Beazley v. Suzuki Motor Corporation

2010 BCSC 681 Beazley v. Suzuki Motor Corporation

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Beazley v. Suzuki Motor Corporation, 2010 BCSC 681 Date: 20100512 Docket: S043377 Registry: Vancouver Between: Jason Beazley, Laurel Beazley and William Beazley and Insurance Corporation of British Columbia Plaintiffs And Suzuki Motor Corporation, General Motors Corporation, General Motors of Canada Limited - General Motors Du Canada Limitee, CAMI-Automotive, Inc. Stingray Holdings Ltd. formerly known as Sunshine Motors Ltd., and Anchors Away Worldwide Cruises Inc., formerly known as Sunshine Motors (1994) Limited Defendants - and - Docket: S060519 Registry: Vancouver Between: Natalia Spehar, a person under disability, by her Committee, Ann Spehar, and Insurance Corporation of British Columbia Plaintiffs And: Suzuki Motor Corporation, General Motors Corporation, General Motors of Canada Limited - General Motors Du Canada Limitee, CAMI-Automotive, Inc., Stingray Holdings Ltd. formerly known as Sunshine Motors Ltd., and Anchors Away Worldwide Cruises Inc., formerly known as Sunshine Motors (1994) Limited Defendants Before: The Honourable Mr. Justice Goepel Procedural Ruling #3 Counsel for the Plaintiffs: D.B. Kirkham, Q.C. G.J. Tucker P.A. Brackstone Counsel for the Defendants, Suzuki Motor Corporation, General Motors of Canada Limited - General Motors Du Canada Limitee, CAMI Automotive Inc., Stingray Holdings Ltd. formerly known as Sunshine Motors Ltd., and Anchors Away Worldwide Cruises Inc. formerly known as Sunshine Motors Limited: G.R. Switzer A.K. Foord S. McEachern Place and Date of Trial: Vancouver, B.C. Dates ongoing Place and Date of Ruling: Vancouver, B.C. May 12, 2010

INTRODUCTION [1] This ruling concerns the admissibility of certain documents found in Exhibit 13 that the plaintiffs seek to rely on in this trial. Exhibit 13 consists of six binders containing in excess of 400 individual documents. When the plaintiffs tendered Exhibit 13 as part of their case, by agreement of the parties it was admitted into evidence subject to the defendants' right to challenge the admissibility of individual documents. The defendants now submit that a number of the documents contained in Exhibit 13 are inadmissible and seek their removal from the Exhibit.

BACKGROUND [2] On August 23, 1994, a 1994 two-door 4 x 4 Geo Tracker ("the J1 Tracker") owned by William and Laurel Beazley and driven by their son Jason was involved in a single car accident. The three passengers in the J1 Tracker, including the plaintiff Natalia Spehar, suffered serious injuries and each commenced actions against the Beazleys. I detailed the resolution of those actions and the background of these proceedings in Beazley v. Suzuki Motor Corporation, Spehar v. Suzuki Motor Corporation, 2008 BCSC 13. I need not repeat that history here. [3] The focus of the present actions is the design and safety of the J1 Tracker. The plaintiffs allege the J1 Tracker was defective in design and manufacture and was unreasonably dangerous in numerous ways as particularized in their statement of claim. The plaintiffs allege that the design and manufacture defects resulted in vehicle instability which, in turn, caused the accident. [4] In their pleadings, the plaintiffs allege the J1 Tracker was originally designed, manufactured and sold by the defendants General Motors Corporation ("GMC"), General Motors of Canada - General Motors Du Canada Limitee ("GMCL"), Suzuki Motors Corporation ("SMC") and CAMI Automotive Inc. ("CAMI") (collectively "the GM Defendants"). CAMI was a joint venture formed by GMC and SMC for the purpose of manufacturing and selling automobiles in Canada. GMCL

