurred without any physical injury to the plaintiff or his or her property: A.G. (Ont.) v. Fatehi, 1984 85 (SCC), [1984] 2 S.C.R. 536, at p. 542. In 1874, in Cattle v. Stockton Waterworks Co. (1874), L.R. 10 Q.B. 453, the English court recognized the general principle that compensation for pure economic losses, losses not connected to personal injury or property damage, are not generally recoverable in negligence.

[209] The four policy considerations behind the law's attitude to pure economic loss were explained by Justices Iacobucci and Major in Martel Building Ltd. v. Canada, 2000 SCC 60, [2000] 2 S.C.R. 860 at para. 37, where they stated:

37. Over time, the traditional rule was reconsidered. In Rivtow and subsequent cases it has been recognized that in limited circumstances damages for economic loss absent physical or proprietary harm may be recovered. The circumstances in which such damages have been awarded to date are few. To a large extent, this caution derives from the same policy rationale that supported the traditional approach not to recognize the claim at all. First, economic interests are viewed as less compelling of protection than bodily security or proprietary interests. Second, an unbridled recognition of economic loss raises the spectre of indeterminate liability. Third, economic losses often arise in a commercial context, where they are often an inherent business risk best guarded against by the party on whom they fall through such means as insurance. Finally, allowing the recovery of economic loss through tort has been seen to encourage a multiplicity of inappropriate lawsuits. …

[210] The matter of indeterminate liability is a particularly important policy factor. In Design Services Ltd. v. Canada, 2008 SCC 22 at para. 62, Justice Rothstein stated for the Court that "in cases of pure economic loss, to paraphrase Cardozo C.J., care must be taken to find that a duty is recognized only in cases where the class of plaintiffs, the time and the amounts are determinate." As I will note later, indeterminate liability is not a factor in the immediate case. The other three policy factors mentioned by Justices Iacobucci and Major in Martel Building, however, are significant.

[211] In 1964, the first major in-road on the general principal denying recovery for pure economic losses in negligence came with Hedley Byrne v. Heller & Partners, [1964] A.C. 465 (H.L.), which established the tort of negligent misrepresentation. For present purposes, however, it is sufficient to start the analysis of the law about tenable claims in negligence for pure economic losses with the 1974 Supreme Court of Canada decision in Rivtow Marine Ltd. v. Washington Iron Works, 1973 6 (SCC), [1974] S.C.R. 1189.

[212] In Rivtow, a crane on a barge collapsed killing the crane operator. The charterer of another barge took its barge out of service in the busiest part or the season in order to have its cranes repaired. A majority of the Supreme Court rejected the charter's claim for the cost of repairing the defective cranes because it was a purely economic loss. Justice Bora Laskin, in dissent, would have found the manufacturer liable for the cost of repairing the defective article that posed a danger if it was not repaired.

[213] After the Rivtow Marine judgment, the next major development in Canada was perhaps Canadian National Railway Co. v. Norsk Pacific Steamship Co., 1992 105 (SCC), [1992] 1 S.C.R. 1021. This case was not a product liability case but rather concerned what is known as a relational economic loss. For present purposes, there are three significant jurisprudential contributions made by the Supreme Court in the Norsk Pacific case.

[214] First, the Supreme Court recognized that there were categorical exemptions to the general principle that purely economic losses were not compensable in negligence. In the Norsk Pacific case, for the purposes of analysis, the Court recognized five established categories where recovery for pure economic losses was permitted; namely: (1) negligent misrepresentation; (2) negligence of public authorities; (3) negligent performance of a service; (4) supply of shoddy goods or structures; and (5) relational economic losses. Second, the Court recognized that the categories were not closed, and new exceptions were possible. Third, the Court envisioned that a duty of care analysis and principled approach could be used to identify new exceptions to the general principle that pure economic losses were not recoverable in negligence.

[215] From an analytical perspective, the case at bar is a shoddy goods or structures case either as a member of the established class or as a novel claim. The current leading case about the recovery of pure economic losses for shoddy products, including building structures, is Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 146 (SCC), [1995] 1 S.C.R. 85.

