Recently, the City of Gatineau (“the City”) claimed from the company 1561660 Ontario Ltd (“Surgenor”) and Volvo Group Canada Inc. (“Volvo”) the amount of $471,406.57 in damages and a reduction in the purchase price for seven ten-wheel trucks that the City considered to be affected by a design defect[1].
Unfortunately for the City, the Superior Court did not share this view and refused to award such compensation.
Facts of the Dispute
On May 15, 2014, the City issued a public call for tenders to purchase seven ten-wheel trucks equipped for snow removal. On July 9, 2014, Surgenor won the bid and delivered seven Mack trucks to the City on January 30, 2015.
Shortly after the trucks were put into service, drivers complained of significant discomfort due to vibrations, shocks, and jolts when driving on uneven roads.
After removing the trucks from the fleet and investigating the issue with experts, the City concluded that the trucks’ suspension was too rigid for year-round transport, especially on imperfect roads. However, the rigidity did not pose any problems when the trucks were equipped for snow removal operations.
Despite this, the City considered the trucks’ inability to be used year-round, particularly for transporting bulk materials, as a quality/design defect rendering them unsuitable for their intended use. Consequently, the City initiated legal proceedings.
Surgenor and Volvo, on the other hand, argued that the trucks had no design defect, as they fully met the specifications required by the City in the call for tenders.
What Does the Law Say?
Under Article 1726 of the Civil Code of Québec[2], there is a warranty of quality against hidden defects. This warranty ensures that the buyer can fully use the item, meaning that no defect renders it unsuitable for its intended use during its useful life.
To determine whether a design defect exists that could trigger the legal warranty of quality, one must assess whether the item suffers from a usage deficit based on the legitimate expectations of a reasonable buyer[3]. These expectations are evaluated using various criteria such as the nature of the product, its intended use, information provided by the manufacturer and distributor, and the contract terms[4].
In this case, the Superior Court primarily relied on the specifications and tender documents prepared by the City to determine its intended use for the trucks. The Court concluded that, aside from a few rare mentions of year-round use, the contractual documents mainly contained requirements related to snow removal operations.
Therefore, the Court assessed the trucks’ quality and usage based on characteristics specific to snow removal trucks, not year-round utility vehicles.
Since Surgenor and Volvo delivered trucks that were fully capable of performing snow removal and met all the City’s tender requirements, the Court concluded that the trucks did not have any design defects.
Furthermore, the Court emphasized that it was not the bidders’ responsibility to guess the City’s intentions, but rather the City’s duty to clearly express its needs in the tender documents[5]. Thus, the City alone was responsible for the discrepancy between the declared usage and the actual intended use of the trucks[6].
For all these reasons, the City was not entitled to any compensation.
Key Takeaway
This ruling serves as a warning to all buyers. It underscores the importance of clearly communicating intended use for a product or vehicle prior to purchase. Otherwise, like the City of Gatineau, you may end up getting exactly what you asked for!
[1] City of Gatineau v. 1561660 Ontario Ltd et al., 2023 QCCS 4242.
[2] Civil Code of Québec, S.Q. 1991, c. 64, art. 1726.
[3] City of Gatineau v. 1561660 Ontario Ltd et al., 2023 QCCS 4242, para. 76.
[4] Lise Fortin et al. v. Mazda Canada Inc., 2016 QCCA 31, para. 80.
[5] City of Gatineau v. 1561660 Ontario Ltd et al., 2023 QCCS 4242, para. 100.
[6] Ibid., para. 104.
This publication was featured in Transport Magazine.