was a wholly owned subsidiary of GMC. [5] On July 1, 2009, GMC sought bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. On July 10, 2009, GMC, in the course of the bankruptcy proceedings, sold most of its assets to General Motors Company and concurrently changed its name to Motors Liquidation Company ("Motors Liquidation"). While Motors Liquidation is no longer defending these proceedings, the remaining defendants, all represented by the same counsel, vigorously deny any wrongdoing by any of the defendants, including GMC. [6] In their opening, the plaintiffs framed the issues as follows: (a) SMC's design of the J1 Tracker was faulty and resulted in an unreasonably dangerous vehicle with an unacceptable propensity to rollover; (b) SMC's design of the J1 Tracker was negligent; (c) the negligent design of the J1 Tracker caused or contributed to the accident; (d) GMCL was negligent in distributing the J1 Tracker; (e) CAMI was negligent in manufacturing the J1 Tracker; and (f) the Beazleys purchased the J1 Tracker from Stingray Holdings Ltd. ("Stingray") and Stingray breached the warranties of merchantability and fitness contained in s. 18 of the Sales of Goods Act, R.S.B.C. 1979, c. 370. [7] With regard to the question of negligent design, the plaintiffs allege that the evidence will show that the J1 Tracker was defective in that it had an unacceptable

propensity to roll over and that it had inadequate directional stability, that is, an unacceptable tendency to spin out in hard cornering. [8] The plaintiffs' case is not based simply on expert evidence concerning standards applicable to proper vehicle design. In addition, the plaintiffs allege that the design of the J1 Tracker failed to meet the specific design requirements of GMC relevant to rollover stability and directional stability. They further allege that once the vehicle was in production, the defendants failed to assess its performance and make design changes necessary to make the vehicle safe. [9] There are numerous defences raised to the claim and the rights of the plaintiffs to maintain these actions. In regard to the safety of the J1 Tracker, the defendants plead that the J1 Tracker was properly designed, tested and manufactured, that it was in no way defective or dangerous and that it performed its intended function adequately and properly prior to the accident. They allege that the J1 Tracker was designed, tested and manufactured in accordance with the then existing state of the art and that the design met or exceeded all applicable industry and motor vehicle safety standards. They plead that the J1 Tracker was reasonably fit for its intended purpose and was in no way defective, dangerous or unsafe prior to the accident. They plead that because the J1 Tracker was properly designed and was in no way defective or dangerous, there was no duty to warn, effect a recall or otherwise redesign the J1 Tracker or its component parts. They plead that Jason Beazley's negligent driving was the sole cause of the accident and that Ms. Spehar and another of the passengers were also negligent for failing to wear their seatbelts.

DOCUMENTS IN POSSESSION [10] With few exceptions, the documents in Exhibit 13 were in the possession of the defendants and set out on their List of Documents. The plaintiffs submit the documents are admissible pursuant to the doctrine of documents in possession. [11] The doctrine of documents in possession is a creature of the common law and is a frequently used method of admitting documents into evidence. The doctrine is set out in Phipson on Evidence, 13th ed. (London: Sweet + Maxwell,1982) at para. 21-09: Documents which are, or have been, in the possession of a party will, as we have seen, generally be admissible against him as original (circumstantial) evidence to show his knowledge of their contents, his connection with, or complicity in, the transactions to which they relate, or his state of mind with reference thereto. They will further be receivable against him as admissions (i.e. exceptions to the hearsay rule) to prove the truth of their contents if he has in any way recognised, adopted or acted upon them. [Emphasis in original. Footnotes omitted.] [12] Documents found on corporate premises are admissible against a corporation if knowledge of their existence can be attributed to a responsible officer or director or an employee acting in the course of his or her duty: R. v. Ash-Temple Co., [1949] O.R. 315, 93 C.C.C. 267 (C.A.). [13] The basic principles of the

doctrine are set out in J.D. Ewart et al, Documentary Evidence in Canada (Toronto: Carswell, 1984) at 247: First, there is no a priori restriction on the types of documents admissible under this exception, whether by reference to their source, veracity or antiquity. Second, the documents are admissible only if relevant. Finally, admissibility and weight are two quite different things; whatever prima facie evidentiary value mere possession may give rise to is always subject to being explained away, or to being given minimal weight. [Footnotes omitted.] [14] In this application the defendants acknowledge their possession of most of the documents in issue. They challenge their admissibility on grounds of relevance. To the extent the documents are relevant, they submit they should, in any event, be excluded because of their impact on the trial process.

