Our readers will recall a first-instance judgment rendered in February 2023 by Justice Alain Michaud, commented on by Ariane Vanasse of RSS, available on our website. This judgment was appealed by Reckitt, the manufacturer of Lysol Advance.
In its recent decision, the Court of Appeal discusses the manufacturer’s duty to inform, re-examining earlier key decisions. Although the behaviour of a product “user” must be taken into consideration, failure to take precautions cannot be invoked against them when the manufacturer did not provide them with the appropriate information.
This important decision confirms previous rulings on a manufacturer’s liability under the extra-contractual regime.
The Facts
This case stems from a subrogation action for $137,0001 brought by La Capitale General Insurance Inc. (hereinafter “La Capitale”) following water damage to the homes of their insureds (the “Insureds”) caused by the rupture of a flexible metal faucet pipe (the “Speedway”).
La Capitale sued the contractor who had built the Insureds’ home, McKinley Construction inc. (“McKinley”), the seller of the Speedway, Céramique Décor M.S.F. inc. (“Céramique Décor”), and the manufacturer of the household cleaning product known as Lysol Advance (the “Product”), Reckitt Benckiser (Canada) inc. (“Reckitt”).
McKinley, who had built the Insureds’ home in 2012, had subcontracted the plumbing work and the purchase of the Speedway to Céramique Décor.
The Insureds cleaned their bathroom with Lysol Advance, which they stored on a shelf in the closed cabinet under the sink. The parties’ experts all concluded that the stainless-steel braided sheath of the Speedway had degraded due to stress corrosion resulting from the Product’s release of chlorine vapours.
First Instance
McKinley’s liability was dismissed. The Court determined that the presumption of knowledge of the defect in Section 1729 C.C.Q. did not apply, since:
1) It did not participate in the manufacturing or design of the Speedway.
2) It had no specific knowledge of flexible hoses. These products are not part of its “specialty”.
3) It had no knowledge of any defect related to the Speedway.
4) It did not participate in or advise on the choice of Speedway, having subcontracted the work2.
Céramique Décor, on the other hand, was in the business of selling ceramics and bathroom accessories. It was also a distributor of certain products, such as the Speedway, manufactured in China. Since 2015, following receipt of complaints from several insurers regarding the Speedway, it had modified the text of its installation guide to add the statement “Avoid all contact, as well as storage, with household, chemical and corrosive products”. Notices to customers who had purchased these Speedways in the past had not been sent out, although Céramique Décor had a record to that effect.
Nonetheless, Céramique Décor was not held liable as the distributor of the Product:
1) It could not assume that the speedways would be subjected to a corrosive environment, which is not a “normal” condition of use, since different household cleaning products have various concentrations of hydrochloric acid.
2) The evidence did not allow the Court to conclude that the Product was affected by a defect, since it complied with the certification standards in force3.
However, its liability was retained under the extra-contractual regime of the safety warranty, provided by articles 1468 and 1469 C.C.Q. Céramique Décor had been “somewhat negligent” in failing to advise pre-2015 purchasers of the “fragility” of the Speedways4.
Regarding Reckitt, the Court found that the “aggressive and corrosive” nature of its Lysol Product was demonstrated by the preponderance of expert evidence presented at trial5. As for Reckitt’s duty to inform, the Court agreed with the company’s lawyers that its scope is “highly factual and variable, depending on the characteristics of each product”6. However, the Superior Court stated it is “obvious” that the Product’s label is insufficient, since an average consumer, described as “gullible and inexperienced”, cannot be expected to understand the risks associated with its use and storage, particularly regarding the risks posed by chlorine vapours7. The Court recognized the restrictive aspect of product labelling in Canada, which also held that it is required to ““specifically highlight” the “real” risks and dangers associated with a product8.
The liability of the Insureds, who admitted that they had not read the information on the Product and had not closed it properly, was not upheld, since, amongst other reasons, the manufacturer’s liability must first be “controlled”9.
Liability was therefore apportioned three quarters to Reckitt and one quarter to Céramique Décor, since “the most decisive causal element” was Reckitt’s failure to comply with its duty to inform10.
Court of Appeal Decision
Reckitt appealed the decision, but its appeal was dismissed.
Reckitt made two (2) criticisms of the trial Court’s decision, namely that it had erred as to the scope of the duty to inform and as to the sharing of liability with Céramique Décor.
Regarding the duty to inform, Reckitt argued that the Superior Court had erred:
1) In absolving the Insureds of not having hermetically sealed the cap of the Product after use,
2) In concluding that it was not clear from the face of the label that the Product was corrosive,
3) In alleging failure to comply with regulatory labelling requirements11.
Firstly, the Court of Appeal found that the trial Court had not erred as to the scope of Reckitt’s duty to inform. The statement on the Product label to “Keep container tightly closed in a cool, well-ventilated place” was insufficient, given “the importance of the risk and its dangers”12. The same applies to the trial Court’s decision that the Insureds were not liable: the decision was correct.
Moreover, Reckitt was aware of the corrosive nature of its Product. Its label intended for the industrial world included a statement, whereas its label for consumers was different13. Reckitt was held liable, as its duty to inform increased in intensity given the “danger and risk associated with the good, and with the severity of the possible consequences of the safety defect”14.
The Court of Appeal also reemphasized that meeting regulatory standards in terms of product labelling does not exempt Reckitt from its obligations under common law, especially as these standards relate to the physical safety of users, whereas in this case, we are concerned with material risks15.
The Court of Appeal also rejected the second ground of appeal, based on the sharing of liability with Céramique Décor. Under article 1478 C.C.Q., liability is shared according to the seriousness of the fault. The trial judge repeatedly found that the Product’s safety defect was more serious than Céramique Décor’s16.
Conclusion
In Quebec, the manufacturer’s product safety obligation falls under both the general legal regime, commonly known as the legal warranty of quality, and the extra-contractual regime. The manufacturer’s obligation to provide information may exceed the regulatory standards for labelling. Its intensity increases with the severity of the hazard and risks associated with each product.
Considering the Court of Appeal’s decision, manufacturers would do well to exercise caution and re-examine their product labels.
1 Admitted for trial at $125,000, see La Capitale assurances générales inc. v. Construction McKinley inc., 2023 QCCS 419, par. 9. [Reckitt, first instance];
2 Reckitt, first instance, par. 31;
3 Reckitt, first instance, par. 61, 63;
4 Reckitt, first instance, par. 86-91;
5 Reckitt, first instance, par. 95-101;
6 Reckitt, first instance, par. 122;
7 Reckitt, first instance, par. 126-130;
8 Reckitt, first instance, par. 141;
9 Reckitt, first instance, par. 173;
10 Reckitt, first instance, par.186, 191;
11 Reckitt Benckiser (Canada) inc. v. Société d’assurance Beneva inc. (La Capitale Assurances Générales Inc.), 2024 QCCA 958, par. 13-15. [Reckitt, Appeal]
12 Reckitt, Appeal, par. 17;
13 Reckitt, Appeal, par. 18;
14 Reckitt, Appeal, par. 19;
15 Reckitt, Appeal, par. 23;
16 Reckitt, Appeal, par. 30-31.
