The Court of Appeal for Ontario, in a case involving an
application to certify a proposed misleading advertising class
action with respect to front loading washing machines1,
determined that the matter should not be certified as a class
action. The case provides comfort for advertisers that they need
not publicize all problems associated with their products.
It was alleged that Whirlpool negligently designed its early
front loading machines, such that they were prone to developing an
unpleasant smell as a result of mold and fungus
("bio-film") build up. Various causes of action were
alleged, including breach of the express warranty provided by the
manufacturer; breach of the implied warranty of fitness for purpose
under the Sale of Goods Act; breach of the misleading
advertising provision of the Competition Act; economic
loss for negligent design of a non-dangerous consumer product; and
waiver of tort.
The Court of Appeal (Hoy, ACJO) rejected each of these possible
causes of action. Associate Chief Justice Hoy noted that the
express warranty was silent with respect to negligent design
– it only spoke to negligence related to materials or
manufacturing. The implied warranty in the Sale of Goods
Act did not apply because there was no direct contract of sale
between Whirlpool and consumers. The claim for economic loss for
negligent design of a non-dangerous consumer product failed because
the Court of Appeal found, as a matter of law, that there could be
no claim law for economic loss resulting in diminution of value due
to negligent design of a consumer product. With respect to waiver
of tort, because there was no predicate wrongdoing upon which to
base waiver of tort the Court concluded that there was no basis for
a cause of action in waiver of tort.
Finally, and of direct relevance with respect to the misleading
advertising claim, the plaintiffs alleged that Whirlpool's
actions were in breach of Section 52 of the Competition
Act, and therefore gave rise to a claim under Section 36 of
the Act, based on representation by omission. The
allegation was that Whirlpool did not tell the public its front
loading washing machines did not self clean in the same way as its
top loading washing machines did, and did not advise that they were
susceptible to the build up of bio-film, resulting in unpleasant
Whirlpool argued that while, in some circumstances,
misrepresentation by omission may be actionable – although
not necessarily a breach of the Competition Act – an
allegation that there is misrepresentation by omission when there
was no positive misrepresentation with respect to the matter cannot
support a claim. The Court stated that while Section 52 of the
Competition Act prohibits material, false or misleading
representations, unlike statutes such as provincial securities
legislation, which require the provision of "full, true and
plain disclosure of all material facts", the Competition
Act does not impose a general duty to disclose. The Court of
Appeal stated "I would note and adopt the holding in
Williams v. Canon2 ... that 'the failure to
disclose the alleged defect cannot be representation for the
purposes of Section 52'."
This case, at the level of the Ontario Court of Appeal,
represents strong authority that failure to disclose something
negative will not constitute breach of Section 52 of the
Competition Act. The decision will be authority in both
the civil as well as the criminal context. Silence, really may be
golden. As noted in the now vaguely superannuated but still much
loved Purolator3 case:
"Advertising...by its nature, it is one-sided and usually does
not convey a full and balanced analysis....competitors may complain
that it does not depict a full and balanced picture...Courts should
be reluctant to intervene in the competitive marketplace unless the
advertisements are clearly unfair".
Confirmation by the Court of Appeal, almost 20 years after
Purolator, that advertisers do not have to tell both sides of the
story – that omissions, absent misleading positive
assertions, do not constitute misleading advertising –
provides useful certainty. Advertisers may tell their story,
honestly, but need not share all the possible negatives surrounding
1. Aurora et al v. Whirlpool Canada Ltd., 2013
O.N.C.A. 657, October 31, 2013.
2. Williams v. Canon Canada Inc.,  O.J.
No. 5049, 2011 ON SC 6571.
3. Purolator Courier Ltd. v. United Parcel Services
Canada Ltd., (1995), 60 C.P.R. (3d) 473.
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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