Elrafih v, 2023 ABCJ 250

In the Alberta Court of Justice Citation: Elrafih v 504147 Alberta Ltd., 2023 ABCJ 250 Date: 20231124 Docket: P2190101185 Registry: Calgary Between: Jamal Elrafih Plaintiff - and - 504147 Alberta Ltd . Defendant Reasons for Decision of the Honourable Justice G.P. Shannon INTRODUCTION [ 1 ] Mr.

Jamal Elrafih (the “Plaintiff”) commenced a civil claim against 504147 Alberta Ltd., also known as “BMW Calgary”, (the “Defendant”), seeking $45,000.00 in damages for negligent misrepresentation. [ 2 ] The Plaintiff alleges that the Defendant had caused catastrophic engine damage to his used 2006 BMW M5 sedan vehicle (the “Car”) by negligently misrepresenting the compatibility of 5w30 engine oil for his Car. [ 3 ] The Plaintiff claims that an employee of the Defendant advised him to switch from 10w60 oil to 5w30 oil.

The Plaintiff claims that his engine suffered irreparable harm and damage shortly after he changed the oil on his own accord and outside of the BMW Calgary dealership in May 2019. [ 4 ] The Defendant denies in its Dispute Note that it made any untrue, inaccurate or misleading misrepresentation to the Plaintiff regarding the oil selection for the Car and did not cause the engine damage as a result thereof. It also states that the Plaintiff always (except for one occasion in December 2009) changed the oil himself or through an independent third party mechanic. [ 5 ] The issues before the Court are whether: (

a) the Defendant is liable to the Plaintiff for making a negligent misrepresentation?; and (

b) if so, what constitutes the proper amount of damages, if any to be awarded? [ 6 ] The evidence in this scheduled 2 day trial was heard on November 16, 2023. Both parties were represented by counsel. An application by the Plaintiff and also closing arguments for each party were heard on the morning of November 17, 2023. [ 7 ] An application by the Plaintiff to reopen his case to hear testimony from a third non-expert witness after the Plaintiff’s case in chief was duly closed and after the Defendant’s defence was closed, was respectfully denied by this Court.

FACTS [ 8 ] The Plaintiff is an entrepreneur in Calgary and owns and operates a shawarma/Mediterranean food restaurant in NE Calgary. He purchased the used Car with approximately 50,000 kms on it from a vendor in Naples, Florida, USA and then duly imported it to Canada in 2008. The Plaintiff claims it was his “dream car”. [ 9 ] The Plaintiff claims he serviced the Car regularly. He provided some records and yet no oil change receipts. However, the records proffered by the Defendant show at Exhibit 2, Tab 1, only 12 maintenance visits to BMW Calgary from December 2008 to May 10, 2018.

There also existed a 56 month gap in services at BMW Calgary from September 13, 2013 until May 10, 2018.

Furthermore, there were never any oil changes performed by BMW Calgary on the Car. [ 10 ] The only oil change performed on the Car at an authorized BMW dealership, was at “The BMW Gallery Mini Crowfoot” (an affiliate of the Defendant) on December 30, 2009 with Castrol synthetic 10w60 oil being put in the Car (See Exhibit 4), as per the BMW manufacture’s Owner’s Manual for the Car (See Exhibit 2, Tab 4, Page 184). [ 11 ] The Plaintiff claims he always purchased the 10w60 oil from BMW Calgary as is indicated in Exhibit 1, Tab 4 with various invoices for same from BMW Calgary. [ 12 ] On April 12, 2019, the Plaintiff purchased 1 litre of 10w60 oil from BMW Calgary.

Then on May 10, 2019, the Plaintiff purchased another 10 litres of 10w60 oil from BMW Calgary. [ 13 ] Thereafter, on May 21, 2019, the Plaintiff returned to BMW Calgary and claims he picked up certain “other parts” (said other parts were undisclosed in his testimony and exhibits/ documents) and at that time Plaintiff also returned the 10 litres of 10w60 oil and replaced it with 10 litres of 5w30 oil and received a $34.97 credit as a result of the exchange thereof. [ 14 ] The Plaintiff then testified that he took the 10 litres of recently exchanged 5w30 oil to his alleged “qualified BMW third party mechanic”, namely “ Mr.

Peter Niech” (note: exact legal name and spelling were not provided to the Court (and no such oil change invoices for the life of the Car from 2008-2019 were ever proffered by the Plaintiff from said Mr. Niech or any other third party mechanic. The background of Mr.

Niech is scant as he was not called by the Plaintiff to testify and no other background information or any of his service receipts were proffered into evidence by the Plaintiff. [ 15 ] The Plaintiff knew that this Car had a high performance BMW engine and as such required very diligent servicing and it had approximately 113,000 km at the time of the last oil change and service by Mr. Niech.

