COURT FILE NO.: CV-20-2965-00
DATE: 2023 06 21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
2599475 Ontario Inc.
G. McMaster, for the Plaintiff
Plaintiff
- and -
2549445 Ontario Inc. trading as House of Diesel
S. Mandalagiri, for the Defendant
Defendant
HEARD: June 7 and 8, 2023. Written submissions completed June 16th, 2023.
REASONS FOR JUDGMENT
LEMAY J
[1] The Plaintiff, 2599475 Ontario Inc. is a commercial trucking company owned and controlled by Mr. Lovepreet Brar. It is engaged in the business of delivering goods across the United States/Canada border. The Defendant, 2549445 Ontario Inc. is a company that repairs trucks. It operates under the name House of Diesel.
[2] On May 15th, 2020, Mr. Brar was driving his truck (which his company leased) across the border when he noticed that the engine light had come on. The truck continued to function, and Mr. Brar brought it to the Defendant’s shop to have it inspected. Ultimately, it was determined that repairs were necessary. Those repairs were completed and the Plaintiff ultimately paid $28,000.00 for them. The repairs took approximately a month, and the vehicle was picked up on June 17th, 2020.
[3] The truck was then driven away from the Defendant’s site in Mississauga. Approximately half an hour later, on Highway 401 near Ayr, the engine suddenly exploded. Multiple warning lights came on and the vehicle could no longer be driven.
[4] The vehicle was towed to a facility and inspected. It was determined that there had been catastrophic engine failure and that significant work would have to be done to make the truck serviceable. The Plaintiff claims that the Defendant negligently repaired the vehicle, which caused significant further damage to the truck. The Defendant denies that its repairs were done negligently and says either the Plaintiff or some other event caused the damage to the truck. The Plaintiff also claims breach of contract.
[5] For the reasons that follow, I have concluded that the catastrophic engine failure was caused by the Defendant’s actions. More specifically, the mechanics employed by the Defendant failed to properly install a snap ring that connects the piston to other components in the truck. In my view, the Defendants breached their contract with the Plaintiff to properly repair the engine in the Volvo, and the Plaintiff is entitled to damages. I also accept that the Defendants could be liable in tort for the damage to the Volvo as a result of negligently repairing the truck. Given the extensive damage to the truck, the quantum of damages is the same regardless of whether the damages are assessed in contract or in tort. I have assessed the damages in the sum of $80,757.51.
Background
a) The Parties
[6] The Plaintiff is a company controlled by Mr. Lovepreet Brar. Mr. Brar has been in the trucking business since 2017. He started as a driver on someone else’s trucks. In 2019, he leased a Volvo truck from Bennington Financial Group. The lease period ran from June 22nd, 2019, to November 22nd, 2022. The lease was for monthly payments of $1,823.25 plus taxes, with the right to buy out the vehicle at the end of the lease for $10.00.
[7] Mr. Brar then entered into an owner/operator agreement with Icon Transport and Logistics (“ITL”) on June 26th, 2019. He was driving for ITL at all material times in this case.
[8] The Defendant is a company with a number of directors and shareholders. One of those directors and shareholders is Mr. Davinder Kaler. Mr. Kaler is qualified as a mechanic. He has experience working on a variety of types of truck engines.
b) The Events Giving Rise to the Claim
[9] On May 15th, 2020, while coming back from a trip to the United States, Mr. Brar was driving the Volvo truck when the engine light turned on. Although Mr. Brar is not a mechanic, he stopped driving and had a look at the engine to make sure that he could continue to drive the Volvo. He drove the Volvo back to his place of business and performed a diagnostic test. This test revealed that there was a problem with the engine.
[10] On Monday, May 18th, 2020, Mr. Brar drove the vehicle to the Defendant’s yard. One of the Defendant’s mechanics performed a diagnostic test and recommended that the Volvo be left at their facility for a full diagnostic review.
[11] On May 25th, 2020, Mr. Kaler called Mr. Brar and advised him that the cylinder head and cylinder number 6 in the engine needed to be replaced. Mr. Kaler recommended that, since they would have to open the cylinder head and because the Volvo was a high mileage vehicle, all six cylinders should be replaced. Mr. Brar accepted this recommendation. The vehicle was repaired, and both Mr. Kaler and one of his mechanics, Mr. Jagjit Singh worked on the reconstruction.
