Torts-_Winter_Notes_(SB)[1]

III. INTENTIONAL TORTS A. INTENTIONAL INTERFERENCE with the PERSON 1. Intention Goshen v. Larin [1974 NS CA] Garratt v. Dailey [1955 Supreme Court of Washington] Carnes v. Thompson [1932 Supreme Court of Missouri] Basley v. Clarkson [1681] Smith v. Stone [ King’s Bench 1647] Tillander v. Gosselin [1967 ON HC] Lawson v. Wellesley Hospital [1975 ON CA] 2. Assault I. De S. & Wife v. W. De S [1348] Stephens v. Meyers [1830] Tuberville v. Savage [1699 KB] Bruce v. Dyer [1970 ON] 3. Battery Cole v. Turner [1705 Engl] Bettel et al. v. Yim [1978 ON County Court] Bazley v. Curry [1999 SCC] Jacobi v. Griffiths [1999 SCC] Blackwater v. Plint [2005 SCC] 4. Intentional Infliction of Mental Suffering Wilkinson v. Downton [1897 QB] 5. False Imprisonment Bird v. Jones [1845 QB] Chaytor et al. v. London New York and Paris [1961 SC NF] 6. Abuse of Public Office Odhavji Estate v. Woodhouse [2003 SCC] B. DEFENCES TO INTENTIONAL TORTS 1. Consent O’Brien v. Cunard [1891] Norberg v. Wynrib [1992 SCC] Malette v. Shulman [1990 ON CA] Marshall v. Curry [1993 NS SC] 2. Self-defence Cockcroft v. Smith [1705 QB] 3. Defence of Property Green v. Goddard [1704 QB] Bird v. Holbrook [1828 Engl] 4. Necessity Dwyer v. Staunton [1974 AB] Vincent v. Lake Erie Transportation Ltd. [1910 SC of Minnesota] Southwark London Borough Council v. Williams and Anderson [1971 CA Engl] 5. Legal Authority Reynen v. Antonenko [1975 AB SC] 3

- If a person should not be held liable for damage that cannot be predicted by a reasonable person because it was "direct" or "natural", equally it would be wrong for a person to escape liability for "indirect" damage if the person foresaw, or could have reasonably foreseen, the events which led to the damage being done - A person must be responsible for the probable consequences of his or her act. Foreseeability is said to be the effective test, as the direct consequence test leads only to never-ending and insoluble causation problems. - In this case: even though the damage was the direct result of the oil spill, the defendant could not have reasonably been expected to have known that the oil would catch fire, and, as such, was not liable for the damage Ratio: Liability is determined by the damages (direct or indirect) that a reasonable person should have foreseen. If damage is not reasonably foreseeable then it is too remote. If the losses were not foreseeable there is no liability. Class Notes: - Reasonably foreseeable = probable (which is 50+1% or greater) – somewhat objective metric - Doesn’t tell us how much we need to foresee- type, extent, manner of occurrence or specific cause? - How far should Def be liable? / where should we draw the line? - (1) HC of Aust had said it was concept of Directness (direct causation) in WM #1 - Came from Polemis (H of L, PC) where direct harm wasn’t the fire but rather oil coagulating on a ramp and then the Pl could claim damages for all its results (including the fire) - (2) Foresight (see CB 346-347) - Foresight of a reasonable man – what is probable - What about the contributory negligence of the Pl? - The Pl were stuck with pushing the purest form of the Polemis test b/c if put forth argument that it was reasonably foreseeable the Defs could see that oil would burn on water then why couldn’t they? At this time in Aust, contributory negligence was full defence and so it would have ruined their case and they would have been fully liable (b/c no apportionment legislation) - Court said some problems w/ Polemis test (principle to make Defs responsible to Pls) - Results of it were sometimes illogical - Not good law (CB 346) - Insofar as principle is concerned, this new test will hold ppl responsible for probable consequences of actions – to demand more is too harsh a rule and to demand less is to ignore the civilized order (CB 346) - Probability - Bolton v. Stone  don’t have to guard against fantastic possibilities, when deciding probability consider- severity of the damage, cost of avoidance, utility of conduct, and likelihood of the harm occurring - Important case b/c change from Directness  Reasonable Foreseeability (even if it is still unclear that is meant) 1b. Type of Damage Hughes (Appl/Appl/Pl) v. Lord Advocate (Resp/Resp/Def) (CB 354) (8-yr old boy burned by paraffin lamps in the street) v (representative of the group that opened manhole) [1963 Engl] 1 st Expansion from Wagon Mound No 1  yes kind of damage has to be reasonably foreseeable, but manner and extent do not have to be (foreseeability to kind of damage only) Facts: A maintenance hole in a street was opened for repair purposes. It was covered with a tent and left unguarded while the employees went for a tea break, but was surrounded by paraffin lamps. An 8-year-old boy entered the tent and knocked one of the lamps into the hole. An explosion occurred causing the boy to fall into the hole and to be severely injured. Def argued that Pl could not recover because the damage he suffered was of a kind that was not foreseeable. The lower courts held that the Def owed a duty of care since it could be foreseen that children could be attracted to the site and burned by the paraffin lamps, but denied liability on the ground that the explosion itself was so unlikely it could not have been foreseen. Issue: Is there proximate cause? YES – appeal allowed Reasoning: (Lord Reid) 6

2 nd Expansion from WM #1  exception to that case b/c court said no, will not throw out thin skull, so even if the test is still reasonable foreseeability of harm, the thin skull doctrine is an exception to this test - expands liability Facts: Mr. Smith, employed by Def , lowered articles by means of an overhead crane into a tank containing molten metal. He was provided with a sheet of corrugated metal for protection, but one day while lowering an article into the tank he looked to see what he was doing, so that his head was outside the metal shield, and a piece of molten metal struck him on the lower lip, causing a burn. The burn was found to be the promoting agent of cancer, which developed at the site of the burn and from which he died three years later. The tissues were found to have already had a pre-malignant condition; but for the burn, however, cancer might not have developed, though there was a strong likelihood that it would have developed at some point in his life. Pl’s wife brought an action against LB. Issue: Is there sufficient proximate cause? YES – judgement for the plaintiff Reasoning: (Lord Parker C.J.) - The Privy Council in Wagon Mound (No. 1) did not have "thin skull" cases in mind - The question is not whether Def could reasonably have foreseen that a burn could cause cancer and that Mr. Smith would die. Rather, the question was whether the Def could reasonably have foreseen the type of injury that was suffered, namely, the burn. - The amount of damage suffered as a result of a burn depends on the characteristics and constitution of the particular victim. - The risk of a worker getting burned by molten metal while operating an overhead crane, unless adequately protected, was one which any reasonable employer should have foreseen, and thus Def was negligent for failing to provide adequate protection. - Since the cancer was merely an extension of that burn, the judge concluded, Def was fully liable in damages to Pl Ratio: 1. The tortfeasor takes his victim as he finds him. 2. The test is not whether the extent of injury was foreseeable, only whether the type of injury suffered was reasonably foreseeable Class Notes: - Death was caused by negligent act but was it proximate? - Use WM#1 test- was it reasonably foreseeable? - foreseeability of the burn but not of the cancer - But court did not want to thrown out thin skull principle - Negligent act was allowing the lead to splash - Based on Hughes – manner and extent do not have to be foreseeable but we don’t have kind of harm foreseeable here so it doesn’t work - Could we make WM #1 applicable here? Would have to say that if the accident was foreseeable you will have to responsible for all the consequences - This really opens it up- no defence for Defs - So to make this case fit w/ the series of cases the Court here uses the thin skull doctrine - If PC in WM#1 intended to destroy thin skull they would have said so- so here it is saved 3. Acts of Third Parties and Intervening Forces Intervening event = event subsequent to the act of negligence that is so significant it snaps the chain of causation (Def did not cause the loss that the Pl suffered and should not be economically liable). This is different from a pre-existing condition of the Pl (thin-skull rule) because that is there before the negligent act. Issue: what is the extent of the defendant’s liability? Act occurring between what the Def did and what happened to the Pl - two situations: a) Initial injury is exacerbated by the second injury. Is it within the ambit of risk created by the defendant’s negligence? b) Another person intervenes and creates the damage. When can the defendant be held liable for the negligent acts of others? 9

- with boats, person in control of boat automatically owes affirmative duty to passengers to take care of them - in the situation, passengers are by definition at peril - legislative and common law duties for this (in this case didn’t rely on the statute) - when Mathews went overboard, skipper (MacLaren) affirmative duty turns into duty to rescue - rescue attempt didn’t work b/c reversed and were throwing things to them - Horsley jumped in to rescue Matthews  he was a Good Samaritan- no duty to rescue  suffers same fate of death by shock - Mrs. Jones (strong swimmer) dives in and tries to help Matthews then Mr. Jones grabs controls of boat and picks her up - Lawsuit by Matthews is a non-starter b/c no negligence in how he went overboard – even if rescue was faulty can’t claim - Even if rescue was negligent, would MacLaren have been liable to Matthews? No b/c cause of death was not linked to rescue attempt (it was heart attack) - Lawsuit by Horsley  standard of care was met for the rescue which matched MacLaren’s affirmative duty - Just met standard (wasn’t perfect / textbook) but Court said it was ok - Courts create second, independent duty to the 2 nd rescuer - Encourages rescue – policy - Foreseeable that if you create an additional situation of peril b/c of your first botched attempt, somebody else will jump in and this shouldn’t be a remoteness question but rather a duty question - A bit of protection for rescuer – standard is gross negligence (AB legislation) - There are also limits on being a rescuer - Has to be reasonable  case talks about “foolhardiness” (more extreme language than unreasonableness? Unclear) - Independent duty is owed to second rescuer unless this second rescuer is foolhardy - We learn from this case that - In a rescue situation the intervening novus actus thing doesn’t apply – quite the opposite w/ second rescuer - Made clear that if a 1 st rescue is botched and b/c of this foreseeability and the policy of encouraging rescuers – the duty owed to 2 nd rescuer is an independent duty (separate action) 4b. Second Accident Situations - can be hard to draw the line / decide what was foreseeable / where the fault lies (if you think this is relevant) - see notes 1 – 4 CB 391-392 for cases that show this difficulty Weiland (Pl) v. Cyril Lord Carpets Ltd. (Def) (CB 388) (Injured in bus accident and in 2 nd accident fell down stairs) v. (negligent in Pl’s first injury) [1969 Engl] 2 nd injury – Def liable if 2 nd injury close in time to first and a result of a necessary and ordinary activity of life Facts: Pl was injured in a bus accident due to negligence of the Def. Went to hospital to get a neck brace, couldn’t see properly because she could not adjust or use bifocals because of the brace , was woozy and fell down stairs and injured ankle. She claims this is part of the initial ambit of harm created by Def. Def says it is an intervening cause- she caused the ankle injury herself. Alternatively, that second injury was not foreseeable. Pl is suing for neck and ankle injuries. Issue: Are the Pl’s actions an intervening cause? NO Did Def’s actions cause the second injury (and is he therefore liable)? - YES, result of the first – action allowed Reasoning: (Eveleigh J.) - Factual causation : because of the short time in between the 1 st and 2 nd injuries it is close enough. Time aspect was essential as it was so soon after the original accident - Furthermore, she was engaged in a necessary activity (hospital told her to come back for neck brace – so not walking for pleasure). The 2nd injury was the result of the 1st injury. The first injury impaired her ability to negotiate stairs, which resulted in the fall. 12

Price v. Milawski [1977 ON CA] - First doctor was negligent - One negligent doctor could be liable for the additional loss caused by another doctor’s negligence - Overrules Mercer? - Seems to be a conscious act by a third party - Court saying that sometimes negligence is foreseeable and first tortfeasor is responsible Overall Notes - Mercer and Gray seem to draw the line at mistakes – those are foreseeable, negligence is not - Why use word “malpractice” in Joseph Brant case – do they mean negligence, gross negligence…? - From Price – first tortfeasor can be responsible for other negligence – new act by 3 rd party isn’t going to break the chain  this is progress - Suicide - Note 2, CB 394  treated as novus actus if deliberately committed by sane person, but do impose liability on Def if the victim committed suicide while insane and if the insanity could be traced directly to the injuries received in the accident - Basically slamming the door on the vast majority of suicide situations (profoundly ill or injured, but not insane – deliberately plan for it) - Some instances where families have received damages from original tortfeasor if thin skull can be shown (e.g. history of depression exacerbated by harm caused by tortfeasor which worsened it) - But this raises the question of why others can’t succeed- doesn’t seem to make sense - Mahoney thinks actus novus rule is outdated and ineffective  Pl is left w/out help and get no nuanced decisions 4d. Proximate Cause and Intermediate Inspection Manufacturers owe a direct responsibility to consumer (since Donoghue v Stephenson) to provide products fit for use (safe). Why? Because they are in control, knowledgeable, and doing it for profit. Responsibility for (duties of): a) Manufacture (how it was put together) b) design c) warnings regarding safety and defects These duties of manufacture and design are enforced based on when product is made. However, the duty to warn is continuous and evolving based on new knowledge. The more dangerous the product, the higher the obligation on the manufacturer. You can’t design a bad product and then warn everybody about it. In the products liability area, the fact that different parties at different stages can become involved with a product complicates the question as to who should be liable when something to do with the product goes wrong (ex: manufacturer, assembler, distributor, retailer, repairman…) Which, if any, of these intermediate acts should be treated as intervening forces? Through whose hands has it passed? Ives (Pl) v. Clare Brothers (Def) (CB 395) (damage from carbon monoxide poisoning) v. (furnace manufacturer & inspector) [ON HC 1971] Intermediate inspector will not break the chain of causation to exonerate a manufacturer from liability Facts : Pl was bound to take gas service from Twin City Gas. In 1967 he bought a Clare gas furnace from Twin City. This was manufactured by the Def Clare Brothers. The furnace was supplied and installed by Twin City. It was inspected on 3 occasions by the Twin City following service calls made to the company. Pl wasn't given any warning of any danger. In 1968 the plaintiff felt sick, suffered injuries (carbon monoxide) Issues: 1. Were the defendants negligent? YES – action allowed 15

- Manufacturer: - produced an inherently dangerous product - failure to warn of danger (began to know of danger or rupture in 1979) - Dr. Birch: - Failure to disclose material risks of procedure [Reibl v Hughes] - Not just a surgeon because selected the product as well (distributor) – failure to warn about a product Viridian Inc. v. Dresser Canada Inc. (CB 398) (bought compressor from Dresser) v. (used weak diaphragm halves in high pressure gas compressor) [AB CA 2002] Facts: Mainland supplies diaphragm halves to Dresser, which incorporated them into high pressure gas compressor which it sold to Viridian. Deficiencies in size / strength of diaphragms contributed to failure of the compressor. Trial judge dismissed claim against Maitland – concluded that failed to meet specifications of Dresser and said Mainland was negligent in doing so. But, there was reasonable probability of inspection by Dresser which would have detected the defects and not foreseeable that a defected diaphragm would subsequently be used. Alternatively, found that even if duty was owed the use of the diaphragms after the first compressor failure was not foreseeable and constituted an intervening act. Issues: Did trial judge err in finding Mainland did not owe a duty of care? NO- Appeal Dismissed Did trial judge err in alternative finding that Dresser’s conduct following discovery of defect was intervening act? UNECESSARY TO DEAL W/ THIS Reasoning: - Trial judge properly applied Anns/Kamloops test - Authorities establish that the reasonable probability of a defect being discovered by intermediate examination at the time the product is released is a pivotal factor in determining whether a duty of care is owed to an ultimate user - Trial judge didn’t err in law b/c: - Recognized category of manufacturer’s liability (under Anns test) - His approach was not inconsistent w/ 2 step approach - Critical time to assess duty owed to an ultimate user is at point of distribution – goes to foreseeability of harm - Not reasonably foreseeable that negligence by Maitland would injure Sherritt b/c (1) reasonably probably to have intermediate examination, (2) proper examination would have revealed defect, (3) Mainland was not aware of how diaphragms to be used, (4) diaphragms had to be engineered by Dresser before could be used, (5) parties were sophisticated, and (6) there was no reliance - Moreover, viewing proximity from policy perspective – scope of duty cannot practically extend to every potential use of products (from commercial standpoint) Ratio: Class Notes: - Instead of changing the diagphragm that had problems w/ it, Dresser had a second product failure which was the cause of this lawsuit - Ultimate consumer claimed against manufacturer saying it failed to meet specifications of intermediary (Dresser) and was ultimate cause of compressor failure - Court held yes, duty of care exists from manufacturer point of view but in this case it didn’t carry the whole way through b/c the manufacturer couldn’t foresee the way in which the product would ultimately be used and was not involved in the product’s ultimate use - Para 52, CB 403  policy statement - “It would be commercially impractical for manufacturers of such products to undergo testing for every potential use of such products” - The manufacturer here not responsible for damage to ultimate consumer b/c of intermediary made it unforeseeable as to how product would be ultimately used 18

Facts: The Appls filed 4 separate sets of pleadings each claiming damages suffered as a result of receiving negligent medical care, attention and treatment which resulted in injury and, in certain cases, death. The inadequate treatment was alleged to be the result of funding cuts to the Alberta Health system. Issue: Should Ralph Klein (Premier of AB) and Shirley McClellan (Minister of Health) as representatives of the Crown be removed as defendants in 4 separate statements of claim? NO Can representatives of the Crown be sued personally? YES appeal allowed Reasoning: Russell, J.A.  allow appeal - should both be named b/c of underlying personal element of tort law- personal wrong / tort - supported by Prof Hogg - general principle public servants / politicians are individuals not govt actors - distinguishable from Fox-Hitchner v. Alberta (1977) b/c contract law there and here it’s tort - Vicarious liability - Proceedings Against the Crown Act - Crown will bear liability for an official’s actions if “the wrongful act is sufficiently related to conduct authorized by the employer (Crown) to justify the imposition of vicarious liability” - Does not immunize Crown workers from suit (personally), but if Crown is liable in tort, no real reason to hold employees liable - Some policy reasons why claims against crown officers for torts in cnxn w/ official fxns should not be permited - But despite these (Hogg) may still be necessary to name individual to determine if conduct was sufficiently connected to his official role b/f Crown can become vicariously liable - Office of the Premier is creature of convention and not law so it is not a suable party b/c no statute establishe the office s(not enough the office is recognized explicitly in other statutes) - Minister of Health is suable- but by title “Minister of Health”- this is different from Shirley McClellan - Names should be restored as Defs b/c all liability in tort is “first and foremost” personal and it cannot be said the two Defs were improperly joined Irving, J.A. (dissenting)  dismiss appeal - when a Crown servant commits a tort the servant is personally liable (even if during course of employment) and in that case the Crown is liable as well - only the servant who actually commits a tort is personally liable and only the Crown (the master) is vicariously liable - allegations are allegations for vicarious liability for the torts of hospital personnel and must fail as disclosing no cause of action against either Klein of McClellan Ratio: Office created by statute can be sued on basis of vicarious liability Class Notes: - Would want to sue these people personally because have the right to examine defendants in discovery - Can’t sue Premier of Alberta because that’s not a legal position (not a position created by statute). However, can sue Ministers 2. What is the Duty Owed by the Government? Just (Appl/Appl/Pl) v. British Columbia (Resp/Resp/Def) (CB 493) (father & daughter injured & killed in rock slide) v. (provincial govt) [1989 SCC] Provincial Government Framework for government liability problems Facts: Pls were stopped in traffic beside a rocky slope on a major highway in British Columbia. A boulder from the slope rolled down upon their car, killing the daughter and seriously injuring the father. The Department of Highways had set up a system for inspection and remedial work on rock slopes under which engineers made inspections and recommendations and the work was performed by rock-scaling crews. The Department's practice had been to make visual inspections of the highway unless rock falls or a history of instability in an area 21

indicated the need for a rock engineer to climb the slope. The father claimed that the provincial authority was negligent in its maintenance of the highway. The trial judge found that the entire inspection system and the way it was implemented was a policy matter which could not give rise to liability (no tort duty), and the Court of Appeal upheld this decision. Issue: Is it policy or operational? OPERATIONAL – appeal allowed (ordered new trial) Reasoning : - Public authorities may be exempt from the application of the traditional tort law duty of care if an explicit statutory exemption from liability exists or if the decision is one of policy - The way in which inspection systems are carried out is an operational, not policy decision - Therefore, there is no exemption from tort duty - Standard of care required of the government agency – the manner and quality of the inspection system, being clearly part of the operational aspect of a governmental activity, should be assessed in light of all the surrounding circumstances including budgetary restraints and the availability of qualified personnel and equipment. - SCC ordered a new trial so that the necessary findings of fact on the issue of negligence could be made. Ratio: (Cory J.) - As a general rule, the traditional tort law duty of care will apply to a government agency in the same way that it will apply to an individual - Government inspections (frequency, manner in which carried out, when should be carried out) are the products of administrative decisions, therefore are operational and therefore subject to a tort analysis - Decisions concerning budgetary allotments for departments or government agencies should be classified as policy decisions, which may be open to challenge on the basis that they were not made in the bona fide exercise of discretion. Analysis: (CB 495) 1) Does a duty of care exist? a) Are the parties in a relationship of sufficient proximity to warrant the imposition of such a duty? b) Is there exemption from the duty (& liability) because of: (i) an explicit statutory exemption (ii) the nature of the decision made by the govt agency (exempt from the imposition of a duty of care in situations that arise from its pure policy decisions) - policy decisions are generally made by persons of higher level of authority (but not always) - characterization of decision rests on nature of decision and not on identity of the actors - products of administrative decisions = duty / policy decisions = no duty - if policy – was the decision not bona fide or irrational so that it could not constitute a proper exercise of discretion? - if operational, government is treated just like any other individual 2) What is the standard of care? a) manner and quality of an inspection system - standard must be assessed in light of all surrounding circumstances including budgetary restraints and the availability of qualified personnel and equipment. Class Notes: - standard of care imposed on govt may not be standard imposed on an individual (CB 494-495 – Cory) o example of neighbour’s standard of keeping sidewalk clear vs govt’s standard of maintaining roads o higher standard for neighbour o much bigger responsibility for govt so the standard can’t be as high (b/c courts recognize it’s impossible for govt to perform in all cases at that high level) - Mahoney raises point that it could be useful to apply analysis of Bolton v. Stone (cost of avoidance, etc) to rationalize difference b/w govt’s standard and that of an individual Brown (Appl/Appl/Pl) v. B.C. (Resp/Resp/Def) (SM 285) (hit black ice when driving on highway and drove into river) v. (Minister of Transport. & Highways) 22