The Plaintiff was also aware of certain connecting rod bearing and crankshaft and camshaft issues with these types of high performance BMW engines, as well as the Plaintiff knew of potential rod bearing issues with these engine types when reaching significant kilometres. [ 16 ] Thereafter, the Plaintiff testified that he went for a “spirited drive” and really enjoyed himself one night in June of 2019 for approximately 50 kilometres and then on the way home heard some “soft jingling noises” coming from the engine and then the engine warning lights came on.

He did not immediately pull over; did not stop the Car; did not and tow it to BMW Calgary dealership or another third party mechanic of his choice, but instead drove the Car home another few kilometres and then parked it. [ 17 ] After said engine problems in early June of 2019, the Plaintiff testified that he called “Alan” at BMW Calgary and told Allan that he had some engine issues with his Car. Then he proceeded to take the Car not to BMW Calgary right away but instead over to Mr. Neich again and had the oil dumped and changed by Mr. Niech again; The old oil had some metal filings in it claims the Plaintiff.

The Court has no photographs or actual saved evidence of this old oil with metal filings in it and no inspection report or analysis by Mr. Niech on record. No corroborating evidence was brought to Court by the Plaintiff including the absence of Mr. Niech - thus no testimony of Mr. Niech, no expert report, and no photos by Mr. Niech were ever submitted in this regard. [ 18 ] On June 14, 2019, the Plaintiff towed the vehicle back to BMW Calgary for an engine diagnosis which is contained at Exhibit 2, Tab 1, entry 1.

The Defendant then told the Plaintiff that the engine would need to be disassembled to fully diagnose and inspect the bearings for failure and wear (note: the reference to bearings was probably to the “connecting rod bearings”), as these bearing were notorious for damage and breakdown/failure in these types of BMW high performance engines with anywhere from 50,000 to 100,000 kms and up, according to evidence and testimony of Mr. Brent Carefoot, the new Operations Manager of BMW Calgary.

The Plaintiff would not pay the Defendant for any such engine disassembly and diagnostics and towed the Car away. [ 19 ] The Plaintiff testified that he always took the Car to BMW Calgary for servicing, yet the facts and records indicate otherwise, and that only 12 services were performed by BMW Calgary and that no oil changes were ever performed at BMW Calgary. Later, the Plaintiff testified the oil changes were all done by Mr. Niech either at his mechanical establishment or elsewhere at a UWrench shop. [ 20 ] There were also no services by BMW Calgary indicated or logged on Carfax for the Car.

No reason was put forward by either party to this fact and it is somewhat irrelevant for our purposes in this claim for negligent misrepresentation. [ 21 ] The Plaintiff testifies that he could not locate or subpoena Mr. Niech to testify on his behalf at this trial either as an expert witness or lay witness. This was unfortunate.

The Court has empathy for the Plaintiff with his difficulties in procuring a material key witness (and possible expert witness), however the Plaintiff has the burden of proof beyond a balance of probabilities. [ 22 ] Moreover, the Plaintiff did not submit evidence of any oil changes and regular maintenance service invoices from Mr.

Niech for the 11 years at issue (i.e. from 2008-2019), in order to help substantiate regular and properly conducted oil changes and to bolster and corroborate his testimony and also to verify the services were done in a timely manner and at appropriate milage intervals and with proper oils and specifications, all in accordance with the manufacture’s Owner’s Manual. [ 23 ] The manufacturer’s key codes for the Car (See Exhibit 2, Tab 3 pages 3-6) indicate that oil changes were late at times or alternatively never reset in the Car’s electronics warning system after each such oil change, if said oil changes were properly done by the Plaintiff and/or through using Mr.

Niech from 2008-2019.

[ 24 ] The Plaintiff testifies that Mr. Niech put the 5w30 oil in the Car on or about May 22, 2019. It is somewhat unclear if it was Mr. Niech who changed the oil or if Plaintiff himself did the oil change - as no receipts were ever proffered into evidence verifying same. [ 25 ] This begs the question, was Mr. Niech a qualified mechanic?

Why would he then after 11 years of knowing the Plaintiff and the Car at issue and after performing various (but undocumented) oil changes, take the newly delivered 5w30 oil in May of 2019 and put the 5w30 oil in the Car after he had always used 10w60 oil in the past 11 years of servicing this high performance engine? [ 26 ] The Plaintiff testifies that the 10 litres of 10w60 oil originally purchased on May 10, 2019 and then subsequently exchanged for 10 litres 5w30 oil on May 21, 2019, was a result of certain representations made and advice relied upon from a certain Mr. Roman Sotelo (“Mr.

