On March 13, 2014, the Supreme Court of Canada denied leave to appeal the Ontario Court of
Appeal's (OCA) decision in Arora v. Whirlpool Canada LP. As a result, the
OCA's unanimous decision – refusing to certify a class
action and dismissing the case in its entirety – stands as
the leading Ontario decision on the liability of manufacturers
under a variety of causes of action: breach of express warranty,
breach of implied warranty, breach of section 52 of the
Competition Act, negligence, and waiver of tort.
The case is summarized in our previous
Blakes Bulletin: Certification Denied in Consumer Product Class
Action regarding the motions judge's decision on the motion
for class certification. Briefly, it concerned a putative class
action against the manufacturers of certain older models of
front-loading washing machines. The motions judge dismissed the
plaintiffs' class certification motion and dismissed the
action, in part on the basis that the claim for recovery of pure
economic loss and other causes of action were not sustainable. On
appeal, the OCA upheld the motions judge's decision, albeit on
somewhat narrower grounds. It found that the plaintiffs' claim
boiled down to this: they purchased allegedly "shoddy"
but non-dangerous goods and sought damages in the form of a partial
rebate of the purchase price they paid. That claim was not
sustainable under the causes of action pleaded.
Among several important holdings, the OCA determined:
express warranties covering "defects in materials or
workmanship" do not extend to "design
implied warranties under the Sale of Goods Act require
privity of contract, so a manufacturer who did not sell goods
directly to the consumer is not subject to such warranties;
a manufacturer who "fails to disclose an alleged
defect" has not made any "representation" within the
meaning of section 52 of the Competition Act, absent an
express representation which could convert an omission into a
misrepresentation by implication, or a duty to disclose based on
some other legal obligation;
a consumer cannot recover in negligence for pure economic loss
based on diminution in value, if that loss was caused by a shoddy
but non-dangerous product; and
a claim for waiver of tort requires a predicate wrongdoing on
which to base the plea, absent which there can be no waiver of tort
– in this case, because there was no tenable cause of action
pleaded and no duty of care in tort in respect of "diminution
in value," there was no basis to claim waiver of tort.
In its reasoning, the OCA held that "policy considerations
negate recognizing a cause of action in negligence for diminution
in value for a defective, non-dangerous consumer product." It
found courts should be wary of wading into the regulation of
consumer transactions – an area already governed extensively
by contract and statute:
"[R]equiring the courts to
analyze a myriad of consumer transactions – some involving
small outlays of money for goods that quickly depreciate and become
redundant – in tort, without the framework of consumer
protection legislation, to determine whether the consumer received
value for his or her money, would burden an already taxed court
On this point, the OCA agreed with the motions judge that the
plaintiffs "should not look to tort law to negotiate a better
bargain for themselves."
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