[1994 SCC] Provincial Government No liability for policy decisions Policy factors include considerations of finance, personnel, & negotiations with govt unions Misfeasance / nonfeasance – no legal distinction Policy can be made at any level (dicta only) Facts: Pl was driving down hwy around 8:30am and hit black ice causing him to lose control and go into river. On the same stretch of highway that morning there had been 3 other accidents and the RCMP had called for a sanding truck at 7:25, 8:10 and 8:20. It finally got there at 9:23. One delay was that at that time of year the staff was not on at full level, because they were still operating on summer schedule. Two allegations of negligence: (1) Failing to respond in a timely fashion to the reports of icy conditions & to remedy them (2) Failing to maintain section of the road so that ice would not form on it Issue: Was the decision regarding highway staff one of policy or operation? POLICY. Is the government liable for the results? NO – appeal dismissed Reasoning: (Followed reasoning of Just case) 1) Does a duty of care exist? a) Prima facie duty of care - Yes, there is a duty of care resting on the Department to reasonably maintain the provincial highways b) Statute - There is no statutory exemption from tortious liability provided by the Highway Act or any other Act - Policy or Operation – The decision to maintain a summer schedule was a policy decision - The decision involved consideration of finance and personnel & significant negotiations with govt unions - No allegation was made that the decision was not bona fide or was so irrational that it could not constitute a proper exercise of discretion; therefore, the policy decision cannot be attacked. - Operational – the manner in which the sanding was carried out. Whether the manner in which the sanding was carried out under the summer schedule was negligent 2) Was the standard met? (In the operational aspect): - Once the Tower was notified, things moved expeditiously - The fact that the Tower did not have the phone numbers of on-call employees was negligent, but did not affect the result in this case - (Even with the number, the sanding truck would not have made it in time – factual causation argument on the basic ‘but for’ test) Dicta: Policy decisions are not just threshold decisions. Persons at any level can make them. Sopinka (concurring): - Government did not have a statutory duty to maintain its highways - If a statutory duty did exist, it would be unnecessary to find a private law duty - It is only necessary to consider the policy/operational dichotomy in connection with the search for a private law duty of care - Doesn’t like the policy/operational test and notes it has been rejected by the SC of UK and USA Ratio : (Cory J.) Decisions involving considerations of finance and personnel and involving negotiations with govt unions are policy decisions. Class Notes: - Ingles (Appl/Resp/Pl) v. Tutkaluk Construction (City of Toronto) (Resp/Appl/Def) (SM 299) (hired a contractor to renovate his basement) v. (municipality that issued building permit) [2000 SCC] Municipal Government 23

Policy decisions can be criticized if govt doesn’t act in a reasonable manner that constitutes a bona fide exercise of discretion Facts: Appl homeowner hired a contractor to renovate his basement. The project required the installation of underpinnings under the existing foundation to prevent the walls from cracking and the home from collapsing. Although the contract specified that the contractor would obtain a building permit prior to commencing construction, and Appl wanted the permit obtained & the inspection made, the contractor convinced him that construction should commence before the permit was obtained. By the time the permit was issued, the underpinnings had been completed, but were concealed by subsequent construction. Inspector relied upon the contractors’ word that it was up to code. Work was defective; damage was caused to the home. Appl sued the contractor in contract and the City for negligent inspection. Issue: 1. Whether the municipality owed a duty of care to owner in conducting the inspection - YES 2. Whether the owners conduct absolved the municipality of all or part of its liability – NO – appeal allowed Reasoning: Followed Anns / Kamloops test (appropriate test for determining whether a private or public actor owes a duty of care) (1) a) Prima facie duty of care - It was foreseeable that a deficient inspection of the construction could result in damage to the property or injury to the owners b) Statute - Building Code Act was enacted to ensure the imposition of uniform standards of construction safety c) Policy - Policy decision was made to inspect construction even if it had commenced prior to the issuance of a building permit - In a situation like this where a statute provides for a positive duty such as inspection, a government agency cannot immunize itself from liability by making a policy decision not to inspect. In a policy decision, the government agency must act in a reasonable manner that constitutes a bona fide exercise of discretion - Operational - Once the City chose to implement this decision, it owed a duty of care to all who it reasonably could foresee might be injured by the negligent exercise of that power. - Court erred in concluding that through his own negligence the Appl removed himself from the class of persons to whom the City owed a duty of care. (2) Standard – To avoid liability, a municipality must show that its inspectors exercised the standard of care that would be expected of an ordinary, reasonable and prudent inspector in the same circumstances - A City can only be liable for those defects which the inspector could reasonably be expected to have detected and had the power to have remedied - Inspector failed to meet the standard by failing to ensure that the underpinnings were compliant with the Code Apportionment - when there are 2 or more tortfeasors and a Pl has also been found negligent, the proper approach to apportionment is to first reduce the extent of the recoverable damages in proportion with the Pl’s negligence, and then to apportion the remaining damages b/w the Defs, in accordance w/ their fault (SM 318) Ratio: (Bastarache J.) 1) In a situation like this where a statute provides for a positive duty such as inspection, a government agency cannot immunize itself from liability by making a policy decision not to inspect. In reaching a policy decision, the government agency must act in a reasonable manner that constitutes a bona fide exercise of discretion 2) Pl’s conduct will be relevant with respect to contributory negligence, but will not absolve the city of its duty to inspect according to a statute that provides for such a positive duty. Class Notes: - Policy at work – don’t want to prevent people from getting some compensation even if they were acting outside of the municipal by-law - Inspection system in place so this has moved to operational side. Dealing with negligent provision of a service that only the govt can perform. This case is not hard - SCC admits the possibility that those who “flout” the law may be outside the duty of the care that the municipality owes. So it’s not impossible that a plaintiff could not be owed a duty of care. But on the facts, this plaintiff was still within the ambit that the govt ought reasonably to have taken into account. 24

- Anns / Kamloops test: 1. Is there a sufficiently close relationship b/w the parties so that, in the reasonable contemplation of the authority, carelessness on its part might cause damage to that person? If so, 2. Are there any considerations which ought to negative or limit (a) the scope of the duty and (b) the class of persons to whom it is owed or (c) the damages to which a breach of it may give rise? 3. Constitutional Torts Jane Doe v. Board of Police Commissioners for the Municipality of Metropolitan Toronto (raped at knifepoint in her own bed) v. (police that knew of neighbourhood threat and didn’t warn her) [1998 ON] Police Officer Policy decisions can be criticized for Charter reasons Facts: Pl was raped at knifepoint in her own bed by a stranger. She was the 5 th known victim of someone called the “balcony rapist”. Police failed to warn her about the danger they were aware of in her neighborhood because they feared that women might become hysterical and cause the rapist to flee ad thwart their efforts to apprehend him. Victim felt she had been used as “bait”. She alleged negligence in failing to either warn her or adequately protect her from the foreseeable harm. Issue: Did the police owe a duty of care? YES - both statutory and common law duty to warn Reasoning: - Police are statutorily obligated (Police Act) to prevent crime and at CL they owe a duty to protect life and property - Police failed utterly in their duty to protect the Pl by failing to warn them of the foreseeable harm - Charter – violation of Pl’s rights under s.15(1) because there was discriminatory conduct by state officials in the carrying out and enforcing of the law - The Police had a legal duty to warn of the danger - They adopted a policy not to warn her because of a stereotypical discriminatory belief that as a woman she and others like her would become hysterical and scare off an attacker - It was implicit in the detective’s comments that a man in similar circumstances would have been warned - It is not necessary that their policy decision be based solely on discriminatory grounds - There is no s.1 justification Ratio: Constitution is another way to attack government policy decisions. If a policy decision is even partially based on discriminatory grounds it may be questioned Class Notes: - brought forward by LEAF (women’s legal aid group active for equality of women) - this case was a change in attitude (like Jordan House was for drinking in bars) and enforced duty to warn and report on progress – breakthrough case - scope of s. 15 extends through to government policy - this case clearly was a policy that discriminated w/out any s. 1 justification whatsoever, and that changed the govt policy from being immune to tort action to no longer being immune b/c not made in good faith - police made the decision not to warn the women in that area where he would strike next b/c they said the women would likely get hysterical and scare the rapist off so they wouldn’t be able to catch him - Pl here sued in tort for duty to warn her of danger and, failing that, police must protect her - Duty is owed to her privately b/c of the special knowledge that the police had – owed private duty to every woman in that area on 1 st 3 floors of apartment building who would be susceptible to this particular criminal - Court agreed w/ this duty- private law duty of care owed to these women and general duty to rest of the city - Also brought parallel action, sued under s. 15(2) of the Charter – sued police as govt actors b/c of the policy - This action taken to show the policy wasn’t bona fide and therefore could criticize the govt policy in tort action - See LEAF’s strategy – not a personal wrong but rather a systemic discrimination that affects all women 25

- These two actions made a lot of sense to take together - Court held - Tort duty – standard of care owed by police officers in this situation is to protect and, if appropriate, to warn and here the Def failed to meet this std b/c did nothing in either category and made this policy not to warn based on discriminatory attitude about women - Charter analysis – - Finds s. 15 breach - Also infringement on s. 7 – everyone has the right to life, liberty and security…in accordance w/ the principles of fundamental justice - What is just about discriminatory policy - Looked at s. 1 to see if police could defend - No s. 1 defence brought forward by police that was worthy of consideration (they brought forward no evidence, just said “mind your own business” kind of thing) - Lookded at s. 24 – where there’s a breach of the Charter the court has discretion to award damages - Here the Court stuck to the damages awarded under the tort breach and did not award damages under s. 24 of the Charter - Mahoney doesn’t agree with this b/c of stature of the case, etc - Quoted Janzen v. Platy Enterprises Ltd – Dickson, C.J. - Sexual harassment in workplace is poisonous – true it can happen intra-sex but it is poisonous when women treated like that by men - Equality requires more than treating women the same way as men- equality requires a protection / interference - Duty to warn comes out of this case and has been adopted by police, RCMP, schools, universities, etc - Parole boards have also accepted this duty to warn with respect to pedophiles - This case shows Charter applies to common law not just to govt actions b/c applied to this tort action here - Note 8, CB 513 - Note 5, CB 513 - Over the top police behaviour often connected w/ drug searches - Even when search warrants were unlawful the police were still immune from liability in this case - That’s the test  Reckless, threatening, intimidating, with potential dangers - So good faith can stretch quite far, it seems - In this case they were successful but it seemed like an extreme situation – unlawful warrants, etc, but this threshold of reckless, threatening, intimidating, etc put it over the top - Note 4, CB 512 - Hill v. British Columbia [1997 BC CA] - Damages of only $500 - Courts are proceeding v. carefully and v. gingerly on issue of compensation for Charter breach G. ECONOMIC LOSSES - Until 1960s, there was no liability (and no recourse in tort) for negligent statements, unless a contractual or a fiduciary relation was involved - If it is pure economic loss, courts are a bit weary to award damages b/c it is a marketplace issue – is this the place for the courts? Not really - Generally where court intervenes in pure economic loss is in areas on fringe of marketplace – not a general contract situation - Courts are less willing to award damages for pure economic loss (b/c it is a transfer of wealth rather than societal damage) - There will have to be something over and above the normal ‘neighbour’ relationship b/c the very nature of contracts means ppl are bargaining (assessing the risk in this process) - Categories causing pure economic loss (accepted by courts, but list from an academic) - Negligent misstatement - Negligent performance of a service - Defective products or structures - Relational losses - Public authority liability - But there are exceptions to that general rule - One area where pure economic losses are compensated for is in the area of negligent misstatement 26

- Where someone has suffered a purely economic loss by virtue of somebody else’s negligent statement - Everything changed with Hedley Byrne case ANALYSIS: 1) Duty of Care ( Hercules ) 1 st Branch of Anns – Prima facie duty of care? - It’s not sufficient to show that the defendant might reasonably foresee the damage to the plaintiff. In negligent misrepresentation cases, the plaintiff must establish: (1) that the representor “ought reasonably to have foreseen that the plaintiff would rely on his representation” (2) that “reliance by the plaintiff, in the circumstances, would be reasonable ” - General indicia for foreseeable and reasonable reliance (a) Expertise and knowledge of the representor (b) Seriousness of the Occasion (c) An Initial Request for Information (d) Pecuniary Interest (e) Nature of the Statement (f) Disclaimers 2 nd Branch – Does the prima facie duty create sufficient concerns of indeterminate liability that it must be negated on the grounds of public policy? - To not be negated: (1) Def must know identity of Pl or class of Pl, and (2) Reliance losses claimed by Pl must result from using the statement in the manner and for the purpose that it was intended to be used 2) Standard of Care ( Queen v Cognos ) The defendant must “exercise such reasonable care as the circumstances require to ensure that representations made are accurate and not misleading.” Factors: - nature of occasion - purpose for which statement made - foreseeable use to be made of statement - probable damage to result from inaccurate statement - status of the advisor - level of competence generally observed by others similarly placed Causation – It must be shown that the plaintiff did, in fact, rely on the misrepresentation. As per Hercules, there must be actual reliance 1. Negligent Statements Hedley Byrne & Co. (Def) v. Heller & Partners Ltd. (Pl) (CB 439) (bankers for Easipower) v. (extended credit to Easipower on assurances of Def) [1963 Engl HL] Very important case 1 st time tort of negligent misrepresentation recognized by the courts – even though it was in obiter , don’t underestimate it! Facts: Pl placed several orders for television time and advertising space in newspapers on behalf of client, Easipower on terms under which Pl became personally liable. To establish the credit worthiness of Easipower, their bank contacted the Def, and asked “in confidence and without responsibility” whether Easipower would be trustworthy to the extent of £100,000. Def assured the bank that it was. Soon after, Easipower went bankrupt and the Pl lost money on the advertising contracts. Issue: Whether bank can be liable for this pure economic loss for this negligent misstatement- NO 27

Reasoning: - bank had condition and said “don’t rely on us” - court went on to long explanation of how would consider these cases in the future and what the criteria would be for Pl to succeed - even though Pl didn’t succeed here, it is leading case on negligent misstatement for pure economic loss b/c of this Ratio: Although the Pl lost their case because of the “without responsibility” waiver (so no special relationship and therefore no duty), HL did establish a new liability for negligent statements that cause economic loss. - A duty can be posed in certain circumstances for negligent words in the absence of contract and without fiduciary relations “It should now be regarded as settled law that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise” Class Notes: - company wanted to buy airtime for commercials – nature of this business is once it is on air it’s done - ad agency contacted bank and had them contact the bank of their client (Easipower) to check on their credit worthiness - called again b/c Easipower came back with potential bigger contract and bank said they thought they’d be fine for it but put a condition on their statement - on strength of bank’s statement, ad agency went ahead with contract but Easipower didn’t pay  ad agency looks to the bank b/c knew that they were relying on their advice and it was foreseeable that damage would be suffered and it is not too remote - this is the first time court had to deal with negligent misstatement (rather than fraudulent misstatement) - court goes into this duty of care and although it is obiter - Lord Reid: o Should there be a duty? It doesn’t matter if the bank didn’t know the Pl (same as Donoghue where manufacturer didn’t know the woman) as Hedley Byrne argued o Key here is the foreseeability of harm – neighbour principle based on whether harm could occur to someone based on the statements made (test is not physical proximity, knowing the other party, or being in the same vicinity) o Have to contain this duty (put a fence around it so can find duty owed to ppl inside it) 1. Speaker must be found to have taken responsibility for the statement (either explicitly or implicitly) – easy cases are those of fiduciary responsibility 2. A special relationship  where the representor will have been found to accept responsibility will be in a relationship where representee reasonably trusts / relies upon this advice  Different from fiduciary relationship b/c depends on the facts  Test is that of a reasonable person o How do representors get out of this duy?  By exculpating themselves – refusing to take responsibility for the statement (like bank here put in its letter “without responsibility of the bank”)  This places an affirmative duty on the representor to exculpate themselves  Or can answer without qualification, and if they do this they are more likely to be relied upon either as fiduciary or special relationship o Rule  you’re not exempted from liability unless you say so (onus is on representor), otherwise the duty is to be honest - Lord Morris of Borth-Y-Gest: o Should not be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relied on such skill, a duty of care will arise o The fact that the service is to be given by means of, or by instrumentality of, words can make no difference o In a sphere in which a person is so placed that others could reasonably rely on his judgment or his skill or on his ability to make careful inquiry, a person takes it on himself to give information or advice to , or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance on it, then a duty of care will arise 28

o Lord Morris explicitly deals w/ skill (Lord Reid alludes to it)  is this confined to ppl w/ special skill or knowledge? - Lord Hodson: o No special duty here o Looks at actual terms given – responsibility was never assumed so no duty o More confined to this particular case (v. the other judges who provide frameworks) - Lord Devlin: o Wherever there is a relationship equivalent to contract there is a duty of care – may be either a general or particular relationship  Particular could be banker- client,  Just have to prove this relationship existed and then the duty of care will follow o Not confining this duty merely to ppl already in contractual relationships, but also to the ‘equivalent’  Is this pre-contractual only? Or does it extend to someone making inquiries? Or could it be no contract in mind at all? o Opening door a little wider for the duty Fletcher (Appl/Resp/Pl) v. Manitoba Public Insurance Co. (Resp/Appl/Def) (SM 321) (thought he had total insurance coverage) v. (government insurer – didn’t inform about underinsured) [1990 SCC] Pure economic loss + negligent misstatement, against a government authority (public insurer) Facts: Pl asked for maximum insurance coverage on an auto policy. Got maximum liability coverage but not underinsured or uninsured motorist coverage. Was not told about it and also on renewal form said that this coverage was not applicable. Got in an accident with an underinsured motorist, got $500,000 back but shortfall of $800,000 (wife was rendered quadriplegic). Issue: Did the Def government insurer have a duty to tell Pl of all the insurance options? YES Did it fulfill the duty? NO Is it liable for the Appl’s loss (causation)? YES Reasoning: (Wilson, J) - Appellate courts should overturn trial judge finding of fact only when the Judge has made a “palpable and overriding error which affected his assessment of the facts. - Failure to speak (to disclose information) can give rise to liability in negligence if: o there is a voluntary assumption of that responsibility by one person o there is reliance on that assumption by the other - Hedley Byrne applies to establish a duty of care if: o customers rely on the information o the reliance is reasonable o the person giving the info knew or ought to have known that they would rely on the info - Scope of private insurers duty: o to provide both information and advice and o to provide the insurance coverage bargained for, and if that is not available, to explain the gaps - Scope of public insurers’ duty: not as stringent, are not specialists in insurance. Merely to inform the customer of all the options of coverage available. Idea is that a private insurer would be more personalized and special, as opposed to this government insurer - Contra proferentem rule of construction: ambiguous terms of a contract of insurance are resolved in favor of the insured - Causation clear here. Had the person bought the extra insurance, would not have suffered the loss Ratio: A company owes a duty of care to its customers if: a) such customers rely on the information b) their reliance is reasonable c) the company knew or ought to have known that they would rely on the information 29

