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In recent years, claims for water damage from corrosion of flexible plumbing connectors (commonly called “speedways”) have multiplied. A number of these cases have highlighted the fact that flexible hoses can corrode when they are in continuous contact with the vapours of corrosive cleaning products. Very recently, the Superior Court ruled on this very issue in La Capitale assurances générales inc. v. Construction McKinley inc.[1]
The decision is of interest to the insurance industry. Home insurers acting in claims recovery matters and commercial insurers acting in liability matters will both be involved in such cases.
As Justice Alain Michaud noted in his decision, the issue of flexible hoses in combination with corrosive cleaning products [translation:] “is problematic and concerning“[2]. In a detailed decision, the Court ruled on the involvement and liability of the main actors in such claims.
Summary of the facts
The facts giving rise to the dispute are typical. A private residence sustained water damage when the flexible hose from a tap broke suddenly. The braided stainless-steel sheathing of the flexible hose failed due to corrosion caused by chlorine fumes from a bottle of Lysol Advanced cleaner stored in a cupboard under the sink in the immediate vicinity of the hose.[3].
The homeowners’ insurer, acting in recovery, sued the general contractor that built the property four and a half years earlier as well as the Canadian distributor of the flexible hose and the manufacturer of the Lysol product. The Chinese manufacturer of the speedway was not involved in the proceedings.
[3] This was the cause identified by the three (3) experts involved in the case– CEP, Technorm and Pyrotech BEI.
Decision
The liability of the parties was considered from the perspective of two legal concepts that apply to sellers, distributers and manufacturers of products: the warranty of product quality[4] and the duty to inform[5].
The Court’s consideration of the first concept (warranty of quality) was brief, as it determined that neither the flexible hose nor the Lysol product was affected by a latent defect. It is only when they come into contact with each other that the flexible hose will deteriorate.
The judge did not hold the owners of the house liable, despite the allegations that they failed to read the instructions on the bottle of Lysol, had not properly closed it and had not properly maintained the cupboard under the sink. Citing passages from the 2019 Court of Appeal decision in Imperial Tobacco[6], the Court noted that the “average consumer” whose conduct is being analyzed is no longer a reasonably prudent and diligent buyer, let alone a well-informed buyer. The applicable standard of conduct [translation] “is now that of a “credulous and inexperienced” consumer, namely someone with a “low level of discernment“[7]“.
The contractor that built the house was also exonerated from any liability. Apart from the fact that the flexible hose sold with the house was unaffected by a latent defect, the judge noted that in any event the contractor had rebutted the presumption that a professional seller is aware of the existence of the defect at the time of sale[8], because the contractor was a seller of real estate and not a professional seller specialized in the sale of plumbing equipment. He also held that the contractor could not have committed a fault in its duty to inform, given that when the house was built and until the occurrence of the incident in question, it was unaware of the risks associated with flexible connectors exposed to chlorinated vapours.
Thus, liability was shared between the distributor of the speedway (25%) and the manufacturer of the Lysol product (75%). Both were held liable for failing in their duty to inform.
As regards the distributor of the flexible hose, the court held that it had demonstrated [translation:] “a certain negligence in its duty to inform once it became aware“, as early as 2014, of the vulnerability of its product[9]. The judge was of the view that the distributor should have notified its past customers in writing when it was made aware of a real risk associated with its product.
Lastly, as regards the manufacturer of Lysol, the Court held that the warning on the back of the product which states “Keep container tightly closed in a cool, well-ventilated place” was insufficient to warn the user that the vapours that may escape from the bottle could significantly degrade metals in the immediate vicinity[10]. The specific risks and dangers of the product must be made clear to the more “credulous and inexperienced consumer” referred to by the Court of Appeal[11]. In the judge’s opinion, the undisclosed risk of Lysol’s highly corrosive properties was the most significant causal element in the occurrence of the loss.
[4] Articles 1726 to 1730 of the Civil Code of Québec.
[5] Articles 1468 and 1469 of the Civil Code of Québec.
[6] Imperial Tobacco Canada Ltée c. Conseil québécois sur le tabac et la santé, 2019 QCCA 358.
[7] Supra note 1, at paragraph 129.
[8] Presumption codified in article 1729 of the Civil Code of Québec.
[9] Supra note 1, at paragraph 91.
[10] Supra note 1, at paragraphs 124 and 125.
[11] Supra note 6.
This publication has originally been published in the Association des Femmes d’Assurance de Montréal March 2023 newsletter.
Comment
Very often, the liability arising from the duty to inform is eclipsed in case law by the liability resulting from a latent defect affecting a specific product. What makes this decision particularly noteworthy is its focus on the duty to inform imposed on the distributer and the manufacturer.
At the time of writing, the deadline for appealing the decision had not expired. It will be interesting to follow the fate of this decision, either through the intervention of the Court of Appeal or the manner in which it is applied in pending and future litigation.
This article was originally published in Montreal Association of Insurance Woman’s Newsletter, on 3th March 2023.
