Wednesday, September 21, 2011

DJO Canada Inc v. Schroeder, 2011 SKCA 106

The Saskatchewan Court of Appeal determined that the warranties described in s.48 of the Saskatchewan Consumer Protection Act (the “CPA”) can only be deemed to have been given by a manufacturer when a consumer product is “sold by a retail seller.” Section 50(2) of the CPA deems certain warranties described in s.48 to have been given by manufacturers. The court held that s.50(2) is not a freestanding provision and does not independently impose warranty obligations. Accordingly, the requirement in s.48 that a product be sold by a retail seller also applies to warranties deemed to be given by manufacturers under s.50(2).

Schroeder et al alleged that the manufacturers of pain pumps breached their statutory warranties under the CPA. The pain pumps were sold to the patients by a hospital. The court determined that in order to take advantage of the warranties described in s.48 the pain pumps had to have been sold by a retail seller. The wording of s.48 “clearly indicates that the warranties described therein are considered to be given by a retail seller only when a consumer product is ‘sold by a retail seller.’” Further, the court held that s.50(2), which deems certain of the s.48 warranties to have been given by manufacturers, is not a freestanding provision and cannot independently impose warranty obligations. It follows that there can be no manufacturer’s warranty if there is no retail seller’s warranty. As a retail seller is necessary for the existence of a retail seller’s warranty, Schroeder et al will have to show at trial that the hospital was a “retail seller.”

According to the court, the use of the term “consumer” in s.50(2), and the expansion of the definition of “retail seller” in s.50(1), confirms their interpretation of the CPA. This is because a “consumer” is defined in the CPA as someone who buys a consumer product “from a retail seller.” It is also because the expansion of the definition of “retail seller” per s.50(1) would not be necessary if s.50(2) was intended to independently impose warranty obligations on manufacturers.

Finally, the court determined that s. 64 of the CPA, which describes those who are entitled to recover damages for a breach of warranty, does not create warranties or warranty obligations. The section only specifies who can claim damages if there is a breach.

September 21, 2011
Link to Decision

Kaitlind de Jong & Steve Holinski
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