1. If someone who possess a special skill, undertakes (irrespective of contract) to apply that skill for the assistance of another who relies on this skill, a duty of care will arise - (Don't need to be a professional by degree - all they need to do is to hold they are professionals even if they aren't - Reasonable reliance is essential 2. Silence can also amount to a negligent mistake 3. In a private insurance company - have a higher duty than public insurance but public insurance still has a duty Class Notes: - Here it is silence- an interesting twist on negligent misrepresentation - CA held there was no duty, and furthermore he should have read the brochure - It is too much to ask a govt employee selling mandatory govt insurance to advise each individual - Here, court is saying that physical proximity may or may not be relevant but really isn’t crucial - Key to this case is the probability of harm – special relationship - Goes through the law in paras 39, 41 - Hedley Byrne principle - Clearly special relationship if private insurance company - Mere silence is not an escape from liability if the silence is relied upon to the detriment - Para 46 - Goes through reliance questions: - Was there reliance? YES, based on the representations (counter and brochure) - Was that reliance reasonable? YES, few ppl approaching the counter would have any great familiary with the offering – they would go to the insurer to find out about it - Reasonable for person buying compulsory product to rely on service provider - Was reliance expected? - Pl has to establish that not only did they rely, but that Def was aware of that reliance - What do you do? Make the Govt of MB liable to everyone who hasn’t had the info? - Compare duty owed by private and public insurers - Private insurers will have very broad duty Queen (Appl/Resp/Pl) v. Cognos Inc. (Resp/Appl/Def) (CB 443) (C.A. who applied for job w/ Def) v. (company that interviewed Pl) [1993 SCC] Negligent misstatement can occur in absence of contract (this was pre-contractual misrepresentation) Facts: Pl sued the Def for damages as a result of negligent misrepresentations made during an interview. Pl applied for a position with the Def. He was told during the interview that the product would take at least two years to develop and had a bright and long future. Def neglected to say that funding was not yet guaranteed. Pl accepted the position, quit his job in Calgary and moved to Ottawa. The funding for the project was not approved and the Pl’s employment was terminated after one year. The Def argued that the employment contract, which provided that the Pl could be terminated without cause and that he could be reassigned, acted as a disclaimer of responsibility for the representations made during the interview. Issue: Did a duty of care exist during the interview? YES – appeal allowed Reasoning: - 2 nd , 4 th and 5 th requirements (below) are not in question. (#1 is the big issue) (1) Duty of care - Def conceded that it owed a duty of care to Pl not to make negligent misrepresentations - There existed a special relationship between the two - The Hedley Byrne duty of care is not restricted to professionals such as doctors and lawyers. While this factor may provide a good indication as to whether a special relationship exists, it should not be treated as a threshold requirement. (2) Breach of Duty of Care - The misrepresentations made by the Def’s manager were negligently made. The manager knew or ought to have known that approval for the project was speculative and that there was a considerable risk that senior management would not give the budgetary approval required. 30

Ratio: (Iacobucci J.) Required elements for a successful negligent misstatement claim (refining judgments from Hedley Byrne ) (1) There must be a duty of care based on a special relationship between the representor and representee (2) The representation in question must be untrue (false), inaccurate or misleading (3) The representor must have acted negligently in making the misrepresentation / statement (4) The representee must have relied, in a reasonable manner, on the negligent misrepresentation (reasonable reliance) (5) The reliance must have been detrimental to the representee in the sense that damages resulted Factors in determining whether a special relationship exists between the parties (Duty of Care ): - foreseeable and reasonable reliance (by Pl on information given to him by Def) - voluntary assumption of responsibility (by Def for information that he was giving to Pl) - foreseeability of damage - proximity of relationship (a relationship of proximity between the parties at all material times) - reasonableness or otherwise of imposing a duty Standard of care: the defendant must “exercise such reasonable care as the circumstances require to ensure that representations made are accurate and not misleading” Factors: - nature of occasion (goes to reasonableness) - purpose for which statement made (goes to question of whether it’s reasonable for somebody to rely on this- reliance) - foreseeable use to be made of statement - probable damage to result from inaccurate statement - status of the advisor - level of competence generally observed by others similarly placed Class Notes: - court felt a special relationship was present b/w interviewer and interviewee - what is the test for a special relationship? The court gives a couple views: - reasonable reliance on the representation is they key, vs. - duty is based on a voluntary responsibility of responsibility - House of Lords hse - Foreseeability of damage, proximity of relationship, and - In this case, reliance was foreseeable, was reasonable, representor was assuming responsibility (come to Ottawa) – and remember from Hedley Byrne there is a positive duty to exculpate themselves, no limiting of the promises, and no caveats Notes on CB 444 – 445 Note 3 - There are a number of factors to be considered, regardless of whether one employs the reliance or assumption of responsibility approach - what is the skill of the representor and the representee? - what is the nature of the coccasion? - was the advice solicited? - did representor incur an indirect financial benefit? - what was the nature of the advice? - These factors can go to reasonabless Note 4 - question in Cognos was whether the Hedley Byrne duty of care was owed only professionals or those who are in the business of giving advice - Evatt[1971]  court said it would only apply to ppl in the business of giving advice - But in subsequent case this was set aside b/c it was found to be too confining Note 5 - when reliance is not reasonable - unsolicited telephone conversation etc - but lunches, hockey games, parties, etc are still places for doing business- depends on context - this duty can arise in all kinds of circumstances 31

Hercules Management Ltd. (Pl) v. Ernst & Young (Def) (CB 447) (shareholders that relied on Def’s audit advice to make investment decisions) v. (auditors) [1997 SCC] Good overview of Anns/ Kamloops test – CB 448 Duty of Care Facts: Pl relied on an audit prepared by the Def to make investments in a company. Economic loss ensued because the auditors' statements were inaccurate; they negligently prepared the audits. Issue : Do the auditors owe a duty of care with respect to the losses allegedly resulting from their audit advice? NO Reasoning (La Forest J): - Applied Anns / Kamloops test for duty - Is there a sufficiently close relationship b/w the parties so that in the reasonable contemplation of the Def, carelessness on its part might cause damage to that person? - If so, are there any considerations which ought to negative or limit - The scope of the duty - The class of persons to whom it is owed, or - The damages to which a breach of it may give rise? - Reasonableness of Pl’s reliance must be considered in negligent misrepresentation actions  only by doing so will the first branch of the Kamloops test be applied consistently - Includes these two considerations as policy factors under the 2 nd branch of Kamloops test: - Whether Def had knowledge of the Pl and - Whether the Pl used the statements at issue for the particular transaction for which they were provided - Fundamental policy consideration that must be addressed in negligent misrepresentation actions centres around the possibility that the Def might be exposed to “liability in an indeterminate amount for an indeterminate time to an indeterminate class” ( quoted from Ultramares Corp. v. Touche - NY CA 1931) Analysis: 1 st Branch  SCC had no difficulty in finding a prima facie duty of care - What constitutes “relationship of proximity” in context of negligent misrepresentation actions? - Yes, there is foreseeability  possibility that Appl’s would rely on the audited statements and that they might suffer from harm if the reports were negligently prepared must have been reasonably foreseeable to the Appls - Confirmed by fact shareholders often choose to rely on audited financials for wide variety of purposes 2 nd Branch  failed a) Appl did know class of plaintiffs BUT b) Purpose of audited financials: to assist shareholders in their task of overseeing management (not to help people who want to make personal investment decisions) Ratio: Some modification of the Anns test is necessary to accommodate the special features of negligent misrepresentation cases: 1 st Branch – Prima facie duty of care? - It’s not sufficient to show that the defendant might reasonably foresee the damage to the Pl - In negligent misrepresentation cases, the plaintiff must establish: (1) that the representor “ought reasonably to have foreseen that the plaintiff would rely on his representation” (2) that “reliance by the plaintiff, in the circumstances, would be reasonable ” - General indicia for foreseeable and reasonable reliance (not all from Hercules- list from Hercules on CB 452 ): 1. Expertise and knowledge of the representor – duty of care most commonly arises where the defendant has some special expertise, knowledge, skill, information, or access to information that is not possessed by the ordinary person (although duty is not restricted to professionals or those in the business of giving info to others – what’s important is if they represent themselves as having an expertise) 32

2. Seriousness of the Occasion – more R&F when information is given in a business, professional, formal or serious occasion 3. An Initial Request for Information – more R&F to rely on information that was, at least initially, given at the request of some person 4. Pecuniary Interest – more reasonable and foreseeability if information or advice is purchased 5. Nature of the Statement – Reliance upon facts may be more reasonable and foreseeable than reliance on more subjective and speculative statements but there is no hard and fast rule about it ( Queen v. Cognos ) 6. Disclaimers – As a general rule, a disclaimer of responsibility for the accuracy or reliability of the representation will prevent the establishment of a duty of care ( Hedley Byrne ) 2 nd Branch – Does the prima facie duty create sufficient concerns of indeterminate liability that it must be negated on the grounds of public policy? - To not be negated: (1) Def must know identity of Pl or class of Pl, and (2) Reliance losses claimed by Pl must result from using the statement in the manner and for the purpose that it was intended to be used Class Notes: - good example of courts being refined in their discussion of the duty in this case - here, every requirement for duty under Anns test has been met (1 st branch)- and court finds this - BUT goes to 2 nd branch and finds policy reason why duty shouldn’t be found - All the action in this case happens on the 2 nd branch of Anns - Court here says that at first blush there shouldn’t be a policy reason to negate the duty here b/c members are of a small, limited, determined class that have fit the prima facie requirement (not the whole world where it is too indeterminate) - But court looks deeper than that- it is still not good enough b/c the audit can be used for many, endless purposes even if prepared by the company and the auditors might not know or intend the statements to be used for - Even though we have a limited class, the report can be used in a multitude of ways and the Court says this is too much indeterminacy (see bottom para CB 452) - To deal w/ this, court says duty will only extend to those entities for whom the audit was prepared for in precise purpose - Here, it was prepared for company as a whole at the AGM but for the company, not the shareholders as a whole - Liability / duty will only extend to the use of the audit for the precise purpose for which it was created - So court can still preserve concept of tort liability for negligent misrepresentation w/out throwing all caution to the wind - Obiter in case - Court here is respecting contract – this is the way the business world operates and parties negotiate risk in these contracts - On anything less than fraud, the law is reluctant to weigh in and throw off balance of market place - Unless there is inequity (e.g. unequal bargaining power) - Audits can be used for many purposes  auditors will only be liable for negligence to the specific party for the specific purpose for which the audit was done BG Checo International (Pl) v. B.C. Hydro (Def) (CB 455) (successful bidder) v. (called for tenders to erect transmission towers and string lines) [1993 SCC] Facts: Def called for tenders to erect transmission towers and string transmission lines. Pl was the successful bidder and entered into a contract with Def. The tender documents, upon which the Pl relied, and the contract documents both stated that clearing of the right-of-way would be done by others and not form part of the contract. The clearing was inadequate and caused Pl additional expenses. Pl sues, and Def says agreed in terms of contract that any liability would be sorted out in contract, not tort. Issue: Can a pre-contractual representation that becomes a contractual term found liability in negligent misrepresentation? 33

Can a party sue in tort for a wrong where there is an express term in the contract dealing with the matter? YES Reasoning: (La Forest & McLachlin JJ.) - The right to sue in tort is not taken away by a contract that contains an express term dealing with the matter in question - However, a contract, by limiting the scope of the tort duty or waiving the right to sue in tort, may limit or negate tort liability - Where a given wrong prima facie supports an action in contract and in tort, the party may sue in either or both, except where the contract indicates that the parties intended to limit or negative the right to sue in tort - The tort duty not to misrepresent is not excluded by the contract that confirms the Def’s obligation to clear the right-of-way - Therefore, Pl may sue in tort Ratio: - A plaintiff may sue either in contract or in tort, subject to any limit the parties themselves have placed on that right by their contract - The mere fact that the parties have dealt with a matter expressly in their contract does not mean that they intended to exclude the right to sue in tort o It’s not the form, have to look at content of provisions Dissent: (Iacobucci): - He recognizes parties thought about tort, but that they consciously chose that contract law would prevail - From a policy perspective, contracts are becoming increasingly complex and negotiate risk and where duties (tort duties of care) are expressed in the contract itself, the Court must honour that o And this would pull in the pre-contractual statements - Judges need to use a contextual approach and decide these case w/in the circumstance in which they fall - If parties choose to define a specific duty, then consequences should be determined by law of contract and not by the law of tort Class Notes: - concept of “primacy of private ordering”  if you’re making a contract, you’re making law and this contract will have primacy over the common law (there can be exceptions to this, but this is the starting point) - there has clearly been a negligent misrepresentation, there is clearly proximity, also reasonable reliance (and govt would know this )  therefore, meets prima facie part of Anns test - but 2 nd branch  policy of “primacy of private ordering” - CB 456  3 situations that could arise 1. Contract stipulates more stringent obligation than tort law would o E.g. makes standard of care higher than reasonable person o In fact, most contracts have a higher standard of care required of parties 2. Contract stipulates a lower duty than tort law would o Find this in places where ppl want to take a big risk o Common law won’t bind o E.g. extreme sports (heli-skiing, sky diving, etc) o But generally where personal injury is involved courts don’t love exemption clauses (e.g. Crocker v. Sundance )  But did uphold exemption clause in Dick (snowmobiling case where he signed contract to waive rights / take on risk and it was upheld)  But courts looks at this w/ jaundiced eye- if any indication that it shouldn’t apply, they will override and tort will apply 3. Duty in contract and common law duty in tort are co-extensive o The kind of case that doesn’t expressly address the situation which has arisen o The parties are silent in the contract about this particular tort o If this is the case, they are co-extensive / concurrent  you can have liability in both  Can sue in both and wait until end of action to pick o If the contract is silent, you have concurrent liability and the election is up to the Pl o If you want to exclude a form of liability, it is the responsibility of the parties to do this (silence is not exclusion) - Other situation court doesn’t mention here 34

o An independent tort that is outside the contractual relationship, you can sue in tort notwithstanding that you have a contractual relationship o E.g. BC govt’s truck rolled down a hill and hit somebody  independent tort and outside of contract o This is another way in which tort can co-exist w/ contract even if contract has addressed tort liability (i.e. if the tort is totally independent and outside of the contract and can stand on its own) 2. Negligent Performance of Services - Negligent performance of services is similar to negligent misrepresentation - Contract law provides incomplete protection in 2 situations: (1) No remedy for economic loss caused by the negligent performance of a gratuitous service (2) The negligent performance of a contractual service may cause economic loss to a 3 rd person who stands to benefit directly or indirectly from the promised performance - The rule of privity of contract prevents the 3 rd party from suing on the contract ( B.D.C. v Hofstrand ) B.D.C. Ltd. (Appl/Def) v. Hofstrand Farms Ltd. (Resp/Pl) (CB 461) (courier company) v. (lost opportunity to purchase land b/c of late delivery of envelope by courier) [1986 SCC] Example of 3 rd party suing for negligently-performed contract Facts: Def courier entered into a contract with the Crown to deliver an envelope from a governmental department to a land registry office by a certain date. Delivery was delayed because of the Def’s negligence. This resulted in certain grants of land not being registered to the Pl in sufficient time to allow it to perform a lucrative contract with another party. Pl blamed the courier company for the deal falling through. No contractual relationship here b/w Pl and Def. Issue: Is there a duty of care? NO - no proximity Reasoning: 1. No knowledge  Def had no knowledge of: - the contents of the envelope - the existence of the plaintiff - the existence of a class of persons whose interests depended upon timely transmission of the envelope - the plaintiff’s contract - at most it might have been foreseen that some person or class of persons had a financial interest in the contents of the envelope and that they might suffer some loss as a result of its late delivery  indeterminacy problems 2. No reliance - situation of risk had nothing to do with the courier - risk was separate and apart from 3rd party - reliance was on the Crown not on the 3rd party, the courier Ratio: - Followed Hedley Byrne - There is no proximity (and no reasonable foreseeability) between a courier company and a 3 rd party if the courier has no knowledge of the contents of the envelope or of the 3 rd party and if there is no reliance placed on the courier by the 3 rd party Class Notes: - how far does economic loss extend when the party doesn’t even know what’s at stake / in the envelope - question in this case is the question of indeterminacy 3. Economic Loss Caused by Defective Products and Structures Background: 35

The majority of these cases are in respect to the negligent construction of defective buildings. Most commonly, the building has a latent defect caused by the negligence of the builder. If the original purchaser/owner discovers the defect, they can claim under breach of contract. The building may, however, be sold before the defect is discovered. The 2 nd owner cannot sue in contract. Important: Product quality claim – seeks to recover compensation for damage to or in the building itself. This is different from Donoghue v Stephenson, which would be damage done by the building. - A product quality claim is brought to recover economic loss (cost of repairs) and the claim is one that has traditionally only been available in contract - Plaintiffs can recover for damage to or in the building itself so long as the defect is dangerous - If you have a defect but it’s not dangerous, you cannot successfully sue in tort. Why not? Because how do you determine losses? - Problem: while some defects are clearly dangerous ( Bird ), in the typical situation it will be difficult to draw the line between dangerous and non-dangerous defects Winnipeg Condominiums No. 26 (Pl) v. Bird Construction Co. (Def) (CB 465) (purchaser of building had to spend $1.5M to get plastering repaired) v. (negligent contractor) [1995 SCC] If it’s dangerous as opposed to merely defective, there is reasonable proximity and damages can be given Facts: Def contractor built an apartment block that was later sold by the 1 st owner to the Pl. 10 yrs after construction, cladding started falling off and was a clear danger to people. The 2 nd owner spent 1.5M$ to get the plastering repaired. Is now suing the contractor in tort for negligence. Therefore, have a non-contractual relationship between Def and Pl. Issue: Can the Pl recover for repair costs of a building negligently built? YES, building is a threat to safety Reasoning (La Forest J): - followed Anns test (1) Duty of Care – yes a) Prima facie duty of care – yes - It is reasonable to foresee that the negligence of contractors could affect the safety of future occupants & that this danger also applies to subsequent owners b) Policy reasons to negate? – no – indeterminacy concerns were not severe - Class of plaintiffs restricted to future occupants; amount of money payable restricted to the cost of repairs; duration of potential liability restricted to the useful life of the building - Policy reasons to support imposition of duty: encouragement to prevent measures to avoid future damage to persons or to property; deterrence of poor construction; availability of affordable 3 rd party liability insurance for builders; purchaser’s difficulties in detecting latent defects Holding: - MB CA erred in deciding Bird could not, in principle, be held liable in tort to the condo corp  these costs are recoverable under economic loss (law of tort) in Canada Ratio: - SCC drew a distinction between product quality defects that create a real and substantial danger to the occupants of the building and non-dangerous defects such as poor quality or shoddy construction  Def owed a duty of care in respect of dangerous defects - “Where a contractor (or any other person) is negligent in planning or constructing a building, and where that building is found to contain defects resulting from that negligence that pose a real and substantial danger to the occupants of the building, the reasonable cost of repairing the defects and putting the building back into a non-dangerous state are recoverable in tort by the occupants.” - Liability to 3rd party when no contract b/w them is OK in cases of negligent construction if such construction is dangerous - Tort and contract are both OK as causes of action and overlapping as long as tort can rest independently from contract - Independent if risk to safety/dangerous  separate and apart from contract 36