RELEVANCE [15] To be admissible, evidence must be relevant to the facts in issue and not subject to exclusion under any other rule of law or policy. Evidence is relevant "where it has some tendency as a matter of logic and human experience to make the proposition for which it is advanced more likely than the proposition would appear to be in the absence of that evidence" ( D.M. Paciocco & L. Stuesser, The Law of Evidence (Toronto: Irwin Law,1996) at 19). [16] In a civil case, the facts in issue are established by the pleadings. Evidence unrelated to the issues as disclosed in the pleadings is not admissible. [17] Not all relevant evidence is admissible. The court must also balance the cost to the trial the process of admitting the evidence. The judge's task was described by Sopinka J. in R. v. Mohan, [1994] 2 S.C.R. 9 at 20-21: Relevance is a matter to be decided by a judge as question of law. Although prima facie admissible if so related to a fact in issue that it tends to establish it, that does not end the inquiry. This merely determines the logical relevance of the evidence. Other considerations enter into the decision as to admissibility. This further inquiry may be described as a cost benefit analysis, that is "whether its value is worth what it costs." See McCormick on Evidence (3rd ed. 1984), at p.

544. Cost in this context is not used in its traditional economic sense but rather in terms of its impact on the trial process. Evidence that is otherwise logically relevant may be excluded on this basis, if its probative value is overborne by its prejudicial effect, if it involves an inordinate amount of time which is not commensurate with its value or if it is misleading in the sense that its effect on the trier of fact, particularly a jury, is out of proportion to its reliability. While frequently considered as an aspect of legal relevance, the exclusion of logically relevant evidence on these grounds is more properly regarded as a general exclusionary rule (see Morris v. The Queen, [1983] 2 S.C.R. 190). Whether it is treated as an aspect of relevance or an exclusionary rule, the effect is the same. [18] While the above passage was written in the context of the admissibility of expert evidence, the same principles must be considered in determining the admissibility of any form of evidence.

THE APPLICATION A. Overview [19] The defendants submit that seven broad categories of documents are inadmissible. Although the challenged documents were in the possession of the defendants, the defendants submit they are not relevant or should otherwise be excluded. In addition, they challenge the admissibility of several other miscellaneous unrelated documents. [20] When Exhibit 13 was introduced into evidence, the plaintiffs acknowledged that documents 2, 2A, 3, 4, 4A, 9A, 13, 114A, 122, 138, 152, 259A, 295 and 356 were not admissible under the doctrine of documents in possession and would not be admissible until proven by other evidence. The defendants challenge the admissibility of certain of those documents on this application. I do not intend to deal with those challenges in these reasons. Those objections can be renewed when and if the plaintiffs seek the admissibility of those documents. Those documents will eventually be removed from Exhibit 13 unless the plaintiff in the course of the trial establishes their admissibility. B. SJ410 and the Samurai [21] The SJ410 and the Samurai are two other vehicles that SMC designed and manufactured in the 1980s. GMC gave consideration to marketing the SJ410 in the United States. It ultimately decided not to do so. [22] The plaintiffs suggest that GMC's decision not to market the SJ410 was at least in part due to concerns over the

contribution of its short wheelbase to rollover propensity and that GMC concluded that both vehicles posed an unacceptable risk to their occupants. The plaintiffs allege that one of GMC's design requirements for the J1 Tracker was that the J1 Tracker have improved rollover stability compared to the SJ410 and the Samurai. [23] The defendants submit that the SJ410 and the Samurai are completely different vehicles from the J1 Tracker. They submit that there is no relevant connection between these vehicles and the J1 Tracker. They submit evidence regarding the SJ410 and the Samurai only serve to confuse the court, create prejudice and waste time. They submit that if the documents concerning GMC's concerns with the SJ410 and Samurai are admitted, the defendants will be forced to counter that evidence by defending the designs of the SJ410 and the Samurai and distinguishing them from the J1 Tracker. [24] GMC's concerns about the SJ410 and Samurai are relevant to the defendants' state of the art defence. That defence cannot be considered in a vacuum. GMC's knowledge of and consideration of rollover problems with the other vehicles is relevant to that issue. Whether those concerns were communicated to SMC and steps taken by SMC in response are also relevant. [25] The admission of these documents does not open the door to a detailed enquiry into the safety of the SJ410 and Samurai. The