[216] The facts of Winnipeg Condominium were that in 1974, Bird Construction built an apartment building that came to be purchased by a Winnipeg condominium corporation. In 1989, a section of cladding fell off the building. The condominium corporation retained engineering consultants to inspect, and then the corporation removed and replaced the cladding at a cost in excess of $1.5 million.

[217] Reversing the Manitoba Court of Appeal, the Supreme Court refused to follow the decision of the English House of Lords in D & F Estates Ltd. v. Church Commissioners for England, [1988] 2 All E.R. 992 (H.L.), where the Law Lords had ruled that, in the absence of a contractual relationship, the cost of repairing a defective structure, where the defect is discovered before it causes personal injury or physical damage to other property, is not recoverable in negligence by a remote buyer against the original contractor or builder. The English decision was built on caveat emptor and a policy decision about the scope of tort law to the effect that it was not for tort law to create a non-contractual warranty of fitness.

[218] Justice La Forest, however, concluded that with respect to a product that was dangerous, there were public policy and legal policy reasons for making the builder or manufacturer of the product liable for the costs of repairing the product before it actually caused harm. The justification for liability and for tort intruding into the realm of contract was that the product was not just shoddy but was dangerous and could cause harm to persons or property. In paragraph 12 of his judgment, Justice La Forest stated, with my emphasis added:

12. …. The negligently supplied structure in this case was not merely shoddy; it was dangerous. In my view, this is important because the degree of danger to persons and other property created by the negligent construction of a building is a cornerstone of the policy analysis that must take place in determining whether the cost of repair of the building is recoverable in tort. As I will attempt to show, a distinction can be drawn on a policy level between "dangerous" defects in buildings and merely "shoddy" construction in buildings and that, at least with respect to dangerous defects, compelling policy reasons exist for the imposition upon contractors of tortious liability for the cost of repair of these defects.

[219] At paragraph 33 of his judgment, Justice La Forest agreed with Justice Bora Laskin's opinion in Rivtow Marine Ltd. supra, that although courts must be careful to not provide compensation in tort for safe but shoddy products, where the product was unsafe, there should be recovery for the cost (repair cost) of preventing harm.

[220] Justice La Forest undertook a duty of care analysis of the responsibilities of a builder and concluded that if a defective product presented "a real and substantial danger" and if the defect was discovered before any injury had occurred, the builder should be liable for the cost of repairing the defect to prevent the danger from materializing. At paragraph 37 of his judgment, he stated: "Allowing recovery against contractors in tort for the cost of repair of dangerous defects thus serves an important preventative function by encouraging socially responsible behaviour."

[221] At paragraph 43 of his judgment, Justice La Forest summarized the current state of the law in Canada. He stated:

43. I conclude that the law in Canada has now progressed to the point where it can be said that contractors (as well as subcontractors, architects and engineers) who take part in the design and construction of a building will owe a duty in tort to subsequent purchasers of the building if it can be shown that it was foreseeable that a failure to take reasonable care in constructing the building would create defects that pose a substantial danger to the health and safety of the occupants. Where negligence is established and such defects manifest themselves before any damage to persons or property occurs, they should, in my view, be liable for the reasonable cost of repairing the defects and putting the building back into a non-dangerous state.

[222] Pausing here, it would appear that Justice La Forest was emphatically limiting recovery for pure economic losses for a negligently designed or manufactured product to substantially dangerous products. Dangerousness was the cornerstone of the duty of care analysis and a critical precondition to liability. Indeed, the defects had to pose "a real and substantial danger."

[223] However, Justice La Forest's comment earlier in paragraph 41 of his judgment has led some to argue that he was keeping open the prospect that there could be a duty of care for the cost of repairing non-dangerous defects in buildings. In paragraph 41, he stated:

41. Given the clear presence of a real and substantial danger in this case, I do not find it necessary to consider whether contractors should also in principle be held to owe a duty to subsequent purchasers for the cost of repairing non-dangerous defects in buildings.