Sotelo”), a former parts department employee at BMW Calgary (who we understand had worked at BMW Calgary from April 23, 2008 to December 6, 2019. The Plaintiff claims he had known Mr. Sotelo for many years (since 2008) and was a person he felt he had a “special relationship” with, as they spoke often and had similar cars and interests and that Mr.

Sotelo had also frequented his Mediterranean restaurant. [ 27 ] The Plaintiff did not produce any other documentation including emails or texts or oral testimony from third parties regarding the exchange of the oils from 10w60 to 5w30, save for Exhibit 3 (which was a surreptitiously recorded conversation between the Plaintiff and Mr. Sotelo) which took place at the parts counter of BMW Calgary on June 7, 2019. This Court admitted in evidence Exhibit 3 accordingly. [ 28 ] Exhibit 3 was identified for authenticity purposes by a former court reporter/transcriber Mr. Dougals R.

Lebel, CSR (A), now retired, who gave brief testimony that he received a memory stick from the Plaintiff and transcribed it verbatim accordingly and appeared in Court to testify to this fact and the Court accepted his testimony and also accepted the transcript into the record. Moreover, the Defendant had no issues or objections with this submission either. [ 29 ] The actual contents of Exhibit 3 are not at all in dispute, only the parties’ respective

interpretation of same. [ 30 ] However, the various statements/bytes made by the parties throughout Exhibit 3 has resulted in each party interpreting the contents much differently and making claims that are diametrically opposite as follows:

a) the Plaintiff claims it is an admission by Defendant (by Mr. Sotelo) who had authorized and advised as to the oil exchange from 10w60 to 5w30 and; (

b) the Defendant vehemently denies such advice and directions and to the contrary points to various statements/bytes where Mr. Sotelo clearly indicates that the recommended oil or preferred oil is 10w60, as mandated by BMW Canada and that BMW Canada’s official position is 10w60. [ 31 ] Furthermore, the Owner’s Manual (See Exhibit 2, Tab 4 at page 184) confirms this direction of preferred oil use is 10w60 oil for the Car. [ 32 ] First, the Plaintiff relies on Exhibit 3, page 11, lines 5 and 6 interpreting the comments or statement/ bytes made by Mr.

Sotelo to indicate that he said that or agreed with Plaintiff that the 5w30 oil was the preferred oil to put in the Car and not 10w60. [ 33 ] Second, in Exhibit 3, pages 5, 6, 7 and 10 contain at least 5 statements/bytes by Mr. Sotelo confirming that 10w60 oil is the preferred oil for use in the Car and BMW Canada says its authorizing the use of 10w60 oil and that the USA had already switched to 5w30 oil, but not yet in Canada. [ 34 ] Third, there was an emphatic: “no, no, no” by Mr. Sotelo in Exhibit 3, page 5, line 6 therein.

There is a lack of concrete evidence and a lack of clarity and certainty of any alleged admissions against interest made by the Defendant anywhere in Exhibit 3 purporting to claim that BMW Calgary had authorized the use of 5w30 oil over the BMW recommended 10w60 oil, as per the Owner’s Manual. [ 35 ] Fourth, the Plaintiff claims that Mr. Sotelo at BMW Calgary told the Plaintiff that Canada did not change over yet to 5w30 oil; but it was “ cheaper than 10 w 60”. [ 36 ] Nowhere is there clear and uncontradictory evidence indicating that Mr.

Sotelo or anyone from BMW Calgary instructed the Plaintiff to use 5w30 oil in the Car and to exchange the 10w60 oil for 5w30 oil. There was a reference made in Exhibit 3 by Mr. Sotelo and corroborated by the Plaintiff that 5w30 oil was “cheaper” (and it was by a mere $34.97 for 10 litres of said oil). Mr. Sotelo confirmed that BMW Canada did not change over yet to 5w30; but that it was cheaper than 10w60. [ 37 ] Mr. Kurt de Freitas also provided testimony for the Plaintiff – he was a former employee of BMW Calgary and was a certified BMW mechanic – but not qualified as an expert.

He owned and operated a BMW specialty imports shop called KDF Imports. He went to

SAIT and was a Level 3 senior technician as of 2019; He had a Red Seal official government of Alberta technician certification and had operated KDF Imports for about 10 years with 5 employees and worked on BMWs about 70% of the time. [ 38 ] He was engaged by the Plaintiff to review the alleged engine damage to the Car some 4 years later on May 17, 2023. He testified that he took the engine apart and diagnosed it. The Car had not been driven since June 2019 and it had metal shavings in the oil filter and engine. The connecting rod bearings were out of tolerance and scored and worn.

