March 14, 2005

Supreme Court upholds punitive damages against Chrysler

Toronto, Ontario – Canada’s Supreme Court has upheld a decision which states that the courts can award punitive damages when an automaker fails to honour its warranty.

The appeal involves a $25,000 punitive damage award given by Saskatchewan courts in Prebushewski v. Dodge City Auto (1984) Ltd.

In December 1996, Shawna Prebushewski and her husband purchased a brand-new 1996 Dodge Ram 4×4 half-ton truck. Fourteen months later, the truck burned beyond repair, with 31,000 km on the odometer. The Prebushewskis had paid $43,198.80 for the vehicle, including taxes and extended warranty. Chrysler Canada Ltd. declined to negotiate with Prebushewski and redirected her to their insurer.

Prebushewski’s insurer, Saskatchewan Government Insurance (SGI) investigated the fire and concluded it was caused by a defective daytime running light module. Two other trucks subsequently caught fire; at the time of the trial, SGI had a claim against Chrysler for all three.

The trial judge concluded that the cause of the fire was a defect in the module and that Chrysler breached the Consumer Protection Act, awarding $25,000 exemplary damages to Prebushewski.

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