[224] In my opinion, and as supported by the case law that I shall discuss below, it is a mistake to read Justice La Forest's comment as supporting the proposition that there can be recovery for pure economic losses from negligently designed or manufactured products that are not dangerous. And, in my opinion, it is also a mistake to read his statement as supporting the proposition that pure economic claims beyond repair costs or perhaps costs similar to repair costs can be recovered. Justice La Forest's statement mentions only the cost of repair of a dangerous good as a recoverable head of damage, not economic losses generally. Thus, in the context of the case at bar, there is, in any event, no support here for a head of damages based on the diminishment in value of the washing machines.

[225] The reason that it is a mistake to read Justice La Forest's comment as leaving open the question of recoverability for pure economic losses from non-dangerous products is that before and after paragraph 41, his judgment makes it clear that he was making the comment as a foil to demonstrate that for dangerous goods there were policy issues favouring liability and there were no policy issues that would negate the duty of care for repairing dangerous goods. In contrast, there were significant policy issues that would negate liability for pure economic losses for shoddy but non-dangerous products.

[226] For purely economic losses from shoddy products, the established policy was that the responsibility for the quality of a product is primarily contractual in nature and extending responsibility for quality beyond those with whom there was privity was objectionable as it would expose the manufacturer or builder to indeterminate liability. (And I would add, the exposure to liability would also engage the other policy factors identified by Justices Iacobucci and Major in Martel Building Ltd. v. Canada, supra.) Thus, Justice La Forest stated at paragraphs 48, 49, and 54:

48. The tort duty to construct a building safely is thus a circumscribed duty that is not parasitic upon any contractual duties between the contractor and the original owner. Seen in this way, no serious risk of indeterminate liability arises with respect to this tort duty. In the first place, there is no risk of liability to an indeterminate class because the potential class of claimants is limited to the very persons for whom the building is constructed: the inhabitants of the building. The fact that the class of claimants may include successors in title who have no contractual relationship with the contractors does not, in my view, render the class of potential claimants indeterminate. As noted by the New Jersey Supreme Court in Aronsohn v. Mandara, 484 A.2d 675 (1984), at p. 680, "[t]he contractor should not be relieved of liability for unworkmanlike construction simply because of the fortuity that the property on which he did the construction has changed hands".

49. Secondly, there is no risk of liability in an indeterminate amount because the amount of liability will always be limited by the reasonable cost of repairing the dangerous defect in the building and restoring that building to a non-dangerous state. …. . However, in my view, any danger of indeterminacy in damages is averted by the requirement that the defect for which the costs of repair are claimed must constitute a real and substantial danger to the inhabitants of the building, and the fact that the inhabitants of the building can only claim the reasonable cost of repairing the defect and mitigating the danger. The burden of proof will always fall on the plaintiff to demonstrate that there is a serious risk to safety, that the risk was caused by the contractor's negligence, and that the repairs are required to alleviate the risk.

50. I conclude, then, that no adequate policy considerations exist to negate a contractor's duty in tort to subsequent purchasers of a building to take reasonable care in constructing the building, and to ensure that the building does not contain defects that pose foreseeable and substantial danger to the health and safety of the occupants. In my view, the Manitoba Court of Appeal erred in deciding that Bird could not, in principle, be held liable in tort to the Condominium Corporation for the reasonable cost of repairing the defects and putting the building back into a non-dangerous state. These costs are recoverable economic loss under the law of tort in Canada.

[227] Justice La Forest's argument was that the legal policies that stood against the recovery of economic losses in negligence were inappropriate or inapplicable when a product was dangerous. His comments reveal that he was indicating that the foundations for a duty of care and also for overcoming any negating policy factors are that the product is dangerous and the manufacturer's liability is limited to the cost of repairing a product that posed a serious risk to safety. In my opinion, it became settled law that there is not, and for good policy reasons, there should not be, compensation in tort for shoddy but not-dangerous products.

[228] That the law is settled about non-dangerous products, which is the law to be applied to the case at bar, however, is not to say that the law about dangerous products is settled. Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 146 (SCC), left at least one and perhaps two areas of uncertainty or for further development. The first area of uncertainty is the scope and meaning of a "serious risk to safety." The second area of uncertainty is what counts for a cost of repair and whether other similar economic losses might be recoverable for a negligently manufactured dangerous product. It was because of these areas of uncertainty that the Manitoba Court of Appeal reversed a summary judgment dismissing a product liability claim in Brett-Young Seeds Ltd. v. K.B.A. Consultants Inc., 2008 MBCA 36 and said that the issues should be resolved on a fuller factual record.