He mentioned that the bearings were spun. [ 39 ] Mr. de Freitas was offered as a lay witness only with industry knowledge of BMW engines (as opposed to being qualified as an expert witness). Therefore, he could provide helpful knowledge and advice to the Court regarding the potential issues and suggested causes but as he was not an expert, he could not provide any expert opinion evidence as to the causation of the engine failure. He also said that the Car appeared to be well maintained, however, no evidence was provided to corroborate this testimony and claim other than some photographs.

The witness had no actual knowledge or copies of oil changes and/or written reports since BMW Calgary no longer serviced the Car at issue since 2013 (and he had also no reports from previous mechanic Mr. Niech). [ 40 ] For further clarity, Mr. de Frietas supposed the engine failure was caused due to the 5w30 oil in the engine but it also could be a result of any one of the five (5) following alternative causes: (

a) overrevving of engine at high RPM’s could result in bearing issues and failure; (

b) not warming up the engine long enough before driving the Car could result in engine bearing issues; (

c) not doing regular maintenance and services could be an issue; (

d) having dirty oil with contaminants could be an issue; and (

e) that these high performance engines are very susceptible to bearing issues over time with use and enhanced kilometres. [ 41 ] The Defendant called as its first witness, Mr. Brent Carefoot, the Operations Manager. He is relatively new at the dealership (being there for 2.5 months) and is in charge of all parts and service employees. He has formal BMW mechanical training. He has been a journeyman certified mechanic since 2000. His work experience includes time as a GM journeyman mechanic from 2000-2009; a Mercedes Benz mechanic from 2009-2011; a Ferrari, Maserati and Rolls Royce mechanic from 2011-2016.

The Court was also informed by Mr. Carefoot that BMW engines were similar to Rolls Royce engines and manufactured by the same company. [ 42 ] He testified that BMW high performance engines like the one in the Car requires more service and care and its very important to follow the BMW manufacturer’s Owner’s Manual and specifics during each oil change, as there are certain protocols and enhanced measures for high performance engines. There could be oil change issues if the oil temperature is not brought up to top temperatures then left idling for a set period of time as that could also cause adverse engine issues.

He stated that if an oil change is not performed in accordance with BMW manufacture’s suggested procedures then that could cause engine failure of connecting rod bearings and cam bearing and also crank bearings which could lead to expedited engine wear and tear on various bearings.

He noted that 10w60 synthetic oil is the preferred oil to use as it has thicker viscosity to allow for bearing tolerance and is BMW recommended, as opposed to 5w30 oil. [ 43 ] He also stated that the engine in the Car was very unreliable and as a result BMW does not even manufacture this type of engine any longer, as its simply too unreliable. [ 44 ] Mr. Carefoot referred to Exhibit 2, Tab 1 – the Car’s service history with date, milage issue diagnosis and parts and service performed. There were various gaps in maintenance history and major gaps from 2013 – 2018 - oil changes are missing from 2008 to present.

This is simply missing from BMW’s records but we heard some evidence from the Plaintiff that he had them done elsewhere but neglected to produce invoices and or testimony for Peter Niech to verify this key fact. [ 45 ] On June 14, 2019, the last time the Car was viewed by BMW Calgary, the mileage indicated 113,304 kilometers.

The Plaintiff did not request and or pay the Defendant to take the engine apart to fully diagnose the real and actual problem with the engine and also to have a BMW “expert” attempt to diagnose the exact cause of the Car’s engine failure. [ 46 ] Maintenance of engine oils was missed and or delayed by the Plaintiff according to Mr. Carefoot’s testimony; hence the lifespan of engine of the Car could be compromised with failure to regularly and strictly maintain engine oils and other scheduled services for the Car. [ 47 ] Mr.

Carefoot testified that at Exhibit 1, Tab 1 notes – 5w30 “would not solely cause the engine to seize and fail”. [ 48 ] Under cross-examination, Mr. Carefoot stated that Exhibit 1, Tab 3 shows engine issues; and the condition of photographs suggests engine damage.

Such damage could result from starting the Car up too quickly and driving away immediately which could result in scoring to various bearings; very high engine revolutions could also cause damage and also the actual Car’s engine came from BMW factory with 5w30 oil in it; then was changed to 10w60 oil and he noted that not once did Calgary BMW change the oil in the Car. [ 49 ] Under redirect exam, Mr.

Carefoot stated that the estimate for a rebuilt engine for the Car would be: $19,778.97 as opposed to an earlier representation of $28,000.00. (See Exhibit 5 for the Defendant’s replacement engine estimate). [ 50 ] The Defendant’s second and final witness, Mr. Neil McLelland, a corporate VP since 2020, provided nominal evidence to the Court. In any event he stated that Mr.

