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To Warn or Not To Warn: An Explanation of the Duty to Warn and the Reasonable Foreseeability Analysis

Case Comment: Maxrelco (Immeubles) v Lumipro Inc.

Howard Borlack
Howard Borlack,
Partner

Israel Klein
Israel Klein,
Law Student

June 2018

by Howard Borlack and Israel Klein

Introduction

To what extent must service technicians warn their customers of particular risks associated with the product they are servicing? After presiding over a seven-day trial on liability alone, Madame Justice S. Gomery grappled with this very question and provided a framework to help answer it in her recent decision in Maxrelco v Lumipro Inc., 2018 ONSC 3638.

This decision explains what factors would trigger the duty to warn and in what circumstances would they attract liability. The Court reiterated that liability for failure to warn is not based merely on a knowledge imbalance between the parties because if that were so, every person with knowledge would be under a duty to warn. The Court held that simply because a risk materialized does not mean that it was reasonably foreseeable to have occurred. The Court also found that knowledge alone of an increased risk would not give rise to a duty to warn in the absence of evidence establishing a relationship of proximity and reasonable foreseeability of the particular risk occurring.

The Facts

Maxrelco Inc. owned a service centre located off Highway 417. The service centre had several neon signs of differing varieties. From time to time, Maxrelco hired Lumipro Inc. to repair its neon and/or outside panel signs. Lumipro Inc., however, did not install the signs.

In August of 2008, a fire originated in one of the exterior neon signs causing extensive damage to the service centre. Expert witnesses testified that the fire was caused by the sign's improper installation, deteriorated components, and a high-voltage failure. The service centre subsequently sued Lumipro for the damages caused by the fire based on a theory that Lumipro had a duty to warn Maxrelco of the risk of a fire.

The Issues and Analysis

...there was no evidence that Lumipro had serviced the specific sign where the fire originated.

Justice Gomery established that there was no evidence that Lumipro had serviced the specific sign where the fire originated. Maxrelco argued that even if Lumipro had never serviced that particular neon sign, it should have had a heightened awareness of the potential risks associated with that sign, due to Lumipro's involvement in repairs to other signs at the service centre. They argued further that the heightened awareness triggered a duty to warn Maxrelco of the potential risk of fire. According to Maxrelco, the duty was based on Lumipro's special knowledge and expertise in the area of neon signage and its role in servicing the signs and lights at the service centre.

Justice Gomery cited the recent decision of the Supreme Court of Canada, Rankin (Rankin's Garage & Sales) v. JJ, where the Supreme Court clarified the analysis that a trial judge must undertake to determine whether a risk was reasonably foreseeable.1 The Supreme Court held that a trial judge must decide whether the plaintiff's evidence establishes "that the risk of the type of damage that occurred was reasonably foreseeable to the class of plaintiff that was damaged".2 The Supreme Court focused in particular on the type of evidence that must underpin a finding that a defendant owed a plaintiff a duty of care. It held that the plaintiff must present evidence that the defendant ought to have anticipated a particular harm would probably occur if it did not take appropriate steps to guard against it.

Using the Supreme Court's framework, Justice Gomery concluded that the service centre had not proven that Lumipro owed a positive duty to warn of the danger of electrical fire caused by its neon signage. The service centre did not establish that Lumipro ought to have anticipated the specific risk of an electrical fire caused by a sign that was not properly installed. Neon signs are not inherently dangerous. The sign at the service centre was at risk for an electrical fire only because it was poorly installed. Lumipro having not worked on that particular neon sign was not aware of the installation issue. While Lumipro technicians had experience in repairing neon signage, the Court found that experience or expertise alone does not give rise to a duty to warn of specific risks caused by a third party.

Conclusion

Prior decisions gave a wide scope to “duty to warn”. It was common in a weak negligence case for a plaintiff to plead and rely on the duty to warn to save the claim. Cases such as Maxrelco (Immeubles) Inc. v. Lumipro Inc. will hopefully help to limit the potential for an otherwise weak claim from proceeding based on a general claim that the defendant failed to warn of the danger.


1 2018 SCC 199.
2 Rankin at para. 24, citing A.M. Linden and B. Feldthusen, Canadian Tort Law (10th ed. 2015) at p. 322.


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