[229] I will return to these themes about areas for development below, when I discuss Hughes v. Sunbeam, (2002), 2002 45051 (ON CA), 61 O.R. (3d) 433 (C.A.), leave to appeal to SCC refused, [2002] S.C.C.A. No. 446 and the cases in the next section of these Reasons. For present purposes, I simply make the point that the areas of uncertainty in the law concern dangerous products.

[230] In contrast to these areas of uncertainty, in my opinion, it is plain and obvious that for non-dangerous goods, there is no recovery in negligence for pure economic losses, save for a negligent misrepresentation claim, which is a different category for pure economic losses.

[231] Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., 1995 146 (SCC), has been applied in cases binding on me, and these cases and other cases that, technically speaking, may not be binding on me, make it plain and obvious that the Plaintiffs' negligence claim for pure economic losses for a non-dangerous consumer appliance is legally untenable. As already noted above and as the discussion below will enlarge upon, the main policy reasons for negating a duty of care are the spectre of indeterminate liability and the spectre that liability for the quality of a good is a matter for contract and property law or statute law and the intrusion of tort law would unnecessarily and undesirably interfere with commercial and property law.

[232] Provided that the defective product poses a substantial danger, the manufacturer is liable for the pure economic loss of the costs of repair: Ducharme v. Solarium de Paris Inc., [2008] O.J. No. 1558 (Div. Ct.); Poulin v. Ford Motor Co. of Canada, [2006] O.J. No. 4625 (S.C.J.), affd. 2008 54299 (ON SCDC), [2008] O.J. No. 4153 (Div.Ct.); Mariani v. Lemstra, 2004 50592 (ON CA), [2004] O.J. No. 4283 (C.A.), leave to appeal refused [2004] S.C.C.A. No. 355 (S.C.C.); M. Hasegawa & Co. v. Pepsi Bottling Group (Canada), Co., 2002 BCCA 324, [2002] B.C.J. No. 1125 (C.A.) (discussed below); Brett-Young Seeds Ltd. v. Assié Industries Ltd., 2002 MBCA 74; Zidaric v. Toshiba of Canada Ltd., [2000] O.J. No. 4590 (S.C.J.); TransCanada Pipelines Ltd. v. Solar Turbines Inc., [1998] O.J. No. 3594. These cases are authority that for product liability negligence there is no compensation for a pure economic loss unless the product is dangerous to persons or property.

[233] Mariani v. Lemstra, 2004 50592 (ON CA), leave to appeal refused [2004] S.C.C.A. No. 355 (S.C.C.), is an example of a case binding on me that holds for recovery, the defective product must be dangerous. In this case, the Lemstras built and sold a home to Ms. Mariani. After the closing of the sale, Ms. Mariani discovered that the centre load-bearing wall was structurally unsound and that the building envelope was defective. The defects caused or allowed water penetration that could lead to mould that would make the house uninhabitable. Justice Sharpe in the Court of Appeal applied Winnipeg Condominium Corporation No. 36, and at paragraph 26 of his judgment, he stated that a claim for defective construction is a claim for purely economic loss, and recovery under Winnipeg Condominium is subject to the caveats that the structure must be dangerous, not merely shoddy, and it is only the cost of repairing the structure and restoring it to a non-dangerous state that is recoverable.

[234] Although, as a matter of stare decisis, I am not bound to follow it, I am persuaded by Justice Cumming's decision in Zidaric v. Toshiba of Canada Ltd., supra. In this case, the plaintiff purchased an allegedly defective laptop computer manufactured by Toshiba from Future Shop, a retail store. The defect in the computer could cause data loss. The defect did not make the computer dangerous. Although, the plaintiff had a claim for breach of contract against Future Shop, he sued the manufacturer Toshiba for negligence in failing to warn consumers as to the defect in the computer. Justice Cumming dismissed the action for failing to disclose a reasonable cause of action. He reasoned that the claim was for a pure economic loss but that the claim did not come within the principles of Winnipeg Condominium Corporation No. 36 v. Bird Construction Co. Justice Cumming concluded that the plaintiff's claim was against the retailer in contract and not the manufacture in tort. In paragraph 11 of his judgment, he stated:

