On September 11, 2014, our office attended an application before Madam Justice Gunn of the Court of Queen’s Bench for Saskatchewan in the above-referenced matter wherein the Defendants, Paccar Inc., Paccar of Canada Ltd.-Paccar Du Canada Ltee. and Kenworth Truck Company (collectively the “Paccar Defendants”), sought various remedies relating to the striking of pleadings and spoliation. Our office brought a cross-application for the production of additional documents.
We were wholly successful in both applications and this paper highlights some of the key aspects of that decision.
Background
Our client, Triple 3 Holdings Ltd. (“Triple 3”) owned a building in Stoughton, Saskatchewan, which was leased to our client, Mustang Vac Services Inc (“Mustang Vac”), and from which, Mustang Vac operated its trucking business.
The Paccar Defendants manufacture transport trucks including the T800 model of truck. The T800 model of trucks are often custom built, with the Paccar Defendants manufacturing them to the owner’s specifications. These are generally subject to the anticipated use of the truck. As a result, while the chassis is the same for the T-800 model of trucks, the components between the trucks may vary.
Mustang Vac owned a 2007 Kenworth T800 model of truck (the “Truck”), which included a truck frame and cab designed and manufactured by the Paccar Defendants. The Truck was equipped with a vacuum unit manufactured and installed by the Defendant, Camex Equipment Sales & Rental Inc.
On February 14, 2009, a fire occurred within the building destroying the building and most of the contents within it. Our expert, Thomas Kamm, concluded that the fire originated within the Truck and was electrical in origin. He determined that the fire was the result of a short circuit of a power conductor connected to the battery. At the time of the fire, the Truck was parked and not in use. The quantum of the damage is approximately $2.1 million.
Shortly after the fire, the insurer for Triple 3 and Mustang Vac, Aviva, arranged for the disposal of the Truck. At the time of the disposal, Aviva was concerned with resolving the first party claim in a quick manner as both Triple 3 and Mustang Vac had ongoing business concerns.
None of the Defendants were immediately put on notice of the fire nor were they afforded the opportunity to examine the fire scene before the Truck was disposed. Notwithstanding, over the course of litigation, the Defendants were provided with the fire department records, our preliminary report from Mr. Kamm and a joint evidence inspection was conducted by the parties’ experts of the various components retained by Mr. Kamm.
Other Fires
Our office is also involved in three other actions (all in Alberta) involving fires in 2007 Kenworth T800 models of truck, each of which occurred while the trucks were in the “off” position. Different experts were retained, but the respective experts determined that the fires were caused by short circuits of the power conductors and/or other wires connected to the batteries. We further learned of a 2007 Kenworth T-800 model of truck catching fire in Ontario under similar conditions.
Pleadings
On February 11, 2011, our office commenced an action against the Paccar Defendants and Camex in respect of the fire. On November 4, 2013, we amended the Statement of Claim (by consent) to include the following allegations:
20. The Kenworth T800 model of truck has experienced other similarly caused electrical fires in the engine components throughout Canada and the United States and the Defendant Camex and the Paccar Defendants knew or ought to have known of these incidents. In particular, the other similarly caused electrical fires include:
a. other fires in the Kenworth T800 model of truck caused or contributed to by a short circuit between wires connected to the battery, including the Power Conductor; and
b. other fires in the Kenworth T800 model of truck caused or contributed to by chaffing of wires connected to the batter, including the Power Conductor.
