Canada: What Comes Down The Pipe: Knowledge Of A Product’s Purpose Founds Basis Of Liability Against Manufacturer And Distributor


In a recent case from the Ontario Superior Court of Justice, Gordon. J considered a product liability action against both a distributor and manufacturer of copper tubing for use in a residential watermain, in the context of new regulations established following the Walkerton water crisis of 2000.

Ultimately, the Court's finding of liability against both manufacturer and distributer may well have resulted from a striking underlying factual scenario, involving conduct on the part of the manufacturer verging on bad faith. 

Justice Gordon's decision addresses the following legal issues:

  • To what extent will a product that fails to meet its purpose be considered defective?
  • When will a seller be held liable for a defective product based solely on a history of reliance between the buyer and seller?
  • Is a distributor responsible to identify when a material specified for use by the owner's representative is not fit for the owner's purpose?


SCS Consulting Group ("SCS Consulting") were the project engineers responsible for designing a  watermain system to be installed in the City of Brantford. Two sections of the watermain were designed for the use of 2-inch Type K copper tubing (the "Copper Tubing"). In November 2006, SCS Consulting released a call for tender. As part of the tender package, it provided a list of the material required for the watermains, including the Copper Tubing

The plaintiff, Brantford Engineering and Construction Limited ("Brantford Engineering") was awarded the contract for the installation of the watermains. Brantford Engineering contracted with Underground Specialities (the "Distributer") for the specified materials. The Distributer in turn placed a purchase order for the materials with the manufacturer, Wolverine Tube (Canada) Inc. (the "Manufacturer").

The Walkerton Water Crisis

Both the Walkerton water crisis and the judicial inquiry that followed it provided crucial context to the decision.1 The inquiry concluded that the crisis could have been prevented by the use of continuous chlorine residual, a chemical used to kill bacteria in drinking water.2

Pursuant to legislative changes in the aftermath of the crisis, the city of Brantford (the "City") implemented a two-step sterilization procedure: a chlorination test and a chlorine residual test. The watermain must pass both steps before being connected to the municipal water system.

Problems with the Copper Tubing

In June of 2007, Brantford Engineering installed the watermain and commenced the sterilization protocol. The Copper Tubing passed the first step of the test, but following repeated attempts, failed the chlorine residual test.

Uncertain as to the cause of the failure, Brantford Engineering consulted the Distributor and the Manufacturer. The Manufacturer in turn contacted a representative of Copper Canada, who suggested that a chemical reaction with chlorine could be causing the test failure. In the course of its correspondence, the Manufacturer acknowledged that, "whichever way you look at this it is pretty ugly and not good for copper."3

The Manufacturer advised the Distributor that the chlorine content could be cause for concern. However, it did not explain why or disclose any of the information received from Copper Canada. Brantford Engineering was therefore given no explanation for why the Copper Tubing was not passing the second step of the test. Eventually, it ordered plastic tubing to replace the Copper Tubing. The plastic tubing passed both steps of the test.

Brantford Engineering brought a claim against the Distributer for breach of implied contractual warranties under the Sale of Goods Act (the "SGA") and a claim in negligence against the Manufacturer for damages resulting from the failure of the Copper Tubing.


(i) Liability of the Distributer under theSale of Goods Act

Section 15(1) – Was there a Breach of the Implied Warranty of Reasonable Fitness?

The Court found the Distributer liable for a breach of implied warranty under s. 15(1) of the SGA. Fundamental to the judge's decision was his finding that Brantford Engineering relied on the Distributer's skill or judgment and was not merely contracting to purchase materials.4 Justice Gordon supported this conclusion on two grounds.

First, Gordon J. found that Brantford Engineering's specialization was limited to the installation of watermains, while the Distributer's expertise was in the material it supplies.5 Additionally, he relied on the testimony of the Distributor's General Manager who professed he had knowledge of the relevant regulations of the City and admitted that he was aware of the sterilization process and the special purpose of the Copper Tubing.6 Accordingly, Gordon J. found that Brantford Engineering relied on the Distributor's expertise in this regard.