11. A tort is a civil wrong independent of contract. A contractual relationship can be coincidental with a relationship giving rise to a duty of care and potential liability in tort. However, as stated above, apart from the inapplicable exceptional situations, there is not recovery for a pure economic loss under tort law. In the instant situation there is the added element that, in my view, the economic loss is properly characterized as an economic loss arising from an alleged breach of contract. The claimed loss is really a result of the alleged failure of the seller to fulfil its contractual promise. Thus, the plaintiff's claim properly sounds entirely in contract and not in tort.

[235] As already noted above, however, the Plaintiffs rely on Bondy v. Toshiba of Canada Ltd., supra; Sable Offshore Energy Inc. v. Ameron International Corp., 2007 NSCA 70; Griffin v. Dell Canada Inc., 2009 3557 (ON SC), [2009] O.J. No. 418 (S.C.J.), leave to appeal to the Div. Ct. refused [2009] O.J. No. 3438 (Div. Ct.); and Barwin v. IKO Industries Ltd., 2012 ONSC 3969, for the argument that it is not plain and obvious that their claim for pure economic losses is untenable.

[236] In Bondy, Toshiba manufactured and sold a notebook computer that did not perform as represented. It would overheat, shut-down, and fail to perform at the anticipated 1.1 GHz processing speed. There was no allegation that the computer was dangerous. The Plaintiffs alleged that Toshiba breached a duty to produce notebooks that were of merchantable quality and fit for their intended purpose of performing in accordance with their stated performance specifications. The Plaintiffs sued for breach of contract, negligent misrepresentation, and breach of s. 52(1) of the Competition Act (Canada). Toshiba moved to have the Plaintiffs' claim struck out for failing to disclose a case of action and Toshiba submitted that the Plaintiffs' cause of action was for pure economic loss for shoddy goods.

[237] Justice Brockenshire dismissed the Defendant's motion, and relying on the academic commentary of Justice Allen Linden in Canadian Tort Law, (7th ed.) and on Justice Nordheimer's comment in Gariepy v. Shell Oil Co. [2002] O.J. No. 2766 (S.C.J.) at paragraphs 41 and 42 that the possibility exists that claims for repairs in non-dangerous situations may yet be recoverable, Justice Brockenshire concluded at paragraph 15 that "it is not plain and obvious to me that the claim of negligence in design and manufacture, particularly when combined with the alleged claim of negligent misrepresentation, and also combined with the claim of a direct relationship between the manufacturer and customer, cannot succeed."

[238] A close reading of Bondy reveals that it is not helpful to the Plaintiffs. First, as appears, it was Toshiba that characterized the Plaintiffs' claim as for shoddy non-dangerous goods. Justice Brockenshire's refusal to strike the claim can be explained as a refusal to accept the defendant's characterization of the plaintiffs' claim and rather a recognition that the contractual, statutory, and negligent misrepresentation claims of the plaintiffs do admit of claims for pure economic losses. Second, as I have explained above, it is to misread Winnipeg Condominium Corporation No. 36 as leaving open a pure economic loss claim for a shoddy non-dangerous product and whatever, may have been said in Gariepy v. Shell Oil Co., supra, there is higher authority, like Mariani v. Lemstra, that is binding and that holds the goods must be dangerous for there to be recovery in negligence.

[239] An examination of Gariepy v. Shell Oil reveals that it also is not that helpful for the Plaintiffs. Gariepy was a proposed class action against several manufacturers of a raw material used in plastic plumbing pipes that were manufactured by others for use in potable water systems. The pipe manufactured from the defendants' raw material was prone to leak causing damage to itself and to the homes in which it was being used. The plaintiffs alleged that the various defendants were negligent in failing to adequately test their products and in failing to properly warn class members of the limitations of using plumbing systems with pipe fabricated from the defendants' raw material. There was no allegation that the raw material or the pipe was dangerous. The plaintiffs asserted causes of action including negligent design, failure to warn, misrepresentation, and breach of warranty.