Satelo worked there for only 1.5 years , but that was later found to be incorrect and he was contacted on the morning of November 17, 2023 by counsel to correct this statement for the record and did so and informed the Court through counsel that Mr. Satelo commenced work at BMW Calgary on April 23, 2008 and resigned on December 6, 2019 (so approximately 11.5 years as an employee according to BMW Calgary’s human resource department records).

THE LAW Negligent Misrepresentation [51] The test for negligent misrepresentation is set out in the landmark decision of the Supreme Court of Canada in Queen vCognos Inc., (SCC), [1993] 1 SCR 87. [52] The following factors must be established by the Plaintiff to prove a negligent misrepresentation by the Defendant: (

a) there must be duty of care based on a “special relationship: between the representor and the representee; (

b) the representation must be untrue, inaccurate or misleading; (

c) the representor must have acted negligently in making the misrepresentation; (

d) the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and (

e) the reliance must have been detrimental to the representee in the sense that damages resulted. (Collectively, the “Cognos Framework”). [53] The Court will now proceed through the negligent misrepresentation Cognos Framework analysis. ANALYSIS (

a) Duty of Care Based on a “Special Relationship” [54] The first issue is whether there is a duty of care based on a “special relationship” between the parties. [55] Counsel for the Defendant referred to the case Labiuk v 603558 Alberta Ltd., 2010 ABPC 62.

In that case, the Court heldthat a special relationship did not exist between a dealer of vehicles and a buyer of vehicles, or at least it did not in the particulardistinguishing circumstances of that case. [56] Judge Young (as she then was) explained that examples of “special relationships” involved employer/employee, parent/child,doctor/patient and teacher/pupil.

In other words, she stated, they are relationships where authority and control come into play. [57] With respect, the factors of authority and control are not what drives the “special relationship” analysis currently. [58] In Nussbaum v Hall, 2022 ABQB 388, at paras 58-59, Justice Loparco set out the requirements for a “special relationship”: The existence of a special relationship may be found where:

a) the defendant ought reasonably to foresee that the plaintiff will rely on hisor her representations; and

b) reliance by the plaintiff would, in the particular circumstances of the case, be reasonable: HerculesManagement Ltd v Ernst & Young, (SCC), [1997] 2 SCR 165 at para 24; Deloitte & Touche, 2017 SCC 63 atparas 29-31.

Determining whether there was reasonable reliance will depend on a number of possible indicia, such as: having a direct or indirectfinancial interest in the transaction; whether the defendant is a professional or someone with special skill, judgment, or knowledge;whether the advice was provided in the course of the defendant’s business; whether the information or advice was deliberately provided;and, whether the information was given in response to a specific request: Hercules at para 42. [59] Nussbaum finds that when analyzing the relationship between the parties, the focus is not so much on the factors of authorityand control, but on reasonable reliance and proximity.

The relationship is analyzed for proximity, not control. [60] A number of the factors listed from the Hercules Management case are present in the case at bar. Mr. Sotelo was an 11.5year employee with the Defendant. He had special industry knowledge as to what type of engine oil should be used in various BMWmodels. The advice was provided at the Defendant’s premises in the course of a business transaction.

Lastly, the advice was deliberatelyprovided after the Plaintiff inquired about the type of oil he should be using going forward, as for the past 11 years he had been using10w60 oil in his Car. [61] These indicia suggest that Mr.

Sotelo ought to have reasonably foreseen that the Plaintiff would rely on his representations,and that the reliance by the Plaintiff was reasonable in the circumstances. [62] The Court acknowledges that in the ruling in Gregson v Smith McLeay Coatings, 2001 ABPC 14, (as cited by the Plaintiff),wherein Judge Hess “had no difficulty” finding that a special relationship existed between the Plaintiff-customer and the defendant-paintsupplier.

Much like in this case, the Defendant was in the business of selling the specialized product and offered advice to the Plaintiffon the use and application of the products sold by the Defendant. The advice was given in the course and as part of the Defendant’sbusiness. The circumstances of the two relationships are largely similar and support the reasoning that a special relationship exists in thiscase. [63] The Plaintiff has therefore established, beyond a balance of probabilities, that there was a duty of care based on a “specialrelationship” between the parties. (

b) A Representation that is Untrue, Inaccurate or Misleading [64] The Plaintiff testified that on May 21, 2019, the Defendant’s employee, Mr. Sotelo, “recommended” that he use 5w30 engine

oil for his Car. The Plaintiff suggests that this was a representation that is either inaccurate or misleading on the basis that the oil could actually cause damage to his Car. [ 65 ] The Plaintiff entered a transcript of a surreptitious recording between the Plaintiff and Mr. Sotelo made after his Car’s engine broke down. The Plaintiff submitted that this recording contains an admission against interest by Mr. Sotelo in which the Plaintiff attempted to show the Court that Mr. Sotelo agrees that he provided the misleading recommendation in their previous conversation. In closing arguments, Plaintiff’s counsel correctly submitted that a lot of this decision turns on the

interpretation of the transcript, and it does. The Court listened to the memory stick provided by the Plaintiff as well as reviewed the transcript at Exhibit 3. [ 66 ] In the transcript of the recording, the Plaintiff suggests to Mr. Sotelo that Mr. Sotelo said: “use this 5-30, it is cheaper. You said, BMW USA has already switched over”. Mr. Sotello replied: “I remember this conversation, no, no, no”, and later, “I was like, no, officially BMW can’t say that”. [ 67 ] The Plaintiff later suggested that “the recommendation was to take the 5-30?”. Mr.

