Fall 2021 - BUS8330 - Global Trade Law

Case Study 2

On January 1st, 2021, Mr. Patino Pascal of Waterloo decided to gift himself a New Year present and purchased a Toyota Micato SUV from the Excellent Autos car dealership based in Cambridge, Ontario, Canada. Mr. Pascal had been introduced to the Toyota Micato through an advertisement in a national car magazine in which the experience of driving the vehicle was described as "almost the same as cruising in an aircraft". The Micato came very strong, sturdy, flashy and had every conceivable gadget intended to make for a unique driving experience. According to Toyota, the Micato SUV's safety features are second to none. To put some icing on the cake, the vehicle came with a two-year warranty for any manufacturing defects. Because the Micato has only recently been introduced to Toyota's manufacturing line, it was only available at Toyota's manufacturing plant in Kobe, Japan. As such, Mr. Pascal's Micato was imported directly from Japan into Canada by Excellent Motors.

While driving the Micato along the Ontario 401 Highway on June 16th, 2021, Mr. Pascal applied the brakes as traffic slowed down. But the brake pedal stayed rigid and failed to function regardless of how much pressure Mr. Pascal applied to it. Mr. Pascal, who had been cruising at a speed of 120 kilometers an hour, lost control of the vehicle and smashed into a truck ahead of him. Mr. Pascal was seriously injured and had to be airlifted to hospital. On impact, the driver of the truck ahead of Mr. Pascal when he lost control of the Micato hit their chest on the steering wheel and suffered serious injuries as well. Both the Micato and the truck were severely damaged.

In spite of the positive public portrayal of the Micato, Toyota had long known that the SUV had some design flaws, especially with regard to the braking system. A tab in the system intended to prevent the loosening of a nut in the system was not fully bent and overtime affected the transmission of braking fluid. Toyota, in fact, were about to recall all 25 Micato SUV vehicles that were sold at the same time as Mr. Pascal's.

Answer the following questions -

1. Does Toyota owe a duty of care to Mr. Pascal when manufacturing the Micato SUV to ensure that there are no defects in the vehicle? Can Mr. Pascal sue Toyota for the losses he suffered as a result of the accident? What could Toyota say to defend themselves? (5%).

1. Assuming that the Excellent Autos car dealership wants to sue Toyota of Kobe, Japan what law will apply and what court will have jurisdiction to decide the case?

1. What is the "neighbour principle" in product liability claims and how does the principle apply in this case?