[240] In Gariepy¸ Justice Nordheimer's comments about Winnipeg Condominum Corporation No. 36 were made after he had already concluded that the plaintiffs had pleaded a reasonable cause of action. The context of his comment was a discussion of the fact that some class members had experienced no leaks and so their particular claims were only pure economic loss claims. It was in that context that Justice Nordheimer quoted Justice La Forest's comment above. Justice Nordheimer concluded at paragraph 42 that: "It would seem, therefore, that the possibility exists that claims for repairs in non-dangerous situations may yet be held to be recoverable. It is at least clear that the issue is not foreclosed." It would appear that all that Justice Nordheimer was saying was that there was no reason to exclude class members who had not experienced leaks or had experienced leaks without attendant damage from the class for the purposes of determining whether the statement of claim disclosed a cause of action.

[241] However, if Justice Nordheimer was saying something more about the scope of recovery in tort, then for the reasons set out above, I disagree with him and my opinion is that negligence claims for non-dangerous products are foreclosed.

[242] Griffin v. Dell, 2009 3557 (ON SC), [2009] O.J. No. 418 (S.C.J.), leave to appeal to the Div. Ct. refused [2009] O.J. No. 3438 (Div. Ct.) is a favourable judgment for the Plaintiffs. However, for the above reasons, I do not agree with Justice Lax's decision that it is not plain and obvious that there is not a negligence claim for pure economic losses for non-dangerous shoddy goods.

[243] In Griffin, Dell, a computer manufacturer, sold a notebook computer along with a one-year limited warranty covering defects in workmanship and materials with the option to purchase an enhanced warranty. The plaintiffs alleged that the computers were of poor workmanship and quality and unfit for their intended purpose as they were prone to overheating, power failure, inability to "boot up," and unexpected shutdowns. They sued for negligence, breach of contract, unjust enrichment, waiver of tort, and breach of s. 52 of the Competition Act.

[244] Justice Lax disagreed with Dell's argument that the law was settled and there is no recovery in tort for defective products, unless the defect causes a substantial danger. Dell relied on Hughes v. Sunbeam, (2002), 2002 45051 (ON CA), 61 O.R. (3d) 433 (C.A.), leave to appeal to SCC refused, [2002] S.C.C.A. No. 446 and Design Services Ltd. v. Canada, 2008 SCC 22, but Justice Lax concluded that Hughes left the point open and that the decision in Design Services Ltd. was based on a full evidentiary record of a trial and a similar decision should not be made on a certification motion.

[245] Referring to Bondy v. Toshiba Canada, Justice La Forest's comments in Winnipeg Condominium Corporation No. 36 v. Bird Construction Co. Ltd, and Justice Nordheimer's comments in Gariepy v. Shell Oil Co., supra, (but with no mention of Mariani v. Lemstra, supra), Justice Lax reasoned that it was not plain and obvious that the negligence claim cannot possibly succeed. She stated in paragraph 57 of her reasons:

57. The authors of Canadian Tort Law, 8th ed. (Markham: Butterworths, 2006), Allen Linden and Bruce Feldthusen, after discussing the law in the United States, the United Kingdom, Australia and New Zealand, state at p. 475 that it is an open question whether Canadian courts will extend recovery in negligence to non-dangerous defects. They divide the Canadian decisions following Winnipeg Condominium into three categories, concluding that the "recent trend" is not to allow recovery as a matter of law. The Nova Scotia Court of Appeal points out in Sable-Offshore at para. 30 that the test is not whether the recent trend disallows recovery, but whether the claim is certain to fail. In Hughes, the court observed that on the present state of the law, the negligence claim would "likely fail". I make the same observation about the negligence claim in this case, but likelihood of success is not the test. Given the test that I must apply, it is not plain and obvious that the negligence claim cannot possibly succeed.

[246] For the above reasons, I disagree with Justice Lax's decision, but I can certainly understand her reluctance to foreclose the claim in circumstances where there was a certifiable claim for breach of contract to underpin an economic loss claim.