issue in this litigation is the design of the J1 Tracker. Resolution of that question will not turn on the designs of SJ410 or Samurai and whether those vehicles were or were not properly designed. That issue is not before me and the defendants need not embark on such proof. The challenged SJ410 and Samurai documents are admissible. C. Consumer Reports/JARI/Millbrook/FAA [26] In July 1988, Consumer Reports wrote an article condemning the Samurai. Following publication of the article, SMC conducted certain tests on the Samurai and the J1 Tracker in Japan and in England. Other tests were carried out in the United States by the Failure Analysis Association ("FAA"). The defendants submit that the Consumer Reports articles and the testing that followed are not relevant to this proceeding. They note that the Consumer Reports article concerns the Samurai, a vehicle of entirely different design. They submit that evidence relating to the Samurai in the form of the Consumer Reports article or subsequent demonstration should not be admissible at trial. They further submit that the plaintiffs' suggestion that the Consumer Reports article constituted notice of a test procedure that should have been utilized by the defendants in the design and development of the J1 Tracker is undermined by their own expert, Mr. Heitzman, who testified that the Consumers Report test was "crap". [27] The

defendants submit that if the plaintiffs are permitted to admit evidence of the July 1988 Consumer Reports article and the demonstrations that followed, the defendants will have to take the time to vigorously defend against the allegations that relate to these events. [28] The plaintiffs do not rely on the Consumer Reports article for its truth. They do rely, however, on its existence and submit that the testing of the J1 Tracker that followed its publication demonstrates that the defendants should have been aware of potential problems with the J1 Tracker that the defendants should have corrected long before the accident of August 1994. [29] The veracity of the Consumer Reports testing and the article are not relevant to this proceeding. The Consumer Reports article is however admissible to explain the subsequent testing that took place. That testing is relevant to the safety of the J1 Tracker's design and whether the defendants, or some of them, became aware because of testing done subsequent to the publication of the article, of flaws in the J1 Tracker that should have been corrected before the accident. The subject documents are admissible. D. Lotus - SMC Relationship/ J2 Tracker [30] I intend to deal with these two classes of documents together because they raise similar legal issues. In late 1988, after the design and development process was complete and the J1 Tracker was

in production, SMC sought Lotus Engineering's ("Lotus") advice with regard to improvements in the J1 Tracker's manoeuvrability, stability and riding comfort. Lotus recommended certain changes to improve the J1 Tracker which SMC did not institute. [31] In 1999, SMC replaced the J1 Tracker with the J2 Tracker. The J2 Tracker incorporated some of the changes that Lotus had earlier suggested. [32] The plaintiffs submit that the Lotus recommendations could have been incorporated into the J1 Tracker prior to the accident. They allege that the design goal of the J2 Tracker was to improve actual and perceived vehicle stability. They submit the documents show that the defendants recognized a stability problem with the J1 Tracker that required specific improvement and intended to achieve improvements in stability with the J2 Tracker. They submit the documents also indicate that certain engineering tests performed in 1995 were done for the purpose of identifying improvements in the handling characteristics for the J1 Tracker and establishing benchmarks for the new model. They submit that the development of the J2 Tracker arose directly out of issues that existed with the J1 Tracker. [33] The defendants submit that the J2 Tracker is a completely different vehicle, designed years later and is not relevant to the matters at issue in these proceedings, namely whether the defendants were

negligent with respect to the design and development of the J1 Tracker. The defendants say that the fact that they made design changes in a next generation vehicle does not assist the court in deciding the issue in these proceedings, being whether the J1 Tracker was deficient before the J2 Tracker design. The defendants submit that the prejudicial effect of the admissibility of these documents outweighs any probative value in these proceedings. They submit the waste of time involved in trying a case about the J2 Tracker is completely unjustified. [34] Evidence of subsequent redesign is admissible. In Cominco Limited v. Westinghouse Canada Ltd. (1979), 11 B.C.L.R. 142 (C.A.) the court considered the admissibility of post-event conduct. At para. 30, the court set out the policy questions raised by such evidence: [30] Evidence of conduct subsequent to the date of the fire raises three quite separate issues. First, is such evidence relevant or, to put it more accurately, is it "regarding any matter ... relating to a matter in question in the action"? Secondly, is there a policy that such evidence will be excluded? It is said that its use would discourage people from making improvements that would avoid further loss for fear such improvements would be used to their disadvantage as evidence. The learned chambers judge accepted the policy argument to exclude questions about knowledge