[12] There is a dispute between the parties about the amount that Mr. Brar was quoted for the work. That dispute resulted in a short delay before the vehicle could be picked up by Mr. Brar. The parties did not focus on that dispute in either cross-examination or argument, and it is not necessary for me to resolve it. It is common ground that the Plaintiff paid the Defendant the sum of $28,000.00 for the repairs.
[13] Mr. Brar drove the Volvo off of the Defendant’s lot in Mississauga on June 17th, 2020. Approximately a half an hour later, while driving on Highway 401 near Campbellville Road in Halton Region, Mr. Brar heard an explosion from the engine. Several warning lights came on almost immediately thereafter, and the Volvo could not be driven any further. Mr. Brar observed debris, oil and coolant strewn on the road.
[14] Emergency services were called and Mr. Brar called Mr. Kaler. Mr. Kaler asked that the vehicle be towed back to their facility and Mr. Brar made those arrangements at his own expense. Mr. Brar states that Mr. Kaler was apologetic and accepted responsibility for the failure of the engine. Mr. Kaler disagrees with this assertion and says that all he said was that he wanted to inspect the Volvo to see whether there was a deficiency in the installation and that the Defendant would address the issue promptly if there was a deficiency.
[15] After the explosion, part of the one piston that had been damaged in the explosion could now be examined without having to open the engine up completely. In other words, anyone who opened the hood of the truck could see at least some of the damage.
[16] The Volvo remained at the Defendants facility for a couple of weeks. However, Mr. Ryan Vance, a safety officer from ITL, became involved in the case at this point. Two issues flow from that involvement.
[17] First, during the course of the trial and in his submissions, counsel for the Defendant argued that the Plaintiff did not properly access insurance to pay for the damage to his truck. Counsel argued that the damages should have been either reduced or eliminated as a result of the Plaintiff’s alleged failure to access insurance. There are two problems with that argument:
a) The Plaintiff’s own evidence states that he made inquiries about the availability of insurance to cover the damage to the truck and was advised by Mr. Vance that his insurance did not cover this incident.
b) The fact that the Plaintiff has insurance does not change the Defendant’s liability in either contract or in tort. It would only be relevant to the issue of damages.
[18] Second, Mr. Vance made a couple of telephone calls to Mr. Kaler as well as sending him some text messages. Eventually, on July 2nd, 2020, Mr. Vance advised Mr. Kaler by text message that he was not to touch the Volvo or legal action would be taken by him. I am given to understand that no one from the Defendant did anything other than look at the damage to the Volvo. The truck was ultimately towed to Expressway Trucks in Ayr and inspected. I will return to the significance of this issue below.
[19] The inspection report from Expressway Trucks reads as follows:
Towed unit in for further inspections. Removed value cover and oil pan. All valves are in place, Keepers on, did not drop a valve at this time. #2 rod has broken in half and there are multiple holes in the block. CCV, oil filter housing, EGR cooler, stiffener, oil pan, ETC, all destroyed. Reached in engine spun top half of piston around it still has a piece of the road attached at the wrist pin, wrist pin has damage on one side. Inspected through debris in oil pan, no snap rings that I can find. Best conclusion is that the snap rings either came out or were not installed which allowed the wrist pin to walk out and contact liner, causing the failure of the engine. *NEEDS COMPLETE drop in engine, not much if anything can be re-used. Provided estimate to customer.
[20] Based on this information, the Plaintiff determined that the Defendant was at fault for the damage to the Volvo’s engine. The Plaintiff then commenced this action. The Plaintiff obtained an estimate to repair the vehicle from Expressway Trucks in the amount of $75,394.32 all-inclusive. However, the Plaintiff has never actually repaired the vehicle, and it cannot currently be driven. No evidence was led by the Defendant to dispute the cost of repairing the truck.
