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Court File No.

8542/12 CP

ONTARIO
c Pe SUPERIOR COURT OF JUSTICE
c>>.
ETW

AMY BRAUEN
Plaintiff

- and -
'aid
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HYUNDAI AUTO CANADA CORP. and


HYUNDAI MOTOR AMERICA, INC. (c.o.b. as "HYUNDAI AUTO CANADA")
Defendants

Proceeding under the Class Proceedings Act, 1992

STATEMENT OF CLAIM

TO THE DEFENDANTS

A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the


plaintiff. The claim made against you is set out in the following pages.

IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting


for you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil
Procedure, serve it on the plaintiffs lawyer or, where the plaintiff does not have a lawyer,
serve it on the plaintiff, and file it, with proof of service, in this court office, WITHIN
TWENTY DAYS after this statement of claim is served on you, if you are served in Ontario.

If you are served in another province or territory of Canada or in the United States of
America, the period for serving and filing your statement of defence is forty days. If you are
served outside Canada and the United States of America, the period is sixty days.

Instead of serving and filing a statement of defence, you may serve and file a notice of
intent to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you
to ten more days within which to serve and file your statement of defence.

IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN


AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF
YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL
FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL
LEGAL AID OFFICE.

IF YOU PAY THE PLAINTIFF'S CLAIM, and $1000 for costs, within the time for
serving and filing your statement of defence, you may move to have this proceeding
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dismissed by the court. If you believe the amount claimed for costs is excessive, you may pay
the plaintiff s claim and $400 for costs and have the costs assessed by the court.

Date November 2, 2012 Issued by


Local regis

Address of 80 Dundas Street, East


court office London, ON N6A 6A3

TO: HYUNDAI AUTO CANADA CORP.


74 Frontenac Drive
Markham, Ontario L3R 6H2

AND TO: HYUNDAI MOTOR AMERICA INC.


10550 Talbert Avenue
Fountain Valley, California 92728-0850 USA
DEFINED TERMS

1. In this Statement of Claim, in addition to the terms that are defined elsewhere herein,
the following terms have the following meanings:

(a) "CJA" means the Ontario Courts of Justice Act, RSO 1990, c C-43, as
amended;

(b) "Class Members" means all people in Canada (excluding Quebec) who
purchased or leased one or more of the Defendants' Vehicles;

(c) "Class Proceedings Act" means the Class Proceedings Act, 1992, SO 1992, c
6, as amended;

(d) "Competition Act" means the Competition Act, RSC 1985, c C-34, as
amended;

(e) "Consumer Protection Act" means the Consumer Protection Act, 2002, SO
2002, c 30, Sch A, as amended;

(f) "Consumer Protection Legislation" means:

(i) Fair Trading Act, RSA 2000, c F-2, as amended;

(ii) Business Practices and Consumer Protection Act, SBC 2004, c 2, as


amended;

(iii) The Business Practices Act, CCSM, c B120, as amended;

(iv) Consumer Protection and Business Practices Act, SNL 2009, c C-31.1,
as amended, and Trade Practices Act, RSNL 1990, c T-7, as amended;

(v) Business Practices Act, RSPEI 1988, c B-7, as amended; and

(vi) Consumer Protection Act, SS 1996, c C-30.1, as amended;

(g) "Defendants" means Hyundai;


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(h) "Hyundai" means the Defendants, Hyundai Auto Canada Corp. and Hyundai
Motor America Inc.;

"Plaintiff' means Amy Brauen;

"Representations" means the Defendants' statements regarding the fuel


efficiency of the Defendants' Vehicles; and

"Vehicles" means the following automobiles, model year 2010 — 2013,


Elantra, Elantra Coupe, Elantra GT, Santa Fe, Tucson, Genesis, Sonata
Hybrid, Veloster, and Accent.

CLAIM

2. The Plaintiff, Amy Brauen, on her behalf and on behalf of all Class Members, claims:

(a) an Order pursuant to the Class Proceedings Act, 1992 certifying this action as
a class proceeding and appointing her as representative plaintiff;

(b) a declaration that the Representations were false, misleading and contrary to s.
52(1) of the Competition Act;

(c) a declaration that the Representations were made in violation of s. 14 of the


Consumer Protection Act and the parallel provisions of the Consumer
Protection Legislation' ;

(d) damages for misrepresentation in the amount of $50,000,000;

(e) a declaration that the Representations were made in violation of s. 15 of the


Consumer Protection Act and the parallel provisions of the Consumer
Protection Legislation 2 ;