[247] I also think that the defendant's argument in Griffin v. Dell Canada Inc. was correct, which brings the discussion to the Court of Appeal's decision in Hughes v. Sunbeam, (2002), 2002 45051 (ON CA), 61 O.R. (3d) 433 (C.A.), leave to appeal to SCC refused, [2002] S.C.C.A. No. 446. In Hughes, the plaintiff in a proposed class action purchased a smoke alarm that was defective and sued for a refund. He sued the manufacturers, and as noted above, he also sued Underwriters' Laboratories of Canada ("ULC"). The Court of Appeal held that Justice Cumming was correct to strike out the claim against ULC but wrong to strike the claim against the manufacturers, against whom it was not plain and obvious that the claim for pure economic loss was untenable.

[248] For the negligence claim against the manufacturers of the smoke alarm, Justice John Laskin was prepared to treat the unreliable smoke detectors as within the principle from Winnipeg Condominium Corporation No. 36 v. Bird Construction Co. Ltd. However, he had reservations about the eventual success of the plaintiff's claim for a refund, as opposed to repair costs. Thus, Justice John Laskin stated in paragraphs 25 to 29 of his judgment:

25. I accept that, under the current state of the law, Hughes' negligence claim against First Alert would likely fail. But this appeal is from a rule 21.01(1)(b) motion, where causes of action should not be barred simply because they are novel. In my view, compelling reasons exist to allow the negligence claim against First Alert to get over the rule 21.01(1)(b) hurdle.

26. The underlying rationale for permitting recovery for pure economic loss in a case like Winnipeg Condominium is safety, the prevention of threatened harm. By compensating the owner of a dangerously defective product for the cost of repair, the law can encourage the owner to make the product safe before it causes injury to persons or property. By contrast compensation to repair a defective but not dangerous product will improve the product's quality but not its safety.

27. This case falls on the border. A smoke detector that does not detect fires in time for occupants to escape injury is not itself dangerous, but relying on it is. The occupants are lulled into a false sense of security. The threatened harm to persons or property is no less than that from a dangerous defect. In other words, the safety considerations are similar. Safety justified compensating the owner of the apartment building in Winnipeg Condominium to eliminate the dangerously defective cladding. Safety may also justify compensating the owner of a defective smoke alarm to eliminate dangerous reliance on it.

28. This claim thus shows that in the negligent supply of defective goods cases, the safety rationale for compensation does not always support a clear distinction between dangerous and non-dangerous defects. …. The defect is not dangerous, though reliance on the product is. If safety is the rationale for recovery of economic loss in these kinds of cases, I find it hard to justify recovery in the first scenario but not the second.

29. For these reasons, I am not persuaded that Hughes' negligence claim against First Alert discloses no reasonable cause of action. As a supplier of allegedly defective safety devices on which reliance is dangerous, First Alert may well owe a duty of care to a purchaser that is not defeated by the relevant policy considerations. This claim should not fail on a rule 21.01(1)(b) motion. Before deciding whether First Alert owes a duty of care to compensate Hughes for purely economic losses, the court should have an evidentiary record.

[249] The Hughes case does not support the proposition that the law is unsettled about whether there is recovery for purely economic losses for negligently manufactured or designed non-dangerous goods. The areas of legal uncertainty identified in Hughes were about what counts for a dangerous good and about whether there were other heads of damages beyond the cost of repair. The law, however, is settled that there is no recovery for shoddy non-dangerous goods, which explains why Justice John Laskin emphasized that a defective safety device was little different from a device that itself was dangerous.

[250] The Plaintiffs in the case at bar also relied on the recent judgment of Justice Baltman in Barwin v. IKO Industries Ltd., 2012 ONSC 3969. The defective product in this case was roofing shingles, and in a proposed class action, Justice Baltman rejected the defendants' argument that the plaintiffs' negligence claim was based upon pure economic loss for a non-dangerous good. She did so for two reasons. First, it was arguable that the goods were dangerous because they threatened the safety of the houses and thus fell within the parameters of Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., supra. Second, following Gariepy, Bondy, and Griffin, there was the possibility of claims for repairs in non-dangerous situations. For present purposes, Barwin is distinguishable because the product was dangerous and not merely shoddy. If Barwin is not distinguishable, it follows Gariepy, Bondy, and Griffin, which for the reasons already expressed, I do not follow.

