Leonard Olsen, Paul Dennis v. Linda Dennis, 2003 BCSC 429

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Olsen et al. v. Behr Process Corporation et al., 2003 BCSC 429 Date: 20030320 Docket: S006106 Registry: Vancouver Between: Leonard Olsen, Paul Dennis and Linda Dennis Plaintiffs And Behr Process Corporation and Behr Process Canada Ltd. Defendants Before: The Honourable Mr. Justice R.R. Holmes Reasons for Judgment Counsel for the Plaintiffs: Ward K. Branch & Joseph Prodor Counsel for the Defendants: R. Barry Fraser & Elaine J.

Adair Date and Place of Hearing: October 29, 2002 Vancouver, B.C. [ 1 ] The defendants' application pursuant to Rule 19(24) of the Rules of Court is for the following paragraphs of the Amended Statement of Claim to be struck out: Paragraphs 13-17; Paragraph 19 (all except subparagraph (c)); Paragraphs 20-21; Paragraph 22 (except subparagraphs (

a) and (b)); Paragraph 24; Paragraph 26; Paragraph 28; Paragraph 40(g); Paragraphs 41 (the allegations "would not perform as promised in paragraphs 15 and 16 herein and, in particular that they"); Paragraph 42 (the allegations respecting "practices or representations"); Paragraphs 43-49;

Paragraph 52; Paragraph 53 (the allegations "their contraventions of the Trade Practice Act and Competition Act, their conspiracy to use unlawfulmeans to further their interests at consumers' expense, and their breach of express or implied warranties"); Paragraph 54 (allegations respecting "representations and other practices" and damage claims based on "representations and otherpractices"); Paragraph 55 (allegations respecting "representations and other practices"); Paragraphs 56 and 57, together with those parts of the Prayer for Relief that are based on allegations in the parts of the Statement ofClaim being struck out. [2] In his submission, counsel for the plaintiffs clarified that the plaintiffs are not advancing the cause of action of negligentmisrepresentation.

The defendants therefore move to have the “representations” alleged in paragraphs 15, 16 and l7 of the AmendedStatement of Claim that appear only to be pleaded as part of the plaintiffs' claim under the Trade Practice Act, R.S.B.C. 1996, c.454 orCompetition Act, R.S.C. 1985, c.C.34 struck out. [3] I agree with counsel for the defendants that to enhance the clarity of the pleading as no claim in negligent misrepresentation isintended, the references to “promises” and “representations” in paragraphs 41 and 42 should be struck out as embarrassing. [4] The action is a proposed class action proceeding not yet certified under the Class Proceedings Act, R.S.B.C. 1996, c.50.

It istherefore subject to the Rules of Court as in an ordinary action. [Edmonds v. Actton Super-Save Gas Stations Ltd., [1996] B.C.J. No.2050 (S.C.); Scott v. TD Waterhouse Investor Services (Canada) Inc., [2000] B.C.J. No. 2524 (S.C.)]. [5] The function of pleadings is to clearly define the issues of fact and law that are to be decided [Homalco Indian Band v. B.C.(1998), (BC SC), 25 C.P.C. (4th) 107 at 109]. As noted by Southin J.A. in Cotton v.

Wellsby (1991), (BC CA), 59 B.C.L.R. (2d) 366 (C.A.) at p. 373, "… on a hopelessly inadequate statement of claim, there is nothing upon whichthe trial judge can concentrate his or her mind". [6] The defendants are manufacturers of liquid chemical wood coatings.

The plaintiffs purchased and used the coatingsmanufactured by the defendants and sold under the trade names “Natural Seal Plus”(“NSP”) and Super Liquid Raw Hide”(“SLR”). [7] The plaintiffs allege the purchased products were defective in that they did not protect the wood surfaces to which they wereapplied and “promoted mildew growth, discoloration and degradation of wood fibre.” [8] The plaintiffs purchased and used three of the defendants' products: NSP #81; SLR #12; and SLR #13 on wooden structures thatthey owned in B.C.

The plaintiffs allege they have suffered damage to their property as a result of use of the products as they weredefective. [9] The defendants in this application attack the identified portions the Amended Statement of Claim as being improper pleading onseveral grounds: (

a) the plaintiffs' claims include 15 products in the NSP and SLR lines that they neither purchased nor used; (

b) the plaintiffs' claim for misrepresentation and breach of warranty absent knowledge or reliance by the plaintiffs or any allegationthat they were induced by the misrepresentation; (

c) allegations of contravention of the British Columbia Trade Practice Act and similar legislation in other provinces absent any base fora claim by the plaintiffs; (

d) allegations as to contravention of the Competition Act; (

e) and a conspiracy claim. PARAGRAPHS 19-22, 24, 28 AND 40(g): [10] These paragraphs concern claims in relation to specified coatings in the product line of the defendants that were neither purchasednor used by the plaintiffs. The defendants argue this leaves the existence of any person with a cause of action in relation to thoseproducts speculative [Ragoonanan Estate v.