4. Relational Losses Relational Economic Loss: Occurs when the defendant negligently damages the property or person of a 3 rd party and, because of the relationship between that property or that person and the plaintiff, the plaintiff suffers pure economic loss. This is the most problematic form of economic loss 1) Relational Economic Loss Arising from Property Damage - severe indeterminacy problems a) Contractual relational economic loss – where the defendant has interfered with or damaged the property of a 3 rd person with whom the plaintiff has a contractual relationship. The property damage disrupts or interferes with the performance of the contract, causing Pl to lose some economic benefit. ( CNR v Norsk ) ( Bow Valley ) b) Non-contractual relational economic loss – where there is no contract between the property owner and the plaintiff, but damage to the property adversely affect the plaintiff’s business interests 2) Relational Economic Loss Arising from Personal Injury or Death a) Contractual relational economic loss - Early common law developed a cause of action per quod servitium amisit = an action for contractual relational economic loss arising from the injury of an employee - This action has been abolished by statute in BC - A claim for loss of services brought forward by employer for loss of services of injured employee (limited by D’Amato ) b) Non-contractual relational economic loss - the only kind of loss that is recoverable is that which is suffered by family members (i) Injury to a Family Member - The ancient CL action per quod consortium amisit allowed a husband to recover damages for a total loss of consortium arising from injuries to his wife caused by a tortfeasor - Consortium has 2 elements: 1) economic element – domestic services provided by a wife in the home 2) emotional element – support, comfort, and affection - Statutory basis is s.43 of the Domestic Relations Act (ii) Death of a Family Member - Statutory basis is Fatal Accidents Act CNR (Resp/Resp/Pl) v. Norsk Pacific Steamship Co. Ltd. (Appl/Appl/Def) (CB 472) (sued Def for economic loss- costs of re-routing trains) v. (negligently hit bridge used by Pl) [1992 SCC] Claim for contractual relational economic loss Facts: Def was the owner of a tug that negligently struck a railway bridge. The bridge, owned by Public Works Canada, was closed for several weeks for repair. Pl had a contractual license to use the bridge for its rail traffic. Def knew that the bridge was used by Pl, that it was essential to the Pl’s operation, and that Pl was the main user of the bridge (86%). Pl sued for the cost of rerouting its trains while the bridge was closed. Reasoning : (McLachlin J. – 3 judges) - more liberal - contractual relational economic loss claims should be dealt with on a case-by-case basis and should be allowed where, on the facts, there are no insuperable indeterminacy problems Dissent: (LaForest J. – 3 judges) - more conservative - the exclusionary rule must be applied to contractual economic loss claims and no duty of care arises in respect of that loss unless the case falls within narrow exception categories where identifiable policy factors strongly support recovery Ratio: - This case left the law in an unsatisfactory state – 2 visions presented 37

- Pure Economic Loss: loss suffered by an individual that is not accompanied by physical injury or property damage LaForest lists five situations that allow for recovery in economic cases: 1) Independent Liability of Statutory Public Authority (Govt) 2) Negligent Misrepresentation 3) Negligent Performance of a Service 4) Negligent Supply of Shoddy Goods or Structures 5) Relational Economic Loss (no such successful case yet) Class Notes: - CNR was a user of the bridge, not an owner - Question – whether party who has not been physically damaged by the tortfeasor can claim damages for the physical damage to another - Justice Stephenson broke the tie but none of the other judges agreed w/ him (as long as Pl is known to the wrongdoer then economic losses should be recoverable) - LaForest camp - Start from proposition that nobody gets anything in relational loss cases – start w/ an exclusion of liability - 3 categories of exception to the exclusion:  If Pl had possessory interest in the land (i.e. co-owned the bridge)  General average cases – maritime law cases  Where parties are in joint venture with one another - Reasons had to do w/ nature of business community – parties enter into relationships to minimize their losses and this is a good thing for risk allocation to be done privately, as supported by insurance – not place of courts to intervene when the sophisticated parties are able to sort it out themselves - To increase obligations and distributing loss in a way that is less efficient than the free market would be is not good public policy - This is too indeterminate – will open floodgates if follow McLachlin’s approach - The categories aren’t necessarily closed if it can be shown from public policy perspective there is a good reason for finding liability (turning the Anns test on its head) - McLachlin’s camp - She would prefer to do a more standard tort analysis - Is there proximity based on foreseeable harm - If prima facie duty, go to next step – is there any reason to negate the duty? If so, no duty of care (Anns test) - LaForest disagrees w/ her rational in his judgment - Left w/ unclear position by 2 camps in SCC D’Amato (Appl/Resp/Pl) v. Badger (Resp/Appl/Def) (SM 342) (body shop that employed D’Amato & suffered economic loss) v. (driver that negligently hit D’Amato) [1996 SCC] Facts: Pl was in a car accident and severely injured. He was part owner of a body shop and continued to work after the accident, but could no longer do physical labour, only paperwork. Continued to be paid at his old salary, but body shop had to hire someone else to do the work that he normally did. Body shop is now suing for economic loss and the Pl is suing for loss on earning capacity. Issue: Can the Pl Body Shop claim relational economic loss? NO - the relationship is a contractual one. Reasoning: Major J. refused to choose between the 2 tests in Norsk and so applied both, which he suggested “will usually achieve the same result”: 1) La Forest J. test of a general exclusionary rule: - no policy grounds to justify a departure from the exclusionary rule - Policy criteria: a) no deterrence/ already liability for the physical loss b) if there is a contract there is a remedy already (damages) 38

c) indeterminacy too many will recover due to relationship with the plaintiff - Left the door open  when these 3 elements are not present, there may be a chance to recover for relational economic losses (right now there is no case that was successful in this area) 2) McLachlin J. broader approach (applying Ann’s test) Step 1  the loss was neither foreseeable nor sufficiently proximate to the act of negligence to warrant recovery. No relationship between tortfeasor and company. Step 2  policy reasons: failed on first test so no need to examine Ratio: 1. Relational Economic Loss: (aka contractual and relational) economic loss that arises solely because of a relationship with the injured party 2. If the loss arises out of an employment contract, it is a contractual relational economic loss - Therefore, there is no foreseeability or proximity - No liability Class Notes: - Loss came about by personal injury done by tortfeasor to company - 2 principals in company – guy who was injured and his partner - b/c of injuries, the Pl could no longer fulfill the bulk of his job (physical labour) - Pl and business partner agreed he (Pl) would keep getting his salary and had to hire someone else for physical work  company lost money - D’Amato is seeking his own damages, but company is also asking court to compensate them for relational losses b/c of damage to D’Amato which has decreased net income - Similar to CNR v. Norsk  damage to D’Amato is like damage to the bridge - Policy reasons underlie LaForest’s exclusion from CNR (Prof Linden on SM 345) - Prof Linden in Canadian Tort Law lists four policy reasons for reluctance to allow recovery for pure economic loss: (SM 345) 1. Economic interests have been seen as less worthy of protection than bodily security and property 2. Indeterminacy – fear of “liability in an indeterminate amount for an indeterminate time to an indeterminate class” (Cardozo J in Ultramares Corp v. Touche NY 1931) a. Perhaps biggest reason / most important policy reason why, as a general rule, these cases are not successful  in society there are always ripple effects from injury / damage  question of where to draw the line can be very difficult (e.g. all people / parties relying on the bridge in CNR case)  huge policy reason to keep courts from awarding damages if Pl is in indeterminate class (key for Pl is to place themselves in a determinate class) 3. It may be more efficient to place the burden of economic loss on the “victim” a. LaForest puts a lot of weight on this reason in his decision in CNR v. Norsk 4. The restrictive approach discouraged a multiplicity of lawsuits, in favour of channeling claims into 1 action a. Usually cited  discourages multiplicity of legal actions, related to the indeterminacy question - Nevertheless, there are situations that arise from time to time that compel the courts to act in this area - Cases like Rivtow (SM 346)  where there is a duty to warn - Kamloops  pure economic losses granted where a public authority was negligent in acting under a statute (b/c govt responsibility, have to show it’s operational not policy) and at the end of the day pure economic losses were granted - Fletcher  govt case, public authority being negligent w/ respect to purchasing car insurance - Winnipeg Condominiums  indeterminacy problem resovled through evidence that showed there was a very well defined class of Pls (occupants), and Anns test was satisfied on both grounds – who would get injured if sides of bldg fell down and also public policy duty to do repairs if there is a serious risk to people - Cases of improperly performed services Cheko  dealing w/ precontractual negotiations – successful in claiming pure economic loss in that case - McLachlin says that although she and LaForest disagree on categorical approach (CNR) they usually come to same result - Difference is in joint venture – she looks at it through lens of Anns test – it is not a closed category - All this is obiter b/c neither LaForest’s or McLachlin’s test worked here - The known plaintiff approach of Stevenson J in Norsk was rejected in that case and is not the law in Canada - McLachlin J lists several factors related to proximity in Norsk : - The relationship b/w the parties, physical propinquity, assumed or imposed obligations, and close causal connection 39

Bow Valley Husky (Bermuda) Ltd. (Pl) v. St. John Shipbuilding Ltd. (Def) (CB 485) (suffered economic loss) v (failed to warn of danger of fire) [1997 SCC] Claim for contractual relational economic loss Facts: 3 plaintiffs: HOOL 2 defendants: SJSL (builder) BVI Raychem (materials use) BVHB Rig was built by the Def SJSB for BVHB. A component of the heating system knows as thermaclad was supplied by the Def Raychem. The rig was leased by the owner, BVHB to HOOL & BVI. During the drilling of an exploratory well, the thermaclad caught fire and, as a result, the rig was out of service for several months for repairs. During this time, Pls were obliged, under their contracts, to pay day rates to BVHB and they suffered additional financial losses in respect of contracts with suppliers. Pls claimed that Defs had a duty to warn them of the flammability of the thermaclad and that their failure to do so caused them contractual relational economic loss. Holding: 1) Liability in contract: - SJSL to BVHB  failure to warn: liability excluded by contractual term. Contract went to great lengths to avoid liability for certain losses. The risks were clearly allocated so no recovery 2) Liability in tort - SJSL to BVHB  failure to warn: liability excluded by contractual term. Contract went to great lengths to avoid liability for certain losses. The risks were clearly allocated so no recovery - Raychem to BVHB  failure to warn: economic loss and property damage: recovery subject to contributory negligence - SJSL to HOOL & BVI  failure to warn: pure economic loss: claim dismissed as contractual relational economic loss - Raychem to HOOL & BVI  failure to warn: pure economic loss: claim dismissed as contractual relational economic loss - Allocation of fault: 60% BVHB; 40% Rachem: contributory negligence no longer bar to recover at common law (even absent federal contribution legislation) Reasoning: - This case does not fall within any existing exceptional category of cases, and must therefore be examined under the Anns test: (1) Prima facie duty of care – yes - There was foreseeability of the economic loss (2) Policy factors to negate the duty – yes - Indeterminacy concerns were insuperable - Furthermore, there was no need for additional deterrence since BVHB sued the defendants, and there had been every opportunity for the plaintiffs to channel their economic losses back to BVHB by contract Ratio (McLachlin J.): 1) Contractual relational economic loss is recoverable only in special categories of exceptional cases. This amounts to a recognition of a general exclusionary rule subject to exceptions 2) The exceptional categories of cases currently recognised by the SCC include: a) where the plaintiff has some possessory or proprietary interest in the damaged property (making it appear that the plaintiff is the owner in all but name). b) general average cases – in the course of a voyage, a ship may be in peril and the shipowner may incur expenses to save the ship and continue the voyage with minimal disruption. The cargo owners are obliged to contribute to these expenses in what are known as general average contributions. The cargo owners may recover the contribution from a tortfeasor even though they have no possessory or proprietary interest in the ship and their cargo is unharmed. c) cases where the defendant and plaintiff are involved in a joint venture . Where a number of people use property owned by one of them for a joint business enterprise. When the defendant negligently damages 40

or destroys the property, all of the participants may suffer economic loss. These financial losses are recoverable directly from the tortfeasor by the owner and non-owners of the property. d) transferred loss cases . A contract for the sale of goods may allocate the risk of damage to the buyer before the ownership of the goods passes from the seller. If goods are damaged during this period, the owner may have no claim because she has suffered no loss (the risk being allocated to the buyer) and the buyer may have no claim because he has no ownership. This exception may support the buyer’s claim for the contractual economic loss. 3) Although the categories of exceptional cases are not closed, the Court will not assiduously seek to develop new categories. There must be compelling policy reasons in favour of recognising a new category. - New categories may be recognised in situations where: a) the deterrent effect of the potential liability the property owner is low b) the plaintiff has no opportunity to allocate the risk of economic loss to the owner of the property 4) The approach in Anns must be used to determine if a new category of exceptional cases should be recognized Class: - Who should have known about flammability of Thermaclad? Who should have taken responsibility for its damage without warranty? - BVHB knew about flammability, but not extent of risk. Both SJSL and Raychem knew of risk  had to duty warn BVHB so because of that, court found causation - How do you determine whether failure to warn caused damage? SCC said that on an objective test, a reasonable rig owner would not have used Thermaclad. On subjective test, they wouldn’t have used it either. - Could have discharged duty to warn HOOL by warning BVHB - Result: HOOL and BVI got zero because pure economic loss - Why can’t you recover for relational economic losses? Concern is indeterminacy. - SJSL was exonerated of any liability because of exclusion clause - If in contract use language that excludes tort liability, then contract trumps tort - Thermaclad not highly technical product and doesn’t need supervision to use, Raychem could not relieve responsibility by warning SJSL. Learned intermediary rule didn’t apply. - If followed tort analysis of Anns test (McLachlin’s methodology) there is a prima facie duty, but when get to second branch it is negatived for policy reasons b/c of indeterminacy problem (CB 487) - Have not been able to draw line around themselves to create determinate category  didn’t convince court there was a reason to pay them and nobody else - Furthermore, reliance (from negligent misrep cases) didn’t work either (CB 488)  any person who is contractually dependent on a building or structure is dependent – this doesn’t help them - Owed duty to be warned  this didn’t put them in specialized / determinate class either  court rejects this b/c this says yes, prima facie duty owed, but still left w/ policy question from Anns – this is not sufficient b/c doesn’t go there - CB 488- last paragraph - Iacobucci says problem has been solved by looking - Start w/ LaForest’s categories, then zero in on joint venture category and see does this meet the Anns test (both branches) - Don’t forget categories aren’t closed - LaForest said could be 4 th category - We also know categories for general economic loss (1. negligent misrep, 2. shoddy materials, 3. govt statutory services negligently performed, 4. negligent performance of non-govt services, and 5. relational losses – purely economic) aren’t closed either - It’s the relational losses category that is unique amongst the economic loss categories - b/c it starts w/ an exclusion (whereas the other categories start w/ an Anns analysis from step 1) - joint venture, general averaging, and proprietary interest exceptions - joint venture is one we’re interested in b/c it’s where LaForest and McLachlin disagree - McLachlin uses Anns analysis (prima facie duty, and policy reasons), and she says there might be more categories of exception that would come from this analysis - LaForest also said there might be new categories but didn’t tell us how to figure out if there were any - In obiter dicta, also said there could be another category of general economic loss (this is what Martel case is about) (this would be the sixth category of economic loss) - Kelly v. Brezowski case (wrongful birth) might be a seventh category of economic loss – it is technically relational (could fall as new category under LaForest’s 3 categories) but makes more sense in broader economic loss 41

- On exam, way to approach it is the way in this case: - It’s a categorical approach seems to be compromised reached by SCC - Go through this analysis - Then go through way McLachlin would analyze it – through joint venture and Anns test - If new category that doesn’t fit any existing, there is a possibility to create it (this was LaForest’s concession to McLachlin that they weren’t closed) - Deal w/ it in the blended way that this case deals w/ it 5. Possibly Other Categories? Martel Building Ltd. (Pl) v. Canada (Def) (SM 353) (treated rudely during negotiations w/ Dept of Public Works) v. (Dept of Public Works – Govt of Canada) [2000 SCC] Denied existence (in this case) of 6 th category of economic loss (bad / unfair / rude negotiations) - Through number of meetings, Martel led to believe contract w/ Dept of Public Works would be renewed, but it wasn’t - Martel was treated rudely and wasn’t told up front in pre-negotiations what was going on - In tendering documents, there were issues to do w/ space, security, renovations already completed that were additions to the bid proposed by Martel - Martel was convinced by lack of info coming to him from govt they were not propertly informed – would have been able to either adjust their bid or talk to these points - Contract went to company that bid $500k lower than Martel - Martel saying duty of care owed b/c of precontractual relationship (sufficiently proximate that activity by the govt like this would result in foreseeable economic loss) and duty of care extends to different stages of this process - Court says although it’s true that categories of economic loss are not closed, court has never before recognized this kind of a duty that Pls are alleging we should here - These categories are really analytical tools - Look at factors – SM 361 – which are relevant to proximity (para 50 – 51) - Para 50  factors for duty are physical propinquity, assumed or imposed obligations and close causal connection - Proximity exists here b/c of pre-contractual relationship  prima facie duty of care owed - But then with Anns test go to second branch – there are no sufficient policy reasons to allow this case to succeed on economic losses - SM 363  clearly set out reasons as to why second branch fails - Economic losses less worthy than physical damage - From public policy perspective it doesn’t make sense for courts to interfere w/ negotiations- not place for court to interfere – this would pre-determine the outcome and favour parties (pre-existing relationship would be owed higher standard of care by tort law, but this contradicts the fundamental principle that all parties be treated fairly) - Not prepared to say Martel was wrong in tort - This case looks at broad obiter discussion of this new category and why they’re NOT GOING TO ACKNOWLEDGE this as a new category (category 6) under economic loss - Badly, unfairly, rudely conducted negotiations  not what tort law is designed to address - Martel was aware of inherent risks in submitting bids, competition, etc – there was no negligent misrep, fraud, coercion, etc - Martel was unsuccessful  this is NOT going to be a new category - But can always fall back on McLachlin and LaForest’s comments that categories are never closed – perhaps w/ a different set of facts this category could possibly be created… unknown - pushed envelope on both LaForest and McLachlin’s comments in CNR  categories are not closed - new category that doesn’t fall into McLachlin’s factors for expanding LaForest’s categories, or into LaForest’s categories H. Wrongful Birth 42

- Normally arises in an action instituted by parents of a child who is born with birth defects as a result of a planned pregnancy - The legal basis comes from the interference by the defendant with the mother’s lawful right to terminate the pregnancy had an informed decision been available to her - Pre-conception negligence – in Kealy not doing sterilization propertly - Also post-conception negligence can exists – e.g. genetic counseling, unsuccessful abortions, etc - Some cases brought by child from wrongful life – where child says “had you not been negligent towards my parents I never would have been born and I would not now exist and therefore you have to pay for that wrongful life” Kealey (Pl) v. Berezowski (Def) (SM 378) (parents who had unwanted 3 rd child) v. (doctor who performed sterilization procedure) [1996 ON] The reasons for the sterilization are relevant to determine whether the consequences of a failed sterilization constitute a genuine injury or a “blessed event” Potentially 7 th category for economic loss Facts: Pl wife went to Def for sterilization procedure (tubal ligation) because she and her husband did not want any more children. Procedure (performed July 1991) failed and Pls had a third child (September 1992). Parents sued doctor for negligence in performing the tubal ligation. Parents were in the middle of a divorce. Issue: What damages are recoverable for a wrongful pregnancy? LIMITED DAMAGES APPROACH - Pregnancy, labour, delivery and necessity for the 2nd tubal ligation. - Loss of income during pregnancy (wife) and post-delivery (husband) - No award was given for cost of raising third child. Reasoning: - The doctor was negligent in performing the procedure – did not meet standard because failed to apply the clip properly - Public policy reasoning could both support and deny recovery for child-rearing costs: one the one hand, public policy favours sensible family planning and does not impose children on people contrary to their choice. On the other hand, children are regarded undeniably by the state as benefit and it is the loss of a child (not the birth) that in law is a compensable wrong. - This is analogous to a claim for purely economic loss because no injuries incurred - Total Recovery and Offset/Benefits approaches are flawed because they assume that the birth of a health child can constitute an injury. Latter is also flawed because the responsibilities and rewards cancel each other out. - It is not enough that the Pl’s injury be foreseeable to get child rearing damages. Damages are awarded to compensate for an injury, not in the abstract, but with reference to the purpose of the activity (ie: sterilization). Therefore, the fact that the parents are happy with their healthy baby and can afford to raise her is an important consideration. - In this case, there is no damage caused by the Def’s negligence that prevents the baby’s parents from fulfilling their responsibilities to her. According, the child-rearing costs in this case are not a compensable loss. Dicta: Note that this was not a case where a sterilization was sought to protect a mother’s health and mother became ill, avoid transmission of a hereditary condition and child was born diseased, or economic necessity and unreasonable financial burdens were imposed. Ratio: (Lax J.) If a child is born as a result of unplanned pregnancy following a failed sterilization, this does not, in itself, constitute a harm that inevitably leads to damages for child-rearing costs. An award for child rearing costs very much depends on a court finding that the birth of a healthy child in fact constitutes a harm. (Ex: sterilization is sought for economic reasons and its failure imposes an economic burden or it is sought for genetic reasons and its failure produces a defective child.) Class: 43

