Dura-Lite Heat Transfer Products Ltd. v. Wasteco Environmental Services Ltd.,

• Judge: Wittmann
• Neutral Citation: 2008 ABQB 494
• Citation: 2008 ABQB 494,(2008), 453 A.R. 362 (QB),453 AR 362,(2008), 453 AR 362 (QB),453 A.R. 362
• Date: 12 August 2008
• Court: Court of Queen's Bench of Alberta (Canada)

Dura-Lite Heat Transfer v. Wasteco Env. (2008), 453 A.R. 362 (QB)

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. AU.135

Dura-Lite Heat Transfer Products Ltd. (plaintiff) v. CEDA Environmental Services, operated by Wasteco Environmental Services Ltd. (defendant)

(0301 17608; 2008 ABQB 494)

Indexed As: Dura-Lite Heat Transfer Products Ltd. v. Wasteco Environmental Services Ltd.

Alberta Court of Queen's Bench

Judicial District of Calgary

Wittmann, A.C.J.Q.B.

August 12, 2008.

Summary:

The plaintiff's manufacturing plant was severely damaged by a fire that originated in a pyrophoric drum used to store magnesium dust, which was a hazardous byproduct of the plaintiff's manufacturing process. The plaintiff sued the defendant environmental waste disposal company for $16,000,000, claiming that the defendant negligently misrepresented that it was acceptable to store magnesium dust in the pyrophoric drum. Alternatively, if no representation was made, the defendant was allegedly negligent in failing to warn the plaintiff of the risks of storing magnesium dust in the drum. The defendant claimed that there was no advice or representation. The plaintiff was responsible for managing its own hazardous waste and the defendant merely contracted to dispose of the waste. Alternatively, if the defendant were liable, it alleged contributory negligence by the plaintiff.

The Alberta Court of Queen's Bench dismissed the action. Although a representation was made, there was no negligent misrepresentation because the bulk storage of magnesium dust in a pyrophoric drum was an acceptable storage method. There was no duty to warn the plaintiff of the dangers and risks it already had knowledge of. Further, the plaintiff failed to prove that it would have chosen an alternative storage method had it been warned of the danger. Finally, although it was unnecessary to decide the issue, the court opined that the plaintiff failed to prove on a balance of probabilities that the fire resulted from contact between magnesium dust and moisture in the air as a result of the bulk storage process.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepresentation - The plaintiff's manufacturing plant was severely damaged by a fire that originated in a pyrophoric drum used to store magnesium dust, which was a hazardous byproduct of the plaintiff's manufacturing process - The plaintiff sued the defendant environmental waste disposal company, claiming that the defendant negligently misrepresented that it was acceptable to store magnesium dust in the pyrophoric drum - The Alberta Court of Queen's Bench accepted that the plaintiff was advised by the defendant that bulk storage of magnesium dust in a sealed pyrophoric drum was an acceptable storage method - The plaintiff changed its storage method based on that advice - The defendant supplied the drum - The court held that where the evidence established that it was an acceptable method of storage, the representation was not untrue, inaccurate, misleading or negligent - Accordingly, there was no negligent misrepresentation - See paragraphs 48 to 116.

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepresentation - The Alberta Court of Queen's Bench stated that "in order for an action for negligent misrepresentation to be successful, five general requirements need be met: (1) There must be a duty of care based on a special relationship; (2) the representation in question must be untrue, inaccurate or misleading; (3) the representor must have acted negligently in making the misrepresentation; (4) the representee must have relied, in a reasonable manner, on the misrepresentation; and (5) the reliance must have been detrimental to the representee in the sense that damages resulted." - See paragraph 48.

Fraud and Misrepresentation - Topic 2533

Misrepresentation - Elements - Special relationships - [See Fraud and Misrepresentation - Topic 2747 ].

Fraud and Misrepresentation - Topic 2535

Misrepresentation - Elements - Reliance - [See Fraud and Misrepresentation - Topic 2826.1 ].

Fraud and Misrepresentation - Topic 2747

Misrepresentation - Negligent advice - Elements of liability - Special relationship - The plaintiff's manufacturing plant was severely damaged by a fire that originated in a pyrophoric drum used to store magnesium dust, which was a hazardous byproduct of the plaintiff's manufacturing process - The plaintiff sued the defendant environmental waste disposal company, claiming that the defendant negligently misrepresented that it was acceptable to store magnesium dust in the pyrophoric drum - The defendant denied that it owed a duty of care based on a "special relationship", one of the required elements for negligent misrepresentation - The Alberta Court of Queen's Bench applied the two part Anns test to find the required "special relationship" - First, there was a sufficiently close relationship between the plaintiff and defendant that the defendant would reasonably contemplate that carelessness might cause damage to the plaintiff (i.e., relationship of "neighbourhood" or "proximity") - A prima facie duty of care was owed where reliance was reasonably foreseeable and reliance itself was reasonable - After finding a prima facie duty of care, the second step was to determine whether there were any policy concerns that would negative or limit the scope of the duty of care - The court stated that "there was a sufficient relationship of proximity between [the plaintiff] and [the defendant]. [The defendant] operated a waste management business. It provided equipment for proper storage and disposal of hazardous waste and it offered disposal services. [The defendant] informed [the plaintiff] on the appropriate way to store and dispose of magnesium as well as provided a drum for these very purposes. ... there are no relevant policy reasons to negate or limit this prima facie duty" - See paragraphs 49 to 57.