and conduct subsequent to the fire. I will return to these two questions. [35] The court, at paras. 31-36, reviewed various authorities and texts on post-event conduct. The court concluded its discussions at paras. 37-39: [37] No case binding on us supports an exclusionary rule based on policy and I am not inclined to introduce such a rule. In my view a defendant will not expose other persons to injury and himself to further lawsuits in order to avoid the rather tenuous argument that because he has changed something he has admitted fault. [38]That leaves for consideration only the question of relevance. In this case post-fire conduct bears on the capacity to produce a fire retardant cable; on the capacity to test cables and know of their flammability, on the fitness of the cable produced for the purpose for which it was required; and on what ought to have been known before the fire. [39] In my view, in this case, the examinations for discovery cannot be cut off at the date of sale, the date of the fire, or any other date. [36] While the discussion in Cominco was raised in the context of an examination for discovery, it was adopted and followed in Anderson v. Maple Ridge (District) (1993), 71 B.C.L.R. (2d) 68 (C.A.) which concerned the admission of post-event conduct at trial. Based on those authorities, it is clear that in British Columbia evidence of post-accident conduct is

admissible if otherwise relevant. [37] The Lotus recommendations and the design changes incorporated in the J2 Tracker are relevant to the safety of the J1 Tracker design. While the potential changes are not determinative of whether the J1 Tracker was negligently designed, the evidence is admissible at this trial. E. Advertising and Promotional Material [38] Exhibit 13 includes advertising and promotional material relating to the J1 Tracker and other SMC and GMC vehicles. The plaintiffs suggest the advertisements are relevant to the case against GMCL as distributor. The defendants submit that these documents do not meet the threshold test of relevance and are not admissible at trial. [39] The advertising material is not relevant to whether or not the vehicle was safely designed. The plaintiffs do not plead the Beazleys relied on any advertising or promotional materials in deciding to purchase the J1 Tracker. The advertising material is not relevant to any facts in issue and the advertising documents found at Tabs 121, 185, 291, 305, 307, 317, 318, 348, 391 and 394 should be removed from Exhibit 13. F. Complaints [40] The plaintiffs have included 17 complaint-related documents in Exhibit 13. The defendants submit that the complaint-related documents are not relevant, are inadmissible hearsay and do not meet the test for admissible similar fact evidence. [41] The plaintiffs

submit that the complaint documents are not being admitted for the truth but as evidence that the defendants were on notice of J1 Tracker rollover accidents and failed to take steps to modify or correct the vehicle. [42] There can be many causes to a motor vehicle accident. Evidence concerning individual accidents are of limited value in determining whether or not the subject vehicle was properly designed and potentially involve an inordinate amount of time which is not commensurate with their value. The complaint-related documents found at Tabs 275, 286, 292, 293, 298, 302, 303, 304, 308, 311, 319, 325, 337, 346, 347 and 366 are inadmissible and shall be removed from Exhibit 13. G. Other Matters that Post-Date Design and the August 23, 1994 Crash [43] The defendants object to certain documents that relate to studies and developments that arose well after the events in question in this proceeding, with respect to the study of future design direction and National Highway Traffic Safety Administration ("NHTSA") testing. [44] The defendants submit they cannot be held in these proceedings to standards, technical specifications or testing that did not apply or was not available at the time of the design and development of the J1 Tracker, or even prior to the date of the crash. They submit this evidence is not relevant. [45] In regard to this objection, it is necessary to consider

