Viridian Inc. v. Dresser Canada Inc. et al., 2002 ABCA 173

• Judge: Conrad, O'Leary and Hunt, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: January 31, 2002
• Citations: 2002 ABCA 173;(2002), 312 A.R. 93 (CA)

Viridian Inc. v. Dresser Can. Inc. (2002), 312 A.R. 93 (CA);

    281 W.A.C. 93

MLB headnote and full text

Temp. Cite: [2002] A.R. TBEd. AU.027

Viridian Inc. (plaintiff/appellant) v. Dresser Canada Inc. (defendant/not a party to the appeal) and Bovar Inc. (defendant/respondent) and Dresser Canada Inc. and Bovar Inc. (third parties)

(0003-0496-AC; 2002 ABCA 173)

Indexed As: Viridian Inc. v. Dresser Canada Inc. et al.

Alberta Court of Appeal

Conrad, O'Leary and Hunt, JJ.A.

July 23, 2002.

Summary:

Dresser contracted to provide certain equipment, including a compressor, to a plant expansion project. Bovar supplied to Dresser the diaphragms that were used in the compressor. Problems with the compressor and diaphragms caused damage and business interruption losses. Viridian, the plant owner, sued Dresser and Bovar in negligence. Bovar third-partied Dresser, claiming contribution or indemnity from Dresser in respect of any liability it might have to Viridian. Dresser settled with Viridian and applied to have Bovar's third party claim dismissed.

The Alberta Court of Queen's Bench, in a decision reported 247 A.R. 23, dismissed the application. A trial ensued.

The Alberta Court of Queen's Bench, in a decision reported 274 A.R. 28, dismissed Viridian's claim against Bovar. Bovar's third party claim against Dresser was dismissed on the basis that Bovar had no liability in respect of which indemnity or contribution was required. Viridian commenced appeal proceedings, and applied for an order to settle the contents of an appeal book where the parties could not agree on the contents.

The Alberta Court of Appeal, per Berger, J.A., in a decision reported 277 A.R. 198; 242 W.A.C. 198, instead of issuing the order sought, directed that there be an appeal book filed by both the appellant and respondent.

The Alberta Court of Appeal, in the decision reported below, dismissed Viridian's appeal. The court affirmed that Bovar owed no duty of care to Viridian. A probability of discovery by the intermediary, Dresser, was reasonably foreseeable. Thus, at the time of sale, it was not reasonably foreseeable that the diaphragms would reach and, through their use harm Viridian, the ultimate consumer.

Torts - Topic 4327

Suppliers of goods - Negligence - Manufacturers - Defective goods - Dresser supplied a compressor to Viridian's plant - Bovar manufactured a diaphragm used by Dresser in the compressor - The compressor failed causing damage to Viridian's plant - Viridian sued Bovar, claiming negligent manufacture of the diaphragm - The trial judge held that there were defects in the failed diaphragm caused by Bovar's negligence - However, the court concluded that Bovar owed no duty of care to Viridian because of an opportunity for intermediate inspection by Dresser which would have revealed the defects - Further, there was no causal link between Bovar's manufacture of the diaphragm and Viridian's damage because of the intervening negligence of Dresser - Viridian appealed - The Alberta Court of Appeal dismissed the appeal on the ground that Bovar did not owe a duty of care to Viridian - The probability of discovery by the intermediary, Dresser, was reasonably foreseeable - Thus at the time of sale it was not reasonably foreseeable that the diaphragms would reach and, through their use harm Viridian, the ultimate consumer.

Torts - Topic 4332

Suppliers of goods - Negligence - Manufacturers - Defective design or manufacture - [See Torts - Topic 4327 ].

Torts - Topic 4334

Suppliers of goods - Negligence - Manufacturers - Causation - [See Torts - Topic 4327 ].

Torts - Topic 4468

Suppliers of goods - Defences - Products liability - Learned intermediary defence or intermediate inspection - [See Torts - Topic 4327 ].

Cases Noticed:

Housen v. Nikolaisen (2002), 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 211 D.L.R.(4th) 577 (S.C.C.), refd to. [para. 26].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; 10 D.L.R.(4th) 641, refd to. [para. 27].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), consd. [para. 28].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (2001), 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 206 D.L.R.(4th) 193 (S.C.C.), refd to. [para. 29].

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

Edwards et al. v. Law Society of Upper Canada et al. (2001), 277 N.R. 145; 153 O.A.C. 388; 206 D.L.R.(4th) 211 (S.C.C.), refd to. [para. 29].

Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al., [1992] 1 S.C.R. 1021; 137 N.R. 241, refd to. [para. 30].

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. 30].

Donoghue v. Stevenson, [1932] A.C. 562, refd to. [para. 31].

Paine v. Colne Valley Electricity Supply Co., [1938] 4 All E.R. 803 (K.B. Div.), refd to. [para. 31].

Mathews v. Coca-Cola Co. of Canada Ltd., [1944] O.R. 207 (C.A.), affd. [1944] S.C.R. 385, refd to. [para. 32].

Marschler v. G. Masser's Garage, [1956] O.R. 328 (H.C.), refd to. [para. 33].

Hobbs Manufacturing Co. v. Shields, [1962] S.C.R. 716, refd to. [para. 34].

McCain Foods Ltd. v. Grand Falls Industries Ltd. (1991), 116 N.B.R.(2d) 22; 293 A.P.R. 22; 80 D.L.R.(4th) 252 (C.A.), refd to. [para. 36].

Hollis v. Dow Corning Corp. et al., [1995] 4 S.C.R. 634; 190 N.R. 241; 67 B.C.A.C. 1; 111 W.A.C. 1, refd to. [para. 37].

Ingles v. Tutkaluk Construction Ltd., [2000] 1 S.C.R. 298; 251 N.R. 63; 130 O.A.C. 201, refd to. [para. 39].

Smith v. Inglis Ltd. (1978), 25 N.S.R.(2d) 38; 36 A.P.R. 38; 83 D.L.R.(3d) 215 (C.A.), refd to. [para. 42].

Authors and Works Noticed:

Linden, A.M., Canadian Tort Law (6th Ed. 1997), p. 582 [para. 42].

Waddams, S.M., Products Liability (3rd Ed. 1993), p. 54 [para. 49].

Counsel:

K.F. Bailey, Q.C., and D.C. Rolf, for the appellant;

W.E. Code, Q.C., and C.J. Popowich, for the respondent.

This appeal was heard on January 31, 2002, before Conrad, O'Leary and Hunt, JJ.A., of the Alberta Court of Appeal. The following decision was released for the court by Conrad, J.A., on July 23, 2002.