Second, Gordon J. cited the historical relationship between the parties. He noted that Brantford Engineering had on previous occasions relied on the Distributor to scrutinize the materials list and provide advice on any issues with the material complying with municipal specifications.7 He based his finding of reliance on this past relationship, despite the fact that there were no specific discussions between the parties about the use of the Copper Tubing for this project when Brantford Engineering provided the Distributor with the materials list.8

The Distributor disputed liability on the grounds that it relied on the Manufacturer. Gordon J. stated that although a distributor can usually rely on the manufacturer to determine whether material is fit for the intended purpose, in this case such reliance was misplaced.9 He went on to state that where information is available, as it was in this case, the Distributor had an obligation to diligently obtain it.10 In this regard, the Court relied on expert opinion that a chemical reaction occurs when copper comes in to contact with chlorine.11 Gordon J. held that the Distributor "cannot simply rely on the Manufacturer. It has an obligation to make inquiry. The information was available."12

Justice Gordon's decision raises some questions about this obligation as it is unclear when it is triggered. In this case, the Manufacturer failed to disclose information that would have provided much needed insight about the incompatibilities of the Copper tubing and Chlorine. However, at the time in question what further steps should the Distributor have taken? If a distributor is usually permitted to rely on the manufacturer of a product to determine whether it is fit for its intended purpose, what distinguishes the facts in this case from those normally encountered by Distributors? At what point in the process should the Distributor have abandoned its reliance on the Manufacturer, who was then one of the premier manufacturers of water distribution system products in North America?    

Finally, Gordon J. states that it was of no consequence that SCS Consulting specifically listed the Copper Tubing as material to use for the project.13 Unfortunately, he does not elaborate on this any further. This leaves some questions unanswered. As currently articulated, this reasoning would hold a seller liable to the buyer for failure to provide a product fit for its purpose, when the product was expressly specified by the buyer for that purpose. This would be less of a concern if the issue in this case was that there was something defective about the Copper Tubing. However, the "defect" was arguably not a defect at all, but the use of an incorrect item entirely. No copper tubing could have passed the test.

Section 15(2) – Was there a Breach of the Implied Warranty of Merchantable Quality?

In addition to holding the Distributor liable under s. 15(1), the Court also found the Distributor liable under s. 15(2) of the SGA for a failure to provide goods of a merchantable quality.

Goods must be saleable in the market. Goods must also be reasonably fit for their general purpose in order to be merchantable.14 Gordon J. determined on a balance of probabilities the Copper Tubing failed to meet the sterilization test because of the chemical reaction with chlorine.15 As a result, the Copper Tubing was not able to meet the requirements of the municipality and was consequently defective.16

The issue of whether the copper product would be merchantable in other municipalities came up in one witnesses' testimony. The witness for the manufacturer complained about the reasonableness of the city's two-step test, insinuating that the product would have been merchantable in other municipalities that did not have the same standards. Gordon J. dismissed this argument on the basis that the municipality had the right to impose higher standards. This argument had no impact on the Judge's eventual finding of liability.

Section 15(4) – Was the Application of the Sale of Goods Act precluded by virtue of the contractual limited warranty?

The Court also considered whether thepresence of a seven-day limited warranty precluded the application of the implied warranties in the SGA. The limited warranty in this case was not included in the contract document, but was in the packing slips and invoices the Distributor issued to Brantford Engineering.17

In determining whether the limited warranty constituted a term of the sale contract, the Court looked at the historical dealings of the parties. The Court assessed instances where Brantford Engineering  received packing slips and invoices that contained the limited warranty clause and did not contest receiving them in this form. The Court determined that the impact of the inclusion of the limited warranty provision in past documents was unclear, but emphasized that it should not be ignored.18

Ultimately, the Court concluded that the warranty was not sufficiently clear to preclude the application of the SGA. The Court provided the following example as a provision that would be clear enough to preclude the SGA: "no other warranty or conditions, statutory or otherwise shall be implied."19

(ii) Liability of the Manufacturer in Tort

The Court went on to consider Brantford Engineering's claim of negligence against the Manufacturer. Gordon J. strongly condemned the actions of the Manufacturer and found them liable for the full extent of the claim.  

The Manufacturer conceded that it owed a duty of care to Brantford Engineering, the ultimate consumer of its product.20 Indeed, to deny such a duty in the face of Donoghue v Stevenson21and decades of product liability jurisprudence would have been futile. Instead, the Manufacturer argued that to meet its standards of care it only needed to comply with ATSM 8822 standards, which it complied with.23 Gordon J. rejected this argument, stating that such a position ignores the shift in standards that occurred following the findings of the Walkerton inquiry.