[21] The Plaintiff also paid out the lease costs of the Volvo, even though it was not being driven or repaired. The Plaintiff claims the total value of those payments, both monthly and an amount to pay off the remainder of the lease, at a total of $62,824.44 inclusive of all taxes.
c) The Procedure
[22] The Plaintiff brought a claim seeking damages for breach contract, as well as various consequential losses such as loss of business income, special damages and other special damages. The Plaintiff’s claim was also advanced in tort and the same damages were claimed.
[23] The matter came before me on October 14th, 2022 for a summary judgment motion. At that time, I determined that the matter could not be disposed of by way of summary judgment, but that it was appropriate to conduct a mini trial on the issue of what caused the engine to explode.
[24] Both parties indicated that they wanted to provide expert reports and might want to provide other evidence. I advised the parties that Affidavits would be required from every witness, and that that would function as their examinations-in-chief and that Affidavits from all non-expert witnesses were to be delivered by December 7th, 2022.
[25] A further hearing was held on December 7th, 2022 to confirm the parties readiness for the mini trial. A timetable was set for the exchange of expert reports, and two days were booked for cross-examinations on the Affidavits before me as well as the argument of the case.
[26] The parties originally did not file any case law, other than what was filed on the summary judgment motion. During the course of argument on June 8th, 2023, I expressed some concerns particularly with the Plaintiffs damages claims. In response, counsel for the Plaintiff suggested that he would be interested in providing further case-law on the point. As a result, I gave both parties the opportunity to provide further case-law on damages issues, along with brief written submissions. I have reviewed these submissions and will discuss them more fully below.
The Evidence
a) The Evidence Generally
[27] As part of the evidence in this case, I received Affidavits from the following individuals:
a) Mr. Lovepreet Brar, the Principal of the Plaintiff.
b) Mr. Flavius Stanciu, a mechanic who was qualified as an expert.
c) Mr. Ryan Vance, an employee of ITL who was involved in events after the Volvo’s engine exploded.
d) Mr. Davinder Kaler, a shareholder and director of the Defendant.
e) Mr. Jagjit Singh, a mechanic employed by the Defendant.
f) Mr. Ranjodh Singh Gill, a mechanic who was qualified as an expert.
[28] I was advised that Mr. Vance was unavailable the first day of the trial as he had had surgery the previous day. As a result, we completed the rest of the Plaintiff’s evidence, called the Defendant’s witnesses out of order and completed the examinations of everyone else on the first day of the mini-trial. At the beginning of the second day, counsel for the Plaintiff advised that Mr. Vance was still unable to attend and that I should, therefore, disregard his Affidavit. I have done so.
[29] I should also briefly explain how the Affidavits were marked as exhibits. The Plaintiff compiled a trial record containing all of the Affidavits, as well as some other documentation such as the Statement of Claim and Statement of Defence. For ease of reference, that document was marked as one exhibit.
[30] All parties understood and agreed that the Affidavits of each witness were being tendered as their examination-in-chief and that the exhibits attached to those Affidavits would be treated as if they had been entered into evidence during the course of the examination in chief of that person. The remaining documents in the Trial Record were not to be considered as evidence.
[31] One problem arose when, shortly before the trial commenced, I was reviewing one of the attachments to Mr. Brar’s Affidavit and I noticed a paragraph that began with the potential discussion of a settlement. I ignored the rest of the document and suggested to counsel that there needed to be redactions to remove anything covered by settlement privilege. That was duly done, and the redacted volume was marked as Exhibit 1.
b) Expert Evidence
[32] Both the Plaintiff and the Defendant tendered experienced truck mechanics as expert witnesses. The Plaintiff’s expert, Mr. Stanciu, has training from Conestoga College and Fanshawe College, has more than ten years of experience as a Licensed 310T Mechanic, and has worked in diesel engine repair shops for most of that time. He currently owns and operates a mobile specialized diesel repair business.
[33] The Defendant’s expert, Mr. Singh has a diploma from Mohawk College and has more than ten years of experience as a Licensed 310T mechanic and has worked in diesel engine repair shops for most of that time. He now owns and operates his own repair shop in Mississauga.
[34] The parties accepted that their experts were qualified to give expert evidence on the operation of the engine in question and the potential reasons for the failure of that engine. I confirmed that I also accepted their expertise and the necessity and relevance of their testimony. However, I have a gatekeeper function with respect to expert evidence, so I will briefly set out my reasons for accepting their expertise and permitting expert evidence on these issues.