I Specifically, the Fair Trading Act, RSA 2000, c F-2, s 6; Business Practices and Consumer Protection Act,
SBC 2004, c 2, s 4; The Business Practices Act, CCSM, c B120, s 2; Consumer Protection and Business
Practices Act, SNL 2009, c C-31.1, s 7; Trade Practices Act, RSNL 1990, c 1-7, s 5; Business Practices Act,
RSPEI 1988, c B-7, s 2; and Consumer Protection Act, SS 1996, c C-30.1, s 5.
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(0 a declaration pursuant to s. 101 of the Consumer Protection Act and the


parallel provisions of the Consumer Protection Legislation 3 that it is not in the
interests of justice to require notice be given;

(g) a declaration that any funds received by the Defendants through the sale of its
Vehicles as a result of the Representations are held in trust for the benefit of
the Plaintiff and Class Members;

(h) damages pursuant to s. 36 of the Competition Act, to s. 18(2) of the Consumer


Protection Act, and to the parallel provisions of the Consumer Protection
Legislation4 , in the amount of $10,000,000;

(i) punitive damages in the amount of $10,000,000;

(i) a permanent injunction restraining the Defendants from continuing any actions
taken by it in contravention of the Consumer Protection Legislation, the
Consumer Protection Act, and the Competition Act;

(k) prejudgment interest and postjudgment interest, compounded, or pursuant to


ss. 128 and 129 of the CJA;

(1) costs of this action on a substantial indemnity basis and, pursuant to s. 26(9) of
the Class Proceedings Act, the costs of notice and of administering the plan of
distribution of the recovery in this action, plus applicable taxes; and

(m) such further and other relief as to this Honourable Court may seem just.

2Specifically, Business Practices and Consumer Protection Act, SBC 2004, c 2, s 8; Consumer Protection and
Business Practices Act, SNL 2009, c C-31.1, s 8; Trade Practices Act, RSNL 1990, c T-7, s 6; and Business
Practices Act, RSPEI 1988, c B-7, s 2.

3Specifically, the Fair Trading Act, RSA 2000, c F-2, s 7.2(3).


4Specifically, the Fair Trading Act, RSA 2000, c F-2, s 7(3); Business Practices and Consumer Protection Act,
SBC 2004, c 2, s 171; The Business Practices Act, CCSM, c B120, s 23(2); Consumer Protection and Business
Practices Act, SNL 2009, c C-31.1, s 10(2); Trade Practices Act, RSNL 1990, c T-7, s 14(2); Business Practices
Act, RSPEI 1988, c B-7, s 4(1); and Consumer Protection Act, SS 1996, c C-30.1, s 16(1).
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PARTIES
The Plaintiff

3. The Plaintiff, Amy Brauen, resides in Waterdown, Ontario. Ms. Brauen purchased
one the Defendants' Vehicles, specifically a 2011 Tucson, after receiving information from
the Defendants as to the fuel efficiency associated with their Vehicles, and specifically the
2011 Tuscon. The Plaintiff relied upon the Representations of the Defendants to her
detriment in making her purchasing decision.

The Defendants

4. The Defendant, Hyundai Auto Canada Corp., is a coroporation incorporated pursuant


to the laws of Canada, the head offices of which are situated in Markham, Ontario. Hyundai
Auto Canada Corp. is a subsidiary of Hyundai Motor Company, a corporation incorporated
pursuant to the laws of the Republic of Korea, the head offices of which are situated in
Seaoul, Republic of Korea. Hyundai Canada Inc. distributes, markets and sells throughout
Canada Vehicles that are designed and manufactured in the Repulic of Korea by Hyundai
Motor Company and certain of its subsidiaries.

5. The Defendant, Hyundai Motor America, Inc. is a corporation organized pursuant to


the laws of the State of California in the United States, the head offices of which are situated
in Fountain Valley, California. Hyundai Motor America, Inc. is a subsidiary of Hyundai
Motor Company. Hyundai Motor America, Inc. carries on business in Canada under the name
"Hyundai Auto Canada". Hyundai Motor American, Inc. distributes, markets and sells
throught Canada and the United States Vehicles that are designed and manufactured in teh
Republic of Korea by Hyundai and certain of its subsidiaries.

6. The Defendants are resident in Ontario for the purpose of section 2 of the Consumer
Protection Act.

THE NATURE OF THE CLAIM


7. Prior to and during the time the Vehicles have been for sale in Canada, the Defendants
made the Representations, specifically stating that the Vehicles had certain levels of fuel
efficiencies. The Representations were designed to, and did, exploit Plaintiff's and the Class
Members' desire for fuel efficient vehicles, and the Plaintiff and the Cl ass relied upon the
Representations to their detriment. Hyundai undertook a marketing campaign to sell the
Vehicles claiming fuel efficiency well beyond the true fuel efficiency of the Vehicles, that is
not reached in real-world, normal use. As part of the advertising campaign designed to
capitalize on public concern over escalating fuel prices, the Defendants utilized high-impact
television, internet, and print advertisements that misleadingly overstated the fuel efficiency
of the Vehicles.

