Buyers of Whirlpool front-loading washing machines complained that, owing to what they said was a design defect, the machines failed to self-clean properly. This was alleged to cause a build-up of smelly mould, mildew and bacteria in inaccessible parts of the machine. In the ensuing class action against the manufacturer, it was apparent that very few class members would have claims for damage to property or for personal injuries; the claims were for pure economic losses resulting from the allegedly negligent design of the washing machines: Arora v Whirlpool Canada LP, 2012 ONSC 4642. Possible health hazards from the smelly build-up were not the main issue; it was really that negligent design diminished the fitness and value of the machines.
Perell J dismissed the certification motion on the grounds that the plaintiffs had no contractual or statutory claim against the manufacturer. Purchasers might have contractual claims against the retailer they bought from, but had no contractual relationship with Whirlpool apart from a limited warranty which excluded liability for design defects, consequential damages and the implied warranties under the Sale of Goods Act. There was no misrepresentation by Whirlpool for the purposes of s 52 of the Competition Act, which does not require disclosure of a design defect. The claim in negligence also failed: the case law (reviewed carefully in 88 paragraphs) allows recovery for economic loss only where a product defect relates to safety, which was not the case with the smelly build-up in the washing machines. In the judge’s view, ‘there is no recovery in negligence for shoddy goods that are not sources of danger directly or indirectly’. Waiver of tort didn’t work for the plaintiffs either, whether as an independent cause of action or as an election of remedies (a question the judge did not need to decide).