…
25. Particulars of the negligence, breaches of duty, breaches of statutory duty, breaches of the duty to warn and breaches of contract of the Paccar Defendants include, but are not limited to:
h. failing to reasonably and adequately investigate other similarly caused fires in Kenworth T800 truck models that they knew or ought to have known about;
i. failing to reasonable and adequately test Kenworth T800 truck models for the risk of electrical fires in the engine components on an ongoing basis and, in particular, after they knew or ought to have known about other similarly caused fires;
j. failing to communicate their findings on other similarly caused fires in Kenworth T800 truck models to the appropriate authorities, Kenworth truck retailers, repair facilities, purchasers and users, including the Plaintiffs;
k. failing to communicate their findings on other similarly caused fires in Kenworth T800 truck models to and within each department of the respective Paccar Defendants including but not limited to failing to advise the following:
i. the other Paccar Defendants;
ii. the engineering departments or other similar departments;
iii. the sales departments or other similar departments;
iv. the marketing departments or other similar departments;
v. the design and manufacturing departments or other similar departments;
vi. the customer complaints departments or other similar departments;
vii. management; and
viii. their employees;
…
n. failing to promptly update or amend existing owner manuals, repair manuals or other instructing documents concerning Kenworth T800 truck models to include warnings or, alternatively, appropriate warnings concerning the risk of electrical fires when it knew or ought to have known of other similarly caused fires;
o. failing to promptly distribute updated owner manuals, repair manuals or other instructing documents on Kenworth T800 truck models to Kenworth truck retailers, repair facilities, purchasers and users, including the Plaintiffs; and
p. such further particulars as may become known to the Plaintiffs.
In or around the Summer of 2014, due to an illness with counsel, the Paccar Defendants retained another law firm that shortly advised of its objection to the pleadings.
The Applications
Striking of Pleadings
The Paccar Defendants applied to strike the pleadings relating to the allegations of “similarly-caused fires”.
The law respecting the striking of pleadings in Saskatchewan is essentially the same as in British Columbia. The Saskatchewan Court of Appeal Saskatchewan Power Corporation v. Swift Current (City), 2007 SKCA 27, summarized the applicable principles at para. 18:
a. The claim should be struck where, assuming the plaintiff proves everything alleged in the claim there is no reasonable chance of success.
b. The jurisdiction to strike a claim should only be exercised in plain and obvious cases where the matter is beyond doubt.
c. The court may consider only the claim, particulars furnished pursuant to a demand and any document referred to in the claim upon which the plaintiff must rely to establish its case.
d. The court can strike all, or a portion of the claim.
e. The plaintiff must state sufficient facts to establish the requisite legal elements for a cause of action. (citations omitted)
Rather than take the traditional approach and attack the pleadings with reference to the above-test, the Paccar Defendants contended that the pleadings should be struck on the basis of similar fact evidence.
In support of this argument, the Paccar Defendants argued that similar fact evidence is presumptively inadmissible where prior acts of negligence are used to prove a present act of negligence. The Paccar Defendants relied on the case of Woods (Litigation Guardian of) v. Jackiewicz, 2013 ONSC 519, where Justice Murray explained:
Similar fact evidence is presumptively inadmissible because of the prejudice – both reasoning prejudice and moral prejudice – which results. … A general allegation that there is similar fact evidence is insufficient to justify its inclusion in the amended statement of claim.
Similar fact evidence has sometimes been pleaded in medical malpractice cases. Williams v. Cai-Ping, [2005] O.J. No. 1940 is one such case. In Williams v. Cai-Ping, specific cases of repetitive negligence were set out in the statement of claim and in each case there were striking similarities before the Court. As Justice Mackinnon said at para. 15 of his decision:
Where there is a real and substantial nexus or connection between the allegations made and the facts relating to previous transactions which are sought to be given in evidence, then those facts have relevance and are admissible not only to rebut the defences such as accident but also to prove the facts of the acts or allegations made.
…
The principles applicable to pleading similar facts have been set out in Prism Data Services Ltd. v. Neopost Inc., [2003] O.J. No. 2994 (Ont. Master) as the relevant principles to apply when a party seeks to plead allegations of similar facts. They are:
(a) Such allegations are proper as long as the added complexity resulting therefore does not outweigh the probative value;
(b) Similar acts are not probative if there is not a sufficient degree of similarity;
(c) The similarity must be provable without prolonged inquiry, although inevitably, the litigation process will be lengthened to some extent as a result of proper similar fact allegations;
(d) The added complexity should not lead to undue oppression or unfairness;
(e) If a system of scheme of conduct is alleged, the past similar acts must have sufficient common features to constitute the system or scheme.
The Paccar Defendants further maintained that the pleading of similar fact evidence in this instance would create significant added complexity as the cause of the “similarly caused fires” would have to be canvassed on a case-by-case basis to prove that they were, in fact, similarly caused. This would potentially entail the involvement of two experts for each “similarly caused fire”. In addition, the Paccar Defendants argued that since the Kenworth T800 model of truck was fully customizable, there was no similarity between the other trucks that may have suffered an electrical fire.