Imperial Tobacco Canada Ltd. (2000), (ON SC), 51 O.R. (3d) 603(S.C.)]. [11] The plaintiffs have clearly pleaded a claim for negligence in the design, manufacture and testing of the NSP and SLR products theyactually purchased and used and that they allege caused them damage.

The plaintiffs' position is that having shown a cause of action inrelation to some of the products in issue, the balance is for the court to consider on the certification motion. [12] The fifteen described NSP and SLR products that were not used by the plaintiffs and which the defendants seek to strike from thepleadings, are alleged to be generically chemically equivalent to the three that were purchased and used by the plaintiffs, differing mainlyin relation to pigmentation. [13] It is not disputed the Amended Statement of Claim pleads a complete cause of action in negligence in relation to the three products

the plaintiffs purchased and used. It appears most of the other described product is likely generically equivalent to that purchased by theplaintiffs. The issue of whether all described product is in fact generically equivalent seems an appropriate factor for consideration onrepresentation issues in the certification application. [14] Many class actions have been approved where different products are involved or where the product has changed over time [Endeanv. Canadian Red Cross Society, [2002] B.C.J. No. 1610; Chace v. Crane Canada Inc., (BC SC), [1996] B.C.J. No.1606; Harrington v.

Dow Corning Corp., 2000 BCCA 605 , [2000] B.C.J. No. 2237]. [15] It may be that technically to conform to strict pleading rules the class of product in the pleading should be limited to the productpurchased and used by the plaintiffs, and that on the certification motion that class could be expanded as appropriate. [16] I find the present method however helpful where generic or practically similar product is in question.

There is a practical efficacyfor the parties to be focused from the beginning on the products actually in issue. [17] It would for example seem folly in a proposed class action to limit a plaintiff who purchased a vehicle with a defectivetransmission to restrict his claim only to the “white” vehicle he purchased rather than have application to all the other vehicles of thatmake regardless of color. [18] In the circumstances here I consider the application to strike the specified products, other than the three actually purchased andused by the plaintiffs, to be premature.

That issue should abide the certification application and is adjourned to be dealt with on thatmotion. BREACH OF WARRANTY; PARAGRAPHS 13-17, 41 AND 47-49 [19] Warranty is a contract based claim but the breach of warranty does not go to the root of the contract [Fraser-Reid et al. v.Droumtsekas et al., (SCC), [1980] 1 S.C.R. 720]. [20] None of the plaintiffs are alleged to have purchased product from the defendants, and a claim for breach of warranty may only bemade by a purchaser. The pleadings do not contain material facts which are necessary to plead a cause of action for breach of warranty.

There is no close proximity between the cause of action in negligence shown by the plaintiffs and the claims for breach of warrantywhere it might be said one encompasses the other. [21] The pleadings do not indicate the plaintiffs knew of any warranty and therefore were neither induced to purchase or relied in anysense upon a warranty by the defendants. [22] The plaintiffs can draw no comfort from the line of authorities which included Murray v. Sperry Rand Corporation et al. (1979), (ON SC), 23 O.R. (2d) 456); Shanklin Pier LD. v. Detel Products LD., [1951] 2 K.B. 854; and Haley v.

Ford MotorCo. of Canada Ltd. (1966), (AB CA), 57 D.L.R. (2d) 15 (S.C.C.); were an indirect form of inducement and reliancewas found. Those circumstances are not pleaded and do not exist here. [23] The plaintiffs cited and relied upon Committee on Children's Television, Inc. v. General Foods Corp. (1983), 35 Cal. 3d 197 asauthority in support of their pleadings being sufficient. I have not found the decision helpful.

Counsel for the defendants in reply notedthat the California statue law in issue differed substantially from that in British Columbia and that the basis of the defendants' applicationhere is not the detail of statements concerning warranty, rather it is the more fundamental issue of reliance. [24] The plaintiffs here must allege that a statement intended by the defendants to be a warranty induced them to purchase. Reliance bythe plaintiff purchaser on the alleged inducing statements of the defendant manufacturers is the essence of the requisite cause of actionfor breach of warranty.

The pleadings do not indicate that reliance. [25] It is of no assistance to refer to brochures or other written material of the defendants alleged to have effect as a warranty wherethere is no nexus alleged between such material and the plaintiffs. [26] The present pleading appears in this regard to postulate a cause of action available to phantom persons and in circumstances thatare different from the plaintiffs. In Kimpton v. Canada (Attorney General) et al., 2002 BCSC 1645 , [2002] B.C.J.

No. 2691,Macaulay J., in somewhat analogous circumstances, held at ¶81: It is not enough for a plaintiff to plead causes of action that may be available to other persons in different circumstances. [27] I would allow the defendants' application to strike the warranty allegations if the plaintiffs do not move within thirty days to amendto plead a complete cause of action in warranty by an existing or added plaintiff. TRADE PRACTICE ACT [28] The defendants have correctly argued that a party must plead material facts as to the elements of a statutory cause of action asdelineated in Mikulas v.

