Watch your Warnings – The Québec Court of Appeal Sets the Bar High

Watch your Warnings – The Québec Court of Appeal Sets the Bar High

On July 11, 2024 in Reckitt Benckiser (Canada) inc. v. Société d’assurance Beneva inc. (La Capitale Assurances Générales Inc.)[1], the Québec Court of Appeal rendered a decision which clarifies the manufacturer, supplier and distributor’s obligation to provide proper warnings and information to the consumer. These obligations arise from articles 1468, 1469 and 1473 of the Civil Code of Québec (“C.C.Q.“) and section 37, 38 and 53 of the Consumer Protection Act (“C.P.A.“).

This decision upholds the first instance decision rendered by the Honourable Mr. Justice Alain Michaud of the Superior Court of Québec in the file La Capitale assurances générales inc. v. Construction McKinley Inc.[2].

Through its in-depth analysis of the duty to inform incumbent on manufacturers and distributors, the Court of Appeal held Reckitt Benckiser (Canada) Inc. (“Reckitt”) liable for failing to disclose the risks and dangers inherent to their products with sufficient precision, and Céramique Décor M.S.F. Inc. (“Céramique Décor”) for failing to inform past customers of these risks and dangers.

Background

First Instance Decision

On February 2, 2017, a Rubi faucet sold by Céramique Décor ruptured due to corrosion, causing water damage to the plaintiffs’ home. This corrosion was caused by the product Lysol Advanced, a household product containing 12% hydrochloric acid, which was stored by the plaintiffs under the shelf of their sink, causing the cap of the product to come within a few inches of the path of the flexible connector that feeds the cold-water faucet.

Therefore, La Capitale, subrogated to the rights of its insurers, filed a claim for $137,239.23 against namely Céramique Décor, supplier of the faucet, and Reckitt manufacturer of the Lysol Advanced product.

This decision deals with the alleged defect of the flexible connector, the duty of the supplier of the flexible connector to warn former buyers of dangers of corrosion, as well as the sufficiency of the warnings provided with the Lysol Advanced product.

Fault of Céramique Décor (faucet and flexible connector distributor)

a.     Latent Defect

The Superior Court concluded that the Rubi faucets sold by Céramique Décor did not suffer from a latent defect. Indeed, although La Capitale submitted that the faucet’s flexible connectors were affected by a material defect and a functional defect, due to the fact that corrosion would have prematurely affected the connectors’ components, the Tribunal did not find a defect for the following reasons:

1. It is not reasonable to assume that the normal conditions of use of a faucet and its fittings include a corrosive environment component.
2. The faucet and its fittings comply with standards and have been certified.
3. Even if the product had been affected by a latent defect, Céramique Décor would have been able to rebut the presumption against it considering there was no evidence at the hearing to suggest that the distributor – at the time the faucet was sold in 2012 – was aware that hydrochloric acid vapours could alter stainless steel braided fittings.

b.     Failure to Inform

In light of the foregoing, the Court concludes that this is not a latent defect dispute, but rather one relating to the duty to inform.

Céramique Décor had known since 2014 that Rubi faucets were susceptible to corrosion when subjected to a chlorinated environment and modified the text of the installation guide in 2015, to disclose such risks. However, the first instance judge considered that Céramique Décor ought to have also sent a notice to past customers and held it responsible for not having done so.

Fault of Reckitt (manufacturer of Lysol Advanced)

a.     Latent Defect

With regard to Reckitt’s liability, the first instance judge concluded that although Lysol Advanced was an aggressive and corrosive product containing a high dose of hydrochloric acid, there was nothing to prevent it from being offered over the counter to consumers. Reckitt can therefore not be held liable for having put the product on the market and the product was free from any latent defect.

b.     Failure to Inform

However, the Superior Court ruled that the manufacturer was liable for failing to inform consumers accurately and completely of the risks and dangers associated with the use of Lysol Advanced, as well as of the means to guard against them. The Court held that Reckitt was aware of the danger associated with the use of the product, as it clearly disclosed it on its safety data sheet, intended for the industrial use, by disclosing that Lysol Advanced can be corrosive to metals. However, the disclosure made to consumers was only to keep the container tightly closed in a cool, well-ventilated place without further explanations. The company had a duty to clearly state the risk to the consumers, as it did for the industrial world.