Sotello replied: “Well, BMW can’t direct that”. [ 68 ] Finally, near the end of the conversation, Mr. Sotelo said, “I remember saying officially it is 10-60” . The Plaintiff replied “Yes, officially it is 10-60. You did say that Canada has not switched over yet” . [ 69 ] Based on the transcript, it appears that the Plaintiff inquired about using 5w30 oil for his Car, having seen on some online forum and discussion that others were using same. Mr. Sotelo appears to have acknowledged that BMW USA had switched to 5w30 but maintained that BMW Canada’s official recommendation was 10w60.

At no point does it seem clear and unequivocal that Mr. Sotello recommended to the Plaintiff that he should use 5w30 oil. [ 70 ] The only evidence that suggests an inaccurate or misleading statement was made is the Plaintiff’s recollection of the initial conversation between Mr. Sotelo and himself on May 21, 2019. The transcript (including the actual recording) not only does not corroborate this recollection, but it is inconsistent with the Plaintiff’s testimony. [ 71 ] Counsel for the Plaintiff suggests that credibility is a key consideration in this analysis.

That is very true. [ 72 ] The Plaintiff testified that Mr. Sotelo told him to buy the 5w30 oil because it was cheaper. Further, he testified that Mr. Sotelo “remembered” telling him to buy the 5w30 oil in the conversation that he recorded. The transcript simply does not reveal an admission like the Plaintiff claims. The Court rejects the Plaintiff’s individual recollection of the conversation with Mr. Sotelo and relies on the transcript and the actual recording provided. Both do not reveal that Mr.

Sotelo told the Plaintiff to use 5w30 oil. [ 73 ] The Court does not agree that the transcript contains an admission against interest by the Defendant resulting in untrue, inaccurate or misleading statement. [ 74 ] Hence, the Plaintiff has not proven on a balance of probabilities that the Defendant made a representation that was untrue, inaccurate or misleading. As a result, there can be no negligent misrepresentation and the Plaintiff’s claim can be dismissed on this point. For completeness, however, the Court will provide its findings and analysis on the final stages of the Cogno s Framework. (

c) Representor Acted Negligently in Making the Representation [ 75 ] Even if the Court were to accept the Plaintiff’s assertion that a misleading statement was made, the Court concludes that it would not have been made in a negligent manner. [ 76 ] Mr. Sotelo told the Plaintiff that BMW’s official recommendation was to use 10w60 oil, that BMW USA transitioned to 5w30 oil, and that BMW Canada may transition to 5w30 oil in the future. Even if the Court accepts that this statement was misleading, it would not have been negligently made. Mr. Sotelo never deviated from the official position of BMW Canada.

The Court finds that the advice he gave was no different than what a reasonable employee in the circumstances would have said. He provided the full context of the situation to the Plaintiff, while adhering to the Defendant’s policies. There can be no finding of negligence in this context. (

d) Did Representor Rely, in a Reasonable Manner, on the Negligent Misrepresentation? [ 77 ] The question of reasonable reliance by the Plaintiff is considered twice under the Cognos Framework test, the first time in determining proximity under the duty of care and “special relationship” analysis, and the second time in determining the fourth requirement of the Cognos test. [ 78 ] Under the duty of care analysis, the question is whether the Defendant could reasonably foresee harm to the Plaintiff Car and had the reliance been reasonable.

This more general inquiry assists in establishing a relationship class that requires a duty of care. Under the fourth requirement, the Plaintiff’s reliance assists with the causal link between the misrepresentation and the loss.

Thus, while a defendant can owe a duty of care because it can reasonably foresee harm to the Plaintiff, if cannot be held liable for damages that were unforeseeable because of remoteness or intervening causes including contributory negligence. [ 79 ] In the Supreme Court of Canada case Deloitte & Touche v Livent Inc. (Receiver of) , 2017 SCC 63 , the majority discussed the potential confusion caused by this concept. The majority reiterated that the duty of care analysis is separate from the issue of remoteness, though there is a closeness between the two.