Gordon J. articulated the test to establish a breach of the standard of care in product liability cases  as requiring the negligent conduct to create an unreasonable risk of harm.24 In this case, harm would occur when the Copper Tubing came in contact with the concentrated chlorine, precluding a chlorine residual from forming. This, in turn, would have prevented chlorine from destroying pathogens in the watermain, placing consumers in a very real and significant harm. Based on the testimony, and the information from Copper Canada, the Court found that the Manufacturer had sufficient knowledge to be aware of the potential risk.25

Additionally, Gordon J. stated that the Manufacturer had a due diligence obligation to ensure its product met applicable regulatory and municipal standards.26 This obligation was in place as soon as the legislative changes were made in 2002, following the Walkerton inquiry.27 Gordon J. went as far as to say that the Manufacturer breached the standard of care before the project even commenced.28 This proposition suggests that a manufacturer could be held liable if its product does not meet the standards in a particular jurisdiction, but would satisfy the requirements in other areas.

(iii) Duty to Warn

Lastly, Gordon J. concluded that upon receiving the information from Copper Canada the Manufacturer had a duty to warn Brantford Engineering, but does not elaborate on these reasons.29


Justice Gordon granted judgment against the Distributor and the Manufacturer on a joint and several basis. Additionally, he allowed the cross-claim by the Distributor against the Manufacturer. 

Ultimately, Gordon. J found that both a distributor and a manufacturer may be held liable for a product that fails to meet its intended purpose, even if the product was specifically requested by the purchaser. Gordon J. supported this by establishing reliance as between the distributor and the purchaser. The manner in which Gordon. J establishes reliance in this case is important. His conclusion hinges on the specific expertise of the parties and the past relationship between the parties, where the Distributor had speculated on the adequacy of the materials list for the specified purpose. In this case, however, there was no specific discussion between the parties concerning the product being fit for its intended purpose.

This case expands the circumstances in which reliance may found liability in a product liability case. This may have been the result of the unusual factual circumstances underlying the case, and the Court's concern regarding the gravity of harm which could have resulted.  In any event, the case stands as a warning for greater diligence on the part of manufacturers and distributers alike in considering the use to which their products are to be put.


1 Ibid at paras 11 – 13.

2 The Honourable Dennis R. O'Connor, Report of the Walkerton Inquiry: Part One (Toronto: Queen's Printer for Ontario, 2002).

3 Brantford at para 124

4 Ibid at para 104.

5 Ibid at para 102 -103.

6 Ibid.

7 Ibid at para 67 and 108.

8 Ibid.

9 Ibid at para 110.

10 Ibid at para 111.

11 Ibid at para 86, 90 and 112.

12 Ibid at para 112.

13 Ibid at para 109.

14 Edgell, Dean, Product Liability Law in Canada. Markham, ON: Buterworths Canada, 2000 at 128.

15 Ibid at para 113.

16 Ibid.

17 Ibid at para 71.

18 Ibid.

19 Ibid at para 120.

20 Ibid at para 125.

21 Donoghue v Stevenson, [1932] UKHL 100.

22 ATSM standards are the industry recognized standards for the use of seamless copper.

23 Ibid at para 133.

24 Ibid at para 135.

25 Ibid at para 130.

26 Ibid at para 132.

27 Ibid at paras 132 - 133.

28 Ibid at para 139.

29 Ibid at para 142.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
22 Nov 2017, Seminar, Montreal, Canada

Please join us on Wednesday, Nov. 22 for a breakfast seminar featuring a panel of experts who are abreast of the most recent developments in the field. Also featured will be Paul Allard, president of Impak Finance, who launched the first cryptocurrency offering under the traditional financial regulatory framework.

29 Nov 2017, Seminar, London, UK

Join us at 4 More London for this breakfast seminar on Wednesday, 29 November 2017 to gain a greater understanding on this debate. Coffee and breakfast will be from 08:30 with the discussion commencing at 09:00. We will finish and have you on your way by 10:00.

7 Dec 2017, Seminar, London, UK

Would you like the opportunity to hear more about the potential disruptive effect that blockchain is going to have in the energy sector? If so, please join us on 7 December where Jo-Jo Hubbard, a leading light in this area, will explain all.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.