[251] I concede that the decision of the Nova Scotia Court of Appeal in Sable Offshore Energy Inc. v. Ameron International Corp., 2007 NSCA 70 is favourable to the Plaintiffs' argument that it is not plain and obvious that a product liability negligence claim for pure economic loss for a non-dangerous product is untenable. The case, however, is not binding on me, and I do not agree with it to the extent that it holds that the law is unsettled about non-dangerous goods and negligence claims for pure economic losses.

[252] In Sable Offshore, the plaintiff was the operator for the owner of four offshore gas platforms. The defendant manufactured and supplied the paint used to cover the steel used on the platforms. The plaintiffs claimed that the paint system failed resulting in corrosion impairing the structural integrity of the platforms and making them unsafe. Notwithstanding the allegations that the paint system failure was dangerous, the defendant paint manufacturer submitted that there is no cause of action that would allow the plaintiff to recover repair costs and other economic losses for defects in the paint that did not result in a clear presence of a real and substantial danger. The Court of Appeal affirmed the motion judge's decision that it was not plain and obvious that the claim was untenable.

[253] I note once again in Sable Offshore the phenomena of a defendant attempting to re-categorize a claim to take it outside of what is permitted by Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., supra, which phenomena by itself makes it understandable to me why a court might say that the plaintiff's action should not be dismissed on a preliminary motion. That said, largely based on an extra-judicial essay by Chief Justice McLachlin writing about the contribution of Justice La Forest, the Nova Scotia Court of Appeal adopted the view that Justice La Forest had left open the recovery of pure economic loss for the supply of non-dangerous products.

[254] In the "The Evolution of the Law of Private Obligation: The Influence of Justice La Forest" in Johnson and McEvoy eds. Gérard V. La Forest at the Supreme Court of Canada 1985-1997 (2000) 21, at p. 41, Chief Justice McLachlin wrote:

However, some have drawn from this decision that, absent danger of personal injury, the pure economic loss would not have been recoverable, thus concluding that Winnipeg Condo is inconsistent with the universalist approach of Anns. Construed at its narrowest, though, it may be argued that this case stands only for the proposition that pure economic loss is recoverable where danger of bodily injury is established, not that this is the only circumstance where recovery of economic loss is possible. The emphasis on a risk of personal injury has been advanced at least since Justice [Bora] Laskin's (as he then was) dissenting judgment in Rivtow Marine Ltd. v. Washington Iron Works, 1973 6 (SCC), [1974] S.C.R. 1189. If this is so, then Winnipeg Condo simply left other situations to be resolved another day. Whichever view one takes, Winnipeg Condo most assuredly did not conclusively settle whether Anns stood for a universal rule of tort recovery or one limited to physical loss, subject to certain tightly-controlled broader exceptions. The analysis in the case does illustrate, however, the difficulties inherent in defining practical limits in an ostensibly universal process.

[255] I read this passage from Chief Justice McLachlin's essay as directed at a different question from the question of what was settled by the Winnipeg Condominium judgment. It is directed at the question of whether Justice La Forest's Winnipeg Condominium judgment, with its apparent emphasis on dangerous goods, was inconsistent with the universalist more open-ended approach associated with the Anns v. Merton test for a duty of care. For what it is worth, I would interpret Justice La Forest's judgment as being universalist and admitting the possibility of other circumstances where there might be recovery for pure economic losses but as foreclosing pure economic losses being recovered when goods are simply shoddy. For non-dangerous goods, Justice La Forest was well aware that there were weighty policy reasons for leaving compensation to the realm of contract and property law or to statutory regimes.

[256] Although he was concerned about a different category of pure economic losses, that Justice La Forest was not leaving the door open for pure economic loss claims in negligence for shoddy non-dangerous goods is supported by what he said in Canadian National Railway Co. v. Norsk Pacific Steamship Co., 1992 105 (SCC), at para. 60 about Justice Bora Laskin's judgment in Rivtow. Speaking about contractual relational loss, Justice La Forest stated:

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