[35] The test for the admissibility of expert evidence is based on the criteria set out in R. v. Mohan, 1994 CanLII 80 (SCC), 1994 SCC 80, as follows:
a) Relevance;
b) Necessity in assisting the trier of fact;
c) The absence of any exclusionary rule, apart from the opinion rule itself; and
d) A properly qualified expert.
[36] In White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182, the Supreme Court divided the admissibility requirement into two distinct steps. First, a trial judge considers the four Mohan criteria. Then the judge balances the potential risks and benefits of admitting the expert evidence.
[37] In this case, the evidence is necessary to assist me in understanding how the engine works and what might have caused it to fail. Those are matters well beyond the general expertise of Courts. Both experts have extensive knowledge in the assembly and functioning of engines and, as a result, they are properly qualified experts. There are very few risks in admitting the expert evidence, while the benefits are clear: the evidence provides a better understanding of the issue I have to decide. As a result, both experts were permitted to tender their reports.
Issues
[38] The issues to be determined in this case are:
a) What caused the failure of the Volvo’s engine, and whether the Defendant is liable for that failure in either contract or tort?
b) If the Defendant is liable for the failure of the Volvo’s engine, what is the quantum of damages?
[39] I will deal with each issue in turn.
Issue #1- What Caused the Engine to Fail?
[40] For the reasons that follow, I have concluded that the failure of the Defendant’s mechanics to install the snap rings around cylinder #2 on the engine was the cause of the explosion in the Volvo’s engine, and the cause of the damage to the engine. To explain the reasons for my conclusion, I will divide my analysis into two parts:
a) A discussion of how the components that were damaged fit together and each party’s theory on how they came to be damaged.
b) My analysis of why I accept the Plaintiff’s theory and reject the Defendant’s theory.
a) The Components and the Theory
[41] The Volvo engine has a number of cylinders. The #2 cylinder was the one that suffered damage in this case. In each of these cylinders there several parts. There is a piston casing, a piston, and a connecting rod that connects the piston to the drive shaft. The piston is fastened to the connecting rod with a wrist pin. The wrist pin is held in place with a snap ring on each side of it.
[42] The damage to the engine was described by the mechanics at Expressway Trucks, as set out at paragraph 19, above. The key part was that the connecting rod had broken in half. As a result, there was other damage to the engine and the engine would have to be rebuilt. There was no real dispute between the parties that the damage to the engine was extensive.
[43] The Plaintiff argues that this damage resulted from the failure of the Defendant’s mechanics to install the snap rings around the wrist pin in cylinder #2. The Plaintiff alleges that the absence of the snap rings led to the piston coming into contact with the piston liner, which led to gouging, overheating and ultimately the failure of the engine.
[44] The Defendant, on the other hand, argues that something else caused the engine failure as both mechanics who worked on the engine, Mr. Kaler and Mr. Singh, testified that they had installed the snap rings. The Defendant’s expert ran a diagnostic scan on the engine after it had failed and identified that there was an engine overspeed condition fault that was noted to have taken place on June 17th, 2020. The Defendant argues that it was this problem, and not any missing snap rings, that caused the failure of the engine.
b) The Snap Rings Were Never Installed
[45] I have concluded that the snap rings were not installed for a number of reasons. First, there is the fact that no snap rings, or even pieces of a snap ring, were found on the area (called a land) where the snap ring would have been installed. The snap rings were not found in the oil pan either. As a result, the complete absence of either snap ring after the fact means that it was more likely than not that they weren’t there to begin with.
[46] The Defendant argues that both Mr. Singh and Mr. Kaler testified that they installed the snap rings. There are two problems with this assertion. First, it is surprising to me that both witnesses would have a specific memory of installing this particular snap ring. There are two on each cylinder, and the installation would have taken place almost three years ago. Each witness would also have been involved in the repair and reconstruction of several engines since that time.
[47] The second problem with the Defendant’s argument about the mechanics testimony comes when Mr. Singh’s evidence is reviewed in detail. In his Affidavit (at para. 7), Mr. Singh states:
- It is stated that I installed the 6 six cylinders along with snap rings and wrist pins. The said installations were made by me painstakingly to the standards and thereafter the engine was inspected by Danny as well.
