Smelly washing machines were at the center of a recent decision of the Ontario Court of Appeal. In Arora v. Whirlpool Canada LP, the plaintiffs all bought Whirlpool front-loading washing machines. The early models of these washing machines resulted in complaints of odour, mould and mildew. Though Whirlpool gradually improved its design and instructions to avoid these problems, the plaintiff owners of the earlier models claimed that the machines they purchased were shoddy. They sought a form of rebate for diminution in value on behalf of owners or previous owners of 2001-2008 Whirlpool front-loading washing machines and the costs for their damaged clothing. The plaintiffs did not allege that the washing machines were dangerous. Instead, they alleged breach of express and implied warranty, breach of the Competition Act, negligence and waiver of tort.
The certification motion judge and the Court of Appeal, in reasons released in October, dismissed the certification motion. The motion judge concluded that the pleadings did not disclose a cause of action and that a class action was not the preferable procedure. Justice Hoy, writing the reasons for the Court of Appeal, noted that the appellants' pleading was not well particularized.
Breach of Express Warranty
The warranties provided by Whirlpool in the proposed class period were limited to one year from the date of purchase and were applicable only if the washing machine was operated and maintained according to its instructions. The warranties provided that Whirlpool would pay for replacement parts and labour costs to correct defects in materials or workmanship. The Court of Appeal agreed with the motion judge's finding that the express warranties provided by Whirlpool did not apply to the plaintiffs since the plaintiffs did not sue to correct defects in materials or workmanship, but instead alleged defective design, and each plaintiff brought their claim more than a year after they purchased their washing machine.
Breach of Implied Warranty
The Court of Appeal also dismissed the plaintiffs' argument that Whirlpool breached the implied condition that its washing machines were fit for their purpose. The plaintiffs claimed against only the manufacturer, whereas the Ontario Sale of Goods Act applies to sellers only. Since there was no privity of contract between the plaintiffs and Whirlpool, the Court of Appeal ruled that the plaintiffs' claim for breach of implied warranty had no reasonable prospect of success.
Breach of the Competition Act
The plaintiffs also alleged that Whirlpool breached the Competition Act's provisions regarding false or misleading representations. The Court of Appeal found that since the plaintiffs had relied on Whirlpool's omission to inform the public of the self-cleaning shortcomings of their washing machines, instead of an express representation, their claim under the Competition Act could not succeed.
The crux of the plaintiffs' claim was for pure economic loss arising from the negligent design of a non-dangerous consumer product.
The Court of Appeal disagreed with the motion judge who found that there can be no such claim. It noted that the jurisprudence had not settled this issue. However, the Court concluded that this was not an appropriate case for such an extension of the law of negligence because it was not a case in which the plaintiffs were without a remedy.
The Court of Appeal found that the appellants' claim for diminution in value of their washing machines was more appropriately a contract claim than a tort claim. Deciding such a claim in the class actions context would require the court "to analyze a myriad of consumer transactions in tort, without the framework of consumer protection legislation" which would burden the court system. The Court of Appeal further found that the Sale of Goods Act and Consumer Protection Act provided a statutory remedy against the seller of the machines, and the Business Practices Act and Consumer Protection Act provided remedies against Whirlpool for unfair practices.
Waiver of Tort
The plaintiffs also claimed for waiver of tort. This cause of action allows the plaintiffs to sue for a disgorgement of Whirlpool's profits instead of their losses. In order to plead waiver of tort, there has to be a "wrongdoing". As the motion judge and the Court of Appeal concluded that there was no breach of contract, no breach of the Competition Act and no negligence, there could be no waiver of tort.
This case might suggest that courts are taking a hard-line on pleadings: rather than allowing the plaintiff to amend the pleading to correct deficiencies, the court appears ready to simply dismiss the certification motion. The result in this case might be informed by the fact that the court found that the plaintiffs had other avenues of recourse, even against Whirlpool. Though this case left the door open to potential claims for pure economic loss for negligent design of non-dangerous consumer products, it suggests that the law of negligence will not be extended to provide a remedy to plaintiffs who have a more appropriate cause of action that they have failed to plead.
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