- Policy considerations - Bad message to tell your child they weren’t planned - Rewards unloving parents (essentially punished for being a loving mother) - Encourages doctors to promote late abortions to avoid damages - Furthermore children should be seen as a joy and a blessing - Challenges court faces b/c cases raise question, what is an injury? - When the ‘injury’ also causes benefit (birth of a child) how do you reconcile this claim? - Is theory of tort law compromised by these cases? Is doctrine of foreseeability enough to deal w/ them? Maybe we need something more - Court also discusses arguments (policy) for rewarding for wrongful birth (p 351) - Clear there is no rule of public policy that requires ppl to have children / number of children, etc - Have reliable birth control and family planning is encouraged – those services around for ppl to take advantage of and when they are negligent makes sense they can be sued - Norms and standards of community replaced w/ economic pressures to produce skilled labour force (smaller families, expensive to maintain) - Losses flow from economic injury to the parents of the child rather than to the child - Very strong statement about the offset benefits approach – p 353 second paragraph - Court says the basic approach to tort law (bear responsibility for damages you cause to your foreseeable neighbour) and that total recovery approach compensates for foreseeable whether or not injury causes that - Rejects offset benefits approach – it fundamentally violates the principle of tort law in this factual situation - Goes on to talk about the foreseeability – if it’s the sole determinant of recovery it also falls very short - Talks about British case (similar to case we looked at re: accountant & financial statements – Hercules Mngmt v. Ernst & Young ) – financials prepared by auditors for company, and then shareholders used the info to make investment – had proximity, negligently-made financials - Shareholders could not succeed even though prima facie duty of care and foreseeability – court held in order to make auditors liable, those ppl relying on the financials had to rely on them for the precise purpose for which they were made – had been made for purpose of informing shareholders / directors about direction company should take in the future, not for investment advice - b/c of problem of indeterminacy - you will get damages for the reason the operation was performed – so, if you don’t want to be pregnant b/c don’t want your body to go through it again that’s one reason and if negligence causes you injury, then that reason will define the injury (what she didn’t want and got b/c of the negligence) - on the other hand, woman says to doctor she doesn’t want another child b/c she can’t afford it  injury is the economic one – this is the rationale for which she sought not to be pregnant - this gives the judge more to work w/ than the foreseeability principle - another rationale is person w/ a disability – say it could be exacerbated by a pregnancy - another situation is I don’t want to get pregnant b/c I’ve been told if I do I will have a disabled child – if disabled child born this was the harm that was attempted to be avoided so it might make sense for this to be the ‘injury’ - this is the way this judge is dealing w/ this tension b/w harm and benefit, not just using crude instrument of offset benefits approach (joys > costs so get over it)  this is more sophisticated instrument - saying foreseeability and causation are not enough in these cases  injury must fall w/in the ambit of risk that has been identified in order to be compensable - Cherry case is still relevant, as is Emma - SCC hasn’t made pronouncement - If have case like this, don’t put all eggs in this judgment basket – here doesn’t give all damages for her not wanting the pregnancy - In both Cherry and Emma the child was born disabled – this must have had an impact on the judge in each case – what is important that the statement made wrt justifying that approach was a general principle about being responsible for losses you cause rather than something tied to fact that child was disabled - At least so far we can say these cases are authority for full compensation TJ in Cherry (adopting Emma) – no rule of public policy preventing the Pl from recovering in full the financial losses whether child was healthy or disabled - This is an example (Mahoney’s view) of too much abstraction – doesn’t seem appropriate to liken this to Hercules and an auditor situation - Mahoney  McLachlin and LaForest talking about categories of pure economic loss 44

- Maybe these cases should be the 6 th category where problem isn’t indeterminacy it is making doctor paying for raising the child when parents get the benefit - Cost of raising a child - $163,000 (low end) – 1996 - Mahoney thinks these numbers are out of whack - Does say different studies that peg costs at different places - Here, judge applies 11% of family income  arrived at $9,300 / per year which is significantly higher than $163k over lifetime - Make note of what damages were awarded - $40k (loss of income for both parents, start-up costs of raising a child, etc) - Not a satisfactory result from many ppl’s perspectives (it is taxable so even less than $40) - An area in need of work! Kat’s CANS - Who do you sue in sterilization cases? a) doctor: faulty treatment and/or failure to warn - failure to warn standard may be higher in optional procedures b) manufacturer: faulty clip - Issue in these cases is not was there a duty or was there a breach. Issue is what are the damages. - Divisive issue: what do you do of the costs of raising the child? - Can the child himself sue? Different if not a healthy child. - Courts don’t want to get into valuation of life – quantifying damages for less than full life - Prefer if parents sue for costs of pregnancy and future care - They are foreseeable costs of failed sterilization - How can doctor argue that the chain is broken? – parents did not mitigate damages by abortion or adoption – courts don’t accept this argument – they won’t infringe on very personal and private decision - Court uses a proximate cause argument to limit the types of damages available. - If this had been a case of failure to warn, probably wouldn’t have gotten costs of redoing the sterilization - Judge characterizes the nature of the loss being put forward as one of pure economic loss (not physical damage to mother). - Should there really be a policy difference between those who can and cannot afford to have children? - Where child is born with physical injuries, court will provide costs for cost of care. In this case no, because life is not a physical injury - Not physical injury of mother either – just a question of money that you are out of pocket - Certain damages in tort are compensable and others are not. Physical injury is, while economic loss is not so much I. Negligent Infliction of Nervous Shock - take note that it seems to be strangers that get the damages usually, even though relational proximity is one of the factors that courts take into consideration - Cases ask the question: how do we deal with this type of injury? - Law is distrustful/sceptical of mental damage  can’t see it or measure it; can fake it. - Also careful because it has the potential of being very widespread - Vietnam war seems to have changed the court’s approach and understanding of post traumatic stress disorder - Different category of damages for mind and body injuries - If you intentionally inflict emotional harm, they have no problem awarding damages. So it seems a little disingenuous not to react the same way for negligent emotional harm - Court says: you can have psyhcological shock when: 1. you have had physical injury. 2. Then courts said don’t need actual physical injury but need to have been within range of physical injury (could have been injured and saw something disturbing). IN the zone of physical danger. 3. Aftermath cases - Not in zone of physical injury but came upon it later – reasonably foreseeable that the physically injured have people in their lives that would receive mental shock. Had to see the scene with your own eyes – near to accident in time, saw damages, and had close relationship to physically injured 4. Bystanders? Other people without personal connections that have witnessed the accident 45

What are the devises of the courts to limit recovery? How do they do that? What are the tests and standards? A Note on Psychiatric Damage (CB 310) Law in Canada - damages for psychiatric losses covered in specific situations began after Bourhill v. Young - concerns remain about the floodgates and possible fake claims - some principles have emerged: - main test for establishing a duty is foreseeability of shock - there must be a “recognizable psychiatric illness” suffered, not merely an emotional upset - necessary for Pls to have been endangered themselves or to have witnessed w/ their own unaided senses the accident or its immediate aftermath (generally means being on the scene of the accident) - some question about whether seeing accident on TV is sufficient - Pls that can recover not limited to close relatives and loved ones – rescuers are entitled to recover if they witness a horrible accident ( Bechard ) - But mere bystanders less likely to be able to recover - Until recently, it was plain that suffering psychiatric damage on being told about an accident was insufficient to qualify for damages for psychiatric damage, unless that person was also injured in the accident ( Rhodes v. CNR ) - “reasonable and robust fortitude” is expected of Canadians ( Vanek ) - Hospital case  Possibility left open for compensation for negligent communication of bad news (if fals info communicated causing damages that is compensable) Law in Australia - recently expanded scope of liability to allow recovery when there is foreseeability of psychiatric damage, unless policy reasons compel a different conclusion - this might permit liability to someone hearing about a terrible accident Law in England - much debated area - confusing distinction between: - primary victims  actually suffered physical harm in the accident - foresight of physical injury suffices to create a duty - secondary victims  a mere bystander - foresight of psychiatric injury to a person of normal fortitude is required for duty to exist Rhodes (Resp/Pl) v. C.N.R. (Appl/Def) (SM 399) (mother who received nervous shock on son’s death) v. (negligently caused train crash) [1990 BC CA] Leading case in this area Shock from hearing about crash or visiting scene later is not compensable Facts : Pl’s 23-year-old son was killed in a train crash caused by the Def’s negligence. After hearing of the accident on the radio, Pl journeyed to the accident scene. She eventually reached the scene 8 days after the collision and the wreckage of the car in which her son was killed had by then been removed. She was at first misdirected to the wrong car and didn’t receive factual information from Def in a timely fashion. Pl suffered from extreme depression Issue: Is the Pl entitled to recovery for emotional distress given that she wasn't present when the accident occurred and did not visit either scene or victim immediately afterwards – are these compensable harms? NO – appeal allowed Reasoning: (Taylor J.A.) - The critical question is whether Pl was “closely and directly” affected the railway’s negligent conduct, rather than being affected by it indirectly (by way of her reaction to the fact that her son had died as a result of it) - Foreseeability of the damage is not enough; there must also be proximity 46

- Causal proximity excludes indirect injury, such as that which results from merely learning of an accident or of injury or death. - A person present at the time of a negligently-caused accident who suffers psychological illness as result of what he or she sees or hears may recover. But someone who suffers psychological injury as a result of being informed of the death of a relative, or of visiting the scene some days later cannot, in the absence of any unexpected alarming or horrifying experience caused by the circumstances of the accident, be said to have been closely and directly affected by the negligence that caused it. - Pls illness was not found by the Court to be a reasonably foreseeable direct consequence of Def’s negligent conduct. Therefore, Def was not under a duty of care to avoid causing the injury sustained. - Pl’s illness was attributed to the death of her son and not to the trauma of the accident itself. Dicta: (Wallace J.A.) - Grief and sorrow are not compensable as a psychiatric illness. Direct psychiatric injury is recoverable if there was a sufficient proximate connection between the injury and the accident. The requisite proximity relationship is made up of a combination of relational elements: a) relational proximity - the closeness of the relationship between the plaintiff and the victim; b) locational proximity - being at the scene observing the shocking event; and c) temporal proximity - the relation between the time of the event and the onset of the psychiatric illness. - One element cannot be decisive in establishing the reasonable foreseeability of psychiatric injury, though relational proximity should be a predominant factor. Ratio: (Taylor J.A.) - Someone who suffers psychological injury as a result of being informed of the death of a relative or of visiting the scene some days later cannot, in the absence of any unexpected alarming or horrifying experience caused by the circumstances of the accident, be said to have been closely and directly affected by the negligence that caused it. Class Notes: - She is not physically injured – psychologically injured – hard to show - Historically courts haven’t been open to psychological injuries – hard to show, deal w/ it attitude, etc - Taylor (p 403 ) - Proximity  Pl does not have to be present at accident – psychological injury does not have to arise directly, person does not have to be close or dependent on that person, does not have to arise from specific shock - No single limiting factor based on foreseeability, proximity, remoteness, etc - Proximity is really important – all those considerations are relevant but don’t decide the question - Relying on McLachlin v. O’Brien case – breakthrough case on proximity question - Mrs. McLachlin was told of accident which involved her husband and children w/ one child dead and others all seriously injured - She wasn’t at the scene – was only taken to the hospital and saw the victims before they’d been cleaned up - Court said she experienced the immediate aftermath of the accident – suffered nervous shock / depression - Breakthrough case b/c didn’t have to show all these factual requirements that had limited recovery prior to this case (not present at accident scene – even though court essentially placed her there b/c she experienced ‘immediate aftermath’ – may as well have been there) - Don’t think they have gotten rid of those factual requirements – but judge here says they are relevant but not necessarily a bar - Applies Lord Akin test – finds no proximity b/w the woman, the train wreck and her injuries b/c - Not an aftermath kind of Pl - Didn’t see or hear anything - Ppl who negligently caused the train wreck couldn’t have foreseen a Pl such as her (heard on radio, saw in newspapers, came to scene) - P 408 – court goes through history on how these cases have been handled – physical proximity in one way or another - Victorian Railways - Rhodes is leading case in Canada - Immediate aftermath case (McLachlin) would safely apply in Canada - Concept is foreseeability - Case where pregnant woman was getting off the bus, heard impact, saw aftermath (but didn’t see actual accident) and she was not related to the injured person  question arose whether or not motorcyclist (who 47

was hit and was driving negligently) owed her a duty  court held no, b/c her nervous shock was not the foreseeable injury - In order to succeed the actual foreseeability of the injury (i.e. nervous shock) must exist - Policy concerns that might negate duty as per second branch of Anns test - Could be an indeterminate class (viewers by TV, other bystanders, etc) - Too difficult to measure / too easy to fake  is that a policy reason or is that an evidentiary or proof rationale? - This judge is looking at Anns approach – but the Anns approach doesn’t seem to be the favoured approach to dealing w/ these cases, but it’s still there - MacLachlin case – leading British authority - Woman heard about accident and went to the hospital immediately – saw her injured family members (the equivalent of the aftermath accident)  court held this nervous shock was compensable b/c witnessing the aftermath was akin to witnessing the accident itself - Looking through proximity lens – the immediate aftermath drew her into those immediate aspects courts look for – had close family relationship w/ the victims, timing was close – she rushed to the hospital (no lag in time like Rhodes , unaided senses – no, she didn’t have that qualification but she did see the aftermath)  therefore proximity established, so duty owed to her by negligent driver - Court said she was w/in the ambit of duty owed by driver b/c she was able to make herself proximate (through those other factors) and was therefore able to claim for her psychiatric injuries - Important case - Interesting to see how HL divided on the ingredients of this tort – what needs to be proved by Pl (materials p 410) - Lord Wilberforce and Davies – reasonable foreseeability by itself not enough to establish duty of care - Lord Scarman… and 2 others – found reasonable foreseeability by itself is sufficient to establish a duty (like Donoghue ) - Don’t forget – the reasonable foreseeability had to be for nervous shock - Duty is linked to factors like - What is the relationship b/w victim and Pl - Where was the Pl? - Did the Pl witness the accident? - See accident w/ unaided senses? - Etc - *note: these are just factors  no single limiting factor that solves it / is determinative - This judge then turns to the American authorities - Dylan v. Legg  court applied reasonable foreseeable test (California) - Mother saw daughter killed when hit by a car - Pl does not have to be in the ‘injury zone’ - It is her daughter, she sees accident w/ unaided senses - Duty owed to the mother - Reasonable foresight is sufficient to establish duty of care - Consistent w/ British cases - 1989 case in California - In absence of physical injury, damages for psychological - To succeed, Pl must be closely related to victim, present at scene, aware incident is causing harm to victim, experiences mental distress - A retreat back from reasonable foreseeability cases - Have limited the duty to those requirements – heavier requirement than the British courts or the earlier California decision – much more rigid - Foreseeability, proximity, causation, remoteness  these are factors to consider - P 411, BC Cases - Griffith v. CPR – court refused damages - Husband reacted to wife’s death and couldn’t manage his life after that - Court held no liability – causation - Subsequent grief and inability to cope w/ life could not be causally linked to the accident - Beecham v. Hughes - Court considered situation where claimant got relatively minor injuries in car accident and his common law wife got brain damage in accident – he claimed from brain damage - Judge held depression was not caused by what he saw in accident – occurred subsequent to accident through sorrow and grief  no causal link 48

Kat’s CANS - Can be very difficult to differentiate these cases. Ex: man who goes to hospital and sees son with bleeding head wins while woman who goes to hospital loses because it’s grief and not nervous shock Bechard (Resp/Pl) v. Haliburton Estates (Appl/Def) (SM 422) (witnessed Def driving over & killing 3 rd party) v. (negligent driver) [1991 ON CA] A rescuer who witnesses a horrible accident to the victim is entitled to recover A blood relationship between Pl and injured victim is not a prerequisite for a claim of nervous shock Facts: Pl’s vehicle collided with a motorcycle operated by a 3 rd party stranger, H. H and the Pls were injured and H remained lying on the road. When the Def’s vehicle approached the scene of the accident, the Pl waved her arms and screamed to alert Def of H lying on the road. Def ran over H and killed him. The Pl witnessed the accident and also had to jump out of the way. Issues: 1.Was the Pl’s relationship to H too remote (not blood relatives) to establish a foreseeable psychological reaction? NO – 2.If Pl is more vulnerable than normal to emotional shock, should she be entitled to recover? YES – appeal dismissed Reasoning: - Liability for nervous shock depends primarily on foreseeability - Def should have foreseen that an accident had occurred at the scene and that there could be victims such as Pl and H in the vicinity - Furthermore, Pl had to jump out of Def’s way for her own safety - Pl was trying to save H by alerting Def to his presence on the road and that under these circumstances it was foreseeable that the Pl would suffer nervous shock from observing H being run over. Pl was a proximate bystander – more like a rescuer. - Even though the Pl had a long history of anxiety & depression (thin skull), here it would have been foreseeable for any reasonable person in her situation to suffer this harm. Ratio: (Griffiths J.A.) – A rescuer who witnesses a horrible accident to the victim is entitled to recover Class: - Damages cannot be given at common law for grief & sorrow – has to be more than that - Main principles / categories - Direct impact  in through back door of Rhodes case – this is a principle that HL has approved of - Pl may recover damages for nervous shock brought on by injury caused to near relative or fear of such injury - No Engl case in which Pl has been able to recover damages where injury occurred out of sight / earshot of Pl - This was before the McLachlin case where mum rushed to hospital (aftermath) - A remedy on account on nervous shock ( Chadwick ) man came on the scene as a rescuer - Bottom line in Canada is foreseeability of nervous shock (not injury)  court will look carefully at all the facts - Who is this person / relationship, how close in time to actual accident, unaided senses, how did they hear about the accident, aftermath, etc? - On fragility issue in this case (her eggshell personality) – court said this was like thin skull  take victim as you find him - Before this case it was hard to succeed as a bystander, but she was a proximate bystander - she was a foreseeable person to whom a duty was owed. - Although she had a pre-existing condition, these damages were over and above her prior instability so could be successful (causation argument of defence not succesful) - It is possible that if there had only been one accident then she would not have succeeded because the second event lets the court around thin skull. 49

- Court doesn’t apply ‘thin skull’ to ‘thin egg-shell’ personality - Relational proximity very low but very high temporal and locational proximity Vanek (Resp/Pl) v. Great Atlantic Pacific Co. (Appl/Def) (SM 435) (child who drank contaminated juice & parents with shock) v. (distributor & retailer of juice) [1999 ON CA] No recovery for everyday incidents Reasonable fortitude and robustness is expected Facts: Eva Vanek was eating her lunch a school. She opened a bottle of Beatrice grape nectar and drank a small amount. She noticed it had a foul taste and regurgitated some of it. She did not vomit or lose consciousness. She said that the top of the drink looked different from the rest of it and that it made her “feel a bit nauseous and extremely scared”. The principal called Eva’s parents who took her to the hospital. She was checked by a doctor but received no other treatment. Her stomach was not pumped and she was given no medication. She left the hospital the same afternoon and returned to school the next day. The juice bottle was sent to a lab for testing. It appeared to have been contaminated by gasoline or a similar product. Mrs. Vanek was nervous about the long-term affects on Eva and was given a prescription to relieve her stress. Mr. Vanek began to feel pressure in his chest, shortness of breath & numbness in his hands. A year later he was hospitalized for coronary disease and unstable angina. Issue: If a company’s negligence causes minor & short-term injury to a child, can a parent recover damages for the substantial psychiatric damage that appears to have flowed from his or her concern about the child’s condition? NO – appeal allowed Reasoning: - In Canadian law, a plaintiff can recover if: 1) the psychiatric damage suffered was a foreseeable consequence of the negligent conduct and 2) the psychiatric damage was so serious it resulted in a recognisable psychiatric illness (1) Foreseeability: - 2 factors suggest foreseeable injury of nervous shock to the parents: a) substance of the careless conduct (production, distribution & sale of contaminated product) and b) close relationship between the person who consumed the product (child) and the parties alleging they were injured (parents) - Factors pointing away from foreseeability: parents did not see Eva consume the juice; the incident did not cause any significant harm to Eva; what confronted the parents when they arrived at the principal’s office was a fairly ordinary scene; they did not become incapacitated at the scene; and Evan suffered no long term effects. - The law expects reasonable fortitude and robustness of its citizens and will not impose liability for the exceptional frailty of certain individuals. This is not the same as the “thin skull” situation. Before a defendant will be held in breach of a duty to a bystander, he must have exposed them to a situation in which it is likely foreseeable that a person of reasonable robustness and fortitude would be likely to suffer psychiatric injury - In being obsessed with the incident, the parents were not acting like the average concerned parent. They were displaying a “particular hypersensitivity” and they lacked “reasonable fortitude and robustness”. (2) Recognizable Psychiatric Illness: - Unnecessary to consider Ratio: (MacPherson J.A.) Reasonable fortitude and robustness is expected and the law will not impose liability for the exceptional frailty of certain individuals. If parents are confronted with an everyday incident that is dealt with appropriately and there are no serious effects or long term consequences, they cannot recover for shock. Class Notes: - In Cdn law, the Pl can recover for negative infliction of psychiatric damage if establishes 2 things - Psychiatric damage suffered was foreseeable consequence of injury - Psychiatric damage was so serious it resulted in an identified psyhicatric illness 50