8. Canadian motor vehicle fuel consumption testing is conducted in laboratories


according to standard testing procedures. Fuel consumption ratings are generated based on
fuel consumption values derived from laboratory tests and averaged based on Canadian
production volumes. Fuel consumption ratings are then adjusted to account for the difference
between controlled test conditions and real-world driving conditions.

9. By way of the Representations, the Defendants misrepresented that the Vehicles had
performance characteristics, benefits, and/or qualities that they do not have. The Defendants
seriously and significantly overexaggerated the fuel efficiency of the Vehicles. Such false,
misleading or deceptive representations deceived or tended to deceive the Plaintiff and the
Class Members. The Plaintiff and the Class Members relied on the Representations to their
detriment.

10. Hyundai knew or ought to have known that the Plaintiff and the Class Members would
not, and could not reasonably protect their own interests by conducting their own testing and
that such purchasers would be unable to receive the benefit misrepresented to them from the
Defenadants, and further that the Plaintiff and the Class Members would rely on the
Defendants' misrepresentations to their detriment.

11. The Representations were made for the purpose of promoting, directly or indirectly,
the sale of the Defendants' Vehicles or for the purpose of promoting, directly or indirectly,
other business interests of the Defendants. The Representations were made knowingly or
recklessly. The Representations were made to the public, to the Plainti ff, and to the Class
Members. The Representations were false and/or misleading in a material respect, namely as
to the actual fuel efficiency of the Defendants' Vehicles.

12. Hyundai has received a large number of complaints regarding the discrepancy between
the advertised and actual fuel efficiency of their Vehicles.

13. The Plaintiff and Class Members suffered loss or damage as a result of the
Defendants' conduct by having to pay for more fuel than anticipated. Further, the Plaintiff
and Class Members were damaged by the Representations in as much as the Defendants'
broad dissemination of inflated fuel efficiency caused the Defendants' Vehicles to be
purchased and sold at prices higher than those at which such Vehicles would have been
purchased and sold had the Defndants' disseminated accurate fuel efficiency information with
respect to their Vehicles.

14. On November 2, 2012, Hyundai announced it had overstated the fuel economy of
about 900,000 vehicles sold in the United States since late 2010, citing an investigation by the
U.S. Environmental Protection Agency ("EPA"). Hyundai said they would lower the miles-
per-gallon estimates on most of their 2012 and 2013 vehicles as a reult of the EPA finding and
that they would compensate U.S. buyers for the difference. A Hyundai spokesperson said
"We're not going to argue this. We're going to pay people back for the money they had to
spend." There was no mention in the announcement of lowering the fuel efficiency estimates
in Canada or providing compensation to Canadian buyers.

RELEVANT LEGISLATION

15. The Plaintiff pleads and relies on the CJA, Consumer Protection Act, Class
Proceedings Act, Competition Act, and the Consumer Protection Legislation.

SERVICE OUTSIDE OF ONTARIO

16. The Plaintiffs plead and rely on section 17.02 (g), (h), and (p) of the Rules of Civil
Procedure, allowing for service ex juris of the foreign defendants. Specifically, this
originating process may be served without court order outside Ontario in that the claim is:

(a) in respect of a tort committed in Ontario (rule 17.02(g));


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(b) in respect of damages sustained in Ontario arising from a tort or breach of


contract wherever committed (rule 17.02(h)); and

(c) against a person carrying on business in Ontario (rule 17.02(p)).

PLACE OF TRIAL
17. The Plaintiffs propose that this action be tried in London, Ontario.

November 2, 2012 SISKINDS LLP


Barristers & Solicitors
680 Waterloo Street
London, ON N6A 3V8

Michael J. Peerless (LSUC#: 34127P)


Matthew D. Baer (LSUC#: 48227K)
Tel: (519) 672-2121
Fax: (519) 672-6065

Lawyers for the Plaintiff


AMY BRAUEN HYUNDAI CANADA INC. et al. Court File No: 8542/12
Plaintiff and Defendant

ONTARIO
SUPERIOR COURT OF JUSTICE

Proceeding commenced at London

STATEMENT OF CLAIM

Siskinds LLP
Barristers & Solicitors
680 Waterloo Street
London, ON N6A 3V8

Michael J. Peerless (LSUC#: 34127P)


Matthew D. Baer (LSUC#: 48227K)
Tel: (519) 672-2121
Fax: (519) 672-6065

Lawyers for the Plaintiff

1950880.1