[48] However, in his trial evidence, Mr. Singh indicated that it was Mr. Kaler who had installed the snap rings. Given the confusion as to who installed the snap rings, it is difficult to accept that either Mr. Singh or Mr. Kaler had a specific memory of installing them.
[49] The second reason for my conclusion that the snap rings were not installed comes from Mr. Stanciu’s evidence. He testified that it was extremely unlikely that both of the snap rings went missing as a result of the explosion. His reasons for that conclusion make sense. First, as I understand it, Mr. Stanciu’s evidence was that the area around the snap ring was undamaged, which makes it less likely that the snap ring came off as a result of the forces. Reviewing the photographs that were provided in evidence supports this conclusion. There is damage to other parts of the piston assembly, but not to the area where the snap ring would have been.
[50] Mr. Stanciu also makes the following observations about the forces at play during engine operation:
- I have come to this conclusion because not only one, but both snap rings on cylinder#2 are completely missing, making this extremely unlikely to have happened as a result of the explosion. The forces at play during engine operation would only be able to have a one directional application on the wrist pin during the catastrophic failure, meaning that it would only be able to push out one of the snap rings had it been progressive damage versus the cause.
[51] This evidence went unchallenged at trial and is not meaningfully addressed in the Defendant’s expert’s testimony. I accept it.
[52] Third, the explanation given by the Defendant for the failure is tenuous at best. The Defendant argues that the engine failure happened as a result of the overspeeding (or over-revving) of the engine. In support of this conclusion, counsel points to the Engine Fault report that shows that there was an engine overspeed condition on the day that the engine failed. Counsel also points to the explanation given by their expert, which is as follows:
- In 90% of cases dealt by me on a daily basis, the major reasons for the failure of engine and breaking of connecting rods are over speeding or driver’s abuse. Due to the wear and tear caused by the rash driving the blocks and pistons often burst.
[53] The second part of that explanation suggests that overspeeding and/or driver’s abuse is something that will cause damage to the connecting rods over time. It must be remembered that these were brand new parts that had been installed very recently and the truck had only been driven any significant distance in the time immediately prior to the explosion. It is unlikely that brand new parts would have failed this quickly and so this explanation is less likely than the explanation that the snap rings were not installed.
[54] Fourth, I reject the Defendant’s explanations that there would have been an audible engine noise if the snap rings had not been installed. While I accept there would have been some vibration and noise when the engine was turned on, I also accept the evidence of Mr. Stanciu that this vibration could not have been heard over the sound of the engine itself until it was too late.
[55] Fifth, there is the length of time it would have taken for this issue to manifest itself. Mr. Stanciu testified that, if the snap rings were missing, it would not have taken much driving before there was a catastrophic failure of the engine. The Defendant’s witnesses testified that they had taken the Volvo for a test drive. However, that evidence does not appear anywhere in either Mr. Singh or Mr. Kaler’s Affidavit. Indeed, the first time it was mentioned was at trial. The very late disclosure of this information, which came only after the expert report was provided, raises serious questions about its reliability.
[56] In addition, I have already explained (at paras. 47-48) why I do not accept Mr. Singh and Mr. Kaler’s evidence that they recall this particular truck repair. Those same concerns also apply with respect to the evidence that the vehicle was taken for a test drive. Given both of these concerns, I reject the Defendant’s evidence that the Volvo was taken for a test drive. Even if it was taken for a test drive, however, the problem might still not have immediately arisen.
[57] When all of these points are considered, I come to the conclusion that the Defendant’s mechanics failed to install the snap rings on the wrist pin on cylinder #2 in the Volvo.
[58] In my view, this is a breach of contract. As our Court of Appeal noted in Barresi v. Jones Lang Lasalle Real Estate Services Inc., 2019 ONCA 884 (at para. 5):
[5] The trial judge correctly noted that contractual repudiation occurs “by words or conduct evincing an intention not to be bound by the contract”: Guarantee Co. of North America v. Gordon Capital, 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423, at para. 40. A contractual breach “is a repudiation of the contract if it is a breach of a contractual condition or of some other sufficiently important term of the contract so that there is a substantial failure of performance”: Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, [2015] 1 S.C.R. 500, at para. 145.
