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 SUVs 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 Toyotas

manufacturing line, it was only available at Toyotas manufacturing plant in Kobe, Japan. As such, Mr.

Pascals 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. Pascals.

Please answer this question.

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