- No damages can be awarded for sorrow / grief, difficulty adjusting to new life, worry, etc  too indeterminate so not recoverable - But they are recoverable for any recognizable psychiatric illness recognized as caused by breach of duty of Def - Is it reasonably foreseeable these parents could suffer nervous shock over well-being of their child in this situation? - Court here criticizes TJ for not delving into foreseeability part of question - This judge (CA) says need to look at context, surrounding circumstances, relationship of parties, injuries suffered, etc - Little girl was injured by negligent filling of the bottle and she wasn’t injured seriously - Could the companies foresee that any other person (i.e. the parents) could be injured - Yes, court says it is reasonably foreseeable that parent could suffer psychiatric damage if child ingests a poison - In this case, parents come to the school (compare w/ Bechard case) – parents go to hospital w/ child where doctor reassures them he doesn’t think anything is wrong after she had thorough check-up and she went to school the next day w/ no visible consequences - Given those facts, court asks would reasonable parent react and get nervous shock? - Not that there is no duty – could have turned out differently if it wasn’t handled so well by school or if she had ingested more, etc - Here, this looks like ordinary event that doesn’t foreseeably predict that the parents would suffer nervous shock - Should psychiatric factor be reassessed in this case? No for 2 reasons: - No question that this is not a psychiatric illness caused by the juice – his angina is not a psychological injury - Any reassessment of law in this difficult area should take place against backdrop of real fact situation which presents issue squarely - Judges here don’t want to go into obiter discussion here b/c not right facts / case - Court took away most of damages given by TJ (except for those awarded to the little girl) - Judge did award costs to little girl - 2 kinds of costs - Party-party costs and solicitor-party costs - Here judge awards costs to girl b/c - Trial lasted long time (expensive one) - Defs did not concede juice was contaminated until the end of the trial – they didn’t admit liability – insisted on Pls proving their case and liability was found - They should have conceded liability and fought about damages instead K. Remedies & Liability 1. Compensatory Damages Compensatory Damages - will be awarded in lump sum at end of the judgment - up until this trilogy of cases, most courts would just award a global sum - not only reflect on losses already incurred (the physical injury etc) but also look into the future, to compensate for these future losses  quite a bit of speculative work to calculate the future costs - Categories of damages - Special damages  in the past, before trial, they have required somebody to pay for something before the trial (e.g. ambulance cost, prescriptions, any other bills associated w/ the tort that have already been paid / charged)  must be proven w/ certainty - General damages  the bulk of the award in most cases – deal w/ the future and the past - Pecuniary damages  things proven to cost $ - e.g. loss of future income, future case costs - Lost earning capacity – highly dependant on individual and career potential - Future care - can be very expensive - Non-pecuniary damages  things that are more notional, e.g. can get non-pecuniary damages for pain & suffering 51

- In Canada this is capped (U.S. it is not – that is how they get to such huge settlements) - U.S. system can be much more impactful on marketplace than our Cdn system Andrews (Appl/Resp/Pl) v. Grand & Toy (Resp/Appl/Def) (CB 716) (became quadriplegic in traffic accident) v. (employer of driver who hit Pl) [1978 SCC] Facts: Negligence action for young man rendered quadriplegic in a traffic accident for which the Resp and his employer (Grand & Toy) were found partially liable. Issues: What are the correct principles of law applicable in assessing damages in cases such as this where young person suffered wholly incapacitating injuries and faces a lifetime of dependency on others? Reasoning: Dickson, J. - should assess general damages in separate amounts - uphold TJ’s decision for home care – Pl must be reasonable in making a claim but doctrine of mitigation of damages has any place in a personal injury claim (might be for conversion of goods, etc) - Pl should get sum of money to put him in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation / reparation - No duty to mitigate, but duty to be reasonable – an award must be moderate and fair to both parties - Compensation should not be extravagant, but no reason it should not be realistic - For life expectancy here look at average for other quadriplegics - Pl cannot recover for the expense or providing for basic necessities as part of the cost of future care while still recovering fully for prospective loss of earnings – two methods - One method – give injured party an award which make no deduction in respet of basic necessities for which he would have had to pay in any event - Alternative method – reversal – deduct the cost of basic necessities when computing the award for future care and then to compute the earnings award on the basis of gross earnings - Length of working life – assumed would retire as early as possible - Contingencies – actuarial evidence - Rate of return – comfortable w/ 5% interest b/c it is essentially 8% interest and 3% inflation - Present interest rates should not be used w/ no allowance for future inflation - Allowance for tax – no consideration should be taken of the amount by which the income from the award will be reduced by payment of taxes on the interest, dividends or capital gain - Regina v. Jennings – SCC held an award for prospective income should be calculated w/ no deduction for tax which might have been attracted had it been earned over the working life of the Pl - Exact tax burden is extremely difficult to predict b/c so political / changes easily - Non-pecuniary loss - No objective measure for translating non-pecuniary losses (pain & suffering etc) into monetary terms - 3 theoretical approaches: - ‘conceptual’ approach  price on body part / injury – proprietary asset w/ an objective value - ‘personal’ approach  values injury in terms of human happiness for particular victim - ‘functional’ approach  values injury of human happiness for particular victim by paying for “reasonable solace for his misfortune” - Everyone in Canada entitled to a more or less equal measure of compensation for similar non-pecuniary loss Ratio: Class Notes: - Andrews damages were cut in half by CA - At the CA, the standard of care he was entitled to through damages was questioned - CA said trial damages were much too high – provided for homecare rather than institutional care – too expensive - SCC had to deal with question of what type of care was person entitled to? (Future care question) - SCC said what CA did was wrong at law b/c violated the fundamental principle for compensatory damages, which is to put Pl in the position he was in before the accident - Right to be made whole is based on the individual life of the Pl - Court says this man is 21 yrs old – institutionalizing him is not making him whole - No justification for Def to say it is more expensive for Pl to have homecare 52

- SCC also says it’s an error in law to give lump sum award w/out breaking it into its components - Doesn’t allow for any reflection or justification for the future – doesn’t provide for any uncertainty as to what happens to the individual (could die, injury could change, etc) or to what happens to the money itself (taxation, market fluctuations, etc) - Looking at future care component - Have to listen to Pl – here he was of sound mind and was adamant about independent living - Pl has to be reasonable – on basis of his lifestyle already and what his wishes are - Court has to look at - How long does future care last for, and how do you calculate it? - Relevant life expectancy is post -accident life expectancy , not pre-accident life expectancy - Will overcompensate Pl if calculated on pre-accident life expectancy - Court started w/ - Life expectancy of 50 yrs (from 23) and quadriplegic would be 5 yrs less - So (45 years) * (annual cost of living) - This needs to be adjusted for interest, inflation, and taxation - 20% of this number is then deducted for contingencies (this is for the ‘what if’ – if he died tomorrow, was hospitalized, switches to institutional living) - Criticism of contingencies is that they are 1-sided – what happens if he outlives the average, might need more help, cost of care could go up, etc) - Annual cost of care includes medical costs, care costs, living costs (food, shelter) - Note: if add costs of living to future care then deduct it out of lost earning capacity  Dickson says better to put new cost of living in category of future care and to deduct from future earnings all of those costs as they were - Here, added it to costs of future care b/c the cost of those necessaries will likely be different post- accident than it would have been pre-accident – special foods, facilities, clothing, etc - It is highly likely will under-compensate the Pl if put net amount in lost earning capacity - Lost earning capacity is calculated on pre-accident life expectancy - Start w/ education – he had high school - He was apprentice carman at CNR – made monthly income of $830 - Look at maximum can earn in that profession – settle on almost halfway b/w what he was making and the max available – midpoint of $1200 / month - Value = (30.8 yrs left pre-accident of employment)*($1,200)*(12 months / yr) - Court then adjusts for 20% contingency decrease - Unemployment, illness, accidents, business depression  this is problematic b/c no positive contingencies are built in – again! - Could argue a number of negative contingencies have already been built in – the fact he is not going back to university (as reflected in his pay), not changing careers  he is so young and it is hard to predict what his earning capacity could have been - Court arguably should have looked at his family background /education / employment, Pl’s marks / ambitions - Court then puts 7% discount rate on the lost earning capacity - As a lawyer, never take actuarial tables for lost earnings at face value – gender bias, not individual enough - Tax - Compensation is not taxable b/c it’s compensation for a lost asset – lost earning capacity – so NOT taxable, so no deduction for tax on the lost earning capacity number - Once you invest the sum, yes it is taxable – the income earned on the lump sum is taxable - Court here makes no allowance for the tax incurred on the income - Looking at non-pecuniary damages - 3 ways of looking at it – conceptual approach, personal approach, functional approach - Functional approach is adopted here  looks at injuries person has and looks to give them some solace, comfort for those injuries - Pl’s own evidence is important here too - Cap then was $100k (now, from inflation, it is up closer to $500k) - See the breakdown of damages on CB 730 - Special equipment (doesn’t seem it was accounted for to have this updated over time) - Nursing care - Contingency deduction & cap rate applied 53

Townsend v. Kroppmanns (SM 474) ( [2004 SCC] Issues: Can Def second-guess Pl’s use of the money? No Class Notes: - Principles (CB 475 – 476) perfect justice not possible in this area – challenge is to come up w/ rule that divides the winners and the losers in the best possible manner good test should distinguish on rational basis b/w potential Pls test for revocery in cases of economic loss to contractual entitlements caused by property damage to another party should reflect the characteristics of this type of litigation good rule should thus place some incentive on both parties to act in an economically rational manner to reduce total accident costs rule must also confront problem of indeterminacy the objection is not simply to a large number of claims since an accident may injure a large number of people or cause extensive property damage important to consider indeterminacy of each claim - Damages are awarded in a lump sum given at trial; - Plaintiff holds lump sum (property in lump sum); - Not open for Courts to re-visit what the plaintiff has done with lump sum after awarded - Amounts are discounted to take into account future income; the fact that the award will be invested; and inflation - Not to overcompensate plaintiffs - 2.5% discount rate; 3.5% future care [BC legislated] - Courts do not give damages for legal fees [but costs do get awarded; usually party/party though; solicitor/ client costs rarely awarded] - Plaintiff not exactly made "whole" - Damages are assess not calculated (can't calculate b/c looking into the future) - Damages largely based on actuarial evidence - Structured Settlement (thus not a judge-awarded amount); Pl and Def enter into negotiations significantly less than what Court would awarded; Pl would take that amount and invest it which would make more money than a judge-awarded sum over his lifetime; structured settlements not taxed on the income earned 2. Punitive Damages Whiten (Pl) v. Pilot Insurance (Def) (CB 750) (house burnt down) v. (claimed it was deliberate against all expert evidence it was an accident) [2002 SCC] Facts: Pl’s house burnt down, expert evidence at trial said it was an accident. Insurers (when Pl’s tried to claim) refused to give money saying they deliberately set the fire. Insurance company maintained this position throughout. Issue: SCC looking at sums to decide: - Is it appropriate to award punitive damages? - Is this amount of punitive damages appropriate (more than triple value of the house)? Reasoning: - 3 objectives of punitive damages : punishment, deterrence, denunciation - some ppl say it should be “retribution” rather than punishment - principles of punitive damages to keep in mind (CB 752 – 753) 1. the appropriate control is achieved not by restricting pun damages to certain categories, but in rationally determining in the circumstances that warrant the addition of punishment to compensation in a civil situation 2. the general objectives are punishment, deterrence, and denunciation 54

3. the primary vehicle of punishment is the criminal law and punitive damages should be resorted to only in exceptional cases 4. the use of pejorative phrases such as “high-handed”, “oppressive”, “vindictive” provide insufficient guidance to the judge / jury 5. the court should relate the facts of the particular case to the underlying purposes of punitive damages and implement the lowest award w/ regard to whether it will further the objectives of the law 6. it is rational to use punitive where compensatory damages would amount to nothing more than a licence fee to earn greater profits through outrageous disregard of the legal or equitable rights of others 7. punitive damages do not have to be fixed by ratio to the compensatory damages, b/c the focus is on the def’s behaviour not the Pl’s loss 8. the overall award should be rationally related to the objectives for which the punitive damages are awarded 9. juries can and should receive more guidance and help from the judges in terms of their mandate 10. there is substantial consensus that punitive damages are not at large and that an appellate court is entitled to intervene if the award exceeds the outer boundaries of a rational and measured response to the facts of the case (i.e. they are reviewable and can appeal them, but appeal will only be successful if they are outside rational connection b/w the harm and the damages) - then Court looked at the facts, the blameworthiness of the Def’s conduct, and looked at the purpose of the contract itself (a ‘peace of mind’ contract) - type of contract made the Def’s behaviour worse b/c purpose of K was to have a roof over the Pl’s head Holding: - court here says $1mm is at the high end, but I see no overriding error on part of TJ, so will go w/ the $1mm - highest punitive award ever given – it is not involving personal injury, but rather property loss / humiliation / outrageous behaviour re: the contract - Mahoney says, there should be room to move up the ceiling for other cases (like that CB note case that got $10k for rape case) Ratio: Class Notes: - has always been debate over punitive damages – arguments against it are: - punishment is for criminal law only and std of proof in civil courts is only balance of probabilities - furthermore going outside of compensatory principle and giving punitive damages is against the idea of making people whole - argument this “Americanizes” Canadian law - on the amount: - how do you measure it? Just pull a number out of the air? We need more precision in the law - should it be relevant if people are poor / wealthy - CB 760 Note 8 - Def sold BMW to Pl as “new” but Pl later found out it had just been re-painted - The Pl got $2mm for the lie the car had not been repainted, even though cost of the paintjob would have been $4k - CB 761  BC SC case w/ punitive damages for rape in civil case ( P.A.D. v. A.E.H. ) – court awarded $10k in punitive damages b/c the rape had totally changed her life – she couldn’t work, psychological damages etc - Hill v. Church of Scientology – punitive damages of $800k - The wrong there was a defamation - Reaction to it was that it was out of whack - Result of these 10 principles - Higher punitive damages for wealthier people / corporations  if want to teach them a lesson it has to mean something / has to sting - another issue here is aggravated damages - in Canada there is v little distinction b/w them and punitive - if were differentiating, aggravation is commonly used when Pl has been humiliated in some way - but otherwise punitive and aggravated mean about the same thing - could be that punitive damages have a higher ceiling b/c humiliation can only go so far - don’t ask for them both together – that would be double recovery – it is one of the other - court talks about importance of ratios - can be helpful - can be argued 55

- are not rigid - can see Pl’s did look into worth of the Resp J. The Relevance of the Plaintiff’s Conduct in Negligence 1. Contributory Negligence 1a. General Contributory Negligence Act (CB 412 and SM 4) Butterfield (Appl/Pl) v. Forrester (Resp/Def) (CB 409) (injured when he rode his horse into a pole) v. (left a pole blocking part of the road) [1809 KB] Contributory negligence as complete defence to an action of negligence Facts: Def left a pole across the road. Pl was riding his horse very quickly at dusk. The horse ran into the pole and the Pl was injured. Reasoning: - Pl was not exercising due care - A reasonable rider would have seen the pole and taken evasive measures. A prudent rider would not have suffered these damages - Although the Def breached his standard of care by leaving his pole over the road at night, because Pl was contributorily negligent, he has no claim Ratio: (Lord Ellenborough C.J.) “One person being in fault will not dispense with another’s using ordinary care for himself.” Pl should use reasonable care to avoid injury even if Def is also at fault. Class Notes: - Good example of common law rule that any amount of contributory negligence on the part of the plaintiff was an absolute bar to recovery. Plaintiff gets nothing if contributorily negligent. - Very harsh rule and the courts tried to find ways around it but did it within evolution of CL principles - In this case, we see contributory negligence as an aspect of causation; that he caused his own loss - Idea was to defer careless conduct Davies (Resp/Pl) v. Mann (Appl/Def) (CB 410) ( left his fettered donkey on the highway and it was run over) v. (ran over the donkey) [1842 Court of Exchequer] Last Clear Chance Doctrine Facts: Pl had left his donkey, with its feet fettered, on a highway. Def negligently drove his horses and wagon into the donkey and killed it. Reasoning: Although there may have been negligence on the part of Pl, unless he might have avoided the consequences of the Def’s negligence by the exercise of ordinary care, he is entitled to recover. It was also held that the jury had been properly directed that the Pl’s negligence in leaving his fettered donkey on the public highway was no answer to the action, unless the donkey's presence there was the immediate cause of the injury. 56

Ratio: “Last clear chance doctrine”. Even if Pl is contributorily negligent, if the Def had the last clear chance, the Def will be liable. Pl. is the author of his own wrong. Class Notes: Labbee (Resp/Pl) v. Peters (Appl/Def) (SM 450) (died in car accident and wasn’t wearing a seatbelt) v. (negligently caused the accident) (1999 AB CA) Facts: Pl was fatally injured in a motor vehicle accident in which he was not wearing his seatbelt. Def struck the left side of the Pl’s vehicle with such force that it rolled over and came to rest upside down 40 metres from the point of impact. Pl was thrown from the truck through the door on the driver’s side and landed on the ground facing upward. While in that position he was struck on the head by the roof rail of the truck as it rolled over. He died 2 days later from massive head injuries. Issue: Was Pl contributorily negligent by his failure to wear a seatbelt? NO – appeal dismissed Reasoning: - A defendant alleging that a plaintiff was contributorily negligent for failing to wear an available seatbelt has the burden of affirmatively proving on a balance of probabilities that the harm suffered by the plaintiff would not have occurred or would have been less severe had the plaintiff been wearing a seatbelt. - Def failed to prove factual causation between the Pl’s lack of care and his resulting death - Although it was not disputed that Pl would not have suffered the specific physical injuries he did had he been restrained, there was expert evidence that had he been wearing his seatbelt, he would still have sustained other injuries of equal severity and consequence - The “damage or loss” referred to in the Contributory Negligence Act is the harm sustained by the plaintiff for which the compensation is being sought. It is not the specific physical injury that gives rise to the harm, but rather the compensable consequences of the injury. (Not the specific head injury that’s important but the fact that he would probably have died anyway.) Ratio: - Test of causation in contributory negligence: a plaintiff’s own negligence will not prejudice him at all, any more than it would a defendant, unless it was causally relevant to his injury in the sense that “but for it” he would not have been hurt - Failure to use an available seatbelt is relevant only if, and to the extent that, the injury would have been significantly less serious if it had been worn - Seatbelt defence is entirely fact driven (look at surrounding circumstances, expert testimony of accident reconstruction). No automatic 25% reduction Class Notes: - very unusual to have exception to seat belt defence, but this is one - b/c harm would have occurred even if wearing seat belt 1b. Seat Belt Defence in Contributory Negligence - Biggest issue in contributory negligence is the seatbelt defence - We know plaintiff owes a duty of care to himself and that there’s a statute that makes it illegal not to wear one - There are consistently deductions for victims where seatbelt would have lessened the injuries (usually 25%- 33%) Galaske (Appl/Appl/Pl) v. O’Donnel (Resp/Resp/Def) (CB 421) (8-year old passenger not wearing a seatbelt who was injured) v. (driver of the truck) (1994 SCC) 57