Fraud and Misrepresentation - Topic 2826.1

Misrepresentation - Defences - Unreasonable reliance - The plaintiff sued the defendant for negligent misrepresentation - The Alberta Court of Queen's Bench referred to the following five general indicia of reasonable reliance: "(1) The defendant had a direct or indirect financial interest in the transaction in respect of which the representation was made; (2) The defendant was a professional or someone who possessed special skill, judgment or knowledge; (3) The advice or information was provided in the course of the defendant's business; (4) The information or advice was given deliberately, and not on a social occasion; and (5) The information or advice was given in response to a specific enquiry or request." - See paragraph 53.

Torts - Topic 61

Negligence - Causation - Causal connection - [See Torts - Topic 86 ].

Torts - Topic 86

Negligence - Duty of care - Duty to warn - The plaintiff's manufacturing plant was severely damaged by a fire that originated in a pyrophoric drum used to store magnesium dust, which was a hazardous byproduct of the plaintiff's manufacturing process - The plaintiff sued the defendant environmental waste disposal company, claiming that the defendant negligently misrepresented that it was acceptable to store magnesium dust in the pyrophoric drum - The negligent misrepresentation claim was dismissed because the representation was not untrue where such a method of disposal was acceptable - Alternatively, the plaintiff submitted that the defendant, as supplier of the drum, was negligent in failing to warn it respecting the requirements for safe use of a pyrophoric drum (e.g., not to open and close the drum daily) - The Alberta Court of Queen's Bench held that there was no duty to warn - The court stated that the defendant "cannot be found negligent for failing to warn [the plaintiff] about something [the plaintiff] already knew" - Even if there was a duty to warn and it was breached, the plaintiff failed to prove a causal connection between the failure to warn and the fire - There was no evidence that had the warning been given, the plaintiff would have used another disposal method - Finally, although unnecessary to decide the issue, the court opined that the plaintiff failed to prove a causal connection between the fire and the bulk storage method - The ignition source was undetermined - It was not proved that the fire resulted from contact between magnesium dust and moisture in the air as a result of the bulk storage process, as opposed to contaminates in the drum - See paragraphs 117 to 163.

Torts - Topic 4364

Suppliers of goods - Negligence - Retailers and wholesalers - Duty of warning respecting dangers - [See Torts - Topic 86 ].

Cases Noticed:

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 58].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 46].

Mustapha v. Culligan of Canada Ltd. (2008), 375 N.R. 81; 238 O.A.C. 130; 2008 SCC 27, refd to. [para. 49].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 49].

Plas-Tex Canada et al. v. Dow Chemical of Canada Ltd. et al. (2004), 357 A.R. 139; 334 W.A.C. 139; 2004 ABCA 309 (C.A.), refd to. [para. 49].

Hedley Byrne and Co. v. Heller and Partners Ltd., [1963] 2 All E.R. 575 (H.L.), refd to. [para. 50].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268, refd to. [para. 50].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 50].

Walford v. Jacuzzi Canada Ltd. et al. (2007), 230 O.A.C. 40; 87 O.R.(3d) 281; 2007 ONCA 729, leave to appeal denied (2008), 386 N.R. 391 (S.C.C.), refd to. [para. 117].

376599 Alberta Inc. v. Tanshaw Products Inc. et al. (2005), 379 A.R. 1; 2005 ABQB 300, refd to. [para. 117].

Rivtow Marine Ltd. v. Washington Iron Works, [1974] S.C.R. 1189, refd to. [para. 121].

Lem v. Barotto Sports Ltd. (1977), 1 A.R. 556 (C.A.), refd to. [para. 123].

Stiles v. Beckett et al. (1996), 69 B.C.A.C. 139; 113 W.A.C. 139 (C.A.), leave to appeal denied (1996), 206 N.R. 72; 84 B.C.A.C. 80; 137 W.A.C. 80 (S.C.C.), refd to. [para. 124].

Deshane et al. v. Deere & Co. (1993), 65 O.A.C. 275; 15 O.R.(3d) 225 (C.A.), leave to appeal denied (1994), 175 N.R. 321 (S.C.C.), refd to. [para. 124].

Bow Valley Husky (Bermuda) Ltd. et al. v. Saint John Shipbuilding Ltd. et al., [1997] 3 S.C.R. 1210; 221 N.R. 1; 158 Nfld. & P.E.I.R. 269; 490 A.P.R. 269, refd to. [para. 125].

Fine's Flowers Ltd. v. General Accident Assurance Co. (1978), 17 O.R.(2d) 529 (C.A.), refd to. [para. 139].

Hanke v. Resurfice Corp. et al., [2007] 1 S.C.R. 333; 357 N.R. 175; 404 A.R. 333; 394 W.A.C. 333; 2007 SCC 7, refd to. [para. 143].

Authors and Works Noticed:

Edgell, D.F., Product Liability Law in Canada (2000), pp. 75 [para. 141]; 76 to 77 [para. 125].

Klar, Lewis N., Linden, Allan M., Cherniak, Earl A., and Kryworuk, Peter W., Remedies in Tort (1987) (Looseleaf), vol. 3, c. 20, pp. 20 to 24 [para. 123].

Linden, Allen M., and Feldthusen, Bruce, Canadian Tort Law (8th Ed. 2006), pp. 647 to 648 [para. 124].

Theall, Lawrence G., Maidment, J. Scott, Dufort, Theresa M., and Brown, Jeffrey, Product Liability: Canadian Law and Practice (2001), pp. L3-8 to L3-10, L6-7, L6-8 [para. 141].

Counsel:

L. Grant Vogeli and James D. Murphy, for the plaintiff;

H. Derek Lloyd, Q.C., and G. Cameron Peacock, for the defendant.

This action was heard on December 10-14 and 17-18, 2007, and April 9, 15 and 16, 2008, before Wittmann, A.C.J.Q.B., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on August 12, 2008.