[59] In this case, the contract was a contract to repair the engine and return the truck in good working order. Although there is no written contract, these terms can easily be implied from the relationship between the parties and the surrounding circumstances. Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29. The Defendant failed to affect a proper repair and the truck was severely damaged as a result. This is a substantial failure of performance by any measure, entitling the Plaintiff to damages.
[60] The repair was also done negligently. In Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, [2008] 2 S.C.R. 114, the Supreme Court set out the requirements for a successful negligence claim:
[3] A successful action in negligence requires that the plaintiff demonstrate (1) that the defendant owed him a duty of care; (2) that the defendant’s behaviour breached the standard of care; (3) that the plaintiff sustained damage; and (4) that the damage was caused, in fact and in law, by the defendant’s breach. I shall examine each of these elements of negligence in turn. As I will explain, Mr. Mustapha’s claim fails because he has failed to establish that his damage was caused in law by the defendant’s negligence. In other words, his damage is too remote to allow recovery.
[61] In this case, all four elements are met. TheDefendant owed the Plaintiff a duty to properly repair the Plaintiff’s truck. The Defendant breached that duty by failing to install a critical component, and the damages flowed from that failure.
[62] Having concluded that this was both a breach of contract and negligence on the part of the Defendant and its mechanics, I now turn to the calculation of damages.
Issue #2- What is the Appropriate Quantum of Damages?
[63] As I noted, I permitted the parties to file additional submissions on damages. I did that because I was concerned with the scope of the claim for damages being made by the Plaintiff.
[64] In his Affidavit, the Plaintiff makes the following claims for damages:
a. $28,000 I paid to the defendant as the cost of repairing the Vehicle, A copy of the invoice from the defendant to me is previously attached as Exhibit “B”;
b. $75,394.32 cost to rebuild and restore the Vehicle. A copy of the repair estimate from Expressway Trucks dated March 19, 2021, is attached as Exhibit “F”;
c. $7,751.03 paid for turbo repair inclusive of parts and labour. A copy of this invoice from TPT Systems Limited dated May 12, 2020 is attached as Exhibit “G”;
d. $1,152.02 for the towing cost to the Premises on June 17, 2021. A copy of the invoice from C.A. Towing dated June 17, 2020 is attached as Exhibit “H”;
e. $536.75 for the cost to tow the Vehicle to the Volve dealership on July 2, 2020. A copy of the invoice from AZ Towing dated July 2, 2020 is attached as Exhibit “I”;
f. $809.19 for the cost of an inspection at the Volvo dealership. A copy of the invoice from Expressway Trucks dated July 10, 2020 is previously attached as Exhibit “E”;
g. $250 for the cost of insurance bi-weekly from June 2020 until October 2021, for a total cost of 8,000.00;
h. $32,964.32 representing (16 monthly payments) of $2,060.27 per month for the Vehicle’s lease from the date of the incident (June 17th 2020) until the lease was paid off in October 2021. A copy of the lease agreement dated June 22nd 2019 and the paid-up lease dated October 19th 2021 is attached as Exhibit “J”;
i. $29,860.12 for lease payoff in October 2021. The receipt evidencing the payoff is also attached and included in Exhibit “J”
j. $3,000 for the cost of renewing the Vehicle’s plates;
k. $100 for the cost of car fuel; and
l. $186,288.50 for the loss of business I experienced from not being able to drive the Vehicle and carry out my business, calculated at $384.10 per working day for a total of 485 working days from June 2020 to October 2021. A copy of a document titled “Driver Settlement Reporting” issued by ITL for the time period of January 1, 2020 to June 1, 2020 which sets out my gross earnings summary is attached as Exhibit “K”.
[65] These claims total more than $200,000.00. As this is a Simplified Rules action, the Plaintiff has abandoned any claim for more than this amount. The Plaintiff seeks judgment for the full $200,000.00, however.