Facts: Pl, aged 8, and his father were passengers in the Def’s truck. Pl was not wearing a seatbelt. An accident occurred, through no fault of the Def, and the Pl was injured. Pl sued the Def driver alleging negligence in not ensuring that the Pl was wearing a seatbelt. Issue: Reasoning: (1) Duty of Care - All occupants of a motor vehicle have a duty to wear their seatbelts  duty to ensure own safety - Courts consistently deduct 5-25% from claims for damages for personal injury on the grounds that victims were contributorily negligent in not wearing their seatbelts. This had been done whenever it has been demonstrated that the injuries would have been reduced if the belts had in fact been worn. - Since 1968 courts in Canada have properly recognized that the exercise of reasonable care requires occupants of a motor vehicle to wear seatbelts - Children under 16 require guidance and direction from parents and older persons. That guidance extends to ensuring that they properly wear their seatbelts. - Drivers must accept the responsibility of taking all reasonable steps to ensure that passengers under 16 years of age are in fact wearing their seatbelts - S.217(6) of the Motor Vehicle Act makes it illegal for a person to drive with a child of 6-16 years who is not wearing a seatbelt. => can be taken as a public indication that the failure of a driver to ensure that children in the vehicle are wearing seatbelts constitutes unreasonable conduct. [ Saskatchewan Wheat Pool ] - The presence of a parent in the car may mean that the responsibility is shared, but it cannot negate the duty owed by the driver to the passengers under the age of 16 (2) Standard of Care - It will depend on the circumstances. In some situations a simple reminder may suffice, while in the case of a very young child the driver may have to put the seatbelt on the child himself\ Ratio: There is a duty of care resting upon a driver of a motor vehicle to ensure that the seatbelts of passengers under the age of 16 are in place. That duty exists whether or not a parent of the child is in the car. The presence of the parent does no more than indicate that the duty of car or responsibility towards the child may be shared by both the parent and the driver Standard of Care – varies with the circumstances Class Notes: - Pl child sues Def driver for not ensuring he was wearing a seatbelt - Court said here responsibility of driver to ppl in the car is constant – can’t be relieved of this responsibility even if there is someone else in the car (e.g. parent) - Duty is not removed from the driver, regardless or who’s in the car – so driver in this case did not meet his duty, even if father was in the car - It might affect the standard of the duty owed but does not negate it - Important that the driver is in control of the vehicle and it is this person that must have control of duty throughout - Furthermore, it is good public policy to keep this duty w/ the driver - Court says the standard of the driver might vary depending on the age of the child  the standard of care to meet the duty will vary on the circumstances - If very young child, standard might be to physically put it on - But if 17 year old, would just have to tell them to put it on, for example - Share liability b/w father (contributorily negligent for him not to look after his son) but it was also the responsibility of the driver (statutory responsibility) 2. Voluntary Assumption of Risk ( volenti non fit injuria ) - this is an absolute defence – if prove volenti you get nothing  judges are reluctant to apply it - judges have consistently made requirements for it more stringent over time - very rare that this defence would succeed Voluntary Assumption of Risk 58

The defence of voluntary assumption of risk is based on the moral supposition that no wrong is done to one who consents. By agreeing to assume the risk, the plaintiff absolves the defendant of all responsibility for it. The doctrine has 2 correlative effects: 1) The plaintiff is agreeable to bearing the injurious consequences of the defendant’s negligent conduct 2) The defendant is relieved of any duty of care to the plaintiff in respect of the particular risk of harm Historical Development: 1) Broad interpretation – In the early part of the 20 th century, merely exposing oneself to a known and wrongful risk was often sufficient to establish a willing assumption of that risk. Idea: you should be free to make choices (good or bad). Tort law shouldn’t apply when you are the author of your own misfortune 2) Current Restricted Scope – The defence is limited in scope and difficult to establish because of judicial emphasis on the compensatory role of negligence law Typical Case Where Defence is Involved: - Drunk drivers whose negligence injured their willing passengers - Plaintiff passengers were clearly guilty of contributory negligence - BUT the volenti defence is in applicable in the great majority of drunk driver – willing passenger cases - Exception (when the defence is applied) – when the plaintiff and defendant jointly planned and participated in an evening of heavy drinking and driving Test (narrow) Defendant must prove an express or implied agreement between the parties whereby the plaintiff has consented to accept both the physical and legal risk of injury from the defendant’s negligence. - Physical risk = the danger of being injured in fact (usually not difficult to establish) - Legal risk = an agreement to abandon her right to sue the defendant in negligence (very difficult to prove) Hambley (Appl/Pl) v. Shepley (Resp/Def) (CB 431) (Used his police car as a roadblock and was injured) v. (drove into stopped police car) (1967 ON CA) No voluntary assumption of risk – policeman in course of his duties Facts: On radio instructions, the Pl used his police cruiser as a roadblock against the Def, a motorist, who was escaping arrest. The Def’s car, then being driven at high speed and in the wrong lane, proceeded into an intersection against the traffic light and struck the police car, before the Pl could get out. Issue: Is the Pl policeman barred from recovery under the principle of volenti non fit injuria ? NO Does the principle of volenti non fit injuria apply against a person whose injuries occur in the discharge by him of a public duty so as to absolve an otherwise negligent defendant whose conduct caused those injuries? NO – appeal allowed Reasoning: - Pl in this case clearly knew of the risk of harm to which he might be exposing himself - BUT it would be a reversion to the rigid old conception of volenti to hold that he thereby accepted that risk so as to absolve the defendant of any duty of care towards him. Ratio: (Laskin J.A.) – The volenti doctrine has no application to a policeman who is aware of a risk of injury which in facts befalls him in the discharge of the duties of his office. Crocker (Appl/Appl/Pl) v. Sundance (Resp/Cross-Appl/Def) (SM 66) (rendered a quadriplegic in an inner tube race) v. (ski resort that held the race) (1988 SCC) No voluntary assumption of risk – did not assume legal risk 59

Facts: Def, as a promotion for its ski resort, held a competition which involved two-person teams sliding down a mogul portion of a steep hill in oversized inner tubes. During the 2 nd heat, Pl suffered neck injury and was rendered quadriplegic. Issue: Can the Def ski resort rely on the volenti defense to avoid liability? – NO appeal allowed Reasoning: (Wilson J.) - Pl did not, either by word or conduct, voluntarily assume the legal risk involved in competing. The volenti defense, therefore, was inapplicable. Appl’s participation in the tubing competition did not amount to an assumption of the physical risks involved, let alone the legal risks, given that his mind was clouded by alcohol at the time. - Given his degree of intoxication, it’s doubtful that Pl could even appreciate or accept the physical risk of injury. Ratio: Since the volenti defence is a complete bar to recovery and therefore anomalous in an age of apportionment, the Courts have tightly circumscribed its scope. It only applies in situations where the plaintiff has assumed both the physical and legal risk involved in the activity. Class Notes: - We’re talking about assumption of risk by conduct, not by exclusion clause (waiver)  keep separate - Volenti was argued - Case was resolved at end of day and Crocker got something – contributory negligence - If volenti worked, what message would this have sent to ski hill? That they could do the whole contest again the next year - Court talks about it – no express agreement to relieve hill of all responsibility whatsoever - There was the release but he didn’t know he was signing it - Court says it doesn’t like the volenti defence b/c there is apportionment legislation (Contributory Negligence Act) that is far more flexible, nuanced, more fair than volenti - Courts will look for any chance there wasn’t a clear agreement b/w the parties to relieve party from creating the risk 3. Illegality of the Plaintiff’s Conduct ( Ex Turpi Causa Non Oritur Actio ) Ex Turpi Causa Non Oritur Actio: No action may arise from a base cause. It embodies an intuitive reaction that plaintiffs who are involved in illegal conduct and other serious wrongdoing when they suffer damage should not be permitted to engage the legal system to pursue a remedy. - Basically saying you were a party to the offence (even though in crime you wouldn’t be) Historical Development: 1) Joint Criminal Activities – Initially the defence played a minor role, operating to deny a claim by the plaintiff whose injuries arose from joint criminal activities undertaken with the defendant. 2) Disapproval of Plaintiff’s Conduct – For a brief time, the defence was seen as a vehicle that could be used to fully deny a claim where a judge strongly disapproved of the plaintiff’s wrongful conduct. 3) Current Restricted Scope – Defence can only operate when the integrity of the legal system is threatened by allowing the claim. [ Hall v Hebert ] Test (narrow): ( Hall v Hebert ) Defendant must prove that: 1) The plaintiff was using the tort action to make a direct profit from illegal conduct, or 2) The tort action would circumvent, subvert, or negate a criminal penalty Hall (Appl/Resp/Pl) v. Hebert (Resp/Appl/Def) (CB 435) (Drunk driver who was injured) v. (drunk car owner who allowed Pl to drive) (1993 SCC) Defence not applicable 60

Facts: Pl and Def, two young men, spent the evening drinking to excess and driving around in the Def’s car. When the car stalled, Pl passenger asked if he could drive. Def agreed, and in the course of roll-starting the powerful manual-shift car, Pl (at the wheel) lost control of it and was injured. He sued the owner for negligence. Issue: Can the owner of the car rely on the defence of ex Turpi Causa Non Oritur Actio because the Pl driver was drunk ? NO – appeal allowed Reasoning: - Recovery in tort should only be barred due to the plaintiff’s immoral or illegal conduct only in very limited circumstances - The power to bar recovery lies in the courts' duty to preserve the integrity of the legal system, and thus is exercisable only where a damages award would, in effect, allow a person to profit from illegal or wrongful conduct, or permit an evasion of a penalty prescribed by the criminal law - As a general rule, the illegality principle will not operate to deny damages for personal injury, since tort suits are generally based on claims for compensation - Compensatory damages, which compensate for personal injuries rather than for an illegal act, only put the plaintiff in the position he or she would have been in had the tort not occurred - These awards cannot be said to be the profit of, or the windfall from, an illegal act - Pl need not be denied recovery since he did not genuinely seek to profit from his illegal conduct, and the claimed compensation was not an evasion of a criminal sanction. Instead, the compensation sought by the passenger was for injuries suffered. It was reduced by the extent of his contributory negligence (50%), but not wholly denied by reason of his disreputable or criminal conduct. Ratio: (McLachlin J.) - 1. The doctrine of ex turpi causa non oritur actio is applied only to preserve the internal consistency of the law (the defence can operate only when the integrity of the legal system is threatened by allowing the claim). Most commonly, this concern will arise where: a) a given plaintiff genuinely seeks to profit from his or her illegal or immoral conduct, or b) the claimed compensation would amount to an evasion, circumvention or negation of a criminal penalty The defence is not justified where the plaintiff’s claim is merely for compensation for personal injuries sustained as a consequence of the negligence of the defendant. Personal injury is not part of profit (so can sue for damages for injury even if have been involved in illegal or immoral activity) Class Notes: - Court can’t give the Pl what he wants b/c he was committing illegal act - Illegality defence doesn’t apply in this case  here the court was compensating for tort - Def committed the tort  supposed to put Pl back to position before injured by Pl - The crime in this case is peripheral to the tort that was caused - Another e.g. of where claim would not succeed is claim for damages for personal injuries where earnings were based on illegal occupation - E.g.drug dealer losing income b/c injured – court is not going to entertain lost earnings based on that occupation  that is ex turpi causai - Literal translation of the latin defence is ‘you can’t profit from your crime’ - Think about what Pl is asking for - If granting it would make court illegitimate then it would fit w/in this heading - But if burglar is injured and hit by car then he should be able to claim for that - Def has burden of proof of showing illegality - Don’t be confused with person doing a bad thing and getting injured in the process - Just b/c they’re a criminal and in process of a criminal act, the law does not allow for ppl acting in unreasonable manner (even a bankrobber could sue a policeman for negligent conduct and this would not engage the illegality defence) - Only case when illegality defence comes in is when the actual damage is to the proceeds of the crime - Yes, driving impaired is illegal / foreseeable injury, but b/c you’re doing it doesn’t mean you can’t sue anyone else for damages 4. Exclusion Clauses Waiver operates as contractual exclusion – concurrency of tort and contract law 61

Waiver clause will operate when: [ Dyck v Manitoba Snowm obile] a) covers precisely the type of negligence which occurred. b) attention is drawn to its contents. c) participant understood the clause. d) participant voluntarily agreed to take part in the activity, and e) party seeking to rely on it did not exert pressure (they had equal bargaining power). Keep in mind: a) Reasonable notice of restrictive terms must be given to the plaintiff b) Contra proferentem rule applies – the waiver must be given the narrowest possible interpretation against the interests of the defendant c) Rules of privity of contract are pertinent Dyck (Appl/Appl/Pl) v. Manitoba Snowmobile (Resp/Resp/Def) (SM 471) (rider who was injured in snowmobile race) v. (race organizers & the signaler) [1985 SCC] Defence successful – signed waiver protected Association and their volunteer Facts: Pl was a participant in a snowmobile race. He was a member of the association and was familiar with the rules. The signal person (volunteer of the association) negligently stepped in front of the snowmobile and caused an accident that injured the Pl. Pl had signed a waiver that released the association from any negligence before the race and knew exactly what it said. Issue: Was the exemption clause valid? YES – appeal dismissed Reasoning: 1. The waiver clause in the entry form exonerated the association from liability for the accident and also exonerated the signaller because the association was acting as his agent in obtaining the waiver 2. Plaintiff argued that the waiver clause was: Form of an indemnity rather than a release  no – called “waiver of claim” Fundamental Breach arguments: Inapplicable to the accident  no – the action of the signaller was precisely the type of negligence contemplated by the clause. Unreasonable  NO - the Pl knew or should have known that snowmobile racing is a dangerous sport and he voluntarily participated in it Unfair  NO – bargaining strengths of each party not an issue. Pl freely joined and participated in activities organized by the association Ratio: Waiver clause will operate when: a) covers precisely the type of negligence which occurred. b) waiver is reasonable (the breach is not fundamental, not the very reason you entered into the contract) c) attention is drawn to its contents. d) participant understood the clause. e) participant voluntarily agreed to take part in the activity, and f) party seeking to rely on it did not exert pressure (they had equal bargaining power). Fundamental breach to negate the waiver won’t work if it covers precisely the kind of negligence that occurred. Class Notes: - Pl argued there was a fundamental breach and that furthermore the clause was unreasonable - Court said have to look at the context of this (para 7)  if look at context, he was of sound mind, he was an adult, he was aware of the rules and had done this before - Context important for assessing if it was reasonable - Elements of fundamental breach – that it is unreasonable or unfair so as to be unenforceable  here it was not found to be unconscionable or unfair 62

Crocker (Appl/Appl/Pl) v. Sundance (Resp/Cross-Appl/Def) (SM 66) (quadriplegic after inner-tube race) v. (ski resort that held the race) [1988 SCC] Defence unsuccessful – signed waiver did not protect because Pl did not read it or understand that it was anything more than an entry form to the race Facts: Def, as a promotion for its ski resort, held a competition which involved two-person teams sliding down a mogul portion of a steep hill in oversized inner tubes. During the 2 nd heat, Pl suffered neck injury and was rendered quadriplegic. Trial judge found as fact that Crocker did not know of waiver – thought it was entry form. Issue: Can the Def ski resort rely on the waiver defense to avoid liability? – NO appeal allowed Reasoning: (Wilson J.) - Waiver as Contractual Defense – Sundance cannot rely on waiver. Crocker thought he was simply signing an entry form. - Although a contractual waiver clause can serve as a full defense to a claim in tort, the waiver signed by appellant did not relieve respondent of liability for its negligent conduct because it had not been drawn to appellant's attention and had not been read by him. - Sundance had no reasonable grounds to believe that signed waiver expressed Crocker’s real intention Ratio: It is not sufficient to merely have someone sign a waiver . A party must take reasonable steps to ensure that the person understands the effect of what he is signing, and has full knowledge of the party’s intention to exempt itself from liability. Have to given notice Class Notes: - level of attention has to be paid to the exclusion clauses  have to draw it to your attention and walk you through it - Crocker signs in bar setting and it isn’t good enough – he didn’t know what he was signing - But in case like Dyck where Pl was participatory in whole thing and helped to draft it etc, he couldn’t say “unfair, unconscionable”  he fits requirement that if you’re going to sign these things the Court isn’t going to save him - In Crocker, court saved him re: waiver, but b/c he was contributorily negligent didn’t get too many damages 5. Mitigation of Damages Another defence that has to be proven by the Def - Pl has duty to Def to mitigate damages (e.g. still have to work if have the ability to do so – if can’t be a teacher anymore, be a janitor, etc) Principle of Mitigation of Damages: The plaintiff is “bound to act not only in his own interests, but in the interests of the party who would have to pay damages, and keep down the damages, so far as it is reasonable and proper, by acting reasonably in the matter.” [ Smailes & Sons v Hans Dessen ] The question what is reasonable for the plaintiff to do in mitigation of damages in not a question of law, but one of fact in the circumstances of each particular case, the burden of proof being upon the defendant. Comparisons Mitigation is most closely aligned with novus actus interven iens and can be contrasted with contributory negligence Novus actus vs. mitigation; - Novus actus  a ‘commission’ – may be the act of a 3 rd party - Mitigation  an ‘omission’ or failure to perform – exclusively the act of the claimant Mitigation v contributory negligence - Mitigation has to do with post-accident events - Contributory negligence deals with pre-injury negligence. 63

Rules: 1) A plaintiff cannot recover for avoided loss E.g. if take only 1 month off work instead of 1 year, can only claim for 1 month 2) If the plaintiff takes reasonable steps and incurs losses or expenses in doing so, those out-of-pocket expenses are recoverable whether or not they reduced the loss. As long as they are reasonable costs reasonably incurred E.g. Can recover money for physiotherapy even if it didn’t work 3) Superb mitigation – can’t claim for avoided losses even if what you’ve done is super duper mitigation. (Will still get costs of mitigating) E.g. If a reasonable person couldn’t get a new crane for 3 weeks but you get new one next day, can’t claim for 3 weeks of lost profits Janiak (Resp/Appl/Pl) v. Ippolito (Appl/Resp/Def) (SM 455) (injured in a car accident and then refused back surgery) v. (negligently caused car accident) [1985 SCC] Facts: Pl had been a crane operator for 11 years when he had his car accident. Def was negligently struck from behind by Def. Couldn't work unless he had surgery. Because of a great fear of surgery, Pl refused to have the procedure to rectify his injury. There was a 70% chance of success, and the Pl continued to be disabled without it. Trial judge found this to be an unreasonable refusal to accept the recommended medical treatment. History: Trial judge found that the plaintiff had a duty to mitigate. The plaintiff's unreasonableness broke the chain of causation. The CA agreed that it was unreasonable not to mitigate but disagreed that it broke the chain of causation. Court decided that Def was only responsible for the damages up to the time that Pl would have been able to return to work plus 30% of the remainder (because 30% chance of surgery failure) Issues: How are damages for personal injury to be assessed when the victim of the accident unreasonably refuses to undergo the recommended surgery? % failure rate of surgical failure (followed CA) – appeal dismissed Principles: (1) Unreasonable Refusal of Treatment 1. Egg-shell personality only applies if: a) Condition is pre-existing at the time of the accident.. The objective test of reasonableness prevails in the absence of any pre-existing condition. b) The nature of the pre-existing condition must be considered too- if it prevents a person from making a reasonable decision, then it’s irrelevant that the decision is unreasonable. So long as a Pl is capable of choice, the assumption of tort damages theory must be that he himself assumes the cost of any unreasonable decision. 2. Conflicting medical opinions? Courts must consider degree of risk to the plaintiff from the surgery, gravity of consequences of refusing it, and the potential benefits to be derived from it. 3. Burden of proof is on the Def (balance of probabilities) if he alleges that the plaintiff could have and should have mitigated his loss. (2) Consequences of an Unreasonable Refusal of Treatmentyo 4. A plaintiff cannot recover from the defendant damages that he himself could have avoided by taking reasonable steps. 5. Whether refusal of surgery is reasonable is a matter of fact, determined at trial- not altered on appeal. 6. Damages determined by % failure rate of the surgery. Class Notes: - Pl argues ‘thin skull’ principle – I’m terrified of surgery so you have to pay me for the lost earnings for the rest of my life - TJ found he had acted unreasonably in refusing this treatment, so only lost earnings he should get are the lost earnings b/w when injury happened and the trial (2 yrs) - ON CA decided yes, he was unreasonable in refusing surgery but they approached award of damages somewhat differently - Looked at it on avoidable / unavoidable loss  the 30% chance of failure for the surgery was unavoidable loss - Recognizing what the Pl really lost here was a 30% chance that the operation wouldn’t be successful 64