Gascon and Brown JJ., for the majority, wrote, at para 78: We acknowledge that remoteness, so understood, overlaps conceptually with the reasonable foreseeability analysis conducted in the prima facie duty of care analysis ( Mustapha , at para. 15). But the two are distinct: the duty analysis is concerned with the type of injury that is reasonably foreseeable as flowing from the defendant’s conduct, whereas the remoteness analysis is concerned with the reasonable foreseeability of the actual injury suffered by the plaintiff (L. N. Klar and C. S. G.

Jefferies, Tort Law , (6th ed. 2017), at p. 565: “Remoteness questions deal with how far liability should extend in reference to injuries caused to the

plaintiff , once a duty relationship . . .[has] been established” (emphasis added). [ 80 ] The focus in this section, therefore, is on the actual injury that may have been suffered by the Plaintiff, rather than they type of injury that is reasonably foreseeable from the Defendant’s conduct. This analysis is more fact specific. [ 81 ] Mr. Sotelo simply advised the Plaintiff that BMW USA had transitioned to 5w30 oil, and that BMW Canada may transition to 5w30 oil in the future. Mr. Sotelo stated that BMW Canada’s official recommendation was still to use 10w60 oil.

The Plaintiff testified that he was not comfortable when Mr. Sotelo allegedly advised him that 5w30 oil was appropriate for his vehicle. If this is the case, the Plaintiff should have been more diligent and undertaken further enquiry. [ 82 ] Using Gregson , the Court found that the Plaintiff acted unreasonably by placing all of his reliance on the advice of the Defendant’s employee without making further reference to the manufacturer’s direction. In that case, the Plaintiff testified that he had doubts about the employee’s knowledge and experience, yet still relied completely on the advice given by that employee.

Judge Hess held that a reasonable consumer of a specialized product ought to make reference to the manufacturer’s manual. [ 83 ] To further emphasize this point, in Remington v Ford of Canada , 2003 ABPC 157 , the Plaintiff was held to have reasonably relied on the Defendant’s misrepresentation because they did check the owner’s manual when issues arose. [ 84 ] In this case, the BMW manufacturer’s Owner’s Manual clearly states that the approved and preferred oil type is 10w60 (See Exhibit 2, Tab 4, page 184). [ 85 ] Further, 5w30 oil is not even one of the alternatives suggested.

The Court finds that it was unreasonable for the Plaintiff to follow Mr. Sotelo’s advice without making any independent reference to the manufacturer’s manual. The manual states that 10w60 oil is the approved and preferred engine oil. On the same page, the manual states that oil changes should be done only at BMW centers or at a workshop that works according to BMW repair procedures with correspondingly trained personnel. The Court has no evidence that the oil change done by Mr. Niech and/or was done to such a BMW standard. As a result, the Plaintiff did not rely on the representation in a reasonable manner. (

e) Reliance Must Have Been Detrimental in the Sense that Damages Resulted [ 86 ] Much of the evidence at this trial was focused on this step of the analysis, which asks whether damages resulted from the representation. This requires a causal link between the alleged misrepresentation and the damage to the engine. [ 87 ] Both parties called witnesses to testify to the cause of the engine damage. On the one hand, Mr. de Freitas, a lay witness for the Plaintiff, submitted that putting 5w30 oil could have caused the damage he discovered.

However, he could not say with 100% certainty that it was the exact cause in this case or cause beyond a balance of probabilities. On the other hand, according to Mr. Carefoot, a witness for the Defendant, 5w30 oil would not cause the engine to fail. On this point, he noted that this model of vehicle comes from the factory with 5w30 oil in it. [ 88 ] Neither party qualified any witnesses as “experts” per se. Nonetheless, the witnesses purported to rely on their specialized industry knowledge and expertise to provide evidence on the purported cause of the damage.

Further complicating the matter is the fact that neither party objected to the lay opinion evidence provided to the Courts. [ 89 ] Despite the willingness of the parties to have lay opinion evidence admitted on causation, these witnesses cannot usurp the role of the Court, which is to draw conclusions from the facts and circumstances where the Plaintiff has the burden of proof beyond a balance of probabilities. Hence, the Plaintiff must tip the scale in his favour. [ 90 ] The Court concludes that the Plaintiff has not proven, on a balance of probabilities, that the representation of Mr.

Sotelo caused the damage to the Car’s engine. [ 91 ] First, there were a minimum of two intervening events that may have also caused the engine damage. The Plaintiff had Mr. Niech change out the 10w60 engine oil for the 5w30 oil. Mr. Niech did not testify at this trial. The Court has no evidence as to whether he conducted the oil change according to BMW protocol and standards. [ 92 ] Second, the Plaintiff testified that he did not immediately stop driving the vehicle when alerted to the engine noises. Mr.