[66] In his post-trial submissions, the Plaintiff acknowledged that he was not entitled to recover all of his claims for damages. Instead, he stated that the claims should be reduced as follows:
a) The Plaintiff acknowledged that there was no juristic reason for him to be compensated for both the $28,000.00 for the repair bill and the total cost of repairing the Volvo. He seeks just the $75,000.00 for the repair bill.
b) The Plaintiff acknowledged that he was not entitled to be compensated for both the lease payments on the truck and the lost income. He seeks only the lost income, which is approximately $180,000.00.
[67] The Plaintiff has provided a revised schedule of damages that eliminates the repair and lease costs, but leaves all of the other claims described at paragraph 64 in place. No case-law was provided in support of these claims.
[68] The Defendant argues that the Plaintiff has failed to mitigate his damages on the grounds that:
a) The Plaintiff failed to have the Volvo repaired under warranty.
b) More generally, the Plaintiff took no steps to get the Volvo repaired.
c) The Plaintiff’s claims are an attempt to enrich himself at the expense of the Defendant.
[69] The Plaintiff’s argument that there was a warranty fails. It appears to me that this argument is similar to the argument about insurance that was addressed at paragraph 17. There was no evidence of a warranty before me. The closest evidence was from Mr. Kaler, and all that was said was that the Defendant might have been prepared to repair the engine if it was their fault.
[70] The Defendant seemed to suggest that, because only one piston was broken, that there might be other parts that could be salvaged. This argument cannot succeed because the Plaintiff has included an estimate for repair from Expressway Trucks that clearly shows that the truck cannot be repaired without a complete engine rebuild. There is no other evidence that would refute this claim.
[71] This brings me to the rest of the claims. There are two issues that exist with the claims that the Plaintiff has brought. They are:
a) There is a significant element of double compensation in the damages that the Plaintiff is seeking.
b) The Plaintiff has failed to mitigate its damages.
[72] In considering these issues, Defendant’s counsel directed my attention to the decision in Southcott Estates v. Toronto Catholic District School Board, 2012 SCC 51. In that case, the Court stated:
[23] This Court in Asamera Oil Corp. v. Seal Oil & General Corp., 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633, cited (at pp. 660-61) with approval the statement of Viscount Haldane L.C. in British Westinghouse Electric and Manufacturing Co. v. Underground Electric Railways Company of London, Ltd., [1912] A.C. 673, at p. 689:
The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.
[24] In British Columbia v. Canadian Forest Products Ltd., 2004 SCC 38, [2004] 2 S.C.R. 74, at para. 176, this Court explained that “[l]osses that could reasonably have been avoided are, in effect, caused by the plaintiff’s inaction, rather than the defendant’s wrong.” As a general rule, a plaintiff will not be able to recover for those losses which he could have avoided by taking reasonable steps. Where it is alleged that the plaintiff has failed to mitigate, the burden of proof is on the defendant, who needs to prove both that the plaintiff has failed to make reasonable efforts to mitigate and that mitigation was possible (Red Deer College v. Michaels, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324; Asamera; Evans v. Teamsters Local Union No. 31, 2008 SCC 20, [2008] 1 S.C.R. 661, at para. 30).
[73] This passage also refers to Supreme Court authority that indicates that the burden of proving a failure to mitigate rests on the Defendant. With these principles in mind, I now turn to the claims made by the Plaintiff.
[74] The first claim is straightforward. The Plaintiff paid $28,000.00 to the Defendants to repair the truck engine. Instead of a repaired engine, the Plaintiff received an engine that needs to be completely rebuilt. It did not receive the value it had bargained for. As a result, the Plaintiff is entitled to receive a refund for the amounts that it paid to the Defendant.
[75] This brings me to the other damages that the Plaintiff has claimed. The Plaintiff has failed to mitigate its damages by not having the truck repaired. As a result, the Plaintiff should not be entitled to claim for repair costs that have never been incurred. Similarly, if the Plaintiff had repaired the truck in a timely manner, it would not have suffered any of the business losses that it is claiming. In terms of business losses, the Plaintiff could also have mitigated those losses by purchasing another truck and continuing its’ operations. There was no explanation in the evidence before me as to why the Plaintiff chose to do neither of these things. Therefore, the Plaintiff should not be entitled to claim for the business losses.
