BMW loses skirmish in $175M claim against Autoport over damaged cars

TORONTO — BMW Canada has lost a skirmish in its quest for $175 million in compensation from storage company Autoport for alleged damage to thousands of imported vehicles.

In a decision Friday, the Ontario Court of Appeal ruled the German automaker should foot the $10,000-a-day bill the company says it’s been paying to preserve the vehicles as litigation evidence.

The court set aside an earlier ruling that had shifted the cost of storage to Autoport, saying the goal was to “best ensure fairness” in the court process.

“I am not persuaded that the ongoing cost of preserving the vehicles in the context of BMW’s $175-million damages claim would constitute hardship or prejudice to BMW that would reasonably justify shifting the interim cost of preservation to Autoport,” Justice Katherine van Rensburg wrote for the Appeal Court.

The case arose after a brutal winter in February of 2015 during which, the German automaker alleges, 2,966 imported BMW and MINI models stored by Autoport in Halifax were unduly exposed to ice, water and salt.

In a July 2015, Transport Canada warned of a serious safety risk. Corrosion, the agency said, could lead to sudden engine shutdowns, steering problems or fires. The recall affected 10 different BMW models and seven 2015 MINI models.

BMW argues it’s impossible to determine the extent of any damage without destructive tests, and, as a result, none of the vehicles could be made roadworthy and sold. The automaker wants to destroy all of them.

The unproven suit, which alleges Autoport was negligent and breached its contract, seeks $175 million — the full value of the vehicles.

Autoport denies any liability. It argues BMW’s claim is grossly exaggerated and the total recall unreasonable. 

To mount a proper defence, the storage company says it needs to examine the automobiles. But it wants the results of inspections BMW has already done, saying it needs that information to know what investigations are required and on how many of the cars.

The automaker says it has been spending about $10,000 a day — roughly $3.5 million a year — to keep the vehicles at three sites in Canada and wanted Autoport to foot the bill.

Autoport appealed after Divisional Court ordered the company to pay for past storage, and to keep paying or take possession of the vehicles for whatever tests it feels are needed.

“I do not agree with the Divisional Court’s unqualified rejection of the duty of litigants to preserve evidence, and BMW’s assertion in this court that parties must be free to deal with their property as they see fit,” van Rensburg wrote.

“The focus here should have been on trial fairness — that is, on the parties’ ability to prosecute and defend the proceeding.”

This report by The Canadian Press was first published Jan. 22, 2021

Colin Perkel, The Canadian Press