the specific documents. Tab 247 involves the General Motors Vehicle Safety Improvement Program ("VSIP"). The document is dated September 20, 1989. VSIP deals with safety concerns during product development and after production of the vehicle has begun. It sets out certain standards which GM purports to follow. Among the safety goals referenced are rollover considerations. The document is relevant and admissible. [46] Tab 350 is a memo/letter from a GM employee to an SMC employee attaching a NHTSA study concerning various vehicles. Although this document is in the possession of the defendants, there is no evidence that this document was ever adopted or used by the defendants. Accordingly, this document is not presently admissible. [47] Tab 372 concerns GMC's response in July 1997 to a television program alleging a high incident of rollover accidents associated with sports utility vehicles. The draft response makes specific reference to the J1 Tracker rollover experience. The document is admissible. [48] Tab 378 is a GMC report dated September 3, 1998 concerning the development of a method for estimating vehicle stability margins. Despite the date of the document, it is relevant to issues in this litigation dealing with vehicle stability. If the document reflects post-accident state of the art information, the defendants will be entitled to lead evidence to that effect to explain

the document and limit its weight. The document is admissible. [49] Tab 385 is an analysis of the effects of engineering parameters on field rollover rates. It was prepared by Mr. Leffert in June 1999. Mr. Leffert was a senior GMC employee who GMC nominated to be examined for discovery. His report concerns the correlation between vehicle parameters and field rollover rates using 1990 to 1995 crash data. The document is relevant to the design of the J1 Tracker and how it ultimately performed in the real world. The document is admissible. [50] Tabs 386-389 involve an exchange of emails in 1999 between GMC personnel responding to certain testing carried out by NHTSA on a 1998 J1 Tracker. Although the testing and comments post-date the accident, they are relevant in regard to the questions at issue in this litigation and are admissible. [51] Tabs 395-396 contain graphs detailing the impact of design factors on field rollover. The documents, although undated, are admissible. If the graphs document matters or information not known in 1994, the defendants can lead such evidence. H. Miscellaneous Documents [52] Tab 1 is a letter from the Ford Motor Company to NHTSA dated August 15, 1973. The plaintiffs now acknowledge that this document is inadmissible. It shall be removed from the Exhibit. [53] Tab 48A is a document dated July 14, 1985, identified as Suzuki of America Automotive

Corporation Meeting Notes. While there is no such company as Suzuki of America Automotive Corporation, this document is in the defendants' possession. The note appears to involve marketing strategies for an unnamed vehicle with a narrow wheel base which is bound to turn over. The note predates by several years the introduction of the J1 Tracker and is not relevant to the design of the J1 Tracker. Tab 48A is inadmissible and should be removed from Exhibit 13. [54] Tabs 227 and 270 do not relate to the J1 Tracker and the plaintiffs agree they are inadmissible and should be removed. [55] Tab 344 is a sample motor vehicle purchase agreement of Sunshine Motors (1994) Ltd. The Beazleys purchased their J1 Tracker from Stingray, which was formerly known as Sunshine Motors Ltd, not from Sunshine Motors (1994) Ltd. Mr. Beazley was not able to offer any evidence regarding the terms of the purchase agreement he entered into for the sale of the J1 Tracker. The plaintiffs do not rely on any term of the sample contract. Tab 344 is not relevant and should be removed from Exhibit 13. [56] Tab 357 is dated June 20, 1996, and is in response to a request for a proposal to compare GM vehicles to peer vehicles by market segment. It is not relevant to any issue in this litigation and should be removed from Exhibit 13. [57] Tab 390 concerns a vehicle not in issue and the plaintiffs agree that it is not admissible in these proceedings and should be removed from Exhibit 13. [58] Tab 393 consists of photographs of a vehicle which is not a J1 Tracker. It is not relevant to matters at issue and should be removed from Exhibit 13.

SUMMARY [59] In summary I find the documents at Tabs 1, 48A, 121,185, 227, 270, 275, 286, 291, 292, 293, 298, 302, 303, 304, 305, 307, 308, 311, 317, 318, 319, 325, 337, 344, 346, 347, 348, 350, 357, 366, 390, 391, 393 and 394 are inadmissible and should be removed from Exhibit 13. The balance of the challenged documents are admissible. [60] If I have overlooked any documents, I trust counsel will bring the omissions to my attention. "R.B.T. Goepel J." ________ The Honourable Mr. Justice Richard B.T. Goepel