[76] This brings me to the most difficult question on damages. That is the lease payments that the Plaintiff was required to make. Normally, I would take the view that these payments were not damages that the Plaintiff could reasonably recover. However, it must be remembered that, at the time of the accident, paying out the lease would have cost less than the actual repairs to the truck. In the circumstances, it would have been reasonable for the Plaintiff to treat the Volvo as a total loss, pay out the lease payments and then purchase a new truck and continue with his business. In those circumstances, the Defendant is liable for the remainder of the lease payments, less the amount that the Volvo is worth as scrap or for spare parts.
[77] I have no evidence as to what the value of the Volvo would have been for scrap and/or spare parts, but it is clear that it would have been worth something and I am given to understand that the Plaintiff still has possession of it. The Defendant is entitled to a credit for the value of the Volvo, which I am going to fix at 20% of the lease payments as that seems a reasonable amount. It accounts for the fact that the Volvo would have depreciated but would still have had some value even without a working engine. As a result, the total value of the lease payments that the Plaintiff is entitled to recover is $50,259.55 inclusive of HST and disbursements.
[78] This brings me to some of the smaller claims made by the Plaintiff. The towing the day of the accident is an amount that the Plaintiff can recover. I acknowledge that the Defendant offered to send a tow truck, but the Plaintiff would have had to move his vehicle promptly and should not have been required to wait for the Plaintiff’s tow truck. Similarly, the costs of the tow from the Defendant’s yard to Expressway Trucks is recoverable as is the inspection at Expressway trucks. All of these activities were required in order to assess the damage to the truck, and the Plaintiff should be compensated for them. These smaller claims amount to $2,497.96.
[79] However, the costs for the Volvo’s plates and insurance are not something that the Defendant should be required to pay. If the Plaintiff had mitigated his damages by repairing the truck, these would have been business expenses that he would have incurred regardless of the explosion. Since the Plaintiff did not repair the truck, there was no need for him to incur expenses to ensure that the vehicle could be operated. As a result, there should be no recovery for any of these items, including the cost of car fuel.
[80] Finally, I should address the Plaintiff’s claim for the invoice from TPT systems for the “turbo repair”. This was a repair that was done on the vehicle shortly before it was taken to the Defendant’s facility for an engine rebuild. I see no reason why the Defendant should be responsible for this cost. If the Plaintiff had repaired the engine, any losses flowing from this repair would have been subsumed in the costs to repair the engine. Since the Plaintiff did not repair the engine, any losses flowing from this repair were subsumed in the lease costs for which the Plaintiff has already been compensated.
Conclusion and Costs
[81] For the foregoing reasons, I am ordering the payment of the following damages:
a) The Defendant shall pay to the Plaintiff the sum of $28,000.00 on account of the costs of the engine rebuild that the Plaintiff was charged for but did not receive the benefit of.
b) The Defendant shall pay to the Plaintiff the sum of $50,259.55 on account of the lease payments, less an allowance for depreciation.
c) The Defendant shall pay to the Plaintiff the sum of $2,497.96 on account of miscellaneous expenses caused by the explosion.
[82] The parties are encouraged to agree on the costs of this proceeding. Failing agreement, each side may serve and file costs submissions of no more than three (3) single-spaced pages, exclusive of offers to settle, bills of costs and case-law within fourteen (14) calendar days of today’s date.
[83] Each party may serve and file responding submissions of no more than two (2) single-spaced pages, exclusive of case-law within seven (7) calendar days thereafter.
[84] For filing costs submissions, parties are required to both upload those submissions to case-lines and provide them to my judicial assistant, who can be reached at zoe.chen@ontario.ca . There are to be no extensions for the deadline for costs submissions, even on consent, without my leave. If costs submissions are not made within that time period, then there shall be no costs of the trial.
[85] The parties are reminded to address the issue of the costs of the summary judgment motion last October in their submissions, as those costs were reserved to the end of the trial.
LEMAY J
Released: June 21, 2023
COURT FILE NO.: CV-20-2965-00
DATE: 2023 06 21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
2599475 Ontario Inc.
Plaintiff
- and -
2549445 Ontario Inc. trading as House of Diesel
Defendant
REASONS FOR JUDGMENT
LEMAY J
Released: June 21, 2023