Conclusion

The judgment apportioned liability, to be asserted against the defendants, at 25% for Céramique Décor and 75% for Reckitt.

Reckitt appealed against Superior Court ruling.

A brief overview of Québec legislation

Civil Code of Québec

Article 1468 C.C.Q.

Article 1468 imposes an obligation on all participants in the manufacturing process to repair damage, whether physical, moral or material, caused to others by a defect in the safety of goods. This liability regime also extends to distributors who distribute goods under their own name, as well as to any supplier of the product.

Article 1469 C.C.Q.

Article 1469 sets out the criteria for determining when a product defect can be considered a safety defect that may give rise to liability on the part of the manufacturer, distributor or supplier. The assessment criterion is the inadequacy of the product’s safety in relation to the public’s legitimate expectations.

Consumer Protection Act

Section 38 C.P.A.

Section38 states that an item must be used for normal purposes for a reasonable period of time, taking into account the conditions of use.

Section 53 C.P.A.

Under section 53, a consumer may take action against a merchant for failure to provide information necessary to protect the user against a risk or danger of which he himself could not have been aware.

Imperial Tobacco Canada ltée c. Conseil québécois sur le tabac et la santé, 2019 QCCA 358

The Imperial Tobacco decision is a landmark ruling that clarifies the twofold safety obligation incumbent on the manufacturer or distributor of a good. These obligations are as follows:

• The manufacturer must ensure that the good is not affected by any defect or damage that could give rise to danger and, if it is, he must warn users.
• Even if the product is not defective, the manufacturer must inform the user of the inherent danger and how to protect against or remedy it.

Court of Appeal Decision

In its decision, the Court of Appeal supports the lower court’s ruling, while specifying and clarifying the duty of information incumbent on manufacturers and distributors.

Firstly, the Court of Appeal confirmed that Reckitt was aware of the danger affecting its product, pointing out the significant discrepancy between Reckitt’s disclosure of the risks and dangers associated with the product for industrial use and to consumers.

Secondly, in this decision, the Court reiterates a principle well established in case law, according to which the manufacturer’s obligation increases in intensity with the danger and risk associated with the good, and with the severity of the possible consequences of the safety defect. Thus, considering that the dangerousness of a product such as Lysol Advanced conditions the duty to inform, Reckitt had a duty to provide accurate, precise, comprehensive and complete information that gave a fair measure of the nature and seriousness of the danger, the risk of its materialization and the extent of the harm likely to result. Considering that Reckitt did not clearly specify the reason why the product’s cap had to be tightly closed and that it had to be kept away from metals, liability could not be shared with the consumer. Indeed, a victim who does not have the required information cannot be blamed for failing to take the necessary precautions that would have been required had they had the necessary information.

Thirdly, a manufacturer’s compliance with regulatory standards relating to consumer product safety does not have the effect of exempting it from the general regime governing civil liability, even more so when these regulatory standards concern risks related to the health and safety of an individual and not damages to property, such as in this case.

Fourthly, the judges reiterated that the safety defect attributable to the appellant was more serious, since it was its product that attacked the piping. Céramique Décor knew about the risk of corrosion on its faucets since 2014 and warned its future customers, by adding a note on the subject. Therefore, the Court of Appeal believes that Céramique Décor should also have warned its past customers, which it did not do. The fact remains, however, that this is less serious than Reckitt actions, and that in the Court’s words, the pipes are, in a way, “victims” of the Lysol Advanced products.

Commentary

The Québec Court of Appeal makes it clear that a warning must not only properly direct consumers but also inform the consumer of the reasons behind the prescribed actions or inactions in their warning.  Managing the content and space of the precious real estate on a product label can be a challenge for manufacturers. Moreover, specific requirements that other agencies and regulatory bodies may have, such as Health Canada also influence labels’ contents. As such, manufacturers should be mindful of this judgment of the Court of Appeal going forward and other applicable requirements when designing labels and warnings.

Furthermore, Court of Appeal underscores the duty to contact past consumers when the circumstances justify it to ensure that risk and dangers associated with products are communicated to all customers.

[1] 2024 QCCA 958
[2] 2023 QCCS 419

by Andrei Pascu and Ariane Tousignant (Articling Student)

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2024