Rivtow Marine Ltd. v. Washington Iron Works

Rivtow Marine Ltd. v. Washington Iron Works

The Court held that although damage to the defective article itself and economic loss flowing directly from negligent design could not be recovered by a stranger to the contract (that element resembling warranty), both the manufacturer and the distributor owed a duty to warn Rivtow once they knew of the defects and Rivtow's reliance; their negligent failure to warn was the proximate cause of the foreseeable economic loss from withdrawal during peak operations and that loss was recoverable in tort. The trial judge's award for loss of use was restored while the claim for repair costs was disallowed.

Citation
[1974] SCR 1189
Parties
Appellant / Charterer / Plaintiff: Rivtow Marine Ltd.; Respondent / Manufacturer: Washington Iron Works; Respondent / Distributor: Walkem Machinery & Equipment Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
27 August 1973
Procedural Posture
Appeal — Negligence / Product Liability / Torts / On Appeal From Court of Appeal for British Columbia to Supreme Court of Canada; Final Judgment on Appeal
Outcome
Appeal allowed; judgment of the Court of Appeal set aside; judgment of the trial judge (Ruttan J.) restored in substance; award for economic loss (loss of use) upheld; claim for repair costs disallowed; two judges dissented in part.
Legal Topics
Duty to Warn, Economic Loss (pure Economic Loss), Manufacturer Liability, Distributor Liability, Remoteness/proximity
Source Language
English
Torts Negligence Product Liability Damages Duty to Warn Economic Loss (pure Economic Loss) Manufacturer Liability Distributor Liability +1 more

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Parties

Rivtow Marine Ltd.

Appellant / Charterer / Plaintiff

Washington Iron Works

Respondent / Manufacturer

Walkem Machinery & Equipment Ltd.

Respondent / Distributor

Procedural Posture

Appeal — Negligence / Product Liability / Torts / On Appeal From Court of Appeal for British Columbia to Supreme Court of Canada; Final Judgment on Appeal

Legal Issues

  1. 1 Whether manufacturer and distributor owed a duty to warn the user of known defects
  2. 2 Whether pure economic loss (loss of use and cost of repairs) is recoverable in tort absent physical injury
  3. 3 Whether cost of repairing the defective product is recoverable by a stranger to the manufacturer's contract

Ratio Decidendi

The Court held that although damage to the defective article itself and economic loss flowing directly from negligent design could not be recovered by a stranger to the contract (that element resembling warranty), both the manufacturer and the distributor owed a duty to warn Rivtow once they knew of the defects and Rivtow's reliance; their negligent failure to warn was the proximate cause of the foreseeable economic loss from withdrawal during peak operations and that loss was recoverable in tort. The trial judge's award for loss of use was restored while the claim for repair costs was disallowed.

Court Disposition

Appeal allowed; judgment of the Court of Appeal set aside; judgment of the trial judge (Ruttan J.) restored in substance; award for economic loss (loss of use) upheld; claim for repair costs disallowed; two judges dissented in part.

Orders

  • Appeal allowed and Court of Appeal judgment set aside
  • Judgment of Ruttan J. restored