In response, we asserted that there was not only a real and substantial nexus or connection between the similar fact evidence and the present claim, but, more importantly, the allegations of “similarly caused fires” and the Paccar Defendants’ knowledge of them went to the root of the allegation that the Paccar Defendants’ breached their duty to warn. As a result, the supposed similar fact evidence pleadings involved the material facts necessary to prove this claim of negligence.
We referred her Ladyship to C.M. v. Canada (Attorney General), 2004 SKQB 174, where the Court explained:
In civil cases the courts will admit evidence of similar facts if it is logically probative, that is, if it is logically relevant in determining the matter which is in issue; provided that it is not oppressive or unfair to the other side; and also that the other side has fair notice of it and is able to deal with it.
We maintained that the probative value was self-evident in light of the allegation of a breach of duty to warn. A manufacturers duty to warn is set out in the judgment of La Forest J. in Hollis v. Dow Corning Corp., [1995] 4 SCR 634, at paras. 20 – 21:
It is well established in Canadian law that a manufacturer of a product has a duty in tort to warn consumers of dangers inherent in the use of its product of which it has knowledge or ought to have knowledge. … The duty to warn is a continuing duty, requiring manufacturers to warn not only of dangers known at the time of sale, but also of dangers discovered after the product has been sold and delivered …
… When manufacturers place products into the flow of commerce, they create a relationship of reliance with consumers, who have far less knowledge than the manufacturers concerning the dangers inherent in the use of the products, and are therefore put at risk of the product is not safe. The duty to warn serves to correct the knowledge imbalance between manufacturers and consumers by alerting consumers to any dangers and allowing them to make informed decisions concerning the safe use of the product. (emphasis added)
Thus, we argued that if the pleadings are assumed to be true (i.e. if the Paccar Defendants were aware of similarly caused fires and failed to take any steps to warn the Plaintiffs), then there was a clear cause of action against the Paccar Defendants in negligence for breaching their duty warn. The pleading of “similarly caused fires” was not included to prove a tendency or disposition of negligence, but instead, to incorporate the material facts giving rise to the allegations of a breach of a duty to warn, which is separate and distinct from the negligent design and negligent manufacture claims.
Madam Justice Gunn accepted our arguments ruling that applications to strike pleadings are governed by the factors set out in Swift Current (City). In adopting our Brief of Law, she held that if the allegations are assumed to be true, then it was evident that the Plaintiffs had a cause of action. She further held that the added complexity did not outweigh the probative value, nor did it lead to undue oppression or unfairness which could not be compensated by costs. As a result, she dismissed the application to strike.
Document Production
Leading up to the application, our office sought production of the Paccar Defendants’ files in relation to the similarly caused fires. The Paccar Defendants resisted production of same. Consequently, we filed a cross-application for production.
We relied upon Canadian Natural Resources Limited v. Arcelormittal Tubular Products Roman S.A. (Mittal Steel Roman S.A.), 2013 ABQB 439, where the Court cited the following excerpt from Products Liability: Canadian Law and Practice, loose leaf, (Aurora, ON: Canada Law Book, 2012), with approval at para. 31:
Similar fact evidence can take many forms in a product liability case. This information may include such things as reports of customer contacts or complaints regarding the product, reports on product quality issued by dealers and retailers, and field investigation reports. Chapter L8, “Common Evidentiary Issues in Product Cases”, considers the admissibility of similar fact evidence at trial. Although the same principles are relevant to the question of whether similar fact evidence can form a proper basis for discovery requests, given the broad scope of discovery, courts have developed additional principles for resolving this issue. In many cases, the plaintiff will be permitted to obtain discovery of information about prior incidents, even though the evidence may ultimately be held inadmissible at trial.
Although the scope of discovery is very broad throughout Canada, the information sought must be relevant to the case, in the sense that the information must at least relate to a matter in issue. Relevance for discovery purposes is determined by the pleadings in the case…
It followed that if the pleadings were not struck, then the requested documents fell within the scope of discovery and ought to be produced. Madam Justice Gunn agreed.