Milo European Car Specialists Ltd., [1993] B.C.J. No. 2818; McKay v. CDI Career Development InstitutesLtd., [1999] B.C.J. No. 561. A

summary of the necessary material facts to be pleaded to base a statutory cause of action under s. 22 ofthe Trade Practice Act are: (

a) the plaintiff is a "consumer"; (

b) the defendant is a "supplier";

(

c) the plaintiff and the defendant participated in a "consumer transaction; (

d) the defendant engaged in a "deceptive" (s.3) or "unconscionable" (s.4) act or practice in respect of the consumer transaction; (

e) the plaintiff acted in reliance on the defendant's deceptive or unconscionable act or practice, to his or her detriment. [29] It is obvious from the pleadings that in particular there are no material facts to support the plaintiffs acting in reliance upon any“deceptive” or “unconscionable” act. [30] Despite the apparent absence of the reliance required to support the statutory claim there may be a general basis on which theplaintiffs could properly invoke the statutory cause of action and remedy under the Trade Practice Act. [Robson v. Chrysler CanadaLtd., [2002] B.C.J.

No. 1232 (C.A.) (leave to appeal filed [2002] S.C.C.A.

No. 332).] [31] Although Robson, supra, was not directly decided under the provisions of Rule 19(24), the implication is clear that an action underthe Trade Practice Act may be supported by the mere silence of a manufacturer with knowledge of a product defect. [32] In that circumstance reliance by a purchaser might be assumed as all purchasers would expect to be told of known defect. [33] I conclude there is a sufficient basis to sustain a pleading under the Trade Practice Act. [34] For pleading purposes the defendants can assume that all particulars pleaded are alleged to be misleading, deceptive andunconscionable. [35] The issue of whether the existing plaintiffs are appropriate representatives for any portion of the class claiming under a specificparticular alleged is of course for determination on the certification motion.

COMPETITION ACT [36] No cause of action under s. 36 of the Competition Act can be proven based upon an alleged breach of s. 52 of the Act, unless theclaimant establishes that he or she has relied upon the representation in issue and that the representation caused the loss claimed. [Williams v. Mutual Life Assurance Co. of Canada, (ON SC), [2000] O.J. No. 3821.] [37] It is clear that reliance is a material fact that must be pleaded as part of the cause of action.

There is no allegation the plaintiffsknew of any alleged misrepresentation. [38] The plaintiffs attempt to justify this pleading on the basis that their claim is novel and novel claims ought not to be struck out. [Apotex Inc. v. Hoffmann La-Roche Ltd., (ON CA), [2000] O.J. No. 4732; Carom v. Bre-X Minerals Ltd., [1998]O.J. No. 1428]. [39] I accept that novel claims existed in Apotex and Carom. This is not the case here.

The plaintiffs have simply not alleged all theelements necessary to a cause of action known to exist. [40] If the failure to perfect the statutory cause of action by pleading reliance was inadvertent, leave to amend is granted. Failing anamendment pleading reliance the Competition Act pleading will be struck. CIVIL CONSPIRACY [41] When two persons are alleged jointly to have committed a tort or other wrong, a plea of conspiracy adds nothing and therefore isredundant. [Normart Management Ltd. v. West Hill Redevelopment Co., [2000] O.J. No. 1988; Ward v.

Lewis [1955] 1 All E.R. 55] [42] The allegations of tortuous and other wrongs addressed in paragraph 46 of the Amended Statement of Claim are duplicitous ofclaims generally in the Amended Statement of Claim which are alleged to have been committed jointly. [43] The defendants' application to strike paragraph 46 is allowed.

PARAGRAPHS 26 AND 55 [44] The allegation in paragraph 26 of the Amended Statement of Claim appears to float and not attach or connect as pleas of relevantfact with any other relevant portion of the Amended Statement of Claim. [45] The application to strike paragraph 26 is allowed. [46] The defendants complain that paragraph 55 contains no limiting or defining particulars. Without particularity the paragraph isunfairly wide, general and vague. If the plaintiffs do not amend to provide meaningful particularity within thirty days the paragraph willbe struck. “R.R. Holmes, J.”The Honourable Mr. Justice R.R. Holmes

March 26, 2003 -- Corrigendum to the Reasons for Judgment issued by Mr. Justice R.R. Holmes advising that in paragraph 3, the word“plaintiff” should be replaced with the word “defendants”, so that the paragraph reads: [3] I agree with counsel for the defendants that to enhance the clarity of the pleading as no claim in negligent misrepresentation isintended, the references to “promises” and “representations” in paragraph 41 and 42 should be struck out as embarrassing.

In paragraph 22, the word “defendants” shall be replaced with the word “plaintiffs”, and the spelling of the word “included” is corrected,so the paragraph reads: [22] The plaintiffs can draw no comfort from the line of authorities which included Murray v. Sperry Rand Corporation et al. (1979), (ON SC), 23 O.R. (2d) 456); Shanklin Pier LD. V. Detel Products LD., [1951] 2 K.B. 854; and Haley v. Ford MotorCo. of Canada Ltd., (1966), (AB CA), 57 D.L.R. (2d) 15 (S.C.C.); were an indirect form of inducement and reliancewas found. Those circumstances are not pleaded and do not exist here.