- He is entitled to refuse surgery, but he the Pl is NOT going to get the avoidable losses from the Def b/c of his choice (i.e. the 70% chance the operation would be successful) - CA says if we’re truly going to compensate him for his losses we have to compensate him for the 2 yr lost earnings until court, then the 30% unavoidable loss for the surgery, but Pl is on the hook for that 70% (avoidable loss)  gets 30% of salary for rest of his life - When we get into the thin skull discussion here - Key element of thin skull ( Smith v. Leech Brain )  condition must be pre-existing! (in Smith the pre- cancerous cells were pre-existing and the molten lead triggered them) - Page 459 – Justice Singleton – was saying that “a man who’s in an anxiety state might have difficulty making up his mind, but his mind should be made up by his medical advisors” - Assumption that doctor knows best and that any person that disagrees w/ their doctor is going to be found to be unreasonable on reasonable person standard - This ‘doctor knows best’ is not compatible w/ other side of the law which says patient knows best!! - Mahoney doesn’t like this case - Nature of thin skull- p. 469 - They say in this case, on one hand, that eggshell personality is the same as thin skull - But in this portion of the judgment that an eggshell personality is not the same thing – distrustful view of psychiatric injuries that court appears to have  says person has to be incapable of making a decision and if not incapable then who cares if it’s a pre-existing condition – bar is very high to engage the eggshell personality kind of result - Can extrapolate from this part of judgment that eggshell personality is almost discredited! - Lord Denning- Scrutton s para 14 - Case where guy was seriously injured psychologically – severe anxiety neurosis and depression - What he was recommended to do was have electro-convulsive therapy in a mental hospital - He refused the treatment - It was established that he was an anxious, fearful person prior to the injured condition - Denning rejects subjective test and basically rejects thin skull doctrine! - Para 18 – In BC the Pl had a pre-existing condition predisposing him to schizophrenia and then got it full- blown after the accident - Court found that it was sufficient pre-existing condition - Denning’s reasoning is baffling - But, in a way, court is agreeing w/ Denning b/c they are putting the bar so high that it legitimates Denning’s decision - Presumably the guy in Denning’s case was not incapable of making a choice - It is going to be very difficult to succeed on thin skull argument - But in para 25  if the incapacity is actually caused by the accident, this may be the way out - Here in this case, should be able to show on balance of probs that Yaniuk was afraid of surgery b/c of the trauma induced by the accident - If this is so it would be manifestly unfair to cut off his damages (all 100%) - If you can demonstrate that the refusal to take medical treatment (even if unreasonable) is causally linked to the injury itself, then it is part and parcel of the injury - In the U.S. – para 26 (Mahoney thinks this is better approach) - Don’t have to have total incapacity to make a decision to claim thin skull - Personal situation, finances and irrational fears of the Pl are given due weight to see what he should do to minimize damages  the subjective standard of what can be expected of the particular Pl rather than the objective std of what could be expected of the reasonable man - This seems to be more consistent w/ Reibl v. Hughes and other cases that have a subjective element - Giving the patient the Reibl v. Hughes subjective elements in an objective test would be a good thing – Mahoney - Conflicting medical opinions is another way out of this - If can find a doctor to disagree that it is not reasonable to undertake the treatment – then Pl can choose which doctor to follow - Def also argued that Pl potentially set up for a windfall – say he gets 30% damages at court, then after the trial goes and gets the operation which is successful  then Pl ha the 30% plus his original earning capacity - Court wasn’t impressed – no evidence for this, court won’t speculate that the Pl is dishonest 65

III. INTENTIONAL TORTS - deliberate act vs. negligence which involves accidents, they are not deliberate - deliberate conduct is more likely to spur revenge by Pl - intentional tort was the first area of tort developed to deal w/ intentional conduct - cross-over w/ criminal law - when criminal law was first invented, it dealt w/ most serious offences and put them in the CC - the intentional torts we look at are all in the CC but they were in torts first and then later in CC - certain cases where you can sue for damages in tort (pay damages) on top of criminal penalties - still in compensation mode – not into punishment or retribution, b/c criminal law deals w/ those things, but there is an overlap - in tort, Pl has to show - harmed by a deliberate act of the Def - don’t have to show damage b/c there can be harm, like harm to dignity, that was deliberately caused by Def - then onus shifts to Def to prove, on the balance of probabilities, that it was either unintentional / not deliberate and not negligent - *different than negligence law where Pl has the burden until get to the defences - Motive isn’t relevant for the proving of the offence, might be relevant for consideration of damages awarded  it is only important for amount of damages awarded, not important for whether the tort occurred A. Intentional Interference with the Person 1. Intention Goshen (Resp/Pl) v. Larin (Appl/Def) (CB 37) (pushed down by the Def and fractured his wrist) v. (referee at a wrestling match) [1974 NS CA] Once Pl proves injury, burden shifts to Def to prove no intention or negligence Facts: Def made an unpopular decision as far as the crowd was concerned. After leaving the ring he proceeded toward the dressing room escorted by the police amidst a mass of thrown objects. He was struck on the head by one of these objects and fell to his knees, a bit stunned. He got up and continued out of the arena with his right arm shielding his face. Although no one saw him strike anybody, Pl alleged that he pushed him Reasoning: - Appl did shove or push the Resp to the floor, but there was no malice and no intention on the part of the Appl to wilfully injure him - Appl did not act negligently because he was in protective police custody at the time Ratio: In an action for damages in trespass where the Pl proves that he has been injured by the direct act of the Def, the onus falls upon the Def to prove that his act was both unintentional and without negligence on his part ACCIDENTAL, NEGLIGENT, AND INTENTIONAL CONDUCT – CB 38 Accident  Negligence  Intentional Torts - When considering the Def’s conduct as an element of a cause of action in tort, and describing it as accidental, negligent, or intentional, one is having regard to the Def’s state of knowledge and appreciation of the consequences of the contemplated act, and the steps which ought to have been taken to avoid them Differences in knowledge and foreseeability of consequences - Accidental: where a Def acts and produces consequences which were either not reasonably foreseeable or not reasonably preventable - Negligent: where a Def ought to have reasonably foreseen and avoided the result 66

- Intentional : where a Def acts either knowing with substantial certainty what the consequences of the act would be, or desiring them, the Def can be said to have intended those consequences - As a practical matter, suing someone in tort has much to do with the Def’s ability to pay. People are not normally insured for intentional acts. Garratt (Appl/Pl) v. Dailey (Resp/Def) (CB 41) (injured when sat down and missed the chair) v. (5-year old who moved the lawn chair) [1955 SC of Washington] Absence of intent irrelevant if knowledge is present Facts: This case involved an action against a five-year-old boy for injuries sustained when he allegedly pulled a lawn chair our from under the plaintiff when she started to sit down. The boy claimed that while the Pl was in the house he moved the chair slightly in order to sit in it, and that the Pl later sat down, not realising that the chair had been moved. The trial judge dismissed the action, finding that the boy had moved the chair, but without the purpose or intent of harming the Pl. Reasoning: - A battery would be established if it was proved that when the boy moved the chair, he knew with substantial certainty that the Pl would attempt to sit where the chair had been - Mere absence of intent to injure the Pl or to play a prank on her or to embarrass her, or to commit an assault and battery on her, would not absolve him from liability if, in fact, he had such knowledge. Ratio: A battery would be established if the Pl, when he moved the chair, knew with substantial certainty that the Pl would attempt to sit down where the chair had been. The mere absence of intent to injure, play a prank, or embarrass would not absolve him of liability if in fact he had such knowledge. Class Notes: - TJ absolved him - SC said if Def should have know that Pl would experience some offensive conduct then guilty – Pl does not have to be injured - If you know the consequences, then liable - The kid was found liable here when it was re-tried - If it’s done w/ purpose to embarrass, humiliate, play a prank, injure, etc then liability will be found - In negligence, age was roughly 12 – 13 for being able to be sued for negligence (duty, standard, reasonable person standard – high bar) - The American Restatement of Torts has become a codification of their tort law – all cases don’t match up but does give good definitions - Intent  focus on consequences - Commentary in the Restatement - Intent has reference to the consequences of the act rather than the act itself (e.g. of shooting a gun in the desert and hitting someone when you don’t expect anyone to be there) - If hunter shoots at ‘deer’ but shoots your dog instead – is this an intentional tort instead? - Yes, it is intentional to shoot something vs. intention to shoot bullet into the empty desert - Intention on a continuum – - Closer to probable, more successful in negligence – closer to possible, just an accident - When get to certain / substantially certain that is an intentional tort - E.g. of doctor operating on wrong disk if patient consented  Defence of consent - Negligence b/c patient consented - Whereas if doctor operated on wrong patient - Intentional tort b/c doctor intended to do what he did and patient didn’t consent Carnes(Resp/Pl) v. Thompson (Appl/Def) (CB 42) (Def accidentally hit Pl with pliers) v. (attempted to evict Pl and her husband) [1932 Supreme Court of Missouri] Transferred intent - If 3 rd party is accidentally injured, Pl is still liable in intentional tort 67

Facts: The Def in an attempt to evict a former employee and his wife from a farm house, tried to hit the husband with a pair of pliers. The husband dodged the blow and the Def corked the wife. The wife, upon coming to, brought the action before the court. Issue: Is the Def liable even though he never intended to hit the Pl (was aiming for her husband)? Ratio: If one person intentionally strikes at, throws at, shoots at another, and unintentionally strikes a third person, he is not excused, on the ground that it was a mere accident, but it is an assault and battery of third person. The Def’s intention, in such a case, is to strike an unlawful blow, to injure some person by his act, and it is not essential that the injury be to the one intended. Class Notes: - court says defence of ‘I didn’t intend to hit her, I meant to hit him – it was an accident’ does work  can’t use the accident defence b/c you had the intention to touch / threaten to touch somebody - go to the purpose for which this tort was created – to protect bodily integrity - here you have an invasion of somebody’ bodily integrity even if it was a different person - doctrine of transferability  still a tort here when hits his wife rather than intended man - have it for notion that tort is trying to protect bodily integrity and in both instances that is violated, so won’t let Def off on a technicality Basley (Pl) v. Clarkson (Def) (CB 43) (didn’t give permission for Def to be on his land) v. (accidentally mowed some of Pl’s lawn) [1681] Intentional Act - mistake is no defence Facts: The Def became a little carried away while moving his lawn and mowed some of the Pl’s. The Def apparently didn’t notice he crossed the balk (the dividing ridge) and the hade (strip of land left unploughed to act as a dividing line). Ratio: - Mistake as a defence doesn't work in intentional torts - He intended his result and is therefore liable - What’s important is that the Def’s actions were voluntary - His intentions and knowledge are not material because they cannot be ascertained Class Notes: - mistake is no defence here b/c the intention was clear – to cut down the grass there - Note 3  City of Calgary expropriated Pl’s land and a number of yrs later, SCC found order was invalid so Pls took action against city for trespass - City said didn’t intend to trespass – relied on expropriation order - Court said didn’t matter – City intended to do exactly what they did Smith v. Stone (CB 44) ( [King’s Bench 1647] Non-voluntary action cannot be intentional Facts: Pl brought action against Def for trespass. Def pleads that he was carried onto the land by force and violence of others, and was not there voluntarily. Reasoning : Trespass committed by those carrying him onto the property, no voluntary action on the part of the Def Ratio: 68

- He that drives my cattle into another man’s land is the trespasser against him, and not I, who am owner of the cattle. - It is a general condition of tort liability that the act of the Def must be voluntary in the sense that it was directed by his conscious mind. Class Notes: - court held, no intention on party of Stone to trespass on Smith’s property o it wasn’t his choice  element of volition is required o not enough if others intend the consequence and you don’t Tillander (Pl) v. Gosselin (Def) (CB 45) (baby who received fractured skull and brain damage from actions of Def) v. (3-yr-old who dragged baby) [1967 ON HC] ‘Tender years doctrine’ - Young child cannot act intentionally (also not voluntary) Issue: Can a 3-year old infant be held responsible in damages? NO Reasoning: - Followed Cook v Lewis TEST: 1) Child of such tender years clearly couldn’t be guilty of negligence because such an infant is considered to be lacking in sufficient judgement to exercise reasonable care 2) Likewise, the child cannot be said to have acted deliberately and with intention when the injuries were inflicted upon the baby 3) Cannot describe the act of a normal 3-year old child in doing injury to the baby as a voluntary act on his part Ratio: - A child of tender years lacks the mental ability to appreciate or know the real nature of the act he is performing - Therefore, the act is not intentional Class Notes: - consequences – this is what Court will look for o would 3-yr old understand the consequences here? o No, not according to the Court - Mahoney thinks 3-yr olds do have understanding of cause and effect o But might be different if thought it was a doll, etc o But good decision overall b/c 3 yr olds shouldn’t be tortfeasors Lawson (Appl/Pl) v. Wellesley Hospital (Resp/Def) (CB 47) (non-psychiatric patient attacked by a psychiatric patient with a history of violent conduct ) v. (hospital) [1975 ON CA] Mentally ill person might not be able to act intentionally (also not voluntary) Ratio: (Dubin J.A.) - Where a person, by reason of mental illness, is incapable of appreciating the nature of quality of his acts, such person has committed no tort since the intention, which is an essential element of the cause of action, is missing - It is an essential element in the tort of assault that there be a voluntary act Class Notes: - challenge here was to show no tort was committed even though violent act, b/c if no tort then hospital would have to pay for the harm - backwards way of going at the hospital – show it was NOT a tort and then hospital would be on the hook - must be a voluntary act (volition directed by the mind) 69

- if Pl establishes that patient suffered from such profound mental disorder that he was incapable of comprehending the nature or quality and consequences of the act or is unable to form the necessary intention then it cannot be a tort since the intention is missing  cannot be said to have committed a tort - Note 6 on CB 49 o Similar case o Defence raised of mental incapacity o Moral quality of it  Def doesn’t have to appreciate that what he’s doing is wrong  Much lower standard of intention than in criminal law  In civil cases, don’t need to know it was wrong  Key thing is what consequences did they desire B. Assault Assault: Intentionally causing another person to fear imminent contact of a harmful or offensive nature. Assault is the intentional creation in another person of a reasonable apprehension of imminent harmful or offensive contact. As will be seen, harmful or offensive contact constitutes a battery. Accordingly it can be said that assault is the creation of a reasonable apprehension of battery. Elements of Assault: 1) Reasonable Apprehension - Assault is committed where the Pl has a reasonable apprehension of imminent harmful or offensive contact, even if the Def in fact lacks the actual ability to cause the harm - E.g. Pointing an unloaded gun can constitute assault [Kennedy v Hanes, 1940] - Actual fear on the part of the Pl is not required; what is needed is merely an apprehension of the harm 2) Imminent - The apprehended contact must be imminent - If the Def threatens to harm the Pl at some point in the future, the conduct does not constitute the tort of assault - E.g. It would not constitute assault to threaten someone over the telephone, unless the call is made from very close by, or the threat is to detonate a bomb by remote control - E.g. of assault: shaking a fist [Bruce v Dyer] ; unleashing a growling dog Relationship Between Assault and Battery - Can have assault without battery. E.g. Def takes a swing at Pl but misses [I. De S. & Wife] - Can have battery without assault. E.g. Def strikes the Pl from behind or while Pl is asleep I. De S. & Wife (Appl/Pl) v. W. De S (Resp/Def) (CB 50) (pub owner) v. (obnoxious drunk who wanted in) [1348] Actual physical contact not required for assault Facts: Def came to a pub to drink. Upon finding the door closed he starting hitting at the door with a hatchet. As he was pounding, the female Pl poked her head out a window and asked him to stop. The guy struck at her with the hatched but did not hit her. Issue: Was there trespass even though no physical harm was done? YES Ratio: (Thorpe C.J.) There was harm done, and a trespass for which they shall recover damages, since Def made an assault upon the woman, although he did no other harm Class Notes: - no offensive contact being made here – just swung the hatchet at the Pl (she wasn’t hit) - court held it is also harmful to cause the Pl an immediate apprehension of harm - didn’t need to hit her w/ hatchet, just needed to create in her the immediate apprehension of being hit - purpose of this area of the law is to maintain the peace 70

Stephens (Pl) v. Meyers (Def) (CB 51) (Chairman of a parish meeting) v. (threatened Def at a public meeting) [1830] Assault requires the available means to carry out the threat Facts: Def, a participant at a public meeting, threatened to remove the chairperson and advanced towards him, fists clenched. He was stopped before he got near enough to the chairperson to strike him. The jury found in favour of the chairperson. Ratio: Not every threat (when there is no actual violence) constitutes an assault. If the Def was advancing with intent to harm, and if he would have done so if he had not been stopped, then that amounts to an assault in law. To be an assault there must be means available to carry out the threat. Class Notes: - court held that he had committed an assault by being just about to strike the Pl and intending to do so - there must be a means of carrying the threat into effect, and it must be imminent - sent back for trial w/ question being whether the means was available to carry out the threat - wouldn’t be an assault if the Chairman believed the Def would be stopped Tuberville (Pl) v. Savage (Def) (CB 51) ( [1699 KB] Must be an intention to assault Facts: In the course of some 17 th Century banter, Pl, put his hand on his sword and said to Def, "If it were not assize-time (i.e. court in town), I would not take such language from you." The Def retaliated by hitting the Pl in the eye. The Court of King's Bench dismissed Def's action for assault. Ratio: If one strikes another in discourse, it is no assault, because there is no intention to assault. If one who intends to assault strikes at another and misses him this is an assault. So, if a person holds up his hand against another in a threatening manner and says nothing, it is an assault. Class Notes: - was no assault here - conditional threat “if it wasn’t assize-time” – so he’s not going to do it  not an immediate apprehension of harm - Def unsuccessfully argued self-defence - E.g. “come one step closer and I’ll run you through”  there’s an out, don’t come closer - E.g. “I’ll run you through if you don’t get out of here”  immediate apprehension of harm? - E.g. “I’ll run you through if you don’t give me your money”  yes, b/c this is illegal act - E.g. Def phones Pl and tells him he’s coming over to shoot him  No, b/c doesn’t meet test for “immediate apprehension of harm” – there is a delay which doesn’t fit this requirement - E.g. Def arrives and knocks on the door  still not an assault - E.g. Pl answers the door and Def is there w/ gun pointed  yes! This is an assault - Immediate apprehension of harm is a subjective test – what you apprehend (i.e. doesn’t matter if gun is loaded or not – if immediate apprehension of harm is still there then it’s assault) - E.g. B is threatened to be shot at while asleep, when he wakes up he is told of it then has a heart attack - Do have apprehension but it is delayed b/c not conscious of the time - Public policy reason – concept of bodily integrity that needs protection  something wrong w/ having no consequences here for putting loaded gun to somebody’s head - b/c of twist of the facts are we going to leave it and have no repercussions? - Could then ‘transfer the tort’ - E.g. of shooting over someone else’s property and shooting a person on it - Intention was to trespass (shoot over the property) but court found trick that the tort was trespass of the person (shooting him) even though this wasn’t the intention 71

- Might say here that the fact that there was a delay in response was irrelevant b/c immediate apprehension was there as soon as person woke up – just delayed by sleep - Another argument – if can prove nervous shock – could say the intention might have been to assault the Pl or to batter the Pl by pulling the trigger and you didn’t do it, but you still committed a tort  the intentional tort of nervous shock - Red flags here: - Whole purpose of this area of the law is to prevent his kind of behaviour (to prevent retaliation, escalation of tension and threat of violence)  so court will push and pull the law to make it fit Bruce (Pl) v. Dyer (Def) (CB 53) (wouldn’t let Def pass & then gestured with a clenched fist) v. (hit Pl & fractured his jaw) [1970 ON] Facts : Def attempted to pass a line of cars on the highway, but because of an oncoming vehicle was unable to do so. He then attempted to pull into a space in the driving lane between the 1 st and 2 nd cars in the line. Pl, driving the 2 nd car, accelerated and closed the gap, forcing Def to fall back and to enter the space between the 2 nd and 3 rd cars. Pl claimed that thereafter Def drove with his car's high beams on, in retaliation. Def claimed that Pl kept accelerating to prevent him from passing. After some distance, Pl suddenly stopped his car, forcing Def to stop, and gestured at Def with a clenched fist. A fight ensued in which Def struck one blow, that fractured Pl’s jaw. Pl brought an action for assault. Def claimed self-defence on the basis that Pl’s conduct on the highway had constituted assault. Ratio: (Ferguson J.) - The striking of a person against his will has been, broadly speaking, always regarded as an assault - Attempted assault is itself an assault; so an attempt to strike another is an assault even though no contact has been made - Usually, when there is no actual intention to use violence there can be no assault. When there is no power to use violence to the knowledge of the Pl there can be no assault - However, there need not be in fact any actual intention or power to use violence, for it is enough if the Pl on reasonable grounds believes that he is in fact in danger of violence (reasonable man test) - Therefore, if a person shakes his fist at another the person so assaulted may strike back, if he, on reasonable grounds, believes that he is in danger - One who is being assaulted has the right to hit back in defense of oneself, one's property or one's way. The defense, though, must not be disproportionate to the severity of the assault. Class Notes: - not a clear-cut case on many grounds - in the notes it asks - Note 1  is Ferguson’s conclusion consistent w/ the authorities?  not a bold new breakthrough, but could be a policy-driven decision on its facts, which would not be consistent w/ authorities to date 3. Battery Class Notes - in CC  assault and battery are the same thing – a person commits an assault when, w/out consent, applies force to another or attempts to apply force (s. 265- a) is assault and b) is battery) - Cole v. Turner [1785]  common law dfn - The least touching of another is battery - Can be touching w/out it being battery - American Restatement - Battery if intending to cause (or cause imminent apprehension of causing) harm, if those occur to either the party or a third person - Hostility is not required – it can be a mistake, so long as the contact is offensive Battery: the intentional infliction of a harmful or offensive contact with another person Trespass to person is essentially battery. 72