Spoliation
The Paccar Defendants argued that they have been prejudiced by disposal of the Truck. In their application, they alleged that the Plaintiffs committed spoliation, which entitled them to the following relief:
a. an Order excluding the testimony of Mr. Kamm and any related documents;
b. alternatively, an Order deferring the Plaintiffs from making any use of Mr. Kamm’s evidence until the issue of spoliation has been determined by the trial judge; or
c. in the further alternative, an Order directing the Plaintiffs to produce Mr. Kamm’s file, including all correspondence to the Paccar Defendants.
Both sides relied upon the Alberta Court of Appeal’s decision in MacDougall v. Black & Decker Canada Inc., 2008 ABCA 353, where Justice Conrad provided the following summary of legal principles concerning spoliation:
In conclusion, therefore, I would summarize the Canadian law of spoliation in the following way:
1. Spoliation currently refers to the intentional destruction of relevant evidence when litigation is existing or pending.
2. The principal remedy for spoliation is the imposition of a rebuttable presumption of fact that the lost or destroyed evidence would not assist the spoliator. The presumption can be rebutted by evidence showing the spoliator did not intend, by destroying the evidence, to affect the litigation, or by other evidence to prove or repel the case.
3. Outside this general framework other remedies may be available – even where evidenced has been unintentionally destroyed. Remedial authority for these remedies is found in the court’s rules of procedure and its inherent ability to prevent abuse of process and remedies may include such relief as the exclusion of expert reports and the denial of costs.
4. The courts have not yet found that the intention destruction of evidence gives rise to an intentional tort, nor that there is a duty to preserve evidence for purposes of the law of negligence, although these issues, in most jurisdictions remains open.
5. Generally, the issues of whether spoliation has occurred, and what remedy should be given if it has, are matters best left for trial where the trial judge can consider all of the facts and fashion the most appropriate response.
6. Pre-trial relief may be available in the exceptional case where a party is particularly disadvantaged by the destruction of evidence. But generally this is accomplished through the applicable rules of court, or the court’s general discretion with respect to costs and the control of abuse of process.
The main point of contention was whether the circumstances of the case justified the imposition of pre-trial relief. In this respect, we argued that this was not the exceptional case as contemplated in the jurisprudence. Instead, we highlighted the fact that the Plaintiffs took all necessary steps to minimize any disadvantage suffered by the Paccar Defendants by:
– producing Mr. Kamm’s preliminary report;
– producing all photographs and field notes within Mr. Kamm’s file;
– producing the Office of the Fire Commissioner’s report; and
– providing the Defendants with an opportunity to examine the evidence retained by Mr. Kamm.
We further pointed out that Examinations for Discover had not yet been conducted. This would serve as a further potential avenue for the Paccar Defendants to learn of additional information that may be useful in their defence of the claim. Madam Justice Gunn agreed and refused to grant any of the relief sought by the Paccar Defendants.
Summary
Although this is a Saskatchewan ruling, it is nevertheless an important decision not only for subrogation, but also for defence of product liability claims as it underscores a few key procedural areas that often arise in similar claims – striking of pleadings in the context of similar fact evidence and pre-trial remedies for spoliation.
In any product liability claim (whether from the subrogation or defence perspective), breach of the duty to warn is an important allegation as it provides a further potential avenue for recovery and it may broaden the scope of inquiry. From this decision, similar fact evidence may be pleaded if it is logically probative; in other words, it may be permissible if it pleads the material facts relating to the duty to warn allegations.
For defence counsel, this decision also highlights some potential avenues for the striking of similar fact pleadings. Most notably, from the jurisprudence, the added complexity that similar fact pleadings bring to a litigation is an important factor that Courts will consider. Thus, when faced with broad pleadings relating to past events, defence counsel may want to consider whether the added complexity outweighs any probative value. Or, to use the words of the Supreme Court Civil Rules, counsel may argue that the added complexity is disproportionate to the claim.
With regard to spoliation, this ruling emphasizes the importance of the discovery process where evidence has been disposed. Any steps taken to minimize any disadvantage to the adverse party may be important in resisting any pre-trial relief where spoliation is alleged to have occurred.