Carefoot testified that the vehicle should be towed as soon as the warning light came on especially if the Plaintiff heard “soft jingling noises” from the engine. [ 93 ] The Court notes that in Remington v Ford of Canada , 2003 ABPC 157 , that Court found that it was reasonable for the Plaintiffs to continue operating the motor vehicle once the engine light came on. However, the Plaintiffs in that case did so after referencing the manufacturer’s manual, which implied that it was alright to continue operating the motor vehicle.

Further, the Plaintiffs in that case were on a highway, on their own, without immediate access to a service station or garage. In this case, the Plaintiff was a few kilometers from his residence when the engine light came on (See Exhibit 3, page 9). Further, there is no evidence that he checked the manufacturer’s Owner’s Manual before proceeding home.

These circumstances distinguish the facts in Remington from the case at bar. [ 94 ] Therefore, based on the totality of the evidence in this matter, the Court cannot rule out the intervening event of the Plaintiff driving the vehicle after the engine light came on. [ 95 ] It is well-settled law that the Defendant’s representation need not be the sole cause of the injury, just a necessary cause. Therefore, the engine damage could have been caused by a combination of the use of 5w30 oil and the intervening acts of the oil change and driving with the engine light on.

Also, driving the Car at high engine revolutions can also cause this type of damage as these types of high performance BMW engines are susceptible to engine rod failures and breakdowns, especially in high kilometer vehicles like the Plaintiff’s Car. However, it is also well-settled law that the legal burden is on the Plaintiff to prove a factual and cause link between the Defendant’s breach and the Plaintiff’s loss beyond a balance of probabilities. There is simply insufficient evidence to link the 5w30

engine oil to the damages observed in the vehicle. Therefore, the Plaintiff did not meet its burden in this case. [ 96 ] A substantial portion of the Defendant’s evidence and argument focused on an alternative cause for the engine damage, that being the Plaintiff’s poor or lack of proper documented maintenance and use of the vehicle. In Deloitte & Touche v Livent Inc. (Receiver of) , 2017 SCC 63 , the majority of the Court confirmed that if the representee’s loss would have been sustained because of a different reason, even if the representation had been true, then the representor will not be liable.

The majority of judges framed this as the “ Saamco principle”, derived from the House of Lords decision in South Australia Asset Management Corp. v York Montague Ltd. , [1997] A.C. 191 (Eng HL) . [ 97 ] In Saamco , the House of Lords provided the following example: A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee.

He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee [p. 213]. [ 98 ] In that example, even if the mountaineer’s knee had been fit, the injury would still have occurred, since the fitness of his knee would not have prevented the injury caused by the avalanche. [ 99 ] Using Saamco , the suggestion is that, even if the vehicle had 10w60 oil in it, the damage still would have occurred, since the type of oil in the car would not have prevented the damage caused by the many possible intervening events, including but not limited to poor or lack of strict regular BMW maintenance and failure to stop the Car upon a hearing a “soft jingling noise”. [ 100 ] The Court reiterates that the Defendant’s witness was also not properly qualified as an expert.

Therefore, to be clear, Mr. Carefoot’s evidence that the engine was damaged by poor maintenance is not being accepted as a fact. Mr. Carefoot’s “opinion evidence” is given similar weight to that of Mr. de Fraites by this Court. However, having considered the totality of the evidence, the Court concludes that the Plaintiff has failed to prove a causal link between the Defendant’s alleged breach and the Plaintiff’s loss. CONCLUSION [ 101 ] The law, applied to the facts of this case, supports the conclusion that the Plaintiff has established that there was a proximate or special relationship between the parties.

However, acknowledging that the Plaintiff has suffered a misfortune, the Plaintiff has failed to prove beyond a balance of probabilities that the Defendant made a misrepresentation that was untrue, inaccurate, or misleading that caused the Plaintiff’s misfortune. For this reason, the Plaintiff’s claim for negligent misrepresentation is dismissed with costs.

COSTS [ 102 ] The Court is inclined to award costs to the Defendant pursuant to Column 3 of the Tariff of Recoverable Costs , Practice Note 3, for the filing of pleadings and document disclosure, pre-trial conference and case management conference, trial preparation, and the trial, plus other reasonable disbursements. [ 103 ] If the parties cannot reach an agreement on costs, they may make brief (three pages or less) written submissions to the Court within thirty days of these Reasons for Decision and costs will be decided by the Court. Heard on the 16 th and 17 th day of November, 2023.

Dated at the Judicial Centre of Calgary, Alberta this 24 th day of November, 2023. G.P. Shannon A Justice of the Alberta Court of Justice Appearances:

Alain Hepner, KC, Counsel for the Plaintiff Catherine Duguay and Alex Norris, Counsel for the Defendant